[10-Q] Cyngn Inc. Quarterly Earnings Report
Cyngn Inc. (CYN) filed its quarterly report for the period ended September 30, 2025 and disclosed that prior annual and interim financial statements were misstated due to the accounting for warrant liabilities, leading to a restatement of 2024 and earlier 2025 periods. Those restatements are contained in a previously filed amended annual report, while this filing includes restated March and June 2025 interim results.
For the nine months ended September 30, 2025, Cyngn generated revenue of $150,851 but recorded a net loss of $17,798,600, reflecting heavy investment in research and development and general and administrative expenses totaling $19,284,749. The balance sheet shows total assets of $49,267,435, driven by $30,054,492 of short-term U.S. Treasury investments and $4,820,464 of cash, and total liabilities of $10,588,062 after the warrant liability was removed following reclassification of certain warrants to equity. Management states that the current cash and investment position is expected to fund operations for at least 12 months from issuance of these statements.
- None.
- Material restatement of prior financial statements due to misstatements in accounting for warrant liabilities, with earlier 2024 and 2025 periods no longer to be relied upon and replaced by restated figures.
- Large losses with minimal revenue: nine-month 2025 revenue of $150,851 versus operating costs and expenses of $19,284,749, resulting in a net loss of $17,798,600 and significant operating cash burn.
Insights
Cyngn combines a warrant-driven restatement with ongoing heavy cash burn.
Cyngn reports that earlier 2024 and 2025 financial statements should no longer be relied on because of misstatements in accounting for warrant liabilities tied to a December
Operationally, the business remains in an early-revenue stage. Revenue for the nine months ended
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EXPLANATORY NOTE
As previously announced in the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 7, 2025, Cyngn Inc. (“we,” “us,” “our,” the “Company” and “Cyngn”) determined that the Company’s previously issued consolidated financial statements and other financial data for the fiscal year ended December 31, 2024 contained in its Annual Report on Form 10-K (the “Affected Period”), as well as the previously issued unaudited financial statements for the first and second quarters of 2025 included in the Company’s Quarterly Report on Form 10-Q, should no longer be relied upon. The misstatements are related to accounting for warrant liabilities with respect to the Company’s issuance of warrants pursuant to the terms of that certain Securities Purchaser Agreement dated December 20, 2024. As a result of this misstatement, the Company filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 with the SEC on November 14, 2025 (the “Form 10-K/A”) to restate certain financial information for the Affected Period. All restated financial information is included in the Form 10-K/A. The Company does not intend to amend any other reports previously filed with the SEC.
This quarterly report on Form 10-Q for the nine months ended September 30, 2025 includes financial statements that amend and restate the Company’s unaudited financial statements as of and for the three and six-month periods ended March 31, 2025 and June 20, 2025. Therefore, the previously filed Form 10-Qs for those prior periods will not be amended through separate filings.
Please refer to Note 15 “Restatement of Previously Issued Consolidated Financial Statements” and Note 16 “Restatement of Previously Issued Interim Financial Statements – Unaudited” in the notes to the consolidated financial statements in this Form 10-Q for a discussion of the restatement and the impact on the specific accounts in such unaudited financial statements.
CYNGN INC.
TABLE OF CONTENTS
| Page No. | ||
| PART I FINANCIAL INFORMATION | 1 | |
| ITEM 1. | FINANCIAL STATEMENTS | 1 |
| Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 | 1 | |
| Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024 (unaudited) | 2 | |
| Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the Three and Nine Months ended September 30, 2025 and 2024 (unaudited) | 3 | |
| Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024 (unaudited) | 4 | |
| Notes to Condensed Consolidated Financial Statements (unaudited) | 5 | |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 37 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 46 |
| ITEM 4. | CONTROLS AND PROCEDURES | 46 |
| PART II OTHER INFORMATION | 47 | |
| ITEM 1. | LEGAL PROCEEDINGS | 47 |
| ITEM 1A. | RISK FACTORS | 47 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 47 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 47 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 47 |
| ITEM 5. | OTHER INFORMATION | 47 |
| ITEM 6. | EXHIBITS | 47 |
| SIGNATURES | 48 | |
i
PART 1 — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| (Unaudited) September 30, 2025 | December 31, 2024 (Restated) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Short-term investments | – | |||||||
| Prepaid expenses and other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Right of use asset, net | ||||||||
| Intangible assets, net | ||||||||
| Security Deposit | – | |||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Current operating lease liability | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Non-current operating lease liability | – | |||||||
| Warrant liability | – | |||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Common stock, Par $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COSTS AND EXPENSES | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| TOTAL COSTS AND EXPENSES | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE), NET | ||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||||||||||
| Change in fair value of warrant liability | ‒ | ‒ | ‒ | |||||||||||||
| Other income (expense), net | ||||||||||||||||
| TOTAL OTHER INCOME (EXPENSE), NET | ( | ) | ||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of June 30, 2025 (Restated) | – | – | $ | | $ | $ | ( | ) | $ | |||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2025 | – | $ | – | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of June 30, 2024 | – | – | $ | – | $ | $ | ( | ) | $ | |||||||||||||||||||
| Issuance of at-the-market common stock, net of issuance costs | – | – | – | – | ||||||||||||||||||||||||
| Exercise of stock options and vesting of restricted stock units | – | – | – | ( | ) | – | ( | ) | ||||||||||||||||||||
| Issuance of common stock in connection with the public offering | – | – | – | – | – | – | – | |||||||||||||||||||||
| Exercise of pre-funded warrants in connection with the public offering | – | – | – | – | – | – | – | |||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2024 | – | $ | – | $ | – | $ | $ | ( | ) | $ | ||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of December 31, 2024 (Restated) | – | – | $ | | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Exercise of stock options and vesting of restricted stock units | – | – | – | – | – | – | ||||||||||||||||||||||
| Reclassification of Series A warrants to equity in connection with the public offering | – | – | – | – | – | |||||||||||||||||||||||
| Exercise of Series B warrants in connection with the public offering, net of issuance costs | – | – | – | |||||||||||||||||||||||||
| Issuance of common stock in connection with the public offering | – | – | – | |||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2025 | – | $ | – | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of December 31, 2023 | – | – | $ | – | $ | $ | ( | ) | $ | |||||||||||||||||||
| Issuance of at-the-market common stock, net of issuance costs | – | – | – | – | ||||||||||||||||||||||||
| Exercise of stock options and vesting of restricted stock units | – | – | – | ( | ) | – | ( | ) | ||||||||||||||||||||
| Issuance of common stock and pre-funded warrants in connection with the public offering | – | – | – | – | ||||||||||||||||||||||||
| Exercise of pre-funded warrants in connection with the public offering | – | – | – | – | ||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2024 | – | $ | – | $ | – | $ | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
3
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Realized gain on short-term investments | ( | ) | ( | ) | ||||
| Loss on disposed assets | – | |||||||
| Patent impairment | – | |||||||
| Change in fair value of warrant liability | ( | ) | – | |||||
| Change in estimate of capitalized software | – | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses, operating lease right-of-use assets, and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses, lease liabilities, and other current liabilities | ( | ) | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Acquisition of intangible asset | ( | ) | ( | ) | ||||
| Purchase of short-term investments | ( | ) | ( | ) | ||||
| Proceeds from maturity of short-term investments | ||||||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from at-the-market equity financing, net of issuance costs | – | |||||||
| Proceeds from public issuance of common stock and pre-funded warrants, net of issuance costs | ||||||||
| Issuance costs from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | ( | ) | – | |||||
| Issuance costs for stock dividend and restricted stock units | – | ( | ) | |||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Net increase in cash and cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash and cash equivalents and restricted cash, beginning of year | ||||||||
| Cash and cash equivalents and restricted cash, end of year | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW: | ||||||||
| Cash paid during the period for interest and taxes | $ | – | $ | – | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||||||||
| Recognition of operating lease right-of-use assets and operating lease liabilities | $ | $ | ||||||
| Acquisition of right-of-use asset in exchange for new operating lease obligation | $ | $ | – | |||||
| Acquisition of property and equipment included in accounts payable and accrued expenses | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
CYNGN INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Description of Business
Cyngn Inc., together with its subsidiary (collectively, “Cyngn” or the “Company”), was incorporated in Delaware in 2013. Our wholly owned subsidiary, Cyngn Singapore PTE. LTD., is a Singaporean limited company organized in 2015. The Company is headquartered in Mountain View, CA.
Cyngn develops and deploys scalable, differentiated autonomous vehicle technology for industrial organizations. Our full-stack autonomous driving software, (“DriveMod”), can be integrated onto vehicles manufactured by Original Equipment Manufacturers (“OEM”) either via retrofit of existing vehicles or by integration directly into vehicle assembly. The Enterprise Autonomy Suite (“EAS”) is designed to be compatible with sensors and components from leading hardware technology providers and integrate our proprietary Autonomous Vehicle (“AV”) software to produce differentiated autonomous vehicles.
