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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December
8, 2023
CYNGN INC.
(Exact name of registrant as specified in charter)
Delaware |
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001-40932 |
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46-2007094 |
(State or other jurisdiction |
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(Commission File Number) |
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(IRS Employer |
of incorporation) |
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Identification No.) |
1015 O’Brien Dr.
Menlo Park, CA 94025
(Address of principal executive offices) (Zip Code)
(650) 924-5905
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock |
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CYN |
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The Nasdaq Stock Market LLC (The Nasdaq Capital Market) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mart if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive
Agreement
On
December 8, 2023, Cyngn Inc. (the “Company”) entered into a Placement Agent Agreement (the “PA Agreement”) with
Aegis Capital Corp. (“Aegis”), pursuant to which Aegis acted as the Company’s
placement agent, on a reasonable best efforts basis, in connection with the sale by the Company of an aggregate of 11,466,733 shares
of common stock (the “Shares”) and pre-funded warrants to purchase up to 21,866,600 shares of common stock (the “Pre-funded
Warrants”), in a public offering at a purchase price of $0.15 per Share or $0.14999 per Pre-Funded Warrant. The Pre-funded Warrants
will be immediately exercisable and expiring upon the exercise of the Pre-funded Warrants in full, at an exercise price of $0.00001 per
share, subject to certain adjustments set forth therein.
Pursuant to the PA Agreement, the Company agreed
to pay Aegis a cash fee of 7.0% of the gross proceeds the Company receives in connection with the offering. The Company also agreed to
pay Aegis $50,000 for non-accountable expenses.
The Company has agreed to certain restrictions
on the issuance and sale of shares of the Company’s securities, and the Company’s directors and officers have agreed to certain
restrictions on the sale of the Company’s securities, in each case, for a period of 75 days following the date of the closing date,
subject to certain exceptions.
The gross proceeds from the offering are expected
to be $5 million, before deducting fees and expenses payable to Aegis and other estimated offering expenses. The public offering is expected
to close on or about December 12, 2023, subject to satisfaction of customary closing conditions.
The Company intends to use the net proceeds from
the offering for working capital and general corporate purposes.
The Shares and Pre-funded Warrants (and underlying
shares) were offered, and issued, pursuant to the Company’s Registration Statement on Form S-1 (Registration No. 333-275530) filed
with the Securities and Exchange Commission on November 14, 2023, and declared effective December 7, 2023.
The foregoing description
of the PA Agreement and Pre-funded Warrants does not purport to be complete and is qualified in its entirety by reference to the complete
text thereof, forms of which are filed as exhibits to this report.
Item 8.01 Other Events
On December 8, 2023, the Company issued a press
release regarding the public offering. A copy of the press release is attached as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: December 11, 2023
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CYNGN INC. |
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By: |
/s/ Donald Alvarez |
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Donald Alvarez |
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Chief Financial Officer |
2
Exhibit 10.1
AEGIS CAPITAL CORP.
December 8, 2023
PERSONAL AND CONFIDENTIAL
Mr. Lior Tal, Chief Executive Officer
Cyngn Inc.
1015 O’Brien Dr.
Menlo Park, CA 94025
Re: | CYN Placement Agent Agreement |
Dear Mr. Tal:
The purpose of this placement
agent agreement (“Agreement”) Agreement is to outline our agreement pursuant to which Aegis Capital Corp. (“Aegis”)
will act as the placement agent on a “best efforts” basis in connection with the proposed fully marketed public offering (the
“Placement”) by Cyngn Inc. (collectively, with its subsidiaries and affiliates, the “Company”)
of its shares of Common Stock (the “Securities”). The Company confirms that entry into this Agreement and completion
of the Placement with Aegis will not breach or otherwise violate the Company’s obligations to any other investment bank.
The terms of our agreement in
principle are as follows:
1. Engagement.
The Company hereby engages Aegis, for the period beginning on the date hereof and ending three (3) months thereafter or upon the completion
of the Placement, whichever is sooner (the “Engagement Period”), to act as the Company’s exclusive placement
agent and investment banker in connection with the proposed Placement. During the Engagement Period or until the consummation of the Placement,
and as long as Aegis is proceeding in good faith with preparations for the Placement, the Company agrees not to solicit, negotiate with
or enter into any agreement with any other source of financing (whether equity, debt or otherwise), any underwriter, potential underwriter,
placement agent, financial advisor, investment banking firm or any other person or entity in connection with an offering of the Company’s
debt or equity securities or any other financing by the Company.
