Cyngn Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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.
Mar 31, 2026 · Filed May 14, 2026
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 2025-09-30; filed 2025-11-19.
0001213900-25-112611
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001213900-26-056821
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 89 previous paragraphs and 82 current paragraphs.
43 unchanged; 20 reworded; 19 added; 25 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (19)
Current report
Following deployment, we continue to generate revenue through ongoing access to and use of our Enterprise Autonomy Suite (“EAS”), which includes software-enabled functionality, monitoring, updates, and support. These arrangements provide customers with continuous access to our evolving autonomous vehicle capabilities and are generally structured over a contractual term during which the customer receives and consumes the benefits of the integrated solution.
Current report
Appointment of New Board Member
Current report
On February 3, 2026, the Board of Directors, appointed Mr. Ran Makavy to serve as a member of the Board, effective as of immediately, to fill a vacancy on the Board of Directors.
Current report
Mr. Makavy was elected as a Class III director and will serve on the Board until the Company’s 2027 annual meeting of stockholders at which time he will stand for election alongside the Company’s other Class III directors. The Board has also appointed Mr. Makavy to serve as Chairman of the Nominating and Corporate Governance Committee, and a member of the Compensation Committee and Audit Committee.
Current report
Mr. Makavy is a global business leader, investor, and professional board director with approximately 30 years’ experience in the engineering and product management arena. In 2007, he started a company called Snaptu and sold it to Facebook in 2011, led growth in emerging markets at Facebook, started internet.org, built the growth team at Lyft, then led the tech org and the ridesharing business and took the company public in 2019. He has invested in over sixty startup companies since 2013. Mr. Makavy currently serves as lead investor to the Ran Makavy Angel Investment Fund, and as an advisor to Passport Global, Dimension, Fora Travel, Argo, and Honeybook.
Current report
Mr. Makavy will be compensated in accordance with the Company’s standard compensation policies and practices for non-employee directors of the Board, which is described in the Company’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on October 22, 2025.
Current report
Registered Direct Offering
Current report
On March 16, 2026, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 1,686,788 shares of its common stock, par value $0.00001 per share, at a purchase price of $1.93 per share and 3,313,212 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $1.92999 per Pre-Funded Warrant.
Current report
The closing of the Offering occurred on March 17, 2026. The Company received net proceeds of approximately $8.8 million from the Offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees. The Company intends to use the net proceeds from the Offering for general corporate purposes, including working capital.
Current report
In connection with the Offering, the Company entered into a Placement Agent Agreement with Aegis Capital Corp., as the exclusive placement agent in connection with the Offering. As compensation to Aegis Capital Corp., the Company paid Aegis Capital Corp. a cash fee of 7% of the aggregate gross proceeds raised in the Offering and reimbursed certain expenses of Aegis Capital Corp.
Current report
Computer software to be sold, leased or otherwise marketed is classified as an intangible asset. Capitalized software development costs are amortized using the greater of (a) the amount computed using the ratio that current gross revenue for a product bear to total of current and anticipated future gross revenue for that product or (b) the straight-line method, beginning upon commercial release of the product, and continuing over the remaining estimated economic life of the product, not to exceed three years to five years and recorded as cost of revenue. Amortization will begin when the product or enhancement is available for general release to customers. No amortization has begun for externally sold software, as the software enhancement is still in development. Management evaluates the useful lives of these assets on a quarterly basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Current report
During the third quarter of 2025, management completed a review of the Company’s capitalized software development projects. Based on this review, management determined that projects previously capitalized as developed software no longer met the criteria for capitalization under ASC 985-20, External-Use Software, resulting from new technical development issues that did not exist and could not have been reasonably anticipated in prior periods.
Current report
As a result, the Company revised its estimate regarding the point at which technological feasibility is achieved for software development activities. This change in estimate was made to reflect management’s current expectations about the timing and certainty of future technological milestones.
Current report
The change in estimate was accounted for prospectively in accordance with ASC 250, Accounting Changes and Error Corrections, and did not require restatement of prior-period financial statements. For the third quarter of 2025, this change resulted in an increase to research and development expense of approximately $2.6 million, with a corresponding decrease in capitalized software costs of $2.6 million.
Current report
Revenue recognized for three months ended March 31, 2026 increased by $57,421 or 121.8% to $104,573 from $47,152 for the three months ended March 31, 2025. The increase is attributable to an increase in tugger deployments in 2026.
Current report
Cost of revenues reported for the three months ended March 31, 2026 increased by $45,537 or 385.5% to $57,350 from $11,813 for the three months ended March 31, 2025. The increase is attributable to costs related to an increase in tugger deployments in 2026, including personnel costs, travel expenses and associated hardware costs to specific customers.
