# EDGAR Filing Document

**Accession Number:** 0001389545
**File Stem:** 0001829126-25-006520
**Filing Date:** 2025-8
**Character Count:** 647226
**Document Hash:** 191b59e55e2b8ed4df3aa79b32774337
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-25-006520.hdr.sgml**: 20250819

**ACCESSION NUMBER**: 0001829126-25-006520

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 28

**CONFORMED PERIOD OF REPORT**: 20250819

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

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

**ITEM INFORMATION**: Material Modifications to Rights of Security Holders

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250819

**DATE AS OF CHANGE**: 20250819

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NovaBay Pharmaceuticals, Inc.
- **CENTRAL INDEX KEY:** 0001389545
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 680454536
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-33678
- **FILM NUMBER:** 251233101

**BUSINESS ADDRESS:**
- **STREET 1:** 2000 POWELL STREET, SUITE 1150
- **CITY:** EMERYVILLE
- **STATE:** CA
- **ZIP:** 94608
- **BUSINESS PHONE:** (510) 899-8800

**MAIL ADDRESS:**
- **STREET 1:** 2000 POWELL STREET, SUITE 1150
- **CITY:** EMERYVILLE
- **STATE:** CA
- **ZIP:** 94608

?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 15(d) of the Securities Exchange Act of 1934**

**Date of Report** (Date of earliest event reported): August 19, 2025

**NovaBay Pharmaceuticals, Inc.**

**(Exact Name of Registrant as Specified in its Charter)**

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| | | |
|:---|:---|:---|
| Delaware | 001-33678 | 68-0454536 |
| **(State or Other Jurisdiction<br> of Incorporation)** | **(Commission<br> File Number)** | **(I.R.S. Employer**<br> **Identification No.)** |

---

2000 Powell Street, Suite 1150, Emeryville, CA 94608

**(Address of Principal Executive Offices) (Zip Code)**

(510) 899-8800

**(Registrant**'**s telephone number, including area code)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ 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:

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| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange On Which Registered** |
| Common Stock, par value $0.01 per share | NBY | NYSE American |

---

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. ☐

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| | |
|:---|:---|
| **Item 1.01** | **Entry into a Material Definitive Agreement.** |

---

<u>Overview</u>

NovaBay Pharmaceuticals, Inc. (the "Company") has been continuing to explore and evaluate strategic options available to the Company to maximize its value following the sale of the Company's eyecare products sold under the Avenova brand and related assets to PRN Physician Recommended Nutriceuticals, LLC on January 17, 2025. Among these strategic options, the Company has been pursuing potential strategic transactions, including investments, mergers, reverse mergers, strategic partnerships, licensing and sub-licensing transactions. The Company also has the option to pursue a voluntary liquidation and dissolution under Delaware law (the "Dissolution") pursuant to the Plan of Complete Liquidation and Dissolution of the Company that stockholders approved at the Company's special meeting of stockholders held on April 16, 2025. Although stockholder approval of the Dissolution was received, the Board of Directors (the "Board") was authorized to subsequently determine, in its discretion, whether or not to proceed with the Dissolution. Accordingly, the Board retained complete discretion to evaluate and determine if and when the Dissolution should be effected or if another strategic option would be a better opportunity to maximize the remaining value of the Company for its stockholders. Following the Company's review of its strategic options, the Company determined that pursuing a strategic investment transaction that provides for a Special Dividend and a Post-Investment Transaction (both as defined below), instead of pursuing the Dissolution, is in the best interest of the Company and its stockholders at this time.

On August 19, 2025, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with David E. Lazar, an Israeli and E.U. citizen residing in Panama, that provides for the Company to sell in a private placement (i) an aggregate of 481,250 shares of Series D non-voting convertible preferred stock, par value $0.01 per share (the "Series D Preferred Stock") convertible into an aggregate of 77.0 million shares (the "Series D Conversion Shares") of the Company's common stock, par value $0.01 (the "Common Stock") for $3.85 million and (ii) an aggregate of 268,750 shares of Series E non-voting convertible preferred stock, par value $0.01 per share (the "Series E Preferred Stock") convertible into an aggregate of 43.0 million shares (together with the Series D Conversion Shares, the "Conversion Shares") of Common Stock for an additional $2.15 million (collectively, the "Investment"). The shares of Series D Preferred Stock and the shares of Series E Preferred Stock, upon becoming fully convertible, will represent in excess of 90% of the issued and outstanding shares of Common Stock on a fully diluted basis as of the Final Closing (as defined below). The Series D Preferred Stock and the Series E Preferred Stock are subject to certain conversion limitations as described below.

Simultaneous to entering into the Purchase Agreement on August 19, 2025, Mr. Lazar purchased 481,250 shares of Series D Preferred Stock from the Company at a price of $8.00 per share for aggregate gross proceeds to the Company of $3.85 million (the "First Closing"). The Purchase Agreement also contemplates that Mr. Lazar will separately purchase and acquire 268,750 shares of Series E Preferred Stock as soon as practicable after the Company receives the Conversion Approval (as defined below) at a price of $8.00 per share for aggregate gross proceeds of $2.15 million (the "Final Closing"), subject to the satisfaction of certain conditions to closing as provided in the Purchase Agreement. Pursuant to the Purchase Agreement, the net proceeds of the Investment will be used for the Company's operations, including for general corporate and working capital purposes, for expenses related to the Investment and to satisfy certain agreed upon Company obligations. Additionally, after the Final Closing and subject to approval by the Board, the Company plans to use the net proceeds from the Investment to pursue a strategic transaction that would involve an investment and/or acquisition of an operating going concern and solvent company (the "Post-Investment Transaction"). In connection with the Investment (and as further detailed in Item 5.02 of this Current Report on Form 8-K below), the Board appointed Mr. Lazar as a director immediately prior to the First Closing and as Chief Executive Officer upon the effectiveness of the First Closing, with the Company's former Chief Executive Officer, Justin Hall, continuing with the Company as its Vice President of Business Development, General Counsel and Corporate Secretary.

As a result of receiving the proceeds from the Investment, the Purchase Agreement contemplates the Company declaring a special dividend to stockholders after having entered into the Purchase Agreement (the "Special Dividend"). Pursuant to the Purchase Agreement, the Company will segregate into a separate bank account an amount comprised of the Company's cash as set forth in the Purchase Agreement (the "Aggregate Cash Distribution Amount"). The Company expects to utilize up to the full amount of the Aggregate Cash Distribution Amount for the Special Dividend and expects to declare the Special Dividend in the fourth quarter of 2025. The Aggregate Cash Distribution Amount and matters relating to the Special Dividend, including the amount of the Special Dividend to be segregated into a separate bank account, will be under the direction and control of an independent Special Transaction Committee of the Board, which committee does not include Mr. Lazar or Mr. Hall among its members. Pursuant to the Purchase Agreement, the Series D Preferred Stock or Series E Preferred Stock will not be converted by Mr. Lazar until after the Special Dividend has been declared and paid to Company stockholders.

<u>Securities Purchase Agreement</u>

The Purchase Agreement entered into by the Company and Mr. Lazar contains customary representations, warranties, and covenants of the Company and Mr. Lazar, as well as indemnification rights, and other obligations of the parties.

The shares of Series D Preferred Stock issued at the First Closing, upon conversion, will represent approximately 61% of the Company's issued and outstanding Common Stock on a fully diluted basis, and the Series E Preferred Stock to be issued, upon conversion, will represent approximately 34% of the Company's issued and outstanding Common Stock on a fully diluted basis as of the Final Closing, or collectively approximately 95% in the aggregate (based on the number of shares of Common Stock anticipated to be outstanding as of the Final Closing). Since the Common Stock is currently listed on the NYSE American, LLC ("NYSE American"), the Company is required to comply with the continued listing rules of the NYSE American Company Guide (the "Company Guide"), and among these requirements are Section 713(a) and (b) of the Company Guide. Section 713(a) of the Company Guide requires stockholder approval in connection with any transaction, other than a public offering, involving the sale, issuance, or potential issuance, of common stock or securities convertible into common stock, equal to 20.0% or more of presently outstanding stock for less than the greater of book or market value. Section 713(b) of the Company Guide requires stockholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into, or exercisable for, common stock) when the issuance or potential issuance of additional shares may result in a change of control of the issuer. As a result of the significant number of shares of Common Stock that may be issued upon the future conversion of the Series D Preferred Stock and Series E Preferred Stock compared to the currently issued and outstanding shares of Common Stock as provided above, the Company will be required to obtain stockholder approval in accordance with the Company Guide Rule 713(a) and Rule 713(b) for Mr. Lazar to be able to convert the Series D Preferred Stock and the Series E Preferred Stock (the "Conversion Approval"). Each share of Series D Preferred Stock is convertible into 160 shares of Common Stock (or an aggregate of 77.0 million shares of Common Stock), and each share of Series E Preferred Stock will be convertible into 160 shares of Common Stock (or an aggregate of 43.0 million shares of Common Stock); provided that, in no event will the Series D Preferred Stock or Series E Preferred Stock be convertible into shares of Common Stock if such conversion would result in Mr. Lazar or his transferees, or affiliates, or any other persons acting as a group together with Mr. Lazar exceeding the "Share Issuance Limitation" prior to the date of Conversion Approval. The "Share Issuance Limitation" means the lesser of either (i) 19.99% of the outstanding Common Stock as of the date of the Purchase Agreement, which percentage shall take into account any shares then owned by such holder and any of their affiliates or (ii) the maximum percentage of the number of shares of Common Stock issuable upon conversion of the Preferred Stock that can be issued to Mr. Lazar without requiring a vote of the Company's stockholders under the rules and regulations of the NYSE American.

Pursuant to the Purchase Agreement, the Company agrees to use its best efforts to hold the Company's 2025 Annual Meeting of Stockholders (the "Annual Meeting") early in the fourth quarter of 2025 for the purpose of obtaining the Conversion Approval, as well as obtaining stockholder approval of (i) an increase in the Company's authorized shares of Common Stock to a maximum of 300 million shares, (ii) an increase in the Company's authorized shares of preferred stock to a maximum of 10 million shares, (iii) the election of Company directors to the Board, including the Initial Nominee (as defined below) that is nominated by Mr. Lazar, as further summarized below, (iv) an increase in shares available under the Company's 2017 Omnibus Incentive Plan to up to one (1) million shares, (v) the issuance of the Equity Consideration (as discussed and defined below) to the Resigning Non-Employee Directors (as defined below) as contemplated by the Release Agreements (as discussed and defined below) (the "Equity Consideration Approval") and (vi) a reverse stock split of the Common Stock in the range of not less than 1-for-2 and not more than 1-for-10, with the specific ratio to be determined by, and the implementation to be in the sole and absolute discretion of, the Board (collectively, the "Stockholder Meeting Proposals"). To the extent that the Conversion Approval is not obtained, then the Company will be required to use its reasonable best efforts to call another stockholder meeting within seventy (70) days of the date of the Annual Meeting (the "Second Meeting"). If the Conversion Approval is not received at the Second Meeting, the Company agrees to issue to Mr. Lazar, in a private placement transaction, up to 19.99% of the Common Stock outstanding as of the date of the Purchase Agreement, at a price per share equal to the closing stock price of the Common Stock on the day of the Second Meeting plus $0.02, provided, that the number of shares of Common Stock that Mr. Lazar will be entitled to purchase shall be automatically reduced to a number of shares of Common Stock such that Mr. Lazar, together with his affiliates, will not own, beneficially or otherwise, shares of Common Stock in excess of 19.99% of the Common Stock outstanding as of the date of the Purchase Agreement. If Mr. Lazar acquires 19.99% of outstanding shares of Common Stock in aggregate following this private placement of Common Stock, then (1) he will have reached the Share Issuance Limitation and will not be entitled to convert shares of Series D Preferred Stock into Common Stock until after Conversion Approval has been received and (2) for avoidance of doubt, the dilution protections applicable to the Series D Preferred Stock and the Series E Preferred Stock will not be applicable to such transaction (as further discussed below).

The consummation of the First Closing on August 19, 2025 was subject to the satisfaction of customary closing conditions, including the accuracy of the representations and warranties in the Purchase Agreement and the delivery of certain transaction documents, including the Series F Agreements (as defined and described below), the Voting Agreement (as defined and described below), as well as the Hall Employment Agreement, the Law Employment Agreement and the Release Agreements (each as defined and described in Item 5.02 of this Current Report on Form 8-K below). In addition to Mr. Lazar being appointed as a director and Chief Executive Officer of the Company in connection with the Investment, pursuant to the Purchase Agreement, Mr. Lazar will have certain one-time contractual rights involving the Board. These rights include: (i) a one-time contractual right to recommend to the Company one (1) individual (the "Initial Nominee"), to be nominated for election at the Annual Meeting to serve as a director on the Board, provided that at the time this right is exercised, Mr. Lazar continues to own his shares of Series D Preferred Stock; (ii) subject to the Conversion Approval and the Final Closing occurring, a one-time contractual right to nominate up to three (3) individuals (the "Additional Purchaser Nominees") to be qualified (including satisfying director "independence" requirements under the Company Guide) and appointed to serve as directors on the Board after the resignation of the current directors (other than the Continuing Director (as defined below)), following the Conversion Approval, the Equity Consideration Approval and the Final Closing occurring, as provided in such resigning director's Release Agreements; and (iii) subject to the Conversion Approval and the Final Closing occurring, a one-time contractual right to be appointed as the Chair of the Board. The "Continuing Director" as contemplated above shall be a currently serving director on the Board who satisfies the "independence" requirements as set forth in the Company Guide and under the federal securities laws, who is currently contemplated by the Company to be Yenyou (Jeff) Zheng, Ph.D. Pursuant to the Purchase Agreement, when exercising his one-time right to appoint Additional Purchaser Nominees as provided above, Mr. Lazar will be entitled to nominate up to three (3) Additional Purchaser Nominees to the Board based on his beneficial ownership of Common Stock (including through his ownership of Preferred Stock convertible into Common Stock) at the time of such nomination as follows: (i) one (1) Additional Purchaser Nominee when Mr. Lazar beneficially owns 20% but less than 40% of the outstanding Common Stock; (ii) two (2) Additional Purchaser Nominees when Mr. Lazar beneficially owns at least 40% of the outstanding Common Stock but less than 60% of the outstanding Common Stock; and (iii) three (3) Additional Purchaser Nominees when Mr. Lazar beneficially owns 60% or more of the outstanding Common Stock.

The consummation of the Final Closing by the Company and Mr. Lazar is subject to the satisfaction or waiver of, among other customary closing conditions, the Company's receipt of the Conversion Approval, the accuracy of the representations and warranties of each of the parties in the Purchase Agreement, the compliance by the parties with the covenants in the Purchase Agreement, and no permanent suspension or other trading suspension for more than three consecutive trading days of the Common Stock by the Securities Exchange Commission (the "SEC"), NYSE American or as reported by Bloomberg L.P.

Pursuant to the Purchase Agreement, Mr. Lazar has the right to assign and transfer the Series D Preferred Stock, the Series E Preferred Stock and the Conversion Shares and/or his right to acquire such securities (collectively, the "Securities Purchase Rights"), or the option to sell the Securities Purchase Rights, subject to Mr. Lazar and the transferee satisfying certain requirements pursuant to the Purchase Agreement.

The Company and Mr. Lazar agree to be bound by certain covenants pursuant to the Purchase Agreement, which include:

● The Company agrees to maintain a reserve of Common Stock from its duly authorized shares in order to complete the Investment and related transactions pursuant to the Purchase Agreement, except to the extent limited by the Company's authorized shares of Common Stock.

● The Company agrees that until the Annual Meeting, without Mr. Lazar's consent which shall not be unreasonably withheld, conditioned or delayed, the Company will not, except as contemplated by the Purchase Agreement: (i) change the number of directors constituting the Board from eight (8) or fill any vacancy on the Board; (ii) change the nature of the Company's operations; (iii) incur any debt outside of the ordinary course of business; (iv) guarantee any obligation of any third party; (v) issue any capital stock or Common Stock equivalent, other than pursuant to certain limited exceptions such as those related to the Company's 2017 Omnibus Plan; or (vi) amend its certificate of incorporation or bylaws.

● Mr. Lazar agrees to ensure the Company will have sufficient capital to identify, conduct due diligence and complete a Post-Investment Transaction in a timely manner and fund operations and pursue the growth opportunity and business strategy of a target company for at least twelve (12) months after completing a Post-Investment Transaction (the "Post-Investment Available Capital"). Further, after both the First Closing and the Final Closing, Mr. Lazar has agreed that the Company will maintain a cash balance sufficient to fund the Minimum Company Operating Capital (generally at least three (3) months of the Company's operations), the Post-Investment Available Capital and the Other Company Liabilities (as defined in the Purchase Agreement) or that he, or other institutional investors known to him, will otherwise provide the necessary additional cash through private placement investments on commercially reasonable terms.

● Mr. Lazar agrees, upon receipt of written notice from the Company that the Remaining Warrant Holders (as defined below) have exercised their right to redeem the Series F Preferred Stock (as defined below) in exchange for a cash payment equivalent to the Series F Redemption Amount, to cause the Company to pay the full amount of such payment (the "Series F Redemption Amount"), including through the proceeds of the Investment.

● Mr. Lazar agrees that he will not offer, sell, dispose of, or otherwise transfer the Series D Preferred Stock, the Series E Preferred Stock or the Conversion Shares to a U.S. person within six (6) months from the date of purchase, subject to certain exceptions (including the Securities Purchase Rights), or engage in any hedging transactions in compliance with Regulation S. Additionally, prior to the First Closing, the Board unanimously adopted resolutions exempting Mr. Lazar's acquisition of the Series D Preferred Stock, Series E Preferred Stock and the Conversion Shares from Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), pursuant to Rule 16b-3 of the Exchange Act.

The Company also granted Mr. Lazar a right to participate in subsequent financing transactions where the Company issues Common Stock or Common Stock equivalents for cash consideration, indebtedness or a combination thereof until the earlier of closing a Post-Investment Transaction or February 19, 2026 (i.e. the six (6) month anniversary of the First Closing), in an amount up to 25% of the subsequent financing transaction or a lesser amount to the extent that Mr. Lazar no longer holds at least 25% of the issued and outstanding shares of Common Stock, including on an as converted basis.

<u>Warrant Holder Agreements</u>

On August 19, 2025, simultaneous with the First Closing, the Company entered into Warrant Exchange Agreements (collectively, the "Series F Agreements") with each of Anson Investments Master Fund LP, Hudson Bay Capital Management LP and Armistice Capital, LLC, as the three largest remaining holders (collectively, the "Remaining Warrant Holders") of the Company's Series F-1 Common Stock warrants ("Series F Warrants"). The Series F Agreements provide for the irrevocable surrender and cancellation by each of the Remaining Warrant Holders of all of their respective Series F Warrants, as well as the additional respective Common Stock purchase warrants that each Remaining Warrant Holder beneficially owns, if any, in exchange for (i) the Company issuing an aggregate of 1,986,565 shares of a new series of Series F voting retractable preferred stock, par value $0.01 (the "Series F Preferred Stock"), to the Remaining Warrant Holders and (ii) a cash payment of $175,000 to each of the Remaining Warrant Holders. The Series F Agreements also include a voting commitment by such Remaining Warrant Holders to vote their shares of Series F Preferred Stock at the Annual Meeting within seven (7) days of the Company filing a definitive proxy statement, as further discussed below. Additionally, the Series F Agreements include a standstill provision pursuant to which the Remaining Warrant Holders will not initiate any claims against the Company, including claims related to the transactions contemplated by the Purchase Agreement and the Special Dividend. The Warrant Exchange Agreements also include a "most favored nations" provision that would increase the amount paid to the Remaining Warrant Holders if, after the effective date of the Warrant Exchange Agreement, another holder of the Company's Common Stock purchase warrants receives a higher amount per underlying warrant; except that this provision shall not apply to (i) settlements with retail investor warrant holders that (1) individually is less than or equal to six and thirty hundredths percent (6.30%) of a Remaining Warrant Holder's total warrants outstanding or (2) in the aggregate is less than or equal to twelve and seventy hundredths percent (12.70%) of a Remaining Warrant Holder's total warrants outstanding shall not trigger any repricing or (ii) prior warrant settlements by the Company.

The Series F Preferred Stock shall have the powers, preferences, rights, qualifications, limitations and restrictions as set forth in the Certificate of Designation of Preferences, Rights and Limitations for the Series F Voting Retractable Preferred Stock (the "Series F Certificate of Designation"). Among these rights (as further described below) includes each share of Series F Preferred Stock having a right to vote equivalent to approximately 0.424 shares of Common Stock, or in the aggregate the right to vote 842,829 shares of Common Stock, which represents 14.47% of the currently outstanding shares of Common Stock. The Series F Agreements provide for the Remaining Warrant Holders to vote their Series F Preferred Stock at the Annual Meeting in favor of the Stockholder Meeting Proposals, including the Conversion Approval. Additionally, as further detailed below, the terms of the Series F Preferred Stock provide each holder with the right to require the Company to retire their shares of Series F Preferred Stock and convertible securities held by such holder beginning after the earlier of (i) the Stockholder Approval (as defined in the Purchase Agreement) and (ii) December 31, 2025 for an amount of $175,000 to each Remaining Warrant Holder, or an aggregate of $525,000 for all shares of Series F Preferred Stock and convertible securities held by such holders.

<u>Description of Voting Agreement</u>

In connection with the First Closing of the Investment, on August 19, 2025, the Company and Mr. Lazar entered into a voting agreement (the "Voting Agreement") with a stockholder of the Company owning approximately 17.54% of the Company's outstanding Common Stock as of June 4, 2025, Jad Fakhry, together with his controlled entities Poplar Point Capital Management LLC, a Delaware limited liability company, Poplar Point Capital Partners LP, a Delaware limited partnership, and Poplar Point Capital GP LLC, a Delaware limited liability company (together, the "Poplar Entities"). The Voting Agreement was entered into and became effective upon the execution and effectiveness of the Purchase Agreement and will have a two (2) year term. In connection with the Poplar Entities entering into the Voting Agreement, the Company shall use commercially reasonable efforts for the contemplated Special Dividend to equal or exceed $0.80 per share (prior to any stock split, share consolidation, recapitalization or similar transaction). Pursuant to the terms of the Voting Agreement, the Poplar Entities have agreed to (1) vote all of their shares of Common Stock at the Annual Meeting in favor of the proposals recommended by the Board in order to facilitate the Investment (the "Meeting Proposals"), (2) the appointment of the Company as an irrevocable proxy for the Poplar Entities for the duration of the Voting Agreement, and (3) the ability of the Company to appoint a successor proxy for the Poplar Entities, in the event the Company is unable or unwilling to serve as the proxy, and in return, the Poplar Entities will benefit from the Company completing the Investment. The Voting Agreement provides for, among other things, a standstill provision relating to the Poplar Entities that ensures they will (i) not effect, offer or propose to purchase any additional securities or assets of the Company (including derivative rights), engage in any tender, merger, recapitalization, liquidation, or other business combination transaction, solicit proxies or otherwise act to control or influence the management of the Board, (ii) not take any action (or enter into any discussions) that may force the Company to make a public announcement of the matters set forth in (i) above, (iii) not request that the Company (or directors, management, employees or agents) amend or waive any provision of the standstill and (iv) not dispose of any shares of the Company until (1) the Poplar Entities have voted their shares of Common Stock at the Annual Meeting in favor of the Meeting Proposals and (2) such proposals at the Annual Meeting have passed. Notwithstanding the standstill provision, the Poplar Entities can make proposals to the Company's Board or special committee of the same, the Chairman, and/or the Chief Executive Officer of the Company on a confidential, non-public basis for each of (a) the pursuit of a proposed transaction between the Company, Mr. Lazar and the Poplar Entities, so long as the Company would not reasonably be expected to publicly disclose such a proposal and (b) a waiver of the standstill provision.

<u>Description of Series D Preferred Stock and Series E Preferred Stock</u>

The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series D Preferred Stock and the Series E Preferred Stock to be issued in the Investment are set forth in the Company's Certificate of Designation of Preferences, Rights and Limitations of the Series D Non-Voting Convertible Preferred Stock (the "Series D Certificate of Designation") and the form of Certificate of Designation of Preferences, Rights and Limitations of the Series E Non-Voting Convertible Preferred Stock (the "Series E Certificate of Designation"). As provided in Item 5.03 below, the Series D Certificate of Designation was filed with the Delaware Secretary of State on August 19, 2025 and is attached as Exhibit 3.1 to this Current Report on Form 8-K. The Series E Certificate of Designation will be filed with the Delaware Secretary of State prior to the Final Closing occurring, with the form of such Series E Certificate of Designation attached as Exhibit 3.2 to this Current Report on Form 8-K. As summarized below, the powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series D Preferred Stock and the Series E Preferred Stock are substantially similar.

*Voting Rights*

The holders of the shares of the Series D Preferred Stock and Series E Preferred Stock generally will have no voting rights, except as required by law, with the exception that the consent of the majority of holders of the outstanding Series D Preferred Stock or Series E Preferred Stock, as applicable, would be required to: (i) alter or change adversely the powers, preferences or rights given to the Series D Preferred Stock or Series E Preferred Stock or alter or amend the Series D Certificate of Designation or Series E Certificate of Designation, as applicable; (ii) amend the Company's certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock or Series E Preferred Stock, as applicable; (iii) increase the number of authorized shares of Series D Preferred Stock or Series E Preferred Stock, as applicable; and (iv) enter into any agreement with respect to any of the foregoing.

*Dividends*

The holders of the Series D Preferred Stock and the Series E Preferred Stock will be entitled to receive, and the Company will be required to pay, dividends on shares of the Series D Preferred Stock and the Series E Preferred Stock equal (on an as if converted to Common Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock; <u>provided</u>, <u>however</u>, that no dividends will be paid to the holders of the Series D Preferred Stock or the Series E Preferred Stock prior to the declaration and payment of the Special Divided and the Company receiving the Conversion Approval.

*Conversion and Limitations*

Pursuant to the Series D Certificate of Designation and the Series E Certificate of Designation, the Series D Preferred Stock and the Series E Preferred Stock are each generally subject to the Share Issuance Limitation.

After issuance by the Company, (i) each share of Series D Preferred Stock will be convertible into 160 shares of Common Stock per share of Series D Preferred Stock, or an aggregate of 77.0 million shares of Common Stock, and (ii) each share of Series E Preferred Stock will be convertible into 160 shares of Common Stock, or an aggregate of 43.0 million shares of Common Stock (as may be adjusted from time to time as a result of certain corporate actions such as a reverse stock split), in each case, subject to the Share Issuance Limitation and receipt of the Conversion Approval. Thereafter, on the third business day after the Company receives the Conversion Approval, each outstanding share of the Series D Preferred Stock will automatically convert into 160 shares of Common Stock (or an aggregate of up to 77.0 million shares of Common Stock), which conversion, as a result of having received the Conversion Approval, shall not be subject to the Share Issuance Limitation. Effective on the 30<sup>th</sup> business day after Conversion Approval is received and the issuance of the Series E Preferred Stock, each outstanding share of the Series E Preferred Stock will automatically convert into 160 shares of Common Stock (or an aggregate of up to 43.0 million shares of Common Stock), which conversion, as a result of having received the Conversion Approval, shall also not be subject to the Share Issuance Limitation.

*Dilution Protection*

In the event the Company, at any time that any shares of Series D Preferred Stock or Series E Preferred Stock are outstanding: (i) pays a dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, a dividend or other distribution shall not include any shares of Common Stock issued by the Company upon conversion of the Series D Preferred Stock and Series E Preferred Stock); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the number of shares of Common Stock underlying each share of Series D Preferred Stock and Series E Preferred Stock shall be adjusted as provided in the respective Series D Certificate of Designation or Series E Certificate of Designation. Any adjustment made pursuant to the respective Series D Certificate of Designation or Series E Certificate of Designation shall become effective immediately after the effective date of the applicable event described in subsections (i) through (iv) above.

In addition, if the Company issues shares of Common Stock (or other shares of capital stock or other securities convertible into Common Stock) at any time while the Series D Preferred Stock and Series E Preferred Stock are outstanding and the consideration per share payable to the Company reflects a pre-money imputed equity value of the Company less than $10.0 million, then the stated value of the Series D Preferred Stock or the Series E Preferred Stock will be reduced to such lower price, which is referred to as a "full-ratchet" anti-dilution protection. This full-ratchet anti-dilution protection is subject to: (i) the reduced stated value only being reduced to the extent such reduction will not require further stockholder approval and (ii) it not being applicable to any Post-Investment Transaction.

Such dilution protections are not applicable to the Investment and other transactions pursuant to the Purchase Agreement or to any Post-Investment Transaction.

*Rank*

Based upon the rights and preferences as provided in the Series D Certificate of Designation and the Series E Certificate of Designation, each of the Series D Preferred Stock and the Series E Preferred Stock, respectively, will rank as to dividends or distributions of assets upon the Company's liquidation, dissolution or winding up, whether voluntarily or involuntarily, as follows:

● on par with the Series D Preferred Stock and the Series E Preferred Stock, as applicable, and any class or series of capital stock hereafter created specifically ranking by its terms to be on parity with the Series D Preferred Stock and the Series E Preferred Stock, as applicable;

● senior to the Common Stock and any class or series of the Company's capital stock that is currently or hereafter created specifically ranking by its terms junior to the Series D Preferred Stock and the Series E Preferred Stock; and

● junior to any class or series of the Company's capital stock hereafter created specifically ranking by its terms senior to the Series D Preferred Stock and the Series E Preferred Stock.

*Liquidation Preference*

In the event of the Company's liquidation, dissolution or winding up, the holders of Series D Preferred Stock and Series E Preferred Stock will be entitled to receive an amount equal to $8.00 per share, the stated value of the Series D Preferred Stock and the Series E Preferred Stock (as may be increased from time to time pursuant to the terms of the Series D Certificate of Designation or Series E Certificate of Designation, as applicable) plus any declared but unpaid dividends that such holders are entitled to at such time. Next, the remaining assets of the Company will be distributed to the holders of Common Stock and any other junior securities until such holders receive a return of their capital originally contributed. Following this distribution, any remaining assets will be distributed to all holders of Common Stock, junior securities, Series D Preferred Stock, Series E Preferred Stock and any other parity securities pro rata based on the number of shares held on an as-converted basis. Pursuant to the terms of the Series D Certificate of Designation and the Series E Certificate of Designation, a liquidation event includes an acquisition or merger of the Company (not including transactions where stockholders maintain 50% or more voting power) or a sale of substantially all of the assets of the Company. The Series D Certificate of Designation and Series E Certificate of Designation each expressly provide that a liquidation event will not be triggered by a Post-Investment Transaction, or any other transaction contemplated by the Purchase Agreement.

<u>Description of Series F Preferred Stock</u>

The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series F Preferred Stock to be issued pursuant to the Series F Agreements are set forth in the Series F Certificate of Designation. As provided in Item 5.03 below, the Series F Certificate of Designation was filed with the Delaware Secretary of State on August 19, 2025.

*Voting Rights*

The holders of shares of the Series F Preferred Stock will have voting rights on all matters voted upon by the holders of Common Stock with each share of Series F Preferred Stock representing the voting equivalent of approximately 0.424 shares of Common Stock (the "Per Share Voting Equivalent").

*Dividends*

The holders of the Series F Preferred Stock will not be entitled to receive any dividends on the shares of Series F Preferred Stock or based on the Per Share Voting Equivalent.

*Conversion and Retirement*

No shares of Series F Preferred Stock will be convertible into shares of Common Stock or any other equity security of the Company.

Beginning on the earlier of (i) Stockholder Approval (as defined in the Purchase Agreement) or (ii) December 31, 2025, each holder of the Series F Preferred Stock may request that the Company retire (i.e., redeem) all of their shares of Series F Preferred Stock and convertible securities for $175,000 or an aggregate of $525,000 for all shares of Series F Preferred Stock and convertible securities (the "Retirement Value"). To the extent any holder of Series F Preferred Stock does not request their Series F Preferred Stock be retired before December 31, 2025, the following business day, the Company may send notice and cause such Series F Preferred Stock and any convertible securities held by such holder to be retired by paying the Retirement Value. Any amount due to a holder of the Series F Preferred Stock pursuant to the Series F Certificate of Designation, including the amount to retire shares of Series F Preferred Stock, which is not paid by the Company when due shall result in a late charge at the rate of 15% per annum from the date such amount was due until the same is paid in full.

*Dilution Protection*

In the event the Company, at any time while any shares of the Series F Preferred Stock are outstanding: (i) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then the Per Share Voting Equivalent shall be adjusted as provided in the Series F Certificate of Designation. Any adjustment made pursuant to the Certificate of Designation shall become effective immediately after the effective date of the applicable event described in subsections (i) through (iv) above. The Series F Preferred Stock does not otherwise provide for any anti-dilution protection.

*Rank*

Based upon the rights and preferences as provided in the Series F Certificate of Designation, the Series F Preferred Stock will rank as to dividends or distributions of assets upon the Company's liquidation, dissolution or winding up, whether voluntarily or involuntarily, as follows:

● on par with the Common Stock;

● senior to any class or series of the Company's capital stock hereafter created specifically ranking by its terms junior to the Series F Preferred Stock; and

● junior to the Series D Preferred Stock, Series E Preferred Stock and any class or series of the Company's capital stock hereafter created specifically ranking by its terms senior to the Series F Preferred Stock.

*Liquidation Preference*

In the event of the Company's liquidation, dissolution or winding up, the holders of Series F Preferred Stock will be entitled to receive the same amount that a holder of Common Stock would receive if the Series F Preferred Stock were converted at a rate equal to the Per Share Voting Equivalent; provided, that the aggregate amount paid to the Series F Preferred Stock holders is limited to the Retirement Value.

\* \* \*

The representations, warranties and covenants contained in the Purchase Agreement and Series F Agreements were made only for purposes of such agreements as of a specific date and were solely for the benefit of the parties to such agreements. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreements instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the Purchase Agreement and Series F Agreements are incorporated herein by reference only to provide investors with information regarding the terms of such agreements, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company's periodic reports and other filings with the SEC.

The foregoing summaries of the material terms of the Purchase Agreement, the Series F Agreements (with each of the three Remaining Warrant Holders), the Voting Agreement, the Series D Certificate of Designation, the Series E Certificate of Designation and the Series F Certificate of Designation do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, which are filed as Exhibits 10.1, 10.2 through 10.4, 10.5, 3.1, 3.2 and 3.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

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

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The information disclosed in Item 1.01 of this Current Report on Form 8-K regarding the issuance of the Series D Preferred Stock, the Series E Preferred Stock and the Series F Preferred Stock, and the Investment and transactions pursuant to the Series F Agreements, is incorporated herein by reference. The Series D Preferred Stock and Series E Preferred Stock were sold without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and Regulation S promulgated under the Securities Act as sales to accredited investors and in reliance on similar exemptions under applicable state laws. The Series F Preferred Stock was issued without registration under the Securities Act, in reliance on an exemption from registration as provided by Section 3(a)(9) of the Securities Act, and in reliance on similar exemptions under applicable state laws. No form of general solicitation or general advertising was conducted by the Company in connection with the issuance. The Series D Preferred Stock and the Series E Preferred Stock, when and if issued at the Final Closing, shall contain (or will contain, where applicable) restrictive legends preventing the sale, transfer, or other disposition of such securities, unless registered under the Securities Act, or pursuant to an exemption therefrom. The disclosure contained in this Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company, and is made only as required under applicable rules for filing current reports with the SEC.

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|:---|:---|
| **Item 3.03** | **Material Modification to Rights of Security Holders.** |

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The information disclosed in Item 1.01 of this Current Report on Form 8-K regarding the Purchase Agreement, the Series F Agreements and the issuance of the Series D Preferred Stock, Series F Preferred Stock and the Conversion Shares, is incorporated herein by reference.

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|:---|:---|
| **Item 5.02** | **Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.** |

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(b) <u>Resignation of Justin Hall as Chief Executive Officer Effective Immediately; Resignation of the Board Directors to be Effective at the Annual Meeting</u> 

On August 19, 2025 and effective at the First Closing, Justin Hall voluntarily resigned as the Chief Executive Officer of the Company, though he will remain a named executive officer of the Company and serve as the Vice President of Business Development, General Counsel and Corporate Secretary of the Company (as further described in subpart (e) below) as well as a director serving on the Board.

Separately, pursuant to the Release Agreements (as defined and further described in subpart (e) below), Mr. Hall and each of the Resigning Non-Employee Directors, other than the Continuing Director, generally agreed to later resign from the Board to be effective at the Annual Meeting, except in the limited circumstances as described below.

(c) <u>Appointment of David Lazar as Chief Executive Officer, Tommy Law as Chief Financial Officer and Justin Hall as Vice President of Business Development, Effective Immediately</u> 

In connection with the Investment, on August 19, 2025 and simultaneous with the First Closing, (i) Mr. Lazar was appointed to serve as the Company's Chief Executive Officer, (ii) Mr. Hall was appointed to serve as the Company's Vice President of Business Development, General Counsel and Corporate Secretary and (iii) Mr. Law, currently the Company's Interim Chief Financial Officer and Treasurer, was appointed to serve as the Company's Chief Financial Officer and Treasurer.

There are no arrangements or understandings, other than the Purchase Agreement described in Item 1.01 above and the employment and severance arrangements described in subpart (e) below (as incorporated by reference herein), as applicable, between each of Mr. Lazar, Mr. Hall and Mr. Law and any other persons pursuant to which they were selected for such roles. There are also no family relationships among any of Mr. Lazar, Mr. Hall and Mr. Law and any director or executive officer of the Company. Other than Mr. Lazar's interest in the Investment described in Item 1.01 above and the employment and severance arrangements described in subpart (e) below (as incorporated by reference herein), Mr. Lazar, Mr. Hall and Mr. Law have no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Mr. Lazar, age 35, previously served as director on the board of directors of FiEE, Inc. (formerly Minim, Inc.) (NASDAQ: FIEE) where he also previously served as the Chief Executive Officer and Chief Financial Officer from December 2023 to February 2025. Mr. Lazar served as interim Chief Executive Officer and principal financial officer of Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC), from January 2, 2025 through February 26, 2025. Mr. Lazar served as the Chief Executive Officer of Titan Pharmaceuticals Inc. listed on Nasdaq (NASDAQ: TTNP) from August 2022 to April 2024, where he also served as a director and board chairman from August 2022 until October 2023. Mr. Lazar also served as the chief executive officer and chairman of the board of directors of OpGen, Inc. (OTC: OPGN) from March 2024 to August 2024. Mr. Lazar also served as the president and a member of the board of directors of LQR House Inc. (NASDAQ: YHC) from October 2024 to April 2025.

