Document:

Exhibit 10.7

 

 

    	 	 	 

    	 

    

 

 

    	 	 	 

    	 

    

 

Sigma
Labs, Inc.

 

FORM
OF CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS
AND LIMITATIONS

OF

SERIES
E CONVERTIBLE PREFERRED STOCK

 

PURSUANT
TO SECTION 78 OF THE Nevada REVISED STATUTES

 

The
undersigned, John Rice, Chief Executive Officer, does hereby certify that:

 

1.
He is the Chief Executive Officer of Sigma Labs, Inc., a Nevada corporation (the “Corporation”).

 

2.
The Corporation is authorized to issue up to ten million (10,000,000) shares of preferred stock, of which (a) shares of Series
A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock were authorized, none of which are presently issued
and outstanding, nor will be outstanding, and (b) up to 7,796 shares of Series D Convertible Preferred Stock have been authorized.

 

3.
The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):

 

WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of 10,000,000 shares, $0.001 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 series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase
Agreement, up to 500 shares of Series E Preferred Stock (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 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. Definitions. For the purposes hereof, the following terms shall have the following meanings:

 

“Additional
Amount” means, as of the applicable date of determination, with respect to each Preferred Share, all declared and unpaid
dividends on such Share and any other unpaid amounts then due and payable hereunder with respect to said Share.

 

    	 	1	 

     

    

 

“Affiliate”
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.

 

“Alternate
Consideration” shall have the meaning set forth in Section 7(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined
in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary
thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Corporation or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for
it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e)
the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Corporation
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts, or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates
its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.

 

“Business
Day” 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.

 

“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).

 

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount and (ii) the
Corporation’s obligations to deliver the Securities have been satisfied or waived.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Stock” means the Corporation’s common stock, par value $0.001 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries including without limitation the Corporation’s
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Convertible Preferred Stock, and any other
class of preferred stock or other equity other than the Preferred Stock 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.

 

    	 	2	 

     

    

 

“Conversion
Amount” means the sum of the Stated Value at issue.

 

“Conversion
Date” shall have the meaning set forth in Section 6(a).

 

“Conversion
Price” shall have the meaning set forth in Section 6(c).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock and
dividends in accordance with the terms hereof.

 

“Disclosure
Letter” shall have the meaning set forth in the Purchase Agreement.

 

“Dividend
Date” means the first Trading Day of each calendar month, but with the first Dividend Date commencing on March 1, 2020.

 

“Dividend
Rate” means nine percent per annum.

 

“Dividend
Share Amount” shall have the meaning set forth in Section 3(a).

 

“Effective
Date” means the date that all of the Conversion Shares and Dividend Conversion Shares have been sold pursuant to Rule
144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144 and without volume or manner-of-sale restrictions and Company counsel has delivered to the Transfer
Agent and Holders a standing written unqualified opinion that resales may then be made by Holders of the Conversion Shares and
Dividend Conversion Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such
holders.

 

“Equity
Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) the Corporation shall have paid all liquidated damages and other amounts owing to the applicable Holder
in respect of the Preferred Stock, (c) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares
issuable in lieu of cash payments of dividends) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to the Corporation as set forth in a written opinion letter
to such effect, addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a
Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading
Market (and the Corporation believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of
Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) Shareholder Approval
has been obtained, (g) there has been no public announcement of a pending or proposed Fundamental Transaction that has not been
consummated, (h) the applicable Holder is not in possession of any information provided by the Corporation that constitutes, or
may constitute, material non-public information, (i) the Corporation is not in material default of any of its obligations pursuant
to the Purchase Agreement, and (j) a Material Adverse Effect (as defined in the Purchase Agreement) has not occurred

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

    	 	3	 

     

    

 

“Fundamental
Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d 5(b)(1) promulgated under the Exchange Act), other than a legal
entity majority owned by, or a group wholly consisting of, officers and directors of the Corporation and their Affiliates, of
effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 50% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock
and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders
of the Corporation immediately prior to such transaction own less than 50% of the aggregate voting power of the Corporation or
the successor entity of such transaction, (c) the Corporation, directly or indirectly, effects 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,
(d) 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, (e) to the extent not covered
by clauses (a) – (d) above, the Corporation, directly or indirectly, in one or more related transactions effects 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 (f) the execution by the Corporation of an
agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (a)
through (f) above.