Current report
Interest Income, net
Current report
Other Income, net
Current report
On March 16, 2026, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 1,686,788 shares of its common stock, par value $0.00001 per share, at a purchase price of $1.93 per share and 3,313,212 pre-funded warrants to purchase shares of common stock, at a purchase price of $1.92999 per pre-funded warrant. The Company received net proceeds of approximately $8.75 million from the offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Removed paragraphs (25)
Previous report
Departure of Officer
Previous report
Effective October 24, 2025, Ben Landen, Vice President of Business Operations of the Company, resigned from his position with the Company to pursue another professional opportunity. Mr. Landen’s resignation was not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.
Previous report
ATM Sales Agreement
Previous report
As of September 30, 2025, no shares of common stock were sold under the Sales Agreement. However, as of November 6, 2025, the Company has sold 935,114 shares under the Sales Agreement, for net proceeds of $5,604,690 after payment of commission and fees of $173,341.** **
Previous report
Appointment of Chief Financial Officer
Previous report
Effective August 12, 2025, Natalie Russell was appointed Chief Financial Officer of the Company.
Previous report
In connection with her appointment as Chief Financial Officer, the Company entered into an offer letter (the “Offer Letter”) with Mrs. Russell dated August 12, 2025. Pursuant to the terms of the Offer Letter, Mrs. Russell will receive an annual base salary of $250,000 and will be eligible to receive a pro-rated target discretionary annual bonus of up to 20% of her base salary, based on the Company’s performance and her individual performance, subject to the Company’s policy for paying bonus and the sole discretion of the Company.
Previous report
In connection with Mrs. Russell’s appointment, the Company also entered into a Severance and Change of Control Agreement (the “Severance Agreement”) with Mrs. Russell. The Severance Agreement provides for a lump sum payment to the officer if the Company terminates the officer’s employment without Cause (as defined in the Severance Agreement), or if the officer terminates her employment for Good Reason (as defined in the Severance Agreement) or in the case of a Change of Control (as defined in the Severance Agreement) of the Company. The term, Change of Control, includes the acquisition of Common Stock of the Company resulting in one person or company owning more than 50% of the outstanding shares, a merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent (50%) of the Company’s outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company’s assets.
Previous report
In the event that, the Company terminates the officer’s employment without Cause (as defined in the Severance Agreement), or if the officer terminates her employment for Good Reason (as defined in the Severance Agreement), or in the event of a termination within sixty days before or six months following the consummation of a Change of Control (as such events are defined in the Severance Agreement), then the Company will pay the officer (i) a lump sum amount equal to six months of the officer’s then current base salary, plus (ii) the annual bonus, pro-rated based on the officer’s termination date, or the lump sum amount equal to six months of the annual bonus if termination is as a result of a Change of Control, that the officer is eligible to receive for the calendar year in which the officer’s termination occurs assuming Company performance is achieved at target (100% for both Company and personal performance), which will be payable within the period of time set forth in the Severance Agreement following the termination of employment, (iii) 25%, or 50% if termination is as a result of a Change of Control, of the then-unvested equity awards issued to the officer by the Company will be vested as of officer’s termination date or the Change of Control date (if later), and (iv) 6 months of COBRA premium payments based on the coverages in effect as of the date of the officer’s termination of employment. All of the officer’s severance benefits are subject to her execution of a release in a form reasonably acceptable to the Company.
Previous report
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 report
During the three and nine months ended September 30, 2025, the Company recognized $69,973 and $150,851, respectively, of revenue, substantially all related to EAS subscriptions, software royalties and hardware revenue.
Previous report
During the three and nine months ended September 30, 2025, the Company reported cost of revenue of $50,816 and $79,574, respectively, consisting primarily of deployment costs, related to personnel costs, travel expenses and associated hardware costs to specific customers.
Previous report
Research and development expense for the nine months ended September 30, 2025 increased by approximately $0.1 million or 2.0% to $9.3 million from approximately $9.2 million for the nine months ended September 30, 2024. The decrease is primarily attributable to a decrease in personnel related costs and the capitalization of costs related to capitalized software and customer contracts.
Previous report
General and administrative expenses for the nine months ended September 30, 2025 increased by approximately $2.0 million or 25.3% to $9.9 million from approximately $7.9 million for the nine months ended September 30, 2024. The increase is primarily attributable to an increase in personnel related costs.