Mr. Hall, age 47, served as the Company's Chief Executive Officer since June 2019 until his resignation effective at the First Closing. Mr. Hall served as the Company's Interim President and Chief Executive Officer from March 2019 to June 2019 and as the Company's Senior Vice President and General Counsel beginning in December 2015. Prior to this, he served as the Company's lead in-house counsel beginning in February 2013. Prior to joining the Company, Mr. Hall worked as Corporate Counsel at Accuray Incorporated, a radiation oncology company, which he joined in October 2006, where he provided substantive legal advice on a broad range of complex legal matters with a focus on employment, corporate compliance, and corporate governance. Mr. Hall's prior experience also includes serving as an investment advisor at Sagemark Consulting from 2000 to 2006, and a stockbroker at First Security Van Kasper from 1998 to 2001. Mr. Hall received a B.A. in Business Administration and Management from the University of California, San Diego, and a J.D. from the University of San Diego, School of Law.

Mr. Law, age 39, prior to his appointment as Chief Financial Officer and Treasurer of the Company, served as the Company's Interim Chief Financial Officer and Treasurer since February 2023. Prior to that, he served the Company since December 2019 in a variety of positions, most recently as the Corporate Controller since September 2022. As the Corporate Controller, Mr. Law was responsible for quarterly filings with the SEC, as well as managing the periodic financial close process. Prior to serving as the Corporate Controller, Mr. Law served the Company as an Assistant Controller (April 2022 to September 2022), Accounting Manager (June 2020 to April 2022) and Senior Accountant (December 2019 to June 2020). Prior to joining the Company, Mr. Law was a Senior Accountant at KP LLC, a marketing solutions company, from January 2017 to December 2019. Previously, he served as Accounting Manager at Hitachi Solutions America, Ltd., an information technology company, from 2012 to 2015. Mr. Law received a B.S. in Business Administration, Accounting from the San Jose State University.

(d) <u>Appointment of David Lazar to the Board of Directors</u> 

On August 19, 2025, the Board increased the size of the Board to eight (8) directors and appointed Mr. Lazar to fill the new vacancy on the Board resulting from the increased Board size. On August 19, 2025, immediately prior to the First Closing, Mr. Lazar was appointed to serve as a Class III director until the Annual Meeting, subject to his prior death, resignation or removal from office as provided by law. Mr. Lazar's business experience and background is provided in subpart (c) above which is incorporated by reference herein.

Mr. Lazar was appointed to the Board in connection with the Investment and is a party to the Purchase Agreement related to the Investment. Mr. Lazar also has certain one-time contractual rights that provide for (i) his nomination (or for another individuals nomination as the Initial Nominee) to be elected at the Annual Meeting, (ii) his later appointment of Additional Purchaser Nominees and (iii) him to serve as the Chair of the Board, subject to certain conditions, as described in Item 1.01 above, which is incorporated by reference herein. There is no other arrangement or understanding between Mr. Lazar and any other person pursuant to which he was appointed as a director of the Company. As a result of Mr. Lazar also serving as Chief Executive Officer of the Company, the Board does not deem Mr. Lazar to be independent. As a result, Mr. Lazar will not participate in the Company's Non-Employee Director Compensation Program or serve on any of the Board's committees, including the newly established Special Transaction Committee of the Board.

(e) <u>Employment Agreements, Severance Payment, Signing Bonus and Settlement and Release Agreements</u> 

Mr. Lazar is not currently party to an employment agreement with the Company and will not receive any compensation for assuming and serving in the role of Chief Executive Officer.

*Amended and Restated Employment Agreement with Justin Hall*

On August 19, 2025, the Company entered into an amended and restated employment agreement with Mr. Hall for his service as the Company's Vice President of Business Development, General Counsel and Corporate Secretary (the "Hall Employment Agreement"), which entirely amends and restates the Employment Agreement, dated January 31, 2020, as amended, between the Company and Mr. Hall (the "Prior Hall Employment Agreement").

The Hall Employment Agreement provides for employment with a term commencing on the date of the First Closing and ending on October 31, 2025 (the "Hall Employment Term"). The Hall Employment Agreement provides for an annual base salary of one hundred seventy-five thousand dollars ($175,000) (the "Hall Base Salary").

The Hall Employment Agreement is guaranteed through the Hall Employment Term. If the Company terminates Mr. Hall prior to the end of the Hall Employment Term, the Company is required to pay the Hall Base Salary from the date of termination through the end of the Hall Employment Term (the "Hall Severance Amount"). The Hall Severance Amount will be paid in a lump sum within sixty (60) days following the executive's separation from service.

*Employment Agreement with Tommy Law & Signing Bonus*

On August 19, 2025, the Company entered into an employment agreement with Mr. Law for his service as the Company's Chief Financial Officer (the "Law Employment Agreement"). Mr. Law did not previously have an employment agreement in place. As a result of Mr. Law's appointment as the Chief Financial Officer and Treasurer of the Company, Mr. Law also received a one-time signing bonus of $89,250, to be paid in cash, separate from the terms of the Law Employment Agreement.

The Law Employment Agreement provides for at-will employment with a term commencing on the date of the First Closing and continuing until the first anniversary of the date of commencement. The Law Employment Agreement provides for an annual base salary of one hundred seventy thousand dollars ($170,000) (the "Law Base Salary"). In addition, Mr. Law shall be eligible for any bonus plan that is deemed appropriate by the Board. The bonus amount shall be determined by the Board, in its sole discretion, based upon, among others, the following factors: (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to the executive as set by the Company's Chief Executive Officer and/or the Board, before the end of the first calendar quarter; (ii) the evaluation of the executive by the Company's Chief Executive Officer and/or the Board; (iii) the Company's financial, product and expected progress; and (iv) other pertinent matters relating to the Company's business and valuation. Any bonus will be payable within two and a half (2 ½) months following the end of the year for which the bonus was earned. The Compensation Committee of the Board of Directors shall have the sole discretion to pay any or all of the annual bonus in the form of equity compensation. Any such equity compensation shall be issued from the Company's 2017 Omnibus Incentive Plan and shall be fully vested upon payment.

Further, Mr. Law is entitled to a retention bonus of $170,000 to the extent he remains employed through the Company's filing of its quarterly report on Form 10-Q with the SEC for the quarter ended September 30, 2025 (the "Retention Date") and he has not otherwise resigned or been terminated for cause (as defined in the Law Employment Agreement) prior to the Retention Date.

In the event the Company terminates Mr. Law without cause (including death, disability or for constructive termination), or his employment term otherwise expires at the end of the term, he shall be entitled to an amount equal to Law's Base Salary in effect on the date of separation from service (the "Law Severance Amount"). The Law Severance Amount will be paid in a lump sum within sixty (60) days following the executive's separation from service. The Law Severance Amount shall be in addition to Mr. Law's earned wages and other compensation (including reimbursements of his outstanding expenses and unused vacation) through the date his employment is terminated from the Company as provided in the preceding sentence. In the event the Company terminates Mr. Law for cause, he shall be entitled to any earned but unpaid wages or other compensation (including reimbursements of his outstanding expenses and unused vacation) earned through the termination date.

Moreover, all outstanding equity awards held by Mr. Law will be subject to full accelerated vesting on the date of termination without cause or at the expiration of the employment term, and the exercise period shall be extended to three (3) years from the date of termination. In order to terminate Mr. Law for cause (or for Mr. Law to resign for constructive termination), the acting party shall give notice to the other party specifying the reason for termination and providing a period of thirty (30) days to cure the reason specified. If there is no cure within thirty (30) days or the notified party earlier refuses to effect the cure, the termination shall then be deemed effective.

*Settlement and Release Agreement with Mr. Hall and the Resigning Non-Employee Directors*

On August 19, 2025, the Company entered into a Settlement Agreement and General and Mutual Release (collectively, the "Release Agreements") with Mr. Hall and with five (5) of the six (6) non-employee directors serving on the Board (Paul E. Freiman, Julie Garlikov, Swan Sit, Mijia (Bob) Wu and Yongxiang (Sean) Zheng) (collectively, the "Resigning Non-Employee Directors"). The remaining non-employee director, Mr. Yenyou (Jeff) Zheng, will continue to serve on the Board of Directors as the Continuing Director and, therefore, he will not enter into a Release Agreement. The Release Agreements provide for (i) Mr. Hall and the Resigning Non-Employee Directors to generally release the Company from any claims, actions, or losses that such person may have against the Company and (ii) the Company to similarly release Mr. Hall and each of the Resigning Non-Employee Directors from any claims, action or losses that the Company may have against such person, provided that the Company shall remain obligated pursuant to the indemnification agreements with each person and to maintain D&O insurance coverage, or a D&O tail policy.

Pursuant to the Release Agreement with Mr. Hall, he agreed to resign from the Board effective on the date and at the time that each of the following have occurred: (i) the Conversion Approval; (ii) the Final Closing; and (iii) the Additional Purchaser Nominee(s) are qualified and appointed to serve on the Board. Mr. Hall further agreed to resign, and did resign, as the Company's Chief Executive Officer as of the First Closing (as described above). Under the terms of the Release Agreements with the Resigning Non-Employee Directors, these directors agreed to resign from the Board effective on the date and at the time that each of the following have occurred: (i) the Conversion Approval; (ii) the Final Closing; and (iii) the Additional Purchaser Nominee(s) are qualified and appointed to serve on the Board (the "Resignation Effective Date"); provided, however, such resignation is conditioned upon (A) the Special Dividend having already been declared and paid and (B) Conversion Approval and the Equity Consideration Approval having been received, the Final Closing having occurred and an Additional Purchaser Nominee having been qualified and being appointed to serve on the Board.

Pursuant to, and as consideration for, the Release Agreements with the Resigning Non-Employee Directors, each Resigning Non-Employee Director shall receive (1) a settlement payment of newly-issued shares of restricted Common Stock, with an aggregate value of $40,000 (determined based on the closing price of Common Stock on the trading day that immediately precedes the date of the Resignation Effective Date) to be issued on the date of the Resignation Effective Date (the "Equity Consideration"), plus (2) any accrued and unpaid director's fees. To the extent that the Equity Consideration Approval is not obtained and the Equity Consideration is not issued to the Resigning Non-Employee Director, then the Release Agreements with the Resigning Non-Employee Directors will terminate and be of no further force and effect. The Release Agreement with Mr. Hall provides for Mr. Hall to receive a cash settlement payment of $481,250 plus any unpaid wages and $8,778 in payments pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"). Further, Mr. Hall will receive a second cash settlement payment of $481,250 plus any unpaid wages and $8,778 in COBRA payments by October 31, 2025. Mr. Hall's payment amounts comprise his earned severance under the Prior Hall Employment Agreement.

\* \* \*

The foregoing descriptions of the Hall Employment Agreement, the Law Employment Agreement, the Release Agreement with Mr. Hall and the Release Agreements with each of the Resigning Non-Employee Directors do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, which are attached hereto as Exhibits 10.6, 10.7, 10.8 and 10.9, respectively, and incorporated by reference herein. Further, the incorporated description of the Investment and the Purchase Agreement in this Item 5.02 does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

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|:---|:---|
| **Item 5.03** | **Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.** |

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Before the First Closing described in Item 1.01 above, on August 19, 2025, the Company filed the Series D Certificate of Designation and the Series F Certificate of Designation with the Secretary of State of Delaware setting forth the powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series D Preferred Stock and the Series F Preferred Stock, respectively, both as summarized in Item 1.01 above with such summaries incorporated herein by reference. A copy of the Series D Certificate of Designation and the Series F Certificate of Designation are attached hereto as Exhibits 3.1 and 3.3, respectively, and are incorporated herein by reference.

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|:---|:---|
| **Item 8.01** | **Other Events.** |

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On August 19, 2025, the Company issued a press release announcing the Investment and related matters, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.

**Cautionary Language Concerning Forward-Looking Statements**

*This Current Report on Form 8-K, including exhibits, contains forward-looking statements within the meaning of the* "*safe harbor*" *provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. These forward-looking statements are based upon the Company and its management*'*s current expectations, assumptions, estimates, projections and beliefs. Such statements include, but are not limited to, statements regarding the Investment, the expected completion of the Final Closing, the Company*'*s financial condition including the financial impact of the Investment, the Special Dividend, the Company*'*s evaluation of other strategic transactions, including a Post-Investment Transaction, and related matters. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in, or implied by, these forward-looking statements. Other risks relating to the Company*'*s business, including risks that could cause results to differ materially from those projected in the forward-looking statements in this Current Report, are detailed in the Company*'*s latest Form 10-K, subsequent Forms 10-Q and/or Form 8-K filings with the SEC, especially under the heading* "*Risk Factors.*" *The forward-looking statements in this release speak only as of this date, and the Company disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.*

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

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(d) Exhibits

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|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Certificate of Designation of Preferences, Rights and Limitations of Series D Non-Voting Convertible Preferred Stock](novabay_ex3-1.htm) |
| 3.2\* | [Form of Certificate of Designation of Preferences, Rights and Limitations of Series E Non-Voting Convertible Preferred Stock](novabay_ex3-2.htm) |
| 3.3 | [Certificate of Designation of Preferences, Rights and Limitations of Series F Voting Retractable Preferred Stock](novabay_ex3-3.htm) |
| 10.1++ | [Securities Purchase Agreement, dated August 19, 2025, between the Company and David Lazar](novabay_ex10-1.htm) |
| 10.2 | [Warrant Exchange Agreement, dated August 19, 2025, between the Company and Anson Investments Master Fund LP](novabay_ex10-2.htm) |
| 10.3 | [Warrant Exchange Agreement, dated August 19, 2025, between the Company and Hudson Bay Capital Management LP](novabay_ex10-3.htm) |
| 10.4 | [Warrant Exchange Agreement, dated August 19, 2025, between the Company and Armistice Capital, LLC](novabay_ex10-4.htm) |
| 10.5++ | [Voting Agreement, dated August 19, 2025, between the Company and the Poplar Entities](novabay_ex10-5.htm) |
| 10.6++\*\*\* | [Amended and Restated Employment Agreement, dated August 19, 2025, between the Company and Mr. Hall](novabay_ex10-6.htm) |
| 10.7++\*\*\* | [Employment Agreement, dated August 19, 2025, between the Company and Mr. Law](novabay_ex10-7.htm) |
| 10.8\*\*\* | [Settlement Agreement and General and Mutual Release, dated August 19, 2025, between the Company and Mr. Hall](novabay_ex10-8.htm) |
| 10.9\*\*\* | [Form of Settlement Agreement and General and Mutual Release with the Resigning Non-Employee Directors](novabay_ex10-9.htm) |
| 99.1 | [Press Release, dated August 19, 2025](novabay_ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

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\* This document is not currently effective and will be entered into and become effective only in connection with the Final Closing being completed.

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|:---|:---|
| ++ | Certain schedules and exhibits were omitted as well as certain confidential portions of the agreements by means of marking such portions with brackets (due to such confidential portions not being material and being the type of information that the Company treats as private or confidential) pursuant to Item 601 of Regulation S-K promulgated by the SEC. The Company agrees to supplementally furnish a copy of any omitted schedule, exhibit or confidential portions to the SEC upon request. |

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\*\*\* Indicates a management contract or compensatory plan or arrangement.

**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.

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| | |
|:---|:---|
| **NovaBay Pharmaceuticals, Inc.** | **NovaBay Pharmaceuticals, Inc.** |
| By: | /s/ David E. Lazar |
|  | David E. Lazar |
|  | Chief Executive Officer |

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Dated: August 19, 2025

## Exhibit 3.1

**Exhibit 3.1**

**NOVABAY PHARMACEUTICALS, INC.**

**CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS**

**OF**

**SERIES D NON-VOTING CONVERTIBLE PREFERRED STOCK**

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Justin Hall, does hereby certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. He is the Chief Executive Officer, President and Secretary of NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Corporation</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Corporation is authorized to issue 5,000,000 shares of preferred stock, 15,000 of which have been issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. This Certificate of Designation of Preferences, Rights and Limitations of Series D Non-Voting Convertible Preferred Stock (the "<u>Certificate of Designation</u>") that includes the following resolutions have been approved and adopted by the board of directors of the Corporation (the "<u>Board of Directors</u>"):

WHEREAS, the Amended and Restated Certificate of Incorporation, as amended of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 5,000,000 shares, $0.01 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a new series of Corporation preferred stock titled "Series D Non-Voting Convertible Preferred Stock", which shall consist of up to 481,250 shares of the preferred stock, which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a new series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

**TERMS OF PREFERRED STOCK**

Section 1. <u>Definitions</u>. For the purposes hereof, the following terms shall have the following meanings:

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

"<u>Alternate Consideration</u>" shall have the meaning set forth in Section 7(d).

"<u>Attribution Parties</u>" shall have the meaning set forth in Section 6(d).

"<u>Automatic Conversion Date</u>" shall have the meaning set forth in Section 6(b).

"<u>Automatic Conversion</u>" shall have the meaning set forth in Section 6(b).

"<u>Business Day</u>" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"<u>Buy-In</u>" shall have the meaning set forth in Section 6(c)(iv).

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the Corporation's common stock, par value $0.01 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Common Stock Equivalents</u>" means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, 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, Common Stock.

"<u>Conversion Amount</u>" means the sum of the Stated Value at issue.

"<u>Conversion Date</u>" shall have the meaning set forth in Section 6(a).

"<u>Conversion Ratio</u>" shall have the meaning set forth in Section 6(a).

"<u>Conversion Shares</u>" means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.

"<u>Dilutive Issuance</u>" shall have the meaning set forth in Section 7(e)(i).

"<u>Distribution</u>" shall have the meaning set forth in Section 7(c).

"<u>DTC</u>" shall have the meaning set forth in Section 6(c)(i).

"<u>Exempt Issuance</u>" shall have the meaning set forth in Section 7(e)(iii).

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

"<u>First Closing</u>" shall have the meaning set forth in the Purchase Agreement.

"<u>Fundamental Transaction</u>" shall have the meaning set forth in Section 7(d).

"<u>Holder</u>" shall have the meaning set forth in Section 2.

"<u>Junior Securities</u>" means the Common Stock or other class or series of Corporation stock that ranks junior to the Preferred Stock.

"<u>Liquidation</u>" shall have the meaning set forth in Section 5(a).

"<u>New York Courts</u>" shall have the meaning set forth in Section 8(d).

"<u>Notice of Conversion</u>" shall have the meaning set forth in Section 6(a).

"<u>Original Issue Date</u>" means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.

"<u>Parity Securities</u>" means the Series E Preferred Stock and any other class or series of Corporation preferred stock issued on or after the date hereof that ranks by its terms to be on parity with the Preferred Stock.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Post-Investment Transaction</u>" means the strategic transaction that would involve an investment and/or acquisition of an operating going concern and solvent company in a timely manner as contemplated in and following the signing of the Purchase Agreement.

"<u>Preferred Stock</u>" shall have the meaning set forth in Section 2.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of August 19, 2025, among the Corporation and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Purchase Rights</u>" shall have the meaning set forth in Section 7(b).

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Share Delivery Date</u>" shall have the meaning set forth in Section 6(c).

"<u>Share Issuance Limitation</u>" shall have the meaning set forth in Section 6(d).

"<u>Special Dividend</u>" shall have the meaning set forth in the Purchase Agreement.

"<u>Standard Settlement Period</u>" shall have the meaning set forth in Section 6(c)(i).

"<u>Stated Value</u>" shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 7(e).

"<u>Stockholder Approval</u>" means all such approvals as may be required by the applicable rules and regulations of the NYSE American (or any successor entity) or under applicable law from the stockholders of the Corporation with respect to the conversion of all the Preferred Stock and issuance of the Conversion Shares to the Holder, including the Automatic Conversion of the Preferred Stock into Common Stock upon receipt of such approval.

"<u>Stockholders Meeting</u>" means the meeting of the stockholders of the Corporation in which Stockholder Approval is voted on as set forth in a proxy statement approved by the original Holder.

"<u>Successor Entity</u>" shall have the meaning set forth in Section 7(d).

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for business.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the New York Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market, (or any successors to any of the foregoing).

"<u>Transfer Agent</u>" means Equiniti Trust Company, LLC, the current transfer agent of the Corporation with a mailing address of 6201 15<sup>th</sup> Avenue, Brooklyn NY 11219 and any successor transfer agent of the Corporation.

Section 2. <u>Designation, Amount and Par Value</u>. The series of preferred stock shall be designated as the Series D Non-Voting Convertible Preferred Stock (the "<u>Preferred Stock</u>") and the number of shares so designated shall be 481,250 (which shall not be subject to change without the written consent of the holders of a majority of the voting power of all then outstanding shares of such Preferred Stock (each, a "<u>Holder</u>" and collectively, the "<u>Holders</u>")). Each share of Preferred Stock shall have a par value of $0.01 per share and a stated value equal to $8.00 (the "<u>Stated Value</u>"), subject to increase pursuant to Section 7(e).

Section 3. <u>Dividends</u>. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis, without regard to conversion limitations herein) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock; provided however, that this right to receive dividends on the Preferred Stock by the Holder(s) shall not exist and the Holder(s) shall not be entitled to receive dividends on shares of Preferred Stock and no dividends shall be paid on shares of Preferred Stock, with respect to any dividends paid by the Corporation prior to the declaration and payment of the Special Dividend and the Stockholder Approval. No other dividends shall be paid on shares of Preferred Stock. The Corporation shall not pay any dividends on the Common Stock, other than the Special Dividend, unless the Corporation simultaneously complies with this provision.

Section 4. <u>No Voting Rights</u>. Except as required by law, the Preferred Stock shall have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, after the date hereof (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

Section 5. <u>Liquidation Preference</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a "<u>Liquidation</u>"), subject to the rights of any existing series of Corporation preferred stock or to the rights of any series of preferred stock which may from time to time hereafter come into existence, the Holders of the Preferred Stock shall be entitled to receive for each share of Preferred Stock held thereby, out of (but only to the extent) the assets of the Corporation are legally available for distribution to its stockholders, pari passu with then outstanding Parity Securities (after any Corporation securities that are senior in preference) and prior and in preference to any distribution of any of the assets of the Corporation to the holders of Junior Securities by reason of their ownership thereof, the Stated Value per share of Preferred Stock then held by them, plus declared but unpaid dividends to which the Holder(s) of the shares of Preferred Stock are entitled to and are payable. If, upon the occurrence of any Liquidation the assets and funds thus distributed among the holders of the Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series of Corporation preferred stock or to the rights of any series of Corporation preferred stock, which may from time to time hereafter come into existence (in each case, including those senior Corporation preferred stock or Parity Securities), such assets and funds of the Corporation that are legally available for distribution shall be distributed ratably among the holders of the each series of Corporation preferred stock in accordance with their preference and in proportion to the preferential amount such series of preferred stock and their holders are otherwise respectively entitled to receive upon such Liquidation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the completion of the distribution required by Section 5(a) above and any other distribution that may be required with respect to the preference and rights of any existing series of Corporation preferred stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, if assets remain in the Corporation, the remaining assets shall be distributed to the holders of the Common Stock and other Junior Securities until such time as the holders of the Common Stock and Junior Securities shall have received a return of the capital originally contributed thereby. Thereafter, if assets remain in the Corporation that are legally available for distribution to its stockholders, subject to the rights of any senior Corporation preferred stock, then all such remaining assets shall be distributed to all holders of Common Stock, holders of other Junior Securities and holders of Preferred Stock and Parity Securities, pro rata based on the number of shares of Common Stock held by each (assuming conversion of all such Preferred Stock into Common Stock).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of this Section 5, a Liquidation shall be deemed to include (i) the completed acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); or (ii) a completed sale of all or substantially all of the assets of the Corporation, unless the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale as contemplated by subsections (i) and (ii) above will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity in approximately the same relative percentages after such acquisition or sale as before such acquisition or sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In any of the events specified in (c) above, if the consideration received by the Corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued 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) Securities not subject to investment letter or other similar restrictions on free marketability:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.

&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) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (i) (A), (B) or (C) to reflect the approximate fair market value thereof, as mutually determined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the event the requirements of this Section 5 are not complied with, the Corporation shall forthwith either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) cause such closing to be postponed until such time as the requirements of this Section 5 have been complied with; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 5(d)(iv) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Corporation shall give each holder of record of Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 5, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided for herein; provided, however, that time periods set forth in this paragraph may be shortened upon the written consent of the holders of Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary, the provisions of this Section 5 shall not apply to any Post-Investment Transaction or any of the transactions contemplated to be performed pursuant to the Purchase Agreement.

Section 6. <u>Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conversions at Option of Holder</u>. Each one share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into 160 shares of Common Stock (subject to the limitations set forth in Section 6(d) or upon conversion as provided in Section 6(b)) (the "<u>Conversion Ratio</u>"). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a "<u>Notice of Conversion</u>"). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile or email such Notice of Conversion to the Corporation (such date, the "<u>Conversion Date</u>"). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of the Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Automatic Conversion</u>. Subject to the provisions of this Section 6, effective as of 5:00 p.m. (New York City, New York time) on the third Business Day after the Stockholders Meeting at which Stockholder Approval is obtained (the "<u>Automatic Conversion Date</u>"), all of the outstanding shares of Preferred Stock (including any fraction of a share) held by the Holder(s) shall automatically convert (the "<u>Automatic Conversion</u>") along with any aggregate accrued or accumulated and unpaid dividends thereon. Each one share of Preferred Stock shall be convertible into an aggregate number of shares of Common Stock (including any fraction of a share) as is determined by the Conversion Ratio. On the Automatic Conversion Date, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the Holder and whether or not any certificates representing such shares are surrendered to the Corporation or the Transfer Agent. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mechanics of Conversion</u>.

&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date or the Automatic Conversion Date (the "<u>Share Delivery Date</u>"), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion of the Preferred Stock and (B) a bank check in the amount of accrued and unpaid dividends, if any. As used herein, "<u>Standard Settlement Period</u>" means the standard settlement period, expressed in a number of Trading Days, on the Corporation's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion. Notwithstanding the foregoing, with respect to any Notice(s) of Conversion delivered by 12:00 pm (New York time) on the Original Issue Date, the Corporation agrees to deliver the Conversion Shares subject to such notice(s) by 4:00 pm (NY time) on the Original Issue Date.

&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) <u>Failure to Deliver Conversion Shares After Notice of Conversion</u>. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Notice of Conversion, in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Corporation's obligation to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a 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, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $8.00 of Stated Value of Preferred Stock being converted, $0.50 per Trading Day for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion pursuant to Section 6(b)(ii). Nothing herein shall limit a Holder's right to pursue actual damages for the Corporation's failure to deliver Conversion Shares within the period specified herein, and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion</u>. In addition to any other rights available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm 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 such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a "<u>Buy-In</u>"), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder's total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the Corporation, 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 Corporation's failure to timely deliver Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Reservation of Shares Issuable Upon Conversion</u>. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>RESERVED</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes in the United States that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the DTC (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Share Issuance Limitation</u>. Notwithstanding anything to the contrary herein, and except for the Automatic Conversion, the Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder's Affiliates, and any Persons acting as a group together with such Holder or any of such Holder's Affiliates (such Persons, "<u>Attribution Parties</u>")) would beneficially or otherwise own in excess of the Share Issuance Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially or otherwise owned by such Holder and its Affiliates and Attribution Parties shall include (i) the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially or otherwise owned by such Holder or any of its Affiliates or Attribution Parties and (ii) the number of shares of Common Stock and other Corporation securities that are otherwise issuable upon exercise or conversion that are beneficially or otherwise owned by the Holder or any of its Affiliates or Attribution Parties, including Parity Securities. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder's determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Share Issuance Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such conversion will not violate the Share Issuance Limitation and other restrictions set forth in this paragraph, which the Holder acknowledges and agrees that the Corporation shall be entitled to rely upon for purposes of allowing any conversion of the Preferred Stock. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely solely on the number of outstanding shares of Common Stock as stated in a written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within two Trading Days confirm orally and in writing to such 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 Corporation, including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "<u>Share Issuance Limitation</u>" shall mean, as of any date, the lower of either, (X) the maximum percentage of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Preferred Stock that can be issued to the Holder without requiring a vote of the stockholders of the Corporation under the rules and regulations of the Trading Market on which the Common Stock trades on such date and applicable securities laws; or (Y) 19.99% of the number of shares of the Common Stock outstanding as of the date of the Purchase Agreement, after the Holder takes into account all Parity Securities, Junior Securities and any other Corporation securities to which such Holder and any of its Affiliates and Attribution Parties beneficially or otherwise own as of the date of the Purchase Agreement. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Share Issuance Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock. For avoidance of doubt, the limitations contained in this Section 6(d) shall not apply after Stockholder Approval and the Automatic Conversion occurs pursuant to Section 6(b) hereof. Additionally, each and every reference to share numbers and/or percentage of shares of Common Stock in this Section 6(d) (including the definition of Share Issuance Limitation above) shall be subject to adjustment automatically for any reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Certificate of Designation.

Section 7. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Stock Dividends and Stock Splits</u>. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the number of shares of Common Stock underlying each share of Preferred Stock shall be convertible into shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. For the avoidance of doubt, the Post-Investment Transaction and Special Dividend shall not result in an adjustment of the number of shares of Common Stock underlying each share of Preferred Stock under this Section 7(a). Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Subsequent Rights Offerings</u>. Except as provided in Section 7(g), in addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "<u>Purchase Rights</u>"), 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 conversion of such Holder's Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Share Issuance Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Share Issuance Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Share Issuance Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Pro Rata Distributions</u>. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes 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 or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), except for the Special Dividend (a "<u>Distribution</u>"), at any time after the issuance of this Preferred Stock, 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 conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Share Issuance Limitation) immediately before the date of 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 (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Share Issuance Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Share Issuance Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Fundamental Transaction</u>. Except as provided in Section 7(g), if, at any time while any shares of Preferred Stock are outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, consummates any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions with another Person, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions consummates any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then, upon any subsequent conversion of the Preferred Stock by the Holder thereof, the Holder shall receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion of the Preferred Stock), the number of shares of common stock (as applicable) of the successor or acquiring corporation or the number of shares of Common Stock of the Corporation (as applicable), if it is the surviving corporation, and all additional securities (equity or debt), cash, property or other consideration (all such additional consideration, the "<u>Alternate Consideration</u>"), receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which such Holder's Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6(c) on the conversion of the Preferred Stock). If holders of Common Stock are entitled to elect the proportion of securities, cash, property or other consideration to be received by holders of Common Stock in a Fundamental Transaction, then each Holder of Preferred Stock shall be given the same choice as to the proportion of securities, cash, property or other consideration such Holder is entitled to receive upon any conversion of such Holder's shares of Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designations in respect of a new series of preferred stock of the successor or acquiring corporation, or the Corporation, if it is the surviving corporation, setting forth the same rights, preferences, privileges and other terms contained in this Certificate of Designation in respect of the Preferred Stock, including, without limitation, the provisions contained in this Section 7(d) and evidencing, among other things, the Holders' right to convert such new preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the "<u>Successor Entity</u>") to assume in writing all of the obligations of the Corporation under this Certificate of Designation in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of a Holder of Preferred Stock, deliver to such Holder in exchange for such Holder's Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of the Preferred Stock (without regard to any limitations on the conversion of the Preferred Stock) prior to such Fundamental Transaction, and with a conversion ratio (or conversion price, as the case may be) which applies the Conversion Ratio to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such Conversion Ratio being for the purpose of protecting the economic value of the Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder thereof. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the "Corporation" shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation with the same effect as if such Successor Entity had been named as the Corporation herein. For the avoidance of doubt, if, at any time while any shares of Preferred Stock are outstanding, a Fundamental Transaction occurs, pursuant to the terms of this Section 7(d), a Holder of Preferred Stock shall not be entitled to receive any consideration in such Fundamental Transaction in respect of such Holder's shares of Preferred Stock, (i) if such transaction occurs as a result of one or a series of transactions contemplated by the Purchase Agreement and/or (ii) except as provided for in this Certificate of Designation (or any new certificate of designations in respect of a new series of preferred stock issued to the Holders of Preferred Stock as contemplated hereby).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Full Ratchet Protection</u>.

&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) Except as provided in Section 7(g), if at any time after the date of filing of this Certificate of Designation (x) the Corporation shall issue shares of Common Stock (or other shares of capital stock or other securities convertible into Common Stock), and (y) the consideration per share payable to the Corporation for the Common Stock (or other share of capital stock or other securities convertible into Common Stock) reflects a pre-money imputed equity value of the Corporation of less than Ten Million United States Dollars (US$10,000,000) (a "<u>Dilutive Issuance</u>"), then in each such case (subject to Section 7(e)(ii)), the Preferred Stock Conversion Ratio shall be adjusted by increasing the Stated Value to the lowest price per share at which any such share of Common Stock (or other share of capital stock or other securities convertible into Common Stock) has been so issued or sold; provided that, in the event the adjustment pursuant to this Section 7(e)(i) would result in the Dilutive Issuance requiring stockholder approval pursuant to the requirements of NYSE American LLC Company Guide Sections 710 through 713, the Stated Value shall be increased the greatest amount that would not require such stockholder approval.

&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) <u>Adjustments Only After Stock Issued; Determination of Consideration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) The mere issuance of options, warrants or other securities (other than capital stock) convertible into capital stock of the Corporation shall not require an adjustment hereunder until such securities are exercised or converted into Common Stock capital stock of the Corporation (or capital stock convertible into Common Stock of the Corporation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) For purposes of Section 7(e)(i), the reference to the consideration received by the Corporation for an issuance of capital stock convertible into Common Stock shall mean the aggregate of the consideration received for the issuance of such capital stock, plus the consideration that will be payable to the Corporation upon its conversion into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Exceptions</u>. The provisions of Section 7(e)(i) shall not apply to the following issuances (each of the following an "<u>Exempt Issuance</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any issuance otherwise covered by Sections 7(a) through 7(d);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) any stock options granted to employees or directors of the Corporation or the issuance of shares upon exercise thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any issuance as consideration for mergers or acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) any issuance in connection with the formation of joint ventures, strategic business relationships, or corporate partnering transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) any issuance of shares in a public offering; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) any other issuance with the written consent of the Holders of a majority of the voting power of all then outstanding shares of such Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Effectiveness</u>. Any adjustment made pursuant to Section 7(e)(i) above shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Calculations</u>. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Notice to the Holders</u>.

&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) <u>Adjustment to Conversion Amount</u>. Whenever the number of shares of Common Stock that the shares of Preferred Stock are convertible into is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the number of shares of Common Stock after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

&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) <u>Notice to Allow Conversion by Holder</u>. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least fifteen (15) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation, the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 15-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Adjustments Not Applicable</u>. Notwithstanding anything to the contrary, the provisions of this Section 7 shall not apply to any Post-Investment Transaction or any investment or other transaction contemplated to occur or otherwise be performed pursuant to the Purchase Agreement, except in the case of Section 7(a).

Section 8. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 2000 Powell Street, Suite 1150, Emeryville, CA 94608, Attention: Corporate Secretary, e-mail address jhall@novabay.com or such other e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder to the Holders shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of such Holder appearing on the books of the Corporation, or if no such email address or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lost or Mutilated Preferred Stock Certificate</u>. If a Holder's Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. Each of the Corporation and each Holder agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Certificate of Designation (whether brought against the Corporation, a Holder or any of their respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan, New York (the "<u>New York Courts</u>"). Each of the Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each of the Corporation and each Holder 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such Person at the address in effect for notices to it under this Certificate of Designation 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 other manner permitted by applicable law. Each of the Corporation and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that Person (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Headings</u>. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Status of Converted or Redeemed Preferred Stock</u>. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series D Convertible Preferred Stock.

\* \* \*

RESOLVED, FURTHER, that the Chief Executive Officer, President and the Secretary of the Corporation be and hereby is authorized and directed to prepare and file this Certificate of Designation in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 19<sup>th</sup> day of August, 2025.

---

| | |
|:---|:---|
| /s/ Justin Hall | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer, President, General Counsel and Secretary |

---

**ANNEX A**

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned being the Holder of NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Corporation</u>") Series D Non-Voting Convertible Preferred Stock (the "<u>Preferred Stock</u>") hereby elects to convert the number of shares of Series D Non-Voting Convertible Preferred Stock indicated below into shares of common stock, par value $0.01 per share (the "<u>Common Stock</u>"), of NovaBay Pharmaceuticals, Inc., according to the conditions as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series D Non-Voting Convertible Preferred Stock (the "<u>Certificate of Designation</u>"), as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

---

| |
|:---|
| Date to Effect Conversion: |
| Number of shares of Preferred Stock owned prior to Conversion: |
| Number of shares of Preferred Stock to be Converted: |
| Stated Value of shares of Preferred Stock to be Converted: |
| Number of shares of Common Stock to be Issued: |
| Applicable Conversion Price: |
| Number of shares of Preferred Stock subsequent to Conversion: |
| Address for Delivery: |
| <u>or</u> |
| DWAC Instructions: |
| Broker no: |
| Account no: |

---

---

| | |
|:---|:---|
| [HOLDER] | [HOLDER] |
| By: |  |
|  | Name: |
|  | Title: |

---

## Exhibit 3.2

**Exhibit 3.2**

**NOVABAY PHARMACEUTICALS, INC.**

**CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS**

**OF**

**SERIES E NON-VOTING CONVERTIBLE PREFERRED STOCK**

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Justin Hall, does hereby certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. He is the Chief Executive Officer, President and Secretary of NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Corporation</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Corporation is authorized to issue [10,000,000]<sup>1</sup> shares of preferred stock, [496,250]<sup>2</sup> of which have been issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. This Certificate of Designation of Preferences, Rights and Limitations of Series E Non-Voting Convertible Preferred Stock (the "<u>Certificate of Designation</u>") that includes the following resolutions have been approved and adopted by the board of directors of the Corporation (the "<u>Board of Directors</u>"):

WHEREAS, the Amended and Restated Certificate of Incorporation, as amended of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of [10,000,000] shares, $0.01 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a new series of Corporation preferred stock titled "Series E Non-Voting Convertible Preferred Stock", which shall consist of up to 268,750 shares of the preferred stock, which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a new series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

<sup>1</sup> **<u>NTD</u>**: Final authorized share number assumes stockholder approval of the increase in authorized preferred stock (as contemplated in Section 4.15(b) of the Purchase Agreement).

<sup>2</sup> **<u>NTD</u>**: Share number will be confirmed at the time of issuance.

**TERMS OF PREFERRED STOCK**

Section 1. <u>Definitions</u>. For the purposes hereof, the following terms shall have the following meanings:

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

"<u>Alternate Consideration</u>" shall have the meaning set forth in Section 7(d).

"<u>Attribution Parties</u>" shall have the meaning set forth in Section 6(d).

"<u>Automatic Conversion Date</u>" shall have the meaning set forth in Section 6(b).

"<u>Automatic Conversion</u>" shall have the meaning set forth in Section 6(b).

"<u>Business Day</u>" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"<u>Buy-In</u>" shall have the meaning set forth in Section 6(c)(iv).

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the Corporation's common stock, par value $0.01 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Common Stock Equivalents</u>" means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, 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, Common Stock.