The Company has been operating autonomous vehicles in production environments and in 2023 began licensing EAS commercially. Built and tested in difficult and diverse real-world environments, DriveMod, the fleet management system and our proprietary Software Development Kit (“DriveMod Kit”) combine to create a full-stack advanced autonomy solution designed to be modular, extendable, and safe. The Company operates in one business segment.
On June 25, 2024, the Company’s stockholders voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within a range of 1-for-5 to 1-for-100. On June 25, 2024, the Company’s Board of Directors determined to effect the reverse stock split of the common stock at a 1-for-100 ratio, which reverse split became effective in the market on July 5, 2024. On January 30, 2025, the Company’s stockholders voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within a range of 1-for-5 to 1-for-150. On January 30, 2025, the Company’s Board of Directors determined to effect the reverse stock split of the common stock at a 1-for-150 ratio, which reverse split became effective in the market on February 18, 2025.
All share and per share amounts and exercise prices of stock options and warrants in the accompanying condensed consolidated financial statements and notes to the condensed consolidated financial statements have been retroactively adjusted to reflect the reverse stock splits for all periods presented.
Liquidity
The Company has incurred losses from operations since inception. The
Company incurred net losses of approximately $
The Company’s liquidity is based on its
ability to increase its operating cash flow position, obtain capital financing from equity interest investors and borrow money 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 to generate positive financing cash flows. As of September
30, 2025, the Company’s unrestricted cash balance was approximately $
Based on cash flow projections from operating, investing and financing activities and the existing balance of cash and short-term investments, management is of the opinion that the Company has sufficient funds for sustainable operations, and it will be able to meet its payment obligations from operations and related commitments for the 12 months following the date these condensed consolidated financial statements were issued.
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2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements as of and for the three months ended September 30, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to applicable rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 6, 2025.
The accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the audited consolidated financial statements for the fiscal years ended December 31, 2024, and 2023, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. There have been no changes to the Company’s significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that have had a material impact on the consolidated financial statements and the related notes.
The results reported for the interim period presented are not necessarily indicative of results that may be expected for any subsequent quarter or for the full year ending December 31, 2025. These unaudited condensed consolidated financial statements include all adjustments and accruals that are necessary for a fair statement of all interim periods reported herein.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Cyngn Inc. and its wholly owned subsidiary. Intercompany accounts and transactions have been eliminated upon consolidation.
Foreign Currency Translation
The functional and reporting currency for Cyngn is the U.S. dollar. Monetary assets and liabilities denominated in currencies other than U.S. dollar are translated into the U.S. dollar at period end rates, income and expenses are translated at the weighted average exchange rates for the period and equity is translated at the historical exchange rates. Foreign currency translation adjustments and transactional gains and losses are immaterial to the condensed consolidated financial statements.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates and judgments include but are not limited to internal-use software and developed software to be sold, leased or marketed, warrants and share-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, which is placed with high-credit-quality financial institutions and at times exceeds federally insured limits.
Cash maintained with domestic financial institutions generally exceed the Federal Deposit Insurance Corporation insurable limit. To date, the Company has not experienced any losses on its deposits of cash. Cyngn invests in U.S. Treasury securities and carries these at amortized cost and recognizes gains and losses when realized.
Concentration of Supplier Risk
The Company generally utilizes suppliers for outside development and engineering support. The Company does not believe that there is any significant supplier concentration risk as of September 30, 2025 and December 31, 2024.
6
Cash and Short-term Investments
The Company considers its bank accounts and all
highly liquid investments that are both readily convertible to cash with minimal risk of changes in value due to changes in interest rates,
to be cash. As of September 30, 2025 and December 31, 2024, the Company had $
The Company considers short-term investments to include marketable U.S. government securities that it intends to hold until maturity and redeem within one year. The Company treated its U.S. government treasury bill placements as held-to-maturity securities in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic (“ASC”) 320, “Investments – Debt and Equity Securities”, and recorded these securities at amortized cost on the accompanying condensed consolidated balance sheet as of September 30, 2025 and December 31, 2024.
Accounts Receivable
Accounts receivables are recorded at the invoiced
amount and do not bear interest. The Company provides for probable uncollectible amounts based upon its assessment of the current status
of the individual receivables and after using reasonable collection efforts. The allowance for credit losses was
Fair Value Measurements
The accounting guidance under ASC Topic 820, Fair Value Measurement, defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants. As such, fair value is considered a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.
The Company uses the following fair value hierarchy prescribed by U.S. GAAP, which prioritizes the inputs used to measure fair value as follows:
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities are considered to be fair valued on a recurring basis if fair value is measured regularly. However, if the fair value measurement of an instrument does not necessarily result in a change in the amount recorded on the condensed consolidated balance sheets, assets and liabilities are considered to be fair valued on a nonrecurring basis. This typically occurs when accounting guidance requires assets and liabilities to be recorded at the lower of cost or fair value, or on certain nonfinancial assets and liabilities. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include certain long-lived assets, intangible assets, and share-based compensation measured at fair value upon initial recognition.
The carrying amounts of the Company’s cash and accounts receivable are reasonable estimates of their fair values due to their short-term nature. The fair values of the Company’s share-based compensation and underwriter warrants were based on observable inputs and assumptions used in Black-Scholes valuation models derived from independent external valuations.
7
Property and Equipment
Property and equipment is stated at cost less
accumulated depreciation. Construction work in progress includes production costs and costs of materials used in the development of the
Company’s autonomous driving software. Assets are held as construction work in progress until placed into service, at which date
depreciation commences over the estimated useful lives of the respective assets.
| Property and Equipment | Useful life | |
| Automobiles (DMV-registered) | ||
| Machinery, tools and equipment | ||
| Computer and equipment | ||
| Internal-use software | ||
| Furniture and fixtures | ||
| Leasehold improvements | Shorter of 3 years or lease term |
Operating Leases
The Company accounts for leases in accordance with ASC Topic 842 (“ASC 842”), Leases. All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases. The Company recognized a right-of-use asset and lease liability in the condensed consolidated balance sheets under ASC 842 on the office space lease in Mountain View, California that commenced in May 2025 and the previous office space lease in Menlo Park, California that ended in May 2025. Lease expense will be recognized on a straight-line basis over the remaining term of the lease. Operating leases are recognized on the balance sheet as right-of-use assets, and operating lease liabilities.
Costs to Develop Software
The Company incurs costs related to internally developed software. Based on the nature of the software, the Company capitalizes software costs under the following guidance.
Internal-Use Software costs
The Company determined when to capitalize its internal-use software after planning and design efforts are successfully completed. Management has implicitly authorized funding and the software is expected to be completed and used as intended. The Company determines the amount of internal software costs to be capitalized based on the amount of time spent by the developers on projects in the application stage of development. There is judgment involved in estimating time allocated to a particular project in the application stage. Costs associated with building or significantly enhancing the internally built software platform for internal use are capitalized, while costs associated with planning new developments and maintaining the internally built software platforms are expensed as incurred. Capitalized costs include certain payroll and stock compensation costs, as well as subscription server and consulting costs.
Internal-use software is classified as property
and equipment and is amortized on a straight-line basis over their estimated useful life of
8
Costs to Develop Software to be Sold, Leased or Otherwise Marketed
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.
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
During the three months ended September 30, 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.
As a result, beginning in the third quarter of fiscal 2025, 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.
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 three months ended September 30, 2025, this change resulted in an increase to research and development expense of
approximately $
Long-Lived Assets and Finite Lived Intangibles
The Company has finite-lived intangible assets
consisting of patents and trademarks. These assets are amortized on a straight-line basis over their estimated remaining economic lives.
The patents and trademarks are amortized over
The Company reviews its long-lived assets and finite-lived intangibles for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The events and circumstances the Company monitors and considers include significant decreases in the market price of similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs. The Company assesses the recoverability of these assets by comparing the carrying amount of such assets or asset group to the future undiscounted cash flow it expects the assets or asset group to generate. The Company recognizes an impairment loss if the sum of the expected long-term undiscounted cash flows that the long-lived asset is expected to generate is less than the carrying amount of the long-lived asset being evaluated. An impairment charge would then be recognized equal to the amount by which the carrying amount exceeds the fair value of the asset.
The Company also identified that the long-lived asset “Patents”, which have international and U.S. based patents, as the asset group. The Company evaluated its patents and identified expired international patent applications (“expired assets”) for the year ended December 31, 2024. The Company determined there were no further plans to put resources toward these international patent applications. The group of expired patents carrying value was set to its salvage value which is zero given no future cash flows.
