Cyngn Inc. Announces Closing of $9.0 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

Cyngn (Nasdaq: CYN), an AI-powered autonomous driving software developer for industrial applications, has closed its previously announced registered direct offering. The company sold 15,000,000 shares of common stock (or pre-funded warrants) at $0.60 per share ($0.5999 for warrants), raising $9.0 million in gross proceeds. The funds will be used for general corporate purposes and working capital. Aegis Capital Corp. served as the Exclusive Placement Agent, with the offering conducted under an effective shelf registration statement previously declared effective by the SEC on June 13, 2023.

Positive

• Secured $9.0 million in additional funding
• Successfully completed at-market offering indicating market acceptance

Negative

• Significant shareholder dilution through issuance of 15 million new shares
• Low share price of $0.60 indicates challenging market conditions

Insights

Financial Analyst

Cyngn's $9.0 million registered direct offering represents a significant dilutive event, pricing shares at $0.60 per unit and issuing 15 million new shares. This represents substantial dilution given the company's current market cap of $1.92 million. The at-market pricing suggests investor premium, while the inclusion of pre-funded warrants adds complexity to the capital structure. The offering strengthens the balance sheet but comes at a considerable cost to existing shareholders. The timing, during year-end and the need for additional working capital may indicate cash burn concerns. This financing, while providing needed liquidity, could pressure the stock price in the near term due to increased supply of shares and dilution impact.

Capital Markets Specialist

The structure of this offering reveals important market dynamics. Utilizing Aegis Capital as placement agent for a registered direct offering, rather than pursuing a traditional follow-on offering, suggests a targeted approach to institutional investors. The at-market pricing of $0.60 indicates pricing power, while the inclusion of pre-funded warrants provides flexibility for investors subject to ownership limitations. The shelf registration usage demonstrates proactive capital planning, but the size relative to market cap suggests significant shareholder dilution. The working capital use of proceeds, rather than specific growth initiatives, may signal operational funding pressures rather than strategic expansion plans.

MENLO PARK, Calif., Dec. 31, 2024 /PRNewswire/ -- Cyngn Inc. (the "Company" or "Cyngn") (Nasdaq: CYN), a developer of AI-powered autonomous driving software solutions for industrial applications, today announced the closing of its previously announced  registered direct offering priced at-the-market under Nasdaq rules for the purchase and sale of an aggregate of 15,000,000 shares of common stock (or pre-funded warrants in lieu thereof) at a purchase price of $0.60 per share (or $0.5999 for each pre-funded warrant).

The gross proceeds to the Company from the offering were $9.0 million, before deducting placement agent fees and other offering expenses payable by the Company.  The Company intends to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. acted as Exclusive Placement Agent for the offering. Sichenzia Ross Ference Carmel LLP acted as counsel to the Company. Kaufman & Canoles, P.C.  acted as counsel to Aegis Capital Corp.

The common stock (and pre-funded warrants in lieu thereof) were issued in a registered direct offering pursuant to an effective shelf registration statement on Form S-3, as amended (File No. 333-271567), previously filed with the United States Securities and Exchange Commission (the "SEC"), and declared effective by the SEC on June 13, 2023. A final prospectus supplement and accompanying prospectus describing the terms of the proposed registered direct offering was filed with the SEC and is available on the SEC's website located at www.sec.gov/edgar. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

Interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

This press release shall not constitute an offer to sell or the 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).

Forward-Looking Statements

The foregoing material may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company's product development and business prospects, and can be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "plan," "believe," "potential," "should," "continue" or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Investor Contact:
Donald Alvarez, CFO
investors@cyngn.com
Media Contact:
Luke Renner, Head of Marketing
media@cyngn.com 

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SOURCE Cyngn

FAQ

How much did Cyngn (CYN) raise in its December 2024 offering?

Cyngn raised $9.0 million in gross proceeds through the sale of 15,000,000 shares at $0.60 per share.

What is the price per share for CYN's December 2024 registered direct offering?

The offering price was $0.60 per share of common stock, or $0.5999 for each pre-funded warrant.

How will Cyngn (CYN) use the proceeds from its $9M offering?

Cyngn plans to use the net proceeds for general corporate purposes and working capital.

Who was the placement agent for Cyngn's (CYN) December 2024 offering?

Aegis Capital Corp. acted as the Exclusive Placement Agent for the offering.

How many shares did Cyngn (CYN) issue in its December 2024 offering?

Cyngn issued 15,000,000 shares of common stock (or pre-funded warrants in lieu thereof).