 

“GAAP”
means United States generally accepted accounting principles.

 

“Holder”
shall have the meaning given such term in Section 2.

 

“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $300,000 (other than trade accounts payable incurred
in the ordinary course of business), (b) 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 Corporation’s 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, but in all cases excluding trade accounts payable incurred by the Corporation and its Subsidiaries in the ordinary
course of business.

 

“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation, at any time outstanding
or issuable, including the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock of the Corporation
but not the Company’s Series D Convertible Preferred Stock.

 

“Liquidation”
shall have the meaning set forth in Section 5.

 

“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Make-Whole
Amount” means as of any given date, the amount of any dividend that, but for any conversion on such date, would have
accrued with respect to the Conversion Amount being redeemed hereunder at the Dividend Rate then in effect for the period from
such date through the third anniversary of the Initial Issuance Date.

 

    	 	4	 

     

    

 

“New
York Courts” shall have the meaning set forth in Section 10(d).

 

“Notice
of Conversion” shall have the meaning set forth in Section 6(a).

 

“Original
Issue Date” 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.

 

“Person”
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.

 

“Preferred
Shares” shall have the meaning set forth in Section 2.

 

“Preferred
Stock” shall have the meaning set forth in Section 2.

 

“Purchase
Agreement” means with respect to the Series E Preferred Stock, the Securities Purchase Agreement entered into by the
Corporation and the initial issuees of Preferred Stock, at or about January 27, 2020, as amended, modified or supplemented from
time to time in accordance with its terms.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Senior
Securities” means the Series D Preferred Stock and any series of preferred stock which by its terms is expressly senior
in rank to the Series E Preferred Stock.

 

“Series
D. Preferred Stock” means the Series D Convertible Preferred Stock, par value $0.001.

 

“Series
E Preferred Stock” means the Series E Preferred Stock, par value $0.001, issued at or about January 28, 2020.

 

“Share
Delivery Date” shall have the meaning set forth in Section 6(c).

 

“Shareholder
Approval” shall have the meaning attributed to such term in the Purchase Agreement.

 

“Stated
Value” shall have the meaning set forth in Section 2.

 

“Subscription
Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to
the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to
the heading “Subscription Amount” and on the Exercise Notice in United States dollars and in immediately available
funds.

 

    	 	5	 

     

    

 

“Subsidiary”
means any subsidiary of the Corporation as set forth on Schedule 3.1(a) of the Disclosure Letter (as defined in the Purchase Agreement)
and shall, where applicable and with regard to future events, also include any direct or indirect subsidiary of the Corporation
identified on the SEC Reports and formed or acquired after the date hereof.

 

“Successor
Entity” shall have the meaning set forth in Section 7(e).

 

“Trading
Day” means a day on which the principal Trading Market is open for business.

 

“Trading
Market” 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 Bulletin Board, the OTCQB or the OTCQX (or any successors to any of the foregoing). As of
the date of the Purchase Agreement and the Initial Closing Date, the NASDAQ Capital Market is and will be the Trading Market.

 

“Transaction
Documents” means this Certificate of Designations, the Purchase Agreement, the Disclosure Letter, the Warrants, the
Lockup 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.

 

“Transfer
Agent” means Issuer Direct Corporation, 1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah 84117, and any successor
transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock, the
Warrant Shares and shares of Common Stock issued and issuable in lieu of the cash payment of dividends on the Preferred Stock
in accordance with the terms of this Certificate of Designation.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b) of the Purchase Agreement.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not
a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common Stock
on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the
fees and expenses of which shall be paid by the Corporation.

 

“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Holder at the Closing in accordance with the Purchase
Agreement.