For the three and nine months ended September
30, 2024, the Company determined the existence of an impairment associated with the Company’s intangible asset “Patents”
and accordingly recorded an impairment charge of $
9
Income Taxes
The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance as of September 30, 2025 and December 31, 2024 (see Note 11. Income Taxes).
There are no uncertain tax positions that would require recognition in the condensed consolidated financial statements. If the Company were to incur an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax would be reported as income taxes. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon on ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.
Common Stock Warrants
The Company issued to its lead underwriter in
the Company’s IPO warrants to purchase up to
The Company also applied the guidance in ASC 340-10-S99-1, Other Assets and Deferred Costs, that states specific incremental costs directly attributable to a proposed or actual offering of equity securities may properly be deferred and charged against the gross proceeds of the offering. The Company treated the valuation of the warrants as directly attributable to the issuance of an equity contract, and accordingly, classified the warrants as additional paid-in capital.
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 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.
Stock-based Compensation
The Company recognizes the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards. Cost is recognized on a straight-line basis over the service period, which is generally the vesting period of the award. The Company recognizes stock-based compensation cost and reverses previously recognized costs for unvested awards in the period forfeitures occur, if any. The Company determines the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the fair value of common stock, expected price volatility of common stock, expected term, risk-free interest rates, and expected dividend yield (see Note 9. Stock-based Compensation Expense).
10
Net Loss Per Share Attributable to Common Stockholders
The Company computes loss per share attributable to common shareholders by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised into shares. In calculating diluted net loss per share, the numerator is adjusted for the change in the fair value of the shares (only if dilutive) and the denominator is increased to include the number of potentially dilutive common shares assumed to be outstanding (see Note 8. Net Loss per Share Attributable to Common Stockholders).
Research and Development Expense
Research and development expenses consists primarily of outsourced engineering services, internal engineering and development expenses, materials, labor and stock-based compensation of Company personnel involved in the development of the Company’s products and services, and allocated lease costs based on the approximate square footage area used in research and development activities. Research and development costs are expensed as incurred.
Selling, General, and Administrative Expense
Selling, general, and administrative expense consist
primarily of personnel costs, facilities expenses, depreciation and amortization, travel, and advertising costs. Advertising costs are
expensed as incurred in accordance with ASC 720-35, “Other Expense – Advertising Costs”, other than trade show expenses
which are deferred until occurrence of the future event. Advertising costs for the three months ended September 30, 2025
and 2024 were $
Commitments
The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. There have been no such liabilities recorded by the Company as of September 30, 2025 and December 31, 2024.
Segment Reporting
The Company operates as one operating segment.
The Company’s chief operating decision maker is the executive management team, its Chief Executive Officer and Chief Financial Officer.
The executive management team manages operations and business as
The one operating segment generates revenues from EAS subscriptions with relative add-on offerings such as hardware revenue and other revenue (i.e., deployment/set up costs) and fixed-price NRE contracts related to customer-specific configuration 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.
For the Company’s
11
Revenue Recognition
Under ASC 606, “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps:
| ● | Identifying the contract, or contracts, with the customer; |
| ● | Identifying the performance obligations in the contract; |
| ● | Determining the transaction price; |
| ● | Allocating the transaction price to performance obligations in the contract; and |
| ● | Recognizing revenue when, or as, the Company satisfies performance obligations by transferring the promised goods or services. |
Nature of Products and Services and Revenue Recognition from (a) subscription of our Enterprise Autonomy Service (“EAS”), (b) nonrecurring engineering services under fixed fee arrangements (“NRE services”), (c) product sales of hardware to customers and distributors, and (d) other are recognized as follows:
Subscription
Subscription revenue primarily consists of the sale of SaaS offerings. Through the SaaS offerings and related support services, customers are granted access to a hosted software application over the contract period, generally ranging from one year to five years, without a contractual right to possession of the software.
SaaS and related support services: Revenues from the sale of hosted software applications and related support services are generally recognized ratably over the contractual period that the services are delivered, beginning on the date the service is made available to customers. Revenue is recognized ratably because the customer simultaneously receives and consumes the benefits of the services throughout the contract period. Contracts are generally fixed price the Company’s standard payment terms vary by customer and the products or services offered.
Revenue is measured based on considerations specified in a contract with a customer. Customer contracts for software subscriptions are generally represented by a sales contract or purchase order with contract durations typically ranging from three to five years.
For the three months ended September 30, 2025
and 2024, subscription revenue was $
Non-Recurring Engineering (“NRE”)
The Company enters into Non-Recurring Engineering (“NRE”) contracts that are principally comprised of engineering services related to customer-specific configuration of the DriveMod. Generally, with respect to these NRE contracts, i) the determination of the contract price is based on labor and hardware costs estimated to achieve the required milestones specified in the contract; ii) payment under these arrangements are comprised of upfront payments due upon execution of the agreements as well as payments due upon the achievement of milestones specified in each arrangement; and iii) contain mutual termination clauses without penalty. The Company recognizes revenue from NRE contracts that are fully funded by customers and the sale of its products when promised goods or engineering services are transferred to customers. Each of the Company’s NRE arrangements are comprised of multi-phase deliverables recognized at a point in time upon completion and acceptance from the customer of each phase of the arrangement. The Company recognizes revenue in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
For the three and nine months ended September
30, 2025 and 2024, NRE revenue was $
12
Hardware
Hardware Revenue generally consists of sale or lease of industrial vehicles modified with a proprietary autonomous hardware kit, known as a DriveMod Kit. Hardware revenue is recognized over the term of the contract because the hardware is not distinct from the related software and therefore represents a single performance obligation. For customers that lease the hardware, revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided by the hardware. Customer contracts for product sales of hardware are generally represented by a sales contract or purchase order.
For the three months ended September 30, 2025
and 2024, hardware revenue was $
Royalty
Royalty revenue primarily consists of the licensing of the proprietary software that operates and is integrated into the DriveMod Kit. In these arrangements, the software is not distinct from the hardware, as it does not have standalone functionality without the underlying hardware and is highly interrelated with the operation of the hardware. As such, the Company accounts for the software and hardware as a single combined performance obligation and royalty revenue is recognized in the period in which the underlying products, DriveMod Kits, are sold.
For the three months ended September 30, 2025
and 2024, royalty revenue was $
Other
Other revenues generally consist of fees associated with the sale of distinct professional services, either in support of deploying hardware and subscription support. Professional service offerings are typically sold as part of an arrangement for products or services included within subscription revenue. Professional services associated with subscription revenue generally relate to standard implementation, configuration, installation or training services applied to SaaS deployment models. Professional service revenue is recognized over time as the services are performed, as the customer simultaneously receives and consumes the benefit of these services. Professional service contracts are offered at either a fixed or a variable price and may be invoiced in advance or arrears of the services being provided.
The Company’s standard payment terms vary by customer and the products or services offered. Contract terms for other revenue arrangements are generally short-term, with stated contract terms that are less than one year.
The Company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with a revenue-producing transaction between the Company and the Company’s customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise taxes. The Company reports the collection of these taxes on a net basis (excluded from revenues). Shipping and handling fees billed to customers are included in net sales, while costs of shipping and handling are included in cost of revenue.
For the three months ended September 30, 2025
and 2024, other revenue was $
Arrangements with Multiple Performance Obligations
When a contract involves multiple performance obligations, the Company accounts for individual products and services separately if the customer can benefit from the product or service on its own or with other resources that are readily available to the customer and the product or service is separately identifiable from other promises in the arrangement. The consideration is allocated between separate performance obligations in proportion to their estimated stand-alone selling price. The transactions to which the Company had to estimate stand-alone selling prices and allocate the arrangement consideration to multiple performance obligations were immaterial.
The Company’s contracts may include standard warranty or service level provisions that state promised goods and services will perform and operate in all material respects as defined in the respective agreements. The Company has determined that these represent assurance-type warranties, and the Company has not incurred any material costs as a result of such commitments.
13
Cost to Obtain and Fulfill a Contract.
The Company incurs certain costs to obtain contracts, principally third-party fulfillment fees, which the Company capitalizes when the liability has been incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year (as the Company has elected the practical expedient to expense any costs to obtain a contract when the liability is incurred if the amortization period of such costs would be one year or less).
Material Rights
The Company’s contracts with customers may include renewal or other options at stated prices. Determining whether these options provide the customer with a material right and therefore need to be accounted for as separate performance obligations requires judgment. The price of each option must be assessed to determine whether it is reflective of the stand-alone selling price or is reflective of a discount that the customer only received as a result of its prior purchase (a material right).
Other Policies, Judgments and Practical Expedients
Contract balances. Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Receivable represents right to consideration that is unconditional. Such rights are considered unconditional if only the passage of time is required before payment of that consideration is due.
