Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

Securities Purchase Agreement

On November 12, 2024, Cyngn Inc., a Delaware corporation (the "Company") entered into a securities purchase agreement (the "Purchase Agreement") with certain investors (the "Purchasers") pursuant to which the Company sold, in a private placement (the "Offering"), notes with an aggregate principal amount of $4,375,000 (the "Notes"). The Purchase Agreement also provides for the issuance of an aggregate of 405,125 shares of common stock of the Company (the "Shares") to the Purchasers. The transaction is expected to close on November 13, 2024 (the "Closing Date").

The aggregate gross proceeds to the Company are expected to be $3.5 million, before deducting placement agent fees and expenses, $1,000,000 of which shall be held in escrow, of which $500,000 will be released to the Company upon filing the registration statement referenced below and the remaining $500,000 of which shall be released upon effectiveness of the registration statement. The Company intends to use the net proceeds from the Offering for working capital and other general corporate purposes.

Aegis Capital Corp. served as the placement agent in the Offering, pursuant to the terms of a placement agent agreement and received 7% of the gross proceeds of the Offering and reimbursement of the legal fees of its counsel.

Original Issue Discount Senior Note

The Notes were issued with an original issue discount of 20%. No interest shall accrue on the Notes unless and until an Event of Default (as defined in the Notes) has occurred, upon which interest shall accrue at a rate of twenty percent (20.0%) per annum and shall be computed on the basis of a three hundred sixty (360)-day year and twelve (12) thirty (30)-day months and shall be payable on the maturity date. The Notes mature upon the earlier of ninety (90) days from the issuance date or the closing of any subsequent offering by the Company with net proceeds equal to or in excess of all amounts due under the Notes.

The Notes contain certain Events of Default, including (i) the Company's failure to pay any amount of principal, interest, redemption price or other amounts due under the Notes or any other transaction document, (ii) any default under, redemption of, or acceleration prior to maturity of any indebtedness of the Company, as such term is defined in the transaction documents, (iii) bankruptcy of the Company or its subsidiaries, (iv) a final judgement or judgements for the payment of money in excess of $250,000, which is not discharged or stayed pending appeal within 60 days, and (v) any breach or failure to comply with any provision of the Note or any other transaction document. Upon the occurrence of any Event of Default and at any time thereafter, the Purchasers shall have the right to exercise all of the remedies under the Notes. Upon the occurrence of an Event of Default, the Company shall grant to the Purchasers a security interest in the Company's intellectual property to secure the payment obligations under the Notes.

The Notes also provide for redemption upon a change of control, as such term is defined under the Notes and mandatory redemption upon the receipt of net proceeds from any offering of equity or debt by the Company.

Registration Rights Agreement

In connection with the Purchase Agreement, the Company also entered into a registration rights agreement with the Purchasers (the "Registration Rights Agreement"), requiring the Company to register the resale by the Purchasers of the Shares. The Company has agreed to file the initial registration statement pursuant to the Registration Rights Agreement with the Securities and Exchange Commission (the "SEC") within 15 days of the Closing Date, and to use its reasonable best efforts to cause such registration statement to be declared effective by the SEC within 30 days of the Closing Date (or within 60 days of the Closing Date if the SEC notifies the Company that the SEC shall "review" such registration statement).

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