2. The
Placement. The Placement is expected to consist of a base sale of up to approximately $8.0 million of the Company’s Securities
(“Subscription Amount”). The structure of the Placement will be common stock and/or pre-funded warrants to purchase
common stock. The pricing of the Placement will be as set forth in the Pricing Disclosure attached hereto. Aegis will act as placement
agent for the Placement subject to, among other matters referred to herein and additional customary conditions, completion of Aegis’s
due diligence examination of the Company and its affiliates, listing approval by of the Nasdaq Stock Exchange (the “Exchange”)
of the Securities to be issued, and the execution of this Agreement and receipt of any other applicable regulatory approvals. The actual
Subscription Amount and the offering price will be the subject of continuing negotiations between the Company, Aegis and investors.
3. Placement
Agent Compensation. The placement agent fee will be 7.0% of the Subscription Amount.
1345 Avenue of the Americas, New York, New York 10105 (212) 813-1010/Fax
(212) 813-1047
Member FINRA, SIPC
4. Registration
Statement. To the extent the Company decides to proceed with the Placement, the Company will, as soon as practicable, prepare
and file with the Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-1
(the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”)
and a prospectus included therein (the “Prospectus”) covering the Securities to be offered and sold in the Placement.
The Registration Statement (including the Prospectus therein), and all amendments and supplements thereto, will be in form reasonably
satisfactory to Aegis and counsel to Aegis. Other than any information provided by Aegis in writing specifically for inclusion in the
Registration Statement or the Prospectus, the Company will be solely responsible for the contents of its Registration Statement and Prospectus
and any and all other written or oral communications provided by or on behalf of the Company to any actual or prospective investor of
the Securities, and the Company represents and warrants that such materials and such other communications will not, as of the date of
the offer or sale of the Securities, contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
If at any time prior to the completion of the offer and sale of the Securities an event occurs that would cause the Registration Statement
or Prospectus (as supplemented or amended) to contain an untrue statement of a material fact or to omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company will notify
Aegis immediately of such event and Aegis will suspend solicitations of the prospective purchasers of the Securities (“Purchasers”)
until such time as the Company shall prepare a supplement or amendment to the Registration Statement or Prospectus that corrects such
statement or omission.
5. Lock-Ups.
The Company’s directors and executive officers will enter into customary “lock-up” agreements in favor of Aegis for a period
of seventy-five (75) days from the closing date of the Placement; provided, however, that any sales by parties to the lock-ups shall be
subject to the lock-up agreements and provided further, that none of such shares shall be saleable in the public market until the expiration
of the seventy-five (75) days period described above. Notwithstanding anything to the contrary herein, there shall be no restrictions
on transactions under Rule 10b5-1 sales plan by the Company’s directors and executive officers currently in place; provided, however,
that no transactions under any such sales plan shall occur at a price less than $0.90 per share during the Lock-Up Period.
6. Company
Standstill. The Company agrees, for a period of seventy-five (75) days from the closing date of the Placement, that without the
prior written consent of Aegis, it will not (a) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity
of the Company or any securities convertible into or exercisable or exchangeable for equity of the Company; (b) file or caused to be filed
any registration statement, amendments or supplements thereto with the Commission relating to the offering of any equity of the Company
or any securities convertible into or exercisable or exchangeable for equity of the Company; or (c) enter into any agreement or announce
the intention to effect any of the actions described in subsections (a) or (b) hereof (all of such matters, the “Standstill”).
So long as none of such equity securities shall be saleable in the public market until the expiration of the seventy-five (75) day standstill
period, the following matters shall not be prohibited by the Standstill (i) the adoption of an equity incentive plan and the grant of
awards or equity pursuant to any equity incentive plan, and the filing of a registration statement on Form S-8; (ii) securities issued
pursuant to agreements, options, restricted share units or convertible securities existing as of the date hereof provided the terms are
not modified; and (iii) securities issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase
of equity, purchase of assets, reorganization or otherwise) approved by a majority of the disinterested directors of the Company, provided
that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that
require or permit the filing of any registration statement in connection therewith during the Standstill Period, and provided that any
such issuance shall only be to a person or entity (or to the equityholders of an entity) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. In no event should any
equity transaction during the seventy-five (75) day standstill period result in the sale of equity at an offering price to the public
less than that of the Placement referred herein.