Remaining performance obligations. Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied. It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts where the customer is not committed. The customer is not considered committed where they are able to terminate for convenience without payment of a substantive penalty under the contract. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less.
Significant financing component. In certain arrangements, the Company receives payment from a customer either before or after the performance obligation has been satisfied. The Company’s contracts with customer prepayment terms do not include a significant financing component because the primary purpose is not to receive or provide financing from or to the customers.
Contract modifications. The Company may modify contracts to offer customers additional products or services. Each of the additional products and services are generally considered distinct from those products or services transferred to the customer before the modification. The Company evaluates whether the contract price for the additional products and services reflects the stand-alone selling price as adjusted for facts and circumstances applicable to that contract. In these cases, the Company accounts for the additional products or services as a separate contract. In other cases where the pricing in the modification does not reflect the stand-alone selling price as adjusted for facts and circumstances applicable to that contract, the Company accounts on a prospective basis where the remaining goods and services are distinct from the original items and on a cumulative catch-up basis when the remaining goods and services are not distinct from the original items.
14
Principal vs. Agent Considerations
Judgment is required in determining whether we are the principal or agent in transactions with dealers, OEMs and end-users. We evaluate the presentation of revenue on a gross or net basis based on whether we control the service provided to the end-user and are the principal (i.e., “gross”), or we arrange for other parties to provide the service to the end-user and are an agent (i.e., “net”). This determination also impacts the presentation of incentives provided to dealers and OEMs and discounts and promotions offered to end-users to the extent they are not customers.
In dealer transactions where our role is to provide the hardware to the dealer, we do not control and are not primarily responsible for the good or service provided by the dealer to end-users. In these transactions, hardware revenue is recorded on a net basis.
In dealer and OEM transactions where our role is to provide the software subscription to the end-user, we are primarily responsible for the services and present the respective subscription revenue on a gross basis. Payments to dealers in exchange for their services are recorded as cost of revenue.
Judgments and estimates. Accounting for contracts recognized over time involves the use of various techniques to estimate total contract revenue and costs. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near term. The Company reviews and updates its contract-related estimates regularly, and records adjustments as needed. For those performance obligations for which revenue is recognized using a cost-to-cost input method and residual method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made.
Concentration of Credit Risk
The following table sets forth the percentages of total revenue for customers that represents 10% or more of the respective amounts for the three months ended September 30, 2025 and 2024, respectively.
| 2025 | 2024 | |||||||
| Customer A | * | % | ||||||
| Customer B | % | * | ||||||
| Customer C | % | % | ||||||
| Customer D | % | * | ||||||
| Customer E | * | % | ||||||
| * |
The following table sets forth the percentages of total revenue for customers that represents 10% or more of the respective amounts for the nine months ended September 30, 2025 and 2024, respectively.
| 2025 | 2024 | |||||||
| Customer A | * | % | ||||||
| Customer B | % | * | ||||||
| Customer C | % | % | ||||||
| Customer D | % | * | ||||||
| Customer E | % | % | ||||||
| Customer F | % | % | ||||||
| * | Below 10% |
There was $
15
Cost of Revenue
Cost of revenue consists primarily of direct labor and related fringe benefits for internal engineering resources, and deployment related travel costs incurred for the completion of the contracts and hardware costs.
3. Revenue and Contracts with Customers
Contract Balances
Timing differences between revenue recognized,
billings, and customer payments result in contract assets and liabilities. Contract assets represent revenue recognized in excess of customer
billings. Contract liabilities represent payments received from customers in advance of satisfying performance obligations. The Company
had contract assets of $
Deferred Contract Costs
The Company defers costs associated with fulfilling
its contracts if those costs meet all of the following criteria: (i) the costs relate directly to a contract, (ii) the costs generate
or enhance resources of the Company that will be used in satisfying performance obligations in the future, and (iii) the costs are expected
to be recovered. Costs are recognized over the life of the contract or when the respective milestone has been completed as cost of revenue.
The Company had deferred contract costs totaling $
4. Balance Sheet Components
Financial Instruments
The Company’s short-term investments consisted
of U.S. government treasury bills, which are accounted for as held-to-maturity (“HTM”) securities. HTM securities are carried
at amortized cost and, as a result, are not remeasured to fair value on a recurring basis. As of September 30, 2025 and December 31, 2024,
the amortized cost of the Company’s U.S. government treasury bills totaled $
Prepaid expenses and other current assets
Prepaid expenses and other current assets are comprised of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Inventory | $ | $ | ||||||
| Prepaid Expenses | ||||||||
| Short-term Security Deposits | ||||||||
| Tax Receivables | ||||||||
| Receivables and current assets | ||||||||
| Total prepaid and expenses and other current assets | $ | $ | ||||||
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Property and Equipment, Net
Property and equipment is comprised of the following:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Automobiles (DMV-registered) | $ | $ | ||||||
| Machine, tools and equipment | ||||||||
| Computers and equipment | ||||||||
| Internal-Use Capitalized software | ||||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Testing equipment (Work in Progress) | ||||||||
| Property and equipment, gross | ||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense for the three months
ended September 30, 2025 and 2024 was $
Accounts Payable
Accounts payable includes independent director
fees payable of $
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities are comprised of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Credit card payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Accrued payroll | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
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5. Operating Leases
The Company leases its office space in Mountain
View, California, under an operating lease agreement dated March 25, 2025, originally signed for a term of six and one half years that
commenced in May 2025. Monthly payments are approximately $
The Company’s future lease payments under the non-cancellable lease as of September 30, 2025, which are presented as lease liabilities on the Company’s condensed consolidated balance sheet, are as follows:
| Period | Operating Lease | |||
| Remainder in 2025 | $ | – | ||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liability | $ | |||
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted -average discount rate | % | % | ||||||
Lease expense was $
6. Intangible Assets, Net
The gross carrying amount and accumulated amortization of separately identifiable intangible assets are as follows:
| As of September 30, 2025 | ||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Fair Market Value Adjustment | Impairment | Net Carrying Amount | ||||||||||||||||
| Patents | $ | ( | ) | – | – | $ | ||||||||||||||
| Trademark | ( | ) | – | – | ||||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | – | $ | – | $ | |||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Fair Market Value Adjustment | Impairment | Net Carrying Amount | ||||||||||||||||
| Developed software | $ | $ | – | $ | – | $ | – | $ | ||||||||||||
| Patents | ( | ) | – | ( | ) | |||||||||||||||
| Trademark | ( | ) | – | – | ||||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | – | $ | ( | ) | $ | ||||||||||
Amortization expense for the three months ended
September 30, 2025 and 2024 was $
ASC 360, Property, Plant, and Equipment, defines a multi-step process to test long-lived assets, including intangible assets, for recoverability that if failed would indicate impairment. First, the Company must consider whether indicators of impairment of long-lived assets are present. The Company determined the Triggering Events in conjunction with preparation of its financial statements for the year ended December 31, 2024 provided such indication.
18
Next, the Company must review the long-lived assets to define asset group(s) that would reflect the lowest level of assets to which discrete cash flows are identifiable, and test these asset groups for impairment.
In performing this review, the Company identified that the long-lived asset “Patents”, which have international and U.S. based patents, as the asset group. The Company evaluated its patents and identified expired international patent applications (“expired assets”) for the year ended December 31, 2024. The Company determined there were no further plans to put resources toward these international patent applications. The group of expired patents carrying value was set to its salvage value which is zero given no future cash flows.
For the three months ended September 30, 2025
and 2024, the Company recorded a $
It was determined for all remaining long-lived assets that there were no triggering events, and therefore, no further impairment charges to long-lived assets were necessary as of September 30, 2025 and December 31, 2024.
During the three months ended September 30, 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.
As a result, beginning in the third quarter of fiscal 2025, 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.
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 three months ended September 30, 2025, this change resulted in an increase to research and development expense of
approximately $
Estimated amortization expense for all intangible assets subject to amortization in future years is expected to be:
| Years ended December 31, | Amortization | |||
| Remainder 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
7. Capital Structure
Common Stock
As of September 30, 2025, the Company is authorized
to issue
Preferred Stock
In October 2021, the Company amended its Certificate
of Incorporation and revised the number of preferred stock shares authorized for issuance to
Reverse Stock Split
On June 25, 2024, the Company’s stockholders
voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within
a range of
On January 30, 2025, the Company’s stockholders
voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within
a range of
The Company’s primary reason for effecting the reverse stock splits was to increase the per share price of our common stock to meet Nasdaq’s minimum bid price requirement for continued listing on Nasdaq.