 

    	 	6	 

     

    

 

“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

Section
2. Designation, Amount and Par Value; Ranking The series of preferred stock shall be designated as its Series E Convertible
Preferred Stock (the “Preferred Stock”) and the number of shares (the “Preferred Shares”)
so designated shall be 500 (which shall not be subject to increase without the written consent of the holders of a majority of
the then outstanding shares of Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $1,500 (the “Stated
Value”). The Preferred Stock shall be junior in rank to the Series D Preferred Stock in respect of the preferences as
to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

 

Section
3. Dividends.

 

a)
From and after January 28, 2020 (the “Initial Issuance Date”), each holder of a Preferred Share (each, a “Holder”
and collectively, the “Holders”) shall be entitled to receive dividends (“Dividends”), which
Dividends shall be computed on the basis of a 360-day year and twelve 30-day months and shall increase the Stated Value of the
Preferred Shares on each Dividend Date (each, a “Capitalized Dividend”).

 

b)
Prior to the capitalization of Dividends on a Dividend Date, Dividends on the Preferred Shares shall accrue at the Dividend Rate
and be payable by way of inclusion of the Dividends in the Conversion Amount on each Conversion Date in accordance with Section
6.

 

c)
Other Securities. So long as any of the Preferred Stock issued pursuant to the Purchase Agreement or Dividends shall remain
outstanding, neither the Corporation nor any Subsidiary thereof shall redeem, purchase or otherwise acquire directly or indirectly
any Junior Securities. So long as any of the Preferred Stock issued pursuant to the Purchase Agreement or Dividends shall remain
outstanding, neither the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend or make
any distribution upon, nor shall any distribution be made in respect of, any Junior Securities, nor shall any monies be set aside
for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Junior Securities or shares pari
passu with the Preferred Stock. So long as any of the Preferred Stock issued pursuant to the Purchase Agreement or Dividends
shall remain outstanding, neither the Corporation nor any Subsidiary thereof shall issue any security or Common Stock Equivalent
which shall be pari passu or senior to the Preferred Stock in terms of rights upon Liquidation, Dividends or redemption
except for the Series D Convertible Preferred Stock.

 

Section
4. Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have
no voting rights. In any event, and notwithstanding the foregoing limitation, 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, (a) alter or amend this Certificate of Designation, or (b) increase the number of authorized shares of Preferred Stock,
or (c) enter into any agreement with respect to any of the foregoing.

 

Section
5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary
(a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus,
of the Corporation an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated
damages then due and owing thereon under this Certificate of Designation, for each share of Preferred Stock before any distribution
or payment shall be made to the holders of any Junior Securities, but after distribution or payment to holders of the Series D
Preferred Stock and any other Senior Securities, and if the assets of the Corporation shall be insufficient to pay in full such
amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance
with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Upon occurrence
of a Liquidation which is also a Fundamental Transaction, the Holder may elect to receive the rights and benefits of this section
5 and/or the rights and benefits set forth in Section 7(e) or any other rights set forth in the Transaction Documents. The Corporation
shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

 

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Section
6. Conversion. At any time after the Initial Issuance Date, each Preferred Share shall be convertible into validly
issued, fully paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this
Section 6.

 

a)
Holder’s Conversion Right. At any time or times on or after date of Shareholder Approval, each Holder shall be entitled
to convert any portion of the outstanding Preferred Shares held by such Holder into validly issued, fully paid and non-assessable
shares of Common Stock in accordance with Section 6(c) at the Conversion Rate(as defined below). The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share
of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall
pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses
of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion
of any Preferred Shares.

 

b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Preferred Share pursuant to section
6(a) shall be determined by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price (the “Conversion
Rate”):

 

	 	i.	“Conversion
    Amount” means, with respect to each Preferred Share, as of the applicable date of determination, the sum of (A)
    the Stated Value thereof plus (B) the Additional Amount thereon, plus (C) the Make-Whole amount.
	 	 	 
	 	ii.	“Conversion
    Price” means, with respect to each Preferred Share, as of any Conversion Date or other date of determination, $0.13
    above the consolidated closing bid price of the Common Stock for the Trading Day immediately preceding the date of the Purchase
    Agreement, subject to adjustment as provided herein.

