Document:

Exhibit 4.2

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL,
TRANSFER OR ASSIGN THIS PURCHASE WARRANT, OR ANY OF THE UNDERLYING SECURITIES, EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER
OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT, OR ANY OF
THE UNDERLYING SECURITIES, FOR A PERIOD ENDING ON, AND INCLUDING, THE DATE THAT IS ONE HUNDRED EIGHTY (180) DAYS BEGINNING ON THE
DATE OF COMMENCEMENT OF SALES OF THE OFFERING TO ANYONE OTHER THAN (I) SPARTAN CAPITAL SECURITIES, LLC, OR A REPRESENTATIVE OR
A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF SPARTAN CAPITAL SECURITIES, LLC, OR
OF ANY SUCH UNDERWRITERS OR SELECTED DEALER.

  

THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [●]. VOID AFTER 5:00 P.M., EASTERN TIME, [●].

 

UNDERWRITER’S
WARRANT

 

FOR
THE PURCHASE OF [●] SHARES OF COMMON STOCK

 

OF

 

LIPELLA
PHARMACEUTICALS INC.

 

1.         Purchase
Warrant. THIS CERTIFIES THAT, pursuant to that certain Underwriting Agreement by and between LIPELLA PHARMACEUTICALS INC.,
a Delaware corporation (the “Company”), on one hand, and Spartan Capital Securities, LLC (the “Holder”),
on the other hand, dated [●] (the “Underwriting Agreement”), the Holder, as registered owner of this
underwriter’s warrant (this “Purchase Warrant”), is entitled, at any time or from time to time from [●]
(the “Exercise Date”), and at or before 5:00 p.m., Eastern Time, on [●] (the “Expiration Date”),
but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [●] shares of Common Stock of the
Company, par value $0.0001 per share (“Common Stock”) (the “Shares”), subject to adjustment
as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to
close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms
herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase
Warrant. This Purchase Warrant is initially exercisable at $[●] per share (110% of the price of the shares of Common Stock
sold in the Offering); provided, however, that upon the occurrence of any of the events specified in Section 6 hereof,
the rights granted by this Purchase Warrant, including the exercise price per share and the number of shares of Common Stock to
be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean
the initial exercise price of this Purchase Warrant as set forth above or the adjusted exercise price as a result of the events
set forth in Section 6 below, depending on the context. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Underwriting Agreement.

 

2.         Exercise.

 

2.1       Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto as Exhibit A must be duly executed
and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the shares
of Common Stock being purchased payable in cash by wire transfer of immediately available funds to an account designated by the
Company or by certified check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern
Time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented
hereby shall cease and expire.

 

    1

     

    

 

2.2       Cashless
Exercise. The Holder may elect to receive the number of shares of Common Stock equal to the value of this Purchase Warrant
(or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form
attached hereto, in which event the Company shall issue to Holder, Shares in accordance with the following formula:

 

	X	=	Y(A-B)	 	 
	A	 	 
	 	 	 	 
	Where,	X	=	The number of shares
    of Common Stock to be issued to Holder;
	 	Y	=	The number of shares
    of Common Stock for which the Purchase Warrant is being exercised;
	 	A	=	The fair market
    value of one share of Common Stock; and
	 	B	=	The Exercise Price.

 

For
purposes of this Section 2.2, the “fair market value” of a share of Common Stock is defined as follows:

 

	 	(i)	if the shares of
    Common Stock are traded on a national securities exchange, the value shall be deemed to be the weighted average closing price
    on such exchange for the five consecutive trading days ending on the trading day immediately prior to the exercise form being
    submitted in connection with the exercise of the Purchase Warrant; or

 

	 	(ii)	if the shares of
    Common Stock are actively traded over-the-counter, the value shall be deemed to be the weighted average closing bid price
    of the shares of Common Stock for the five consecutive trading days ending on the trading day immediately prior to the exercise
    form being submitted in connection with the exercise of the Purchase Warrant; or

 

	 	(iii)	if there is no market
    for the shares of Common Stock, the value shall be the fair market value thereof, as determined in good faith by the Board.