19
Common Stock Offerings
On June 27, 2025, the Company entered into a securities
purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering,
On June 26, 2025, the Company entered into a securities
purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering,
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,
On December 20, 2024, the Company entered into
a securities purchase agreement for the sale and issuance of (i)
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
At the Market Equity Financing
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 $
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
$
20
Private Placement Offering
On November 12, 2024, the Company entered into
a Securities Purchase Agreement (“SPA”) with certain investors pursuant to which we sold, in a private placement, senior notes
with an aggregate principal amount of $
Common Stock Warrants
The following warrants were outstanding as
of September 30, 2025, all of which contain standard anti-dilution protections in the event of subsequent rights offerings, stock
splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s common stock or capital
structure, and none of which have any participating rights for any losses. All Series B warrants, which were issued as a part of the
December 20, 2024 public offering, were fully exercised as of February 11, 2025 utilizing the cashless exercise provision in the
warrant agreement.
| Securities into which warrants are convertible | Warrants outstanding | Exercise Price | Expiration Date | Fair value | ||||||||||
| Common stock (Initial Public Offering) | $ | $ | ||||||||||||
| Common stock (Private Placement) | $ | |||||||||||||
| Common stock (Series A) | $ | |||||||||||||
| Total | $ | |||||||||||||
The following warrants were outstanding as of December 31, 2024, all of which contain standard anti-dilution protections in the event of subsequent rights offerings, stock splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s common stock or capital structure, and none of which have any participating rights for any losses:
| Securities into which warrants are convertible | Warrants outstanding | Exercise Price | Expiration Date | Fair value | ||||||||||
| Common stock (Initial Public Offering) | $ | $ | ||||||||||||
| Common stock (Private Placement) | $ | |||||||||||||
| Common stock (Series A) | $ | |||||||||||||
| Common stock (Series B) | $ | |||||||||||||
| Total | $ | |||||||||||||
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 Initial Public Offering and Private Placement 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. The warrants are not marked-to-market each reporting period, and thus there is no impact to earnings. Any future exercises of the warrants will be recorded as cash received and recorded in cash, with a corresponding increase to common stock and additional paid-in capital in stockholders’ equity.
The Company used the following assumptions for September 30, 2025 and December 31, 2024:
| Initial Public Offering Warrants | Private Placement Warrants | |||||||
| Fair value of underlying securities | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Expected term (in years) | ||||||||
| Risk-free interest rate | % | % | ||||||
Under ASC 815-40-35-8, Derivatives and Hedging
Reclassification of Contracts, shareholder approval on January 30, 2025, initiated the price reset period, resulting in a fixed exercise
price for the warrants.
| Series A Warrants | ||||
| Fair value of underlying securities | $ | |||
| Expected volatility | % | |||
| Expected term (in years) | ||||
| Risk-free interest rate | % | |||
21
The fair value of the Series B warrants were re-measured prior to exercise using the Black-Scholes model, now that the exercise price has been fixed, based on the following assumptions:
| Series B Warrants |
||||
| Fair value of underlying securities | $ | |||
| Expected volatility | % | |||
| Expected term (in years) | ||||
| Risk-free interest rate | % | |||
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 allocated the proceeds of the deal based on the fair values for the Series A and Series B warrants. 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 for the year-ended December 31, 2024.
The Company used the following assumptions:
| Series A Warrants | Series B Warrants | |||||||
| Fair value of underlying securities | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Expected term (in years) | ||||||||
| Risk-free interest rate | % | % | ||||||
8. Net Loss Per Share Attributable to Common Stockholders
In accordance with ASC 260, basic and diluted
earnings per shares amounts, and weighted-average shares outstanding have been restated for all periods presented to reflect the effect
of the stock dividends and reverse stock split.
| Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average common shares outstanding | ||||||||
| Loss per share: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average common shares outstanding | ||||||||
| Loss per share: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
Basic loss per share is based upon the weighted average number of shares of common stock outstanding during the period. Diluted loss per share would include the effect of unvested restricted stock awards and the convertible preferred stock; however, such items were not considered in the calculation of the diluted weighted average common shares outstanding since they would be anti-dilutive.
22
9. Stock-based Compensation Expense
Stock-Based Compensation
The Company uses stock-based compensation, including restricted stock units, to provide long-term performance incentives for its employees and board directors. The Company measures employee and director stock-based compensation awards based on the award’s estimated fair value on the date of grant. Forfeitures are recognized as they occur. Expense associated with these awards is recognized using the straight-line attribution method over the requisite service period for stock options, restricted stock units (“RSUs”) and restricted stock and is reported in our condensed consolidated statements of stockholders’ equity.
The fair value of the Company’s stock options
is estimated using the Black-Scholes option-pricing model. The resulting fair value is recognized on a straight-line basis over the period
during which an employee is required to provide service in exchange for the award. The Company has elected to recognize forfeitures as
they occur. Stock options generally vest over
Determining the grant date fair value of options requires management to make assumptions and judgments. These estimates involve inherent uncertainties and if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.
The assumptions and estimates for valuing stock options are as follows:
| ● | Fair value per share of Company’s common stock. Because there was no public market for Cyngn’s common stock prior to the IPO, its Board of Directors, with the assistance of a third-party valuation specialist, determined the common stock fair value at the time of the grant of stock options by considering a number of objective and subjective factors, including its actual operating and financial performance, market conditions and performance of comparable publicly traded companies, developments and milestones in the company, and the likelihood of achieving a liquidity event among other factors. Since the Company’s common stock began publicly trading on the Nasdaq, the value of its common stock underlying stock options or RSUs have been valued based on prevailing market prices. |
| ● | Expected volatility. Because the Company’s common stock had no publicly traded history prior to the IPO, it estimated the expected volatility using a combination of its stock price volatility and the stock price volatility of peer companies, for a period equal to the expected term of the options. |
| ● | Expected term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. The Company estimates the expected term of options granted based upon the “simplified method” provided under Staff Accounting Bulletin, Topic 14, or SAB Topic 14. |
| ● | Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect during the period the options were granted corresponding to the expected term of the awards. |
| ● | Estimated dividend yield.
The estimated dividend yield is |
Equity Incentive Plans
In February 2013, the Company’s Board of Directors adopted the 2013 Equity Incentive Plan (“2013 Plan”). The 2013 Plan authorizes the award of stock options, stock appreciation rights, restricted stock awards, stock appreciation rights, RSUs, performance awards, and other stock or cash awards.
In October 2021, the Company’s Board of Directors adopted the Cyngn Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan replaces the 2013 Plan. However, awards outstanding under the 2013 Plan will continue to be governed by their existing terms.
In November 2023, the shareholders of the Company
approved an amendment to the Company’s 2021 Equity Incentive Plan to increase the number of shares authorized for issuance by
As of September 30, 2025 and December 31, 2024,
approximately
23
The following table summarizes information about the Company’s stock options outstanding as well as stock options vested and exercisable as of September 30, 2025, and activity during the three month period then ended:
| Shares | Weighted- average exercise price | Weighted- average remaining contractual term (years) | Aggregate intrinsic value | |||||||||||||
| Outstanding as of June 30, 2025 | $ | $ | – | |||||||||||||
| Granted | – | – | – | |||||||||||||
| Exercised | – | – | – | – | ||||||||||||
| Cancelled/forfeited | ( | ) | $ | – | ||||||||||||
| Outstanding as of September 30, 2025 | $ | $ | – | |||||||||||||
| Vested and expected to vest at September 30, 2025 | $ | $ | – | |||||||||||||
| Vested and exercisable at September 30, 2025 | $ | $ | – | |||||||||||||
The following table summarizes information about the Company’s stock options outstanding as well as stock options vested and exercisable as of September 30, 2025, and activity during the nine month period then ended:
| Shares | Weighted- average exercise price | Weighted- average remaining contractual term (years) | Aggregate intrinsic value | |||||||||||||
| Outstanding as of December 31, 2024 | $ | $ | – | |||||||||||||
| Granted | – | – | – | – | ||||||||||||
| Exercised | – | – | – | – | ||||||||||||
| Cancelled/forfeited | ( | ) | $ | – | – | |||||||||||
| Outstanding as of September 30, 2025 | $ | $ | – | |||||||||||||
| Vested and expected to vest at September 30, 2025 | $ | $ | – | |||||||||||||
| Vested and exercisable at September 30, 2025 | $ | $ | – | |||||||||||||
For the three and nine months ended September 30, 2025, no restricted stock units (RSUs) were granted nor vested.
The fair value of a stock option is estimated using the Black-Scholes option-pricing model that takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate for the expected term of the option. The Company has used the simplified method in calculating the expected term of all option grants based on the vesting period and contractual term. Compensation costs related to share-based payment transactions are recognized in the financial statements upon satisfaction of the requisite service or vesting requirements.
