Cyngn Inc
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
CYN$0.29+7.4%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-07.
0001213900-24-020777
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0001213900-25-021260
Item 7. 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 63 previous paragraphs and 68 current paragraphs.
43 unchanged; 12 reworded; 12 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 7 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 (12)
Current report
Research and development expense for the year ended December 31, 2024 decreased by $1.4 million or 11.5% to $11.3 million from $12.7 million for the year ended December 31, 2023. The decrease is primarily attributable the capitalization of costs related to capitalized software and customer contract.
Current report
General and administrative expenses increased by approximately $0.5 million or 4.7% to $11.4 million for the year ended December 31, 2024 from $10.9 million for the year ended December 31, 2023. The increase primarily relates to additional executive bonuses offset by a decreases in insurance, professional fees and other general and administrative expenses.
Current report
Interest income (Expenses), net
Current report
Other Income (Expenses), net
Current report
On April 23, 2024, the Company entered into an underwritten Agreement with Aegis Capital Corp. (“Aegis”), pursuant to which Aegis acted as the Company’s underwriter on a firm commitment basis in connection with the sale by the Company of an aggregate of 3,333(1) shares of common stock in a public offering, which included: (i) 1,320(1) shares of common stock, and (ii) pre-funded warrants to purchase 2,013(1) shares of common stock. The Pre-Funded Warrants had a nominal exercise price of $0.0015(2). Each share of common stock was sold at an offering price of $1,500(1), and each Pre-Funded Warrant was sold at an offering price of $1,499.85(1). The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The offering closed on April 25, 2024. On May 3 2024, the Company closed on the sale of an additional 136(1) shares of common stock, upon exercise by the underwriter of the over-allotment option. The Company received net proceeds of approximately $4.6 million, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Current report
On November 12, 2024, the Company entered into a securities purchase agreement with certain investors pursuant to which we sold, in a private placement, senior notes with an aggregate principal amount of $4,375,000 (the “Notes”), and received proceeds before expenses of $3,500,000. As consideration for entering into the agreement, we issued a total of 2,701(2) shares of common stock of the Company to the Purchasers on November 13, 2024. The principal amount of the Notes were repaid on December 23, 2024.
Current report
On November 12, 2024, the Company implemented a cost reduction plan in order to reduce its average monthly cash burn from approximately $1.8 million per month to approximately $1 million per month for 90 days. This included reducing staff from approximately 80 people to approximately 60 people, temporarily suspending certain non-essential operations and reducing or eliminating all discretionary expenses. With the additional capital raised in December 2024, the Company has resumed normal operations.
Current report
On December 20, 2024, the Company entered into a securities purchase agreement for the sale and issuance of (i) 20,507(2) units at a public offering price per Unit of $241.50(2) with each Unit consisting of one share of common stock, par value $0.00001 per share, one Series A warrant to purchase one share of Common Stock at an exercise price of $301.875(2) per share and one Series B warrant to purchase one share of Common Stock at an exercise price of $301.875(2) and (ii) 62,309(2) pre-funded units at a public offering price of $241.485(2) per Pre-Funded Unit, with each Pre-Funded Unit consisting of one pre-funded warrant exercisable for one share of Common Stock at an exercise price of $0.015(2) per share, one Series A Warrant and one Series B Warrant. The net proceeds to the Company from the Offering were approximately $18.2 million, after deducting placement agent’s fees and the payment of other offering expenses associated with the offering that were payable by the Company.
Current report
On December 30, 2024, the “Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering, 44,333(2) shares of its common stock, par value $0.015(2) per share at a purchase price of $90(2)per share and 55,667(2) pre-funded warrants to purchase shares of Common Stock, at a purchase price of $89.985(2)per Pre-Funded Warrant. The Company received net proceeds of approximately $8.1 million from the Offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Current report
Net cash used in operating activities for the year ended December 31, 2024 was $9.5 million, a decrease of approximately $10 million or 51% compared to $19.5 million for the year ended December 31, 2023. The decrease is primarily attributed to increase costs for customer deployment, an increase in inventory related to the DriveMod Kits, an increase in lease payments due to the lease extension and the fair value remeasurement of the warranty liabilities.