 

2.3             Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear the following legends unless such securities
have been registered under the Securities Act of 1933, as amended (the “Act”), or are exempt from registration
under the Act:

 

(i) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD ENDING ON, AND
INCLUDING, THE DATE THAT IS ONE HUNDRED AND EIGHTY (180) DAYS BEGINNING ON THE DATE OF COMMENCEMENT OF SALES OF THE OFFERING PURSUANT
TO THE REGISTRATION STATEMENT OF THE COMPANY’S SECURITIES (FILE NO. 333-266397) AND MAY NOT BE (A) SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED TO ANYONE OTHER THAN SPARTAN CAPITAL SECURITIES, LLC, OR BONA FIDE OFFICERS OR PARTNERS OF SPARTAN
CAPITAL SECURITIES, LLC, OR (B) CAUSED TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION THAT WOULD
RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THE SECURITIES HEREUNDER, EXCEPT AS PROVIDED FOR IN FINRA RULE 5110(E)(2).”

 

(ii)
Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by a
certificate, instrument, or book entry so legended.

 

3.         Transfer.

 

3.1        General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder
will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant or any of the Shares exercisable hereunder for
a period ending on, and including, the date that is one hundred eighty (180) days beginning on the date of commencement of sales
of the Offering (the “Initial Transfer Date”) to anyone other than: (i) the Underwriter or a selected dealer
participating in the Offering, or (ii) a bona fide officer or partner of the Underwriter or of any such selected dealer, in each
case in accordance with FINRA Rule 5110(e)(2)(B), or (b) cause this Purchase Warrant or the securities issuable hereunder to be
the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition
of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(e)(2). On and after the Initial
Transfer Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order
to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto as Exhibit B
duly executed and completed, together with this Purchase Warrant and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall
execute and deliver a new warrant or warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase
the aggregate number of shares of Common Stock purchasable hereunder or such portion of such number as shall be contemplated by
any such assignment. 

 

    2

     

    

 

3.2         Restrictions
Imposed by the Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company
has received the opinion of counsel for the Company that the securities may be transferred pursuant to an exemption from registration
under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of
the Company, (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the offer and
sale of such securities that has been declared effective by the Commission and includes a current prospectus or (iii) a registration
statement, pursuant to which the Holder has exercised its registration rights pursuant to Sections 4.1 and 4.2 herein,
relating to the offer and sale of such securities has been filed and declared effective by the Commission and compliance with
applicable state securities law has been established.

 

4.         Registration
Rights. The Company shall be required to keep a registration statement effective on Form S-1 until such date that is the earlier
of the date when all of the shares of Common Stock underlying this Purchase Warrant have been publicly sold by the Holder or such
time as Rule 144 or another similar exemption under the Securities Act, is available for the sale of all of such Holder’s
Shares underlying this Purchase Warrant without registration.

 

5.         New
Purchase Warrants to be Issued.

 

5.1         Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned
in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for
cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or
transfer tax if exercised pursuant to Section 2.1 hereof, the Company shall cause to be delivered to the Holder without
charge a new warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase
the number of shares of Common Stock purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

 

5.2         Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver
a new warrant of like tenor and date. Any such new warrant executed and delivered as a result of such loss, theft, mutilation
or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

6.         Adjustments.

 

6.1         Adjustments
to Exercise Price and Number of Shares of Common Stock. The Exercise Price and the number of Shares of Common Stock underlying
this Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

 

6.1.1       Share
Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of
outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock or by a split up of shares
of Common Stock or other similar event, then, on the effective day thereof, the number of shares of Common Stock purchasable hereunder
shall be increased in proportion to such increase in outstanding shares of Common Stock , and the Exercise Price shall be proportionately
decreased.

 

    3

     

    

 

6.1.2       Aggregation
of Shares of Common Stock. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number
of outstanding shares of Common Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock
or other similar event, then, on the effective date thereof, the number of shares of Common Stock purchasable hereunder shall
be decreased in proportion to such decrease in outstanding shares, and the Exercise Price shall be proportionately increased.