The weighted average per share grant-date fair
value of options granted during the nine months ended September 30, 2025 and 2024 was $
24
The following weighted average assumptions were used in estimating the grant date fair values on September 30, 2025 and 2024:
| September 30 | ||||||||
| 2025 | 2024 | |||||||
| Fair value of common stock | $ | $ | ||||||
| Expected term (in years) | ||||||||
| Risk-free rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Dividend yield | % | % | ||||||
The Company recorded stock-based compensation
expense from stock options and RSUs of approximately $
As of September 30, 2025, total stock-based compensation
cost related to outstanding unvested stock options that are expected to vest was $
10. Retirement Savings Plan
Effective November 17, 2017, the Company established the Cyngn Inc. 401(k) Plan for the exclusive benefit of all eligible employees and their beneficiaries with the intention to provide a measure of retirement security for the future. This plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and qualifies under Section 401(k) of the Internal Revenue Code. The Company did not offer and has not provided a company match for its 401(k) Plan.
11. Income Taxes
For the three and nine months ended September
30, 2025 and 2024, the Company recorded income tax expense of $
For financial reporting purposes, the Company’s effective tax rate used for the interim periods is based on the estimated full-year income tax rate. For the three and nine months ended September 30, 2025, the Company’s effective tax rate differs from the statutory rate, primarily due to a valuation allowance recorded against the net deferred tax asset balance. Currently, the Company is not under examination by any taxing authority.
12. Commitments and Contingencies
Legal Proceedings
The Company is subject to legal and regulatory actions that arise from time to time. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events, and the outcome of litigation, which is inherently uncertain.
In May 2025, a former contractor of the Company
filed a complaint alleging breach of contract and related claims arising from certain professional services agreements entered into between
2021 and 2024. The complaint seeks approximately $
25
In August 2025, a former employee filed a complaint
with the U.S. Department of Labor, Occupational Safety and Health Administration (“OSHA”), alleging retaliation in connection
with the employee’s internal reporting. The Company intends to defend or respond to the allegations as appropriate. The Company has recorded an accrual of approximately $
Under the terms of a settlement agreement with
a former placement agent, the Company may be obligated to pay a $
To avoid litigation and minimize costs, the Company
agreed in principle to a one-time payment of $
There is no other material pending or threatened litigation against the Company that remains outstanding as of September 30, 2025.
13. Risks and Uncertainties
The Company’s business operations, operating results, and financial condition are vulnerable to certain risks and uncertainties including:
| ● | Inflation and its related impact on costs and expenditures on domestic and foreign-sourced materials and services; |
| ● | Rising interest rates and its impact on the equity markets, investment valuations, and interest rate-sensitive calculations such as discount rate assumptions used in cash flow projections and going concern assessments; |
| ● | Effects of the Russia-Ukraine conflict such as possible cyberattacks and potential disruptions in the banking systems and capital markets and the supply chain; and |
| ● | Other factors beyond its control such as natural disasters, terrorism, civil unrest, infectious diseases and pandemics including COVID-19 and its variants. |
The Company is unable to predict and quantify at this time the extent of the related potential adverse effects but continuously monitors these risks and uncertainties on its future operations and financial performance.
14. Subsequent Events
As of November 13, 2025, the Company has sold
26
15. Restatement of Previously Issued Financial Statements
The Company restated its previously reported financial
statements for the period ended December 31, 2024. The adjustment resulted in an increase to warrant liability by $
The tables below set forth the effect on the various financial statement captions including the balances originally reported and the restated balances as of December 31, 2024.
| Balance Sheet | As Previously Reported | Adjustments | As Restated | |||||||||
| Warrant liability | ||||||||||||
| Total liabilities | ||||||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficits | ( | ) | ( | ) | ( | ) | ||||||
| Total stockholders’ equity | ( | ) | ( | ) | ||||||||
| Statement of Stockholders’ Equity | As Previously Reported | Adjustments | As Restated | |||||||||
| Issuance of common stock and pre-funded warrants and exercise of pre-funded warrants in connection with the private and public offerings | ( | ) | ||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
Following this review, the Company completed a comprehensive review
of its previously issued financial statements. The Company is adjusting for certain out-of-period errors that were not material, individually
or in the aggregate, and are being corrected as part of the restatement. The Company corrected a duplicate bill of $
| Balance Sheet | As Previously Reported | Adjustments | As Restated | |||||||||
| Accounts Payable | ( | ) | ||||||||||
| Statement of Cash Flows | As Previously Reported | Adjustments | As Restated | |||||||||
| Accounts Payable | ( | ) | ||||||||||
16. Restatement of Previously Issued Interim Financial Statements
In connection with the restatement of financial statements discussed in Note 15. Restatement of Previously Issued Audited Financial Statements, the Company determined that the restatement adjustments had an impact on its previously issued unaudited financial statements for each of the periods ended March 31, 2025, and June 30, 2025. The tables below depict restated financial statements for each of the affected periods.
27
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, 2025 (Restated)
| As Previously Reported | Adjustment | Restated | ||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash | $ | – | $ | |||||||||
| Short-term investments | – | |||||||||||
| Prepaid expenses and other current assets | – | |||||||||||
| TOTAL CURRENT ASSETS | – | |||||||||||
| Property and equipment, net | – | |||||||||||
| Right of use asset, net | – | |||||||||||
| Intangible assets, net | – | |||||||||||
| Security Deposit | – | |||||||||||
| TOTAL ASSETS | $ | – | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Accounts payable | $ | – | $ | |||||||||
| Accrued expenses and other current liabilities | – | |||||||||||
| Current operating lease liability | – | |||||||||||
| TOTAL CURRENT LIABILITIES | – | |||||||||||
| Warrant liability | – | – | – | |||||||||
| TOTAL LIABILITIES | – | |||||||||||
| Commitments and contingencies (Note 12) | ||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||
| Preferred stock, Par $ | – | – | – | |||||||||
| Common stock, Par $ | ||||||||||||
| Additional paid-in capital(1) | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total stockholders’ equity | – | |||||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | – | $ | ||||||||
28
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
March 31, 2025 (Restated)
| As Previously Report | Adjustment | Restated | ||||||||||
| REVENUE | $ | $ | – | $ | ||||||||
| COSTS AND EXPENSES | ||||||||||||
| Cost of revenue | – | |||||||||||
| Research and development | – | |||||||||||
| General and administrative | – | |||||||||||
| TOTAL COSTS AND EXPENSES | – | |||||||||||
| LOSS FROM OPERATIONS | ( | ) | – | ( | ) | |||||||
| OTHER INCOME (EXPENSE), NET | ||||||||||||
| Interest income, net | – | |||||||||||
| Change in fair value of warrant liability | ( | ) | ||||||||||
| Other income (expense), net | ( | ) | ||||||||||
| TOTAL OTHER INCOME (EXPENSE), NET | ( | ) | ||||||||||
| NET LOSS | $ | ( | ) | $ | $ | ( | ) | |||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | ( | ) | $ | $ | ( | ) | |||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted(1) | ||||||||||||
29
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited) (Restated)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ (Deficit) | ||||||||||||||||||||||||
| Three Months Ended March 31, 2025, Restated | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of December 31, 2024(1) | – | – | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Reclassification of Series A warrants to equity in connection with the public offering | – | – | – | – | – | |||||||||||||||||||||||
| Exercise of Series B warrants in connection with the public offering, net of issuance costs | – | – | – | |||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2025 | – | $ | – | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Additional Paid-in Capital | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of December 31, 2024(1) | $ | $ | ( | ) | $ | |||||||
| Reclassification of Series A warrants to equity in connection with the public offering | ( | ) | ||||||||||
| Exercise of Series B warrants in connection with the public offering, net of issuance costs | ||||||||||||
| Stock-based compensation | – | |||||||||||
| Net loss | – | – | – | |||||||||
| Balance as of March 31, 2025 | $ | $ | $ | |||||||||
| Accumulated Deficit | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of December 31, 2024(1) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss | ( | ) | ( | ) | ||||||||
| Balance as of March 31, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
30
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
March 31, 2025 (Restated)
| As Previously Reported | Adjustment | Restated | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | – | |||||||||||
| Stock-based compensation | – | |||||||||||
| Realized gain on short-term investments | ( | ) | – | ( | ) | |||||||
| Gain on asset | – | – | – | |||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Prepaid expenses, operating lease right-of-use assets, and other assets | ( | ) | – | ( | ) | |||||||
| Accounts payable | – | |||||||||||
| Accrued expenses, lease liabilities, and other current liabilities | ( | ) | – | ( | ) | |||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Purchase of property and equipment | ( | ) | – | ( | ) | |||||||
| Acquisition of intangible asset | ( | ) | – | ( | ) | |||||||
| Disposal of assets | – | |||||||||||
| Purchase of short-term investments | ( | ) | – | ( | ) | |||||||
| Proceeds from maturity of short-term investments | – | |||||||||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | ( | ) | ( | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Proceeds from at-the-market equity financing, net of issuance costs | – | – | – | |||||||||
| Issuance costs from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | ( | ) | – | ( | ) | |||||||
| Issuance costs for stock dividend and restricted stock units | – | – | – | |||||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | ( | ) | ( | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ) | – | ( | ) | |||||||