 

c)
Mechanics of Conversion

 

i.
Delivery of Certificate Upon Conversion. To convert a Preferred Share into shares of Common Stock on any date (a “Conversion
Date”), a Holder shall deliver a copy of an executed notice of conversion to the Company with the form of said notice
attached hereto as Annex A (a “Notice of Conversion”). Not later than two (2) Trading Days after each Conversion
Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting
Holder (A) a certificate or certificates representing the Conversion Shares, which, on or after the Effective Date, shall be free
of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement), provided
that the Conversion Shares meet the requirements of the Securities Act for removing such restrictive legends, representing the
number of Conversion Shares being acquired upon the conversion of the Preferred Stock (including, if the Corporation has given
notice pursuant to Section 3(c) for payment of dividends in shares of Common Stock at least 20 Trading Days prior to the date
on which the Notice of Conversion is delivered to the Corporation, shares of Common Stock representing the payment of accrued
dividends otherwise determined pursuant to Section 3(a) but assuming that the Dividend Notice Period is the 20 Trading Days period
immediately prior to the date on which the Notice of Conversion is delivered to the Corporation and excluding for such issuance
the condition that the Corporation deliver the Dividend Share Amount as to such dividend payment prior to the commencement of
the Dividend Notice Period), and (B) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected
or is required to pay accrued dividends in cash). On or after the Effective Date, the Corporation shall deliver any certificate
or certificates required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company
or another established clearing corporation performing similar functions.

 

    	 	8	 

     

    

 

ii.
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates 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 certificate or certificates, to rescind such 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 Common Stock certificates issued to such Holder pursuant to the rescinded
Conversion Notice.

 

iii.
Obligation Absolute; Partial Liquidated Damages. 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. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may
not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the
Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock and
Dividends which are subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the
absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion.
If the Corporation fails to deliver to a Holder such certificate or certificates pursuant to Section 6(c)(i) on the second Trading
Day after 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 $1,000 of Stated Value of Preferred Stock being converted, $10 per Trading Day (increasing
to $20 per Trading Day on the fifth Trading Day after such damages begin to accrue) for each Trading Day after such second Trading
Day after the Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. 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.

 

    	 	9	 

     

    

 

iv.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable certificate or certificates 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 “Buy-In”), then as such Holder’s
sole remedy against the Corporation and the Corporation’s sole liability in respect of such Buy-In 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 certificates representing shares of Common Stock upon conversion of the shares of Preferred Stock as required pursuant
to the terms hereof.

 

v.
Reservation of Shares Issuable Upon Conversion. 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
and payment of dividends on the Preferred Stock, each 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 (subject to the terms and conditions set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred
Stock and payment of dividends hereunder. 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.

 

vi.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Conversion Price or round up to the next whole share.

 

    	 	10	 

     

    

 

vii.
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Preferred
Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of
the issue or delivery of such certificates, 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 certificate 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 certificates
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.

 

Section
7. Certain Adjustments.

 

a)
Stock Dividends and Stock Splits. 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 Securities upon the exercise or exchange
of or conversion of any Securities issued or issuable pursuant to the Transaction Documents), (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 Conversion Price 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 record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.

 

b)
Subsequent Rights Offerings. 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 “Purchase Rights”), then the Holder of 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 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.

 

c)
Pro Rata Distributions. The Corporation, at any time while this Preferred Stock is outstanding, shall include Holders,
on an as-if-converted-to-Common-Stock basis, in all distributions of any kind (including cash and cash dividends) issued to all
holders of Common Stock.

 

    	 	11	 

     

    

 

d)
Fundamental Transaction. If, at any time while this Preferred Stock is outstanding, a Fundamental Transaction occurs, then,
upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number
of shares of Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which this Preferred Stock is convertible immediately prior
to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this 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 Designation with the same
terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the
Holders’ right to convert such 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 “Successor Entity”) to assume
in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents
(as defined in the Purchase Agreement) 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 the holder of this Preferred Stock, deliver to the Holder in exchange for
this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this 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 this Preferred Stock
(without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with
a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred
Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and
substance to the Holder. 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
and the other Transaction Documents 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 and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation
herein. Notwithstanding the foregoing or anything contained herein to the contrary, in the event of a Fundamental Transaction
in which the Corporation’s stockholders receive consideration consisting primarily of cash and in which the Corporation
ceases to be listed or quoted on a Trading Market, the Holder shall only have the right to receive the Alternate Consideration
upon consummation of such Fundamental Transaction.