"<u>Conversion Amount</u>" means the sum of the Stated Value at issue.

"<u>Conversion Date</u>" shall have the meaning set forth in Section 6(a).

"<u>Conversion Ratio</u>" shall have the meaning set forth in Section 6(a).

"<u>Conversion Shares</u>" means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.

"<u>Dilutive Issuance</u>" shall have the meaning set forth in Section 7(e)(i).

"<u>Distribution</u>" shall have the meaning set forth in Section 7(c).

"<u>DTC</u>" shall have the meaning set forth in Section 6(c)(i).

"<u>Exempt Issuance</u>" shall have the meaning set forth in Section 7(e)(iii).

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

"<u>First Closing</u>" shall have the meaning set forth in the Purchase Agreement.

"<u>Fundamental Transaction</u>" shall have the meaning set forth in Section 7(d).

"<u>Holder</u>" shall have the meaning set forth in Section 2.

"<u>Junior Securities</u>" means the Common Stock or other class or series of Corporation stock that ranks junior to the Preferred Stock.

"<u>Liquidation</u>" shall have the meaning set forth in Section 5(a).

"<u>New York Courts</u>" shall have the meaning set forth in Section 8(d).

"<u>Notice of Conversion</u>" shall have the meaning set forth in Section 6(a).

"<u>Original Issue Date</u>" means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.

"<u>Parity Securities</u>" means the Series D Preferred Stock and any other class or series of Corporation preferred stock issued on or after the date hereof that ranks by its terms to be on parity with the Preferred Stock.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Post-Investment Transaction</u>" means the strategic transaction that would involve an investment and/or acquisition of an operating going concern and solvent company in a timely manner as contemplated in and following the signing of the Purchase Agreement.

"<u>Preferred Stock</u>" shall have the meaning set forth in Section 2.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of August 19, 2025, among the Corporation and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Purchase Rights</u>" shall have the meaning set forth in Section 7(b).

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Share Delivery Date</u>" shall have the meaning set forth in Section 6(c).

"<u>Share Issuance Limitation</u>" shall have the meaning set forth in Section 6(d).

"<u>Special Dividend</u>" shall have the meaning set forth in the Purchase Agreement.

"<u>Standard Settlement Period</u>" shall have the meaning set forth in Section 6(c)(i).

"<u>Stated Value</u>" shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 7(e).

"<u>Stockholder Approval</u>" means all such approvals as may be required by the applicable rules and regulations of the NYSE American (or any successor entity) or under applicable law from the stockholders of the Corporation with respect to the conversion of all the Preferred Stock and issuance of the Conversion Shares to the Holder, including the Automatic Conversion of the Preferred Stock into Common Stock upon receipt of such approval.

"<u>Stockholders Meeting</u>" means the meeting of the stockholders of the Corporation in which Stockholder Approval is voted on as set forth in a proxy statement approved by the original Holder.

"<u>Successor Entity</u>" shall have the meaning set forth in Section 7(d).

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for business.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the New York Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market, (or any successors to any of the foregoing).

"<u>Transfer Agent</u>" means Equiniti Trust Company, LLC, the current transfer agent of the Corporation with a mailing address of 6201 15<sup>th</sup> Avenue, Brooklyn NY 11219 and any successor transfer agent of the Corporation.

Section 2. <u>Designation, Amount and Par Value</u>. The series of preferred stock shall be designated as the Series E Non-Voting Convertible Preferred Stock (the "<u>Preferred Stock</u>") and the number of shares so designated shall be 268,750 (which shall not be subject to change without the written consent of the holders of a majority of the voting power of all then outstanding shares of such Preferred Stock (each, a "<u>Holder</u>" and collectively, the "<u>Holders</u>")). Each share of Preferred Stock shall have a par value of $0.01 per share and a stated value equal to $8.00 (the "<u>Stated Value</u>"), subject to increase pursuant to Section 7(e).

Section 3. <u>Dividends</u>. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis, without regard to conversion limitations herein) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock; provided however, that this right to receive dividends on the Preferred Stock by the Holder(s) shall not exist and the Holder(s) shall not be entitled to receive dividends on shares of Preferred Stock and no dividends shall be paid on shares of Preferred Stock, with respect to any dividends paid by the Corporation prior to the declaration and payment of the Special Dividend and the Stockholder Approval. No other dividends shall be paid on shares of Preferred Stock. The Corporation shall not pay any dividends on the Common Stock, other than the Special Dividend, unless the Corporation simultaneously complies with this provision.

Section 4. <u>No Voting Rights</u>. Except as required by law, the Preferred Stock shall have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, after the date hereof (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

Section 5. <u>Liquidation Preference</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a "<u>Liquidation</u>"), subject to the rights of any existing series of Corporation preferred stock or to the rights of any series of preferred stock which may from time to time hereafter come into existence, the Holders of the Preferred Stock shall be entitled to receive for each share of Preferred Stock held thereby, out of (but only to the extent) the assets of the Corporation are legally available for distribution to its stockholders, pari passu with then outstanding Parity Securities (after any Corporation securities that are senior in preference) and prior and in preference to any distribution of any of the assets of the Corporation to the holders of Junior Securities by reason of their ownership thereof, the Stated Value per share of Preferred Stock then held by them, plus declared but unpaid dividends to which the Holder(s) of the shares of Preferred Stock are entitled to and are payable. If, upon the occurrence of any Liquidation the assets and funds thus distributed among the holders of the Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series of Corporation preferred stock or to the rights of any series of Corporation preferred stock, which may from time to time hereafter come into existence (in each case, including those senior Corporation preferred stock or Parity Securities), such assets and funds of the Corporation that are legally available for distribution shall be distributed ratably among the holders of the each series of Corporation preferred stock in accordance with their preference and in proportion to the preferential amount such series of preferred stock and their holders are otherwise respectively entitled to receive upon such Liquidation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the completion of the distribution required by Section 5(a) above and any other distribution that may be required with respect to the preference and rights of any existing series of Corporation preferred stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, if assets remain in the Corporation, the remaining assets shall be distributed to the holders of the Common Stock and other Junior Securities until such time as the holders of the Common Stock and Junior Securities shall have received a return of the capital originally contributed thereby. Thereafter, if assets remain in the Corporation that are legally available for distribution to its stockholders, subject to the rights of any senior Corporation preferred stock, then all such remaining assets shall be distributed to all holders of Common Stock, holders of other Junior Securities and holders of Preferred Stock and Parity Securities, pro rata based on the number of shares of Common Stock held by each (assuming conversion of all such Preferred Stock into Common Stock).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of this Section 5, a Liquidation shall be deemed to include (i) the completed acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); or (ii) a completed sale of all or substantially all of the assets of the Corporation, unless the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale as contemplated by subsections (i) and (ii) above will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity in approximately the same relative percentages after such acquisition or sale as before such acquisition or sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In any of the events specified in (c) above, if the consideration received by the Corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued 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) Securities not subject to investment letter or other similar restrictions on free marketability:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.

&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) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (i) (A), (B) or (C) to reflect the approximate fair market value thereof, as mutually determined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the event the requirements of this Section 5 are not complied with, the Corporation shall forthwith either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) cause such closing to be postponed until such time as the requirements of this Section 5 have been complied with; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 5(d)(iv) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Corporation shall give each holder of record of Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 5, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided for herein; provided, however, that time periods set forth in this paragraph may be shortened upon the written consent of the holders of Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary, the provisions of this Section 5 shall not apply to any Post-Investment Transaction or any of the transactions contemplated to be performed pursuant to the Purchase Agreement.

Section 6. <u>Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conversions at Option of Holder</u>. Each one share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into 160 shares of Common Stock (subject to the limitations set forth in Section 6(d) or upon conversion as provided in Section 6(b)) (the "<u>Conversion Ratio</u>"). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a "<u>Notice of Conversion</u>"). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile or email such Notice of Conversion to the Corporation (such date, the "<u>Conversion Date</u>"). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of the Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Automatic Conversion</u>. Subject to the provisions of this Section 6, effective as of 5:00 p.m. (New York City, New York time) on the 30<sup>th</sup> Business Day after Stockholder Approval is received and the issuance of the Preferred Stock (the "<u>Automatic Conversion Date</u>"), all of the outstanding shares of Preferred Stock (including any fraction of a share) held by the Holder(s) shall automatically convert (the "<u>Automatic Conversion</u>") along with any aggregate accrued or accumulated and unpaid dividends thereon. Each one share of Preferred Stock shall be convertible into an aggregate number of shares of Common Stock (including any fraction of a share) as is determined by the Conversion Ratio. On the Automatic Conversion Date, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the Holder and whether or not any certificates representing such shares are surrendered to the Corporation or the Transfer Agent. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mechanics of Conversion</u>.

&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date or the Automatic Conversion Date (the "<u>Share Delivery Date</u>"), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion of the Preferred Stock and (B) a bank check in the amount of accrued and unpaid dividends, if any. As used herein, "<u>Standard Settlement Period</u>" means the standard settlement period, expressed in a number of Trading Days, on the Corporation's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion. Notwithstanding the foregoing, with respect to any Notice(s) of Conversion delivered by 12:00 pm (New York time) on the Original Issue Date, the Corporation agrees to deliver the Conversion Shares subject to such notice(s) by 4:00 pm (NY time) on the Original Issue Date.

&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) <u>Failure to Deliver Conversion Shares After Notice of Conversion</u>. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Notice of Conversion, in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Corporation's obligation to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a 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, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $8.00 of Stated Value of Preferred Stock being converted, $0.50 per Trading Day for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion pursuant to Section 6(b)(ii). Nothing herein shall limit a Holder's right to pursue actual damages for the Corporation's failure to deliver Conversion Shares within the period specified herein, and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion</u>. In addition to any other rights available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm 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 such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a "<u>Buy-In</u>"), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder's total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the Corporation, 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 Corporation's failure to timely deliver Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Reservation of Shares Issuable Upon Conversion</u>. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>RESERVED</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes in the United States that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the DTC (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Share Issuance Limitation</u>. Notwithstanding anything to the contrary herein, and except for the Automatic Conversion, the Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder's Affiliates, and any Persons acting as a group together with such Holder or any of such Holder's Affiliates (such Persons, "<u>Attribution Parties</u>")) would beneficially or otherwise own in excess of the Share Issuance Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially or otherwise owned by such Holder and its Affiliates and Attribution Parties shall include (i) the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially or otherwise owned by such Holder or any of its Affiliates or Attribution Parties and (ii) the number of shares of Common Stock and other Corporation securities that are otherwise issuable upon exercise or conversion that are beneficially or otherwise owned by the Holder or any of its Affiliates or Attribution Parties, including Parity Securities. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder's determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Share Issuance Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such conversion will not violate the Share Issuance Limitation and other restrictions set forth in this paragraph, which the Holder acknowledges and agrees that the Corporation shall be entitled to rely upon for purposes of allowing any conversion of the Preferred Stock. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely solely on the number of outstanding shares of Common Stock as stated in a written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within two Trading Days confirm orally and in writing to such 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 Corporation, including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "<u>Share Issuance Limitation</u>" shall mean, as of any date, the lower of either, (X) the maximum percentage of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Preferred Stock that can be issued to the Holder without requiring a vote of the stockholders of the Corporation under the rules and regulations of the Trading Market on which the Common Stock trades on such date and applicable securities laws; or (Y) 19.99% of the number of shares of the Common Stock outstanding as of the date of the Purchase Agreement, after the Holder takes into account all Parity Securities, Junior Securities and any other Corporation securities to which such Holder and any of its Affiliates and Attribution Parties beneficially or otherwise own as of the date of the Purchase Agreement. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Share Issuance Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock. For avoidance of doubt, the limitations contained in this Section 6(d) shall not apply after Stockholder Approval and the Automatic Conversion occurs pursuant to Section 6(b) hereof. Additionally, each and every reference to share numbers and/or percentage of shares of Common Stock in this Section 6(d) (including the definition of Share Issuance Limitation above) shall be subject to adjustment automatically for any reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Certificate of Designation.

Section 7. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Stock Dividends and Stock Splits</u>. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the number of shares of Common Stock underlying each share of Preferred Stock shall be convertible into shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. For the avoidance of doubt, the Post-Investment Transaction and Special Dividend shall not result in an adjustment of the number of shares of Common Stock underlying each share of Preferred Stock under this Section 7(a). Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Subsequent Rights Offerings</u>. Except as provided in Section 7(g), in addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "<u>Purchase Rights</u>"), 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 conversion of such Holder's Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Share Issuance Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Share Issuance Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Share Issuance Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Pro Rata Distributions</u>. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes 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 or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), except for the Special Dividend (a "<u>Distribution</u>"), at any time after the issuance of this Preferred Stock, 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 conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Share Issuance Limitation) immediately before the date of 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 (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Share Issuance Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Share Issuance Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Fundamental Transaction</u>. Except as provided in Section 7(g), if, at any time while any shares of Preferred Stock are outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, consummates any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions with another Person, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions consummates any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then, upon any subsequent conversion of the Preferred Stock by the Holder thereof, the Holder shall receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion of the Preferred Stock), the number of shares of common stock (as applicable) of the successor or acquiring corporation or the number of shares of Common Stock of the Corporation (as applicable), if it is the surviving corporation, and all additional securities (equity or debt), cash, property or other consideration (all such additional consideration, the "<u>Alternate Consideration</u>"), receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which such Holder's Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6(c) on the conversion of the Preferred Stock). If holders of Common Stock are entitled to elect the proportion of securities, cash, property or other consideration to be received by holders of Common Stock in a Fundamental Transaction, then each Holder of Preferred Stock shall be given the same choice as to the proportion of securities, cash, property or other consideration such Holder is entitled to receive upon any conversion of such Holder's shares of Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designations in respect of a new series of preferred stock of the successor or acquiring corporation, or the Corporation, if it is the surviving corporation, setting forth the same rights, preferences, privileges and other terms contained in this Certificate of Designation in respect of the Preferred Stock, including, without limitation, the provisions contained in this Section 7(d) and evidencing, among other things, the Holders' right to convert such new preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the "<u>Successor Entity</u>") to assume in writing all of the obligations of the Corporation under this Certificate of Designation in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of a Holder of Preferred Stock, deliver to such Holder in exchange for such Holder's Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of the Preferred Stock (without regard to any limitations on the conversion of the Preferred Stock) prior to such Fundamental Transaction, and with a conversion ratio (or conversion price, as the case may be) which applies the Conversion Ratio to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such Conversion Ratio being for the purpose of protecting the economic value of the Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder thereof. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the "Corporation" shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation with the same effect as if such Successor Entity had been named as the Corporation herein. For the avoidance of doubt, if, at any time while any shares of Preferred Stock are outstanding, a Fundamental Transaction occurs, pursuant to the terms of this Section 7(d), a Holder of Preferred Stock shall not be entitled to receive any consideration in such Fundamental Transaction in respect of such Holder's shares of Preferred Stock, (i) if such transaction occurs as a result of one or a series of transactions contemplated by the Purchase Agreement and/or (ii) except as provided for in this Certificate of Designation (or any new certificate of designations in respect of a new series of preferred stock issued to the Holders of Preferred Stock as contemplated hereby).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Full Ratchet Protection</u>.

&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) Except as provided in Section 7(g), if at any time after the date of filing of this Certificate of Designation (x) the Corporation shall issue shares of Common Stock (or other shares of capital stock or other securities convertible into Common Stock), and (y) the consideration per share payable to the Corporation for the Common Stock (or other share of capital stock or other securities convertible into Common Stock) reflects a pre-money imputed equity value of the Corporation of less than Ten Million United States Dollars (US$10,000,000) (a "<u>Dilutive Issuance</u>"), then in each such case (subject to Section 7(e)(ii)), the Preferred Stock Conversion Ratio shall be adjusted by increasing the Stated Value to the lowest price per share at which any such share of Common Stock (or other share of capital stock or other securities convertible into Common Stock) has been so issued or sold; provided that, in the event the adjustment pursuant to this Section 7(e)(i) would result in the Dilutive Issuance requiring stockholder approval pursuant to the requirements of NYSE American LLC Company Guide Sections 710 through 713, the Stated Value shall be increased the greatest amount that would not require such stockholder approval.

&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) <u>Adjustments Only After Stock Issued; Determination of Consideration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) The mere issuance of options, warrants or other securities (other than capital stock) convertible into capital stock of the Corporation shall not require an adjustment hereunder until such securities are exercised or converted into Common Stock capital stock of the Corporation (or capital stock convertible into Common Stock of the Corporation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) For purposes of Section 7(e)(i), the reference to the consideration received by the Corporation for an issuance of capital stock convertible into Common Stock shall mean the aggregate of the consideration received for the issuance of such capital stock, plus the consideration that will be payable to the Corporation upon its conversion into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Exceptions</u>. The provisions of Section 7(e)(i) shall not apply to the following issuances (each of the following an "<u>Exempt Issuance</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any issuance otherwise covered by Sections 7(a) through 7(d);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) any stock options granted to employees or directors of the Corporation or the issuance of shares upon exercise thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any issuance as consideration for mergers or acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) any issuance in connection with the formation of joint ventures, strategic business relationships, or corporate partnering transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) any issuance of shares in a public offering; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) any other issuance with the written consent of the Holders of a majority of the voting power of all then outstanding shares of such Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Effectiveness</u>. Any adjustment made pursuant to Section 7(e)(i) above shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Calculations</u>. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Notice to the Holders</u>.

&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) <u>Adjustment to Conversion Amount</u>. Whenever the number of shares of Common Stock that the shares of Preferred Stock are convertible into is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the number of shares of Common Stock after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

&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) <u>Notice to Allow Conversion by Holder</u>. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least fifteen (15) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation, the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 15-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Adjustments Not Applicable</u>. Notwithstanding anything to the contrary, the provisions of this Section 7 shall not apply to any Post-Investment Transaction or any investment or other transaction contemplated to occur or otherwise be performed pursuant to the Purchase Agreement, except in the case of Section 7(a).

Section 8. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 2000 Powell Street, Suite 1150, Emeryville, CA 94608, Attention: Corporate Secretary, e-mail address jhall@novabay.com or such other e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder to the Holders shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of such Holder appearing on the books of the Corporation, or if no such email address or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lost or Mutilated Preferred Stock Certificate</u>. If a Holder's Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. Each of the Corporation and each Holder agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Certificate of Designation (whether brought against the Corporation, a Holder or any of their respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan, New York (the "<u>New York Courts</u>"). Each of the Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each of the Corporation and each Holder 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such Person at the address in effect for notices to it under this Certificate of Designation 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 other manner permitted by applicable law. Each of the Corporation and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that Person (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Headings</u>. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Status of Converted or Redeemed Preferred Stock</u>. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series E Convertible Preferred Stock.

\* \* \*

RESOLVED, FURTHER, that the Chief Executive Officer, President and the Secretary of the Corporation be and hereby is authorized and directed to prepare and file this Certificate of Designation in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned has executed this Certificate this ______ day of _________, 2025.

 <br> Name: David E. Lazar <br> Title: Chief Executive Officer

**ANNEX A**

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned being the Holder of NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Corporation</u>") Series E Non-Voting Convertible Preferred Stock (the "<u>Preferred Stock</u>") hereby elects to convert the number of shares of Series E Non-Voting Convertible Preferred Stock indicated below into shares of common stock, par value $0.01 per share (the "<u>Common Stock</u>"), of NovaBay Pharmaceuticals, Inc., according to the conditions as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series E Non-Voting Convertible Preferred Stock (the "<u>Certificate of Designation</u>"), as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

---

| |
|:---|
| Date to Effect Conversion: |
| Number of shares of Preferred Stock owned prior to Conversion: |
| Number of shares of Preferred Stock to be Converted: |
| Stated Value of shares of Preferred Stock to be Converted: |
| Number of shares of Common Stock to be Issued: |
| Applicable Conversion Price: |
| Number of shares of Preferred Stock subsequent to Conversion: |
| Address for Delivery: |
| <u>or</u> |
| DWAC Instructions: |
| Broker no: |
| Account no: |

---

---

| | |
|:---|:---|
| [HOLDER] | [HOLDER] |
| By: |  |
|  | Name: |
|  | Title: |

---

## Exhibit 3.3

**Exhibit 3.3**

**NOVABAY PHARMACEUTICALS, INC.**

**CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS**

**OF**

**SERIES F VOTING RETRACTABLE PREFERRED STOCK**

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Justin Hall, does hereby certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. He is the Chief Executive Officer, President and Secretary of NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Corporation</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Corporation is authorized to issue 5,000,000 shares of preferred stock, 15,000 of which have been issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. This Certificate of Designation of Preferences, Rights and Limitations of Series F Voting Retractable Preferred Stock (the "<u>Certificate of Designations</u>") that includes the following resolutions has been approved and adopted by the board of directors of the Corporation (the "<u>Board of Directors</u>"):

WHEREAS, the Amended and Restated Certificate of Incorporation, as amended, of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 5,000,000 shares, $0.01 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a new series of Corporation preferred stock titled "Series F Voting Retractable Preferred Stock", which shall consist of up to 1,988,283 shares of this new series of the preferred stock, which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a new series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

**TERMS OF PREFERRED STOCK**

<u>Section 1</u>. <u>Definitions</u>. For the purposes hereof, the following terms shall have the following meanings:

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

"<u>Business Day</u>" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the State of New York generally are open for use by customers on such day.

"<u>Common Stock</u>" means the Corporation's common stock, par value $0.01 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Common Stock Equivalents</u>" means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, 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, Common Stock.

"<u>Exchange Agreement</u>" means the warrant exchange agreement, dated as of August 19, 2025, between the Corporation and the related Holder, as may be amended, modified or supplemented from time to time in accordance with its terms.

"<u>Holder</u>" shall have the meaning given such term in Section 2.

"<u>Liquidation</u>" shall have the meaning set forth in Section 5.

"<u>New York Courts</u>" shall have the meaning set forth in Section 9(d).

"<u>Optional Retirement Notice</u>" shall have the meaning set forth in Section 8(b).

"<u>Per Share Voting Equivalent</u>" shall have the meaning set forth in Section 4.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Preferred Stock</u>" shall have the meaning set forth in Section 2.

"<u>Purchase Agreement</u>" means the definitive agreement, dated as of August 19, 2025, among the Corporation and the Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Retirement Event</u>" means the earlier of (x) the Stockholder Approval (as defined in the Purchase Agreement) and (y) December 31, 2025.

"<u>Retirement Notice</u>" shall have the meaning set forth in Section 8(a).

"<u>Retirement Value</u>" shall have the meaning set forth in Section 8(a).

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Stated Value</u>" shall have the meaning set forth in Section 2.

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for business.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

"<u>Transaction Documents</u>" means this Certificate of Designation, the Exchange Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase Agreement.

<u>Section 2</u>. <u>Designation, Amount and Par Value</u>. The series of preferred stock of the Corporation pursuant to this Certificate of Designation shall be designated as the Corporation's Series F Voting Retractable Preferred Stock (the "<u>Preferred Stock</u>") and the number of shares so designated shall be up to 1,988,283 shares (which shall not be subject to increase without the written consent of all of the holders of the Preferred Stock (each, a "<u>Holder</u>" and collectively, the "<u>Holders</u>")). Each share of Preferred Stock shall have a par value of $0.01 per share and a stated value equal to $1,000 (the "<u>Stated Value</u>").

<u>Section 3</u>. <u>Dividends</u>. Holders shall not be entitled to receive dividends on shares of Preferred Stock, and no dividends shall be paid on shares of Preferred Stock.

<u>Section 4</u>. <u>Voting Rights</u>. The Preferred Stock shall vote on matters of the Corporation that are also voted upon by holders of Common Stock with each share of Preferred Stock representing the voting equivalent of approximately 0.424 shares of Common Stock (the "Per Share Voting Equivalent").

<u>Section 5</u>. <u>Liquidation</u>. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "<u>Liquidation</u>"), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Preferred Stock of such Holders were convertible at a rate equal to the Per Share Voting Equivalent to Common Stock which amounts shall be paid <u>pari passu</u> with all holders of Common Stock; provided, however, that in no event shall the aggregate amounts paid to the Holder(s) be in excess of the Retirement Value of the shares of Preferred Stock held by such Holder(s). The Corporation shall mail written notice of any such Liquidation, not less than forty-five (45) days prior to the payment date stated therein, to each Holder.

<u>Section 6</u>. <u>Conversion</u>. No shares of Preferred Stock shall be convertible into shares of Common Stock or other equity securities of the Corporation.

<u>Section 7</u>. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Stock Splits</u>. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Per Share Voting Equivalent shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the effective date of any such dividend, distribution, subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Notice to the Holders</u>. Whenever the Per Share Voting Equivalent is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice as provided below setting forth the Per Share Voting Equivalent after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

<u>Section 8</u>. <u>Retirement of Preferred Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) If, at any time beginning on the next Business Day after the Retirement Event, each Holder originally issued the Preferred Stock pursuant to the Exchange Agreement may request in writing (the "<u>Retirement Notice</u>") that the Corporation retire all of such original Holder's Preferred Stock by paying the Holder an amount equal to $175,000 for the retirement of all Preferred Stock (together with any Late Charges (as defined below) thereon, if any) and convertible securities held by such original Holder (the "<u>Retirement Value</u>"), with such payment to be made to the requesting original Holder for all of their shares of Preferred Stock within two (2) Business Days from the date the Retirement Notice is received by the Corporation to the bank account designated by the Holder at the time of entering into the Exchange Agreement or as otherwise set forth in the Retirement Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Subject to the provisions of this Section 8, to the extent that any Holder has not caused their shares of Preferred Stock to be retired pursuant to Section 8(a) (the "<u>Remaining Shares</u>") by December 31, 2025, then the Corporation beginning on the next Business Day may elect to send written notice ("<u>Optional Retirement Notice</u>") to any of these remaining original Holders to cause all of their shares of Preferred Stock to be retired by paying an amount equal to the Retirement Value for their shares Preferred Stock and convertible securities held by such Holders within five (5) Business Days from the date of the Optional Retirement Notice is delivered to the bank account designated by the Holder at the time of entering into the Exchange Agreement. If an original Holder transfers shares of Preferred Stock, then the aggregate amount to be paid by the Corporation to retire the shares of Preferred Stock issued to such original Holder that are subsequently held by any transferee who becomes a Holder shall not, in the aggregate, exceed the Retirement Value. For avoidance of doubt, the aggregate Retirement Value to be paid by the Corporation to retire all of the shares of Preferred Stock whether pursuant to Section 8(a) or this Section 8(b) shall be $525,000 (plus any applicable Late Charges).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) After payment by the Corporation of the Retirement Value to any Holder pursuant to Section 8(a) or Section 8(b), as the case may be, then all of such Holders' shares of Preferred Stock shall automatically be deemed irrevocably cancelled and extinguished without further action on the part of the Holder or the Corporation and the Holder shall have no further rights relating thereto and the Corporation shall have no further obligations. Notwithstanding the foregoing, the Holder shall promptly return and deliver to the Corporation any certificate or certificates representing such retired shares of Preferred Stock or deliver such other documentation reasonably requested by the Corporation evidencing such cancellation of the retired shares of Preferred Stock.

<u>Section 9</u>. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holders hereunder shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 2000 Powell Street, Suite 1150, Emeryville, CA 94608, Attention: Corporate Secretary, e-mail address jhall@novabay.com or such other e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 9. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder to the Holders shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of such Holder appearing on the books of the Corporation, or if no such email address or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and <u>unconditional</u>, to pay liquidated damages and accrued dividends, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Lost or Mutilated Preferred Stock Certificate</u>. If a Holder's Preferred Stock certificate (to the extent issued to a Holder) shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new <u>certificate</u> for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan, New York (the "<u>New York Courts</u>"). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation 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 other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Waiver</u>. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Severability</u>. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Headings</u>. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

&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) <u>Status of Retired or Redeemed Preferred Stock</u>. Shares of Preferred Stock may only be issued pursuant to the Exchange Agreement. If any shares of Preferred Stock shall be retired, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Late Charges</u>. Any amount due to any Holder of Preferred Stock pursuant to this Certificate of Designations which is not paid when due shall result in a late charge being incurred and payable by the Corporation in an amount equal to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (each, a "<u>Late Charge</u>").

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

RESOLVED, FURTHER, that the Chief Executive Officer, President and the Secretary of the Corporation be and hereby is authorized and directed to prepare and file this Certificate of Designation in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation on this <u>19</u><sup>th</sup> day of <u>August</u>, 2025.

---

| | |
|:---|:---|
| /s/ Justin Hall | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer, President, General Counsel and Secretary |

---

## Exhibit 10.1

**Exhibit 10.1**

***CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REDACTED TERMS HAVE BEEN MARKED WITH THE FOLLOWING MARKING: [Redacted.]***

***Execution Version***

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this "<u>Agreement</u>") is dated as of August 19, 2025 (the "<u>Effective Date</u>"), between NovaBay Pharmaceuticals, Inc., a Delaware corporation (the "<u>Company</u>"), and Mr. David Lazar, an Israeli and E.U. citizen residing in Panama (the "<u>Purchaser</u>" or "<u>Lazar</u>").

WHEREAS, the Company has been exploring the strategic options available to it that will result in what it believes to be the best opportunity available to maximize the value for the Company and its stockholders;

WHEREAS, the Purchaser, who has experience in investing and acquiring U.S. public companies, proposed completing a series of transactions with the Company that will involve, among other terms set forth in this Agreement, (i) an investment of $6.0 million of new capital ($3.85 million at the First Closing (as defined below) on the date hereof and $2.15 million at the Final Closing (as defined below)) to the Company in exchange for the Company issuing the Securities (the "<u>Investment</u>"), which Securities, upon becoming fully convertible will in the aggregate represent in excess of 90% of the issued and outstanding shares of Common Stock on a fully diluted basis as of the Effective Date, (ii) a commitment from the Purchaser that a distribution of the Company's cash as of the time the Special Dividend is declared, but exclusive of the Investment, shall be distributed to the stockholders of the Company prior to the Final Closing, (iii) the Purchaser facilitating and capitalizing the Company to complete the Post-Investment Transaction (as defined below), and (iv) the Purchaser, immediately prior to the execution and effectiveness of this Agreement, being appointed to a vacancy on the Board of Directors (as defined below), and, in connection with the Final Closing, having a right to nominate up to an additional four (4) individuals to be elected to the Board of Directors at the Company's 2025 annual meeting of stockholders (the "<u>Annual Meeting</u>"); and

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to the applicable regulations under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), including pursuant to Regulation S of the Securities Act, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, the Securities of the Company and to consummate the other transactions contemplated by this Agreement and the other Transaction Documents (collectively, the "<u>Contemplated Transactions</u>") as more fully described in this Agreement.

WHEREAS, it is the intention of the parties hereto that Lazar's acquisition of Securities under the Transaction Documents (as defined below) shall be exempt from Section 16(b) of the Securities Exchange of Act 1934, as amended (the "<u>Exchange Act</u>"), and, accordingly, prior to the date of this Agreement, the Board of Directors adopted resolutions appointing David Lazar as a director on the Board of Directors effective immediately prior to the execution and effectiveness of this Agreement and as Chief Executive Officer of the Company effective as of the First Closing, and subsequently approving Lazar's acquisition of Securities hereunder and exempting such acquisition from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 (the "<u>Rule 16b-3 Exemption Approvals</u>").

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

**ARTICLE 1.**

**DEFINITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Certificate of Designations (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:

"<u>Acquiring Person</u>" shall have the meaning given such term in Section 4.8.

"<u>Action</u>" shall have the meaning given such term in Section 3.1(j).

"<u>Additional Purchaser Nominees</u>" shall have the meaning given such term in Section 4.15(d).

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Aggregate Cash Distribution Amount</u>" shall have the meaning set forth in Section 4.10(a).

"<u>Annual Meeting</u>" shall have the meaning given such term in the recitals.

"<u>Board of Directors</u>" means the board of directors of the Company or any authorized committee thereof.

"<u>Business Day</u>" means any day other than Saturday, Sunday, any day which is a federal legal holiday in the United States or any other day on which commercial banks in the City of New York, New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York, New York are generally open for use by customers on such day.

"<u>Certificates of Designations</u>" means the Certificate of Designations of the Series D Preferred Stock and the Series E Preferred Stock to be filed prior to the applicable Closing by the Company with the Secretary of State of Delaware, in the forms of <u>Exhibit A</u> and <u>Exhibit B</u>, respectively, attached hereto.

"<u>Closing</u>" each has the meaning set forth in Section 2.2.

"<u>Closing Cash Proceeds</u>" shall have the meaning set forth in Section 4.10(c).

"<u>Closing Date</u>" means, with respect to the First Closing, the date of this Agreement and with respect to the Final Closing, the Trading Day on which all of the Transaction Documents with respect to the applicable Closing, have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser's obligations to pay the applicable portion of the Purchase Price and (ii) the Company's obligations to deliver the applicable portion of the Securities, in each case, have been satisfied or waived, but in no event later than the second (2<sup>nd</sup>) Trading Day following the date hereof.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

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

"<u>Company Party</u>" means all directors, officers, stockholders, employees, agents, and representatives, including those directors comprising the current Board of Directors.

"<u>Confidentiality Agreement</u>" shall have the meaning set forth in Section 3.2(g).

"<u>Contemplated Transactions</u>" shall have the meaning given such term in the recitals.

"<u>Continuing Director</u>" shall have the meaning set forth in Section 4.15(d).

"<u>Conversion Shares</u>" means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms of the Certificates of Designations.

"<u>Disclosure Schedules</u>" means the Disclosure Schedules of the Company delivered concurrently herewith.

"<u>Disclosure Time</u>" means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.

"<u>Distribution Compliance Period</u>" shall have the meaning set forth in Section 4.3.

"<u>Environmental Laws</u>" shall have the meaning given such term in Section 3.1(m).

"<u>Evaluation Date</u>" shall have the meaning given such term in Section 3.1(r).

"<u>Exchange Act</u>" means Securities Exchange Act of 1934, as amended.

"<u>Exempt Issuance</u>" means the issuance of (a) shares of Common Stock or options, restricted stock units or other equity awards to employees, consultants, contractors, advisors, officers or directors of the Company pursuant to any stock, option or equity plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise, exchange or conversion of any Securities issued hereunder, and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions, including the Post-Investment Transaction, approved by a majority of the disinterested directors on the Board of Directors, provided that such securities are issued as "restricted securities" (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.16(a) herein, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, or (d) the issuance of shares of Common Stock to the Purchaser contemplated by this Agreement.

"<u>FCPA</u>" means the Foreign Corrupt Practices Act of 1977, as amended.

"<u>Final Closing</u>" shall have the meaning given such term in Section 2.2.

"<u>Final Closing Shares</u>" shall mean the aggregate shares of Series E Preferred Stock issued at the Final Closing, which will not be convertible into shares of Common Stock prior to Stockholder Approval, except as provided in Series E Preferred Stock Certificate of Designation.

"<u>First Closing</u>" shall have the meaning given such term in Section 2.2.

"<u>First Closing Shares</u>" shall mean the aggregate shares of Series D Preferred Stock issued at the First Closing, which will not be convertible into shares of Common Stock prior to Stockholder Approval, except as provided in Series D Preferred Stock Certificate of Designation.

"<u>GAAP</u>" shall have the meaning given such term in Section 3.1(h).

"<u>Indebtedness</u>" shall have the meaning given such term in Section 3.1(z).

"<u>Initial Nominee</u>" shall have the meaning given such term in Section 4.15(d).

"<u>Initial Warrant Holders</u>" shall have the meaning given such term in Section 4.11.

"<u>Investment</u>" shall have the meaning given such term in the recitals.

"<u>IT Systems and Data</u>" shall have the meaning given such terms in Section 3.1(gg).

"<u>Lazar</u>" shall have the meaning set forth in the preamble.

"<u>Liens</u>" means an adverse claim, lien, charge, pledge, security interest, encumbrance, right of first refusal, or preemptive right.

<u>"Material Adverse Effect</u>" shall have the meaning assigned to such term in Section 3.1(b).

"<u>Material Permits</u>" shall have the meaning given such term in Section 3.1(n).

"<u>Minimum Company Operating Capital</u>" shall have the meaning set forth in Section 4.10(c).

"<u>Other Company Liabilities</u>" shall have the meaning set forth in Section 4.10(c).

"<u>Participation Maximum</u>" shall have the meaning given such term in Section 4.16(a).

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Post-Investment Available Capital</u>" shall have the meaning set forth in Section 4.10(b).

"<u>Post-Investment Transaction</u>" shall have the meaning set forth in Section 4.10(b).

"<u>Pre-Notice</u>" shall have the meaning given such term in Section 4.16(b).

"<u>Preferred Stock</u>" means the number of shares of the Series D Preferred Stock and Series E Preferred Stock issued as set forth in the Certificate of Designations, having the rights, preferences and privileges therein, in the form set forth in <u>Exhibit A</u> and <u>Exhibit B</u> hereto, respectively.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or, to the Company's knowledge, threatened in writing, against the Company before or by any court, arbitrator, governmental, or administrative agency or regulatory authority.

"<u>Purchase Price</u>" means, Six Million Dollars (USD $6,000,000), payable in accordance with the terms herein, which shall be paid in exchange for the Securities issued at the First Closing and the Final Closing as provided in Article 2 of this Agreement.

"<u>Purchaser</u>" shall have the meaning set forth in the preamble.

"<u>Purchaser Available Funds</u>" shall have the meaning set forth in Section 3.2(j).

"<u>Purchaser Party</u>" shall have the meaning given such term in Section 4.13.

"<u>Required Approvals</u>" shall have the meaning given such term in Section 3.1(e).

"<u>Redemption Payment</u>" shall have the meaning given such term in Section 4.11.

"<u>Required Minimum</u>" means, as of any date, the maximum aggregate number of shares of Common Stock issuable or potentially issuable in the future pursuant to the Transaction Documents, including through the conversion of the Preferred Stock, ignoring any conversion and other limits that may be set forth in the Certificate of Designations.

"<u>Retractable Certificate of Designations</u>" shall have the meaning given such term in Section 4.11.

"<u>Retractable Preferred Stock</u>" shall have the meaning given such term in Section 4.11.

"<u>Rule 144</u>" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"<u>SEC Reports</u>" shall have the meaning given such term in Section 3.1(h).

"<u>Second Meeting</u>" shall have the meaning given such term in Section 4.15(c).

"<u>Securities</u>" means the Preferred Stock and the Conversion Shares.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Securities Purchase Rights</u>" shall have the meaning given such term in Section 2.3(a)(iv).

"<u>Securities Purchase Rights Transfer Right</u>" shall have the meaning given such term in Section 2.3(a)(iv).

"<u>Series D Preferred Stock</u>" means the series of Company preferred stock, par value $0.01 per share, that is designated as the Series D Non-Voting Convertible Preferred Stock and shall have the rights, preferences, privileges and limitations as set forth in the Certificate of Designations, in the form set forth in <u>Exhibit A</u> hereto.