7. Expenses.
The Company will be responsible for and will pay all expenses relating to the Placement, including, without limitation, (a) all filing
fees and expenses relating to the registration of the Securities with the Commission; (b) all FINRA Public Offering filing fees; (c) all
fees and expenses relating to the listing of the Company’s equity or equity-linked securities on an Exchange; (d) all fees, expenses
and disbursements relating to the registration or qualification of the Securities under the “blue sky” securities laws of
such states and other jurisdictions as Aegis may reasonably designate (including, without limitation, all filing and registration fees,
and the reasonable fees and disbursements of the Company’s “blue sky” counsel, which will be Aegis’s counsel)
unless such filings are not required in connection with the Company’s proposed Exchange listing; (e) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as
Aegis may reasonably designate; (f) the costs of all mailing and printing of the Placement documents; (g) transfer and/or stamp taxes,
if any, payable upon the transfer of Securities from the Company to Aegis; (h) the fees and expenses of the Company’s accountants;
and (i) $50,000 for fees and expenses including “road show”, diligence, and reasonable legal fees and disbursements for Aegis’s
counsel.
8. Closing;
Closing deliverables.
Unless otherwise directed
by Aegis, settlement of the Securities shall occur via “Delivery Versus Payment” (“DVP”) (i.e.,
on the Closing Date, the Company shall cause the Depositary to issue the Securities directly to the clearing firm designated by Aegis;
upon receipt of such Securities, Aegis shall promptly electronically deliver such Securities to the applicable Purchaser, and payment
therefor shall be made by Aegis (or its clearing firm) by wire transfer to the Company).
(a) The Company
shall deliver or cause to be delivered the following:
(i) on the date hereof:
(a) this Agreement
duly executed by the Company;
(b) a cold comfort
letter from the Company’s auditor, addressed to Aegis in form and substance reasonably satisfactory in all material respects; and
(c) the Lock-Up
Agreements.
(ii) on or prior to
the Closing Date:
(a) legal opinion
of Company Counsel, addressed to Aegis and the Purchasers, in form and substance reasonably acceptable to Aegis;
(b) a copy of the
irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust
Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares of Common Stock equal to the portion of such Purchaser’s
Subscription Amount applicable to registered shares of Common Stock, divided by the Per Share Purchase Price, registered in the name of
such Purchaser;
(c) for each Purchaser
of Pre-Funded Warrants, a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock
equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants divided by the Per Share Purchase
Price, with an exercise price equal to $0.00001, subject to adjustment as provided therein;
(d) the Company
shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive
Officer or Chief Financial Officer;
(e) a duly executed
and delivered Officers’ Certificate, in customary form reasonably satisfactory to Aegis and its counsel;
(f) a bring-down
letter from the Company’s auditor, addressed to Aegis in form and substance reasonably satisfactory in all material respects;
(g) the Final Prospectus
(which may be delivered in accordance with Rule 172 under the Securities Act).
(h) a good standing
certificate of the Company as of a recent date; and
(j) an a duly executed
and delivered Secretary’s Certificate, in customary form reasonably satisfactory to Aegis and its counsel.
9. Termination.
Notwithstanding anything to the contrary contained herein, the Company agrees that the provisions relating to the payment of fees,
reimbursement of expenses indemnification and contribution, confidentiality, conflicts, independent contractor and waiver of the right
to trial by jury will survive any termination or expiration of this Agreement. Notwithstanding anything to the contrary contained herein,
the Company has the right to terminate the Agreement for cause in compliance with FINRA Rule 5110(g)(5)(B)(i). During the engagement hereunder:
(i) the Company will not, and will not permit its representatives to, other than in coordination with Aegis, contact or solicit institutions,
corporations or other entities or individuals as potential purchasers of the Securities and (ii) the Company will not pursue any financing
transaction which would be in lieu of an Placement. Furthermore, the company agrees that during Aegis’s engagement hereunder, all
inquiries from prospective investors will be referred to Aegis.
10. Publicity.
The Company agrees that it will not issue press releases or engage in any other publicity, without Aegis’s prior written consent,
commencing on the date hereof and continuing until the earlier of the final closing of the Placement or the expiration of the Engagement
Period.
11. Information.
During the Engagement Period or until the Closing, the Company agrees to cooperate with Aegis and to furnish, or cause to be
furnished, to Aegis, any and all information and data concerning the Company, and the Placement that Aegis deems appropriate (the
“Information”). The Company will provide Aegis reasonable access during normal business hours from and
after the date of execution of this Agreement until the date of the Closing to all of the Company’s assets, properties, books,
contracts, commitments and records and to the Company’s officers, directors, employees, appraisers, independent accountants,
legal counsel and other consultants and advisors. Except as contemplated by the terms hereof or as required by applicable law, Aegis
will keep strictly confidential all non-public Information concerning the Company provided to Aegis. No obligation of
confidentiality will apply to Information that: (a) is in the public domain as of the date hereof or hereafter enters the public
domain without a breach by Aegis, (b) was known or became known by Aegis prior to the Company’s disclosure thereof to Aegis as
demonstrated by the existence of its written records, (c) becomes known to Aegis from a source other than the Company which
information is not provided by the breach of an obligation of confidentiality owed to the Company, (d) is disclosed by the Company
to a third party without restrictions on its disclosure or (e) is independently developed by Aegis as demonstrated by its written
records. For the avoidance of doubt, except as otherwise provided herein, all information which is not publicly available relating
to the Company’s proprietary technology is proprietary and confidential.
12. No
Third Party Beneficiaries; No Fiduciary Obligations. This Agreement does not create, and shall not be construed as creating, rights
enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof.
The Company acknowledges and agrees that: (i) Aegis is not and shall not be construed as a fiduciary of the Company and shall have no
duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention
of Aegis hereunder, all of which are hereby expressly waived; and (ii) Aegis is a full service securities firm engaged in a wide range
of businesses and from time to time, in the ordinary course of its business, Aegis or its affiliates may hold long or short positions
and trade or otherwise effect transactions for its own account or the account of its customers in debt or equity securities or loans of
the companies which may be the subject of the transactions contemplated by this Agreement. During the course of Aegis’s engagement
with the Company, Aegis may have in its possession material, non-public information regarding other companies that could potentially be
relevant to the Company or the transactions contemplated herein but which cannot be shared due to an obligation of confidence to such
other companies.
13. Indemnification,
Advancement & Contribution.
(a) Indemnification.
The Company agrees to indemnify and hold harmless Aegis, its affiliates and each person controlling Aegis (within the meaning of Section
15 of the Securities Act), and the directors, officers, agents and employees of Aegis, its affiliates and each such controlling person
(Aegis, and each such entity or person hereafter is referred to as an “Indemnified Person”) from and against
any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified
Persons) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified Person is a party
thereto, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration
Statement, Prospectus or any other offering documents (as from time to time each may be amended and supplemented), (B) any materials or
information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including
any “road show” or investor presentations made to investors by the Company (whether in person or electronically), or (C) any
application or other document or written communication (collectively called “application”) executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof
or to file for an exemption from such requirement or filed with the Commission, any state securities commission or agency, any national
securities exchange; or (ii) the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information provided to the Company by Aegis in writing specifically for use
in the Registration Statement, Prospectus or any other offering documents with respect which or resulting from conduct by Aegis or another
Indemnified Party, as to which Aegis shall indemnify and hold harmless the Company, its officers, directors and controlling parties in
the manner set forth in this Section 13. The Company also agrees to reimburse and advance each Indemnified Person for all Expenses as
they are incurred in connection with such Indemnified Person’s enforcement of his or its rights under this Section 13.
(b) Procedure.
Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Section 13, such Indemnified Person shall promptly notify the Company in writing; provided
that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation or liability which the
Company may have on account of this Section 13 or otherwise to such Indemnified Person. The Company shall, if requested by Aegis, assume
the defense of any such action (including the employment of counsel designated by Aegis and reasonably satisfactory to the Company). Any
Indemnified Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume
the defense and employ separate counsel reasonably acceptable to Aegis for the benefit of Aegis and the other Indemnified Persons or (ii)
such Indemnified Person shall have been advised that in the opinion of counsel that there is an actual or potential conflict of interest
that prevents (or makes it imprudent for) the counsel designated by and engaged by the Company for the purpose of representing the Indemnified
Person, to represent both such Indemnified Person and any other person represented or proposed to be represented by such counsel, in which
event the Company shall pay the reasonable fees and expenses of one counsel, plus local counsel, for all Indemnified Parties, which counsel
shall, if Aegis is a defendant, be designated by Aegis. The Company shall not be liable for any settlement of any action effected without
its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent
of Aegis, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action
in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Indemnified
Person is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Indemnified
Person, acceptable to such Indemnified Party, from all Liabilities arising out of such action for which indemnification or contribution
may be sought hereunder and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on
behalf of any Indemnified Person. The advancement, reimbursement, indemnification and contribution obligations of the Company required
hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as every Liability
and Expense is incurred and is due and payable, and in such amounts as fully satisfy each and every Liability and Expense as it is incurred
(and in no event later than 30 days following the date of any invoice therefore).
(c) Contribution.
In the event that a court of competent jurisdiction makes a finding, final beyond right of review, that indemnity is unavailable to an
Indemnified Person, the Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion
as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to Aegis and any other Indemnified Person,
on the other hand, of the matters contemplated by this Section 13 or (ii) if the allocation provided by the immediately preceding clause
is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and Aegis
and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as
well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary
to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of commissions
and non-accountable expense allowance actually received by Aegis in the Offering. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand or Aegis on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and Aegis agree that it
would not be just and equitable if contributions pursuant to this subsection 13(c) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to above in this subsection 13(c). For purposes
of this paragraph, the relative benefits to the Company, on the one hand, and to Aegis on the other hand, of the matters contemplated
by this Section 13 shall be deemed to be in the same proportion as: (a) the total value received by the Company in the Placement, whether
or not such Placement is consummated, bears to (b) the commissions paid to Aegis under this Agreement. Notwithstanding the above, no person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from
a party who was not guilty of fraudulent misrepresentation.
(d) Limitation.
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services
or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities (and related Expenses)
of the Company have resulted exclusively from such Indemnified Person’s gross negligence or willful misconduct in connection with
any such advice, actions, inactions or services.
14. Governing Law;
Venue. This Agreement will be deemed to have been made and delivered in the State of New York, USA, and both the binding
provisions of this Agreement and the transactions contemplated hereby will be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles
thereof. Each of Aegis and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby will be instituted exclusively in the courts located in the City of New York,
County of New York, State of New York (ii) waives any objection which it may have or hereafter to the venue of any such suit, action
or proceeding, and (iii) irrevocably consents to the jurisdiction of the courts located in the City of New York, County of New York
and State of New York, in any such suit, action or proceeding. Each of Aegis and the Company further agrees to accept and
acknowledge service of any and all process which may be served in any such suit, action or proceeding in such courts and agrees that
service of process upon the Company mailed by certified mail to the Company’s address will be deemed in every respect
effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon Aegis mailed by
certified mail to Aegis’s address will be deemed in every respect effective service process upon Aegis, in any such suit,
action or proceeding. Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither Aegis nor its
affiliates, and the respective officers, directors, employees, agents and representatives of Aegis, its affiliates and each other
person, if any, controlling Aegis or any of its affiliates, will have any liability (whether direct or indirect, in contract or tort
or otherwise) to the Company for or in connection with the engagement and transaction described herein except for any such liability
for losses, claims, damages or liabilities incurred by the Company that are finally judicially determined to have resulted from the
bad faith or gross negligence of such individuals or entities. Aegis will act under this Agreement as an independent contractor with
duties to the Company.
15. Equitable
Remedies. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach
or threatened breach by the Company of its obligations contained in Section 6 of this Agreement and hereby agree to waive and not to assert
in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. If a breach or a threatened
breach by the Company of any such obligations occurs, Aegis will, in addition to any and all other rights and remedies that may be available
to such party at law, at equity, or otherwise in respect of such breach, be entitled to seek equitable relief, including a temporary restraining
order, an injunction, specific performance of the terms of Section 6 and any other relief that may be available from a court of competent
jurisdiction.
16. Representations and
Warranties of the Company. The Company hereby makes the following representations and warranties:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 16.1(a). The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to
the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a “Material Adverse Effect”; provided, however, that “Material Adverse
Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or
attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which the Company
or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or not
declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health
crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement,
pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by
the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of
Purchaser) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(d) No Conflicts.
The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the
issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which
the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus included in the Registration Statement, (iii)
the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the
Common Stock and Warrant Shares for trading thereon in the time and manner required thereby, and (v) such other filings as are required
to be made under applicable state securities laws (the “Required Approvals”).
(f) Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable (which means that no further sums are required to
be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Warrant Shares, when issued in accordance with the terms
of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means that no further sums are required to be
paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Company has reserved from its duly authorized capital stock
the maximum number of Shares of Common Stock issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed
the Registration Statement in conformity with the requirements of the Securities Act, which became effective on December 7, 2023, including
the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration
Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Shelf Registration
Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and
regulations of the Commission, shall file the Final Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration
Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement
and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the
requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 16.1(g), which Schedule 16.1(g) shall also include
the number of Shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Other than
as stated in Schedule 16.1(g), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of Common
Stock to employees pursuant to the Company’s employee stock purchase plans. Except as set forth in Schedule 16.1(g), no Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as set forth in Schedule 16.1(g), or pursuant to this Agreement, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any Subsidiary to issue Common Stock or other securities to any Person (other
than the Purchasers). Except as set forth in Schedule 16.1(g), there are no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance
of securities by the Company or any Subsidiary. Except as set forth in Schedule 16.1(g), there are no outstanding securities or instruments
of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any shareholder,
the Board of Directors or others is required for the issuance and sale of the Securities. There are no shareholders’ agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s shareholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Final
Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The Company is not currently an issuer subject to Rule 144(i) under the Securities Act. The Company has filed Form 10
information at least one year prior to the date hereof. The financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as
in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports and except as set forth on Schedule 16.1(i), (i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at
least one (1) Trading Day prior to the date that this representation is made.
(j) Litigation.
Except as set forth in Schedule 16.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). None of the Actions set forth on Schedule 16.1(j), (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or (ii) would, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company except in the ordinary
course of business that would not have a Material Adverse Effect. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii)
have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to
lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither
delinquent nor subject to penalties. Neither the Company nor any of its Subsidiaries has received any written notice of any claim of any
sort that has been asserted by anyone adverse to the rights of the Company or its Subsidiaries under any of the leases or subleases or
licenses or with respect to the properties mentioned above, or affecting or questioning the rights of the Company or any Subsidiary to
the continued possession or use of the leased or subleased or licensed premises or the properties mentioned above, other than such claims
which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and
neither the Company nor any Subsidiary has received written notice that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither
the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of
any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage in amount deemed prudent by the Company. Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
with Affiliates and Employees. Except as set forth on Schedule 16.1(r), during the past three fiscal years and the subsequent interim
period through the date of this Agreement, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from
or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company,
any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under
any stock option plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth on Schedule 16.1(s),
the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed
by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in
the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have
materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its
Subsidiaries.
(t) Certain
Fees. Except for the fees and expenses of the Aegis, no brokerage or finder’s fees or commissions are or will be payable by
the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Transaction Documents.
(u) Reserved.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(w) Registration
Rights. Except as disclosed on Schedule 16.1(w), no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.
(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is
or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(y) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
(z) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or
on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made and when made, not misleading.
(aa) No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholders approval
provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(bb) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as
now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the
business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts
are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. Schedule 16.1(bb) sets forth as of the date hereof all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes
of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases
required to be capitalized in accordance with GAAP. Neither The Company nor any Subsidiary is in default with respect to any Indebtedness.
(cc) Tax
Status. Except as disclosed in Schedule 16.1(cc), the Company and its Subsidiaries each (i) has made or filed all material United
States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for
the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
(dd) Reserved.
(ee) Foreign
Corrupt Practices Act. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff) Accountants.
The Company’s accounting firm is Marcum LLP. To the knowledge and belief of the Company, such accounting firm (i) is registered
public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to
be included in the Company’s Annual Report for the now current fiscal year.
(gg) No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by
the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(hh) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ii) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding, it is
understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based
on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded
securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party,
directly or indirectly, presently may have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company
further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing shareholders’
equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(jj) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement
of the Securities.
(kk) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
(ll) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers is true and correct in all respects and the Company has not become aware of any information
which would cause the information disclosed in such questionnaires to become inaccurate and incorrect.
(mm) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan, if any, was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy
or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release
or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(nn) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(oo) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(pp) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(qq) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(rr) Reserved.
(ss) Cybersecurity.
(i) (a) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and
Data”) and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition
that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and
the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation
or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate, have a Material Adverse
Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect
its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and
(iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and
practices.
18. Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement”
shall have the meaning ascribed to such term in the preamble.
“Board
of Directors” means the board of directors of the Company.
“Closing”
means the closing of the purchase and sale of the Securities.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading
Day following the date hereof.
