Filed 2026-03-27 · Period ending 2025-12-31 · 65,192 words · SEC EDGAR
# Cyngn Inc. (CYN) — 10-K **Filed:** 2026-03-27 **Period ending:** 2025-12-31 **Accession:** 0001213900-26-034900 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1874097/000121390026034900/) **Origin leaf:** fbe30caa957af1b686f259fea68e26db59d4bb30cb0b6f41fe48fb25332f2607 **Words:** 65,192 --- ** UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **** **FORM 10-K** (Mark One) **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the fiscal year ended **December 31, 2025** or **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the transition period from [____] to [____] Commission file number **001-40932** | CYNGN INC. | | | (Exact name of registrant as specified in its charter) | | | Delaware | | 46-2007094 | | | State or other jurisdiction of incorporation or organization | | (I.R.S. Employer Identification No.) | | | | | | | | 1344 Terra Bella Avenue, Mountain View, CA | | 94043 | | | (Address of principal executive offices) | | (Zip Code) | | Registrants Telephone number, including area code: **(650) 924-5905** Securities registered pursuant to Section 12(b) of the Act: | Title of Class | | Trading Symbol(s) | | Name of each exchange on which registered | | | Common Stock, Par Value $0.00001 | | CYN | | Nasdaq Stock Market LLC | | Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registered is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. | Large accelerated filer | | | Accelerated filer | | | | Non-accelerated filer | | | Smaller reporting company | | | | | | | Emerging growth company | | | If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2025 (the last business day of the registrants most recently completed second fiscal quarter), computed by reference to the closing price for the common stock on such date ($14.40), as reported on the Nasdaq Capital Market, was $101,365,430.40. The number of shares of Common Stock, $0.00001 par value, outstanding on March 26, 2026 was 13,608,281 shares. DOCUMENTS INCORPORATED BY REFERENCE None **TABLE OF CONTENTS** | | | Page | | | | PART I | 1 | | | | | | | | Item 1. | Business | 1 | | | Item 1A. | Risk Factors | 16 | | | Item 1B. | Unresolved Staff Comments | 36 | | | Item 1C. | Cybersecurity | 37 | | | Item 2. | Properties | 37 | | | Item 3. | Legal Proceedings | 37 | | | Item 4. | Mine Safety Disclosures | 37 | | | | | | | | | PART II | 38 | | | | | | | | Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 38 | | | Item 6. | [Reserved] | 38 | | | Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 38 | | | Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 46 | | | Item 8. | Financial Statements and Supplementary Data | 46 | | | Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 47 | | | Item 9A. | Controls and Procedures | 47 | | | Item 9B. | Other Information | 48 | | | Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 48 | | | | | | | | | PART III | 49 | | | | | | | | Item 10. | Directors, Executive Officers and Corporate Governance | 49 | | | Item 11. | Executive Compensation | 53 | | | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 59 | | | Item 13. | Certain Relationships and Related Transactions, and Director Independence | 60 | | | Item 14. | Principal Accountant Fees and Services | 60 | | | | | | | | | PART IV | 61 | | | | | | | | Item 15. | Exhibit and Financial Statement Schedules | 61 | | | Item 16. | Form 10-K Summary | 64 | | i **** **FORWARD-LOOKING STATEMENTS** This Annual Report on Form 10-K (this Annual Report) contains forward-looking statements. These statements are based on our managements beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally under the headings Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations, and Business. Forward-looking statements include statements concerning: | | our possible or assumed future results of operations; | | | | our business strategies; | | | | our ability to attract and retain customers; | | | | our ability to sell additional products and services to customers; | | | | our cash needs and financing plans; | | | | our competitive position; | | | | our industry environment; | | | | our potential growth opportunities; | | | | expected technological advances by us or by third parties and our ability to integrate and commercialize them; | | | | the effects of wars, such as the wars in Ukraine and the Middle East, natural disasters and pandemics, such as the Covid-19 pandemic; | | | | the effects of future regulation; and | | | | the effects of competition. | | All statements in this Annual Report that are not historical facts are forward-looking statements. We may, in some cases, use terms such as anticipates, believes, could, estimates, expects, intends, may, plans, potential, predicts, projects, should, will, would or similar expressions that convey uncertainty of future events or outcomes to identify forward-looking statements. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These important factors include our financial performance and the other important factors we discuss in greater detail in Risk Factors. You should read these factors and the other cautionary statements made in this Annual Report as applying to all related forward-looking statements wherever they appear in this Annual Report. Given these factors, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our managements beliefs and assumptions only as of the date on which the statements are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. *Unless the context requires otherwise, references in this Annual Report to we, us, our, and Cyngn refer to CYNGN Inc. and its consolidated subsidiaries.