Previous report
Interest Income (Expense), net
Previous report
Interest income (expense), net increased by $421,664 to $(375,670) for the nine months ended September 30, 2025 from $45,994 for the nine months ended September 30, 2024. Interest income consists primarily of interest earned of $149,900 from the Company’s interest-bearing bank accounts, offset by interest expense of $525,570 related to the office lease.
Previous report
Other Income (Expense), net
Previous report
Other income (expense), net increased by $196,389 to $230,856 for the three months ended September 30, 2025 from $34,467 for the three months ended September 30, 2024. Other income consists primarily of realized gains earned on the Company’s short-term investments of $228,770.
Previous report
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, 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 report
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 shares of common stock in a public offering, which included: (i) 764 shares of common stock, and (ii) pre-funded warrants to purchase 1,458 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, and each Pre-Funded Warrant was sold at an offering price of $2,249.85. 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 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 shares of common stock in a public offering, which included: (i) 1,320 shares of common stock, and (ii) pre-funded warrants to purchase 2,013 shares of common stock. The Pre-Funded Warrants had a nominal exercise price of $0.0015. Each share of common stock was sold at an offering price of $1,500, and each Pre-Funded Warrant was sold at an offering price of $1,499.85. 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 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.
Previous 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 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.
Previous 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.
Previous report
On December 20, 2024, the Company entered into a securities purchase agreement for the sale and issuance of (i) 20,507 units at a public offering price per Unit of $241.50 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 per share and one Series B warrant to purchase one share of Common Stock at an exercise price of $301.875 and (ii) 62,309 pre-funded units at a public offering price of $241.485 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 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.
Previous 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 shares of its common stock, par value $0.015 per share at a purchase price of $90 per share and 55,667 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $89.985 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.
Reworded paragraphs (20)
Previous wording
We expect our technology to generate revenue through two main methods: deployment and EAS subscriptions. Deploying our EAS requires us and our integration partners to work with a new client to map the facility, gather data, and install our AV technology within their fleet and site. We anticipate that new deployments will yield project-based revenues based on the scope of the deployment. After deployment, we expect to generate revenues by offering EAS through a Software as a Service (“SaaS”) model, which can be considered the AV software component of Robotics as a Service (“RaaS”).
Current wording
We expect our technology to generate revenue through two main methods: deployment and EAS subscriptions. Deploying our EAS requires us and our integration partners to work with a new client to map the facility, gather data, and install our AV technology within their fleet and site. These deployments typically result in revenue based on the overall scope of the project and the integrated solution delivered.
Previous wording
RaaS is a subscription model that allows customers to use robots/vehicles without purchasing the hardware assets upfront. We will seek to achieve sustained revenue growth largely from ongoing SaaS-style EAS subscriptions that enable companies to tap into our ever-expanding suite of AV and AI capabilities as organizations transition into full industrial autonomy.
Current wording
We will seek to achieve sustained revenue growth largely from ongoing SaaS-style EAS subscriptions that enable companies to tap into our ever-expanding suite of AV and AI capabilities as organizations transition into full industrial autonomy.
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 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.
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 2025. We also had limited paid deployments in 2025 that offset some of the ongoing R&D costs of continually developing EAS.
Previous wording
Our go-to-market strategy is to acquire new customers that use industrial vehicles in their mission-critical and daily operations by (a) leveraging the relationships and existing customers of our network of strategic partners, (b) bringing AV capabilities to industrial vehicles as a software service provider, and (c) executing a robust in-house sales and marketing effort to nurture a pipeline of industrial organizations. Our focus is on acquiring new customers who are either looking (a) to embed our technology into their vehicle product roadmaps or (b) to apply autonomy to existing fleets with our vehicle retrofits. In turn, our customers are any organizations that could utilize our EAS solution, including original equipment manufacturers (“OEMs”) that supply industrial vehicles, end customers that operate their own industrial vehicles, or service providers that operate industrial vehicles for end customers.
Current wording
Our go-to-market strategy is to acquire new customers that use industrial vehicles in their mission-critical and daily operations by (a) leveraging the relationships and existing customers of our network of strategic partners, (b) bringing AV capabilities to industrial vehicles as a software service provider, and (c) executing a robust in-house sales and marketing effort to nurture a pipeline of industrial organizations. Our focus is on acquiring new customers who are looking to embed our technology into their vehicle product roadmaps. In turn, our customers are any organizations that could utilize our EAS solution, including original equipment manufacturers (“OEMs”) that supply industrial vehicles, end customers that operate their own industrial vehicles, or service providers that operate industrial vehicles for end customers.
Previous wording
The shares will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-290079), including the Sales Agreement prospectus contained therein, filed with the Securities and Exchange Commission (the “SEC”) on September 5, 2025, declared effective by the SEC on September 18, 2025.