 

6.1.3       Replacement
of shares of Common Stock upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares
of Common Stock other than a change covered by Section 6.1.1 or Section 6.1.2 hereof or that solely affects the
par value of such shares of Common Stock, or in the case of any share reconstruction or amalgamation or consolidation of the Company
with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the
continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common
Stock ), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety
or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have
the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of Common
Stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction
or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of shares
of Common Stock of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification
also results in a change in shares of Common Stock covered by Section 6.1.1 or Section 6.1.2, then such adjustment
shall be made pursuant to Section 6.1.1, Section 6.1.2 and this Section 6.1.3. The provisions of this Section
6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations,
sales or other transfers.

 

6.1.4       Fundamental
Transaction. If, at any time while this Purchase Warrant is outstanding, the Company enters into the following transactions
with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with, the other Persons making or party to such stock or share purchase agreement or other business combination):
(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 shares 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 shares of Common Stock, (iv) the Company, directly
or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the shares
of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock is 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, spinoff or scheme of arrangement) with another Person or group of Persons (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Purchase Warrant, the Holder shall have the right to receive, for each Share that would
have been issuable upon such exercise 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 Company, if it is the surviving corporation, and any additional
or alternative consideration (the “Alternative Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Purchase 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 Alternative Consideration based on the amount of Alternative Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternative Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternative Consideration. If holders
of shares 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 Alternative Consideration it receives upon any exercise of this Purchase
Warrant following such Fundamental Transaction. 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 Purchase Warrant, and to deliver to the Holder in exchange for this Purchase Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Purchase Warrant which is exercisable
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 exercise of this Purchase Warrant immediately prior to such Fundamental Transaction,
and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction, the value of such shares of capital
stock, the number of shares of such capital stock and the exercise price for such shares of capital stock for the purpose of protecting
the economic value of this Purchase Warrant immediately prior to the consummation of such Fundamental Transaction). 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 Purchase Warrant 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 Purchase Warrant with the same effect as if such Successor Entity had been named as the Company herein.

 

    4

     

    

 

6.1.5       Changes
in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section
6.1, and any warrants issued after such change, in exchange or replacement of this Purchase Warrant may state the same Exercise
Price and the same number of shares of Common Stock as are stated in the Purchase Warrant initially issued pursuant to this Purchase
Warrant. The acceptance by any Holder of the issuance of a new warrant reflecting a required or permissive change shall not be
deemed to waive any rights to an adjustment occurring after the date hereof or the computation thereof.

 

6.2         Substitute
Purchase Warrant. Except as otherwise provided in Section 6.1.5, in case of any consolidation of the Company with, or share
reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction
or amalgamation which does not result in any reclassification or change of the outstanding shares of Common Stock ), the corporation
formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental warrant
providing that the holder of this Purchase Warrant shall have the right thereafter (until the stated expiration of this Purchase
Warrant) to receive, upon exercise of such supplemental warrant, the kind and amount of shares of common stock and other securities
and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of shares of
Common Stock of the Company for which this Purchase Warrant might have been exercised immediately prior to such consolidation,
share reconstruction or amalgamation, sale or transfer. Such supplemental warrant shall provide for adjustments which shall be
substantially the same to the adjustments provided for in this Section 6. The above provisions of this Section 6
shall similarly apply to successive consolidations or share reconstructions or amalgamations.

 

6.3         Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of this Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional
interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or
down, as the case may be, to the nearest whole number of shares of Common Stock or other securities, properties or rights.

 

7.         Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon exercise of this Purchase Warrant, such number of shares of Common Stock or other securities,
properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of this
Purchase Warrant and payment of the Exercise Price therefor, unless this Purchase Warrant is exercised pursuant to a cashless
exercise, as provided in Section 2.2 hereof, in accordance with the terms hereby, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive
rights of any shareholder. The Company further covenants and agrees that upon exercise of this Purchase Warrant and payment of
the exercise price therefor, unless this Purchase Warrant is exercised pursuant to a cashless exercise, as provided in Section
2.2 hereof, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as this Purchase Warrant shall
be outstanding, the Company shall use its commercially reasonable efforts to cause all shares of Common Stock issuable upon exercise
of this Purchase Warrant to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable,
on the OTCQB Market or any successor quotation system) on which the shares of Common Stock are then listed and/or quoted (if at
all).

 

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8.         Certain
Notice Requirements.