* ** Unless otherwise expressly provided in this Annual Report, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents set forth herein relating to our common stock have been adjusted to give effect to a reverse stock split of our common stock in a ratio of 1-for-150 effected on February 18, 2025. ** ii **PART 1** **** **Item 1. Business** **Company Overview** **** Cyngn Inc. is 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, high labor costs, and work safety. We integrate our full-stack autonomous driving software, DriveMod, onto vehicles manufactured by Original Equipment Manufacturers (OEM) by integration directly into vehicle assembly. We design the DriveMod to be compatible with sensors and components from leading hardware technology providers and integrate our proprietary AV software to produce differentiated autonomous vehicles. Autonomous driving has common technological building blocks that remain similar across vehicles and applications. By tapping into these building blocks, DriveMod is designed to deliver autonomy to new vehicles via streamlined hardware/software integration. This vehicle-agnostic approach enables DriveMod to expand to new vehicles and novel operational design domains (ODD). In short, nearly every industrial vehicle, regardless of use case, can move autonomously using our technology. Our approach accomplishes several primary value propositions: | 1. | Provide autonomous capabilities to industrial vehicles built by established manufacturers that are already trusted by customers. | | | 2. | Generate continual customer value by leveraging the synergistic relationship of autonomous vehicles and data. | | | 3. | Develop consistent autonomous vehicle operation and user interfaces for diverse vehicle fleets. | | | 4. | Complement the core competencies of existing industry players by introducing the leading-edge technologies of Artificial Intelligence (AI) & Machine Learning (ML), cloud/connectivity, sensor fusion, high- definition mapping, and real-time dynamic path planning & decision-making. | | We believe our market positioning as a technology partner to vehicle manufacturers creates a synergy with incumbent suppliers that already have established sales, distribution, and service/maintenance channels. By focusing on industrial use cases and partnering with the incumbent OEMs in these markets, we believe we can source and execute revenue-generating opportunities more quickly. Our long-term vision is for our Enterprise Autonomy Suite (EAS)-which includes the DriveMod autonomous driving stack as well as the Cyngn Insight and Cyngn Evolve tools for fleet management, analytics, and data collection-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 ten different vehicle form factors that range from tow tractors and stand-on floor scrubbers to 14-seat shuttles and electric forklifts in a combination of commercially released products, prototypes, and proof of concept projects, demonstrating the extensibility of our AV building blocks. Our recent progress contributes to the validation of EAS with OEM partners and end customers. We also continue to build upon our ability to scale our products and generate novel technological developments. The DriveMod Stockchaser with a 6,000-lb towing capacity became commercially available in early 2023 and was first commercially deployed with our partner-customer US Continental (USC), a California-based manufacturer of quality leather and fabric care products. We then launched the DriveMod Forklift and the DriveMod Tugger as we continued to expand our vehicle-type portfolio fleet through our OEM partnerships with BYD and Motrec, respectively. The DriveMod MT160 Tugger with a 12,000-lb towing capacity was commercially released in 2024 in partnership with Motrec and is now deployed with multiple customers. 1 We secured paid projects with leading global customers like Arauco, along with additional projects from big brands in the Global 500 and the Fortune 100. Paid development projects of this nature are selectively pursued to springboard new products or technology advancements, yielding promising outcomes such as the DriveMod Forklift. The primary focus of the company is to achieve and expand production deployments with its commercially released DriveMod vehicles. As of the end of 2025, those commercial deployments include the named accounts of John Deere, G&J Pepsi, Coats Automotive, and USC, as well as other business awards that have not yet been publicly disclosed. Our patent portfolio expanded with 16 new U.S. patent grants in 2023 3 granted in 2024, and 2 granted in 2025 bringing the total grants to 24. * **** **Figure 0: Summary of recent Cyngn technical and commercial milestones** We intend to continue to pursue and win additional license agreements with companies that depend heavily on the use of material handling vehicles and that all recognize the need for automation to i) compete in todays economy, ii) combat the significant labor shortages and escalating costs, and iii) improve safety. Our approach to securing these opportunities will be a continued direct sales effort coupled with increasing our network of industrial vehicle dealers that already have significant sales of industrial vehicles. **Overview: Automation and Autonomy in Industry 5.0** The fifth industrial revolution is upon us with self-driving industrial vehicles operating alongside human workers and encompasses the benefits from the fourth industrial revolution of smart factories and automated supply chain logistics, with big data connectivity. According to Research Nester, they forecast the global industry 5.0 market to experience remarkable CAGR growth from 2022 - 2030 led by industrial internet of things, artificial intelligence with the alliance of humans and collaborative robots. As automation proliferates, these industries will gradually shift to service-based models that will decrease upfront capital expenditures and create new revenue streams while unlocking new value in the supply chain. Our AV technology is uniquely positioned to capitalize upon these changes by offering a universal autonomy solution that can deliver self-driving capabilities and data insights to nearly every industrial vehicle on the market. 