 

e)
Calculations. 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.

 

    	 	12	 

     

    

 

f)
Notice to the Holders.

 

i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7,
the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

 

ii.
Notice to Allow Conversion by Holder. 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 twenty (20)
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 or any of the Subsidiaries, 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 20-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.

 

Section
8. Redemption. The Corporation shall have no right to require Holders to surrender Preferred Stock for redemption.

 

Section
9. Intentionally Omitted.

 

Section
10. Miscellaneous.

 

a)
Notices. 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 facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Corporation, at: 3900 Paseo del Sol, Santa Fe, New Mexico 87507, Attn: John Rice,
President and CEO, e-mail: rice@sigmalabsinc.com, or such other facsimile number or address as the Corporation may specify for
such purposes by notice to the Holders delivered in accordance with this Section 11. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder
appearing on the books of the Corporation, or if no such facsimile number 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 facsimile at the facsimile number 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 facsimile at the facsimile
number 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.

 

    	 	13	 

     

    

 

b)
Absolute Obligation. 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, accrued dividends and
accrued interest, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein
prescribed.

 

c)
Lost or Mutilated Preferred Stock Certificate. 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.

 

d)
Governing Law. 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 Nevada, without
regard to the principles of conflict of laws thereof. Each party agrees that 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, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto
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. Each party 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. Each party hereto
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 any party
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.

 

    	 	14	 

     

    

 

e)
Waiver. 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.

 

f)
Severability. 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.

 

g)
Next Business Day. 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.

 

h)
Headings. 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.

 

i)
Status of Converted or Redeemed Preferred Stock. 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.

 

j)
No Cash Payments. Notwithstanding any provision of this Certificate of Designations to the contrary, during the period
that any shares of Series D Preferred Stock are outstanding, the Company shall not make any cash payments otherwise required to
be paid hereunder but in lieu thereof shall increase the Stated Value by the amount of such payment.

 

*********************

 

    	 	15	 

     

    

 

RESOLVED,
FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation
be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and
Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

 

IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 27th day of January, 2020.

 

	 	 	/s/
    John Rice
	 	Name:	John
    Rice
	 	Title:	President
    and Chief Executive Officer

 

    	 	16	 

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

(To
be Executed by the Registered Holder in order to Convert Shares of Preferred Stock)

 

The
undersigned hereby elects to convert the number of shares of Series E Convertible Preferred Stock indicated below into shares
of common stock, par value $0.001 per share (the “Common Stock”), of Sigma Labs, Inc., a Nevada corporation
(the “Corporation”), according to the conditions hereof, 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: ________________________

         

	Accrued
        Dividends Being Converted: _________________________________

         

	Conversion
        Price: $____________________

         

	Aggregate
        Conversion Amount to be Converted:____________________________

         

	Number
        of shares of Common Stock to be Issued: ________________

         

	Address
        for Delivery: ______________________

        or

        DWAC
        Instructions:

        Broker
        no: _________

        Account
        no: ___________

 

	 	[HOLDER]
	 	 
	 	By:	              
	 	Name:	 
	 	Title:	 

 

    	 	17Exhibit 10.8

 

NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE 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”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN 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 AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

AS
OF THE DATE OF THE PURCHASE AGREEMENT AND INITIAL ISSUE DATE OF THE PREFERRED STOCK, THE COMPANY IS SUBJECT TO THE REQUIREMENTS
OF NASDAQ LISTING RULE 5635(D). FOR SO LONG AS NASDAQ LISTING RULE 5635(D) APPLIES TO THE COMPANY.

 

CLASS
A COMMON STOCK PURCHASE WARRANT

 

SIGMA
LABS, INC.