 

8.1         Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holder the right to vote or consent or to
receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of this Purchase Warrant and the exercise thereof, any of the
events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice
of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books (the “Notice
Date”) for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of
securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing,
the Company shall deliver to the Holder a copy of each notice given to the other shareholders of the Company at the same time
and in the same manner that such notice is given to the shareholders.

 

8.2         Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of
the following events: (i) if the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling
them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company,
(ii) the Company shall offer to all the holders of its shares of Common Stock any additional shares of capital stock of the Company
or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to
subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation
or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

 

8.3         Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant
to Section 6 hereof, send notice to the Holder of such event and change (“Price Notice”). The Price
Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and
accurate by the Company’s Chief Financial Officer.

 

8.4       Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made if made in accordance with the notice provisions of the Underwriting Agreement to the addresses
and contact information set forth below:

 

If
to the Holder, then to:

 

Spartan
Capital Securities, LLC 

45
Broadway, 19th Floor 

New
York, NY 10006 

Attn:
Jason Diamond, Managing Director, Head of Investment Banking 

		Email:	 

 

With
a copy to:

 

Hunter
Taubman Fischer & Li LLC 

48
Wall Street, Suite 2800 

New
York, NY 1100

Attn: Louis Taubman, Esq. 

		Email:	 

 

    6

     

    

 

If
to the Company:

 

Lipella
Pharmaceuticals Inc. 

7800
Susquehanna St. Suite 505 

Pittsburgh,
PA 15208 

(    )      -  

		Attn.:	Jonathan
Kaufman

		Email:	 

 

With
a copy to: 

 

Sullivan
& Worcester LLP 

1633
Broadway 

New
York, NY 10019 

		Attn:	David
E. Danovitch, Esq.

		Email:	 

 

9.         Miscellaneous.

 

9.1         Amendments.
The Company and the Underwriter may from time to time supplement or amend this Purchase Warrant without the approval of the Holder
in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the
Company and the Underwriter may deem necessary or desirable and that the Company and the Underwriter deem shall not adversely
affect the interest of the Holder. All other modifications or amendments shall require the written consent of and be signed by
the party against whom enforcement of the modification or amendment is sought.

 

9.2         Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

 

9.3         Entire
Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection
with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

9.4         Binding
Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and
their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions
herein contained.

 

9.5         Governing
Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby
irrevocably waive, 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 Agreement or the transactions contemplated hereby.

 

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9.6         Waiver,
etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall
not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant
or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase
Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be
effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach, non-compliance or non-fulfillment.

 

9.7         Holder
Not Deemed a Shareholder. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder
of this Purchase Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Purchase Warrant be construed to confer upon the Holder, solely in its capacity
as a holder of this Purchase Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of shares, reclassification of shares, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Shares which it is then entitled to receive upon the due exercise of this Purchase Warrant. In addition,
nothing contained in this Purchase Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Purchase Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted
by the Company or by creditors of the Company.

 

9.8         Restrictions.
The Holder acknowledges that the Shares acquired upon the exercise of this Purchase Warrant, if not registered, and the Holder
does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

9.9         Severability.
Wherever possible, each provision of this Purchase Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Purchase 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 provision or
the remaining provisions of this Purchase Warrant.

 

[Signature
Page Follows]

 

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IN
WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the [●]th
day of _______, 2022.

 

	 	LIPELLA PHARMACEUTICALS INC.
	 	 	 
	 	By:	 
	 	Name:	Jonathan Kaufman
	 	Title:	President and CEO

 

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EXHIBIT
A

 

Exercise
Notice

 

Form
to be used to exercise Purchase Warrant:

 

Date:
__________, 202_

 

The
undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of Common Stock of LIPELLA PHARMACEUTICALS
INC., a Delaware corporation (the “Company”), and hereby makes payment of $____ (at the rate of $____ per share)
in payment of the Exercise Price pursuant thereto. Please issue the shares of Common Stock as to which this Purchase Warrant is
exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of
shares of Common Stock for which this Purchase Warrant has not been exercised.