2 Automation has long played a role in industrial sectors. The larger industrial automation market has grown significantly by riding the wave of new technology and innovation experienced during Industry 4.0. This consists of a wide range of technology solutions that provide varying levels of automation for critical software control systems and industrial equipment. These components are essential to the operations and growth of global markets such as manufacturing, distribution, transportation, construction, and mining. However, Industry 4.0 has its limitations in industrial autonomy. With the convergence of AI/ML, robotics, connectivity, mapping and interoperability, autonomous vehicle technology is the next leap-frog advancement in materials handling and supply chain logistics efficiency and safety propelling manufacturing into the Industry 5.0 phase. **Figure 1: Illustration of the progression from Industry 1.0 to Industry 5.0.** **Automation Solutions for Industrial Equipment** The Industrial Equipment market covers a broad range of use cases and product categories, with automation solutions targeting Material Transport Equipment (MTE) heavily utilized by the majority of industry market sectors. For our purposes, we can think of MTE to include all material handling equipment directly related to material transit (this includes conveying equipment, monorail, hoists, storage & retrieval, and industrial vehicles). According to a Grand View Research report, the material handling equipment market was valued at $213.4 billion in 2021. They expect the CAGR from 2022 to 2030 of 5.7% to be driven by increased worker safety awareness, rising requirements for managing bulk materials and further adoption of Industry 4.0 initiatives with the use of IoT. Further with the rising need for reducing downtime and focus on improving supply chain efficiency, self-driving industrial vehicles play an important role to achieve these objectives as manufacturing transitions to Industry 5.0. Our belief is that these strong growth indicators will drive increased need for more advanced technology that will address gaps in the current capabilities of automated MTE solutions. Historically, MTE automation has been heavily weighted in solutions related to storage/retrieval systems and conveyors because more rigid and repetitive environments are better suited for the limited capability of existing automation solutions. By contrast, industrial vehicles in the MTE category are largely still driven manually. A March 2023 report released by MHI and Deloitte finds that 74% of supply chain leaders are increasing their supply chain technology and innovation investments with 90% saying they are planning to spend more than $1 million, an 24% increase from 2022 levels. Thirty-six percent plan to spend more than $10 million, up 19% from the prior year. According to an article by Meteor Space, Important Warehouse Automation Statistics you cant Ignore, the use of AI in warehouse management systems has surged, with 70% of large-scale warehouses adopting AI-driven solutions by 2024 to optimize inventory management, demand forecasting, and route planning. 3 Supply chain, logistics, and manufacturing operators are increasingly facing labor shortages, rising costs, and operational inefficiencies, which we believe is accelerating the adoption of automation technologies. Industry data (Descartess Study) indicates that approximately 76% of supply chain operations are currently impacted by labor shortages, and in the United States there are significantly more job openings than available workers, contributing to persistent workforce gaps. The manufacturing sector alone could face millions of unfilled positions over the next decade, further increasing pressure on companies to automate repetitive and labor-intensive tasks. Industrial truck and material handling vehicle operators represent a meaningful component of operating costs within warehouses and manufacturing facilities, with median annual wages in the United States in the mid-$40,000 range, excluding overtime, benefits, and other employer-related costs, according to U.S. Bureau of Labor Statistics data. In addition to labor shortages and rising labor costs, workplace safety expenses represent a significant financial burden for industrial operators. Worker injury claims can average tens of thousands of dollars per incident, and total workplace injury costs in the United States exceed hundreds of billions of dollars annually. According to the Economic Policy Institute, over $250 billionare spent on workplace injuries each year. Autonomous industrial vehicles have the potential to reduce both labor dependency and safety risks by automating repetitive material transport tasks, which may lower operating costs and improve productivity. According to PWCs Industrial Mobility: How autonomous vehicles can change manufacturing report, only 9% of manufacturershave currently adopted autonomous technologies, but this is expected to grow as the benefits of improved efficiency and reduced costs become more apparent. As a result, we believe automation is becoming increasingly essential for industrial operations, with a substantial majority of manufacturing leaders identifying automation as critical to future success. Despite these trends, adoption of autonomous industrial vehicle technology remains in the early stages, suggesting a significant opportunity for future market growth as organizations seek solutions to workforce shortages, cost pressures, and supply chain resilience challenges. Automating industrial vehicles will address the following challenges: Labor shortages* - The hiring and retention of qualified workers is a critical concern for the markets that material transport vehicles operate within. In fact, Deloittes 2020 and 2022 Material Handling Industry Report showed that over 50% of the 1,000 supply chain and manufacturing leaders surveyed rated hiring and employee retention as their biggest challenge (source: MHI Deloitte Industry Report). ** *Difficulty in scaling -*The traditional approaches to vehicle automation make scaling vehicle automation solutions difficult due to strains caused by service lifecycle management and issues with dynamic deployability. Industrial automation customers are forced to coordinate operational components from a variety of different vendors and lack a unifying architecture that allows the technology to scale effectively within and across sites. Significant costs are also associated with expanding the scope of existing automation solutions as they are tightly coupled to specific vehicles and often require an overhaul of the site infrastructure to overcome shortcomings in the automation technology. This can be especially true in niche environments like mines, where the deployability challenges are compounded by unique sites that require heterogeneous fleets. Furthermore, customer service, workforce training, and repair fall under service lifecycle management and must be taken into account along with the technology in order to scale efficiently, according to the Trends in Supporting and Scaling Modern Automation report by Ricoh & ABI Research Report. *Lagging technological advancement*- Manufacturers of material transport vehicles have core competencies in mechanical, electrical, and control systems while the end users of the vehicles typically specialize in logistics, manufacturing, and material moving. There is limited expertise throughout the material handling value chain in software algorithms, sensing, and high-performance computing. Considering the incumbents gaps in leading-edge AV and AI technologies and the pressure existing suppliers face to ship manually-operated vehicles that address the multi-billion dollar demand that already exists, we believe it is unlikely that existing stakeholders will be able to invest in the technological advancements that will solve the industrys fundamental challenges. 4 *High barriers to adoption*- Many solutions for automated material transport require an all-or-nothing commitment from customers: either make a major upfront investment to overhaul operations for automation or postpone automation at the risk of falling behind competition. This all-or-nothing approach to unlocking future return on investment (ROI) can be problematic for risk-averse companies that seek to adopt automation solutions. Depending on fleet size, traditional automation solutions such as robot-in-a-box may command ROI horizons of up to 4 years. Factoring in ancillary costs like installation, maintenance, on-site testing, integration, and deployment, can also represent a significant annual cost burden, according to findings by Ricoh & ABI Research Report. To combat these challenges, we have built an Enterprise Autonomy Suite for industrial vehicles that leverages advanced in-vehicle autonomous driving technology and incorporates leading supporting technologies like data analytics, fleet management, cloud, and connectivity. EAS provides a differentiated solution that we believe will drive pervasive adoption of industrial autonomy and create value for customers at every stage of their automation growth. **Business Model: The Enterprise Autonomy Suite for Industrial Vehicles** A number of business models have been developed to support industrial autonomy where software is the enabling technology thats transforming supply chain logistics under Industry 4.0 and 5.0. Software as a Service (SaaS) is the initial working business model for the company but this is not entirely accurate as vehicle hardware plays an integrated role in automating materials handling. Autonomy requires both the movement of bits (or software) and the movement of atoms (or hardware). Robots as a Service (RaaS) is a useful business model given the high cost of AGVs and AMRs where industrial customers may want to explore different buying models for both software and hardware usage to align with their needs for capital expenditures and operational expenditures. In our served markets where customers primarily purchase and own their industrial vehicle fleet, we deliver the software that enables self-driving vehicle capability. As such, our EAS software is designed to provide level-4 high automation, fully autonomous driving without the need for a human in the vehicle. Cyngns business model is thereby more attuned to Driver as a Service (DaaS) as our EAS software integrated with the vehicle hardware enables the customer to remove the human driver for self-driving functionality. Our unique value proposition stems from the concept that the growth of industrial autonomy requires an approach that deploys applied AV solutions within a system of supportive resources rather than a technology feature that is tuned to a specific industrial vehicle. Some companies manufacture standard industrial vehicles then integrate industrial automation software for rigid tasks. Others develop new vehicle platforms to enable more advanced automation capabilities, limiting the AV technology to a narrow use case. We developed advanced autonomous vehicle software, DriveMod, for industrial vehicles. DriveMod is a component of EAS that is operationally expansive, vehicle agnostic, and compatible with indoor and outdoor environments. EAS centers around DriveMods on-vehicle AV software and is supported by our Cyngn Insight and Cyngn Evolve technology and tools. 5 * **Figure 2: The core components that make up our EAS product offering.** * *Our approach drives value at every stage of a companys autonomy journey* EAS provides extensible industrial autonomy solutions that can include data-driven actionable insights, partial autonomy to augment existing workflows and support human drivers, and fully autonomous vehicle mobility. By offering flexible data and autonomous services through subscription-based business models, we assuage the industrys existing challenge of all-or-nothing adoption for autonomous vehicles. Installing DriveMod onto any vehicle unlocks a collection of valuable product offerings that customers can activate over the air, creating lower barriers to entry and enabling customers to benefit from novel data insights while adopting industrial AVs at their own pace. Our solutions also do not require infrastructure investments to enable autonomous vehicle operation. *EAS galvanizes the relationship between AVs and data* Our EAS combines core autonomous vehicle technology with a suite of tools and products that strengthen the ties between industrial business operations and the positive network effects that underpin the relationship between data and AVs. DriveMod uses data from advanced sensors to navigate AVs, creating a de facto mechanism for rich data collection. Vehicles equipped with DriveMod provide the means for us to collect data then organize, analyze, and expose customers to novel insights. This makes the data collected during vehicle operation a new type of asset that adopters of AV technology can take advantage of. Data can be stored in cloud or on-premise servers, according to customer requirements. We intend to have our customers own the data collected at their facilities and for Cyngn to have the rights to use that data for certain purposes, such as testing simulation and development. These data assets present a new opportunity to reveal previously unknown insights about day-to-day operational processes that impact safety, efficiency, vehicle maintenance, and growth. 6 * **Figure 3: The EAS product flywheel** As the deployment of industrial vehicles with DriveMod scales up, the amount and diversity of data flowing through Cyngn Insight expands, creating an accelerated feedback loop and powers our ability to use Cyngn Evolve to further enhance DriveMod, and update the on-vehicle software over-the-air, resulting in an ever-improving EAS offering. Continual Improvement Drives Technology Advancement* DriveMods building blocks enable a more consistent cadence of upgrades, improvements, and customer-specific feature development that can be deployed via over-the-air updates. These capabilities ensure that the deployed system stays in sync with the changing application demands while allowing customers to focus on monetary and operational ROI. Our EAS plugs into business operations by creating and collecting real-time data and aggregating it into configurable analytics dashboards that inform customer operations as well as future DriveMod releases, creating a data set specific to each customer from high-resolution data collected during their operations. ** *Our Approach Augments and Upskills Workforces* Industrial vehicle autonomy represents an opportunity to minimize the adverse impact that labor shortages, employee health, and safety have on a companys core operations. Autonomous vehicles can be relied upon to fill the voids that commonly create human resource issues like executing repetitive tasks, working during undesirable hours, and operating in uncomfortable or hazardous environments. Furthermore, existing employees can be exposed to cutting-edge technology and develop new valuable career development opportunities. For instance, a manufacturing community in Wisconsin successfully retrained their employees to be skilled in AMR maintenance after AMRs were introduced to replace traditional conveyors, according to the article Are Autonomous Mobile Robots at the Tipping Point by AutomationWorld. *We Designed for Scale* EAS provides a powerful solution to scalability issues, especially for dynamic deployability and service lifecycle management. DriveMods vehicle-agnostic capability to deploy AV technology on diverse vehicle fleets has been proven through its deployment on more than ten different vehicle form factors that we have operated autonomously. DriveMod solutions have been commercially released for the Motrec MT160 Tugger, with BYD ECB50+ Forklift targeted next. Other autonomous vehicles were deployed as prototypes or as a part of proof-of-concept project. More than five past deployments have been at customer or beta customer sites. Other past deployments were part of our normal R&D activities and product validation that was performed with beta customers. 7 Our AV development and testing have included road vehicles that navigate complex dynamic environments. DriveMod is capable of perceiving more than 100 dynamic objects per second and then using that perception information to navigate autonomously. This capability has been proven via road testing in difficult driving settings like urban streets. In contrast, the industrial settings of our target market rarely encounter 100 dynamic actors per minute, let alone per second. Scalability is further strengthened by EAS creating common interfaces and experiences that unify customer data and AV operations within and across sites. Thus, proliferating our solutions with customers will be achieved by iteratively adding onto an existing EAS, which minimizes the marginal cost associated with expanding AV operations. Additionally, the deployment of EAS allows for**all of the on-going administration, services, and vendors associated with managing the lifecycle of the system to be integrated. * **Figure 4: Illustration of DriveMods ability to utilize key subsystems across multiple environments and vehicle platforms (left: off-road utility vehicle; right: indoor material handling vehicle).** **Our Products** EAS is a suite of technology and tools that consists of three complementary categories: DriveMod, Cyngn Insight, and Cyngn Evolve. DriveMod: Industrial Autonomous Vehicle System* We built DriveMod as a modular software product that is compatible with various sensor and computer hardware components that are widely used throughout the autonomous vehicle industry. Our software combined with sensors and components from industry-leading hardware providers covers the end-to-end requirements that enable vehicles to operate autonomously with advanced navigation capabilities. The modularity of DriveMod allows our AV technology to be compatible across vehicle platforms as well as indoor and outdoor environments. DriveMod can be retrofitted to existing vehicle assets or integrated into a manufacturing partners vehicles at assembly, providing accessible options for our customers to integrate leading-edge technology whether their AV adoption strategies are evolutionary or revolutionary. 8 The core vehicle-agnostic DriveMod software stack is targeted and deployed to different vehicles through *DriveMod Kits*, which are the AV hardware systems that take into account the specific needs of operating the DriveMod software on a specific target vehicle. Then, after prototyping and productization, DriveMod kits streamline the integration of AV hardware and software onto vehicles at scale. The DriveMod Kit for Motrec MT160 Tuggers are released to mass production and available at scale. Subsequently, we expect to create different instances of DriveMod Kits to support the commercial release of new vehicles on the EAS platform, such as the electric forklifts and other industrial vehicles. * **Figure 5: Overview of Cyngns autonomous vehicle technology (DriveMod)** DriveMods flexibility combines with our network of manufacturing and service partners to support customers at different stages of autonomous technology integration. This allows customers to grow the complexity and scope of their industrial autonomy deployments as their business transforms while continually capturing returns throughout their transition to full autonomy. EAS will also grant customers access to over-the-air software upgrades, ad hoc customer support, and flexible consumption based on usage and scale of operations. By lessening both the commercial and technical burdens of traditional vehicle automation and industrial robotics investments, industrial AVs can become universally available to the market, even reaching small and medium-sized businesses that may otherwise struggle to adopt Industry 4.0 and 5.0 technology. 9 Cyngn Insight: Intelligent Control Center* Cyngn Insight is the customer-facing tool suite for managing AV fleets and aggregating data to extract business insights. Analytics dashboards surface data about the systems status, vehicle telemetry, and performance metrics. Cyngn Insight also provides tools to switch between autonomous, manual, and remote operation when required. This flexibility allows customers to use the autonomous capabilities of the system in a way that is tailored to their own operational environment. Customers can choose when to operate their DriveMod-powered vehicles autonomously and when to have human operators operate the vehicles manually or remotely based on their own business needs. When combined, these capabilities and tools make up the Cyngn Insight intelligent control center that enables flexible fleet management from any location. Cyngn Insights tool suite includes configurable cloud dashboards that aggregate diverse data streams at several levels of granularity (i.e., site, fleet, vehicle, module, and component). We can collect data during open loop vehicle operation, meaning that the vehicles can be operated manually while still collecting the rich data enabled by the advanced on-vehicle sensors and computers. Data can be used for predictive maintenance, operational improvements, educating employees on digital transformation and more. *Cyngn Evolve: Data Optimization Tools* Cyngn Evolve is our internal tool suite that underpins the relationship between AVs and data. Through a unifying cloud-based data infrastructure, our proprietary data tools strengthen the positive network effects derived from the valuable new data created by AVs. Cyngn Evolve and its data pipelines facilitate AI/ML training and deployment, manage data sets, and support driving simulation and grading to test and validate new DriveMod releases, using both real-world and simulated data. * **Figure 6: The Cyngn AnyDrive simulation is part of the Cyngn Evolve toolchain. The simulation environment creates a digital version of the physical world. This allows for customer data sets to be leveraged and augmented to achieve testing and validation prior to releasing new AV features.** As AV technology expertise matures globally, there may be opportunities to monetize the sophisticated AV-centric tools of Cyngn Evolve. Currently, we believe that AV development is confined to small groups of experts. Therefore, Cyngn Evolve is currently an internal EAS tool that we use to advance DriveMod and Cyngn Insight, our customer-facing EAS products. 10 **Corporate Strategy** * *360 Sales and Marketing* We are building a go-to-market ecosystem that we believe to be highly leveraged by using our partners as the foundation of our growth strategy. We plan to utilize these relationships to generate and cultivate customer demand, acquire new customers, and deliver additional services to our customers. Key elements of our market entry and expansion roadmap include: ** *Focus: manufacturing and distribution material handling vehicles* Manufacturing and distribution applications can be conducive to short deployment timelines due to the similar use of material handling vehicles across these environments. We have already deployed DriveMod-powered industrial vehicles at multiple manufacturing and distribution facilities of varying sizes, including facilities as large as 4 million square feet. *Broaden: address other industrial vehicle use cases* The industries that utilize material transport vehicles share trends, challenges, and opportunities. DriveMod has been architected to be vehicle agnostic and allow for efficient expansion to industries such as mining, construction, yard operations, and agriculture. **Revenue Sources** We anticipate that our technology will generate revenue through three main methods: deployment, EAS subscriptions, and DriveMod customization. ** *Deployment* Deploying our EAS requires us and our integration partners to work with a new client to map the job site, gather data, and install our AV technology within their fleet and site. New deployments yield project-based revenues that are assessed based on the scope of the deployment. Our major collaborators in this area are our OEM partners, and we can reinforce our deployment capability with integration and services from third party partners. Working directly with our OEM partners as well as with third party experts ensures that we can deploy our technology globally and at-scale. ** *EAS License* EAS is a comprehensive suite of technologies comprised of DriveMod, our modular industrial vehicle autonomous driving software; Cyngn Insight, our customer-facing fleet management and data analytics platform; and Cyngn Evolve, our internal AI and machine learning development and simulation infrastructure. Together, these solutions create a foundation for extracting new and valuable enterprise data insights through advanced sensors, electronic control units, and vehicle connectivity that power DriveMods autonomous functionality. Through Cyngn Insight, we monetize these data insights by offering configurable cloud dashboards for fleet and asset management, operational performance monitoring, remote vehicle operations, and predictive analytics. Cyngn Evolve continuously enhances our AI models using real-world and synthetic data, enabling ongoing performance improvements and validated software releases. Collectively, the data generated and analyzed across the EAS suite not only drives customer value but also provides meaningful insights to OEM partners as they optimize product roadmaps and integrate autonomous capabilities to meet the evolving demands of industrial automation. 11 *DriveMod Customization and Non-Recurring Engineering (NRE)* DriveMods capability as an AV software stack will continue to expand in several dimensions-most notably, in the number of vehicles that DriveMod can operate autonomously and the maneuvers that a DriveMod-powered vehicle can execute. Targeting DriveMod to operate new vehicle types autonomously as well as the expansion of autonomous maneuvers that can be executed by DriveMod are both customizations that may generate revenues from OEMs or end customers through NRE contracts. New customizations yield project-based revenues that are assessed based on the scope of the deployment. This revenue stream is substantiated by the commercial contract that was entered into with an end customer for deploying DriveMod on electric forklifts. **Go-to-Market Strategy** Our go-to-market strategy hinges on strategic collaboration and is based on a set of three basic principles: | | | Collaborate with industrial vehicle OEMs and their dealer and service networks | | | | | Land & expand with end customers | | | | | Partner instead of compete on adjacent enabling technology | | *Collaborate - industrial vehicle OEMs* Our focus is on acquiring new customers who are either (a) looking to embed our technology into their vehicle products or (b) upsell their existing clients with our vehicle retrofits. We follow a named account coverage approach. After establishing a customer relationship with an OEM, we seek to embed our technology into their product roadmap and expand our services to their many clients. We believe this category represents a substantial opportunity to generate revenue as a single relationship with an OEM that can lead to revenue opportunities across the entire marketplace. ** *Land & expand - end customers* Our go-to-market strategy is to acquire new customers that use industrial vehicles in their mission-critical operations. We pursue this strategy by being hyper-focused on building a robust pipeline of prospective customers (land) and utilizing strategic sales channels that will result in coordinated opportunities to accelerate growth (expand). Our archetypal customers are corporations