Current report
Net cash provided by financing activities for the year ended December 31, 2024 was $26.6 million, an increase of approximately $20.5 million compared to $6.1 million for the year ended December 31, 2023. The increase is due to the following net proceeds:
Current report
The increase in cash from financing activities from the above transactions were offset by the repayment of the senior notes in the amount of $4,375,000 and the portion of the proceeds allocated to the warrant liabilities for the securities purchase agreement on December 20, 2024.
Removed paragraphs (8)
Previous report
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
Results of Operations
Previous report
Research and development expense for the year ended December 31, 2023 increased by $3.2 million or 34% to $12.7 million from $9.5 million for the year ended December 31, 2022. The increase is attributable to the increase in personnel engaged in the research and development of our AV technology in 2023 compared to headcount levels in 2022, including provisions for non-cash stock-based compensation expense, andexternal R&D contractors. The Company plans to continue to expand its level of engineering and other R&D personnel to support its research and development efforts and expects research and development costs to increase over time.
Previous report
General and administrative expenses increased by approximately $0.9 million or 9% to $10.9 million for the year ended December 31, 2023 from $10.0 million for the year ended December 31, 2022. The increase was attributed to an increase in personnel related costs, including provisions for non-cash stock-based compensation expense, as the Company increased staff to support public company responsibilities, an increase in marketing and advertising expenses, an increase in legal and professional fees associated with public filings and increases in other general and administrative expenses.
Previous report
Interest income, net
Previous report
Other Income
Previous report
Net cash used in operating activities for the year ended December 31, 2023 was $19.5 million, an increase of approximately $3.2 million or 20% compared to $16.3 million for the year ended December 31, 2022. The increase is primarily attributed to the level of increases in personnel and professional services related to the Company’s research and development activities, as well as increases in general and administrative personnel-related costs and professional services as the Company continues to grow, both of which led to the increase in the Company’s net loss for the period.
Previous report
Cash provided by financing activities for the year ended December 31, 2023 was $6.1 million, of which $6.1 million relate to the proceeds from the sale of common stock. Cash provided by financing activities for the year ended December 31, 2022 was $18.2 million, which consisted of proceeds from the April 2022 private placement offering of $18.1 million and $114.2 thousand related to stock option exercises.
Reworded paragraphs (12)
Previous wording
Although both the components and the combined solutions of EAS are still under development, we have EAS licenses with paying customers and have piloted EAS for paid customer trial and pilot deployments. We have not yet derived any significant recurring revenues from EAS but began marketing EAS to customers in 2022 with our first, paid commercial deployment commencing in the first quarter of 2023. We expect EAS to continually be developed and enhanced according to evolving customer needs, which will take place concurrently while other completed features of EAS are commercialized. We expect annual R&D expenditures in the foreseeable future to exceed that of 2023. We also had limited paid deployments in 2023 that offset some of the ongoing R&D costs of continually developing EAS. We target scaled deployments to begin in 2024.
Current wording
Although both the components and the combined solutions of EAS are still under development, we have EAS licenses with paying customers and have piloted EAS for paid customer trial and pilot deployments. We expect EAS to continually be developed and enhanced according to evolving customer needs, which will take place concurrently while other completed features of EAS are commercialized. We expect annual R&D expenditures in the foreseeable future to exceed that of 2024. We also had limited paid deployments in 2024 that offset some of the ongoing R&D costs of continually developing EAS. We target scaled deployments to begin in 2025.
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 140,000 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 6,451,613 shares of its common stock, exercisable at a price per share of $2.98 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 valuation as equity instruments in consideration of the cashless settlement provisions in the warrant agreements.
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 9(1) shares of its common stock, exercisable at a price per share of $140,625(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 426(1) shares of its common stock, exercisable at a price per share of $40,650(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 valuation as equity instruments in consideration of the cashless settlement provisions in the warrant agreements.