“Common
Stock” means the common stock of the Company, par value $0.00001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company
Counsel” means Sichenzia Ross Ference Carmel LLP.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Per
Share Purchase Price” equals $0.15 (less $0.00001 for each Pre-Funded Warrant), subject to adjustment for reverse and forward
share splits, share dividends, share combinations and other similar transactions of the Common Stock that occur after the date of this
Agreement. The Per Share Purchase Price shall be allocated among the Securities as set forth on the Purchaser’s signature page hereto.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pre-funded
Warrants” means the pre-funded common stock purchase warrants, in the form of Exhibit A attached hereto
delivered to the Purchasers at the Closing, which Pre-funded Warrants shall be exercisable immediately and shall expire when exercised
in full.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Final Prospectus”
means the Final Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company
to each Purchaser at the Closing.
“Securities”
means the Common Stock, the Pre-fudned Warrants and the Warrant Shares, to the extent registered under the Shelf Registration Statement.
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Common Stock and Pre-funded Warrants purchased
in this offering in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, the OTCQB, OTCQX, Pink Open Market (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Securities, the Lock-Up Agreement and all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, and any successor
transfer agent of the Company.
“Warrant
Shares” means the Common Stock issuable upon exercise of the Pre-funded Warrants.
If you are in agreement with
the foregoing, please sign and return to us one copy of this Agreement. This Agreement may be executed in counterparts (including facsimile
or .pdf counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
Pricing Disclosure
Number of Shares | |
| 11,466,733 | |
Number of Pre-funded Warrants | |
| 21,866,600 | |
Offering Price per Share: | |
$ | 0.15 | |
Offering Price per Pre-funded Warrant: | |
$ | 0.14999 | |
Exercise Price per Pre-Funded Warrant: | |
$ | 0.00001 | |
Placement Agent Commission per Share: | |
$ | 0.0105 | |
Placement Agent Commission per Pre-funded Warrant: | |
$ | 0.0105 | |
[Signature Page of CYN Placement Agent Agreement
Follows]
|
Very truly yours, |
|
|
|
|
Aegis Capital Corp. |
|
|
|
|
By: |
/s/Robert Eide |
|
Name: |
Robert Eide |
|
Title: |
Chief Executive Officer |
AGREED AND ACCEPTED:
The foregoing accurately sets forth our understanding
and agreement with respect to the matters set forth herein.
Cyngn Inc.
By: |
/s/ Lior Tal |
|
Name: |
Lior Tal |
|
Title: |
Chief Executive Officer |
|
[Signature Page of CYN Public Placement Agent
Agreement]
19
Exhibit 10.2
PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK
CYNGN INC.
Warrant Shares: [●] |
Initial Exercise Date: [●], 2023 |
|
Issue Date: [●], 2023 |
THIS PRE-FUNDED WARRANT TO PURCHASE
COMMON STOCK (the “Warrant”) certifies that, for value received, [●] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time until this
Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from CYNGN
INC., a Delaware corporation (the “Company”), up to [●] shares (as subject to adjustment hereunder, the “Warrant
Shares”) of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant or in the Placement Agent Agreement dated [●], 2023, the following terms
have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Placement Agent Agreement dated [●], these Warrants, such other Warrants as contemplated in the
Placement Agent Agreement, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a fax number of
(801) 274-1099 and an email address of info@actionstocktransfer.com, and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Placement Agent Agreement.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit A (the “Notice
of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date
on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.00001 per Warrant Share, was pre-funded
to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.00001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any
circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination
Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.00001, subject to adjustment hereunder
(the “Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) |
= | as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section
2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior
to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P.