| Cash and cash equivalents and restricted cash, beginning of year | – | |||||||||||
| Cash and cash equivalents and restricted cash, end of year | $ | $ | – | $ | ||||||||
31
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2025 (Restated)
| As Previously Reported | Adjustment | Restated | ||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash | $ | – | $ | |||||||||
| Short-term investments | – | |||||||||||
| Prepaid expenses and other current assets | – | |||||||||||
| TOTAL CURRENT ASSETS | – | |||||||||||
| Property and equipment, net | – | |||||||||||
| Right of use asset, net | – | |||||||||||
| Intangible assets, net | – | |||||||||||
| Security Deposit | – | |||||||||||
| TOTAL ASSETS | $ | – | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Accounts payable | $ | – | $ | |||||||||
| Accrued expenses and other current liabilities | – | |||||||||||
| Current operating lease liability | – | |||||||||||
| TOTAL CURRENT LIABILITIES | – | |||||||||||
| Non-current operating lease liability | – | |||||||||||
| Warrant liability | – | – | – | |||||||||
| TOTAL LIABILITIES | – | |||||||||||
| Commitments and contingencies (Note 12) | ||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||
| Common stock, Par $ | – | |||||||||||
| Additional paid-in capital | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | – | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | – | $ | ||||||||
32
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Restated)
| Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | |||||||||||||||||||
| As Previously Reported | Restated | As Previously Reported | Adjustment | Restated | ||||||||||||||||
| REVENUE | $ | $ | $ | $ | – | $ | ||||||||||||||
| COSTS AND EXPENSES | ||||||||||||||||||||
| Cost of revenue | – | |||||||||||||||||||
| Research and development | – | |||||||||||||||||||
| General and administrative | – | |||||||||||||||||||
| TOTAL COSTS AND EXPENSES | – | |||||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | – | ( | ) | |||||||||||
| OTHER INCOME (EXPENSE), NET | ||||||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ( | ) | – | ( | ) | |||||||||||
| Change in fair value of warrant liability | ‒ | ‒ | ( | ) | ||||||||||||||||
| Other income (expense), net | – | |||||||||||||||||||
| TOTAL OTHER INCOME (EXPENSE), NET | ( | ) | ||||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | – | |||||||||||||||||||
33
CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited) (Restated)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ (Deficit) | ||||||||||||||||||||||||
| Three Months Ended June 30, 2025, Restated | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of March 31, 2025 | – | – | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Exercise of stock options and vesting of restricted stock units | – | – | – | – | – | – | ||||||||||||||||||||||
| Issuance of common stock in connection with the public offering and pre-funded warrants | – | – | – | |||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2025 | – | $ | – | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Additional Paid-in Capital | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | |||||||||
| Balance as of June 30, 2025 | $ | $ | $ | |||||||||
| Accumulated Deficit | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of March 31, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Balance as of June 30, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
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| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ (Deficit) | ||||||||||||||||||||||||
| Six Months Ended June 30, 2025, Restated | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||||||
| Balance as of December 31, 2024 | – | – | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Exercise of stock options and vesting of restricted stock units | – | – | – | – | – | – | ||||||||||||||||||||||
| Reclassification of Series A warrants to equity in connection with the public offering | – | – | – | – | – | |||||||||||||||||||||||
| Exercise of Series B warrants in connection with the public offering, net of issuance costs | – | – | – | |||||||||||||||||||||||||
| Issuance of common stock in connection with the public offering | – | – | – | |||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | – | |||||||||||||||||||||||
| Net loss | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2025 | – | $ | – | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Additional Paid-in Capital | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of December 31, 2024(1) | $ | $ | ( | ) | $ | |||||||
| Reclassification of Series A warrants to equity in connection with the public offering | ( | ) | ||||||||||
| Exercise of Series B warrants in connection with the public offering, net of issuance costs | ||||||||||||
| Issuance of common stock in connection with the public offering | ||||||||||||
| Stock-based compensation | – | |||||||||||
| Net loss | – | – | – | |||||||||
| Balance as of June 30, 2025 | $ | $ | $ | |||||||||
| Accumulated Deficit | ||||||||||||
| As Previously Report | Adjustment | Restated | ||||||||||
| Balance as of December 31, 2024(1) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss | ( | ) | ( | ) | ||||||||
| Balance as of June 30, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
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CYNGN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, 2025 (Restated)
| As Previously Reported | Adjustment | Restated | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | – | |||||||||||
| Stock-based compensation | – | |||||||||||
| Realized gain on short-term investments | ( | ) | – | ( | ) | |||||||
| Loss on disposed assets | – | |||||||||||
| Patent impairment | – | – | – | |||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Prepaid expenses, operating lease right-of-use assets, and other assets | ( | ) | – | ( | ) | |||||||
| Accounts payable | ( | ) | – | ( | ) | |||||||
| Accrued expenses, lease liabilities, and other current liabilities | ( | ) | – | ( | ) | |||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | – | ( | ) | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Purchase of property and equipment | ( | ) | – | ( | ) | |||||||
| Acquisition of intangible asset | ( | ) | – | ( | ) | |||||||
| Purchase of short-term investments | ( | ) | – | ( | ) | |||||||
| Proceeds from maturity of short-term investments | – | |||||||||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | ( | ) | – | ( | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Proceeds from at-the-market equity financing, net of issuance costs | – | – | – | |||||||||
| Proceeds from public issuance of common stock and pre-funded warrants, net of issuance costs | – | |||||||||||
| Issuance costs from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | ( | ) | – | ( | ) | |||||||
| Issuance costs for stock dividend and restricted stock units | – | – | – | |||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | – | |||||||||||
| Net increase in cash and cash equivalents and restricted cash | – | |||||||||||
| Cash and cash equivalents and restricted cash, beginning of year | – | |||||||||||
| Cash and cash equivalents and restricted cash, end of year | $ | $ | – | $ | ||||||||
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The objective of this Management’s Discussion and Analysis is to allow investors to view the Company from management’s perspective, considering items that would have a material impact on future operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”), which we filed with the U.S. Securities and Exchange Commission (“SEC”) on March 6, 2025. The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our other filings with the SEC, including the Form 10-K. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” and Cyngn refer to Cyngn Inc. and its condensed consolidated subsidiaries.
Overview
We are an autonomous vehicle (“AV”) technology company that is focused on addressing industrial uses for autonomous vehicles. We believe that technological innovation is needed to enable adoption of autonomous industrial vehicles that will address the substantial industry challenges that exist today. These challenges include labor shortages, lagging technological advancements from incumbent vehicle manufacturers, and high upfront investment commitment.
Industrial sites are typically rigid environments with consistent standards as opposed to city streets that have more variable environmental and situational conditions and diverse regulations. These differences in operational design domains will be major factors that make proliferation of industrial AVs in private settings achievable with less time and resources than AVs on public roadways. Namely, safety and infrastructure challenges are cited as roadblocks that have delayed AVs from operating on public roadways at scale. Our focus on industrial AVs simplifies these challenges because industrial facilities (especially those belonging to a single end customer that operates similarly at different sites) share much more in common than different cities do. Furthermore, our end customers own their infrastructure and can make changes more easily than governments can on public roadways.
With these challenges in mind, we are developing an Enterprise Autonomy Suite (“EAS”) that leverages advanced in-vehicle autonomous driving technology and incorporates leading supporting technologies like data analytics, asset tracking, fleet management, cloud, and connectivity. EAS provides a differentiated solution that we believe will drive pervasive proliferation of industrial autonomy and create value for customers at every stage of their journey towards full automation and the adoption of Industry 4.0.
EAS is a suite of technologies and tools that we divide into three complementary categories:
| 1. | DriveMod, our modular industrial vehicle autonomous driving software; |
| 2. | Cyngn Insight, our customer-facing tool suite for monitoring and managing AV fleets (including remotely operated vehicles) and generating/aggregating/analyzing data (including the IoT gateway device); and |
| 3. | Cyngn Evolve, our internal tool suite and infrastructure that facilitates artificial intelligence (“AI”) and machine learning (“ML”) training to continuously enhance our algorithms and models and provides a simulation framework (both record/rerun and synthetic scenario creation) to ensure that data collected in the field can be applied to validating new releases. |
Legacy automation providers manufacture specialized industrial vehicles with integrated robotics software for rigid tasks, limiting automation to narrow uses. Unlike these specialized vehicles, EAS can be compatible with the existing vehicle assets in addition to new vehicles that have been purposely built for autonomy by vehicle manufacturers. EAS is operationally expansive, vehicle agnostic, and compatible with indoor and outdoor environments. By offering flexible autonomous services, we aim to remove barriers to industry adoption.