Current wording
The Offering was made pursuant to that certain Registration Statement on Form S-3, as amended (File No. 333-290079), which was originally filed on September 5, 2025, and declared effective by the Securities and Exchange Commission on September 18, 2025, including the Prospectus contained therein and a prospectus supplement dated March 16, 2026 filed with the Securities and Exchange Commission on March 17, 2026.
Previous wording
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached shortly after a working prototype is complete and meets or exceeds design specifications including functions, features, and technical performance requirements. After technological feasibility is established, judgment is required to determine the amount of payroll and stock-based compensation costs to be capitalized on the remaining development efforts. These costs will continue to be capitalized until such time as when the product or enhancement is available for general release to customers. Computer software to be sold, leased or otherwise marketed is classified as an intangible asset in accordance with ASC 985,Software.
Current wording
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, certain payroll and stock compensation, occupancy, and professional service costs that are incurred to develop functionality for the Company’s software and internally built software platforms, as well as certain upgrades and enhancements that are expected to result in enhanced functionality are capitalized. Judgment is required in determining when technological feasibility of a product is established. Management has determined that technological feasibility is established when a working model is complete. After technological feasibility is established, judgement is required to determine the amount of payroll and stock-based compensation costs to be capitalized on the remaining development efforts. These costs will continue to be capitalized until such time as when the product or enhancement is available for general release to customers.
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 9 shares of its common stock, exercisable at a price per share of $140,625 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 shares of its common stock, exercisable at a price per share of $40,650 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 shares of its common stock, exercisable at a price per share of $40,650 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 shares of its common stock, exercisable at a price per share of $140,625 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
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. After shareholder approval on January 30, 2025, the strike price and the number of equity shares are now fixed. Therefore, in accordance with ASC 815-40-35-8,Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the condensed consolidated balance sheet as of September 30, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025.
Current wording
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 estimated fair value of the Company’s warrant agreements has been determined to be Level 3 measurement, as certain inputs used to determine the fair value of these agreements are unobservable. 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. The resulting warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value is recognized in the Company’s consolidated statements of operations under other income (expense). After shareholder approval on January 30, 2025, the strike price and the number of equity shares are now fixed. Therefore, in accordance with ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the consolidated balance sheet as of December 31, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025.
Previous 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.
Current wording
We derive revenue from EAS subscriptions with relative add-on offerings such as hardware revenue and other revenue (i.e., deployment 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
Research and development expense for the three months ended September 30, 2025 increased by approximately $2.5 million or 88.0% to $5.3 million from approximately $2.8 million for the three months ended September 30, 2024. The increase is primarily attributable to an increase in personnel related costs related to a change in estimate of capitalized software and the capitalization of costs related to customer contracts.
Current wording
Research and development expense for the three months ended March 31, 2026 increased by approximately $0.8 million or 37.1% to $2.9 million from approximately $2.1 million for the three months ended March 31, 2025. The increase is primarily attributable to an increase in personnel related costs related to a change in estimate of capitalized software offset by the capitalization of costs related to customer contracts.
Previous wording
General and administrative expenses for the three months ended September 30, 2025 increased by approximately $0.6 million or 23.9% to $3.2 million from approximately $2.6 million for the three months ended September 30, 2024. The increase is primarily attributable to an increase in personnel related costs.
Current wording
General and administrative expenses for the three months ended March 31, 2026 increased by approximately $1.0 million or 30.4% to $4.1 million from approximately $3.1 million for the three months ended March 31, 2025. The increase is primarily attributable to an increase in personnel related costs and an increase in marketing and advertising expenses.
Previous wording
Interest income (expense), net decreased by $298,833 to $(252,497) for the three months ended September 30, 2025 from $46,336 for the three months ended September 30, 2024. Interest income consists primarily of interest earned of $60,936 from the Company’s interest-bearing bank accounts, offset by interest expense of $313,433 related to the office lease.
Current wording
Interest income (expense), net decreased by $52,749 to $22,070 for the three months ended March 31, 2026 from $74,819 for the three months ended March 31, 2025. Interest income consists primarily of interest earned of $22,070 from the Company’s interest-bearing bank accounts.
Previous wording
Other income (expense), net increased by $1.7 million to $(1.7) million for the nine months ended September 30, 2025 from $24,342 for the nine months ended September 30, 2024. Other income consists primarily of fair value remeasurement of $1.1 million and realized gains earned on the Company’s short-term investments of $0.6 million.