as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
| (B) |
= | the Exercise Price of this Warrant, as adjusted hereunder;
and |
| (X) |
= | the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a
cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
i. Delivery of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery of the Warrant Shares. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Transaction Documents, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (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 the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained
in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within
one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial 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 upon
exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain
Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares
of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
b) Reserved.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any share of Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially
all) of the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to all (or substantially all) holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the
voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity
of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), 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 consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this 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 Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant that 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 Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value
of the shares of Common Stock prior to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that
from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor
Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise
every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations
of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor
Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall
be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized shares
of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise
Date.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of the Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the
Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer
of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No
Rights as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
(which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) and free from all
taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any
action that would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant shall be construed
as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the
Commission thereunder. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 1015 O’Brien Dr., Menlo Park, CA 94025 Attention: Donald Alvarez, Chief Financial Officer, email address: dalvarez@cyngn.com,
or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder, on the other hand.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
[CYN Pre-Funded Warrant Signature Page Follows]
[CYN Pre-Funded Warrant Signature Page]
IN WITNESS WHEREOF, the Company
has caused this Pre-Funded Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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CYNGN INC. |
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By: |
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Name: |
Lior Tal |
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Its: |
Chief Executive Officer |
Exhibit A
NOTICE OF EXERCISE
To: CYNGN
INC.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
[ ] in lawful money
of the United States; or
[
] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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Exhibit B
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
______________________________________ |
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(Please Print) |
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Address: |
______________________________________ |
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(Please Print) |
Phone Number: |
______________________________________ |
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Email Address: |
______________________________________ |
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Dated: _______________ __, ______ |
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Holder’s Signature:______________________ |
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Holder’s Address:_______________________ |
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Exhibit
99.1
Cyngn Announces
Pricing of $5.0 Million Public Offering of Common Stock
Dec 08,
2023 9:00 AM
MENLO PARK, Calif., Dec. 8, 2023 /PRNewswire/
-- Cyngn Inc. (the “Company” or “Cyngn”) (Nasdaq: CYN), a developer of AI-powered autonomous driving software
solutions for industrial applications, today announced the pricing of its common stock public offering made on a reasonable best-efforts
basis with gross proceeds of approximately $5.0 million, before deducting placement agent fees and other expenses payable by the
Company. The offering consists of 33,333,333 shares of common stock and pre-funded warrants. Each share of common stock (or pre-funded
warrant in lieu thereof) is being sold at a purchase price of $0.15 per share (or $0.14999 per pre-funded warrant
after reducing $0.00001 attributable to the exercise price of the pre-funded warrants).
The offering is expected to close on December
12, 2023, subject to the satisfaction of customary closing conditions.
The Company expects to use the net proceeds
from the offering for general corporate purposes, including working capital.
Aegis Capital Corp. is acting as exclusive
placement agent for the offering.
A registration statement on Form S-1 (File
No. 333-275530) relating to the offering of the securities was filed with the U.S. Securities and Exchange Commission (SEC)
and declared effective by the SEC on December 7, 2023. The offering is being made only by means of a prospectus. A final
prospectus describing the terms of the proposed transaction may be obtained, when available, on the SEC’s website, www.sec.gov or
by contacting Aegis Capital Corp., 1345 Avenue of the Americas, 27th Floor, New York, NY 10105, by telephone at (212)
813-1010 or by email at syndicate@aegiscap.com. This press release shall not constitute an offer to sell or a solicitation of an
offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Cyngn
Cyngn develops and deploys scalable,
differentiated autonomous vehicle technology for industrial organizations. Cyngn’s self-driving solutions allow existing workforces
to increase productivity and efficiency. The Company addresses significant challenges facing industrial organizations today, such as labor
shortages, costly safety incidents, and increased consumer demand for eCommerce.
Cyngn’s DriveMod Kit can be installed
on new industrial vehicles at end of line or via retrofit, empowering customers to seamlessly adopt self-driving technology into their
operations without high upfront costs or the need to completely replace existing vehicle investments.
Cyngn’s flagship product, its Enterprise
Autonomy Suite, includes DriveMod (autonomous vehicle system), Cyngn Insight (customer-facing suite of AV fleet management, teleoperation,
and analytics tools), and Cyngn Evolve (internal toolkit that enables Cyngn to leverage data from the field for artificial intelligence,
simulation, and modeling).
Find Cyngn on:
Website: https://cyngn.com
Twitter: http://twitter.com/cyngn
LinkedIn: https://www.linkedin.com/company/cyngn
YouTube: https://www.youtube.com/@cyngnhq
Investor/Media Contact:
Bill Ong, bill@cyngn.com; 650-204-1551
FORWARD-LOOKING STATEMENTS:
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar
expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical
facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain.
Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations,
beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking
statements. In addition, we cannot assure that any patent will issue as a result of a pending patent application or, if issued, whether
it will issue in a form that will be advantageous to us. Forward-looking statements are subject to risks and uncertainties that could
cause actual performance or results to differ materially from those expressed in the forward-looking statements. Forward-looking statements
speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual
results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information
except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference
should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements.
References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated
by reference into this press release. Cyngn is not responsible for the contents of third-party websites.
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CYNGN (NASDAQ:CYN)
過去 株価チャート
から 6 2024 まで 7 2024
CYNGN (NASDAQ:CYN)
過去 株価チャート
から 7 2023 まで 7 2024