"<u>Series E Preferred Stock</u>" means the series of Company preferred stock, par value $0.01 per share, that is designated as the Series E Non-Voting Convertible Preferred Stock and shall have the rights, preferences, privileges and limitations as set forth in the Certificate of Designations, in the form set forth in <u>Exhibit B</u> hereto.

"<u>Series F Warrants</u>" shall have the meaning given such term in Section 4.11.

"<u>Settlement Agreements</u>" shall have the meaning set forth in Section 2.3(a)(iii).

"<u>Share Issuance Limitation</u>" shall have the meaning given such term as set forth in the Certificate of Designations for each of the Series D Preferred Stock and the Series E Preferred Stock that will be filed prior to the applicable Closing by the Company with the Secretary of State of Delaware, in the forms of <u>Exhibit A</u> and <u>Exhibit B</u>, respectively, attached hereto.

"<u>Special Dividend</u>" shall have the meaning set forth in Section 4.10(a).

"<u>Stated Value</u>" means the Stated Value of the Preferred Stock as set forth in the Certificate of Designations.

"<u>Stockholder Approval</u>" means all such approvals as may be required by the applicable rules and regulations of the NYSE American (or any successor entity) or under applicable law from the stockholders of the Company with respect to the conversion of all the Securities to the Purchaser, including the automatic conversion of the Preferred Stock into Common Stock upon receipt of such approval or as otherwise provided in the Certificates of Designation.

"<u>Stockholders Meeting</u>" means the Annual Meeting or such other meeting of the stockholders of the Company in which Stockholder Approval is voted on as set forth in a proxy statement prepared by the Company and distributed to its stockholders, which shall be subject to input from the Purchaser to confirm their rights and the Company's obligations under this Agreement.

"<u>Subsequent Financing</u>" shall have the meaning given such term in Section 4.16(a).

"<u>Subsequent Financing Notice</u>" shall have the meaning given such term in Section 4.16(b).

"<u>Target Company</u>" shall have the meaning set forth in Section 4.10(b).

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for trading.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC (or any successors to any of the foregoing).

"<u>Transaction Documents</u>" means this Agreement, the Certificate of Designations, all exhibits and schedules thereto and hereto, the Confidentiality Agreement and any other documents or agreements executed by all or any of the parties hereto in connection with the Contemplated Transactions.

"<u>Transfer Agent</u>" means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15<sup>th</sup> Avenue, Brooklyn NY 11219, and any successor transfer agent of the Company.

"<u>Voting Agreement</u>" means that certain Voting Agreement entered into by (a) the Company, (b) the Purchaser and (c) each of (i) Mr. Jad Fakhry, an individual, (ii) Poplar Point Capital Management LLC, a Delaware limited liability company, (iii) Poplar Point Capital Partners LP, a Delaware limited partnership, and (iv) Poplar Point Capital GP LLC, a Delaware limited liability company.

"<u>Warrant Resolution Transaction</u>" shall have the meaning set forth in Section 4.11.

**ARTICLE 2.**

**PURCHASE AND SALE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Purchase of Preferred Stock</u>. Upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees to purchase the Securities for an aggregate Purchase Price of Six Million Dollars (USD $6,000,000) on the applicable Closing Date as follows: (i) Four Hundred Eighty-One Thousand Two Hundred Fifty (481,250) shares of Series D Preferred Stock (each share of Series D Preferred Stock shall be convertible into 160 shares of Common Stock) at a price per share price of $8.00, or Three Million Eight Hundred Fifty Thousand Dollars (USD $3,850,000) in the aggregate, and (ii) and Two Hundred Sixty-Eight Thousand Seven Hundred Fifty (268,750) shares of Series E Preferred Stock (each share of Series E Preferred Stock shall be convertible into 160 shares of Common Stock) at a price per share price of $8.00, or Two Million One Hundred Fifty Thousand Dollars (USD $2,150,000) in the aggregate. Neither the Series D Preferred Stock nor Series E Preferred Stock is convertible into shares of Common Stock prior to Stockholder Approval, except as provided in their respective Certificates of Designations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Closing</u>. The Closing shall take place in two stages as set forth below (respectively, the "First Closing" and the "Final Closing", and each a "<u>Closing</u>"). At the Closing on the Effective Date (the "<u>First Closing</u>"), upon the terms and subject to the conditions set forth herein, (a) the Purchaser shall pay Three Million Eight Hundred Fifty Thousand Dollars (USD $3,850,000) of the Purchase Price to the Company in the manner set forth in Section 2.3(b)(i), (b) the Company shall in exchange issue and deliver to the Purchaser 481,250 shares of Series D Preferred Stock in the manner set forth in Section 2.3(a)(i) and (c) the Company and the Purchaser shall deliver the other items set forth in Section 2.3 that are deliverable at this Closing. At the second and final Closing, which shall occur as soon as practicable after the date Stockholder Approval has been received (not to exceed ten (10) business days thereafter) (the "<u>Final Closing</u>"), (i) the Purchaser shall pay the remaining Purchase Price of Two Million One Hundred Fifty Thousand Dollars (USD $2,150,000) in the manner set forth in Section 2.3(b)(i), (ii) the Company shall in exchange issue and deliver to the Purchaser 268,750 shares of Series E Preferred Stock in the manner set forth in Section 2.3(a)(i), and (iii) the Company and the Purchaser shall deliver the other items set forth in Section 2.3 that are deliverable at this Closing. Upon satisfaction of the covenants and conditions set forth in Section 2.4, both the First Closing on the date hereof and the later Final Closing shall take place remotely by electronic transfer of the Closing deliverables and documentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Deliverables</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On or prior to each Closing Date (except as indicated below that is specific to a particular Closing), the Company shall deliver or cause to be delivered to the Purchaser the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a book-entry statement or share certificate evidencing issuance of the First Closing Shares or Final Closing Shares, as applicable to such Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) as of the First Closing, an as-filed Certificate of Designations for the Series D Preferred Stock, in the form attached hereto as <u>Exhibit A</u>, and, as of the Final Closing, an as filed Certificate of Designations for the Series E Preferred Stock, in the form attached hereto as <u>Exhibit B</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) as of the First Closing, a copy of the executed settlement agreement and general and mutual releases from executive officers and non-employee directors of the Company set forth on <u>Schedule 2.3</u> attached hereto, in a form acceptable to Purchaser and the Company (collectively, the "<u>Settlement Agreements</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) as of the First Closing, a copy of resolutions of the Company's Board of Directors, or a committee thereof as applicable (A) authorizing the Company's execution, delivery, and performance of this Agreement, including, *inter alia*, the authorization and issuance of the Securities, as well as the authorization of the right for the Purchaser to assign and transfer either the Securities (together with the Common Stock underlying any such Securities) and/or its rights to acquire the Securities (including the Common Stock underlying any such Securities) to be purchased by the Purchaser pursuant to this Agreement (the "<u>Securities Purchase Rights</u>"), including by way of option for the Purchaser to sell and/or a transferee thereof to purchase, the Securities Purchase Rights (the "<u>Securities Purchase Rights Transfer Right</u>"), in each case subject to Purchaser's compliance with Section 5.6 and to the extent permitted by applicable law, (B) the Rule 16b-3 Exemption Approvals, which resolutions shall be prepared and adopted in the form provided by Purchaser to the Company and reasonably acceptable to the Company, (C) increasing the size of the Board of Directors to eight (8) directors, (D) the appointment of the Purchaser as a director to serve on the Board of Directors effective immediately prior to the execution and effectiveness of this Agreement and (E) the formation of an independent Special Transaction Committee of the Board of Directors as of the Effective Date to address matters involving the Contemplated Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) as of the First Closing, employment agreements being entered into by the Company with its former Chief Executive Officer and its current Interim Chief Financial Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) as of the First Closing, the projected flow of funds as determined by the Purchaser and the Company and included as <u>Exhibit D</u>, which funds, along with the Purchase Price received at the Final Closing, shall be available to fund the Company as set forth therein, to address the resolution and/or cancellation of Common Stock Equivalents and as otherwise provided in this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) as of the First Closing, the Voting Agreement being executed by the Company and the other parties thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On or prior to the applicable Closing Date for the First Closing and the Final Closing, the Purchaser shall deliver or cause to be delivered to the Company the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) the applicable Purchase Price being paid by the Purchaser by wire transfer to the account as specified in writing by the Company in <u>Exhibit C</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) as of the First Closing, the Voting Agreement being executed by the Company and the other parties thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Closing Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on each Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of such date), except where the failure of such representations and warranties described in this clause to be so true and correct (without giving effect to any qualification as to materiality, Material Adverse Effect or similar qualification set forth therein), individually or in the aggregate, has not had a Material Adverse Effect on (A) the legality, validity or enforceability of any Transaction Document, (B) the business, assets or liabilities of the Purchaser or (C) the Purchaser's ability to perform in any material respect on a timely basis its obligations under any Transaction Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the applicable Closing Date shall have been performed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the delivery by the Purchaser of the items set forth in Section 2.3(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) regarding the Final Closing, receipt of Stockholder Approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on each Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate in all material respects or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date, except where the failure of such representations and warranties described in this <u>clause</u> to be so true and correct (without giving effect to any qualification as to materiality, Material Adverse Effect or similar qualification set forth therein), individually or in the aggregate, has not had a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date shall have been performed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the delivery by the Company of the items set forth in Section 2.3 (a); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) prior to the date of the Annual Meeting (A) trading in the Common Stock shall not have been suspended permanently or for more than three (3) consecutive Trading Days by the Commission or the Company's Trading Market and (B) trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or materially limited permanently or for more than three (3) consecutive Trading Days, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market for more than three (3) consecutive Trading Days.

**ARTICLE 3.**

**REPRESENTATIONS AND WARRANTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Representations and Warranties of the Company</u>. Except as set forth in the SEC Reports as filed prior to the applicable Closing Date and the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to the Purchaser as of the date hereof for the First Closing and as of the Closing Date for the Final Closing (unless such representation is made as of a specific date therein, in which case, such representation shall be accurate as of that specific date):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>No Subsidiaries</u>. As of the Effective Date, the Company does not own, directly or indirectly, any subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Organization and Qualification</u>. The Company is an entity duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Other than as set forth on <u>Schedule 3.1(b)</u>, the Company is not in violation or default of any of the provisions of its certificate of incorporation or bylaws. The Company is qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, liabilities or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "<u>Material Adverse Effect</u>"); provided, that a change, effect, development or circumstance to the extent arising or resulting from: (A) a change in the market price or trading volume of the Common Stock; (B) general conditions applicable to the economy of the United States or foreign economies in general, including changes in interest rates and tariffs; (C) any act of God, natural disaster or extreme weather conditions or any epidemics, pandemics, disease outbreaks, or other public health emergencies; (D) acts of terrorism or war (whether or not declared) occurring prior to, on or after the date of this Agreement; (E) conditions generally affecting the industry in which the Company operates; (F) any changes in applicable laws or accounting rules (including GAAP) occurring after the date hereof; or (G) the public announcement, pendency or performance of the Contemplated Transactions shall not be deemed to constitute a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As of the Effective Date, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to perform its obligations under this Agreement and the other Transaction Documents. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the performance by it of the Contemplated Transactions have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's stockholders in connection herewith or therewith, other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery at the applicable Closing will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>No Conflicts</u>. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's certificate of incorporation or bylaws, or (ii) except as set forth on <u>Schedule 3.1(e)(ii)</u>, conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject to receipt of the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any material consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.7, (ii) the receipt of consent from or provision of notice to those parties (A) set forth on <u>Schedule 3.1(f)(ii)</u> or (B) that are contemplated by the Transaction Documents, (iii) the notice, non-objection and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares for trading thereon in the time and manner required thereby, (iv) the Stockholder Approval and other approvals contemplated by Section 4.15(b), and (v) such filings as are required to be made under applicable state securities laws (collectively, the "<u>Required Approvals</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Issuance of the Securities</u>. The Preferred Stock at the time of issuance shall be duly designated (as applicable), authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid, and nonassessable, free and clear of any Lien imposed by the Company. The Conversion Shares upon issuance in accordance with the terms of the Preferred Stock will be duly and validly issued, fully paid, and nonassessable, free and clear of any Lien imposed by the Company. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for conversion of the Preferred Stock into the Conversion Shares on the date hereof, subject to Stockholder Approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Capitalization</u>. The capitalization of the Company as of the date hereof is as set forth on <u>Schedule 3.1(h)</u>. Except as set forth on <u>Schedule 3.1(h)</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) The Company has not issued any capital stock since filing its Annual Report on Form 10-K for the year ending December 31, 2024 with the Commission, other than pursuant to the exercise of employee stock options under the Company's stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company's employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the Contemplated Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as a result of the purchase and sale of the Securities as contemplated hereby, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The issuance and sale of the Securities to the Purchaser pursuant to this Agreement will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Except as disclosed in the SEC Reports, there are no outstanding securities or instruments of the Company with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Except as disclosed in the SEC Reports, there are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Except for the Required Approvals, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Preferred Stock; and, other than with respect to approval by the stockholders of the Company at a duly convened meeting thereof, no further approval or authorization of any stockholder is or will be required for the issuance of the Conversion Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) There are no stockholders' agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders that is currently in effect.

&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) <u>SEC Reports; Financial Statements</u>. Other than as set forth on <u>Schedule 3.1(i)</u>, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the year preceding the date of the applicable Closing (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "<u>SEC Reports</u>") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Prior to the Effective Date, to the Company's knowledge, the Company has (i) never been an issuer subject to Rule 144(i) under the Securities Act and (ii) not itself determined or been deemed by the Commission to be a "shell company" for purposes of the Exchange Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved ("<u>GAAP</u>"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Material Changes; Undisclosed Events, Liabilities or Developments</u>. Since the date of the latest financial statements included within the SEC Reports, except as set forth on <u>Schedule 3.1(j)</u>: except as disclosed in the SEC Reports or as otherwise provided in or contemplated by this Agreement and the other Transaction documents, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting in any material respect, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Litigation</u>. Except as set forth on <u>Schedule 3.1(k)</u>, as of the Effective Date there is no material action, suit, inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "<u>Action</u>"). None of the Actions set forth on <u>Schedule 3.1(k)</u>, (i) would adversely affect or challenge the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. As of the Effective Date, neither the Company nor any director or officer thereof is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty that could result in a Material Adverse Effect. Except as set forth on <u>Schedule 3.1(k)</u>, as of the Effective Date, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or executive officer of the Company. As of the Effective Date, the Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Labor Relations</u>. Except as set forth on <u>Schedule 3.1(l)</u>, no labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's employees is a member of a union that relates to such employee's relationship with the Company, and the Company is not a party to a collective bargaining agreement, and the Company believes that its relationships with its employees are good. To the knowledge of the Company, no executive officer of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Compliance</u>. Except as set forth on <u>Schedule 3.1(m)</u> of the Disclosure Schedules, the Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is not in violation of any judgment, decree or order of any court, arbitrator or other governmental authority that existed as of the Effective Date or (iii) is, to the Company's knowledge, not in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case of clause (i), (ii) and (iii) as would not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Environmental Laws</u>. To the knowledge of the Company, the Company (i) is in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "<u>Hazardous Materials</u>") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder ("<u>Environmental Laws</u>"); (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business as currently conducted; and (iii) is in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Regulatory Permits</u>. Except as set forth on <u>Schedule 3.1(o)</u>, the Company possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business as currently conducted, except where the failure to possess such permits would not reasonably be expected to have or result in a Material Adverse Effect ("<u>Material Permits</u>"), and the Company has not received any notice of Proceedings relating to the revocation or modification of any Material Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Title to Assets</u>. The Company has good and valid title in all personal property owned by it that is material to the remaining business of the Company as currently conducted, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Except as set forth on <u>Schedule 3.1(p)</u> and as contemplated by the use of proceeds in Section 4.10, any real property and facilities currently held under lease by the Company are held by them under valid, subsisting and enforceable leases with which the Company is in compliance in all material respects. The Company does not own any real property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Offering Exemption</u>. Subject to the accuracy of the representations of the Purchaser set forth in this Agreement, the offer, sale and issuance of the Securities to be issued to the Purchaser in conformity with the terms of this Agreement constitute transactions which at the time of issuance shall be exempt from the registration requirements of the Securities Act and from all applicable U.S. state registration or qualification requirements. The Company has implemented all necessary offering restrictions applicable to the transactions contemplated by this Agreement under Regulation S promulgated under the Securities Act. Subject to the receipt of the Required Approvals, including from the Trading Market, and assuming the accuracy of the Purchaser's representations and warranties set forth in Section 3.2 and information provided by the Purchaser which was submitted to the Trading Market in connection with the Required Approval, the issuance and sale of the Securities to the Purchaser hereunder will not contravene the rules and regulations of the Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Transactions With Affiliates and Employees</u>. Except as set forth on <u>Schedule 3.1(r)</u> or any transaction contemplated by this Agreement, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees 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, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Sarbanes-Oxley; Internal Accounting Controls</u>. The Company is in compliance in all material respects with applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof, except in each case as disclosed in the SEC Reports. 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 GAAP 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. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the "<u>Evaluation Date</u>"). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company that have materially affected the internal control over financial reporting of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Certain Fees</u>. No brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the Investment. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the Investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Investment Company</u>. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Registration Rights</u>. Except as set forth on <u>Schedule 3.1(v)</u> or otherwise disclosed in SEC Reports, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Listing and Maintenance Requirements</u>. As of the Effective Date, the Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and, except as set forth in its SEC Reports, the Company has taken no action designed to, or which to the Company's knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports or on <u>Schedule 3.1(w)</u>, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company has taken commercially reasonable efforts in connection with the Investment to regain compliance with the listing or maintenance requirements; however, its ability to regain compliance is subject to the risks as set forth in the SEC Reports. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Application of Takeover Protections</u>. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser's and the Company's fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the Securities and the Purchaser's ownership of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Disclosure</u>. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information as of each Closing about the Company or its current business which has not been otherwise disclosed. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>No Integrated Offering</u>. Assuming the accuracy of the Purchaser's representations and warranties set forth in Section 3.2 and except for the Company securities to be issued as provided in the Transaction Documents and as part of the Contemplated Transactions, neither the Company, nor any Person acting on its behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated under U.S. federal securities laws with prior completed offerings by the Company for purposes of any applicable stockholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Solvency</u>. Based on the financial condition of the Company as of the applicable Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder and the Purchaser's compliance with its obligations to deliver the Purchase Price and provide capital to the Company as provided in this Agreement, the fair saleable value of the Company's assets (including the proceeds from the sale of Securities hereunder) exceeds the amount that will be required to be paid on or in respect of the Company's existing known debts and other liabilities (including known contingent liabilities) as they mature as of the applicable Closing Date. <u>Schedule 3.1(aa)</u> sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company, or for which the Company has commitments. For the purposes of this Agreement, "<u>Indebtedness</u>" means (x) any liabilities for borrowed money owed in excess of fifty thousand U.S. dollars ($50,000) (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of fifty thousand U.S. dollars ($50,000) due under leases required to be capitalized in accordance with GAAP. Except as set forth on <u>Schedule 3.1(aa)</u>, as of the Effective Date the Company is not in default with respect to any Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Tax Status</u>. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect and without regard to the effect of entering into and consummating the Investment, the Post-Closing Investment Transaction and the other Contemplated Transactions, the Company (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has 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 and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Foreign Corrupt Practices</u>. Neither the Company nor to the knowledge of the Company, any agent or other person acting on behalf of the Company prior to the Effective Date, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Accountants</u>. The Company's independent accounting firm for the fiscal year ended December 31, 2024 was WithumSmith+Brown, PC. To the knowledge and belief of the Company, such accounting firm: (i) was a registered public accounting firm as required by the Exchange Act and (ii) expressed its opinion with respect to the financial statements that were included in the Company's Annual Report on Form 10-K for the fiscal year ending December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>Regulation M Compliance</u>. As of the Effective Date, the Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>No General Solicitation or Directed Selling Efforts</u>. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising or "directed selling efforts" (as defined in Rule 902(c) of Regulation S).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>Stock Option Plans</u>. Each stock option granted by the Company under the Company's equity incentive plans was granted (i) in accordance with the terms of the Company's equity incentive plans and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's equity incentive plans has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its financial results or prospects. As of the Effective Date, the Company had 14,316 shares available for issuance under its 2017 Omnibus Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>Cybersecurity</u>. To the knowledge and belief of the Company, as of the Effective Date (i)(x) there has been no security breach or other compromise of or relating to any of the Company's material information technology and computer systems, networks, hardware, software, data (including the data of its customers, employees, suppliers, vendors and any third party data maintained by or on behalf of the Company), equipment or technology (collectively, "IT Systems and Data") and (y) the Company has not been notified in writing of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; and (ii) the Company is presently in compliance in all material respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would in each case not, individually or in the aggregate, have a Material Adverse Effect.

&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) <u>Office of Foreign Assets Control</u>. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company serving prior to the Effective Date is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>Money Laundering</u>. The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "<u>Money Laundering Laws</u>"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Representations and Warranties of the Purchaser</u>. The Purchaser hereby represents and warrants as of the date hereof for the First Closing and as of the Closing Date for the Final Closing to the Company as follows (unless such a representation is made as of a specific date therein, in which case, such representation shall be accurate as of that specific date):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Capacity; Authority</u>. The Purchaser is a natural person who has the right, power and legal capacity to enter into and deliver the Agreement and the other Transaction Documents and to consummate the Contemplated Transactions and otherwise to carry out his obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Purchaser and the consummation by him of the Contemplated Transactions have been authorized by all necessary action. Each Transaction Document to which he is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof or thereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against him in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Investment Intent; Understandings or Arrangements</u>. The Purchaser is acquiring the Securities in compliance with applicable securities laws, and in the ordinary course of his business. The Purchaser further represents that he is purchasing the Securities solely for his own account (and not for the account of any other Person except as contemplated in Section 5.6) for investment and not with a view to or for sale in connection with any distribution of the Securities or any portion thereof, and, except as contemplated in Section 5.6, not with any present intention of selling, offering to sell or otherwise disposing of or distributing the Securities or any portion thereof in any transaction other than a transaction exempt from registration under the Securities Act and any applicable state securities laws. Prior to the Initial Closing, Purchaser does not beneficially own, director or indirectly, any shares of Common Stock, Common Stock Equivalents or other Company securities. The Purchaser also represents that the entire legal and beneficial interest of the Securities is being purchased, and will be held, for the Purchaser's account only (and not for the account of any other Person except as contemplated in Section 5.6), and neither in whole or in part for any other person. The Purchaser understands and acknowledges that (i) the Securities are "restricted securities" as the sale of the Securities in the Investment has not been registered under the Securities Act or under any applicable state securities law or laws of any other jurisdiction and the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available and the Company is under no obligation to register the Securities, (ii) the Securities whether held in book-entry form or certified will have transfer restrictions and include the legend as provided in Section 4.1; and (iii) the Company will make a notation in its records and that of its transfer agent of the aforementioned restrictions on transfer and legends. The Purchaser further acknowledges that he will have reporting and disclosure obligations under the Exchange Act as a result of his investment in the Securities, including becoming an "Insider" for purposes of the Exchange Act and will become subject to the Company's insider trading policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Purchaser Status</u>. At the time the Purchaser was offered the Securities, he was, and as of the date hereof he is either (i) an "accredited investor" as defined in any of Rule 501 (a)(4), (a)(5), or (a)(6) under the Securities Act, or (ii) a "qualified institutional buyer" as defined in Rule 144A(a) under the Securities Act. In addition, if Purchaser has purchased the Securities pursuant to Regulation S, the Purchaser represents and warrants that: (i) at the time he was offered the Securities he was not, as of such date and he is not, and throughout the Closing Date for the Final Closing he will continue not to be, a "U.S. Person" as that term is defined in Rule 902 of Regulation S; (ii) he has, and will at all times have, executed all documents (including this Agreement and the other Transaction Documents) outside of the United States; (iii) he was outside of the United States when offered the Securities and will be outside of the United States when initiating any Closing Date and on any Closing Date; and (iv) the Purchaser is not acquiring the Securities for the account or benefit of any "U.S. Person" as that term is defined in Rule 902 of Regulation S. The Purchaser further represents that the Purchaser is not an "underwriter," "distributor" or a "dealer" (each as defined in the Securities Act). Purchaser is presently a citizen of Israel and the E.U., a bona fide resident of the Republic of Panama, and has no present intention of becoming a resident of any other state, country or jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>General Solicitation</u>. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of the Purchaser, any other general solicitation or general advertising. In addition, the Purchaser has not engaged, nor is he aware that any party has engaged, will not engage nor cause any third party to engage in, and is not purchasing the Securities as a result of any "directed selling efforts" (as defined in Rule 902(c) of Regulation S) in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Experience of Purchaser</u>. The Purchaser, either by reason of his extensive business and finance experience alone or together with the experience of the Purchaser's professional advisors and representatives (who are unaffiliated with and who are not compensated by the Company for any affiliate), has the requisite knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the Investment in the Securities and to protect the Purchaser's own interests in connection with the Investment and the other Contemplated Transactions, and has so evaluated the merits and risks of such Investment and the other Contemplated Transactions. The Purchaser realizes that the purchase of the Securities will be a highly speculative investment which involves a high degree of risk, and the Purchaser is able to bear, without impairing his financial condition, to hold the Securities for an indefinite period of time and to suffer the economic risk of the Investment in the Securities and is able to afford a complete loss of such Investment without impairing his financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Access to Information</u>. The Purchaser acknowledges that he has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as he has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable him to evaluate the Investment, including information about the Company's remaining assets, including cash and cash equivalents that will be among the funds to be paid for the Special Dividend as contemplated by Section 4.10; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment. The Purchaser understands that no U.S. or non-U.S. securities regulator or other authority has made any determination or finding relating to the merits or fairness of an investment in the Securities. In making its investment decision, the Purchaser has relied upon its review of the SEC Reports and other Company filings with the Commission and other documents and not any representation, oral or written, by the Company's officers or directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Certain Transactions and Confidentiality</u>. Other than consummating the Contemplated Transactions, the Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time since January 1, 2025 and will not at any time while the Purchaser is the owner of Preferred Stock. Other than to the parties to this Agreement, or to the Purchaser's and/or a transferee's (as contemplated by Section 5.6) representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser and/or transferee has maintained the confidentiality of all disclosures made to him in connection with the Investment and the other Contemplated Transactions (including the existence and terms of this transaction) in accordance with the Confidentiality Agreement entered into on April 3, 2025 (the "<u>Confidentiality Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Director Independence</u>. A sufficient number of the Additional Purchaser Nominees recommended by the Purchaser to be appointed to the Board of Directors following receipt of Stockholder Approval shall satisfy the criteria of "independence" under the rules and regulations of the NYSE American, LLC and applicable securities laws, so that the Company shall continue to be in compliance with such rules, regulations and laws following the appointment of the Additional Purchaser Nominees.

&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) <u>Purchaser Jurisdiction</u>. The Purchaser has satisfied the full observance of the laws of the jurisdiction to which he is subject in connection with any invitation to subscribe for the Securities, including (i) the legal requirements within the Purchaser's jurisdiction for the purchase of the Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. The Purchaser's purchase and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Purchaser's jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Financial Sufficiency</u>. The Purchaser shall at all times as of and after the Effective Date have sufficient cash on hand or other sources of immediately available funds (the "<u>Purchaser Available Funds</u>") to enable him to timely fulfill and/or satisfy his payment and other financial obligations under this Agreement and the other Transaction Documents, including payment of the remaining Purchase Price at the Final Closing, his other funding obligations for the Post-Investment Transaction, his indemnification obligations and for other liabilities he assumed as provided in Article 4. All of the Purchaser Available Funds shall not at any time be subject to any Lien. Purchaser represents that his assets comprising the Purchaser Available Funds, wherever located, whether in the U.S. or outside of the U.S., shall be available to satisfy his obligations under this Agreement regardless of where such assets are located and/or due to the Purchaser's residency in the Republic of Panama or elsewhere.

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser's right to rely on the Company's representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the Contemplated Transactions.

**ARTICLE 4.**

**OTHER AGREEMENTS OF THE PARTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Restrictive Legends</u>. The Purchaser agrees that the Preferred Stock and the Conversion Shares, issued pursuant to exemptions from registration under the Securities Act, shall each bear legends stating that transfer of those Securities is restricted, substantially as follows:

THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY ARE BEING OFFERED AND ISSUED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S OF THE SECURITIES ACT) IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY ARE SUBJECT TO THE TRANSFER RESTRICTION SET FORTH HEREIN AND IN THE SECURITIES PURCHASE AGREEMENT, DATED AUGUST 19, 2025 AS AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE WITH THE SECRETARY OF THE COMPANY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Securities will result in dilution of the outstanding shares of Common Stock. Subject to compliance with the terms of this Agreement, the Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Conversion Shares pursuant to the Transaction Documents when required in accordance with their terms, are unconditional and absolute, except for the Stockholder Approval, and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against Purchaser or any transferee thereof, and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Limitations on Disposition</u>. The Purchaser agrees that he will not offer, sell, dispose of, or otherwise transfer the Securities (inclusive of the Conversion Shares) to a "U.S. Person" as that term is defined in Rule 902 of Regulation S within six months from the date of purchase (the "<u>Distribution Compliance Period</u>"), unless the transferor certifies that it is not a "U.S. Person" and agrees to resell only in compliance with Regulation S, pursuant to registration under the Securities Act or pursuant to an available exemption from registration and not to engage in any hedging transactions. Purchaser further acknowledges and agrees that the distribution compliance period shall be one year in the event that the Company ceases to be a "reporting company" within the meaning of Regulation S or ceases to be current in its SEC reporting obligations. The Purchaser acknowledges that the Company will refuse to register any transfer of the Securities not made (a) pursuant to the provisions of Regulation S, (b) pursuant to registration under the Securities Act, or (c) pursuant to an available exemption from registration. The Purchaser further agrees not to engage in any hedging transactions in Company securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Continuation of Public Reporting</u>. The Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act through the date that Stockholder Approval is received, except in the event that the Company consummates: (a) any transaction or series of related transactions as a result of which any Person (together with its Affiliates) other than the Purchaser acquires then outstanding securities of the Company representing more than fifty percent (50%) of the voting control of the Company; (b) a merger or reorganization of the Company with one or more other entities in which the Company is not the surviving entity; or (c) a sale of all or substantially all of the assets of the Company, where the consummation of such transaction results in the Company no longer being subject to the reporting requirements of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Integration</u>. Except for the Company securities in connection with the Warrant Resolution Transaction and the other Contemplated Transactions, the Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction, unless stockholder approval is obtained before the closing of such subsequent transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Conversion Procedures</u>. The form of Notice of Conversion included in the applicable Certificate of Designations together with the provisions of the applicable Certificate of Designations sets forth the totality of the procedures required of the Purchaser in order to convert the Preferred Stock into shares of Common Stock. Without limiting the preceding sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in order to convert the Preferred Stock. No additional information or instructions shall be required of the Purchaser or transferee thereof to convert the Preferred Stock. The Company shall honor the conversions of the Preferred Stock and shall deliver Conversion Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Bankruptcy</u>. From the Effective Date through the date of Stockholder Approval and subject to the Purchaser complying with his obligations under this Agreement, the Company shall not voluntarily initiate, or cause to be initiated, any bankruptcy proceeding for itself, unless required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Securities Laws Disclosure</u>. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated by this Agreement and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Stockholder Rights Plan</u>. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser or any transferee thereof pursuant to the Securities Purchase Rights Transfer Right) as a result of the Investment is an "Acquiring Person" under any control share acquisition, business combination, poison pill or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 <u>Special Dividend; Use of Proceeds; Post-Investment Transaction</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Purchaser is making the Investment in the Company with the understanding that (i) the net proceeds from the Purchase Price paid at the First Closing and the Final Closing shall be the sole source of capital and liquidity for funding the current operations, liabilities (whether known, unknown or contingent) and expenses of the Company from and after the Effective Date and (ii) the Aggregate Cash Distribution Amount (as defined below) shall remain segregated in a separate bank account under the direction and control of the Special Transaction Committee and be available solely for distribution to Company stockholders through the Special Dividend. In connection with the Investment, the Purchase Price received by the Company in the First Closing and the Final Closing will be used by the Company for its ongoing operation, including for general corporate and working capital purposes, as well as payment for, among other items: (A) certain Company expenses in connection with the Investment, including obtaining the Stockholder Approval and the other stockholder approvals contemplated by Section 4.15(b) and (B) to pursue and consummate the Post-Investment Transaction and to resolve the Company's current office space lease obligation. The Company, in its sole discretion as determined and authorized by the Special Transaction Committee, at any time after the date of this Agreement, shall authorize the Chairman of the Board of Directors, or his designee(s), to take all required action to declare a special cash dividend to stockholders ("<u>Special Dividend</u>") in an amount that is comprised of Company cash as set forth on <u>Exhibit E</u> (the "<u>Aggregate Cash Distribution Amount</u>"). Until the Special Dividend has been declared and paid to Company stockholders, the Purchaser shall not convert any of the Securities into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) After the First Closing and subject to the approval of the Board of Directors and/or other approvals required by law, the Company intends to use the proceeds received from the Investment in the First Closing and Final Closing to pursue a strategic transaction that would involve an investment and/or acquisition of an operating going concern and solvent company (the "<u>Target Company</u>") by the earlier to occur of (i) the end of the third quarter of 2025, provide that Stockholder Approval has been obtained or (ii) the end of the fourth quarter of 2025 (the "<u>Post-Investment Transaction</u>"). The Purchaser will ensure that the Company has sufficient capital to (A) identify, conduct due diligence and complete the Post-Investment Transaction with a Target Company in a timely manner and (B) fund operations and pursue the growth opportunity and business strategy of the Target Company at least for the 12 months after consummation of the Post-Investment Transaction (clauses (A) and (B) collectively, the "<u>Post-Investment Available Capital</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company and the Purchaser shall prior to the First Closing determine the estimated net proceeds from the Purchase Price, after payment of estimated expenses, including those contemplated by Section 4.10(a), in order to determine the amount of cash that will be available to fund the Company's ongoing operations, excluding Aggregate Cash Distribution Amount (the "<u>Closing Cash Proceeds</u>"). In furtherance assessing the Company's assets and liabilities and determining the Closing Cash Proceeds prior to the First Closing, <u>Schedule 4.10(c)</u> of the Disclosure Schedule sets forth the Company's unaudited preliminary balance sheet as of May 31, 2025. After the First Closing and Final Closing, the Company shall maintain a cash balance sufficient to fund (i) at least three (3) months of Company operations for the purposes of continuing to carry on its business, to fulfill its obligations, contractual or otherwise, liabilities and continue its obligations as a public company (the "<u>Minimum Company Operating Capital</u>"), (ii) the Post-Investment Available Capital and (iii) all other liabilities or obligations of the Company, including pursuant to the terms of Common Stock Equivalents, or as a result of any Proceeding or Action that may arise (the "<u>Other Company Liabilities</u>"). To the extent that the Closing Cash Proceeds do not provide the capital resources and liquidity to fund (i) the Minimum Company Operating Capital prior to completing a Post-Investment Transaction or (ii) the Post-Investment Available Capital and/or (iii) Other Company Liabilities, then, the Purchaser shall himself, or together with other institutional investors known to the Purchaser, provide the necessary additional cash to the Company through an additional private placement equity investment to provide such funding on commercially reasonable terms, provided that such additional equity investment is also approved by a majority of the independent members of the Board of Directors unaffiliated with the Purchaser. For avoidance of doubt, the Purchaser acknowledges and agrees that the Aggregate Cash Distribution Amount shall (A) be available solely for the Special Dividend and (B) not to provide capital, liquidity or funding for such matters as set forth in this Section 4.10(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 <u>Warrant, Unsecured Note and Preferred Holder Resolution</u>. At the time of the First Closing, the holders of the Company's Series F-1 warrants exercisable for shares of Common Stock (the "<u>Series F Warrants</u>"), who are each listed on <u>Schedule 4.11</u> (the "<u>Initial Warrant Holders</u>"), shall have each entered into an agreement that provides for the irrevocable surrender and cancellation of all of their respective Series F Warrants in exchange for the Company issuing shares of a new series of Series F non-convertible, voting, retractable preferred stock (the "<u>Retractable Preferred Stock</u>") to each Initial Warrant Holder (the "<u>Warrant Resolution Transaction</u>"), which shall have such rights and preferences as set forth in the Certificate of Designation of Preferences, Rights and Limitations for the Retractable Preferred Stock (the "<u>Retractable Certificate of Designations</u>"). Upon any Initial Warrant Holder or their assignee exercising their right to cause the Company to retract (i.e. redeem) the Retractable Preferred Stock in exchange for a cash payment as provided in the Series F Certificate of Designation (the "<u>Redemption Payment</u>"), then Purchaser shall pay the full amount of the Redemption Payment to the Company in immediately available funds, including through the proceeds of the Investment by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 <u>Indemnification of the Company</u>. Subject to the subsections of this Section 4.12, the Purchaser will indemnify and hold the Company and each Company Party harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any such Company Party may suffer or incur as a result of or relating to (a) any inaccuracy in or breach of or failure to perform any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement or in the other Transaction Documents, (b) any Securities Purchase Rights Transfer Right, Securities Purchase Rights or with respect to the transferred Securities Purchase Rights and/or transferred Securities or (c) any action instituted against the Company or any Company Party in any capacity, or any of them or their respective Affiliates, by any Company stockholder or holder of a Common Stock Equivalent with respect to (i) any of the Contemplated Transactions (unless such action is solely based upon a material breach of the Company's representations, warranties or covenants under the Transaction Documents or any violations by the Company or Company Party of state or federal securities laws or any conduct by the Company or Company Party which is finally judicially determined to constitute fraud or willful misconduct). If any action shall be brought against the Company or any Company Party in respect of which indemnity is provided pursuant to this Agreement, then the Company and such Company Party shall promptly notify the Purchaser in writing, and, unless elected by the Company or the Company Party, the Purchaser shall have the right to assume the defense thereof with experienced legal counsel of his own choosing that is acceptable to the Company and/or the Company Party, as applicable. In such case where the Purchaser assumes the defense, any Company Party shall have the right to employ separate legal counsel in any such action and participate in the defense thereof, but the fees and expenses of such legal counsel shall be at the expense of the Company or such Company Party, except to the extent that (i) the employment thereof has been specifically authorized by the Purchaser in writing, (ii) the Purchaser has failed within ten days after notice from the Company or the Company Party to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of legal counsel, a material conflict on any material issue between the position of the Purchaser and the position of the Company and/or such Company Party, in which case, the Purchaser shall be responsible for the reasonable fees and expenses of no more than one such separate legal counsel. Additionally, if the Company or Company Party elects to assume the defense as provided above from the beginning, then the Purchaser in such case shall be responsible for the reasonable fees and expenses of the Company or the Company Party. The Purchaser will not be liable to the Company or any Company Party under this Agreement (y) for any settlement by the Company or a Company Party effected without the Purchaser's prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to the Company any Company Party's breach of any of the representations, warranties, covenants or agreements made by the Company or such Company Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.12 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Company Party against the Purchaser or others and any liabilities the Purchaser may be subject to pursuant to law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 <u>Indemnification of Purchaser</u>. Subject to the subsections of this Section 4.13, the Company will indemnify and hold Purchaser and his agents (each, a "<u>Purchaser Party</u>") harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to any inaccuracy in or breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed within twenty (20) days after notice from the Purchaser Party to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company's prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party's breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.13 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 <u>Reservation and Listing of Securities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except to the extent limited by the Company's authorized shares of Common Stock, the Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors shall include a proposal for an amendment to the Company's certificate of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at the Stockholders Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market on which the Common Stock is listed, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application to the extent permitted by the Trading Market, (ii) take all steps necessary to cause such shares of Common Stock to be listed on such Trading Market which the Common Stock is then listed as soon as possible thereafter, (iii) provide to the Purchaser evidence of such listing and (iv) use commercially reasonable efforts to maintain the listing of such Common Stock on such Trading Market. The Company agrees to use commercially reasonable efforts to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 <u>Certain Company Actions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Until the duly convened Annual Meeting, without the Purchaser's consent, which shall not be unreasonably withheld, conditioned or delayed, the Company shall not, except in each case, as contemplated by this Agreement, including the Contemplated Transactions, or as required by applicable law: (i) change the number of directors constituting the entire Board of Directors from eight (8) directors or fill any vacancy in the Board of Directors prior to the Annual Meeting (except as set forth above in this Agreement), (ii) change the nature of the Company's operations other than as contemplated by this Agreement, (iii) incur any debt for borrowed money outside of the ordinary course of business as presently conducted, (iv) guarantee any obligation of any third party, (v) issue any capital stock other than pursuant to obligations to issue Common Stock listed on <u>Schedule 3.1(g)</u> or pursuant to any Company equity incentive plan or other Exempt Issuance, (vi) issue or grant any new Common Stock Equivalent, (vii) amend its certificate of incorporation, or bylaws, or (viii) agree to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will use its best efforts to hold the Annual Meeting before the end of the fourth quarter of 2025, the purposes of which will include, among other things, proposals for stockholder approval of (i) the conversion of all of the Securities into Conversion Shares to the Purchaser in compliance with the rules and regulations of the NYSE American (without regard to any limitations on conversion set forth in the applicable Certificate of Designations), (ii) an increase in the authorized shares of Common Stock to a maximum of 300,000,000, (iii) an increase in the Company's authorized shares of preferred stock to a maximum of 10,000,000, (iv) the election of Company directors to the Board of Directors, including the Purchaser as the Initial Nominee, (v) increase in shares available under the Company's existing equity incentive plan to up to 1,000,000 shares, (vi) the issuance of the shares of Common Stock to non-employee directors as contemplated by the Settlement Agreements, and (vii) a reverse stock split of the Common Stock of the Company in the range of not less than 1-for-2 and not more than 1-for-10, with the specific ratio to be determined by the Board of Directors, and, following approval of the proposals at the Annual Meeting provided in this Section 4.15(b), to be implemented at the sole and absolute discretion of the Board of Directors once such reverse stock split is permitted under the rules of the Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event all of the actions in Section 4.15(b) are not approved by the stockholders at the Stockholders Meeting, the Company shall use its reasonable best efforts to call another stockholder meeting (the "<u>Second Meeting</u>") within seventy (70) days of the Annual Meeting for the purpose of obtaining the Required Approvals, with the recommendation of the Company's Board of Directors that such proposals are approved, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxy statement. If the Company does not obtain Stockholder Approval at the Second Meeting, then promptly following the Second Meeting the Company shall issue to the Purchaser and Purchaser shall purchase in a private placement transaction 19.99% of the Common Stock outstanding as of the date of this Agreement, at a price per share equal to the closing price on the date of the Second Meeting plus $0.02, provided that the number of shares of Common Stock that the Purchaser will be entitled to purchase shall be automatically reduced to a number of shares of Common Stock such that the Purchaser together with his Affiliates, will not own, beneficially or otherwise, shares of Common Stock in excess of 19.99% of the Common Stock outstanding as of the date of this Agreement. For the avoidance of doubt, (i) if the Purchaser acquires 19.99% of outstanding shares of Common Stock pursuant to this Section 4.15(c), then the Purchaser shall be deemed to have reached the Share Issuance Limitation and will not be entitled to convert shares of Preferred Stock into Common Stock until after Stockholder Approval has been received and (ii) the dilution protections as set forth in the Certificate of Designations shall not be applicable to this private placement transaction of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Following the First Closing and in reliance upon the Final Closing occurring as provided herein, the Purchaser shall have the one-time contractual right to recommend to the Company one (1) individual, who may be the Purchaser (the "<u>Initial Nominee</u>"), to be nominated for election at the Annual Meeting to serve as a director on the Board of Directors, subject to the Purchaser continuing to beneficially own the shares of Series D Preferred Stock purchased in the First Closing. The Initial Nominee shall first be qualified and approved by the Company's Nominating and Corporate Governance Committee, which shall include an assessment of such Initial Nominee's qualifications and experience, personal and professional integrity, financial literacy and other factors and criteria customarily reviewed and assessed. Except as otherwise provided in this Section 4.15(d), following (i) Stockholder Approval having been obtained at the Annual Meeting, the Second Meeting or at a subsequent Stockholder Meeting and (ii) the Final Closing having occurred as provided herein, the Purchaser shall have the one-time contractual right to nominate up to three (3) individuals (the "<u>Additional Purchaser Nominees</u>") to be qualified and appointed to serve as directors on the Board of Directors to director vacancies that shall result from the director resignations (other than the Continuing Director) that will occur only if Stockholder Approval has been received and the Final Closing occurred. In accordance with the terms of the Settlement Agreements entered into by all of the current members of the Board of Directors (other than the Continuing Director) at the First Closing pursuant to Section 2.3(a)(iii), the directors will resign from the Board of Directors effective immediately after Stockholder Approval, excluding one currently serving director on the Board of Directors who satisfies the "independence" requirements as set forth in the NYSE American, LLC Company Guide and under the federal securities laws and will continue to serve on the Board of Directors, currently contemplated by the Company to be Yenyou (Jeff) Zheng, Ph.D. (the "<u>Continuing Director</u>"). The Additional Purchaser Nominees prior to appointment to the Board of Directors shall first be qualified and approved by the Company's Nominating and Corporate Governance Committee, which shall include an assessment of each Additional Purchaser Nominee's qualifications and experience, personal and professional integrity, financial literacy and other factors and criteria customarily reviewed and assessed. The Purchaser shall recommend a sufficient number of Additional Purchaser Nominees in order for the Company to satisfy the "independence" requirements as set forth in the NYSE American, LLC Company Guide and under the federal securities laws in order to be nominated to the Board of Directors. The Company shall coordinate the class in which the Initial Nominee and each Additional Purchaser Nominee shall be appointed to serve on the Board of Directors. The Initial Nominee and each Additional Purchaser Nominee shall provide the requisite information for purposes of the evaluation of the Company's Nominating and Corporate Governance Committee. Following the appointment of the Additional Purchaser Nominees after Stockholder Approval has been obtained, the Final Closing occurred and the resignation of the then serving directors (other than the Continuing Director) occurs pursuant to their respective Settlement Agreements, the Initial Nominee shall, subject to his consent at the time, have the one-time contractual right to be appointed to serve as Chairman of the Board and shall serve in such role in accordance with the governance provisions of the Company. The Company shall use best efforts to (i) cause the Initial Nominee to be elected to the Board of Directors at the Annual Meeting and (ii) appoint the Additional Purchaser Nominees to the Board of Directors following Stockholder Approval having been obtained, the Final Closing occurring and the resignation of directors (other than the Continuing Director) occurs pursuant to their Settlement Agreements, subject to the next sentence. The actual number of Additional Purchaser Nominees that the Purchaser shall be entitled to nominate and have appointed to the Board of Directors, not to exceed three (3) directors as provided above in this Section 4.15(d), shall be determined based upon the Purchaser's beneficial ownership of Common Stock (including through ownership of Preferred Stock convertible into Common Stock) at the time of such nomination as follows: (A) one (1) Additional Purchaser Nominee when the Purchaser beneficially owns 20% but less than 40% of the outstanding Common Stock; (B) two (2) Additional Purchaser Nominees when the Purchaser beneficially owns at least 40% of the outstanding Common Stock, but less than 60% of the outstanding Common Stock and (C) three (3) Additional Purchaser Nominees when the Purchaser beneficially owns 60% or more of the outstanding Common Stock. In the event that Purchaser's right to appoint Additional Purchaser Nominees is less than three (3), then the Company's Nominating and Corporate Governance Committee shall identify additional director nominees to be appointed to the Board of Directors such that there will be at least five (5) directors who shall serve on the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16 <u>Participation in Future Financing</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except for financing transactions contemplated by Section 4.10(c), from the date hereof until the earlier of the (i) closing of the Post-Investment Transaction or (ii) six (6) months after the Closing Date for the First Closing, upon any issuance by the Company of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units thereof (a "<u>Subsequent Financing</u>"), the Purchaser shall have the right to participate therein up to an amount equal to twenty five percent (25%) of the Subsequent Financing or such lesser amount to the extent that the Purchaser no longer holds at least 25% of the issued and outstanding shares of Common Stock (including on an as converted basis of the Securities then held) (the "<u>Participation Maximum</u>") on the same terms, conditions and price provided for in the Subsequent Financing. Any such Subsequent Financing shall be authorized and determined by a majority of the independent members of the Board of Directors unaffiliated with the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At least four (4) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to the Purchaser a written notice of his intention to effect a Subsequent Financing ("<u>Pre-Notice</u>"), which Pre-Notice shall ask the Purchaser if he wants to review the details of such financing (such additional notice, a "<u>Subsequent Financing Notice</u>"). Upon the request of the Purchaser, and only upon a request by the Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to the Purchaser, provided that the Purchaser agrees to a customary confidentiality obligation. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To participate in such Subsequent Financing, the Purchaser must provide written notice to the Company, by not later than 5:30 p.m. (New York City time) on the second (2nd) Trading Day after the Purchaser has received the Pre-Notice or, that the Purchaser wishes to participate in the Subsequent Financing, the amount of the Purchaser's participation, and representing and warranting that the Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from the Purchaser as of such second (2nd) Trading Day, the Purchaser shall be deemed to have notified the Company that he does not elect to participate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If by 5:30 p.m. (New York City time) on the second (2nd) Trading Day after the Purchaser has received the Pre-Notice, notification by the Purchaser of his wish to participate in the Subsequent Financing is, in the aggregate, less than the total amount of the Participation Maximum, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company must provide the Purchaser with a second Subsequent Financing Notice, and the Purchaser will again have the right of participation set forth above in this Section 4.16, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company and the Purchaser agree that if the Purchaser elects to participate in a Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude the Purchaser from participating in a Subsequent Financing, including, but not limited to, provisions whereby the Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary in this Section 4.16 and unless otherwise agreed to by the Purchaser, the Company shall either confirm in writing to the Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that the Purchaser will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by the Purchaser, such transaction shall be deemed to have been abandoned and the Purchaser shall not be deemed to be in possession of any material, non-public information with respect to the Company. The obligations in this Section 4.16(g) shall not apply during any such period where the Purchaser is then serving on the Board of Directors or as an executive officer of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17 <u>Insurance</u>. The Company through its Special Transaction Committee shall in its sole discretion obtain a "tail" policy for the Company's existing director and officer insurance policy(ies) with a claims period of six years to be effective as of the Annual Meeting, with at least the same coverage and amounts and containing terms and conditions that are not less advantageous to the parties covered by the Company's existing director and officer insurance policies and with respect to claims arising out of or relating to events which occurred before, at the First Closing or as of the date of the Annual Meeting (including in connection with the Contemplated Transactions).

**ARTICLE 5.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Fees and Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as expressly set forth in the Transaction Documents to the contrary, including, *inter alia*, each party shall otherwise pay the fees and expenses of its or his advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement and the consummation of the Contemplated Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion notice delivered by the Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2<sup>nd</sup>) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with this Section 5.4 shall be binding upon the Purchaser and holder of Securities and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Neither party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party (other than by operation of law), except for pursuant to the Securities Purchase Rights Transfer Right and provided that (a) such transferee agrees in writing to be bound, with respect to the transferred Securities Purchase Rights and/or transferred Securities, by the representations and warranties and other applicable provisions of this Agreement and the other Transaction Documents that apply to the Purchaser acquiring the Securities (provided that each reference to the citizenship and residency in this Agreement referencing the Purchaser shall mean the citizenship and residency of such transferee, both of which shall be outside of the U.S.), (b) the exemption relied upon by the Company in connection with the issuance of the Securities in connection with this Investment shall continue to be in full force and effect, (c) such transfer is and will remain in compliance with all applicable laws and (d) upon request, the Purchaser shall certify to the Company as to such compliance with these obligations. For avoidance of doubt, the Purchaser's indemnification obligations and covenants set forth in Article 4 of this Agreement (other than Section 4.3) shall be performed by the Purchaser and not be assignable in connection with any such Security Purchase Rights and/or Securities Purchase Rights Transfer Rights transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>No Third-Party Beneficiaries</u>. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced or waived by, any other Person, except for a transferee or Purchaser pursuant to the Securities Purchase Rights Transfer Right and in accordance with Section 5.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Governing Law</u>. All questions concerning the construction, validity, performance, enforcement and interpretation of this Agreement and other the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the Contemplated Transactions (whether brought against a party hereto or its or his respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it or he, as the case may be, is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it or he, as the case may be, under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its or his reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding. The Purchaser resides in the Republic of Panama and does hereby represent that this Section 5.8 is and will remain enforceable and binding on him and he waives any right to contest the enforceability or the governing law, personal jurisdiction and/or venue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 <u>Survival</u>. The Company's representations and warranties contained in this Agreement shall not survive the Closing and final delivery of Securities pursuant to this Agreement, except for the Company's representations and warranties contained in Sections 3.1(b), 3.1(c), 3.1(f), and 3.1(g), which shall survive for the period of the applicable statute of limitations. The Purchaser's representations and warranties contained in this Agreement (and correspondingly any transferee(s)' reps and warranties, as applicable) shall survive the Closing and the delivery of the Securities for the period of the applicable statute of limitations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a ".pdf" format data file or other electronic signing crated on an electronic platform (such as DocuSign), such signature shall be deemed to have been duly and validly delivered and shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such ".pdf" signature page were an original thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction Document, and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser may rescind or withdraw, in his sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to his future actions and rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15 <u>Payment Set Aside</u>. To the extent that either party makes a payment or payments to the other party pursuant to any Transaction Document or either party enforces or exercises it or his rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to such party, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16 <u>Liquidated Damages</u>. The Company's obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17 <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken, or such right may be exercised on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18 <u>Construction</u>. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices, number(s) and/or percentage(s) of shares of Common Stock in this Agreement and any Transaction Document shall be subject to adjustment automatically to account for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. Unless this Agreement expressly provides otherwise, each definition applies (a) for purposes of this entire Agreement, and (b) to both the singular and plural forms (and other grammatical variations) of the defined term. Unless the context indicates otherwise, each pronoun shall be deemed to include the masculine, feminine, neuter, singular and plural forms. The terms "including", "includes", "include", and words of like import shall be construed broadly as if followed by the words "without limitation" or "but not limited to". Article, Section, Schedule and Exhibit references are to the Articles, Sections, Schedules and Exhibits of this Agreement unless otherwise specified. Any capitalized terms used in any Schedule or Exhibit attached to this Agreement and not otherwise defined shall have the meanings set forth in this Agreement. The words describing the singular number will include the plural and vice versa. All references to "dollars" or "$" will be deemed references to the lawful money of the United States of America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.19 **<u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.**

<u>(Signature Pages Follow)</u>

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

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| | | |
|:---|:---|:---|
| **NovaBay Pharmaceuticals, Inc.** | **NovaBay Pharmaceuticals, Inc.** | <u>Address for Notice</u>: |
| By: | /s/ Justin M. Hall | NovaBay Pharmaceuticals, Inc. |
| Name: | Justin M. Hall | 2000 Powell Street, Suite |
| Its: | Chief Executive Officer and General Counsel | 1150, Emeryville, CA 94608 |
|  |  | Attention: Justin M. Hall, Chief |
|  |  | Executive Officer and General Counsel |
|  |  | Email address: **[Redacted.]** |
|  |  | With a copy to (which shall not constitute notice): |
|  |  | Squire Patton Boggs (US) LLP |
|  |  | Attention: Abby E. Brown, Esq. |
|  |  | 2550 M Street, NW |
|  |  | Washington, DC 20037 |
|  |  | Email: **[Redacted.]** |

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR THE PURCHASER FOLLOWS]

<u>THE PURCHASER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT</u>

<u>PURCHASER</u>:

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| | |
|:---|:---|
| **DAVID LAZAR** | <u>Address for Notice</u>: |
| /s/ David Lazar | Mr. David Lazar |
|  | 30B, Tower 200 The Towers, |
|  | Winston Churchill, San |
|  | Francisco, Paitilla, Panama City, <br> Panama. 07196 |
|  | E-Mail: **[Redacted.]** |
|  | With a copy to (which shall not constitute notice): |
|  | ABZ Law Offices<br> Attn: Avraham Ben-Tzvi, Adv.<br> 28 General Pierre Koenig, Floor 3<br> Jerusalem, Israel<br> E-mail: **[Redacted.]** |

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## Exhibit 10.2

**Exhibit 10.2**

***Execution Version***

**WARRANT EXCHANGE AGREEMENT**

This WARRANT EXCHANGE AGREEMENT (this "<u>Agreement</u>"), dated as of August 19, 2025, is made and entered into between NovaBay Pharmaceuticals, Inc., a Delaware company (the "<u>Company</u>"), and Anson Investments Master Fund LP, an exempted limited partnership organized under the laws of the Cayman Islands ("<u>Holder</u>"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series F Voting Retractable Preferred Stock, substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>Series F CoD</u>"). The Company and Holder shall be collectively referred to herein as the "parties," and each, a "party."

**<u>RECITALS</u>**

**WHEREAS**, Holder is the owner of 636,363 Series F-1 common stock purchase warrants ("<u>Series F-1 Warrants</u>", or the "<u>Series F Warrants</u>"), issued in July 2024; and

**WHEREAS**, in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "<u>1933 Act</u>"), the Holder and the Company desire to exchange the Exchanged Warrants beneficially owned by Holder for shares of a new series of Series F non-convertible, voting, retractable preferred stock (the "<u>Retractable Preferred Stock</u>") of the Company, and cash, upon the terms and conditions set forth in this Agreement; and

**WHEREAS**, the Company intends to cancel the Exchanged Warrants upon their transfer to the Company as described herein, and pursuant to this Agreement.

**NOW, THEREFORE**, for and in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

**ARTICLE I**<br>**<u>EXCHANGE</u>**

**Section 1.1 <u>Exchange of Warrants; Consent and Waiver; Registration; Voting Agreement</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On and subject to the terms and conditions of this Agreement, the Company agrees to exchange with the Holder, 636,363 Series F-1 Warrants and (collectively, the "<u>Exchanged Warrants</u>"), for the issuance of an aggregate of 636,363 shares of Retractable Preferred Stock of the Company (the "<u>New Shares</u>") and $175,000 (the "<u>Cash Payment</u>") (such transactions, collectively, the "<u>Exchange Transaction</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Exchanged Warrants will be exchanged for the New Shares and the Cash Payment at the Closing (as defined below), and such New Shares will be freely tradeable, subject to Section 1.4(b), and shall contain no restrictive legends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall cooperate with the Company to cause the Exchange Transaction to be effective, including coordination and execution of any relevant documentation with the Company's transfer agent, Equiniti Trust Company, LLC, for the ownership of the Series F Warrants to be transferred to the Company and subsequently cancelled.

**Section 1.2 <u>Closing Date</u>**. The closing of the Exchange Transaction (the "<u>Closing</u>") shall occur substantially concurrently with the Closing of the Stock Purchase Agreement by and between the Company and David Lazar to be entered concurrently with this Agreement (the "<u>Lazar SPA</u>"). At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall pay to Holder the Cash Payment in immediately available funds by wire transfer to the account specified in the instructions provided by the Holder to the Company on or prior to the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall issue to the Holder the New Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall surrender the Exchanged Warrants to the Company, together with all documentation reasonably necessary to transfer to the Company all right, title and interest in and to the Exchanged Warrants.

**Section 1.3 <u>Voting Undertaking</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The voting rights of the Retractable Preferred Stock to be issued to Holder as contemplated by this Agreement and the Series F CoD shall be equivalent to an aggregate vote equal to 280,943 shares of Common Stock. Holder hereby acknowledges that such voting rights have been determined in order to limit the aggregate voting rights of all of the shares of Retractable Preferred Stock that will be issued by the Company to all holders of the Retractable Preferred Stock (including Holder), such that the aggregate voting rights shall not exceed an aggregate of 19.99% of the currently issued and outstanding Common Stock, as calculated *immediately prior to* the execution of the Lazar SPA and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the Company's compliance with the terms and conditions of this Agreement and the Series F CoD, Holder agrees to continue to own and vote all of its shares of Retractable Preferred Stock at the Company's first annual meeting of stockholders after the date hereof, to be held no later than December 31, 2025 (the "Stockholder Meeting Deadline") in favor of all proposals recommended by the Board of Directors of the Company that are presented for stockholder approval at such annual meeting; provided, that nothing shall require the Holder to approve any action that would circumvent or otherwise interfere with the due performance of this Agreement and/or the Series F CoD, as applicable (the "<u>Stockholder Approval</u>"). Holder agrees to promptly vote such shares of Retractable Preferred Stock within seven (7) days after the Company files a definitive proxy statement for the Company's annual meeting of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The voting of Retractable Preferred Stock pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. For the avoidance of doubt, voting of the Retractable Preferred Stock pursuant to the Agreement need not make explicit reference to the terms of this Agreement.

**Section 1.4 <u>Standstill</u>**. Effective upon the execution of this Agreement and remaining effective, unless or until the Company does not satisfy its retirement obligation in accordance with Section 8 of the Series F CoD, Holder shall not initiate any claims, either directly or indirectly, or participate in any proceedings, in any capacity, whether as a current or former holder of the Exchanged Warrants or a future, current or former holder of Common Stock, against, or involving, the Company, for any reason whatsoever. Included in this promise, Holder agrees not to oppose or initiate any claim or action against the Company relating to the transactions contemplated by the Lazar SPA, including the Company's contemplated special dividend, either directly or indirectly.

**ARTICLE II**<br>**<u>REPRESENTATIONS AND WARRANTIES OF HOLDER</u>**

To induce the Company to enter into and perform its obligations under this Agreement, Holder hereby represents and warrants to the Company as of the date hereof as follows:

**Section 2.1 <u>Existence</u>**. Holder has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of formation.

**Section 2.2 <u>Authority and Capacity; No Conflicts</u>**. Holder has all requisite power, authority and capacity to enter into and perform its obligations under this Agreement and all actions required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation of the Exchange Transaction have been duly and validly taken, and the consummation of the Exchange Transaction will not violate any law applicable to Holder or result in a breach of or default under Holder's organizational documents or any agreement to which Holder is a party or by which Holder is bound.

**Section 2.3 <u>Binding Agreement</u>**. This Agreement has been duly authorized and validly executed and delivered by or on behalf of Holder and constitutes a valid and binding agreement of the Holder, enforceable in accordance with and subject to its terms, except to the extent enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws affecting enforcement of creditors' rights or by general equitable principles.

**Section 2.4 <u>Title</u>**. Holder has good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, and upon transfer of the Exchanged Warrants pursuant hereto, good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, will pass to the Company. The Holder has not sold, distributed, pledged or otherwise transferred all or any portion, or any interest in, the Exchanged Warrants, nor agreed to do so.

**Section 2.5 <u>Non-Reliance</u>**. Holder (a) is not relying on the Company for any legal, tax, investment, accounting or regulatory advice, (b) has consulted with its own advisors concerning such matters and (c) has conducted to its satisfaction an independent investigation and verification of the financial condition, results of operations, assets, liabilities, properties and operations of the Company, (d) in determining to proceed with the Exchange Transaction, has relied solely on the results of such independent investigation and verification and on the representations and warranties of the Company in <u>Article III</u>, and (e) acknowledges that the Company is entering into this Agreement with it in reliance on the acknowledgments, agreements, representations and warranties set forth in this <u>Article II</u>**.** The Holder acknowledges that the Company may enter into agreements with other holders of Common Stock purchase warrants of the Company for the exchange of such warrants for securities of the Company.

**Section 2.6 <u>No Approvals or Consents</u>**. No consent, approval or authorization of or exemption by, or declaration, filing or registration with or notice to, any third party or any legislative, executive, judicial, or administrative body, including any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality, of the government of the United States or of any foreign country, any state or any political subdivision of any such government (whether state, provincial, county, city, municipal or otherwise) is required in connection with the execution and delivery by Holder of this Agreement or the consummation of the Exchange Transaction except for the Required Approvals (as defined herein).

**Section 2.7 <u>Accredited Investor; Legends</u>**. Holder represents and warrants that, as of the date hereof it is, and on each date on which it shall be issued any New Shares it will be, an "accredited investor" as defined in Rule 501 of Regulation D promulgated under the 1933 Act, and agrees that the New Shares will not contain any restrictive legends when issued as set forth in this Agreement, and the New Shares are "unrestricted securities" and will not be registered under the 1933 Act or any applicable state securities law. Also, Holder represents and warrants that it is acquiring the New Shares as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the New Shares (this representation is not limiting Holder's right to sell the New Shares pursuant to an effective registration statement under the 1933 Act or otherwise in compliance with applicable federal and state securities laws).

**Section 2.8 <u>Access to Information</u>**. Holder acknowledges that it has had the opportunity to review, access information and ask questions about (a) the Company and the disclosures included in the Announcement (as defined below) and (b) the Company's periodic reports and other public filings with the U.S. Securities and Exchange Commission (the "<u>Commission</u>").Holder understands that after receiving the New Shares that the Holder will no longer having any rights under the Exchanged Warrants and that the New Shares will have the rights as set forth in the Series F CoD, which rights expressly will not entitle the Holder to participate in any dividends of the Company In making its investment decision, Holder has relied upon its own review of the Announcement, the Company's filings with the Commission and other information that was made available and has not relied upon any representation, oral or written, by the Company's officers or directors.

**ARTICLE III**<br>**<u>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</u>**

To induce Holder to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to Holder as of the date hereof as follows:

**Section 3.1 <u>Existence</u>**. The Company is an entity duly organized, validly existing and in good standing under the laws of the State of Delaware.

**Section 3.2 <u>Authority and Capacity</u>**. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection herewith, other than in connection with the Required Approvals (as defined herein). This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

**Section 3.3 <u>No Conflicts</u>**. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company's certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any liens, claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals (as defined herein), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company, taken as a whole, or in its ability to perform its obligations under this Agreement. The Company has duly filed, or will file prior to the Closing, the Series F CoD with the State of Delaware's Secretary of State and the Series F CoD is in full force and effect.

**Section 3.4 <u>No Approvals or Consents</u>**. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of this Agreement, other than: (i) the filings required pursuant to this Agreement, (ii) the filing of Form D with the Commission to the extent deemed necessary by the Company; and (iii) such filings as are required to be made under applicable state securities laws (collectively, the "<u>Required Approvals</u>").

**Section 3.5 <u>Securities Law Exemptions</u>**. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the New Shares in exchange for the Exchanged Warrants is exempt from registration under the 1933 Act, pursuant to the exemption provided by Section 3(a)(9) thereof, and applicable state securities laws.

**Section 3.6 <u>Issuance of New Shares</u>**. The issuance of the New Shares are duly authorized and, upon issuance in accordance with the terms of this Agreement, the New Shares shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively "Liens") with respect to the issue thereof.

**Section 3.7 <u>No Consideration Paid</u>**. No commission or other remuneration has been paid by Company for soliciting the Exchange Transactions as contemplated hereby.

**Section 3.8 <u>Disclosure</u>**. Except as disclosed in the Announcement (as defined below), the Company confirms that neither it nor any other person or entity acting on its behalf has provided the Holder or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company, other than the existence of the transactions contemplated by this Agreement. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All disclosure provided to the Holder regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company is true and correct as of the date furnished and does not contain any untrue statement of a material fact or omit to state any material fact as of the date furnished necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company to the Holder pursuant to or in connection with this Agreement, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Except as disclosed in the Announcement, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees that the Holder has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2 above.

**Section 3.9 <u>SEC Reports</u>**. The Company has filed with the SEC all reports required to be filed by it under the Securities Exchange Act of 1934 (the "<u>Exchange Act")</u> for the most recent twelve-month period, including Current Reports on Form 8-K (such filed reports, the "<u>SEC Reports</u>"). As of their respective filing dates, the SEC Reports filed since January 1, 2024 complied in all material respects with applicable accounting requirements and the requirements of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Reports, the financial statements included in the SEC Reports were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended, and none of such SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading

**ARTICLE IV**<br>**<u>MISCELLANEOUS</u>**

**Section 4.1 <u>Disclosure of Exchange Transaction</u>**. The Company shall, on or before 9:30 am New York time, on the third business day after the date of this Agreement (or on the date of this Agreement, if such Agreement is signed prior to 9:30 am New York time), furnish or file a Report on Form 8-K or a press release describing all the material terms of the Exchange Transaction (the "<u>Announcement</u>"). From and after the Announcement, the Company shall have disclosed all material, non-public information (if any) provided to Holder by the Company or any of its officers, directors, employees or agents in connection with the Exchange Transaction. In addition, effective upon the Announcement, the Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the Exchange Transaction under any agreement, whether written or oral, between itself or any of its officers, directors, affiliates, employees or agents, on the one hand, and any of Holder or any of its affiliates, on the other hand, shall terminate.

**Section 4.2 <u>Further Assurances</u>**. Each of the parties hereto shall do and perform and execute and deliver, or cause to be done and performed or executed and delivered, and without further consideration, all further acts and all other agreements, certificates, book entries, instruments, instructions and documents as may be necessary or as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the Exchange Transaction.

**Section 4.3 <u>Notices</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery, if delivered personally or by e-mail prior to 5:00 p.m., in the place of delivery and such day is a Business Day; otherwise, the next Business Day, (ii) on the first Business Day following the date of dispatch if delivered express mail by a recognized overnight courier service or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the address set forth in this Agreement or to such other address either party to this Agreement shall specify by notice given in accordance with this <u>Section 4.3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For the purposes of this <u>Section 4.3</u>, "<u>Business Day</u>" shall mean any day other than Saturday, Sunday or other day on which commercial banks in New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of such commercial banks are generally open for use by customers on such day.

**Section 4.4 <u>Amendments and Waivers</u>**. Other than as amended, consented to or waived herein, all other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement may be amended if, but only if, such amendment is in writing and is duly executed and delivered by the Company and Holder. Any provision of this Agreement may be waived by the party entitled to the benefit thereof, but only by a writing signed by such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

**Section 4.5 <u>Fees and Expenses</u>**. Each party hereto shall pay all of its own fees and expenses (including attorneys' fees) incurred in connection with this Agreement and the Exchange Transaction.

**Section 4.6 <u>Successors and Assigns; No Third Party Beneficiaries</u>**. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and to no other person, provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto. Each party to this Agreement acknowledges and agrees that this Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

**Section 4.7 <u>Independent Nature of Holder</u>**<u>'**s Obligations and Rights**</u>. The Company acknowledges and agrees that the obligations of Holder under this Agreement are several and not joint with the obligations of any Other Holder (if any) under any other agreement related to the Exchange of warrants (such agreements, if any, the "<u>Other Warrant Agreements</u>"), and Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such Other Warrant Agreement. Nothing contained in this Agreement, and no action taken by Holder pursuant hereto, shall be deemed to constitute Holder and any Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Holder and any Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreements, if any, and the Company acknowledges that Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreement.

**Section 4.8 <u>Specific Performance</u>**. The parties agree that irreparable damage for which monetary damages, if available, may not be an adequate remedy, would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Holder shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy to which the Holder is entitled at law or in equity. The parties acknowledge and agree that should the Holder seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 4.8, the Holder shall not be required to provide any bond or other security in connection with any such order or injunction.

**Section 4.9 <u>Governing Law; Waiver of Jury Trial</u>**. This Agreement shall be construed, interpreted and enforced in accordance with, and shall be governed by, the laws of the State of New York without reference to, and regardless of, any applicable choice or conflicts of laws principles to the extent that such principles would direct a matter to another jurisdiction. Each party to this Agreement agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of New York and the Federal courts of the United States of America located in the Southern District of New York (the "<u>Chosen Courts</u>"), and solely in connection with claims arising under this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party to this Agreement and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with <u>Section 4.3</u>. Each party to this Agreement irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement.

**Section 4.10 <u>Entire Agreement</u>**. This Agreement (including the recitals and any schedules hereto) constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto and/or their affiliates with respect to the subject matter hereof.

**Section 4.11 <u>Severability</u>**. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. To the extent that any such provision is so held to be invalid, illegal or unenforceable, the parties shall in good faith use commercially reasonable efforts to find and effect an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

**Section 4.12 <u>Counterparts</u>**. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be signed by any electronic signature and be delivered via electronic mail (including pdf) or other electronic transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

**Section 4.13 <u>Most Favored Nation</u>**. The Company hereby represents and warrants as of the date hereof and covenants and agrees that none of the terms offered to any person or entity with respect to any consent, release, amendment, settlement or waiver relating to the Exchange Transaction as contemplated by this Agreement (each a "Settlement Document"), is or will be on more favorable terms to such person or entity than those of the Holder and this Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document, then the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. Notwithstanding, the foregoing, any future Settlement Document, related to retail investor warrant holders that (i) individually is less than or equal to 6.30% of warrants outstanding or (ii) in the aggregate is less than or equal to 12.70% of the warrants outstanding, shall not trigger any repricing under this Section. The provisions of this Section 4.13 shall apply similarly and equally to each Settlement Document. Notwithstanding the foregoing, prior to the date hereof as disclosed in the Company's filings with the Commission, the Company previously entered into settlement and release agreements with other holders of Series F Warrants on terms and conditions that are different than are provided for in this Exchange Transaction as provided under this Agreement (the "<u>Prior Settlements</u>"), and the Holder acknowledges that such Prior Settlements are expressly excluded from this Section 4.13.

**Section 4.14 <u>Holding Period</u>**. For the purposes of Rule 144 of the 1933 Act, the Company acknowledges that the holding period of the New Shares may be tacked by the Holder onto the holding period of the Exchanged Warrants and, and the Company agrees not to take a position contrary to this Section 4.14, except as required by applicable law. In addition, subject to the truth and accuracy of the Holder's representations set forth in Section 2 of this Agreement and assuming the Holder is not an "affiliate" of the Company within the meaning of Rule 144(a)(1), the New Shares shall take on the unrestricted characteristics of the Exchanged Warrants and the Company agrees not to take a position to the contrary, except as otherwise required by applicable law.

**Section 4.15 <u>PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS</u>**. If (a) this Agreement or the Series F CoD is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Agreement or the Series F CoD or to enforce the provisions of this Agreement or the Series F CoD or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting the Company's creditors' rights and involving a claim under this Agreement or the Series F CoD, then the Company shall pay the costs actually incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys' fees and disbursements.

**Section 4.16 <u>Termination</u>**. If the Closing has not occurred on or prior to the fifth (5<sup>th</sup>) Business Day (as defined in the Series F CoD) after the date hereof, this Agreement shall automatically terminate and shall be null and void.

[*Signature Page Follows*]

IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as of the date first above written.

---

| | |
|:---|:---|
| **NOVABAY PHARMACEUTICALS, INC.** | **NOVABAY PHARMACEUTICALS, INC.** |
| By: | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer |
| **ANSON INVESTMENTS MASTER FUND LP** | **ANSON INVESTMENTS MASTER FUND LP** |
| By: | /s/ Amin Nathoo |
| Name: | Amin Nathoo |
| Title: | Director of Anson Advisors Inc., co-investment adviser of<br> Anson Investments Master Fund LP |

---

## Exhibit 10.3

**Exhibit 10.3**

**WARRANT EXCHANGE AGREEMENT**

This WARRANT EXCHANGE AGREEMENT (this "<u>Agreement</u>"), dated as of August 19, 2025, is made and entered into between NovaBay Pharmaceuticals, Inc., a Delaware company (the "<u>Company</u>"), and Hudson Bay Master Fund Ltd., a limited company organized under the laws of the Cayman Islands ("<u>Holder</u>"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series F Voting Retractable Preferred Stock, substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>Series F CoD</u>").

**<u>RECITALS</u>**

**WHEREAS**, Holder is the owner of 636,363 Series F-1 common stock purchase warrants ("<u>Series F-1 Warrants,"</u> or the "<u>Series F Warrants</u>"), issued in July 2024; and

**WHEREAS**, Holder is the owner of 2,678 common stock purchase warrants from an Amended 2021 transaction ("<u>Amended 2021 Warrants"</u>) and 892 common stock purchase warrants from a September 2022 transaction ("<u>September 2022 Warrants"</u> and together with the Amended 2021 Warrants, the "<u>Old Warrants</u>," and together with the Series F Warrants, the "<u>Total Warrants Outstanding</u>"); and

**WHEREAS**, in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "<u>1933 Act</u>"), the Holder and the Company desire to exchange the Total Warrants Outstanding beneficially owned by Holder for shares of a new series of Series F non-convertible, voting, retractable preferred stock (the "<u>Retractable Preferred Stock</u>") of the Company, and cash, upon the terms and conditions set forth in this Agreement; and

**WHEREAS**, the Company intends to cancel the Total Warrants Outstanding upon their transfer to the Company as described herein, and pursuant to this Agreement.

**NOW, THEREFORE**, for and in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

**Article I**<br>**<u>EXCHANGE</u>**

**Section 1.1 <u>Exchange of Warrants; Consent and Waiver; Registration; Voting Agreement</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On and subject to the terms and conditions of this Agreement, in reliance upon the exemption from registration provided by Section 3(a)(9) of the 1933 Act, the Company agrees to exchange with the Holder, 636,363 Series F-1 Warrants exercisable for 636,363 shares of Common Stock, common stock, par value $0.01 per share ("<u>Common Stock</u>"), 2,678 Amended 2021 Warrants exercisable for 2,678 shares of Common Stock, and 892 September 2022 Warrants exercisable for 892 shares of Common Stock owned by the Holder (collectively, the "<u>Exchanged Warrants</u>"), for the issuance of an aggregate of 639,933 shares of Retractable Preferred Stock of the Company (the "<u>New Shares</u>") and $175,000 (the "<u>Cash Payment</u>") (such transactions, collectively, the "<u>Exchange Transaction</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Exchanged Warrants will be exchanged for the New Shares and the Cash Payment at the Closing (as defined below), and such New Shares will be freely tradeable, subject to Section 1.4(b), and shall contain no restrictive legends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall cooperate with the Company to cause the Exchange Transaction to be effective, including coordination and execution of any relevant documentation with the Company's transfer agent, Equiniti Trust Company, LLC, for the ownership of the Series F Warrants to be transferred to the Company and subsequently cancelled and (ii) surrendering the Old Warrants in Holder's possession to the Company for cancellation.