 

	Warrant
    Shares: __________	Issuance
    Date: January 28, 2020
	 	 
	Warrant
    No: ___________	 

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, ________________,
or its registered assigns (the “Holder”), with an address at: _________________, is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time commencing on the later
to occur of Shareholder Approval or one hundred and eighty (180) days after the date hereof (the “Initial Exercise Date”)
and on or prior to the close of business on the five (5) year anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from SIGMA LABS, INC., a Nevada corporation (the “Company”),
up to ________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Shares. The
purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. 
Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated January 27, 2020, among the Company and the purchasers signatory
thereto.

 

    	 	 	 

     

    

 

Section
2. Exercise.

 

(a)
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books
of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following
the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to
the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder
shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading
Day of delivery of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

(b)
Exercise Price. The exercise price per share of the Common Shares under this Warrant shall be US $1.13, subject
to adjustment as described herein (“Exercise Price”). The Company shall have the right in its sole discretion
to reduce the Exercise Price at any time and from time to time.

 

(c)
[Intentionally Omitted]

 

(d)
Mechanics of Exercise.

 

(i)
Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is
two (2) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant
(if required) and (C) payment of the aggregate Exercise Price as set forth above (such date, the “Warrant Share Delivery
Date”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant
to Section 2(d)(vi) prior to the issuance of such shares, having been paid. The Company understands that a delay in the delivery
of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder. As compensation to the
Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of
Warrant Shares upon exercise of this Warrant the proportionate amount of $10 per Trading Day (increasing to $20 per Trading Day
after the fifth (5th) Trading Day) commencing three (3) Trading Days after the Warrant Share Delivery Date for each
$1,000 of Exercise Price of Warrant Shares for which this Warrant is exercised which are not timely delivered. The Company shall
pay any payments incurred under this Section in immediately available funds upon demand

 

(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

    	 	2	 

    	 

    

 

(iii)
Revocation of Exercise. In addition to any other remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or
part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder
shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given
to the Company.

 

(iv)
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing
the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely
due to any unreasonable action or inaction by the Holder with respect to such exercise), and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount,
if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so
purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon
request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing Common Shares upon exercise
of the Warrant as required pursuant to the terms hereof.

 

(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

(vi)
Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may
be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued
in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing
of any Notice of Exercise.

 

    	 	3	 

    	 

    

 

(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

Section
3. Certain Adjustments.

 

(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Shares or any other equity or equity equivalent securities
payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise
of this Warrant or pursuant to any of the other Transaction Documents), (ii) subdivides outstanding Common Shares into a larger
number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common Shares any shares of capital stock of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common
Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section
3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination
or re-classification.

 

(b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Shares Equivalents or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership 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 Common Shares 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
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such Common Shares 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 Beneficial Ownership Limitation).

 

    	 	4	 

    	 

    

 

(c)
Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders
of Common Shares (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights
or warrants to subscribe for or purchase any security other than the Common Shares (which shall be subject to 3(c)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be
the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less
the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of the Common Shares as determined by the Board of Directors in good faith. In either case
the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness
so distributed or such subscription rights applicable to one Common Share. Such adjustment shall be made whenever any such distribution
is made and shall become effective immediately after the record date mentioned above.

 

(d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects 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, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares 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 Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are
effectively converted into or exchanged for other securities, cash or property, or (v) the Company, 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 or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares 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 “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder,
the number of Common Shares (or successor security) of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable immediately prior
to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common
Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within
30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black and
Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined
as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(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 the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is
exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to
the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to
such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose
of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which
is reasonably satisfactory in form and substance to the Holder. 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 Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

    	 	5	 

    	 

    

 

(e)
Calculations. All calculations under this Section 3 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 3, the number of Common Shares deemed to be issued and outstanding
as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

 

(f)
Notice to Holder.

 

(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3,
the Company shall promptly give notice to the Holder setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a statement of the facts requiring such adjustment (“Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 3, upon the occurrence of any Dilutive or other reduction of the Exercise Price, the Holder is entitled to receive
a number of Warrant Shares based upon the reduced Exercise Price regardless of whether the Holder accurately refers to the Exercise
Price in the Notice of Exercise.