 

or

 

The
undersigned hereby elects irrevocably to convert its right to purchase ___ shares of Common Stock under the Purchase Warrant for
______ shares of Common Stock, as determined in accordance with the following formula:

 

	 	 X	 =	Y(A-B)	 
	 	A	 
	Where,	X	=	The
    number of shares of Common Stock to be issued to Holder;
	 	Y	=	The number of shares of Common Stock
    for which the Purchase Warrant is being exercised;
	 	A	=	The fair market value (as defined
    in Section 2.2 of this Purchase Warrant) of one share of Common Stock which is equal to $_____; and
	 	B	=	The Exercise Price which is equal
    to $______ per share

 

The
undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement
with respect to the calculation shall be resolved by the Company in its sole discretion.

 

Please
issue the shares of Common Stock as to which this Purchase Warrant is exercised in accordance with the instructions given below
and, if applicable, a new Purchase Warrant representing the number of shares of Common Stock for which this Purchase Warrant has
not been converted.

 

Signature

 

Signature
Guaranteed

 

INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

 

Name: 

(Print
in Block Letters) 

Address:

 

NOTICE:
The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities exchange.

 

     

     

    

 

EXHIBIT
B

 

Assignment
Notice

 

Form
to be used to assign Purchase Warrant:

 

ASSIGNMENT

 

(To
be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

FOR
VALUE RECEIVED,                                                             does hereby sell, assign and transfer unto the right to purchase shares of Common Stock of LIPELLA PHARMACEUTICALS
INC., a Delaware corporation (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the
Company to transfer such right on the books of the Company.

 

Dated:
            , 202

 

Signature

 

Signature
Guaranteed

 

NOTICE:
The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration
or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or
by a firm having membership on a registered national securities exchange.ex_436175.htm

Exhibit 4.1

 

	
			Principal Amount of US$100,000.00

				
			Issue Date: October 24, 2022

			
	 	 
	 	 

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, the undersigned, MITESCO, INC., a corporation incorporated under the laws of the State of Delaware (the “Borrower”), hereby promises to pay to the order of LENDER (the “Lender” and collectively with the Borrower, the “Parties”) on the Termination Date (as defined below), the principal amount of one hundred thousand dollars and zero/100 United States Dollars (US$100,000.00) (the “Principal Amount”). The purchase price for this promissory note (this “Note”) shall be one hundred thousand United States Dollars (US$100,000.00) (the “Purchase Price”) and shall be payable by the Lender to the Borrower on the Issue Date.

 

VERY SPECULATIVE AND HIGHLY RISKY INVESTMENT. Investing in this convertible Promissory Note is highly speculative and is suitable only for those who (a) understand and are willing to assume the economic, legal and other risks involved, and (b) are financially able to assume significant losses. Lender represents, warrants and agrees that Lender understands these risks; that Lender is willing and able, financially and otherwise, to assume the risks of this Note and that loss of Lender’s entire Principal Amount will not change your lifestyle. Before deciding to invest in this Note Lender should carefully consider Lender’s investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your Principal Amount and therefore you should not invest money that you cannot afford to lose.

 

Section 1. Certain Terms Defined. The following terms for all purposes of this Promissory Note shall have the respective meanings specified below.

 

“Business Day” means any day except a Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized by law to close.

 

“Default” means any event which, with the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.

 

“Event of Default” has the meaning given to it in Section 12.

 

"Exchange Agreement” means that certain Exchange Agreement, dated as of October 7, 2022, between the Borrower and the Lender.

 

“GAAP” means generally accepted accounting principles in the United States, in effect from time to time, consistently applied.

 

1

 

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, prospects, condition (financial or otherwise) or property of the Borrower, (b) the validity or enforceability of any provision of any Transaction Document, (c) the ability of any party to any Transaction Document to timely perform its obligations thereunder, or (d) the rights and remedies of the Lender under any Transaction Document.

 

“Termination Date” means the maturity date as defined in Section 2.

 

“Transaction Documents” means this Promissory Note.

 

Section 2. Purchase Price.  The Lender shall pay the Purchase Price to the Borrower on the Issue Date.

 

Section 3.   Maturity of this Promissory Note. This Principal Amount of this Note will be due and payable on December 31, 2022 (“Maturity Date”), unless the Parties have mutually agreed upon terms upon which the Maturity Date may be extended or the Principal Amount shall otherwise be converted.

 

Section 4. Conversion of the Principal Amount. The Principal Amount shall convert into Series E Convertible Preferred Stock (the “Series E Shares”) in accordance with the terms of the Exchange Agreement, if the Borrower successfully lists its shares of common stock on any of the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market on or before December 10, 2022.

 

Section 5   Interest Payments. If and only if the Principal Amount is not converted into Series E Shares pursuant to Section 4 above, the unpaid Principal Amount shall bear interest at ten percent (10%) per annum (the “Interest Rate”), which interest shall be accrued on a monthly basis and which shall have been deemed to have been accruing from the Issue Date.

 

Notwithstanding the foregoing, following an Event of Default, the Principal Amount shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the lesser of (i) the maximum interest rate permitted by applicable law and (ii) eighteen percent (18%) (the “Default Rate”).

 

Interest shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).

 

Section 6   Optional Prepayments. The Borrower may prepay the amounts owing under this Promissory Note in whole or in part at any time after December 10, 2022, without penalty by paying the Principal Amount together with interest accrued thereon and any other amount which may be outstanding to the date of prepayment.

 

Section 7. General Provisions As To Payments. All payments owing under this Promissory Note by the Borrower hereunder shall be made not later than 12:00 Noon (New

 

2

 

 

York City time) on the date when due by cashier’s check or by wire transfer of immediately available funds to the Lender’s account at a bank specified by the Lender in writing to the Borrower without reduction by reason of any set-off or counterclaim. In the event that any required payment date is not a Business Day, then said payment date shall be the next succeeding Business Day.

 

Section 8.  Representations and Warranties of the Borrower. The Borrower represents and warrants to the Lender that:

 

	 	
			a.

				
			it is duly organized, validly existing and in good standing under the laws of the state of its incorporation;

			

 

	 	
			b.

				
			it is duly authorized to do business in all jurisdictions material to the conduct of its business;

			

 

	 	
			c.

				
			it has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its obligations under this Promissory Note and to conduct its business substantially as currently conducted by it;

			

 

	 	
			d.

				
			the execution, delivery and performance of this Promissory Note are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action;

			

 

	 	
			e.

				
			this Promissory Note has been duly executed by an authorized officer of the Borrower and constitutes a legal, valid and binding obligation enforceable against the Borrower;

			

 

	 	
			f.

				
			this Promissory Note does not violate any of the Borrower’s organizational documents, any law, court order or material agreement by which the Borrower is bound; and

			

 

	 	
			g.

				
			the Borrower’s performance under this Promissory Note is not threatened by any pending or threatened litigation.

			

 

Section 9.  Affirmative Covenants. Unless the Lender shall otherwise agree, the Borrower shall:

 

	 	
			a.

				
			(i) maintain its corporate existence and qualify and remain qualified to conduct business as currently conducted; (ii) maintain all approvals necessary for this

			

 

3

 

 

	 	
			 

				
			Promissory Note and the Transaction Documents; and (iii) operate its business with due diligence, efficiency and in conformity with sound business practices;

			

 

	 	
			b.

				
			keep its properties and business insured with financially sound and reputable insurers against loss or damage in such manner and to the same extent as shall be no less than that generally accepted as customary in regard to property and business of like character;

			

 

	 	
			c.

				
			comply in all material respects with all applicable laws, rules, regulations and orders of any government authority;

			

 

	 	
			d.

				
			maintain records, books, management information systems and financial control procedures which together are adequate to: (i) support the accounting practices and tax elections of the Borrower; and (ii) accurately, adequately and fairly reflect the financial condition of the Borrower and the results of its operations in conformity with GAAP;

			

 

	 	
			e.

				
			pay and discharge all taxes, assessments and governmental charges upon it, its income and its properties prior to the date on which penalties are attached thereto, unless and only to the extent that (i) such taxes, assessments and governmental charges shall be contested in good faith and by appropriate proceedings by the Borrower, (ii) reserves which are adequate under GAAP are maintained by the Borrower with respect thereto, and (iii) any failure to pay and discharge such taxes, assessments and governmental charges would not have and could not reasonably be expected to have a Material Adverse Effect;

			

 

	 	
			f.

				
			promptly inform the Lender, in writing, of any proposed material change in the nature or scope of the business or operations of the Borrower, or any event or condition which has or could reasonably be expected to have a Material Adverse Effect;

			

 

	 	
			g.

				
			comply with the requirements of all applicable laws, rules, regulations, and orders of any government authority, a breach of which would or would reasonably be expected to result in a Material Adverse Effect;

			

 

	 	
			h.

				
			obtain, make and keep in full force and effect all licenses, contracts, consents, approvals and authorizations from and registrations with government authorities that may be required to conduct its business, to maintain compliance with all applicable laws and regulations, and remit monies payable pursuant to this Promissory Note;

			

 

4

 

 

	 	
			i.

				
			promptly notify the Lender of the occurrence of (i) any Default or Event of Default; (ii) any event, development or circumstance whereby the Borrower’s financial statements fail in any material respect to present fairly and accurately, in accordance with GAAP, the financial condition and operating results of the Borrower as of the date of such financial statements; (iii) any material litigation or proceedings that are instituted or, to the knowledge of the Borrower, threatened against the Borrower or any of their respective assets; (iv) each and every event which, at the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an event of default (however described) under either of the Transaction Documents; and (v) any other development in the business or affairs of the Borrower if the effect thereof might have a Material Adverse Effect;

			

 

	 	
			j.

				
			comply with the Transaction Documents or any other document executed in connection with the transactions contemplated hereby;

			

 

	 	
			k.

				
			inform the Lender, as soon as they are made, of any judicial or non-judicial claims against the Borrower of more than $25,000 or the equivalent thereof in any other currency for each claim; and

			

 

	 	
			l.

				
			execute such other and further documents and instruments as the Lender may reasonably request to implement the provisions of this Promissory Note.

			

 

Section 10.  Negative Covenants. Unless the Lender shall otherwise agree, the Borrower shall not:

 

	 	
			a.

				
			make any change to the scope or nature of its respective business activities as carried on at the date hereof or undertake any operations not permitted by the Transaction Documents;

			

 

	 	
			b.

				
			(i) violate any laws, ordinances, government rules or regulations to which it is subject or (ii) fail to obtain or maintain any patents, trademarks, service marks, trade names, copyrights, design patents, licenses, permits, franchises, or other governmental authorizations necessary to ownership of its property or the conduct of its respective business, in either case where such failure would have or could reasonably be expected to have a Material Adverse Effect; and

			

 

	 	
			c.

				
			assign or otherwise transfer, terminate, waive, or amend either of the Transaction Documents without the prior consent of the Lender, except for amendment in the ordinary course of business.

			

 

5

 

 

Section 11.  Events Of Default. Each of the following events shall constitute an “Event of Default”:

 

	 	
			a.

				
			the amounts owing under this Promissory Note shall not be paid within five (5) Business Days of the date that such amount was due;

			

 

	 	
			b.

				
			any warranty, representation or statement by the Borrower is or becomes false, misleading or incorrect in a material respect when made or regarded as made by the Borrower under this Promissory Note or the Transaction Documents;

			

 

	 	
			c.

				
			the Borrower fails to perform or observe any material undertaking, obligation or agreement expressed or implied in this Promissory Note or the Transaction Documents and such default is not cured within ten (10) days, or such longer period as is determined by the Lender, after receipt by the Borrower of a notice from the Lender specifying the failure;

			

 

	 	
			d.

				
			a receiver, receiver and manager, official manager, trustee, administrator or similar official is appointed, or steps are taken for such appointment, over any of the assets or undertaking of the Borrower;

			

 

	 	
			e.

				
			the Borrower is, or becomes, unable to pay its debts when they are due or is, or becomes, unable to pay its debts within the meaning of the US Bankruptcy Code or is presumed to be insolvent under the US Bankruptcy Code;

			

 

	 	
			f.

				
			an application or order is made for the winding up or dissolution of the Borrower, which application or order is not dismissed or withdrawn within twenty on (21) days, or a resolution is passed or any steps are taken to pass a resolution for the winding up or dissolution of the Borrower otherwise than for the purpose of an amalgamation or reconstruction which has the prior written consent of the Lender; or

			

 

	 	
			g.

				
			the Borrower suspends payment of its debts generally.

			

 

If an Event of Default described above shall occur, the amounts owing under this Promissory Note shall become due and payable within ten (10) days of the Lender’s issuance of a formal demand notice to the Borrower. Immediately upon the occurrence of any Event of Default described above, or upon failure to pay this Promissory Note on the Termination Date, the Lender, without any notice to the Borrower, which notice is expressly waived by the Borrower, may proceed to protect, enforce, exercise and pursue any and all rights and remedies available to the Lender under this Promissory Note and any other agreement or instrument, and any and all rights and remedies available to the Lender at law or in equity.

 

All sums paid or advanced by the Lender in connection with the foregoing and all out-of-pocket costs and reasonable expenses (including, with limitation, reasonable attorneys’ fees, and expenses) incurred in connection therewith, together with interest thereon at the Default Rate

 

6

 

 

from the date of payment until repaid in full, shall be paid by the Borrower to the Lender on demand and shall constitute and become a part of the obligations of the Borrower secured hereby.

 

Section 12.  Further Assurances. The Borrower hereby agrees that, from time to time upon the written request of the Lender, the Borrower will execute and deliver such further documents and do such other acts and things as the Lender may reasonably request in order to fully effect the purposes of this Promissory Note and to protect and preserve the priority and validity of the security interests granted hereunder.

 

Section 13.  Powers And Remedies Cumulative; Delay Or Omission Not Waiver Of Event Of Default. No right or remedy herein conferred upon or reserved to the Lender is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

No delay or omission of the Lender to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any Event of Default or an acquiescence therein; and every power and remedy given by this Promissory Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Lender.

 

Section 14. Transfers. The Parties may not transfer or assign this Promissory Note nor any right or obligation hereunder to any person or entity without the prior written consent of the other Party.

 

Section 15. Modification. This Promissory Note may be modified only with the written consent of both the Borrower and the Lender.

 

Section 16   Notices. Each notice authorized or required to be given to a party shall be in writing and may be delivered personally or sent by properly addressed prepaid mail in each case addressed to the party at its address set out in below:

 

In the case of the Lender:

 

In the case of the Borrower:

 

Mitesco, Inc.

1660 Highway 100 South

Suite 432

St. Louis Park, MN 55416

Attention: Jenny Lindstrom, Chief Legal Officer

 

7

 

 

Section 17    Most Favored Nations. So long as this Promissory Note is outstanding, upon any issuance by the Company or any of its subsidiaries of any new security, with any term that the Lender, reasonably believe is more favorable to the holder of such security or with a term in favor of the holder of such security which Lender reasonably believes was not similarly provided to the Lender in the Warrants, (i) the Company shall notify the Lender of such additional or more favorable term within one (1) business day of the issuance or amendment (as applicable) of the respective security, and (ii) such term, at the option of the Lender, shall become a part of the Transaction Documents (regardless of whether the Company complied with the notification provision of this Section).

 

Section 18    Miscellaneous. This Promissory Note shall be deemed to be a contract under the laws of the State of Nevada, and for all purposes shall be construed in accordance with the laws of said state. The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, and enforcement of or any default under this Promissory Note, except as specifically provided herein, and assent to extensions of the time of payment, or forbearance or other indulgence without notice. The Section headings herein are for convenience only and shall not affect the construction hereof. Any provision of this Promissory Note which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. This Promissory Note shall bind the Borrower and his or her heirs, administrators, executors, personal representatives and permitted assigns. The rights under and benefits of this Promissory Note shall inure to the Lender and its permitted successors and assigns. This Promissory Note may be executed in any number of counterparts, each of which when executed and delivered to the other parties shall constitute an original, but all counterparts together shall constitute one and the same Promissory Note.

 

[Signature Page Follows]

 

8

 

 

IN WITNESS WHEREOF, the Borrower has caused this instrument to be duly executed on the date indicated below.

 

Date: October 24, 2022

 

MITESCO, INC.

By:                                                                      

Name: Lawrence Diamond

Title: Chief Executive Officer

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