**Section 1.2 <u>Closing Date</u>**. The closing of the Exchange Transaction (the "<u>Closing</u>") shall occur substantially concurrently with the Closing of the Stock Purchase Agreement by and between the Company and David Lazar to be entered concurrently with this Agreement (the "<u>Lazar SPA</u>"). At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall pay to Holder the Cash Payment in immediately available funds by wire transfer to the account specified in the instructions provided by the Holder to the Company on or prior to the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall issue to the Holder the New Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall surrender the Exchanged Warrants to the Company, together with all documentation reasonably necessary to transfer to the Company all right, title and interest in and to the Exchanged Warrants.

**Section 1.3 <u>Voting Undertaking</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The voting rights of the Retractable Preferred Stock to be issued to Holder as contemplated by this Agreement and the Series F CoD shall be equivalent to an aggregate vote equal to 280,943 shares of Common Stock. Holder hereby acknowledges that such voting rights have been determined in order to limit the aggregate voting rights of all of the shares of Retractable Preferred Stock that will be issued by the Company to all holders of the Retractable Preferred Stock (including Holder), such that the aggregate voting rights shall not exceed an aggregate of 19.99% of the currently issued and outstanding Common Stock, as calculated *immediately prior to* the execution of the Lazar SPA and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the Company's compliance with the terms and conditions of this Agreement and the Series F CoD, Holder agrees to continue to own and vote all of its shares of Retractable Preferred Stock at the Company's first annual meeting of stockholders after the date hereof, to be held no later than December 31, 2025 (the "<u>Stockholder Meeting Deadline</u>") in favor of all proposals recommended by the Board of Directors of the Company that are presented for stockholder approval at such annual meeting; provided, that nothing shall require the Holder to approve any action that would circumvent or otherwise interfere with the due performance of this Agreement and/or the Series F CoD, as applicable (the "<u>Stockholder Approval</u>"). Holder agrees to promptly vote such shares of Retractable Preferred Stock within seven (7) days after the Company files a definitive proxy statement for the Company's annual meeting of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The voting of Retractable Preferred Stock pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. For the avoidance of doubt, voting of the Retractable Preferred Stock pursuant to the Agreement need not make explicit reference to the terms of this Agreement.

**Section 1.4 <u>Standstill</u>**. Effective upon the execution of this Agreement and remaining effective, unless or until the Company does not satisfy its retirement obligation in accordance with the Series F CoD, Holder shall not initiate any claims, either directly or indirectly, or participate in any proceedings, in any capacity, whether as a current or former holder of the Exchanged Warrants or a future, current or former holder of Common Stock, against, or involving, the Company, for any reason whatsoever. Included in this promise, Holder agrees not to oppose or initiate any claim or action against the Company relating to the transactions contemplated by the Lazar SPA, including the Company's contemplated special dividend, either directly or indirectly.

**Article II<u><br>REPRESENTATIONS AND WARRANTIES OF HOLDER</u>**

To induce the Company to enter into and perform its obligations under this Agreement, Holder hereby represents and warrants to the Company as of the date hereof as follows:

**Section 2.1 <u>Existence</u>**. Holder has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of formation.

**Section 2.2 <u>Authority and Capacity; No Conflicts</u>**. Holder has all requisite power, authority and capacity to enter into and perform its obligations under this Agreement and all actions required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation of the Exchange Transaction have been duly and validly taken, and the consummation of the Exchange Transaction will not violate any law applicable to Holder or result in a breach of or default under Holder's organizational documents or any agreement to which Holder is a party or by which Holder is bound.

**Section 2.3 <u>Binding Agreement</u>**. This Agreement has been duly authorized and validly executed and delivered by or on behalf of Holder and constitutes a valid and binding agreement of the Holder, enforceable in accordance with and subject to its terms, except to the extent enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws affecting enforcement of creditors' rights or by general equitable principles.

**Section 2.4 <u>Title</u>**. Holder has good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, and upon transfer of the Exchanged Warrants pursuant hereto, good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, will pass to the Company. The Holder has not sold, distributed, pledged or otherwise transferred all or any portion, or any interest in, the Exchanged Warrants, nor agreed to do so.

**Section 2.5 <u>Non-Reliance</u>**. Holder (a) is not relying on the Company for any legal, tax, investment, accounting or regulatory advice, (b) has consulted with its own advisors concerning such matters and (c) has conducted to its satisfaction an independent investigation and verification of the financial condition, results of operations, assets, liabilities, properties and operations of the Company, (d) in determining to proceed with the Exchange Transaction, has relied solely on the results of such independent investigation and verification and on the representations and warranties of the Company in <u>‎Article III</u>, and (e) acknowledges that the Company is entering into this Agreement with it in reliance on the acknowledgments, agreements, representations and warranties set forth in this <u>‎Article II</u>**.** The Holder acknowledges that the Company may enter into agreements with other holders of Common Stock purchase warrants of the Company for the exchange of such warrants for securities of the Company.

**Section 2.6 <u>No Approvals or Consents</u>**. No consent, approval or authorization of or exemption by, or declaration, filing or registration with or notice to, any third party or any legislative, executive, judicial, or administrative body, including any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality, of the government of the United States or of any foreign country, any state or any political subdivision of any such government (whether state, provincial, county, city, municipal or otherwise) is required in connection with the execution and delivery by Holder of this Agreement or the consummation of the Exchange Transaction except for the Required Approvals (as defined herein).

**Section 2.7 <u>Accredited Investor; Legends</u>**. Holder represents and warrants that, as of the date hereof it is, and on each date on which it shall be issued any New Shares it will be, an "accredited investor" as defined in Rule 501 of Regulation D promulgated under the 1933 Act, and agrees that the New Shares will not contain any restrictive legends when issued as set forth in this Agreement, and the New Shares are "unrestricted securities" and will not be registered under the 1933 Act or any applicable state securities law. Also, Holder represents and warrants that it is acquiring the New Shares as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the New Shares (this representation is not limiting Holder's right to sell the New Shares pursuant to an effective registration statement under the 1933 Act or otherwise in compliance with applicable federal and state securities laws).

**Section 2.8 <u>Access to Information</u>**. Holder acknowledges that it has had the opportunity to review, access information and ask questions about (a) the Company and the disclosures included in the Announcement (as defined below) and (b) the Company's periodic reports and other public filings with the U.S. Securities and Exchange Commission (the "<u>Commission</u>").Holder understands that after receiving the New Shares that the Holder will no longer having any rights under the Exchanged Warrants and that the New Shares will have the rights as set forth in the Series F CoD, which rights expressly will not entitle the Holder to participate in any dividends of the Company In making its investment decision, Holder has relied upon its own review of the Announcement, the Company's filings with the Commission and other information that was made available and has not relied upon any representation, oral or written, by the Company's officers or directors

**Article III<u><br>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</u>**

To induce Holder to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to Holder as of the date hereof as follows:

**Section 3.1 <u>Existence</u>**. The Company is an entity duly organized, validly existing and in good standing under the laws of the State of Delaware.

**Section 3.2 <u>Authority and Capacity</u>**. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection herewith, other than in connection with the Required Approvals (as defined herein). This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

**Section 3.3 <u>No Conflicts</u>**. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company's certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any liens, claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals (as defined herein), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company, taken as a whole, or in its ability to perform its obligations under this Agreement. The Company has duly filed, or will file prior to the Closing, the Series F CoD with the State of Delaware's Secretary of State and the Series F CoD is in full force and effect.

**Section 3.4 <u>No Approvals or Consents</u>**. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of this Agreement, other than: (i) the filings required pursuant to this Agreement, (ii) the filing of Form D with the Commission to the extent deemed necessary by the Company; and (iii) such filings as are required to be made under applicable state securities laws (collectively, the "<u>Required Approvals</u>").

**Section 3.5 <u>Securities Law Exemptions</u>**. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the New Shares in exchange for the Exchanged Warrants is exempt from registration under the 1933 Act, pursuant to the exemption provided by Section 3(a)(9) thereof, and applicable state securities laws.

**Section 3.6 <u>Issuance of New Shares</u>**. The issuance of the New Shares are duly authorized and, upon issuance in accordance with the terms of this Agreement, the New Shares shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively"Liens") with respect to the issue thereof.

**Section 3.7 <u>No Consideration Paid</u>**. No commission or other remuneration has been paid by Company for soliciting the Exchange Transactions as contemplated hereby.

**Section 3.8 <u>Disclosure</u>**. Except as disclosed in the Announcement (as defined below), the Company confirms that neither it nor any other person or entity acting on its behalf has provided the Holder or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company, other than the existence of the transactions contemplated by this Agreement. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All disclosure provided to the Holder regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company is true and correct as of the date furnished and does not contain any untrue statement of a material fact or omit to state any material fact as of the date furnished necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company to the Holder pursuant to or in connection with this Agreement, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Except as disclosed in the Announcement, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees that Holder has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2 above.

**Section 3.9 <u>SEC Reports</u>**. The Company has filed with the SEC all reports required to be filed by it under the Securities Exchange Act of 1934 (the "<u>Exchange Act")</u> for the most recent twelve-month period, including Current Reports on Form 8-K (such filed reports, the "<u>SEC Reports</u>"). As of their respective filing dates, the SEC Reports filed since January 1, 2024 complied in all material respects with applicable accounting requirements and the requirements of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Reports, the financial statements included in the SEC Reports were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended, and none of such SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

**Article IV<u><br>MISCELLANEOUS</u>**

**Section 4.1 <u>Disclosure of Exchange Transaction</u>**. The Company shall, on or before 9:30 am New York time, on the third business day after the date of this Agreement (or on the date of this Agreement, if such Agreement is signed prior to 9:30 am New York time), furnish or file a Report on Form 8-K or a press release describing all the material terms of the Exchange Transaction (the "<u>Announcement</u>"). From and after the Announcement, the Company shall have disclosed all material, non-public information (if any) provided to Holder by the Company or any of its officers, directors, employees or agents in connection with the Exchange Transaction. In addition, effective upon the Announcement, the Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the Exchange Transaction under any agreement, whether written or oral, between itself or any of its officers, directors, affiliates, employees or agents, on the one hand, and any of Holder or any of its affiliates, on the other hand, shall terminate.

**Section 4.2 <u>Further Assurances</u>**. Each of the parties hereto shall do and perform and execute and deliver, or cause to be done and performed or executed and delivered, and without further consideration, all further acts and all other agreements, certificates, book entries, instruments, instructions and documents as may be necessary or as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the Exchange Transaction.

**Section 4.3 <u>Notices</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery, if delivered personally or by e-mail prior to 5:00 p.m., in the place of delivery and such day is a Business Day; otherwise, the next Business Day, (ii) on the first Business Day following the date of dispatch if delivered express mail by a recognized overnight courier service or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the address set forth in this Agreement or to such other address either party to this Agreement shall specify by notice given in accordance with this <u>‎Section 4.3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For the purposes of this <u>‎Section 4.3</u>, "<u>Business Day</u>" shall mean any day other than Saturday, Sunday or other day on which commercial banks in New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of such commercial banks are generally open for use by customers on such day.

**Section 4.4 <u>Amendments and Waivers</u>**. Other than as amended, consented to or waived herein, all other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement may be amended if, but only if, such amendment is in writing and is duly executed and delivered by the Company and Holder. Any provision of this Agreement may be waived by the party entitled to the benefit thereof, but only by a writing signed by such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

**Section 4.5 <u>Fees and Expenses</u>**. Each party hereto shall pay all of its own fees and expenses (including attorneys' fees) incurred in connection with this Agreement and the Exchange Transaction.

**Section 4.6 <u>Successors and Assigns; No Third Party Beneficiaries</u>**. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and to no other person, provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto. Each party to this Agreement acknowledges and agrees that this Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

**Section 4.7 <u>Independent Nature of Holder's Obligations and Rights</u>**. The Company acknowledges and agrees that the obligations of Holder under this Agreement are several and not joint with the obligations of any Other Holder (if any) under any other agreement related to the Exchange of warrants (such agreements, if any, the "<u>Other Warrant Agreements</u>"), and Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such Other Warrant Agreement. Nothing contained in this Agreement, and no action taken by Holder pursuant hereto, shall be deemed to constitute Holder and any Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Holder and any Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreements, if any, and the Company acknowledges that Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreement.

**Section 4.8 <u>Specific Performance</u>**. The parties agree that irreparable damage for which monetary damages, if available, may not be an adequate remedy, would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Holder shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy to which the Holder is entitled at law or in equity. The parties acknowledge and agree that should the Holder seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 4.8, the Holder shall not be required to provide any bond or other security in connection with any such order or injunction.

**Section 4.9 <u>Governing Law; Waiver of Jury Trial</u>**. This Agreement shall be construed, interpreted and enforced in accordance with, and shall be governed by, the laws of the State of New York without reference to, and regardless of, any applicable choice or conflicts of laws principles to the extent that such principles would direct a matter to another jurisdiction. Each party to this Agreement agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of New York and the Federal courts of the United States of America located in the Southern District of New York (the "<u>Chosen Courts</u>"), and solely in connection with claims arising under this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party to this Agreement and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with <u>‎Section 4.3</u>. Each party to this Agreement irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement.

**Section 4.10 <u>Entire Agreement</u>**. This Agreement (including the recitals and any schedules hereto) constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto and/or their affiliates with respect to the subject matter hereof.

**Section 4.11 <u>Severability</u>**. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. To the extent that any such provision is so held to be invalid, illegal or unenforceable, the parties shall in good faith use commercially reasonable efforts to find and effect an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

**Section 4.12 <u>Counterparts</u>**. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be signed by any electronic signature and be delivered via electronic mail (including pdf) or other electronic transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

**Section 4.13 <u>Most Favored Nation</u>**. The Company hereby represents and warrants as of the date hereof and covenants and agrees that none of the terms offered to any person or entity with respect to any consent, release, amendment, settlement or waiver relating to the Exchange Transaction as contemplated by this Agreement (each a "**S**ettlement Document"), is or will be on more favorable terms to such person or entity than those of the Holder and this Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document, then the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. Notwithstanding, the foregoing, any future Settlement Document, related to retail investor warrant holders that (i) individually is less than or equal to 6.30% of Total Warrants Outstanding or (ii) in the aggregate is less than or equal to 12.70% of the Total Warrants Outstanding, shall not trigger any repricing under this Section. The provisions of this Section 4.13 shall apply similarly and equally to each Settlement Document. Notwithstanding the foregoing, prior to the date hereof as disclosed in the Company's filings with the Commission, the Company previously entered into settlement and release agreements with other holders of Series F Warrants on terms and conditions that are different than are provided for in this Exchange Transaction as provided under this Agreement (the "<u>Prior Settlements</u>"), and the Holder acknowledges that such Prior Settlements are expressly excluded from this Section 4.13.

**Section 4.14 <u>Holding Period</u>**. For the purposes of Rule 144 of the 1933 Act, the Company acknowledges that the holding period of the New Shares may be tacked by the Holder onto the holding period of the Exchanged Warrants and, and the Company agrees not to take a position contrary to this Section 4.14, except as required by applicable law. In addition, subject to the truth and accuracy of the Holder's representations set forth in Section 2 of this Agreement and assuming the Holder is not an "affiliate" of the Company within the meaning of Rule 144(a)(1), the New Shares shall take on the unrestricted characteristics of the Exchanged Warrants and the Company agrees not to take a position to the contrary, except as otherwise required by applicable law.

**Section 4.15 <u>Payment Of Collection, Enforcement And Other Costs</u>**. If (a) this Agreement or the Series F CoD is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Agreement or the Series F CoD or to enforce the provisions of this Agreement or the Series F CoD or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting the Company's creditors' rights and involving a claim under this Agreement or the Series F CoD, then the Company shall pay the costs actually incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys' fees and disbursements.

**Section 4.16 <u>Termination</u>**. If the Closing has not occurred on or prior to the fifth (5<sup>th</sup>) Business Day (as defined in the Series F CoD) after the date hereof, this Agreement shall automatically terminate and shall be null and void.

[*Signature Page Follows*]

IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as of the date first above written.

---

| | |
|:---|:---|
| **NOVABAY PHARMACEUTICALS, INC.** | **NOVABAY PHARMACEUTICALS, INC.** |
| By: | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **HUDSON BAY** | **HUDSON BAY** |
| By: | /s/ Richard Allison |
| Name: | Richard Allison |
| Title: | Authorized Signatory\* |

---

\* Authorized Signatory Hudson Bay Capital Management LP not individually, but solely as Investment Advisor to Hudson Bay Master Fund Ltd.

## Exhibit 10.4

**Exhibit 10.4**

***Execution Version***

**WARRANT EXCHANGE AGREEMENT**

This WARRANT EXCHANGE AGREEMENT (this "<u>Agreement</u>"), dated as of August 19, 2025, is made and entered into between NovaBay Pharmaceuticals, Inc., a Delaware company (the "<u>Company</u>"), and Armistice Capital Master Fund Ltd., a limited company organized under the laws of the Cayman Islands ("<u>Holder</u>"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series F Voting Retractable Preferred Stock, substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>Series F CoD</u>"). The Company and Holder shall be collectively referred to herein as the "parties," and each, a "party."

**<u>RECITALS</u>**

**WHEREAS**, Holder is the owner of 636,363 Series F-1 common stock purchase warrants ("<u>Series F-1 Warrants</u>", or the "<u>Series F Warrants</u>"), issued in July 2024; and

**WHEREAS**, Holder is the owner of 36,264 common stock purchase warrants from a April 2023 transaction ("<u>April 2023 Warrants</u>"), 28,571 common stock purchase warrants from a March 2024 transaction ("<u>March 2024 Warrants</u>"), and 9,071 common stock purchase warrants from a June 2024 transaction ("<u>June 2024 Warrants</u>" and together with the April 2023 Warrants, and March 2024 Warrants, the "<u>Old Warrants</u>", and together with the Series F Warrants, the "<u>Total Warrants Outstanding</u>"); and

**WHEREAS**, in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "<u>1933 Act</u>"), the Holder and the Company desire to exchange the Total Warrants Outstanding beneficially owned by Holder for shares of a new series of Series F non-convertible, voting, retractable preferred stock (the "<u>Retractable Preferred Stock</u>") of the Company, and cash, upon the terms and conditions set forth in this Agreement; and

**WHEREAS**, the Company intends to cancel the Total Warrants Outstanding upon their transfer to the Company as described herein, and pursuant to this Agreement.

**NOW, THEREFORE**, for and in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

**ARTICLE I**<br>**<u>EXCHANGE</u>**

**Section 1.1 <u>Exchange of Warrants; Consent and Waiver; Registration; Voting Agreement</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On and subject to the terms and conditions of this Agreement, the Company agrees to exchange with the Holder, 636,363 Series F-1 Warrants exercisable for 636,363 shares of Common Stock, 36,264 April 2023 Warrants exercisable for 36,264 shares of Common Stock, 28,571 March 2024 Warrants exercisable for 28,571 shares of Common Stock, and 9,071 June 2024 Warrants exercisable for 9,071 shares of Common Stock owned by the Holder (collectively, the "<u>Exchanged Warrants</u>"), for the issuance of an aggregate of 710,269 shares of Retractable Preferred Stock of the Company (the "<u>New Shares</u>") and $175,000 (the "<u>Cash Payment</u>") (such transactions, collectively, the "<u>Exchange Transaction</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Exchanged Warrants will be exchanged for the New Shares and the Cash Payment at the Closing (as defined below), and such New Shares will be freely tradeable, subject to Section 1.4(b), and shall contain no restrictive legends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall cooperate with the Company to cause the Exchange Transaction to be effective, including coordination and execution of any relevant documentation with the Company's transfer agent, Equiniti Trust Company, LLC, for the ownership of the Series F Warrants to be transferred to the Company and subsequently cancelled and (ii) surrendering the Old Warrants in Holder's possession to the Company for cancellation.

**Section 1.2 <u>Closing Date</u>**. The closing of the Exchange Transaction (the "<u>Closing</u>") shall occur substantially concurrently with the Closing of the Stock Purchase Agreement by and between the Company and David Lazar to be entered concurrently with this Agreement (the "<u>Lazar SPA</u>"). At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall pay to Holder the Cash Payment in immediately available funds by wire transfer to the account specified in the instructions provided by the Holder to the Company on or prior to the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall issue to the Holder the New Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder shall surrender the Exchanged Warrants to the Company, together with all documentation reasonably necessary to transfer to the Company all right, title and interest in and to the Exchanged Warrants.

**Section 1.3 <u>RESERVED</u>**.

**Section 1.4 <u>Voting Undertaking</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The voting rights of the Retractable Preferred Stock to be issued to Holder as contemplated by this Agreement and the Series F CoD shall be equivalent to an aggregate vote equal to 280,943 shares of Common Stock. Holder hereby acknowledges that such voting rights have been determined in order to limit the aggregate voting rights of all of the shares of Retractable Preferred Stock that will be issued by the Company to all holders of the Retractable Preferred Stock (including Holder), such that the aggregate voting rights shall not exceed an aggregate of 19.99% of the currently issued and outstanding Common Stock, as calculated immediately prior to the execution of the Lazar SPA and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the Company's compliance with the terms and conditions of this Agreement and the Series F CoD, Holder agrees to continue to own and vote all of its shares of Retractable Preferred Stock at the Company's first annual meeting of stockholders after the date hereof, to be held no later than December 31, 2025 (the "<u>Stockholder Meeting Deadline</u>") in favor of all proposals recommended by the Board of Directors of the Company that are presented for stockholder approval at such annual meeting; provided, that nothing shall require the Holder to approve any action that would circumvent or otherwise interfere with the due performance of this Agreement and/or the Series F CoD, as applicable (the "<u>Stockholder Approval</u>"). Holder agrees to promptly vote such shares of Retractable Preferred Stock within seven (7) days after the Company files a definitive proxy statement for the Company's annual meeting of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The voting of Retractable Preferred Stock pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. For the avoidance of doubt, voting of the Retractable Preferred Stock pursuant to the Agreement need not make explicit reference to the terms of this Agreement.

**Section 1.5 <u>Standstill</u>**. Effective upon the execution of this Agreement and remaining effective, unless or until the Company does not satisfy its retirement obligation in accordance with Section 8 of the Series F CoD, Holder shall not initiate any claims, either directly or indirectly, or participate in any proceedings, in any capacity, whether as a current or former holder of the Exchanged Warrants or a future, current or former holder of Common Stock, against, or involving, the Company, for any reason whatsoever. Included in this promise, Holder agrees not to oppose or initiate any claim or action against the Company relating to the transactions contemplated by the Lazar SPA, including the Company's contemplated special dividend, either directly or indirectly.

**ARTICLE II**<br>**<u>REPRESENTATIONS AND WARRANTIES OF HOLDER</u>**

To induce the Company to enter into and perform its obligations under this Agreement, Holder hereby represents and warrants to the Company as of the date hereof as follows:

**Section 2.1 <u>Existence</u>**. Holder has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of formation.

**Section 2.2 <u>Authority and Capacity; No Conflicts</u>**. Holder has all requisite power, authority and capacity to enter into and perform its obligations under this Agreement and all actions required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation of the Exchange Transaction have been duly and validly taken, and the consummation of the Exchange Transaction will not violate any law applicable to Holder or result in a breach of or default under Holder's organizational documents or any agreement to which Holder is a party or by which Holder is bound.

**Section 2.3 <u>Binding Agreement</u>**. This Agreement has been duly authorized and validly executed and delivered by or on behalf of Holder and constitutes a valid and binding agreement of the Holder, enforceable in accordance with and subject to its terms, except to the extent enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws affecting enforcement of creditors' rights or by general equitable principles.

**Section 2.4 <u>Title</u>**. Holder has good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, and upon transfer of the Exchanged Warrants pursuant hereto, good and valid title to the Exchanged Warrants, free and clear of all liens, encumbrances, equities or claims, will pass to the Company. The Holder has not sold, distributed, pledged or otherwise transferred all or any portion, or any interest in, the Exchanged Warrants, nor agreed to do so.

**Section 2.5 <u>Non-Reliance</u>**. Holder (a) is not relying on the Company for any legal, tax, investment, accounting or regulatory advice, (b) has consulted with its own advisors concerning such matters and (c) has conducted to its satisfaction an independent investigation and verification of the financial condition, results of operations, assets, liabilities, properties and operations of the Company, (d) in determining to proceed with the Exchange Transaction, has relied solely on the results of such independent investigation and verification and on the representations and warranties of the Company in <u>Article III</u>, and (e) acknowledges that the Company is entering into this Agreement with it in reliance on the acknowledgments, agreements, representations and warranties set forth in this <u>Article II</u>**.** The Holder acknowledges that the Company may enter into agreements with other holders of Common Stock purchase warrants of the Company for the exchange of such warrants for securities of the Company.

**Section 2.6 <u>No Approvals or Consents</u>**. No consent, approval or authorization of or exemption by, or declaration, filing or registration with or notice to, any third party or any legislative, executive, judicial, or administrative body, including any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality, of the government of the United States or of any foreign country, any state or any political subdivision of any such government (whether state, provincial, county, city, municipal or otherwise) is required in connection with the execution and delivery by Holder of this Agreement or the consummation of the Exchange Transaction except for the Required Approvals (as defined herein).

**Section 2.7 <u>Accredited Investor; Legends</u>**. Holder represents and warrants that, as of the date hereof it is, and on each date on which it shall be issued any New Shares it will be, an "accredited investor" as defined in Rule 501 of Regulation D promulgated under the 1933 Act, and agrees that the New Shares will not contain any restrictive legends when issued as set forth in this Agreement, and the New Shares are "unrestricted securities" and will not be registered under the 1933 Act or any applicable state securities law. Also, Holder represents and warrants that it is acquiring the New Shares as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the New Shares (this representation is not limiting Holder's right to sell the New Shares pursuant to an effective registration statement under the 1933 Act or otherwise in compliance with applicable federal and state securities laws).

**Section 2.8 <u>Access to Information</u>**. Holder acknowledges that it has had the opportunity to review, access information and ask questions about (a) the Company and the disclosures included in the Announcement (as defined below) and (b) the Company's periodic reports and other public filings with the U.S. Securities and Exchange Commission (the "<u>Commission</u>").Holder understands that after receiving the New Shares that the Holder will no longer having any rights under the Exchanged Warrants and that the New Shares will have the rights as set forth in the Series F CoD, which rights expressly will not entitle the Holder to participate in any dividends of the Company In making its investment decision, Holder has relied upon its own review of the Announcement, the Company's filings with the Commission and other information that was made available and has not relied upon any representation, oral or written, by the Company's officers or directors

**ARTICLE III**<br>**<u>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</u>**

To induce Holder to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to Holder as of the date hereof as follows:

**Section 3.1 <u>Existence</u>**. The Company is an entity duly organized, validly existing and in good standing under the laws of the State of Delaware.

**Section 3.2 <u>Authority and Capacity</u>**. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection herewith, other than in connection with the Required Approvals (as defined herein). This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

**Section 3.3 <u>No Conflicts</u>**. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company's certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any liens, claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals (as defined herein), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company, taken as a whole, or in its ability to perform its obligations under this Agreement. The Company has duly filed, or will file prior to the Closing, the Series F CoD with the State of Delaware's Secretary of State and the Series F CoD is in full force and effect.

**Section 3.4 <u>No Approvals or Consents</u>**. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of this Agreement, other than: (i) the filings required pursuant to this Agreement, (ii) the filing of Form D with the Commission to the extent deemed necessary by the Company; and (iii) such filings as are required to be made under applicable state securities laws (collectively, the "<u>Required Approvals</u>").

**Section 3.5 <u>Securities Law Exemptions</u>**. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the New Shares in exchange for the Exchanged Warrants is exempt from registration under the 1933 Act, pursuant to the exemption provided by Section 3(a)(9) thereof, and applicable state securities laws.

**Section 3.6 <u>Issuance of New Shares</u>**. The issuance of the New Shares are duly authorized and, upon issuance in accordance with the terms of this Agreement, the New Shares shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively "Liens") with respect to the issue thereof.

**Section 3.7 <u>No Consideration Paid</u>**. No commission or other remuneration has been paid by Company for soliciting the Exchange Transactions as contemplated hereby.

**Section 3.8 <u>Disclosure</u>**. Except as disclosed in the Announcement (as defined below), the Company confirms that neither it nor any other person or entity acting on its behalf has provided the Holder or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company, other than the existence of the transactions contemplated by this Agreement. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All disclosure provided to the Holder regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company is true and correct as of the date furnished and does not contain any untrue statement of a material fact or omit to state any material fact as of the date furnished necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company to the Holder pursuant to or in connection with this Agreement, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Except as disclosed in the Announcement, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees that the Holder has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2 above.

**Section 3.9 <u>SEC Reports</u>**. The Company has filed with the SEC all reports required to be filed by it under the Securities Exchange Act of 1934 (the "<u>Exchange Act")</u> for the most recent twelve-month period, including Current Reports on Form 8-K (such filed reports, the "<u>SEC Reports</u>"). As of their respective filing dates, the SEC Reports filed since January 1, 2024 complied in all material respects with applicable accounting requirements and the requirements of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Reports, the financial statements included in the SEC Reports were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended, and none of such SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

**ARTICLE IV**<br>**<u>MISCELLANEOUS</u>**

**Section 4.1 <u>Disclosure of Exchange Transaction</u>**. The Company shall, on or before 9:30 am New York time, on the third business day after the date of this Agreement (or on the date of this Agreement, if such Agreement is signed prior to 9:30 am New York time), furnish or file a Report on Form 8-K or a press release describing all the material terms of the Exchange Transaction (the "<u>Announcement</u>"). From and after the Announcement, the Company shall have disclosed all material, non-public information (if any) provided to Holder by the Company or any of its officers, directors, employees or agents in connection with the Exchange Transaction. In addition, effective upon the Announcement, the Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the Exchange Transaction under any agreement, whether written or oral, between itself or any of its officers, directors, affiliates, employees or agents, on the one hand, and any of Holder or any of its affiliates, on the other hand, shall terminate.

**Section 4.2 <u>Further Assurances</u>**. Each of the parties hereto shall do and perform and execute and deliver, or cause to be done and performed or executed and delivered, and without further consideration, all further acts and all other agreements, certificates, book entries, instruments, instructions and documents as may be necessary or as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the Exchange Transaction.

**Section 4.3 <u>Notices</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery, if delivered personally or by e-mail prior to 5:00 p.m., in the place of delivery and such day is a Business Day; otherwise, the next Business Day, (ii) on the first Business Day following the date of dispatch if delivered express mail by a recognized overnight courier service or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the address set forth in this Agreement or to such other address either party to this Agreement shall specify by notice given in accordance with this <u>Section 4.3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For the purposes of this <u>Section 4.3</u>, "<u>Business Day</u>" shall mean any day other than Saturday, Sunday or other day on which commercial banks in New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of such commercial banks are generally open for use by customers on such day.

**Section 4.4 <u>Amendments and Waivers</u>**. Other than as amended, consented to or waived herein, all other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement may be amended if, but only if, such amendment is in writing and is duly executed and delivered by the Company and Holder. Any provision of this Agreement may be waived by the party entitled to the benefit thereof, but only by a writing signed by such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

**Section 4.5 <u>Fees and Expenses</u>**. Each party hereto shall pay all of its own fees and expenses (including attorneys' fees) incurred in connection with this Agreement and the Exchange Transaction.

**Section 4.6 <u>Successors and Assigns; No Third Party Beneficiaries</u>**. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and to no other person, provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto. Each party to this Agreement acknowledges and agrees that this Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

**Section 4.7 <u>Independent Nature of Holder</u>**<u>'**s Obligations and Rights**</u>. The Company acknowledges and agrees that the obligations of Holder under this Agreement are several and not joint with the obligations of any Other Holder (if any) under any other agreement related to the Exchange of warrants (such agreements, if any, the "<u>Other Warrant Agreements</u>"), and Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such Other Warrant Agreement. Nothing contained in this Agreement, and no action taken by Holder pursuant hereto, shall be deemed to constitute Holder and any Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Holder and any Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreements, if any, and the Company acknowledges that Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Warrant Agreement.

**Section 4.8 <u>Specific Performance</u>**. The parties agree that irreparable damage for which monetary damages, if available, may not be an adequate remedy, would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Holder shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy to which the Holder is entitled at law or in equity. The parties acknowledge and agree that should the Holder seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 4.8, the Holder shall not be required to provide any bond or other security in connection with any such order or injunction.

**Section 4.9 <u>Governing Law; Waiver of Jury Trial</u>**. This Agreement shall be construed, interpreted and enforced in accordance with, and shall be governed by, the laws of the State of New York without reference to, and regardless of, any applicable choice or conflicts of laws principles to the extent that such principles would direct a matter to another jurisdiction. Each party to this Agreement agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of New York and the Federal courts of the United States of America located in the Southern District of New York (the "<u>Chosen Courts</u>"), and solely in connection with claims arising under this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party to this Agreement and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with <u>Section 4.3</u>. Each party to this Agreement irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement.

**Section 4.10 <u>Entire Agreement</u>**. This Agreement (including the recitals and any schedules hereto) constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto and/or their affiliates with respect to the subject matter hereof.

**Section 4.11 <u>Severability</u>**. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. To the extent that any such provision is so held to be invalid, illegal or unenforceable, the parties shall in good faith use commercially reasonable efforts to find and effect an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

**Section 4.12 <u>Counterparts</u>**. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be signed by any electronic signature and be delivered via electronic mail (including pdf) or other electronic transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

**Section 4.13 <u>Most Favored Nation</u>**. The Company hereby represents and warrants as of the date hereof and covenants and agrees that none of the terms offered to any person or entity with respect to any consent, release, amendment, settlement or waiver relating to the Exchange Transaction as contemplated by this Agreement (each a "<u>Settlement Document</u>"), is or will be on more favorable terms to such person or entity than those of the Holder and this Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document, then the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. Notwithstanding, the foregoing, any future Settlement Document, related to retail investor warrant holders that (i) individually is less than or equal to 6.30% of Total Warrants Outstanding or (ii) in the aggregate is less than or equal to 12.70% of the Total Warrants Outstanding, shall not trigger any repricing under this Section. The provisions of this Section 4.13 shall apply similarly and equally to each Settlement Document. Notwithstanding the foregoing, prior to the date hereof as disclosed in the Company's filings with the Commission, the Company previously entered into settlement and release agreements with other holders of Series F Warrants on terms and conditions that are different than are provided for in this Exchange Transaction as provided under this Agreement (the "<u>Prior Settlements</u>"), and the Holder acknowledges that such Prior Settlements are expressly excluded from this Section 4.13.

**Section 4.14 <u>Holding Period</u>**. For the purposes of Rule 144 of the 1933 Act, the Company acknowledges that the holding period of the New Shares may be tacked by the Holder onto the holding period of the Exchanged Warrants and, and the Company agrees not to take a position contrary to this Section 4.14, except as required by applicable law. In addition, subject to the truth and accuracy of the Holder's representations set forth in Section 2 of this Agreement and assuming the Holder is not an "affiliate" of the Company within the meaning of Rule 144(a)(1), the New Shares shall take on the unrestricted characteristics of the Exchanged Warrants and the Company agrees not to take a position to the contrary, except as otherwise required by applicable law.

**Section 4.15 <u>Payment of Collection, Enforcement and Other Costs</u>**. If (a) this Agreement or the Series F CoD is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Agreement or the Series F CoD or to enforce the provisions of this Agreement or the Series F CoD or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting the Company's creditors' rights and involving a claim under this Agreement or the Series F CoD, then the Company shall pay the costs actually incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys' fees and disbursements.

**Section 4.16 <u>Termination</u>**. If the Closing has not occurred on or prior to the fifth (5<sup>th</sup>) Business Day (as defined in the Series F CoD) after the date hereof, this Agreement shall automatically terminate and shall be null and void.

[*Signature Page Follows*]

IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as of the date first above written.

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| | |
|:---|:---|
| **NOVABAY PHARMACEUTICALS, INC.** | **NOVABAY PHARMACEUTICALS, INC.** |
| By: | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer |

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| | |
|:---|:---|
| **ARMISTICE CAPITAL MASTER FUND LTD.** | **ARMISTICE CAPITAL MASTER FUND LTD.** |
| By: | /s/ Steven Boyd |
| Name: | Steven Boyd |
| Title: | CIO of Armistice Capital, LLC, the Investment Manager |

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## Exhibit 10.5

**Exhibit 10.5**

***CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REDACTED TERMS HAVE BEEN MARKED WITH THE FOLLOWING MARKING: [Redacted.]***

***Execution Version***

**VOTING AGREEMENT**

THIS VOTING AGREEMENT (this "**Agreement**") is being signed on August 19, 2025 (the "**Signature Date**") by and among (a) NovaBay Pharmaceuticals, Inc. a Delaware corporation whose Common Stock is listed for trading on the NYSE American (the "**Proxy**" or the "**Company**"), (b) Mr. David Elliot Lazar, an individual ("**Lazar**"), and (c) each of (i) Mr. Jad Fakhry, an individual, (ii) Poplar Point Capital Management LLC, a Delaware limited liability company, (iii) Poplar Point Capital Partners LP, a Delaware limited partnership, and (iv) Poplar Point Capital GP LLC, a Delaware limited liability company (each person or entity part of group "(c)" hereinafter referred to as, a "**Stockholder**" and collectively: the "**Stockholders**").

WHEREAS, the Company and Lazar are contemplating entering into a Securities Purchase Agreement (the "**Securities Purchase Agreement**") that will provide for the sale and issuance of, *inter alia,* shares of newly designated series' of Company preferred stock ("**Preferred Stock**"), which shares, among other rights, are expected to be convertible into shares of the Company's common stock, par value $0.01 per share ("**Common Stock**"), subject to and in accordance with the terms of the Securities Purchase Agreement once finalized, and in connection with that Securities Purchase Agreement, the Stockholders desire to provide the Proxy with certain contractual rights as set forth below.

WHEREAS, Jad Fakhry hereby represents that he does not have any beneficial interest in capital stock of the Company and in any other shares or securities of the Company and/or any of its subsidiaries issued or issuable in respect thereof on and after the Signature Date, other than (a) individually, (b) through Poplar Point Capital Management LLC, a Delaware limited liability company, (c) through Poplar Point Capital Partners LP, a Delaware limited partnership, and/or (iv) through Poplar Point Capital GP LLC, a Delaware limited liability company, in each case as disclosed in the Schedule 13D filed with the Securities and Exchange Commission on June 4, 2025.