Previous wording
We currently derive revenue from two sources. First, we enter into fixed-price NRE contracts related to trial projects that consist of several independent phases and includes design, data gathering, hardware installation on an industrial vehicle, customer-specific configuration of the DriveMod software, and demonstrations. The determination of the contract price is based on labor and hardware costs estimated to achieve the required milestones specified in the contract. The purpose of these fully funded projects is to exhibit the feasibility of the Company’s technology offering to the customer on additional vehicle types and provide a level of confidence to encourage the customer to enter into a multi-year, commercial arrangement with the Company in the future. Revenue on these multi-phase contracts is generally recognized at the point in time when the performance obligations of each independent phase have been completed and customer acceptance has been acknowledged. Contracts often allow mutual termination without penalty. To the extent our actual costs vary from the fixed fee, we will generate more or less profit or could incur a loss.
Current wording
We currently derive revenue from four sources. We enter into fixed-price NRE contracts related to trial projects that consist of several independent phases and include design, data gathering, hardware installation on an industrial vehicle, customer-specific configuration of the DriveMod software, and demonstrations. The determination of the contract price is based on labor and hardware costs estimated to achieve the required milestones specified in the contract. The purpose of these fully funded projects is to exhibit the feasibility of the Company’s technology offering to the customer on additional vehicle types and provide a level of confidence to encourage the customer to enter into a multi-year, commercial arrangement with the Company in the future. Revenue on these multi-phase contracts is generally recognized at the point in time when the performance obligations of each independent phase have been completed and customer acceptance has been acknowledged. Contracts often allow mutual termination without penalty. To the extent our actual costs vary from the fixed fee, we will generate more or less profit or could incur a loss.
Previous wording
Second, we derive revenue from EAS subscriptions. Revenue from these subscriptions is recognized monthly over the service contract life, beginning at the time that a customer acknowledges acceptance of the service.
Current wording
In addition, we derive revenue from EAS subscriptions with relative add-on offerings such as hardware revenue and other revenue (i.e., deployment/set up costs). Revenue from these subscriptions and add-ons are recognized monthly over the service contract life, beginning at the time that a customer acknowledges acceptance of the service.
Previous wording
During 2023, the Company recognized $1.49 million of revenue, of which $1.42 million was associated with NRE contracts and the remaining $0.07 million related to revenue from EAS subscriptions. During 2022, the Company recognized $0.26 million of revenue, of which $0.25 million was associated with NRE contracts and the remaining $0.01 million related to sales of Infinitracker devices.
Current wording
During 2024, the Company recognized $0.4 million of revenue, substantially all related to EAS subscriptions and hardware revenue. During 2023, the Company recognized $1.5 million of revenue, of which $1.4 million was associated with NRE contracts and the remaining $0.1 million related to revenue from EAS subscriptions.
Previous wording
During 2023, the company reported cost of revenue of $1.2 million consisting primarily of fully burdened internal engineering development resources and hardware costs incurred for the completion of the final phases of NRE contracts. During 2022, the Company reported cost of revenue of $0.2 million consisting primarily of fully burdened internal engineering development resources and hardware costs incurred for the completion of the initial phases of NRE contracts.
Current wording
During 2024, the Company reported cost of revenue of $0.5 million consisting primarily of deployment costs, related to personnel costs, travel expenses and associated hardware costs to specific customers. During 2023, the company reported cost of revenue of $1.2 million consisting primarily of fully burdened internal engineering development resources and hardware costs incurred for the completion of the final phases of NRE contracts.
Previous wording
Interest income increased by $93.8 thousand to $137.9 thousand for the year ended December 31, 2023 from $44.1 thousand for the year ended December 31, 2022. Interest income consists primarily of interest earned of $149.9 thousand from the Company’s interest-bearing bank accounts, offset by interest expense of $12.0 thousand representing amortization of the present value interest on the adoption of lease accounting guidelines under ASC 842,Leases, on right-of-use assets and operating liabilities.
Current wording
Interest income (expense) decreased by $1.3 million to ($1.1 million) for the year ended December 31, 2024 from $137.9 thousand for the year ended December 31, 2023. Interest income consists primarily of interest earned of $111.7 thousand from the Company’s interest-bearing bank accounts, offset by interest expense of $1.3 million related to the Notes issued in November 2024.
Previous wording
Other income increased by $276.7 thousand to $396.8 thousand for the year ended December 31, 2023 from $120.1 thousand for the year ended December 31, 2022. Other income consists primarily of realized gains earned on the Company’s short-term investments.
