Cyngn(CYN) - 2024 Q2 - Quarterly Results

Operating Highlights and Management Commentary Cyngn expanded sales channels through new partnerships, strengthened its IP portfolio with two new patents, reported a healthy sales pipeline with reduced lead acquisition costs, and regained Nasdaq compliance with a debt-free balance sheet - Key operational achievements in Q2 2024 include: - Joining the John Deere supply base - Partnering with RobotLAB to add DriveMod Tugger vehicles to their portfolio - Expanding the dealer network with Alta Equipment Group - Receiving two new U.S. patents, bringing the total to 21 for its AI-powered autonomous vehicle solutions[1] - The company is expanding sales channels through partnerships with established dealers like Motrec, Alta, and RobotLAB to accelerate commercialization[2] - Marketing efforts have doubled the number of sourced leads while decreasing the acquisition cost per opportunity by 67%. The sales pipeline is healthy, with engagement from Fortune 500 brands in automotive, defense, and heavy equipment sectors[3] - The company successfully regained compliance with Nasdaq's minimum bid price requirement and maintains a clean balance sheet with no debt[4] Financial Performance Review Revenue significantly decreased due to a strategic shift from NRE contracts to EAS software subscriptions, yet reduced costs led to a lower net loss per share for both Q2 and year-to-date 2024, with all per-share data restated for a reverse stock split - All share and per-share information has been restated to reflect the 1-for-100 reverse stock split that occurred on July 3, 2024[5] Q2 2024 Three-Month Financial Review Q2 2024 revenue sharply declined to $8.7 thousand due to a business model shift, but total costs and expenses decreased to $5.8 million, narrowing the net loss to $(5.8) million or $(4.11) per share Q2 Three-Month Financial Performance (2024 vs. 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue ($ thousands) | $8.7 | $550.9 | -98.4% | | Total Costs & Expenses ($ millions) | $5.8 | $7.0 | -17.1% | | Net Loss ($ millions) | $(5.8) | $(6.4) | Improved | | Net Loss Per Share ($) | $(4.11) | $(12.97) | Improved | - The decrease in total expenses was primarily due to a $447.7 thousand decrease in cost of revenue, a $239.1 thousand reduction in G&A, and a $538.7 thousand decrease in R&D expenses[7] Q2 2024 Six-Month Financial Review Six-month revenue declined to $14.2 thousand due to the NRE to EAS shift, but total costs decreased to $11.8 million, resulting in a slightly reduced net loss of $(11.8) million and improved net loss per share of $(12.15) Six-Month Financial Performance (2024 vs. 2023) | Metric | Six Months 2024 | Six Months 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue ($ thousands) | $14.2 | $1.4 million | -99.0% | | Total Costs & Expenses ($ millions) | $11.8 | $13.8 | -14.5% | | Net Loss ($ millions) | $(11.8) | $(12.0) | Improved | | Net Loss Per Share ($) | $(12.15) | $(24.48) | Improved | - The year-to-date decrease in expenses was driven by a $950.6 thousand decrease in cost of revenue, a $606.6 thousand reduction in G&A, and a $414.1 thousand decrease in R&D expenses[10] Balance Sheet and Liquidity As of June 30, 2024, Cyngn reported $7.0 million in cash and short-term investments, maintained no debt, and subsequently raised an additional $1.8 million through an ATM offering, bringing pro-forma cash to $8.8 million Balance Sheet Highlights (as of June 30, 2024) | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash & Short-term Investments ($ millions) | $7.0 | $8.2 | | Working Capital ($ millions) | $6.1 | $7.4 | | Total Stockholders' Equity ($ millions) | $9.7 | $10.6 | | Debt ($) | $0 | $0 | - Subsequent to Q2, the company sold 256,500 shares of common stock for gross proceeds of $1.8 million, resulting in pro-forma cash and short-term investments of $8.8 million[13] Financial Statements The unaudited consolidated financial statements show a significant revenue decrease from a business model shift, reduced operating expenses, a smaller net loss per share, a debt-free balance sheet with decreased cash, and stable operating cash outflow offset by equity financing Condensed Consolidated Statements of Operations Q2 2024 revenue was $8.7 thousand with a net loss of $(5.8) million, while six-month revenue was $14.2 thousand with a net loss of $(11.8) million, reflecting a business model shift and controlled spending Statement of Operations Summary (Unaudited) | (In thousands, except per share data) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue ($ thousands) | $8.7 | $551.0 | $14.2 | $1,423.8 | | Total costs and expenses ($ thousands) | $5,820.9 | $7,046.4 | $11,792.7 | $13,764.0 | | Loss from operations ($ thousands) | $(5,812.2) | $(6,495.4) | $(11,778.6) | $(12,340.3) | | Net loss ($ thousands) | $(5,819.0) | $(6,353.4) | $(11,789.0) | $(11,982.2) | | Net loss per share ($) | $(4.11) | $(12.97) | $(12.15) | $(24.48) | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets were $11.9 million, primarily due to reduced cash and short-term investments, with total liabilities at $2.2 million and stockholders' equity at $9.7 million Balance Sheet Summary (Unaudited) | (In thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash & Short-term investments ($ thousands) | $6,994.1 | $8,153.5 | | Total current assets ($ thousands) | $8,332.8 | $9,470.0 | | Total Assets ($ thousands) | $11,928.8 | $13,033.4 | | Liabilities & Equity | | | | Total current liabilities ($ thousands) | $2,226.0 | $2,080.8 | | Total Liabilities ($ thousands) | $2,226.0 | $2,398.2 | | Total stockholders' equity ($ thousands) | $9,702.8 | $10,635.2 | | Total Liabilities and Stockholders' Equity ($ thousands) | $11,928.8 | $13,033.4 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2024, net cash used in operations was $(10.2) million, offset by $3.0 million from investing and $9.6 million from financing activities, leading to a net cash increase of $2.3 million Statement of Cash Flows Summary (Unaudited, Six Months Ended June 30) | (In thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities ($ thousands) | $(10,225.5) | $(10,246.9) | | Net cash provided by investing activities ($ thousands) | $2,977.8 | $2,708.5 | | Net cash provided by financing activities ($ thousands) | $9,587.0 | $8.1 | | Net increase (decrease) in cash ($ thousands) | $2,339.4 | $(7,530.4) | | Cash, beginning of period ($ thousands) | $3,591.6 | $10,586.3 | | Cash, end of period ($ thousands) | $5,931.0 | $3,055.8 |