NOW, THEREFORE, in consideration of the recitals set forth hereinabove and the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged hereby, each of the parties hereto, intending legally to be bound, hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Incorporation of Recitals</u>.** The parties to this Agreement hereby agree and acknowledge that all of the Recitals set forth hereinabove are true, complete and correct in every respect and hereby incorporate said Recitals into this Agreement by this reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Representations of each Stockholder</u>**. Each Stockholder hereby represents and warrants to the Proxy and Lazar that he/it: (a) has full power to enter into this Agreement and has not, prior to the Signature Date, executed and/or delivered any proxy or entered into any other voting agreement or similar arrangement and (b) will not take any action inconsistent with the purposes and provisions of this Agreement. Without limiting the above or anything otherwise in this Agreement, each Stockholder represents that neither it nor, any of its representatives or affiliates has (i) entered into (and, except with the prior written consent of the Proxy, agrees that it will not and will use reasonable efforts to ensure that its representatives and affiliates will not enter into) directly or indirectly, any agreement, arrangement or understanding with any person or firm as a principal, co-investor or co-bidder with respect to a possible transaction involving the Company or that would restrict the ability of any other person to provide debt, equity or other financing for a possible transaction involving the Company or (ii) engaged in any discussions which might lead to any agreement, arrangement or understanding with any such person or firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Escrow of Agreement</u>**. Upon execution of this Agreement, it shall be placed in escrow with counsel to Lazar, McMurdo Law Group, until the complete execution and effectiveness of the Securities Purchase Agreement by the Company and Lazar, at which time this Agreement shall be released from such escrow to the benefit of the Proxy (the "**Proxy Effective Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Scope of Agreement</u>.** Upon and following the Proxy Effective Date, this Agreement pertains to the vote of the 1,020,300 shares of Common Stock, representing the aggregate voting interest of the Stockholders taken as a whole as of the Signature Date (assuming the exercise by or vesting in the Stockholders of all equity-linked securities held by them), as well as any additional shares of Common Stock which may be acquired by the Stockholders until the expiration of this Agreement (the "**Proxy Shares**") by the Proxy with respect to any and all matters concerning a stockholder vote in respect of the Proxy Shares with respect to actions to be taken by the Company and recommended by the Board of Directors of the Company at its annual meeting of stockholders, including, *inter alia*, pursuant to the Securities Purchase Agreement between the Company and Lazar, to the following matters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) effecting a reverse stock split of the Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) amending the Amended and Restated Certificate of Incorporation of the Company to provide for an increase in the number of authorized shares of Company preferred stock and Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) electing new members to the Company's Board of Directors as may be nominated by Lazar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) approving the issuance and/or conversion of Preferred Stock of the Company into shares of Common Stock, including in excess of 19.99% of the issued and outstanding shares of Common Stock in accordance with NYSE American rules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) approving an increase to the number of shares available under the Company's existing equity incentive plan to up to 1,000,000 shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) approving the issuance of shares of Common Stock to certain non-employee directors as contemplated by their respective settlement agreements.

In addition, upon and following the Proxy Effective Date, each Stockholder hereby agrees that, for a period of two (2) years from the Proxy Effective Date, unless such shall have been specifically invited in advance in writing by Lazar, no Stockholder, nor any of its representatives acting on its behalf, will in any manner, directly or indirectly: (i) effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way advise, assist or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (a) any acquisition of any securities (or beneficial ownership thereof) or assets of the Company, or any rights to acquire any such securities (including derivative securities representing the right to vote or economic benefit of any such securities) or assets; (b) any tender or exchange offer, merger or other business combination involving the Company; (c) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company; or (d) any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company; (ii) form, join or in any way participate in a "group" (as defined under the 1934 Act) with respect to any securities of the Company; (iii) otherwise act, alone or in concert with others, to seek to control or influence the management, board of directors or policies of the Company; (iv) take any action which might force the Company to make a public announcement regarding any of the types of matters set forth in (i) above; (v) enter into any discussions or arrangements with any third party with respect to any of the foregoing; or (vi) request that the Company (or its directors, officers, employees or agents) amend or waive any provision of this paragraph (including this clause (vi)).

Notwithstanding anything to the contrary contained in this paragraph (the "**Standstill Provision**") a Stockholder shall be permitted to: 1) make proposals to the Company's Board of Directors or special committee, the chairman of the Board of Directors and/or chief executive officer of the Company on a confidential, nonpublic basis for either (A) a proposed transaction between the parties, so long as Stockholder reasonably believes in good faith, based on the written advice of its outside counsel, that neither it nor the Company nor the Proxy would reasonably be expected to be required by applicable law, regulation or stock exchange requirement to disclose publicly any such proposal or (B) a waiver of this Section 4 and 2) dispose of Stockholders' shares in the Company, whenever acquired on the open market, provided Stockholders shall not dispose of any shares owned as of the Signature Date until after (i) they have voted their 1,020,300 shares of Common Stock at the applicable stockholders meeting to approve the Securities Purchase Agreement, referred to herein and (ii) such approval of the Securities Purchase Agreement is passed (the "**Approval**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Changes in Capital Stock</u>**. In the event that subsequent to the Signature Date, any shares of capital stock or other securities the Company are issued on, or in exchange for, any of the Proxy Shares by reason of any stock dividend, stock split, consolidation of shares, reclassification, exchange, merger or consolidation or otherwise involving the Company, such shares of capital stock or other securities shall be deemed to be Proxy Shares for purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Voting of Proxy Shares</u>.** Each Stockholder agrees and covenants that at any meeting of the stockholders of the Company and/or in connection with any corporate action by the stockholders of the Company from the Signature Date until the termination of this Agreement, all of his/its respective shares of the Proxy Shares shall be voted by the Stockholder in favor of all proposals recommended by the Board of Directors of the Company that are presented for stockholder approval as set forth in Section 4 above or otherwise. Each Stockholder agrees to promptly vote their Proxy Shares within seven (7) days after the Company files a definitive proxy statement for a meeting of its stockholders. To the extent that such shares are not voted, then the Stockholders grant the Company an irrevocable proxy, as provided in Section 7, to vote all of the Proxy Shares in the manner and to the effect determined by said Proxy in his sole and absolute discretion with respect to actions proposed to be taken by the Company. Accordingly, during the term of this Agreement, no Stockholder shall vote or attempt to vote any of his/its respective shares of the Proxy Shares, or otherwise exercise or attempt to exercise any voting or other approval rights of any of his/its respective shares of the Proxy Shares except as provided in this Section 6, and any such prohibited exercise by any Stockholder of voting or approval rights shall be void and of no force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Irrevocable Proxy</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In order to give effect to and in furtherance of the agreements and covenants set forth in this Agreement, each Stockholder hereby irrevocably constitutes and appoints Proxy as proxy for such Stockholder, with full power of substitution, for and in the name and on behalf of such Stockholder, to vote any and all of his/its respective shares of Proxy Shares with regard to any question, action, resolution, election or other matter presented to the stockholders of the Company in favor of and/or approval with respect to actions proposed to be taken by the Company. Proxy shall vote said Proxy Shares in such manner and to such effect as the Proxy may determine in his sole and absolute discretion with respect to actions proposed to be taken. The proxy granted hereby shall remain in effect for so long as and at all times that this Agreement shall remain in effect. The proxy granted hereby is irrevocable and is coupled with an interest sufficient in law to support an irrevocable proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Proxy hereby accepts its appointment as proxy of each Stockholder, pursuant to Subsection 7(a) of this Agreement. Other than as specifically set forth herein, the Proxy shall have no other rights with respect to the Proxy Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In no way shall the terms of this Agreement be interpreted in a way to cause a violation of Section 160(c) of the Delaware General Corporate Law or to prohibit, limit or restrict Proxy from exercising any fiduciary duties as an officer and/or director to the Company at and from such time as the Proxy may be such.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The voting of Proxy Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. For the avoidance of doubt, voting of the Proxy Shares pursuant to the Agreement need not make explicit reference to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Limitation of Proxy</u>**<u>'</u>**<u>s Liability</u>.** Proxy shall not incur any liability or responsibility by reason of any error of judgment, mistake of law or other mistake, or for any act or omission of any agent or attorney, or for any misconstruction of this Agreement, or for any action of any kind taken or omitted hereunder or believed by him to be in accordance with the provisions and intents hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Consideration</u>.** In exchange for the Irrevocable Proxy and the transfer of the voting rights of the Stockholders, Lazar and the Company shall use all commercially reasonable efforts to 1) execute the Securities Purchase Agreement and undertake the actions contemplated therein, including the investment by Lazar in the Company and 2) cause a special dividend per share at $0.80 (eighty cents per share), or more, to be paid at the first available opportunity but no later than September 30, 2025, following the execution of the Securities Purchase Agreement, to all common stockholders prior to the effect of any stock split, share consolidation or any other recapitalization or act that would materially affect the number of shares outstanding. For the sake of clarity, the current common shares outstanding of the Company equals 5,823,497 as of August 12, 2025, so the total special dividend to be paid to shareholders shall be $0.80 multiplied by 5,823,497 equaling $4,658,797.60 before any fees or expenses related to processing the special dividend.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Term</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall commence on the Signature Date and continue for a period of two (2) years from the Proxy Effective Date, unless terminated by Proxy, in Proxy's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company and each Stockholder confirms hereby that he/it understands and acknowledges that this Agreement will continue for a period of two (2) years from the Proxy Effective Date as set forth above, unless terminated by Proxy, in Proxy's sole discretion, and that the preceding part of this Section 11(b) reflects his/its intention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Successor Proxy</u>**. In the event that the Proxy is unable or unwilling to serve as the Proxy, a successor proxy (who will become the Proxy under this Agreement, if appointed in accordance with this Section 11) may be appointed by the Proxy at its discretion, or if the Proxy is unable to make such appointment by the consent of the successors to the Company's individual shares of capital stock that hold a majority interest in such shares. A successor proxy shall be vested with all the rights, powers and authority as if originally named in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Legend; Subsequent Holders of Proxy Shares</u>**. Each Stockholder hereby acknowledges and agrees that commencing on the Signature Date all certificates for the shares of Proxy Shares may, but need not, be imprinted by the Company with notice of this Agreement and the irrevocable proxy set forth herein. Each Stockholder agrees not to transfer any interest in his/its respective Proxy Shares, unless the transferee executes and delivers a joinder and adoption agreement pursuant to which transferee or assignee of Proxy Shares shall continue to be subject to the terms hereof and, as a condition precedent to any such transfer(s) (and the Company's recognizing such transfer(s)), each such transferee or assignee shall agree in writing to be subject to each of the terms of this Agreement by executing and delivering such joinder and adoption agreement to the satisfaction of the Proxy. Upon the execution and delivery of by any transferee joinder and adoption agreement, such transferee shall be deemed to be a party hereto as if such transferee were the transferor and such transferee's signature appeared on the signature pages of this Agreement and shall be deemed to be a Stockholder. A Stockholder shall not make, and the Company shall not permit, the transfer of Proxy Shares on its books or issue a new certificate representing any such Proxy Shares unless and until such transferee (or group) shall have complied with the terms of this Section 11.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>Governing Law; Jurisdiction and Venue</u>.** This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to rules regarding choice of law. **EACH PARTY HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN WILMINGTON, DELAWARE FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT AND/OR ANY ADOPTION AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>Benefits; Binding Effect</u>.** This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors, assigns and transferees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. <u>Counterparts</u>.** This Agreement may be executed in several counterparts, and all so executed shall constitute one Agreement, binding on all the parties hereto, notwithstanding that all the parties are not signatories to the original or same counterpart.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16. <u>Amendment or Modification</u>.** This Agreement may be altered, modified or amended only by the unanimous consent, in writing, of the parties hereto, either now or hereafter. Any such modification must be signed by each party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17. <u>Titles and Subtitles</u>**. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18. <u>Notices</u>**. All notices and other communications given or made pursuant to this Agreement shall be c/o NovaBay Pharmaceuticals. Inc., 2000 Powell Street, Suite 1150, Emeryville, California 94608 in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on <u>Schedule A</u> hereto, or to such email address or address as subsequently modified by written notice given in accordance with this Section 18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19. <u>Delays or Omissions</u>**. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20. <u>Further Assurances</u>**. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21. <u>Specific Enforcement</u>**. The Stockholders acknowledges and agrees that irreparable harm will result in the event any of the provisions of this Agreement are not performed by the Stockholders in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that the Company shall be entitled to an injunction to prevent breaches of this Agreement, and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction, as further provided in Section 23.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**22. <u>Entire Agreement</u>.** This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements, both oral and written, among the parties hereto with respect to such subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**23. <u>Enforceability</u>**. The parties expressly agree that this Agreement shall be specifically enforceable in any court of competent jurisdiction in the United States in accordance with its terms against each of the parties hereto. If any provision of this Agreement shall be declared void or unenforceable by any court or administrative board of competent jurisdiction, such provision shall be deemed to have been severed from the remainder of this Agreement and this Agreement shall continue in all respects to be valid and enforceable and shall be construed so as to best give effect to the intention of the voided or unenforceable term or provision.

**IN WITNESS WHEREOF**, the parties have executed this Voting Agreement as of the Signature Date.

---

| | |
|:---|:---|
| NOVABAY PHARMACEUTICALS, INC. | NOVABAY PHARMACEUTICALS, INC. |
| By: | /s/ Justin Hall |
|  | Justin Hall, CEO |

---

---

| | |
|:---|:---|
| JAD FAKHRY (in his individual capacity) | JAD FAKHRY (in his individual capacity) |
| By: | /s/ Jad Fakhry |
|  | Jad Fakhry |

---

---

| | |
|:---|:---|
| POPLAR POINT CAPITAL MANAGEMENT LLC | POPLAR POINT CAPITAL MANAGEMENT LLC |
| By: | /s/ Jad Fakhry |
|  | Jad Fakhry, Manager |

---

---

| | |
|:---|:---|
| POPLAR POINT CAPITAL PARTNERS LP | POPLAR POINT CAPITAL PARTNERS LP |
| By: | Poplar Point Capital GP LLC, its General Partner |
| By: | /s/ Jad Fakhry |
|  | Jad Fakhry, Manager |

---

---

| | |
|:---|:---|
| POPLAR POINT CAPITAL GP LLC | POPLAR POINT CAPITAL GP LLC |
| By: | /s/ Jad Fakhry |
|  | Jad Fakhry, Manager |

---

---

| | |
|:---|:---|
| DAVID ELLIOT LAZAR | DAVID ELLIOT LAZAR |
| By: | /s/ David Elliot Lazar |
|  | David Elliot Lazar |

---

**<u>Schedule A</u>**

---

| | |
|:---|:---|
| **Company/Proxy:** | NovaBay Pharmaceuticals, Inc.<br> Address: 2000 Powell Street, Suite 1150,<br> Emeryville, California 94608<br> Attention: Justin Hall<br> E-mail: **[Redacted.]** |
|  | With a copy, which shall not constitute notice, shall also be sent to **[Redacted.]** |
| **Stockholders:** | Poplar Point Capital Management LLC<br> Poplar Point Capital Partners LP<br> Poplar Point Capital GP LLC<br> Mr. Jad Fakhry<br> Address: 330 Primrose Road, Suite 400<br> Burlingame, CA 94010<br> Attention: Mr. Jad Fakhry<br> E-mail: **[Redacted.]** |
|  | With a copy, which shall not constitute notice, shall also be sent to Ben Fackler **[Redacted.]** and Daniel Fligsten **[Redacted.]** |
| **Lazar:** | Mr. David Elliot Lazar |
|  | Address:<br> 30B, Tower 200 The Towers,<br> Winston Churchill, San Francisco, Paitilla,<br> Panama City, Panama. 07196<br> E-mail: **[Redacted.]** |
|  | With a copy, which shall not constitute notice, shall also be sent to: |
|  | Mr. Avraham Ben-Tzvi, Attorney<br> Address:<br> 28 General Pierre Koenig St.,<br> 3rd Floor – Asif Business Center,<br> Jerusalem 9346936, Israel<br> Email: **[Redacted.]** |

---

Sch. A-1

## Exhibit 10.6

**Exhibit 10.6**

***CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REDACTED TERMS HAVE BEEN MARKED WITH THE FOLLOWING MARKING: [Redacted.]***

***Execution Version***

![](ex10-6_001.jpg)

**AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT**

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of August 19, 2025 (the "Effective Date") by and between NovaBay Pharmaceuticals, Inc. ("Company") and Justin M. Hall ("Executive").

**RECITAL**

The Company and Executive are parties to an Employment Agreement dated January 31, 2020, as amended (the "Original Agreement"), and the Company and Executive desire to enter into this Agreement to amend and restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the foregoing recital, the mutual covenants herein contained and for other good and valuable consideration, the parties hereto hereby agree as follows:

I. <u>EMPLOYMENT</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Position and Responsibilities</u>. The Company continues to employ the Executive as its Vice President of Business Development and General Counsel. Executive shall do and perform all such services and acts as necessary or advisable to fulfill the duties and obligations of said position and/or such other and/or additional responsibilities as reasonably delegated to Executive by Executive's superior and/or the Company's Board of Directors (the "Board") typically performed by a Vice President of Business Development and General Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Term</u>. Executive's employment with the Company shall be governed by the terms of this Agreement, commencing on the Effective Date and continuing until October 31, 2025 (the "Term"), unless this Agreement is terminated at some earlier time in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Devotion</u>. Except as heretofore or hereafter excepted by the Company in writing, during the term of this Agreement, Executive (i) shall devote full time and attention to the foregoing responsibilities, (ii) shall not engage in any other business or other activity which may materially interfere with Executive's performance of said responsibilities, and (iii) except as to any investment made in a publicly traded entity not amounting to more than 1% of its outstanding equity, shall not, directly or indirectly, as an employee, consultant, partner, principal, director or in any other capacity, engage or participate in any business that is in competition with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Services' Uniqueness</u>. It is agreed that Executive's services to be performed under this Agreement are special, unique and extraordinary and give rise to peculiar value, the loss of which may not be reasonably or adequately compensated by a damages award, in any legal action. Accordingly, in addition to any other rights or remedies available to the Company, the Company shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of the terms of this Agreement by Executive.

II. <u>PROPRIETARY RIGHTS, CONFIDENTIAL INFORMATION, NONSOLICITATION, ETC.</u> 

Executive has executed an agreement relating to the treatment of (and Executive's obligations as to) proprietary rights, confidential information, and certain non-solicitation and other matters. It is further understood and agreed that said agreement is deemed to continue in full force and effect, binding and not affected, in any manner, by the terms in this Agreement or the superseding of the Original Agreement.

III. <u>COMPENSATION AND BENEFITS</u>.

Executive's compensation and benefits rights are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Salary</u>. Executive shall be entitled to an annual salary of $175,000 (the "Base Salary"), subject to such deductions, withholding and other charges as required by law, payable in accordance with the Company's standard payroll schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Other Benefits</u>. Executive shall be entitled to five (5) weeks of paid vacation for each calendar year to be taken pursuant to the Company's vacation benefits policy. Executive is also entitled to other benefits as (i) are generally available to the Company's other similar, high level executives, consisting of such medical, retirement and similar benefits as are so available and (ii) are deemed special to Executive and approved by the Board.

IV. <u>TERMINATION</u>.

It is understood and agreed by the Company and Executive that this Agreement contains a promise of Executive's employment with the Company through the end of the Term. In the event the Company terminates Executive's employment prior to the end of the Term, the Company will pay Executive an amount equal to the Base Salary from the termination date through the end of the Term (the "Severance Amount"). The Severance Amount will be paid in a lump-sum within thirty (30) days following Executive's date of termination.

V. <u>ARBITRATION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Arbitration</u>. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or any of the rights, benefits or obligations resulting from its terms, shall be settled by arbitration in San Francisco, California. Except for the right of the Company and Executive to seek injunctive relief in court, any controversy, claim or dispute of any type arising out of or relating to Executive's employment or the provisions of this Agreement shall be resolved in accordance with this Section V of the Agreement, regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any such disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination, discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the California Labor code, the California Fair Employment and Housing Act, and all individual Private Attorney General Act of 2004 claims. Nothing in this provision is intended to restrict Executive from submitting any matter to an administrative agency with jurisdiction over such matter. Pursuant to law, claims that allege conduct constituting sexual harassment or sexual assault may be subject to arbitration only at the election of the person alleging such conduct.

THE COMPANY AND EXECUTIVE VOLUNTARILY AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN HIS/HER OR ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, COLLECTIVE, CONSOLIDATED OR OTHER REPRESENTATIVE PROCEEDING THAT MAY BE WAIVED TO THE FULLEST EXTENT PERMITTED BY LAW. SIMILARLY, COMPANY AND EXECUTIVE FURTHER AGREE THAT NEITHER PARTY MAY OPT IN TO OR OTHERWISE PARTICIPATE IN A CLASS, COLLECTIVE, OR OTHER REPRESENTATIVE ACTION INVOLVING CLAIMS THAT ARE SUBJECT TO BINDING INDIVIDUAL ARBITRATION UNDER THIS AGREEMENT, INCLUDING AS A WITNESS, CLASS OR COLLECTIVE MEMBER. If there is a collective or class action, Employee is waiving Executive's right to participate in any capacity including that Executive shall not receive any opt-in notice.

The Executive and the Company agree that any disputes related to or arising out of the Executive's employment with the Company will be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator. If the Company and Executive cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in accordance with Rule 12 of the JAMS employment arbitration rules and procedures. Reasonable discovery will be permitted by both parties and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to arbitration in this Section V and may award any relief permitted by law. The arbitrator must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The parties hereto hereby waive to the fullest extent permitted by law any rights to appeal or to review of such award by any court. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of arbitration under Section V of this Agreement. At the request of any party, the arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the arbitration proceedings. The arbitrator's fees and cost of the Arbitration will be paid in full by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Acknowledgement</u>. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION V, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO ARBITRATION, AND THAT THE PROVISIONS SET FORTH IN THIS SECTION V CONSTITUTE A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>No Duty to Mitigate</u>. Executive is under no contractual or legal obligation to mitigate Executive's damages in order to receive the severance benefits provided in this Agreement.

VI. <u>LEGAL ADVICE</u>.

Executive acknowledges that an opportunity has been afforded to Executive to consult with legal counsel with respect to this Agreement and that no individual representing the Company has given legal advice with respect to this Agreement.

VII. <u>MISCELLANEOUS AND CONSTRUCTION</u>.

Except as otherwise specifically provided herein, this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. and any benefits or obligations herein may not be assigned or delegated by Executive (but may be so assigned or delegated by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. contains the entire understandings of the parties as to its subject matter, and replaces and supersedes any existing employment agreement, including but not limited to the Original Agreement, and any and all contrary prior understandings or agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. may be amended or modified only by a written amendment or modification signed by the Company and Executive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. is made in, and shall be construed under the laws of, the State of California;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. inures to the benefit of, and is binding upon, the permitted successors, assigns, distributees, personal representatives, heirs and other successors-in-interest to and of the parties hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. shall not be interpreted by reference to any of the captions or headings of the paragraphs herein, which captions or headings have been inserted for convenience purposes only;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. shall be fully effectuated in accordance with its tenor, effect and purposes by each of the parties hereto by executing such further documents or taking such other actions as may be reasonably requested by the other party hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. shall be interpreted, as to its remaining provisions, to be fully lawful and operative, to the extent reasonably required to fulfill its principal tenor, effect and purposes, in the event that any provision either is found by any court of competent jurisdiction to be unlawful or inoperative or violates any statutory or legal requirement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year first above written.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| NOVABAY PHARMACEUTICALS, INC. | NOVABAY PHARMACEUTICALS, INC. |
| By: | /s/ Tommy Law |
| Name: | Tommy Law |
| Title: | Interim Chief Financial Officer |
| **EXECUTIVE:** | **EXECUTIVE:** |
| By: | /s/ Justin M. Hall, Esq. |
| Name: | Justin M. Hall, Esq. |

---

---

| | |
|:---|:---|
| Address: | **[Redacted.]** |
| Telephone No. | **[Redacted.]** |
| E-mail: | **[Redacted.]** |

---

## Exhibit 10.7

**Exhibit 10.7**

***CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REDACTED TERMS HAVE BEEN MARKED WITH THE FOLLOWING MARKING: [Redacted.]***

***Execution Version***

![](ex10-8_001.jpg)

**EXECUTIVE EMPLOYMENT AGREEMENT**

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of August 19, 2025 (the "Effective Date") by and between NovaBay Pharmaceuticals, Inc. ("Company") and Tommy Law ("Executive").

**RECITAL**

The Company and Executive desire to formalize and reflect Executive's employment under the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing recital, the mutual covenants herein contained and for other good and valuable consideration, the parties hereto hereby agree as follows:

I. <u>EMPLOYMENT</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Position and Responsibilities</u>. The Company continues to employ the Executive as its Chief Financial Officer. Executive shall do and perform all such services and acts as necessary or advisable to fulfill the duties and obligations of said position and/or such other and/or additional responsibilities as reasonably delegated to Executive by Executive's superior and/or the Company's Board of Directors (the "Board") typically performed by a Chief Financial Officer consistent with the Company's Bylaws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Term</u>. Executive's employment with the Company is at-will and shall be governed by the terms of this Agreement, commencing on the Effective Date and continuing to and including the first anniversary of the Effective Date (the "Term"), unless this Agreement is terminated at some earlier time in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Devotion</u>. Except as heretofore or hereafter excepted by the Company in writing, during the term of this Agreement, Executive (i) shall devote full time and attention to the foregoing responsibilities, (ii) shall not engage in any other business or other activity which may materially interfere with Executive's performance of said responsibilities, and (iii) except as to any investment made in a publicly traded entity not amounting to more than 1% of its outstanding equity, shall not, directly or indirectly, as an employee, consultant, partner, principal, director or in any other capacity, engage or participate in any business that is in competition with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Services' Uniqueness</u>. It is agreed that Executive's services to be performed under this Agreement are special, unique and extraordinary and give rise to peculiar value, the loss of which may not be reasonably or adequately compensated by a damages award, in any legal action. Accordingly, in addition to any other rights or remedies available to the Company, the Company shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of the terms of this Agreement by Executive.

II. <u>PROPRIETARY RIGHTS, CONFIDENTIAL INFORMATION, NONSOLICITATION, ETC.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Confidential Information</u>*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definition of Company Confidential Information</u>. "Company Confidential Information" means any and all confidential and/or proprietary materials, knowledge, data or information of the Company, its business, employees and contractors, systems, plans, policies, trade practices, suppliers, customers and finances, to which Executive has access during Executive's employment relationship with the Company. By way of illustration but not limitation, "Company Confidential Information" includes (a) trade secrets, inventions, mask works, ideas, innovations, processes, plans, proposals, strategies, tactics, materials, information, formulas, source and object codes, data, programs, know-how, improvements, discoveries, developments, concepts, designs, techniques, works of authorship, domains and URLs, social media accounts (including log-in information, connections, relationships and content), patent, copyright, design right and trademark applications and registrations, and product/service, branding, trademarks and marketing concepts, strategies and programs (all of the foregoing in this subsection (a) collectively "Inventions"); (b) information regarding research, development, new products and services, contracts, systems, tools, technologies, opportunities, vulnerabilities and flaws, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, partners, venturers, suppliers and customers; and (c) information regarding the experience, skills and compensation of other employees and contractors of the Company and other personnel data. Company Confidential Information does not include any of the foregoing items to the extent the same are or become publicly known and/or made generally available through no wrongful act of Executive or of others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Obligations regarding Company Confidential Information</u>*.* Executive agrees that at all times during Executive's employment with the Company and thereafter to (i) hold Company Confidential Information in the strictest confidence; (ii) not use Company Confidential Information except for the benefit of the Company; and (iii) not disclose Company Confidential Information to any person, firm or corporation without prior written authorization of the Company's Chief Executive Officer or Board of Directors. Executive understands that his unauthorized use or disclosure of Company Confidential Information during Executive's employment may lead to disciplinary action, up to and including immediate termination of Executive's employment and legal action by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Former Employer Information</u>*.* Executive agrees that during his employment with the Company Executive will not improperly use, disclose, or induce the Company to use, any proprietary information or trade secrets of any former or concurrent employer or other person or entity. Executive further agrees that Executive will not bring onto the premises of the Company or transfer onto the Company's technology systems any unpublished document, proprietary information or trade secrets belonging to any such employer, person or entity unless consented to in writing by both the Company and such employer, person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Third Party Information</u>*.* Executive recognizes that the Company may have received and in the future may receive from third parties associated with the Company, e.g., the Company's customers, suppliers, licensors, licensees, partners, or collaborators ("Associated Third Parties") their confidential or proprietary information ("Associated Third Party Confidential Information"). By way of example, Associated Third Party Confidential Information may include the habits or practices, technology or requirements of Associated Third Parties, and/or information related to the business conducted between the Company and such Associated Third Parties. Executive agrees at all times during Executive's employment with the Company and thereafter to hold any Associated Third Party Confidential Information in the strictest confidence, and not to use or to disclose it to any person, firm or corporation, except as necessary in carrying out Executive's work for the Company consistent with the Company's agreement with such Associated Third Parties. Executive understands that his unauthorized use or disclosure of Associated Third Party Confidential Information during his employment will lead to disciplinary action, up to and including immediate termination of his employment and legal action by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Immunity From Liability for Confidential Disclosure of a Trade Secret to the Government or in a Sealed Court Filing</u>. Executive understands that the federal Defend Trade Secrets Act of 2016 immunizes him against criminal and civil liability under federal or state trade secret laws – under certain circumstances – if Executive discloses a trade secret for the purpose of reporting a suspected violation of law. Executive understands that Immunity is available if Executive discloses a trade secret in either of these two circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Executive discloses the trade secret (a) in confidence, (b) directly or indirectly to a government official (federal, state or local) or to a lawyer, and (c) solely for the purpose of reporting or investigating a suspected violation of law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In a legal proceeding, Executive discloses the trade secret in the complaint or other documents filed in the case, so long as the document is filed "under seal" (meaning that it is not accessible to the public).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Inventions</u>*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Inventions Retained and Licensed</u>*.* Executive has attached as <u>Exhibit A</u> a list describing all Inventions, discoveries, original works of authorship, developments, improvements, and trade secrets that (i) Executive conceived in whole or in part before commencing his employment with the Company, and (ii) do not relate to the Company's current or proposed business, products, or research and development ("Prior Inventions"). If no such list is attached, Executive represents and warrants that no such Prior Inventions exist. Executive further represents and warrants that the inclusion of any Prior Inventions on <u>Exhibit A</u> to this Agreement will not materially affect his ability to perform all obligations under this Agreement. If, in the course of Executive's employment with the Company, Executive incorporates into or uses any fully developed Prior Invention in connection with any product, process, service, technology or other work by or on behalf of Company, Executive hereby grants to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license, with the right to grant and authorize sublicenses, to make, have made, modify, use, import, offer for sale, and sell such Prior Invention as part of or in connection with such product, process, service, technology or other work and to practice any method related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Assignment of Inventions</u>*.* Executive will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company or to its designee(s) all of Executive's right, title, and interest in and to any and all Inventions, whether or not patentable or registrable under patent, copyright or similar laws, that Executive may solely or jointly conceive, develop or reduce to practice, or cause to be conceived, developed or reduced to practice, (i) during the period of time that the Company employs Executive (including during Executive's off-duty hours), or (ii) in connection with the use of the Company's equipment, supplies, facilities, personnel, or Company Confidential Information, except as provided in Section B.5. below. Executive further acknowledges that all original works of authorship that Executive may make (solely or jointly with others) within the scope of and during the period of his employment with the Company and that are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act. Executive understands and agrees that any decision whether or not to commercialize or market any Inventions is within the Company's sole discretion and for the Company's sole benefit and that no royalty or other consideration will be due to Executive as a result of the Company's efforts to commercialize or market any such Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Maintenance of Records</u>*.* Executive agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions that Executive creates (solely or jointly with others) during the term of his employment with the Company. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that may be specified by the Company. The records are and will be available to, and remain the sole property of, the Company at all times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Patent and Copyright Registrations</u>*.* Executive agrees to assist the Company or its designee(s), at the Company's reasonable expense, in every proper way to secure the Company's rights in any Inventions and in any rights relating to such Inventions in any and all countries. Such assistance regarding any Inventions and/or related rights includes, without limitation, full disclosure to the Company of all pertinent information and data; the execution of all applications, specifications, oaths, assignments and all other instruments that the Company might deem proper or reasonably necessary to apply for, register, obtain, maintain, defend, and enforce such rights, and/or to assign and convey to the Company, its successors, assigns, and/or nominees the sole and exclusive rights, title and interest in and to such Inventions and any rights relating to them; and testifying in a lawsuit or other proceeding relating to such Inventions and any rights relating to them. Executive expressly agrees that his obligation to execute or cause to be executed, when it is in Executive's power to do so, any such instrument or papers continues after the termination of this Agreement, at the Company's reasonable expense. If the Company is unable because of Executive's mental or physical incapacity or for any other reason to secure his signature with respect to any Inventions including, without limitation, to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering such Inventions, then Executive hereby irrevocably designate and appoint the Company and/or its duly authorized officers and agents as his agent and attorney-in-fact, to act for and on his behalf and stead to execute and file any papers, oaths and to do all other lawfully permitted acts with respect to such Inventions with the same legal force and effect as if Executive executed them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Exception to Assignments</u>*.* Executive understands that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention that qualifies fully under the provisions of California Labor Code Section 2870 (the full text of which is in the attached <u>Exhibit B</u>). Executive will advise the Company immediately in writing of any inventions that (i) Executive might create (solely or jointly with others) after today, (ii) Executive believes meet the criteria in California Labor Code Section 2870, and (iii) are not otherwise disclosed on <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Conflicting Employment</u>*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Current Obligations</u>*.* Executive agrees that during the term of his employment with the Company, Executive will not engage in or undertake any other employment, occupation, consulting relationship or commitment that is directly related to the business in which the Company is now involved or becomes involved or has plans to become involved, nor will Executive engage in any other activities that conflict with his obligations to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Prior Relationships</u>*.* Without limiting Section C.1, Executive represents that he has no other agreements, relationships or commitments to any other person or entity that conflict with his obligations to the Company under this Agreement or his ability to become employed and perform the services for which Executive is being hired by the Company. Executive further agrees that if Executive has signed a confidentiality agreement or similar type of agreement with any former employer or other entity, Executive will comply with the terms of any such agreement to the extent that its terms are lawful under applicable law. Executive represents and warrants that after undertaking a careful search (including searches of Executive's computers, cell phones, electronic devices and documents), Executive has returned all property and confidential information belonging to all prior employers. Moreover, Executive agrees to fully indemnify the Company, its directors, officers, agents, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns for all verdicts, judgments, settlements, and other losses incurred by any of them resulting from his breach of his obligations under any agreement to which Executive is a party or obligation to which he is bound, as well as any reasonable attorneys' fees and costs if the plaintiff is the prevailing party in such an action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Returning Company Documents and Property</u>*.* Upon separation from employment with the Company or on demand by the Company during Executive's employment, Executive will immediately deliver to the Company, and will not keep in Executive's possession, recreate or deliver to anyone else, any and all Company property, including, but not limited to, Company Confidential Information, Associated Third Party Confidential Information, as well as all devices and equipment belonging to the Company (including computers, handheld electronic devices, telephone equipment, and other electronic devices), Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, photographs, charts, all documents and property, and reproductions of any of the aforementioned items that were developed by Executive pursuant to his employment with the Company, obtained by Executive in connection with his employment with the Company, or otherwise belonging to the Company, its successors or assigns, including, without limitation, those records maintained pursuant to Section B.3. Executive also consent to an exit interview to confirm his compliance with this Section C.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Termination Certification</u>*.* Upon separation from employment with the Company, Executive agrees to immediately sign and deliver to the Company the "Termination Certification" attached as <u>Exhibit C</u>. Executive also agrees to keep the Company advised of Executive's home and business address for a period of three (3) years after termination of Executive's employment with the Company, so that the Company can contact Executive regarding his continuing obligations arising from this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Notification of New Employer</u>*.* In the event that Executive leaves the employ of the Company, Executive hereby grants consent to notification by the Company to Executive's new employer about his obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Conflict of Interest Guidelines</u>*.* Executive agrees to adhere diligently to all policies of the Company, including the Company's insider trading policies and the Conflict of Interest Guidelines, which may be revised from time to time during Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Representations</u>*.* Executive agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. Executive represents that his performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Executive in confidence or in trust prior to his employment by the Company. Executive hereby represents and warrants that he has not entered into, and Executive will not enter into, any oral or written agreement in conflict herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Audit</u>*.* Executive acknowledges that he has no reasonable expectation of privacy in any computer, technology system, email, handheld device, telephone, or documents that are used to conduct the business of the Company whether such device is personally owned or provided by the Company. As such, the Company has the right to audit and search all such items and systems, without further notice to Executive, to ensure that the Company is licensed to use the software on the Company's devices in compliance with the Company's software licensing policies, to ensure to ensure compliance with the Company's policies, and for any other business-related purposes in the Company's sole discretion. Executive understands that he is not permitted to add any unlicensed, unauthorized or non-compliant applications to the Company's technology systems and that Executive shall refrain from copying unlicensed software onto the Company's technology systems or using non-licensed software or web sites. Executive understands that it is his responsibility to comply with the Company's policies governing use of the Company's documents and the internet, email, telephone and technology systems to which Executive will have access in connection with his employment.

III. <u>COMPENSATION AND BENEFITS</u>.

Executive's compensation and bonus rights are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Salary</u>. Executive shall be entitled to an annual salary of $170,000 (the "Base Salary"), subject to such deductions, withholding and other charges as required by law, payable in accordance with the Company's standard payroll schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Bonus</u>. The Executive shall be eligible for any bonus plan that is deemed appropriate by the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Annual Bonus</u>. Executive shall be entitled to such amount of bonus payment, if any, as considered and approved by the Board in its sole discretion during the Term, which bonus amount shall be determined by all factors deemed relevant for that purpose by the Board and shall include (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to Executive as set by Executive and the Company's Chief Executive Officer and/or the Board, before the end of the first calendar Quarter (ii) the evaluation of Executive by the Company's Chief Executive Officer and/or the Board, (iii) the Company's financial, product and expected progress and (iv) other pertinent matters relating to the Company's business and valuation. The amount of any annual bonus determined with respect to performance during a calendar year or the Company's fiscal year, as the case may be, will be paid in full on or before the date that is 2½ months following the end of the year for which the bonus was earned. The Compensation Committee of the Board of Directors shall have the sole discretion to pay any or all of the Annual Bonus in the form of equity compensation. Any such equity compensation shall be issued from the Company's Omnibus Incentive Plan, and shall be fully vested upon payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Retention Bonus</u>. Provided that the Executive (i) remains employed by the Company through the filing of the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2025 with the Securities and Exchange Commission ("Retention Date"), and (ii) has not resigned or been terminated for Cause prior to the Retention Date, the Company will pay Executive a retention payment equal to $170,000.00 (the "Retention Bonus"), less required taxes and withholdings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Other Benefits</u>. Executive shall be entitled to five (5) weeks of paid vacation for each calendar year to be taken pursuant to the Company's vacation benefits policy. Executive is also entitled to other benefits as (i) are generally available to the Company's other similar, high level executives, consisting of such medical, retirement and similar benefits as are so available and (ii) are deemed special to Executive and approved by the Board.