Current wording
Other income decreased by $5.7 million to $5.3 million for the year ended December 31, 2024 from $396.8 thousand for the year ended December 31, 2023. Other income (expense), net consists primarily of fair value measurement of $5.4 million for the warrant liability, realized gains earned on the Company’s short-term investments of $113 thousand and interest earned of $40.4 thousand related to the office lease offset by the impairment charge of $118.8 thousand 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 December 31, 2023, the Company had unrestricted cash of approximately $3.6 million and short-term investments of $4.6 million. As of December 31, 2022, the Company had unrestricted cash of $10.5 millionand short-term investments of approximately $12.1 million. On April 29, 2022, the Company received net proceeds of approximately $18.1 million from the sale of common stock and exercise of pre-funded warrants in a private placement offering.
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 December 31, 2024, the Company had unrestricted cash of approximately $23.6 million. As of December 31, 2023, the Company had unrestricted cash of approximately $3.6 million and short-term investments of $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 are limited to sales of up to $8.8 million of shares of the Company’s common stock. The ATM Sales Agreement expires at the earliest of 5 years after the date of the agreement or exhaustion of the aggregate limit available under the ATM Sales Agreement. The Company pays Virtu Americas LLC up to 3.0% of the gross proceeds as a commission. For the year ended as of December 31, 2023, a total of 3,731,524 shares of common stock were sold through Virtu Americas LLC under the ATM Sales Agreement for net proceeds of $1,747,468 after payment of commission fees of $36,897 and other related expenses of $60,465. As of December 31, 2023, the Company had $6.9 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 are limited to sales of up to $8.8 million of shares of the Company’s common stock. The ATM Sales Agreement expires at the earliest of 5 years after the date of the agreement or exhaustion of the aggregate limit available under the ATM Sales Agreement. The Company pays Virtu Americas LLC up to 3.0% of the gross proceeds as a commission. As of December 31, 2024, a total of 4,524(1), 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 December 31, 2024, the Company had $0 of common stock remaining available for sale under the ATM Sales Agreement.
Previous wording
On December 8, 2023, the Company entered into a Placement Agent 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 ofan aggregate of 33,333,333 shares of common stock in a public offering, which included: (i) 11,466,733 shares of Common Stock, and (ii) pre-funded warrants to purchase 21,866,600 shares of Common Stock. The public offering closed on December 12, 2023. The Company received gross proceeds of approximately $5 million before deducting transaction related expenses payable by the Company. All commissions, qualified legal, accounting, registration and other direct costs of $0.5 million related to the public offering were offset against the gross proceeds.
Current wording
On December 8, 2023, the Company entered into a Placement Agent 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 2,222(1) shares of common stock in a public offering, which included: (i) 764(1) shares of common stock, and (ii) pre-funded warrants to purchase 1,458(1) shares of common stock. The Pre-Funded Warrants had a nominal exercise price of $0.00001. Each share of common stock was sold at an offering price of $2,250(1), and each Pre-Funded Warrant was sold at an offering price of $2,249.85(1). The Company received net proceeds of approximately $4.5 million, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Previous wording
Net cash provided by investing activities for the year ended December 31, 2023 was approximately $6.4 million, an increase of approximately $19.7 million compared to net cash used in investing activities of approximately $13.3 million for the year ended December 31, 2022. The increase consists of additional investment maturities of $29.5 million, which were offset by purchases of short-term investments of approximately $21.5 million and approximately $1.6 million in purchases of R&D-related hardware equipment, acquisition of intangible asset, capitalization of software and disposal of assets.
Current wording
Net cash provided by investing activities for the year ended December 31, 2024 was $2.9 million, a decrease of approximately $3.4 million or 54% compared to $6.4 million for the year ended December 31, 2023. The decrease consists of smaller investment maturities of $12.2 million, which were offset by purchases of short-term investments of approximately $7.6 million and approximately $1.7 million in purchases of R&D-related hardware equipment, acquisition of intangible asset, capitalization of software and disposal of assets.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company issued Series A warrants and Series B warrants in connection with securities purchase agreement on December 20, 2024. 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 Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity shares in the warrant agreements.