Document:

Exhibit 4.3

      

      

      DESCRIPTION OF SECURITIES

      

      

      General

       

        

      Kinnate Biopharma Inc. (“we,” “our,” or “us”) has one class of securities registered under Section 12 of the Securities Exchange Act of
        1934, as amended (the “Exchange Act”): our common stock, $0.0001 par value per share. The following descriptions of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws
        are summaries and are qualified by reference to our amended and restated certificate of incorporation and amended and restated bylaws. Copies of these documents were filed with the SEC and incorporated by reference as exhibits to our Annual Report
        on Form 10-K of which this Exhibit 4.3 is a part.

       

        

      Our authorized capital stock consists of 1,200,000,000 shares, $0.0001 par value per share, of which:

       

        

      	

            	•	
              1,000,000,000 shares are designated as common stock; and

            

      

      

      	

            	•	
              200,000,000 shares are designated as preferred stock.

            

       

        

      Common Stock

       

        

      Voting Rights

       

        

      Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the
        election of directors. Our amended and restated certificate of incorporation and amended and restated bylaws do not provide for cumulative voting rights. Because of this, the holders of a plurality of the shares of our common stock entitled to vote
        in any election of directors can elect all of the directors standing for election, if they should so choose. With respect to matters other than the election of directors, at any meeting of the stockholders at which a quorum is present or
        represented, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at such meeting and entitled to vote on the subject matter shall be the act of the stockholders, except as otherwise
        required by law. The holders of a majority of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders.

       

        

      Dividends

       

        

      Subject to preferences that may apply to any outstanding shares of preferred stock, holders of our common stock are entitled to receive
        dividends, if any, that our board of directors may declare from time to time out of funds legally available for that purpose on a non-cumulative basis and shared ratably.

       

        

      Liquidation

       

        

      In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets
        legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

       

        

      Rights and Preferences

       

        

      Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions
        applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate
        and issue in the future.

       

        

      
        
          

      

      Preferred Stock

       

        

      Our board of directors has the authority, without further action by the stockholders, to issue up to 200,000,000 shares of preferred stock
        in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences,
        sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of
        holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in our control
        or other corporate action. We have no present plan to issue any shares of preferred stock.

       

        

      Registration Rights

       

        

      Certain holders of our common stock are entitled to rights with respect to the registration of their shares under the Securities Act of
        1933, as amended (the “Securities Act”). These registration rights are contained in the Amended and Restated Investors’ Rights Agreement dated August 24, 2020 (the “IRA”), which was filed with the SEC and incorporated by reference as an exhibit to
        our Annual Report on Form 10-K. We will pay the registration expenses (other than underwriting discounts and commissions) of the holders of the shares registered pursuant to the registrations described below. Generally, in an underwritten offering,
        the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include.

       

        

      Demand Registration Rights

       

        

      Certain holders of shares of our common stock are entitled to certain demand registration rights. At any time beginning 180 days after the
        effective date of our initial public offering (“IPO”) and before the 5 year anniversary of the date of the IRA, the holders of at least 30% of these shares in the aggregate may, on not more than two occasions, request that we register all or a
        portion of their shares. Such request for registration must cover shares with anticipated aggregate gross proceeds, before deducting underwriting discounts and expenses, of at least $15 million.

       

        

      S-3 Registration Rights

       

        

      Certain holders of shares of our common stock are entitled to certain Form S-3 registration rights. The holders of these shares can make a
        request that we register their shares on Form S-3 if we are qualified to file a registration statement on Form S-3 and if the reasonably anticipated aggregate gross proceeds of the shares offered would equal or exceed $3,000,000. We will not be
        required to effect more than two registrations on Form S-3 within any consecutive 12-month period.

       

        

      Piggyback Registration Rights

       

        

      Certain holders of shares of our common stock are entitled to certain piggyback registration rights. In the event that we propose to
        register any of our securities under the Securities Act, either for our own account or for the account of other security holders, the holders of these shares will be entitled to include their shares in such registration, subject to certain
        marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to (i) a registration solely to employee benefit plans; (ii) a registration relating to the offer
        and sale of debt securities; (iii) a registration relating to a corporate reorganization or other transaction covered by Rule 145 promulgated under the Securities Act; (iv) a registration on any registration form that does not permit secondary
        sales; or (v) a registration pursuant to the demand or Form S-3 registration rights described in the preceding two paragraphs above, the holders of these shares are entitled to notice of the registration and have the right to include their shares
        in the registration, subject to limitations that the underwriters may impose on the number of shares included in the offering.