Current wording
Other income (expense), net decreased by $0.8 million to $0.4 million for the three months ended March 31, 2026 from $1.2 million for the three months ended March 31, 2025. Other income consists primarily of discount amortization on the Company’s short-term investments of $0.4 million. The decrease in other income was primarily driven by the fair value measurement of warrants issued in the first quarter of 2025.
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 September 30, 2025, the Company had unrestricted cash of approximately $4.8 million and short-term investments of approximately $30.1 million. As of December 31, 2024, the Company had unrestricted cash of approximately $23.6 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 six months. As of March 31, 2026, the Company had unrestricted cash of approximately $5.1 million and short-term investments of approximately $39.2 million. As of December 31, 2025, the Company had unrestricted cash of approximately $1.0 million short-term investments of approximately $33.7 million.
Previous wording
On June 26, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 192,496 shares of its common stock, par value $0.00001 per share, at a purchase price of $5.01 per share and 2,801,516 pre-funded warrants to purchase shares of common stock, at a purchase price of $5.00999 per pre-funded warrant. The Company received net proceeds of approximately $12.7 million from the offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Current wording
On June 26, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 192,496 shares of its common stock, par value $0.00001 per share, at a purchase price of $5.01 per share and 2,801,516 pre-funded warrants to purchase shares of common stock, at a purchase price of $5.00999 per pre-funded warrant. The Company received net proceeds of approximately $15.9 million from the offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Previous wording
On June 27, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 313,564 shares of its common stock, par value $0.00001 per share, at a purchase price of $7.50 per share and 1,979,769 pre-funded warrants to purchase shares of common stock, at a purchase price of $7.49999 per pre-funded warrant. The Company received net proceeds of approximately $14.7 million from the offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Current wording
On June 27, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 313,564 shares of its common stock, par value $0.00001 per share, at a purchase price of $7.50 per share and 1,979,769 pre-funded warrants to purchase shares of common stock, at a purchase price of $7.49999 per pre-funded warrant. The Company received net proceeds of approximately $13.7 million from the offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
Previous wording
The Company’s liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors and borrow funds to fund its general operations, research and development activities and capital expenditures. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating costs and expenses and obtaining funds from outside sources of financing to generate positive financing cash flows.
Current wording
The Company’s liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors and borrow funds to fund its general operations, research and development activities and capital expenditures.
Previous wording
Net cash used in operating activities for the nine months ended September 30, 2025 was approximately $16.8 million, an increase of approximately $1.2 million or 8.3% compared to approximately $15.6 million for the nine months ended September 30, 2024. The increase is primarily attributed to an increase in prepaid inventory for tuggers, an increase in inventory related to tuggers, and the security deposit for the new office location.
Current wording
Net cash used in operating activities for the three months ended March 31, 2026 was approximately $8.4 million, an increase of approximately $1.9 million or 29.0% compared to approximately $6.5 million for the three months ended March 31, 2025. The increase is primarily attributed to an increase in accounts receivable, deferred costs, and deferred revenue due to new customer contracts.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2025 was approximately $31.6 million, a decrease of approximately $34.0 million compared to net cash provided by investing activities of approximately $2.6 million for the nine months ended September 30, 2024. The decrease consists of short-term investment purchases of approximately $56.0 million and acquisition of equipment purchases of $0.1 million, offset by $22.6 million in short-term investment proceeds and a decrease in acquisition of intangible assets of $0.5 million due to a change in estimate of capitalized software.
Current wording
Net cash used in investing activities for the three months ended March 31, 2026 was approximately $5.4 million, a decrease of approximately $10.7 million compared to net cash used in investing activities of approximately $16.1 million for the three months ended March 31, 2025. The decrease consists primarily of short-term investment purchases of approximately $2.0 million, short-term investment maturities of approximately $8.2 million and acquisition of intangible assets of approximately $0.7 million, offset by R&D-related hardware equipment purchases of approximately $0.1 million.
Previous wording
Net cash provided by financing activities for the nine months ended September 30, 2025 was $29.6 million, which consisted of proceeds from the sale of common stock, an increase of approximately $18.2 million compared to $11.4 million for the nine months ended September 30, 2024, which consisted of proceeds from at-the-market equity financing and the sale of common stock.
Current wording
Net cash provided by financing activities for the three months ended March 31, 2026 was $17.9 million, which consisted of $8.7 million in proceeds from a registered direct offering of common stock and $9.2 million in proceeds from at-the-market equity financings.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On September 5, 2025, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Aegis Capital Corp. (the “Agent”), under which the Company may, from time to time, sell shares of the Company’s common stock having an aggregate offering price of up to $100,000,000 in “at the market” offerings through or to the Agent, as sales agent or principal. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement.