Cyngn Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
CYN$0.27-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001213900-24-066682
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001213900-24-095459
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 78 current paragraphs.
62 unchanged; 15 reworded; 1 added; 2 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
Net cash used in operating activities for the nine months ended September 30, 2024 was approximately $15.6 million, an increase of approximately $1.1 million or 7.6% compared to approximately $14.5 million for the nine months ended September 30, 2023. The increase is primarily attributed to increase costs for customer deployment, an increase in inventory related to the DriveMod Kits and an increase in lease payments due to the lease extension.
Removed paragraphs (2)
Previous report
ATM
Previous report
Net cash used in operating activities for the six months ended June 30, 2024 was approximately $10.2 million, a decrease of approximately $0.02 million or 0.2% compared to approximately $10.2 million for the six months ended June 30, 2023. The decrease is attributed to a smaller net loss and less stock-based compensation expense due to the mix of employees offset by lower short-term investment gains and the patent impairment charge.
Reworded paragraphs (15)
Previous wording
The Company issued to its lead underwriter in the Company’s initial public offering consummated in October 2021, (the “IPO”) warrants to purchase up to 1,400(1) shares of its common stock, exercisable at a price per share of $9.373 and expiring on October 19, 2026. Additionally, in connection with the Private Placement offering completed on April 29, 2022, the Company issued warrants to purchase 70,969(1) shares of its common stock, exercisable at a price per share of $2.71 and expiring on April 29, 2027. The Company accounts for warrants in accordance with ASC 480, “Distinguishing Liabilities from Equity”, depending on the specific terms of the warrant agreement. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the warrants as equity instruments in consideration of the cashless settlement provisions in the warrant agreement.
Current wording
The Company issued to its lead underwriter in the Company’s initial public offering consummated in October 2021, (the “IPO”) warrants to purchase up to 1,400(1) shares of its common stock, exercisable at a price per share of $937.50(1) and expiring on October 19, 2026. Additionally, in connection with the Private Placement offering completed on April 29, 2022, the Company issued warrants to purchase 70,969(1) shares of its common stock, exercisable at a price per share of $271(1) and expiring on April 29, 2027. The Company accounts for warrants in accordance with ASC 480, “Distinguishing Liabilities from Equity”, depending on the specific terms of the warrant agreement. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the warrants as equity instruments in consideration of the cashless settlement provisions in the warrant agreement.
Previous wording
During the three and six months ended June 30, 2024, the Company recognized $8,665 and $14,179, respectively, of revenue, substantially all related to EAS subscriptions and hardware revenue.
Current wording
During the three and nine months ended September 30, 2024, the Company recognized $47,584 and $61,762, respectively, of revenue, substantially all related to EAS subscriptions and hardware revenue.
Previous wording
During the three and six months ended June 30, 2024, the Company reported cost of revenue of $14,922 and $128,698, respectively, consisting primarily of deployment costs, related to personnel costs, travel expenses and associated hardware costs to specific customers.
Current wording
During the three and nine months ended September 30, 2024, the Company reported cost of revenue of $157,251 and $285,949, respectively, consisting primarily of deployment costs, related to personnel costs, travel expenses and associated hardware costs to specific customers.
Previous wording
Research and development expense for the three months ended June 30, 2024 decreased by approximately $0.5 million or 14.4% to $3.2 million from approximately $3.7 million for the three months ended June 30, 2023. The decrease is primarily attributable the capitalization of costs related to capitalized software and customer contracts.
Current wording
Research and development expense for the three months ended September 30, 2024 decreased by approximately $0.1 million or 4.6% to $2.8 million from approximately $2.9 million for the three months ended September 30, 2023. The decrease is primarily attributable the capitalization of costs related to capitalized software and customer contracts.
Previous wording
Research and development expense for the six months ended June 30, 2024 decreased by approximately $0.4 million or 6.1% to $6.4 million from approximately $6.8 million for the six months ended June 30, 2023. The decrease is primarily attributable the capitalization of costs related to capitalized software and customer contracts.
Current wording
Research and development expense for the nine months ended September 30, 2024 decreased by approximately $0.5 million or 5.6% to $9.2 million from approximately $9.7 million for the nine months ended September 30, 2023. The decrease is primarily attributable the capitalization of costs related to capitalized software and customer contracts.
Previous wording
General and administrative expenses decreased by approximately $0.2 million or 8.4% to approximately $2.6 million for the three months ended June 30, 2024 from approximately $2.8 million for the three months ended June 30, 2023. The decrease was attributed to a decrease in consultant costs due to hiring employees full-time, as well as decreases in insurance, professional fees and other general and administrative expenses.
Current wording
General and administrative expenses decreased by approximately $0.1 million or 2.3% to approximately $2.6 million for the three months ended September 30, 2024 from approximately $2.7 million for the three months ended September 30, 2023. The decrease was attributed to a decrease in consultant costs due to hiring employees full-time, as well as decreases in insurance, professional fees and other general and administrative expenses.
Previous wording
General and administrative expenses decreased by approximately $0.6 million or 10.3% to approximately $5.3 million for the six months ended June 30, 2024 from approximately $5.9 million for the six months ended June 30, 2023. The decrease was attributed to a decrease in consultant costs due to hiring employees full-time, as well as decreases in insurance, professional fees and other general and administrative expenses.
Current wording
General and administrative expenses decreased by approximately $0.7 million or 7.8% to approximately $7.9 million for the nine months ended September 30, 2024 from approximately $8.6 million for the nine months ended September 30, 2023. The decrease was attributed to a decrease in consultant costs due to hiring employees full-time, as well as decreases in insurance, professional fees and other general and administrative expenses.
Previous wording
Interest income (expense), net decreased by $20,560 to $(1,669) for the three months ended June 30, 2024 from $18,891 for the three months ended June 30, 2023. Interest income consists primarily of interest earned of $16,382 from the Company’s interest-bearing bank accounts offset by interest expense of $18,051 related to the office lease.
Current wording
Interest income (expense), net increased by $13,431 to 46,336 for the three months ended September 30, 2024 from $32,905 for the three months ended September 30, 2023. Interest income consists primarily of interest earned of $52,632 from the Company’s interest-bearing bank accounts offset by interest expense of $6,296 related to the office lease.
Previous wording
Interest income (expense), net decreased by $66,135 to $(342) for the six months ended June 30, 2024 from $65,793 for the six months ended June 30, 2023. Interest income consists primarily of interest earned of $41,020 from the Company’s interest-bearing bank accounts offset by interest expense of $41,362 related to the office lease.
Current wording
Interest income (expense), net decreased by $52,704 to $45,994 for the nine months ended September 30, 2024 from $98,698 for the nine months ended September 30, 2023. Interest income consists primarily of interest earned of $93,653 from the Company’s interest-bearing bank accounts offset by interest expense of $47,659 related to the office lease.
Previous wording
Other income (expense), net decreased by $128,201 to $(5,079) for the three months ended June 30, 2024 from $123,122 for the three months ended June 30, 2023. Other income (expense), net consists primarily of realized gains earned on the Company’s short-term investments of $48,973 and the impairment charge of $66,107 related to expired international patents.
Current wording
Other income (expense), net decreased by $70,817 to $34,467 for the three months ended September 30, 2024 from $105,284 for the three months ended September 30, 2023. Other income (expense), net consists primarily of realized gains earned on the Company’s short-term investments of $16,503 and interest earned of $17,952 related to the office lease.
Previous wording
Other income (expense), net decreased by $302,457 to $(10,126) for the six months ended June 30, 2024 from $292,331 for the six months ended June 30, 2023. Other income (expense), net consists primarily of realized gains earned on the Company’s short-term investments of $88,912 and the impairment charge of $118,831 related to expired international patents.
Current wording
Other income (expense), net decreased by $373,274 to $24,342 for the nine months ended September 30, 2024 from $397,616 for the nine months ended September 30, 2023. Other income (expense), net consists primarily of realized gains earned on the Company’s short-term investments of $118,825 and interest earned of $24,348 related to the office lease offset by the impairment charge of $118,831 related to expired international patents.
Previous wording
The Company’s principal source of liquidity is its cash and current maturities of short-term investments. Short-term investments consist of placements in U.S. government securities with original maturities between three to nine months. As of June 30, 2024, the Company had unrestricted cash of approximately $5.9 million and short-term investments of approximately $1.1 million. As of December 31, 2023, the Company had unrestricted cash of approximately $3.6 million and short-term investments of approximately $4.6 million.
Current wording
The Company’s principal source of liquidity is its cash and current maturities of short-term investments. Short-term investments consist of placements in U.S. government securities with original maturities between three to nine months. As of September 30, 2024, the Company had unrestricted cash of approximately $2.0 million and short-term investments of approximately $0.8 million. As of December 31, 2023, the Company had unrestricted cash of approximately $3.6 million and short-term investments of approximately $4.6 million.
Previous wording
On May 31, 2023, the Company entered into an ATM Sales Agreement with Virtu Americas LLC (the “ATM Sales Agreement”), under which the Company may, from time to time, sell shares of the Company’s common stock at market prices by methods deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The ATM Sales Agreement and related prospectus is limited to sales of up to an aggregate maximum of $8.8 million of shares of the Company’s common stock. The Company pays Virtu Americas LLC up to 3.0% of the gross proceeds as a commission. As of June 30, 2024, a total of 170,342 shares of common stock were sold through Virtu Americas LLC under the ATM Sales Agreement for net proceeds of $4,460,639 after payment of commission fees of $91,033 and other related expenses of $60,465. As of June 30, 2024, the Company had $4,222,297 million of common stock remaining available for sale under the ATM Sales Agreement.
Current wording
On May 31, 2023, the Company entered into an ATM Sales Agreement with Virtu Americas LLC (the “ATM Sales Agreement”), under which the Company may, from time to time, sell shares of the Company’s common stock at market prices by methods deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The ATM Sales Agreement and related prospectus is limited to sales of up to an aggregate maximum of $8.8 million of shares of the Company’s common stock. The Company pays Virtu Americas LLC up to 3.0% of the gross proceeds as a commission. As of September 30, 2024, a total of 424,598 shares of common stock were sold through Virtu Americas LLC under the ATM Sales Agreement for net proceeds of $8,597,957 after payment of commission fees of $175,468 and other related expenses of $60,465. As of September 30, 2024, the Company had $0 of common stock remaining available for sale under the ATM Sales Agreement.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2024 was approximately $2.9 million, an increase of approximately $0.2 million compared to net cash used in investing activities of approximately $2.7 million for the six months ended June 30, 2023. The increase consists of smaller investment maturities of $7.0 million, which were offset by purchases of short-term investments of approximately $10.6 million and approximately $0.6 million in purchases of R&D-related hardware equipment, acquisition of intangible asset and capitalization of software.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2024 was approximately $2.6 million, a decrease of approximately $3.8 million compared to net cash provided in investing activities of approximately $6.4 million for the nine months ended September 30, 2023. The decrease consists of smaller investment maturities of $10.6 million, which were offset by purchases of short-term investments of approximately $6.8 million and approximately $1.3 million in purchases of R&D-related hardware equipment, acquisition of intangible asset and capitalization of software.
Previous wording
Cash provided by financing activities for the six months ended June 30, 2024 was $9.6 million, which consisted of proceeds from the sale of common stock. Cash provided by financing activities for the six months ended June 30, 2023 was approximately $8.1 thousand, which consisted of proceeds from the exercise of stock options.
Current wording
Cash provided by financing activities for the nine months ended September 30, 2024 was $11.4 million, which consisted of proceeds from the sale of common stock. Cash provided by financing activities for the nine months ended September 30, 2023 was approximately $1.0 million, which consisted of proceeds from the sale of common stock.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As of August 8, 2024, the Company has sold 2,565(1) additional shares under the ATM Sales Agreement, for net proceeds of $1,772,284 after payment of commission and fees of $36,169.