       

        

      
        
          

      

      Anti-Takeover Effects of Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and
        Our Amended and Restated Bylaws

       

        

      Certain provisions of Delaware law and certain provisions included in our amended and restated certificate of incorporation and amended and
        restated bylaws summarized below may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in
        a premium being paid over the market price for the shares held by stockholders.

       

        

      Preferred Stock

       

        

      Our amended and restated certificate of incorporation contains provisions that permit our board of directors to issue, without any further
        vote or action by the stockholders, shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting rights (if any) of the
        shares of the series and the powers, preferences or relative, participation, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series.

       

        

      Classified Board

       

        

      Our amended and restated certificate of incorporation provides that our board of directors is divided into three classes, designated Class
        I, Class II and Class III. Each class has an equal number of directors, as nearly as possible, consisting of one third of the total number of directors constituting the entire board of directors. At each annual meeting of stockholders, successors
        to the class of directors whose term expires at that annual meeting will be elected for a three-year term. The classification of directors, together with the limitations on removal of directors and treatment of vacancies, has the effect of making
        it more difficult for stockholders to change the composition of our board of directors.

       

        

      Removal of Directors

       

        

      Our amended and restated certificate of incorporation provides that stockholders may only remove a director for cause by a vote of no less
        than a majority of the shares present in person or by proxy at the meeting and entitled to vote.

       

        

      Director Vacancies

       

        

      Our amended and restated certificate of incorporation authorizes only our board of directors to fill vacant directorships.

       

        

      No Cumulative Voting

       

        

      Our amended and restated certificate of incorporation provides that stockholders do not have the right to cumulate votes in the election of
        directors.

       

        

      Special Meetings of Stockholders

       

        

      Our amended and restated certificate of incorporation and amended and restated bylaws provide that, except as otherwise required by law,
        special meetings of the stockholders may be called only by an officer at the request of a majority of our board of directors, by the Chair of our board of directors or by our Chief Executive Officer.

       

        

      Advance Notice Procedures for Director Nominations

       

        

      Our amended and restated bylaws provide that stockholders seeking to nominate candidates for election as directors at an annual or special
        meeting of stockholders must provide timely notice thereof in writing. To be timely, a stockholder’s notice generally will have to be delivered to and received at our principal executive offices before notice of the meeting is issued by the
        secretary of the company, with such notice being served not less than 90 or more than 120 days before the meeting. Although the amended and restated bylaws do not give the board of directors the power to approve or disapprove stockholder
        nominations of candidates to be elected at an annual meeting, the amended and restated bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a
        potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of the company.

       

        

      
        
          

      

      Action by Written Consent

       

        

      Our amended and restated certificate of incorporation and amended and restated bylaws provide that any action to be taken by the
        stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by written consent.

       

        

      Amending Our Certificate of Incorporation and Bylaws

       

        

      Our amended and restated certificate of incorporation may be amended or altered in any manner provided by the Delaware General Corporation
        Law (“DGCL”). Our amended and restated bylaws may be adopted, amended, altered or repealed by stockholders only upon approval of at least majority of the voting power of all the then outstanding shares of the common stock, except for any amendment
        of the above provisions, which would require the approval of a two-thirds majority of our then outstanding common stock. Additionally, our amended and restated certificate of incorporation provides that our bylaws may be amended, altered or
        repealed by the board of directors.

       

        

      Authorized But Unissued Shares

       

        

      Our authorized but unissued shares of common stock and preferred stock are available for future issuances without stockholder approval,
        except as required by the listing standards of The Nasdaq Global Select Market, and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The
        existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of the company by means of a proxy contest, tender offer, merger or otherwise.

       

        

      Exclusive Jurisdiction

       

        

      Our amended and restated bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the
        State of Delaware shall be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of fiduciary duty, any action asserting a claim arising pursuant to the DGCL, any action
        regarding our amended and restated certificate of incorporation or amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine. This provision does not apply to suits brought to enforce
        a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. Our amended and restated bylaws further provide that the federal district courts of the United States of America will
        be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented
        to these provisions. Although we believe these provisions benefit us by providing increased consistency in the application of law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits
        against us or our directors and officers. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal
        proceedings. We also note that stockholders cannot waive compliance (or consent to noncompliance) with the federal securities laws and the rules and regulations thereunder.