 

(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Shares, (C) the Company shall authorize the granting to all holders of the Common Shares 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 Company shall
be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is
a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Shares are converted into other securities, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, to the extent that such information constitutes material
non-public information (as determined in good faith by the Company) the Company shall follow the procedure described in Section
13 of the Subscription Agreement and shall deliver to the Holder at its last address as it shall appear upon the Warrant Register
of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their shares of the Common Shares for securities, cash or
other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that
the failure to mail such notice or any defect therein or in the mailing 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 Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

 

(g)
Increase in Warrant Shares. In the event the Exercise Price is reduced for any reason, including but not limited to pursuant
to Section 3(e) of this Warrant, the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise
Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise
Price prior to such adjustment.

 

Section
4. Transfer of Warrant.

 

(a)
Transferability. Subject to compliance with any applicable securities laws and the provisions of the Purchase Agreement,
this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued.

 

    	 	6	 

    	 

    

 

(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.

 

(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section
5. Miscellaneous.

 

(a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

 

(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

(c)
Saturdays, Sundays, Holidays, etc. 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 Trading Day, then, such action may be taken or such right may be exercised on the next
succeeding Trading Day.

 

    	 	7	 

    	 

    

 

(d)
Authorized Shares. Subsequent to the Company obtaining Shareholder approval to increase its authorized shares of Common
Stock, the Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of
the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under
this Warrant. Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

(e)
Jurisdiction. All questions concerning governing law, jurisdiction, venue and the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant will have restrictions
upon resale imposed by state and federal securities laws.

 

(g)
Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

 

    	 	8	 

    	 

    

 

(h)
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, facsimile, or electronic mail, addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated
by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is to be received), or (b) upon receipt, when sent by electronic
mail (provided confirmation of transmission is electronically generated and keep on file by the sending party), or (c) on the
second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company,
to: Sigma Labs, Inc., 3900 Paseo del Sol, Santa Fe, New Mexico 87507, Attn: John Rice, President and CEO, e-mail: rice@sigmalabsinc.com,
with a copy by electronic mail only to: TroyGould PC, 1801 Century Park East, Suite 1600, Los Angeles, CA 90067-2367, Attn: Darren
Freedman, Esq., e-mail: dfreedman@troygould.com (which shall not constitute notice), and (ii) if to the Holder, to: the address
and fax number indicated on the front page of this Warrant.

 

(i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability
of the Holder for the purchase price of any Common Shares or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.

 

(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

(k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.

 

(l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holders of not less than a majority of the outstanding Warrants issued pursuant to the Purchase Agreement.

 

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

 

(n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.

 

********************

(Signature
Page Follows)

 

    	 	9	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date
first above indicated.

 

	 	SIGMA LABS, INC.
	 	 	 
	 	By:
    	 
	 	Name:
    	 
	 	Title:
    	 

 

    	 	10	 

    	 

    

 

NOTICE
OF EXERCISE

 

To:
SIGMA LABS, INC.

 

(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)
Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States

 

(3)
Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

_______________________________

 

(4)
After giving effect to this Notice of Exercise, the undersigned will not have exceeded the Beneficial Ownership Limitation.

 

The
Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

[SIGNATURE
OF HOLDER]

 

Name
of Investing Entity: ___________________________________________________________________________

Signature
of Authorized Signatory of Investing Entity: _____________________________________________________

Name
of Authorized Signatory: _______________________________________________________________________

Title
of Authorized Signatory: ________________________________________________________________________

Date:
___________________________________________________________________________________________

 

    	 	 	 

     

    

 

ASSIGNMENT
FORM

 

(To
assign the foregoing warrant, execute

this
form and supply required information.

Do
not use this form to exercise the warrant.)

 

SIGMA
LABS, INC.

 

FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are
hereby assigned to

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated:
______________, _______

 

Holder’s
Signature: _____________________________

 

Holder’s
Address: _____________________________

 

_____________________________

 

Signature
Guaranteed: ___________________________________________

 

NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration
or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those
acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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