IV. <u>TERMINATION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>At-Will Employment</u>. It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive's employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and with or without notice. In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months or weeks does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future, concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control. This at-will status cannot be altered except in a writing signed by Executive and approved by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Termination of Employment</u>. Although Executive's employment hereunder shall be deemed "at will," any termination shall be subject to the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>For Cause</u>. In the event that Executive is terminated for cause (as hereinafter defined), Executive shall be entitled to Executive's earned wages through the date his employment with the Company is terminated, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Without Cause</u>. In the event that Executive is terminated (i) without cause, as hereinafter defined, or (ii) at the expiration of the Term, and provided such termination constitutes a "separation from service" as such term is defined in Section 409A of the Internal Revenue Code (the "Code"), and further subject to the Executive's compliance with his obligations under the agreement referenced in Section II herein, and his execution and non-revocation of a release of claims in favor of the Company in a form acceptable to the Company in the Company's sole discretion (the "Release"), Executive shall be entitled to an amount equal to the Executive's annualized Base Salary in effect on the date of termination or separation from service (the "Severance Amount"). The Severance Amount will be paid in a lump-sum within sixty (60) days following Executive's separation from service, provided that (i) the Release is executed, delivered to the Company and not revoked by Executive during the applicable revocation period, and (ii) if such sixty (60) day period begins in one calendar year and ends in the next calendar year, Executive shall not designate, nor have the right to designate, the calendar year in which such lump-sum payment is made. The amount payable under this Section IV.B.2 shall be in addition to Executive's earned wages through the date his employment is terminated from the Company, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

All outstanding equity awards held by Executive will be subject to full accelerated vesting on the date of termination without cause or at the expiration of the Term. The exercise period shall also be extended to three (3) years from the date of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Related Provisions</u>. The following terms, conditions and definitions shall apply to the termination of Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. "<u>Termination Without Cause</u>." For purposes of Section IV.B above, a termination without cause shall be deemed to constitute any termination of Executive's employment hereunder by the Company, or by Executive, other than a termination for cause as defined below. Notwithstanding any contrary provision herein, it is understood that a termination without cause also shall include a termination which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) occurs due to the death of Executive or to any physical or mental Long-Term Disability that would prevent the performance of Executive's duties under this Agreement. For the purposes of this Agreement, a "Long-Term Disability" shall mean a long-term disability that after consideration and implementation of reasonable accommodations (provided that no accommodation that imposes undue hardship on the Company will be required), renders or will render Executive unable to perform his essential job functions for one hundred eighty (180) days out of any three hundred sixty-five (365) -day period or for four consecutive months. The determination of Executive's Long-Term Disability shall be made by Executive's attending physician unless the Board disagrees with such determination, in which case Executive's Long-Term Disability shall be determined by a majority of three physicians qualified to practice medicine in the State of the Executive's residence, one to be selected by each of the Executive (or his authorized representative) and the Board and the third to be selected by such two designated physicians; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is a Constructive Termination (as defined below) initiated by Executive. "Constructive Termination" shall mean (i) the assignment or partial assignment of any duties or responsibilities inconsistent in any respect with those customarily associated with the position or those actually provided in this agreement (including status, offices, titles and reporting requirements) to be held by the Executive during his employment period, or any other action by the Company that results in a diminution or other reduction or any adverse change in the Executive's position, title, authority, duties or responsibilities; (ii) any failure by the Company to comply with any provision of this agreement; (iii) a relocation of Executive's principal place of employment more than thirty-five (35) miles from its current location; (iv) any reduction in Executive's base salary or bonus opportunity; (v) a reduction in the kind or level of Executive's benefits to which you were entitled immediately prior to such reduction; (vi) a material reduction of the facilities and perquisites (including office space and location) or secretarial and administrative support available to Executive immediately prior to such reduction; (vii) the assignment of duties that are substantially inconsistent with Executive's training, education, professional experience and the job for which Executive were initially hired hereunder; or (viii) the failure of any successor-in-interest to assume all of the obligations of the Company under this agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. "<u>Termination For Cause</u>." Subject to the notice requirement as provided in paragraph E below, for purposes of Section IV.B.2 (and Section IV.C.1) above, a termination for cause shall be a termination of Executive's employment hereunder made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by the Company, if Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) materially breaches any material terms of this Agreement which has caused demonstrable injury to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) commits willful gross acts of dishonesty, fraud, misrepresentation, or other acts of moral turpitude taken by Executive in connection with Executive responsibilities as an employee provided that no act or failure to act shall be considered "willful" under this definition unless Executive acted, or failed to act, with an absence of good faith and without a reasonable belief that his action, or failure to act, was in the best interest of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) is convicted of any felony or any crime involving moral turpitude resulting in either case in significant and demonstrable harm to the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) fails to achieve the stated milestones and tasks as requested in writing by the Board of Directors, including but not limited to, failure to perform, or continuing to neglect the performance of duties assigned to Executive, which failure or neglect will significantly and adversely affect the Company's business or business prospects and which failure is due to circumstances within Executive's reasonable control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by Executive, unless such termination by Executive is for Constructive Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Company Actions</u>. All relevant determinations to be made by the Company under paragraph C.2(a) above shall be made in the reasonable discretion of the Board (or, if so delegated by said Board, by a committee of the Board), acting in good faith, and, except as otherwise specified herein, shall be conclusive and binding, but shall be subject to arbitration in accordance with Section V below. This Agreement is intended to comply with the requirements of Internal Revenue Code Section 409A ("Section 409A") and the Board and the Board committee will interpret its provisions accordingly. If, at the time of Executive's termination, any stock of the Company is publicly-traded and the Company determines that Executive is a "specified employee" within the meaning of Section 409A of the Code at such time, then (i) the salary continuation payments specified herein (to the extent that they are subject to Section 409A of the Code) will commence on the earlier of (A) the first business day following expiration of the six-month period measured from your separation or (B) the date of your death and (ii) the installments that otherwise would have been paid prior to such date will be paid in a lump sum when the salary continuation payments commence. Executive understands and agrees that the Company makes no assurances with respect to the tax consequences arising as a result of this Agreement and the payment of any tax liabilities or related penalties arising out of this Agreement is solely and exclusively the responsibility of Executive, without any expectation or understanding that the Company will pay or reimburse Executive for such taxes or other items. Concerning any Section 409A taxes or related penalties the Company will use its best efforts in good faith to reduce or eliminate such tax liabilities or penalties including but not limited to a delay of such payments the minimum time necessary to avoid tax liabilities or penalties. If any payment is delayed pursuant to this paragraph on the date of payment the Company shall pay in a lump sum all payments that otherwise would have been paid during the period of the delayed payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Notice and Remedy</u>. In the event that any reason for termination by the Company under paragraph C.2(a) above, or by Executive in the case of a Constructive Termination, may be cured by Executive, or the Company, as the case may be, then the Company, or Executive, shall first give a written notice to the other (by mail, or by email, or by fax, to the last known address of the recipient; said notice being deemed given, if by mail, as of the earlier of four days after mailing or as of the date when actually received, or, if by email or fax, when sent), specifying the reason for termination and providing a period of 30 days to cure the fault or reason specified. Lacking such cure within said 30 days, or if the notified party earlier refuses to effect the cure, the termination shall then be deemed effective. If such cure is so made, the termination shall not then be deemed effective, but any later conduct of a similar nature constituting a reason for termination shall allow the Company, or Executive, as the case may be, the right to cause the termination effectiveness without need for any further period of time to cure. All communications shall be sent to the address as set forth on the signature page hereof, or to such other address as a party may designate by ten days' advance written notice to the other party hereto.

V. <u>ARBITRATION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Arbitration</u>. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or any of the rights, benefits or obligations resulting from its terms, shall be settled by arbitration in San Francisco, California. Except for the right of the Company and Executive to seek injunctive relief in court, any controversy, claim or dispute of any type arising out of or relating to Executive's employment or the provisions of this Agreement shall be resolved in accordance with this Section V of the Agreement, regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any such disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination, discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the California Labor code, the California Fair Employment and Housing Act, and all individual Private Attorney General Act of 2004 claims. Nothing in this provision is intended to restrict Executive from submitting any matter to an administrative agency with jurisdiction over such matter. Pursuant to law, claims that allege conduct constituting sexual harassment or sexual assault may be subject to arbitration only at the election of the person alleging such conduct.

THE COMPANY AND EXECUTIVE VOLUNTARILY AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN HIS/HER OR ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, COLLECTIVE, CONSOLIDATED OR OTHER REPRESENTATIVE PROCEEDING THAT MAY BE WAIVED TO THE FULLEST EXTENT PERMITTED BY LAW. SIMILARLY, COMPANY AND EXECUTIVE FURTHER AGREE THAT NEITHER PARTY MAY OPT IN TO OR OTHERWISE PARTICIPATE IN A CLASS, COLLECTIVE, OR OTHER REPRESENTATIVE ACTION INVOLVING CLAIMS THAT ARE SUBJECT TO BINDING INDIVIDUAL ARBITRATION UNDER THIS AGREEMENT, INCLUDING AS A WITNESS, CLASS OR COLLECTIVE MEMBER. If there is a collective or class action, Employee is waiving Executive's right to participate in any capacity including that Executive shall not receive any opt-in notice.

Executive and the Company agree that any disputes related to or arising out of Executive's employment with the Company will be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator. If the Company and Executive cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in accordance with Rule 12 of the JAMS employment arbitration rules and procedures. Reasonable discovery will be permitted by both parties and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to arbitration in this Section V and may award any relief permitted by law. The arbitrator must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The parties hereto hereby waive to the fullest extent permitted by law any rights to appeal or to review of such award by any court. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of arbitration under Section V of this Agreement. At the request of any party, the arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the arbitration proceedings. The arbitrator's fees and cost of the Arbitration will be paid in full by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Acknowledgement</u>. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION V, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO ARBITRATION, AND THAT THE PROVISIONS SET FORTH IN THIS SECTION V CONSTITUTE A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **No Duty to Mitigate.** Executive is under no contractual or legal obligation to mitigate Executive's damages in order to receive the severance benefits provided in this Agreement.

VI. <u>LEGAL ADVICE</u>.

Executive acknowledges that an opportunity has been afforded to Executive to consult with legal counsel with respect to this Agreement and that no individual representing the Company has given legal advice with respect to this Agreement.

VII. <u>MISCELLANEOUS AND CONSTRUCTION</u>.

Except as otherwise specifically provided herein, this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. and any benefits or obligations herein may not be assigned or delegated by Executive (but may be so assigned or delegated by the Company);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. contains the entire understandings of the parties as to its subject matter, and replaces and supersedes any existing employment agreement and any and all contrary prior understandings or agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. may be amended or modified only by a written amendment or modification signed by the Company and Executive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. is made in, and shall be construed under the laws of, the State of California;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. inures to the benefit of, and is binding upon, the permitted successors, assigns, distributees, personal representatives, heirs and other successors-in-interest to and of the parties hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. shall not be interpreted by reference to any of the captions or headings of the paragraphs herein, which captions or headings have been inserted for convenience purposes only;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. shall be fully effectuated in accordance with its tenor, effect and purposes by each of the parties hereto by executing such further documents or taking such other actions as may be reasonably requested by the other party hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. shall be interpreted, as to its remaining provisions, to be fully lawful and operative, to the extent reasonably required to fulfill its principal tenor, effect and purposes, in the event that any provision either is found by any court of competent jurisdiction to be unlawful or inoperative or violates any statutory or legal requirement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year first above written.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| NOVABAY PHARMACEUTICALS, INC. | NOVABAY PHARMACEUTICALS, INC. |
| By: | /s/ Justin Hall |
| Name: | Justin Hall |
| Title: | Chief Executive Officer |
| **EXECUTIVE:** | **EXECUTIVE:** |
| By: | /s/ Tommy Law |
| Name: | Tommy Law |

---

---

| | |
|:---|:---|
| Address: | **[Redacted.]** |
| Telephone No. | **[Redacted.]** |
| E-mail: | **[Redacted.]** |

---

**EXHIBIT A**

**LIST OF PRIOR INVENTIONS**

**AND ORIGINAL WORKS OF AUTHORSHIP**

---

| | | |
|:---|:---|:---|
| **Title** | **Date** | **Identifying Number or Brief**<br> **Description** |

---

☒ No inventions or improvements

☐ Additional Sheets Attached

---

| | |
|:---|:---|
| Signature: | /s/ Tommy Law |
| Name: | Tommy Law |
| Date: | August 19, 2025 |

---

**EXHIBIT B**

**CALIFORNIA LABOR CODE SECTION 2870**

**INVENTION ON OWN TIME-EXEMPTION FROM AGREEMENT**

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

**EXHIBIT C**

**NOVABAY PHARMACEUTICALS, INC.**

**TERMINATION CERTIFICATION**

I hereby certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to NovaBay Pharmaceuticals, Inc. (the "**Company**") or to its parent company(ies), subsidiaries, affiliates, successors or assigns.

I further certify that I have complied with all the terms of the Employment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined in that agreement), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Employment Agreement, I will preserve as confidential all Company Confidential Information and Associated Third Party Confidential Information including trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

After leaving the Company's employment, I will be employed by _____________________ in the position of _____________________.

*Signature of employee*

*Print name*

*Date*

*Address for Notifications*

## Exhibit 10.8

**Exhibit 10.8**

***Execution Version***

**<u>SETTLEMENT AGREEMENT AND GENERAL AND MUTUAL RELEASE</u>**

This Settlement Agreement and General and Mutual Release (the "Agreement") is on this 19<sup>th</sup> day of August, 2025 by and between NovaBay Pharmaceuticals, Inc. (the "Company") and Justin Hall, Chief Executive Officer, General Counsel and Director of the Company (the "Executive Officer"), collectively known herein as the "Parties."

**WHEREAS,** the Executive Officer was elected to act as a Member of the Board of Directors of the Company and appointed as Chief Executive Officer and General Counsel (the "Services").

**WHEREAS,** the Executive Officer has provided the Services commonly performed by a director of a company in a similar position, as well as a Chief Executive Officer and General Counsel of a company in a similar position.

**WHEREAS,** there is no dispute as to the provision of the Services nor any disagreements with the Company.

**WHEREAS,** in connection with, and as a condition to the transactions contemplated by, the Securities Purchase Agreement, dated August 19, 2025 between the Company and David Lazar (the "Purchase Agreement"), the Parties desire and intend that this Agreement supplement and modify all prior contracts, agreements and understandings between the Parties, other than the Indemnity Agreement, entered into between the Company and the Executive Officer (the "Indemnification Agreement").

**WHEREAS,** upon and subject to the terms and conditions of this Agreement, the Parties desire that the Executive Officer submit his resignation, as provided in Section 2, to be effective as of the Resignation Effective Dates.

**NOW, THEREFORE**, the Parties, intending to be legally bound, and in consideration of the mutual promises, covenants and agreements contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, agree as follows:

1. <u>Settlement Payments Due to the Executive Officer from the Company</u>.

Upon (i) the execution of the Purchase Agreement, the Company shall pay to the Executive Officer a cash settlement payment, including with respect to any and all accrued and unpaid wages and executive compensation, as of the date hereof as applicable to the Executive Officer, in the amount of $481,250, less required taxes and withholdings, in immediately available cash plus $8,777.61 in COBRA payments, and (ii) the date of the Company's 2025 annual meeting of stockholders, the Company shall pay to the Executive Officer a cash settlement payment, including with respect to any and all accrued and unpaid wages and executive compensation, as of the date hereof as applicable to the Executive Officer, in the amount of $481,250, less required taxes and withholdings, in immediately available cash plus $8,777.61 in COBRA payments, to be transmitted via Bank Wire, in U.S. dollars, in accordance with the instructions provided by the Executive Officer in writing prior to the date hereof. It is agreed and understood that time is of the essence with respect to the payments.

2. <u>Resignation</u>.

The Executive Officer hereby agrees to (i) confirm the termination of his service as a director on the Board of Directors by also resigning as a director of the Board of Directors of the Company to be effective on the date and at the time that (A) Stockholder Approval (as defined in the Purchase Agreement) has been obtained at the Company's 2025 annual meeting of stockholders or subsequent Stockholder Meeting (as defined in the Purchase Agreement), (B) the Final Closing (as defined in the Purchase Agreement) occurs in accordance with the Purchase Agreement and (C) the Additional Purchaser Nominee(s) (as defined in the Purchase Agreement) are qualified and appointed to serve on the Board of Directors pursuant to Section 4.15(d) of the Purchase Agreement and (ii) resign as the Chief Executive Officer of the Company, effective as of the date of the execution of the Purchase Agreement (collectively, the "Resignation Effective Dates"). For avoidance of doubt, to the extent that Stockholder Approval is not received, the Final Closing does not occur or an Additional Purchaser Nominee has not been qualified and appointed to serve on the Board, then the Executive Officer upon any of these events occurring shall not be obligated to resign from the Board of Directors; however, all other terms, obligations and provisions of this Agreement shall remain in full force and effect.

3. <u>Release and Covenant Not to Sue</u>.

In exchange for the consideration received by the Executive Officer herein, the Executive Officer irrevocably and unconditionally releases, acquits and forever discharges the Company, its respective parent, affiliates and subsidiaries, and each of their principals and any successors and assigns (and any officers, directors, shareholders, managers, members, employees, representatives, attorneys, consultants, and agents of such entities) (hereinafter referred to for purposes of this section as the "Clients"), from, covenants not to sue or initiate any action for, any and all claims, demands, rights, causes of action, liens, actions, suits, attorneys' fees, costs, damages, losses, expenses and contractual obligations of whatever kind or nature, whether absolute or contingent, liquidated or unliquidated, direct or indirect, in law or in equity, fully accrued or not fully accrued, matured or unmatured, known or unknown, foreseen or unforeseen, suspected or unsuspected, relating to any matter whatsoever, including but not limited to any alleged violation of the Age Discrimination in Employment Act of 1967, as amended, the Fair Labor Standards Act, the Family and Medical Leave Act, the California Fair Employment and Housing Act, the California Family Rights Act, the California Labor Code section 201, et. seq. and section 970, et seq., the California Constitution, the California Healthy Workplaces, Healthy Families Act, the California Government Code (collectively, "Claims") which the Executive Officer had, currently has, shall or may have. Notwithstanding the foregoing, the release contained herein shall not release the Executive Officer from his obligations pursuant to this Agreement.

The Executive Officer understands and expressly agrees that this Agreement extends to all claims of every nature and kind whatsoever, known and unknown, suspected or unsuspected, past or present, which the Executive Officer has or may have against the Company and the Clients, and the Executive Officer hereby knowingly waives any and all rights and protections under Section 1542 of the California Civil Code, which states:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1542. GENERAL RELEASE - CLAIMS EXTINGUISHED.

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Executive Officer agrees that this waiver is an essential and material term of this Agreement, without which this document would not have been executed. For all purposes of this Agreement, the term "creditor" as used and referred to in Section 1542 of the California Civil Code means and includes the Executive Officer.

The Executive Officer agrees that the release set forth in this paragraph 3 shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement. The Executive Officer understands that nothing in this Agreement precludes the Executive Officer from filing any charge with the Equal Employment Opportunity Commission, the National Labor Relations Board or other governmental agency or from participating in any investigation, hearing, or proceeding of governmental agency. However, the Executive Officer does forever waive the Executive Officer's right to recover or receive any personal relief, monetary damages, attorneys' fees, back pay, reinstatement or injunctive relief from the Company and/or Client relating to any matter whatsoever up to the date of this Agreement. The Executive Officer further understands that this release does not extend to: (i) any rights or claims that arise after the Effective Date (defined below); (ii) any rights or claims under the Indemnification Agreement, or (iii) any rights that cannot be waived by operation of law.

The Company, for itself and for its successors and assigns, hereby irrevocably and unconditionally releases, acquits and forever discharges the Executive Officer, any successors and assigns (and any officers, directors, shareholders, managers, members, employees, representatives, attorneys, consultants, and agents of such entities), from any and all Claims (as defined above) which the Company had, currently has, shall or may have. Notwithstanding the foregoing, the release contained herein shall not release the Clients from their obligations pursuant to this Agreement and shall not release the Company from its obligations under the Indemnification Agreement and maintaining commercially reasonable D&O insurance coverage (or tail policy) to cover Director's actions in his former capacity as a director on the Board of Directors.

4. <u>Consideration of Agreement by the Executive Officer</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby advises the Executive Officer and the Executive Officer acknowledges that the Executive Officer has been so advised, to consult with an attorney before executing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Executive Officer acknowledges that, before entering into this Agreement, the Executive Officer had twenty-one (21) calendar days after receipt of this Agreement (the "Consideration Period") to consider this Agreement before signing it. If the Executive Officer signs this Agreement, the date on which the Executive Officer signs the Agreement shall be the "Execution Date." In the event the Executive Officer executes and returns this Agreement prior to the end of the Consideration Period, the Executive Officer acknowledges that the Executive Officer's decision to do so was voluntary and that the Executive Officer had the opportunity to consider this Agreement for the entire Consideration Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties agree that this Agreement will not become effective until seven (7) calendar days after the Execution Date and that the Executive Officer may, within seven (7) calendar days after the Execution Date, revoke the Agreement in its entirety by providing written notice to the Chairman of the Board. If written notice of revocation is not received by the Company by the 8th day after the execution of this Agreement, this Agreement will become effective and enforceable on that day (the "Effective Date").

5. <u>No Admission</u>. The Parties understand and agree that this Agreement shall not be construed as (i) an admission of liability by one party to the other, (ii) that either party has violated any federal, state or local statute, law, ordinance or regulation, or (iii) there has been any material disagreements with the Company.

6. <u>Binding Agreement</u>. This Agreement constitutes the entire and complete understanding between the Parties hereto, and no other representation, promise, or agreement shall be binding upon either of them unless it is in writing and executed by the Parties. This Agreement supersedes all prior agreements between the Parties, including the Executive Employment Agreement dated January 31, 2020, as amended; however, this Agreement does not supersede the Indemnification Agreement, which remains in full force and effect. This Agreement shall be binding upon the Parties hereto and their respective successors and assigns. The Parties agree and stipulate that this Agreement is enforceable in all respects and is not subject to any affirmative claim, once this Agreement is executed.

7. <u>Amendment</u>. This Agreement may not be amended or modified in any manner except by a writing signed by each of the Parties hereto.

8. <u>Recitals</u>. The Parties hereto acknowledge and agree that the recitals set forth at the beginning of this Agreement are true and correct in all respects and are incorporated herein by this reference.

9. <u>Governing Law; Venue</u>. This Agreement is made and delivered in and shall be governed by and construed in accordance with, the applicable laws of the State of California. Any suit involving any dispute or matter arising under this Agreement, the Parties hereby consent to personal jurisdiction in the State of California.

10. <u>Severability</u>. If any provision of this Agreement is held to be illegal, invalid or unenforceable, the provision shall be modified to the extent necessary to render it enforceable and, if necessary, shall be fully severable.

11. <u>Authority</u>. Each signer below warrants that he/she has actual authority to enter into this Agreement. It is understood that each party to this Agreement is relying on the other party executing his Agreement having actual authority to enter into the Agreement.

12. <u>Counterparts</u>. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same Agreement and each of which shall be deemed an original. An executed counterpart of this Agreement faxed or scanned and emailed shall have the same force and effect as an originally executed counterpart.

13. <u>Waiver of Jury Trial</u>. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

14. <u>Encouragement to Consult Attorney; Time to Consider Agreement</u>. EACH OF THE PARTIES REPRESENTS THAT THIS AGREEMENT HAS BEEN ENTERED INTO FREELY AND VOLUNTARILY; THAT IT HAS HAD THE OPPORTUNITY TO ASCERTAIN AND WEIGH ALL OF THE FACTS AND CIRCUMSTANCES LIKELY TO INFLUENCE ITS JUDG-MENTS; THAT IT HAS HAD THE OPPORTUNITY TO SEEK AND OBTAIN LEGAL COUNSEL, AND HAS AVAILED ITSELF OF COUNSEL PRIOR TO SIGNING THIS AGREEMENT, AND TO BE DULY APPRISED OF ITS LEGAL RIGHTS; AND THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THE AGREEMENT.

15. <u>Non-Disparagement</u>. The Parties agree that they will not say, write or cause to be said or written, any statement that may be considered defamatory, derogatory or disparaging of any of the other Parties. Notwithstanding the foregoing, the Company shall not be responsible for any defamatory or disparaging remarks made about the Executive Officer by: (i) former employees, officers, directors, or board members of the Company or its affiliates; or (ii) current employees who are not board members or members of the Company. Nothing in this Agreement prevents the Executive Officer from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that the Executive Officer has reason to believe is unlawful.

IN WITNESS WHEREOF, the Parties have made and entered into this Settlement Agreement and General and Mutual Release as of the date set forth above.

**NovaBay Pharmaceuticals, Inc.**

---

| | |
|:---|:---|
| /s/ Tommy Law | /s/ Tommy Law |
| By: | Tommy Law |
| Its: | Interim Chief Executive Officer |

---

**Justin Hall**

---

| | |
|:---|:---|
| /s/ Justin Hall | /s/ Justin Hall |
| Name: | Justin Hall |

---

## Exhibit 10.9

**Exhibit 10.9**

***Execution Version***

**<u>SETTLEMENT AGREEMENT AND GENERAL AND MUTUAL RELEASE</u>**

This Settlement Agreement and General and Mutual Release (the "Agreement") is on this 19<sup>th</sup> day of August, 2025 by and between NovaBay Pharmaceuticals, Inc. (the "Company") and _________ (the "Director"), collectively known herein as the "Parties."

**WHEREAS,** the Director was elected to act as a Member of the Board of Directors of the Company (the "Services").

**WHEREAS,** the Director has provided the Services commonly performed by a director of a company in a similar position.

**WHEREAS,** there is no dispute as to the provision of the Services nor any disagreements with the Company.

**WHEREAS,** in connection with, and as a condition to the transactions contemplated, by the Securities Purchase Agreement, dated August 19, 2025 between the Company and David Lazar (the "Purchase Agreement"), the Parties desire and intend that this Agreement supplement and modify all prior contracts, agreements and understandings between the Parties, other than the Indemnity Agreement, entered into between the Company and the Director (the "Indemnification Agreement").

**WHEREAS,** upon and subject to the terms and conditions of this Agreement, the Parties desire that the Director submits [her/his] resignation, as provided in Section 2, to be effective as of the Resignation Effective Date.

**NOW, THEREFORE**, the Parties, intending to be legally bound, and in consideration of the mutual promises, covenants and agreements contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, agree as follows:

1. <u>Settlement Due to the Director from the Company</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Issuance and Payment</u>. The Company shall (i) issue to the Director on the Resignation Effective Date a stock settlement payment of newly issued shares of restricted common stock of the Company (the "Common Stock") with an aggregate value of $40,000, as determined based on the closing market price on the NYSE American (or any successor exchange or over-the-counter market) for the Common Stock on the trading day immediately prior to the Resignation Effective Date (the "Equity Consideration"), subject to the payment of the Equity Consideration to the Director first being approved by stockholders at the Company's 2025 annual meeting of stockholders or subsequent Stockholder Meeting (as defined in the Purchase Agreement) (the "Equity Consideration Approval") and (ii) pay to the Director any and all accrued and unpaid director's fees for the third quarter of 2025. It is agreed and understood that time is of the essence with respect to the issuance of the Common Stock and payment of the amounts set forth in this Section 1(a). To the extent that the Equity Consideration Approval is not obtained and the Equity Consideration is not issued to the Director as provided in this Section 1(a), then this Agreement shall terminate between the parties and shall be of no further force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Piggyback Registration Rights; Resale</u>. All shares of Common Stock issued by the Company to the Director pursuant to this Agreement shall also grant the Director with the option to include any and all such shares on each registration statement that the Company files with the Securities and Exchange Commission (the "SEC"), subject to customary pro rata reductions of the shares being registered either required by a underwriter that apply equally to all classes of Company stock or otherwise pursuant to comments of the staff of the SEC. To the extent the Director is eligible to sell or otherwise transfer the shares of Common Stock issued hereunder pursuant to Rule 144 of the Securities Act of 1933, as amended, then the Company shall cooperate with the Director to facilitate such sale and/or transfer, including taking the necessary action to cause the Company's transfer agent to remove any then existing transfer restrictions, legends and/or stop transfer instructions that may exist on such shares.

2. <u>Resignation, Release and Covenant Not to Sue</u>.

The Director hereby agrees to confirm the termination of [her/his] service as a director on the Board of Directors by also resigning as a director of the Board of Directors of the Company to be effective on the date and at the time that (i) Stockholder Approval (as defined in the Purchase Agreement) has been obtained at the Company's 2025 annual meeting of stockholders or subsequent Stockholder Meeting (as defined in the Purchase Agreement), (ii) the Final Closing (as defined in the Purchase Agreement) occurs in accordance with the Purchase Agreement and (iii) the Additional Purchaser Nominees (as defined in the Purchase Agreement) are qualified and appointed to serve on the Board of Directors without reduction (the "Resignation Effective Date"); provided, however, such resignation on the Resignation Effective Date, for avoidance of doubt, shall occur only if (A) the Special Dividend (as defined in the Purchase Agreement) shall have already been declared and paid and (B) Stockholder Approval and the Equity Consideration Approval have been received, the Final Closing has occurred and an Additional Purchaser Nominee has been qualified and is to be appointed to serve on the Board. The Director irrevocably and unconditionally releases, acquits and forever discharges the Company and any principals and any successors and assigns (and any officers, directors, shareholders, managers, members, employees, representatives, attorneys, consultants, and agents of such entities) (hereinafter referred to for purposes of this section as the "Clients"), from covenants not to sue or initiate any action for, any and all claims, demands, rights, causes of action, liens, actions, suits, attorneys' fees, costs, damages, losses, expenses and contractual obligations of whatever kind or nature, whether absolute or contingent, liquidated or unliquidated, direct or indirect, in law or in equity, fully accrued or not fully accrued, matured or unmatured, known or unknown, foreseen or unforeseen, suspected or unsuspected, relating to any matter whatsoever (collectively, "Claims") which the Director had, currently has, shall or may have. Notwithstanding the foregoing, the release contained herein shall not release the Director from [her/his] obligations pursuant to this Agreement.

The Director understands and expressly agrees that this Agreement extends to all claims of every nature and kind whatsoever, known and unknown, suspected or unsuspected, past or present, which the Director has or may have against the Company and the Clients, and the Director hereby knowingly waives any and all rights and protections under Section 1542 of the California Civil Code, which states:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1542. GENERAL RELEASE - CLAIMS EXTINGUISHED.

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Director agrees that this waiver is an essential and material term of this Agreement, without which this document would not have been executed. For all purposes of this Agreement, the term "creditor" as used and referred to in Section 1542 of the California Civil Code means and includes the Director.

The Company, for itself and for its successors and assigns, hereby irrevocably and unconditionally releases, acquits and forever discharges the Director, any successors and assigns (and any officers, directors, shareholders, managers, members, employees, representatives, attorneys, consultants, and agents of such entities), from any and all Claims (as defined above) which the Company had, currently has, shall or may have. Notwithstanding the foregoing, the release contained herein shall not release the Clients from their obligations pursuant to this Agreement, and shall not release the Company from maintaining commercially reasonable D&O insurance coverage (or tail policy) to cover Director's actions in [her/his] former capacity as a director on the Board of Directors.

3. <u>No Admission</u>. The Parties understand and agree that this Agreement shall not be construed as (i) an admission of liability by one party to the other, (ii) that either party has violated any federal, state or local statute, law, ordinance or regulation, or (iii) there has been any material disagreements with the Company.

4. <u>Binding Agreement</u>. This Agreement constitutes the entire and complete understanding between the Parties hereto, and no other representation, promise, or agreement shall be binding upon either of them unless it is in writing and executed by the Parties. This Agreement supersedes all prior agreements between the Parties; however, this Agreement does not supersede the Indemnification Agreement, which remains in full force and effect. This Agreement shall be binding upon the Parties hereto and their respective successors and assigns. The Parties agree and stipulate that this Agreement is enforceable in all respects and is not subject to any affirmative claim, once this Agreement is executed.

5. <u>Amendment</u>. This Agreement may not be amended or modified in any manner except by a writing signed by each of the Parties hereto.

6. <u>Recitals</u>. The Parties hereto acknowledge and agree that the recitals set forth at the beginning of this Agreement are true and correct in all respects and are incorporated herein by this reference.

7. <u>Governing Law; Venue</u>. This Agreement is made and delivered in and shall be governed by and construed in accordance with, the applicable laws of the State of Delaware. Any suit involving any dispute or matter arising under this Agreement, the Parties hereby consent to personal jurisdiction in the State of Delaware.

8. <u>Severability</u>. If any provision of this Agreement is held to be illegal, invalid or unenforceable, the provision shall be modified to the extent necessary to render it enforceable and, if necessary, shall be fully severable.

9. <u>Authority</u>. Each signer below warrants that [she/he] has actual authority to enter into this Agreement. It is understood that each party to this Agreement is relying on the other party executing [her/his] Agreement having actual authority to enter into the Agreement.

10. <u>Counterparts</u>. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same Agreement and each of which shall be deemed an original. An executed counterpart of this Agreement faxed or scanned and emailed shall have the same force and effect as an originally executed counterpart.

11. <u>Waiver of Jury Trial</u>. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

12. <u>Encouragement to Consult Attorney; Time to Consider Agreement</u>. EACH OF THE PARTIES REPRESENTS THAT THIS AGREEMENT HAS BEEN ENTERED INTO FREELY AND VOLUNTARILY; THAT IT HAS HAD THE OPPORTUNITY TO ASCERTAIN AND WEIGH ALL OF THE FACTS AND CIRCUMSTANCES LIKELY TO INFLUENCE ITS JUDG-MENTS; THAT IT HAS HAD THE OPPORTUNITY TO SEEK AND OBTAIN LEGAL COUNSEL, AND HAS AVAILED ITSELF OF COUNSEL PRIOR TO SIGNING THIS AGREEMENT, AND TO BE DULY APPRISED OF ITS LEGAL RIGHTS; AND THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THE AGREEMENT.

13. <u>Non-Disparagement</u>. The Parties agree that they will not say, write or cause to be said or written, any statement that may be considered defamatory, derogatory or disparaging of any of the other Parties.

IN WITNESS WHEREOF, the Parties have made and entered into this Settlement Agreement and General and Mutual Release as of the date set forth above.

---

| | |
|:---|:---|
| **NovaBay Pharmaceuticals, Inc.** | **NovaBay Pharmaceuticals, Inc.** |
| By: | Justin Hall |
| Its: | Chief Executive Officer |

---

**[DIRECTOR NAME]**

Name:

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)

August 19, 2025

**NovaBay Pharmaceuticals Enters Into $6 Million Securities Purchase Agreement with Investor David E. Lazar**

*Investment to support NovaBay*'*s continued public listing and provide funding for a future strategic transaction*

**EMERYVILLE, Calif. (August 19, 2025)** – NovaBay<sup>®</sup> Pharmaceuticals, Inc. (NYSE American: NBY) ("NovaBay" or the "Company") announces it has entered into a $6 million securities purchase agreement with private investor David E. Lazar for the purchase of the Company's non-voting convertible preferred stock. NovaBay has received $3.85 million in the first of two closings under the agreement. Effective immediately, Mr. Lazar has been appointed NovaBay's Chief Executive Officer and a director of the Company. Former Chief Executive Officer Justin Hall has assumed the newly created position of Vice President of Business Development.

At NovaBay's Special Meeting on April 16, 2025, stockholders authorized the Company's Board of Directors, at its discretion, to liquidate and dissolve the Company. This securities purchase agreement and the related transactions, if successfully completed, will be in lieu of pursuing the liquidation and dissolution of NovaBay, and the Company's common stock will continue to trade on the NYSE American exchange. The Company intends to use the proceeds of this investment transaction to pursue a strategic investment and/or acquisition. Additionally, NovaBay expects to declare a special cash dividend to its stockholders during the third quarter of 2025.

"In making this significant investment in NovaBay, I look forward to maintaining NovaBay's public listing and actively exploring strategic opportunities to drive value for our stockholders," said Mr. Lazar. "I appreciate the NovaBay Board's unanimous support for this transaction and faith in my ability to widen the Company's path towards strategic alternatives."

"David brings to NovaBay significant capital restructuring and reverse merger expertise, and I look forward to working with him to identify business opportunities and strategic alternatives that could be transformative for NovaBay," said Mr. Hall. "Following our Board's careful review of strategic options, we view this transaction with Mr. Lazar as the best path forward for our stockholders."

In conjunction with the securities purchase agreement's first closing, NovaBay has issued new shares of non-voting convertible Series D preferred stock in exchange for Mr. Lazar's initial investment of $3.85 million. Completion of the investment transaction and the second closing is contingent on obtaining stockholder approval at the 2025 annual meeting of stockholders, which is expected to be held during the fourth quarter of 2025. Following stockholder approval and upon meeting certain other closing conditions, NovaBay will issue new shares of non-voting convertible Series E preferred stock with the second closing investment of $2.15 million. In connection with Mr. Lazar's investment, he will have certain rights relating to the Board, which include the one-time right to continue to serve on the Board or nominate another candidate for election at the 2025 annual meeting of stockholders, and, after receipt of stockholder approval and the second closing, Mr. Lazar will have the right to nominate up to three additional directors to the Board, subject to his percentage ownership of the Company's common stock at the time and certain other conditions.

**Forward-Looking Statements**

This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. These forward-looking statements are based upon the Company and its management's current expectations, assumptions, estimates, projections and beliefs. Such statements include, but are not limited to, statements regarding the securities purchase agreement with private investor David E. Lazar, the ability for the Company to pursue a strategic investment and/or acquisition and related matters. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in, or implied by, these forward-looking statements. Other risks relating to NovaBay's business, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are detailed in the Company's latest Form 10-K, subsequent Forms 10-Q and/or Form 8-K filings with the SEC, especially under the heading "Risk Factors." The forward-looking statements in this release speak only as of this date, and the Company disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.

**<u>NovaBay Contact</u>**

Justin Hall

Vice President of Business Development

510-899-8800

<u>jhall@novabay.com</u>

# # #