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We understand that scaling of autonomy solutions will require an ecosystem made up of different technologies and services that are enablers for AVs. Our approach is to forge strategic collaborations with complementary technology providers that accelerate AV development and deployment, provide access to new markets, and create new capabilities. Our focus on designing DriveMod to be modular will combine with our experience deploying AV technology on diverse industrial vehicle form factors, which will be difficult for competitors to replicate.
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”).
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.
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.
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.
As OEMs and leading industrial vehicle users seek to increase productivity, reinforce safer working environments, and scale their operations, we believe we are uniquely positioned to deliver a dynamic autonomy solution via our EAS to a wide variety of industrial uses. Our long-term vision is for EAS to become a universal autonomous driving solution with minimal marginal cost for companies to adopt new vehicles and expand their autonomous fleets across new deployments. We have already deployed DriveMod software on more than 10 different vehicle form factors that range from stockchasers and forklifts to 14-seat shuttles and 5-meter-long cargo vehicles demonstrating the extensibility of our AV building blocks.
Our strategy upon establishing a customer relationship with an OEM is to seek to embed our technology into their vehicle roadmap and expand our services to their many clients. Once we solidify an initial AV deployment with a customer, we intend to seek to expand within the site to additional vehicle platforms and/or expand the use of similar vehicles to other sites operated by the customer. This “land and expand” strategy can repeat iteratively across new vehicles and sites and is at the heart of why we believe industrial AVs that operate in geo-fenced, constrained environments are poised to create value.
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Recent Developments
Departure of Officer
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.
ATM Sales Agreement
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.
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.
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.
Appointment of Chief Financial Officer
Effective August 12, 2025, Natalie Russell was appointed Chief Financial Officer of the Company.
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.
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.
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.
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Critical Accounting Policies and Estimates and Judgements
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified below that are considered critical, we make many other accounting estimates in preparing our condensed consolidated financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.
The Company considers costs to develop software, warrants and share-based compensation to be critical accounting estimates and believes the associated assumptions and estimates to have the greatest potential impact on our condensed consolidated financial statements.
Costs to Develop Software
The Company incurs costs related to internally developed software. Based on the nature of the software the Company capitalizes software costs under the following guidance.
Internal-Use Software
The Company capitalizes certain costs related to internal-use software, primarily consisting of direct labor and third-party vendor costs associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs related to the design and implementation of the selected software components, software build and configuration infrastructure, and software interfaces. Capitalization of costs requires judgment in determining when a project has reached the application development stage, the proportion of time spent in the application development stage, and the period over which the Company expects to benefit from the use of that software. Once the software is placed in service, these costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three to five years. There is judgment involved in the determination of the useful life. Internal-use software is classified as property and equipment in accordance with ASC 350, Intangibles – Goodwill and Other.
Costs to develop software to be sold, leased or otherwise marketed
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.
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Common Stock Warrants
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.
The Company also applied the guidance in ASC 340-10-S99-1, Other Assets and Deferred Costs, that states specific incremental costs directly attributable to a proposed or actual offering of equity securities may properly be deferred and charged against the gross proceeds of the offering. The Company treated the valuation of the warrants as directly attributable to the issuance of an equity contract and, accordingly, classified the warrants as additional paid-in capital.
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.
Stock-based Compensation
The Company recognizes the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards. Cost is recognized on a straight-line basis over the service period, which is generally the vesting period of the award. The Company recognizes stock-based compensation cost and reverses previously recognized costs for unvested awards in the period forfeitures occur, if any. The Company determines the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the fair value of the Company’s common stock, expected price volatility of the common stock, expected term, risk-free interest rates, and expected dividend yield.
Results of Operations
Revenue
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.
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.
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.
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Cost of Revenue
Cost of revenues consists primarily of direct labor and related fringe benefits for internal engineering resources costs incurred for the completion of the contracts and hardware costs.
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.
Research and Development
Research and development expense consist primarily of internal engineering and development expenses, materials, labor and stock-based compensation and outsourced engineering services related to development of the Company’s products and services. Research and development costs incurred during deployments are capitalized and expensed when the associated contract revenue is recognized. All other research and development costs are expensed as incurred.
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.
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.
General and Administrative
General and administrative expenses consist primarily of personnel costs, facilities expenses, depreciation and amortization, travel, and advertising costs.
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.
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.
Interest Income (Expense), net
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.
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.
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Other Income (Expense), net
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.
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.
Liquidity and Capital Resources
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.
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.
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.
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.
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.
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.
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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.
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.
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.
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.
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.
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.
Based on cash flow projections from operating and financing activities and the existing balance of cash and short-term investments, management is of the opinion that the Company has sufficient funds for sustainable operations, and it will be able to meet its payment obligations from operations and related commitments for the 12 months following the date that these condensed consolidated financial statements were issued. Based on the above considerations, the Company’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations.
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Cash Flows
Operating activities
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.
Investing activities
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.
Financing activities
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.
Emerging Growth Company Status
We are an “emerging-growth company”, as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an emerging growth company we can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to avail ourselves of these options. Once adopted, we must continue to report on that basis until we no longer qualify as an emerging growth company.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the initial public offering; (ii) the first fiscal year after our annual gross revenue are $1.07 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If, as a result of our decision to reduce future disclosure, investors find our common shares less attractive, there may be a less active trading market for our common shares and the price of our common shares may be more volatile.
We are also a “smaller reporting company”, meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “Smaller Reporting Company”, this Item and the related disclosure is not required.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Principal Executive Officer (our Chief Executive Officer) and Principal Financial Officer (our Chief Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective, except as described below.
Changes in Internal Control over Financial Reporting
As reported in our Annual Report on Form 10-K/A as of December 31, 2024, we identified two material weaknesses, the ineffective oversight of third parties engaged to assist in the Company’s financial reporting process and lack of appropriate technical expertise to a complex accounting transaction. During the first quarter of 2025, the material weakness of ineffective oversight of third parties engaged to assist in the Company’s financial reporting process persisted. Management has revised the processes surrounding this material weakness, and while a new control has been implemented, no relevant transactions occurred during the second and third quarters of 2025. Thus, the effectiveness of the new control could not be tested and the material weakness remains unremediated as of September 30, 2025. The misinterpretation of accounting guidance to a complex accounting transaction was identified in the third quarter of 2025 and plans to be fully remediated by the first quarter of 2026. Notwithstanding this material weakness, management believes that the condensed consolidated financial statements included in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
The SEC defines ‘material weakness’ as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. While we are in the process of adopting remediation procedures related to this identified material weakness, there can be no assurance that such remedies will be effective. In addition, if this is not remediated, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Except as described as above, there has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Remediation
In order to remediate the first material weakness, we hired an additional third-party expert to review and validate the work performed by the initial third-party expert for complex accounting transactions. For the second material weakness, we will hire a third-party expert to review the accounting for complex transactions.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in “Part I, Item 1A. Risk Factors” in the Form 10-K. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
As of the date of this Quarterly Report, there were no material changes to the risks and uncertainties described in the section titled “Risk Factors” in the Form 10-K during the three months ended September 30, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Arrangement
During the three months ended
September 30, 2025, no director or officer of the Company
ITEM 6. EXHIBITS
| Exhibit Number |
Description | |
| 1.1 | At-The-Market Issuance Sales Agreement by and between Cyngn Inc. and Aegis Capital Corp., dated September 5, 2025, incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 5, 2025. | |
| 10.1 | Offer Letter, dated August 12, 2025, between Cyngn Inc. and Natalie Russell, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 15, 2025. | |
| 10.2 | Severance and Change of Control Agreement, dated August 12, 2025, between Cyngn Inc. and Natalie Russell, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 15, 2025. | |
| 31.1* | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. | |
| 31.2* | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities Exchange Act, as amended, and 18 U.S.C. Section 1350. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on this 19th day of November, 2025.
| CYNGN INC. | |
| /s/ Lior Tal | |
| Lior Tal | |
| Chief Executive Officer, | |
| Chairman of the Board of Directors and Director | |
| (Principal Executive Officer) | |
| /s/ Natalie Russell | |
| Natalie Russell | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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FAQ
Why did Cyngn Inc. (CYN) restate its prior financial statements?
What were Cyngn Inc.'s key financial results for the nine months ended September 30, 2025?
What is Cyngn Inc.'s liquidity position as of September 30, 2025?
How did Cyngn Inc. fund its operations during 2025?
What impact did the change in software capitalization estimates have on Cyngn in Q3 2025?
What are Cyngn Inc.'s main sources of revenue?
Did Cyngn Inc. issue new equity or warrants in 2025?