       

        

      
        
          

      

      Business Combinations with Interested Stockholders

       

        

      We are governed by Section 203 of the DGCL. Subject to certain exceptions, Section 203 of the DGCL prohibits a public Delaware corporation
        from engaging in a business combination (as defined in such section) with an “interested stockholder” (defined generally as any person who beneficially owns 15% or more of the outstanding voting stock of such corporation or any person affiliated
        with such person) for a period of three years following the time that such stockholder became an interested stockholder, unless (1) prior to such time the board of directors of such corporation approved either the business combination or the
        transaction that resulted in the stockholder becoming an interested stockholder; (2) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the
        voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock of such corporation outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares
        owned (A) by persons who are directors and also officers of such corporation and (B) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered
        in a tender or exchange offer); or (3) at or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of stockholders (and not by written consent) by the affirmative vote
        of at least 66 2/3% of the outstanding voting stock of such corporation not owned by the interested stockholder.

      

      

      Limitation of Liability and Indemnification of Officers and Directors

       

        

      Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we must indemnify our directors and
        officers to the fullest extent authorized by the DGCL. We are expressly authorized to, and do, carry directors’ and officers’ insurance providing coverage for our directors, officers and certain employees for some liabilities. We believe that these
        indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

       

        

      The limitation on liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from
        bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might
        otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

       

        

      Listing

       

        

      Our common stock is listed on the Nasdaq Global Select Market under the trading symbol “KNTE”.

       

        

      Transfer Agent and Registrar

       

        

      The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent and
        registrar’s address is 6201 15th Avenue, Brooklyn, New York 11219.Exhibit 4.1

 

DESCRIPTION OF SECURITIES

 

General 

 

Our authorized capital stock currently consists
of 350,000,000 shares, consisting of 300,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of “blank
check” preferred stock, par value $0.0001 per share.

 

The following description summarizes important
terms of the classes of our capital stock following the filing of our articles of incorporation. This summary does not purport to be complete
and is qualified in its entirety by the provisions of our articles of incorporation and our bylaws which have been filed as exhibits to
our annual report on Form 10-K for the fiscal year ended December 31, 2021.

 

As of December 31, 2021, there were 19,753,852
shares of common stock and no shares of preferred stock issued and outstanding.

 

Common Stock 

 

Voting Rights. The holders
of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Under our
articles of incorporation and bylaws, any corporate action to be taken by vote of shareholders other than for election of directors shall
be authorized by the affirmative vote of the majority of votes cast. Directors are elected by a plurality of votes. Shareholders do not
have cumulative voting rights.

 

Dividend Rights. Subject to preferences
that may be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends,
if any, as may be declared from time to time by the board of directors out of legally available funds.

 

Liquidation Rights. In the event
of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available
for distribution to shareholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference
granted to the holders of any then-outstanding shares of preferred stock.

 

Other Rights. Holders of common
stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common
stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights
of the holders of shares of any series of preferred stock.

 

Preferred Stock 

 

Our articles of incorporation authorize our board
to issue up to 50,000,000 shares of preferred stock in one or more series, to determine the designations and the powers, preferences and
rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting
rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the
number of shares constituting the series. Our board of directors could, without shareholder approval, issue preferred stock with voting
and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the
effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority
of our outstanding voting stock.

 

Warrants Issued in Initial Public Offering

 

Form. The warrants will be issued
under a warrant agency agreement between us and Vstock Transfer, LLC, as warrant agent. The material terms and provisions of the warrants
offered hereby are summarized below. The following description is subject to, and qualified in its entirety by, the form of warrant agency
agreement and accompanying form of warrant, which is filed as an exhibit to our annual report on Form 10-K for the fiscal year ended December
31, 2021. You should review a copy of the form of warrant agency agreement and accompanying form of warrant for a complete description
of the terms and conditions applicable to the warrants.

 

Exercisability. The warrants are
exercisable immediately upon issuance and will thereafter remain exercisable at any time up to five (5) years from the date of original
issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares purchased upon such exercise (except in the case of a cashless exercise
as discussed below).

 

    

     

    

 

Exercise Price. Each warrant represents
the right to purchase one share of common stock at an initial exercise price of $5.1875, equal to 125% of the initial public offering
price. Due to our subsequent private placement of common stock and common stock purchase warrants at a purchase price of $4.97 for one
share and 1.25 warrants combined, after attributing a warrant value of $0.125, the exercise price per share of the initial public offering
warrants was reduced to $4.81375 as of December 10, 2021. The exercise price is subject to appropriate adjustment in the event of certain
share dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our shares of common
stock and also upon any distributions of assets, including cash, stock or other property to our shareholders. The warrant exercise price
is also subject to further anti-dilution adjustments under certain circumstances.

 

Cashless Exercise. If, at any time
during the term of the warrants, the issuance of shares of common stock upon exercise of the warrants is not covered by an effective registration
statement, the holder is permitted to effect a cashless exercise of the warrants (in whole or in part) by having the holder deliver to
us a duly executed exercise notice, canceling a portion of the warrant in payment of the purchase price payable in respect of the number
of shares of common stock purchased upon such exercise.

 

Failure to Timely Deliver Shares.
If we fail for any reason to deliver to the holder the shares subject to an exercise by the date that is the earlier of (i) two (2) trading
days and (ii) the number of trading days that is the standard settlement period on our primary trading market as in effect on the date
of delivery of the exercise notice, we must pay to the holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of
shares subject to such exercise (based on the daily volume weighted average price of our shares of common stock on the date of the applicable
exercise notice), $10 per trading day (increasing to $20 per trading day on the fifth (5th) trading day after such liquidated
damages begin to accrue) for each trading day after such date until such shares are delivered or the holder rescinds such exercise. In
addition, if after such date the holder is required by its broker to purchase (in an open market transaction or otherwise) or the holder’s
brokerage firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by the holder of the shares which the
holder anticipated receiving upon such exercise, then we shall (A) pay in cash to the holder the amount, if any, by which (x) the holder’s
total purchase price (including brokerage commissions, if any) for the shares of common stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of shares that we were 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 shares for which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the holder the number of shares of common stock that would have been issued had we timely complied
with our exercise and delivery obligations.

 

Exercise Limitation. A holder will
not have the right to exercise any portion of a warrant if the holder (together with its affiliates) would beneficially own in excess
of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other
percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice
from the holder to us.

 

Exchange Listing. The warrants will
be listed and traded on the Nasdaq Capital Market under the symbol “STRNW”.

 

Rights as a Shareholder. Except
as otherwise provided in the warrants or by virtue of such holder’s ownership of our shares of common stock, the holder of a warrant
does not have the rights or privileges of a holder of our shares of common stock, including any voting rights, until the holder exercises
the warrant.

 

Governing Law and Jurisdiction.
The warrant agency agreement and warrant provide that the validity, interpretation, and performance of the warrant agency agreement and
the warrants will be governed by the laws of the State of New York, without giving effect to conflicts of law principles that would result
in the application of the substantive laws of another jurisdiction. In addition, the warrant agency agreement and warrant provide that
any action, proceeding or claim against any party arising out of or relating to the warrant agency agreement or the warrants must be brought
and enforced in the state and federal courts sitting in the City of New York, Borough of Manhattan. Investors in this offering will be
bound by these provisions. With respect to any complaint asserting a cause of action arising under the Securities Act or the
rules and regulations promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce this provision
and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the
Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created
by the Securities Act or the rules and regulations thereunder. Furthermore, notwithstanding the foregoing, these provisions
of the warrant agency agreement and warrant will not apply to suits brought to enforce any liability or duty created by the Exchange Act
or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

 

    2

     

    

 

Representative’s Warrants

 

We also issued a warrant to purchase 149,639 shares
of common stock to the representative of the underwriters in the offering. The representative’s warrant will be exercisable at a
per share exercise price of $5.1875. The representative’s warrant is exercisable at any time and from time to time, in whole or
in part, during the four-and-a-half-year period commencing six months after its issuance.

 

Private Placement Warrants and Placement Agent’s Warrants

 

Warrants

 

On December 10, 2021, the Company issued warrants
for the purchase of 5,464,903 shares of common stock, at an initial exercise price of $4.97 per share, the number of warrant shares and
exercise price each being subject to adjustment provided under the warrants. The warrants are immediately exercisable on the date of issuance,
and expire five years from the date of issuance.

 

The warrants also have certain downward pricing
adjustment mechanisms. If at any time the warrants are outstanding, if the Company issues or sells common stock, or convertible securities
or options issuable or exchangeable into common stock (a “Dilutive Issuance”), under which such common stock is sold for a
consideration per share less than the exercise price then in effect, the exercise price of the warrant will be adjusted to the Dilutive
Issuance price in accordance with the formulas provided in the warrant subject to a floor price. The floor price will be $4.80 per warrant
share before stockholder approval of private placement is obtained and effective. On December 10, 2021, the holders of shares of common
stock entitled to vote approximately 65.4% of our outstanding voting stock on December 10, 2021 approved the Company’s entry into
the private placement. We filed preliminary and definitive information statements on Schedule 14C with the SEC on December 29, 2021
and January 11, 2022, and delivered copies of the definitive information statement to shareholders January 12, 2022. On January 31, 2022,
the stockholders’ consent became effective pursuant to Rule 14c-2 under the Exchange Act. As a result, the exercise price of
the private placement warrants may be reduced to as low as $1.00 per share if their downward-pricing adjustment mechanisms become applicable. 
The warrants also have certain registration rights provided to the purchasers under the Registration Rights Agreement entered in connection
with the private placement.

 

The warrants also have customary antidilution
provisions with respect to stock splits and equity dividends by which the exercise price of the warrant shares and number of shares purchasable
under the warrants will be changed proportionately; participation rights in certain asset distributions and rights offerings and certain
changes of control and other major corporate changes; and will be provided comparable rights to alternative consideration if provided
to shareholders with respect to certain transactions. If there is no effective registration statement registering, or no current prospectus
available for, the resale of the warrant shares by the purchaser, then the warrants may also be exercised, in whole or in part, by means
of a “cashless exercise”. The warrants may not be exercised if, after giving effect to the exercise by the purchaser, the
purchaser would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect
to the issuance of the warrant shares. Upon not less than 61 days’ prior notice to the Company, a warrant holder may increase or
decrease the ownership limitation, provided that the ownership limitation in no event exceeds 9.99% of the number of shares of common
stock outstanding immediately after giving effect to the issuance of the warrant shares.

 

Placement Agent Warrants

 

As partial payment for its placement agent services,
the designees of EF Hutton, division of Benchmark Investments, LLC, or the representative, were issued warrants, or the Placement Agent
Warrants, for the purchase of 3% of the number of shares of common stock purchased by the purchasers. The Placement Agent Warrants become
exercisable on June 8, 2022 and expire on December 8, 2026. The Placement Agent Warrants have an initial exercise price equal to the exercise
price of the Warrants, or $4.97 per share, and otherwise have the same antidilution provisions as the private placement warrants, except
that the exercise price of the Placement Agent Warrants will not change as a result of a Dilutive Issuance (as defined above). If at the
time of an exercise of such Placement Agent Warrants there is no effective registration statement registering, or no current prospectus
available for, the resale of the shares that may be purchased under the Placement Agent Warrants, then the Placement Agent Warrants may
also be exercised, in whole or in part, by means of a “cashless exercise”. The Placement Agent Warrants have the same registration
rights provided to the purchasers under the Registration Rights Agreement entered in connection with the private placement. The Placement
Agent Warrants may not be exercised if, after giving effect to the exercise the holder would beneficially own in excess of 4.99% of the
number of shares of common stock outstanding immediately after giving effect to the issuance of the shares purchased pursuant to exercise
of the Placement Agent Warrants. Upon not less than 61 days’ prior notice to the Company, the holder may increase or decrease the
ownership limitation, provided that the ownership limitation in no event exceeds 9.99% of the number of shares of common stock outstanding
immediately after giving effect to the issuance of shares of common stock pursuant to exercise of the Placement Agent Warrants.

 

    3

     

    

 

Options

 

On November 12, 2021, we filed a Registration
Statement on Form S-8 to register restricted stock and options to purchase stock issuable to certain of our executive officers, directors
and employees pursuant to our Equity Incentive Plan. We then granted options to purchase a total of 1,331,000 shares of our common stock,
including options to purchase up to 400,000 shares to our Executive Chairman, Treasurer, Secretary, and Director, Andrew Stranberg; 323,810
options to our Chief Executive Officer, President and Director, Andrew Shape; 76,190 options to our Executive Vice President, Randolph
Birney; 81,000 options to our Vice President of Finance and Administration, Christopher Rollins; 53,000 options to our Vice President
of Growth and Strategic Initiatives, John Audibert; 377,000 options to 53 other employees; and a total of 20,000 options to our independent
directors. The options have an exercise price of $4.15 per share, and a term of ten years. The options are subject to vesting over a three
(3) year period with one-third (1/3) of the options vesting on each of the first, second and third anniversaries of the date of grant,
except that the options granted to Mr. Stranberg, Mr. Shape and Mr. Birney vest over a four-year period with 25% of the options vesting
on the first anniversary of the date of grant and the balance of the options (75%) vesting monthly over the following three years after
the first anniversary of the date of grant at a rate of 1/36 per month; Mr. Rollins’ options vest over a two-year period with 33%
of the options vesting immediately upon issuance and the balance of the options (67%) vesting monthly over the following two years at
a rate of 1/24 per month; and our independent directors’ options vest in twelve (12) equal monthly installments over the first year
following the date of grant, subject to continued service.

 

On November 19, 2021, we granted a new employee
an option to purchase up to 60,000 shares of common stock at an exercise price of $4.36 per share, which vests one-third per year of employment
for three years.

 

On December 2, 2021, we granted a consultant an
option to purchase up to 65,000 shares of common stock at an exercise price of $3.90 per share, which vests in accordance with the satisfaction
of certain performance-based criteria.

 

On December 6, 2021, we granted a new employee
an option to purchase up to 62,500 shares of common stock at an exercise price of $4.72 per share, which vest one-eighth per quarter of
employment, and an option to purchase up to 62,500 shares of common stock at an exercise price of $4.72 per share, which vests in accordance
with the satisfaction of certain performance-based criteria.

 

On January 31, 2022, we granted 13 new employees
options to purchase a total of 22,000 shares of common stock at an exercise price of $2.17 per share. The options vest over a three (3)
year period with one-third (1/3) of the options vesting on each of the first, second and third anniversaries of the date of grant

 

On
March 11, 2022, we granted a new employee an option to purchase 40,000 shares of common stock at an exercise price of $1.60 per share.
5,000 shares under the option are subject to certain restrictions on transfer until September 11, 2022, and 35,000 shares under the option
vest in accordance with the satisfaction of certain performance-based criteria.

 

For further description of the terms of the option
grants to Mr. Stranberg, Mr. Shape, Mr. Birney, the Consultant, and our independent directors, please see “Executive Compensation
– Employment Agreements” and “Executive Compensation – Director

Compensation” of our annual
report on Form 10-K for the fiscal year ended December 31, 2021.

 

Anti-Takeover Provisions

 

Provisions of the Nevada Revised Statutes,
our articles of incorporation and our bylaws could have the effect of delaying or preventing a third-party from acquiring us, even if
the acquisition would benefit our stockholders. Such provisions of the Nevada Revised Statutes, our articles of incorporation
and our bylaws are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in
the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened
change of control of our company. These provisions are designed to reduce our vulnerability to an unsolicited proposal for a takeover
that does not contemplate the acquisition of all of our outstanding shares, or an unsolicited proposal for the restructuring or sale of
all or part of our company.

 

    4

     

    

 

Nevada Anti-Takeover Statutes

 

Pursuant to our articles of incorporation, we
have elected not to be governed by the terms and provisions of Nevada’s control share acquisition laws (Nevada Revised Statutes
78.378 - 78.3793), which prohibit an acquirer, under certain circumstances, from voting shares of a corporation’s stock after crossing
specific threshold ownership percentages, unless the acquirer obtains the approval of the issuing corporation’s stockholders. The
first such threshold is the acquisition of at least one-fifth but less than one-third of the outstanding voting power.

 

Pursuant to our articles of incorporation, we
have also elected not to be governed by the terms and provisions of Nevada’s combination with interested stockholders statute (Nevada Revised
Statutes 78.411 - 78.444) which prohibits an “interested stockholder” from entering into a “combination” with
the corporation, unless certain conditions are met. An “interested stockholder” is a person who, together with affiliates
and associates, beneficially owns (or within the prior two years, did beneficially own) 10 percent or more of the corporation’s
voting stock, or otherwise has the ability to influence or control such corporation’s management or policies.

 

Bylaws

 

In addition, various provisions of our bylaws
may also have an anti-takeover effect. These provisions may delay, defer or prevent a tender offer or takeover attempt of the company
that a stockholder might consider in his or her best interest, including attempts that might result in a premium over the market price
for the shares held by our stockholders. Our bylaws may be adopted, amended or repealed by the affirmative vote of the holders of at least
a majority of our outstanding shares of capital stock entitled to vote for the election of directors, and except as provided by Nevada law,
our board of directors shall have the power to adopt, amend or repeal the bylaws by a vote of not less than a majority of our directors.
Any bylaw provision adopted by the board of directors may be amended or repealed by the holders of a majority of the outstanding shares
of capital stock entitled to vote for the election of directors. Our bylaws also contain limitations as to who may call special meetings
as well as require advance notice of stockholder matters to be brought at a meeting. Additionally, our bylaws also provide that no director
may be removed by less than a two-thirds vote of the issued and outstanding shares entitled to vote on the removal. Our bylaws also permit
the board of directors to establish the number of directors and fill any vacancies and newly created directorships. These provisions will
prevent a shareholder from increasing the size of our board of directors and gaining control of our board of directors by filling the
resulting vacancies with its own nominees.

 

Our bylaws establish an advance notice procedure
for shareholder proposals to be brought before an annual meeting of our shareholders, including proposed nominations of persons for election
to the board of directors. Shareholders at an annual meeting will only be able to consider proposals or nominations specified in the notice
of meeting or brought before the meeting by or at the direction of the board of directors or by a shareholder who was a shareholder of
record on the record date for the meeting, who is entitled to vote at the meeting and who has given us timely written notice, in proper
form, of the shareholder’s intention to bring that business before the meeting. Although our bylaws do not give the board of directors
the power to approve or disapprove shareholder nominations of candidates or proposals regarding other business to be conducted at a special
or annual meeting, our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures
are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors
or otherwise attempting to obtain control of our company.

 

Authorized but Unissued Shares 

 

Our authorized but unissued shares of common stock
are available for our board of directors to issue without stockholder approval. We may use these additional shares for a variety of corporate
purposes, including raising additional capital, corporate acquisitions and employee stock plans. The existence of our authorized but unissued
shares of common stock could render it more difficult or discourage an attempt to obtain control of the company by means of a proxy context,
tender offer, merger or other transaction since our board of directors can issue large amounts of capital stock as part of a defense to
a take-over challenge. In addition, we have authorized in our articles of incorporation 50,000,000 shares of preferred stock, none of
which are currently designated or outstanding. However, the board acting alone and without approval of our stockholders can designate
and issue one or more series of preferred stock containing super-voting provisions, enhanced economic rights, rights to elect directors,
or other dilutive features, that could be utilized as part of a defense to a take-over challenge. 

  

    5

     

    

 

Supermajority Voting Provisions 

 

Nevada Law provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s articles of incorporation or
bylaws, unless a corporation’s articles of incorporation or bylaws, as the case may be, require a greater percentage. Although our
articles of incorporation and bylaws do not currently provide for such a supermajority vote on any matters, our board of directors can
amend our bylaws and we can, with the approval of our stockholders, amend our articles of incorporation to provide for such a super-majority
voting provision. 

 

Cumulative Voting

 

Furthermore, neither the holders of our common
stock nor the holders of our preferred stock have cumulative voting rights in the election of our directors. The combination of the present
ownership by a few shareholders of a significant portion of our issued and outstanding common stock and lack of cumulative voting makes
it more difficult for other shareholders to replace our board of directors or for a third party to obtain control of our company by replacing
its board of directors.

Listing

 

Our common stock and warrants are listed and traded
under the symbols “STRN” and “STRNW,” respectively, on the Nasdaq Capital Market.

 

Transfer Agent and Registrar 

 

We have appointed VStock Transfer, LLC, 8 Lafayette
Place, Woodmere, NY 11598, telephone 212-828-8436, as the transfer agent for our common stock.

 

 

6

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