that deploy fleets of heterogeneous industrial vehicles across many sites. DriveMods flexibility is intertwined with the wide-ranging applicability of our EAS and creates the unique leveraged opportunity of expanding across vehicles and sites with these major customers. After an initial win for a first AV deployment with a customer, we can expand within the site to additional vehicle platforms, then expand the use of similar vehicles to other sites operated by the customer and finally repeat across new vehicles and sites. ** *Partner instead of compete - technology* The scaling of Industrial Autonomy will benefit from an ecosystem made up of different enabling technologies and services, such as hardware manufacturing, connectivity, Internet of Things (IoT), and digital integration. Rather than trying to compete with other technology suppliers, we intend to rely on our strategic collaborations that give both partners access to new markets and capabilities. For example, hardware partners like Motrec and BYD provide complementary solutions that stand to benefit from Cyngns autonomy software. Thereby, we leverage our R&D resources with existing core competencies of our technology partners through collaboration, resulting in a more efficient asset-light approach in product development and manufacturing. **** **Our Technology** Autonomous vehicles must integrate a suite of technologies to generate operational value. Our core competencies are in DriveMod, the on-vehicle AV technology stack that is underpinned by AI and robotics expertise and paramount to enabling autonomous mobility. With Cyngn Insight, EAS integrates analytics, visual dashboards, connectivity, cloud services, and other traditional software systems that allow customers to interact with and extract insights out of our advanced AV technology. 12 *Mapping & localization* Our proprietary system design abstracts mapping and localization data so that DriveMod can use a variety of high-accuracy solutions to create the optimal mapping and localization system for the given environment. Our mapping and localization system distills sensor data into contextually rich representations of the physical world and extracts common insights like required stops and navigation boundaries. These common insights help to create consistent AV operation across diverse sites, enabling our AVs to navigate both indoor and outdoor. ** *Perception* Granular, efficient perception forms the basis of advanced AVs. Perception is one of the most complex subsystems, requiring specialized data infrastructure and engineering expertise in AI/ML and high-performance computing. We have built a modular sensor fusion pipeline that runs on a low compute footprint and creates the flexibility to customize our perception stack according to application requirements. Our perception architecture streamlines DriveMod deployments on new vehicles. Our approach addresses common industry challenges like integrating different sensor modalities and accounting for different sensor mounting positions. We have now integrated DriveMod into more than ten different vehicle platforms, utilizing various combinations of Light Detecting and Ranging (LiDAR), camera, radar, ultrasonic, and positioning sensors. ** *Path planning* Our systems ability to react and adjust to real-time changes creates a more efficient workflow than basic automation solutions that can only stop/go along a rigid path and require constant human hand-holding. The Cyngn path planning system provides thousands of trajectory candidates per second, enabling more complex paths to be navigated that may include advanced behavior like carefully nudging around obstacles or negotiating intersections. ** *Decision making* The Cyngn decision engine holds the logic and decision-making rules that govern driving behavior. The decision engine pulls together insights from mapping, perception, and path planning to enable more complex vehicle maneuvers and automated conflict resolution. The system is extensible to introduce new capabilities with logic that is designed to achieve a high level of abstraction, which enables us to adopt new driving behaviors. *Actuation* A subsystem of our software stack, Cyngn-by-Wire (CbW), addresses the basic requirements of mechanical vehicle components that must be met for DriveMod to make a vehicle operate autonomously. Legacy electronic control units (ECU) that do not use Drive-by-Wire (DbW) technology that enables software commands to electronically control vehicle actuation typically create a hurdle for integrating AV technology. CbW addresses this issue by decoupling the hardware and software components of DbW systems. For vehicles with legacy ECUs, CbW allows customers to replace existing ECUs with DbW hardware that can be tuned to meet the needs of the selected vehicle platform using CbW software. When vehicles have DbW ECUs already installed, the CbW software layer is configured and applied without the need for replacing the hardware. Thus, CbW enables AV actuation across vehicle fleets with varying levels of vehicle age and sophistication. **** **Competitive Environment** There is an increasing demand for autonomous vehicle solutions in an effort to increase safety, improve efficiency, and enhance productivity to meet the goals set out by Industry 4.0 and 5.0. Autonomous vehicles are an enabling technology that gives us the opportunity to add more value to customers. 13 The market for automated vehicle solutions is burgeoning, and the advanced technology required to enable autonomous solutions in industrial environments is still developing. As a result, we face competition from a range of companies seeking to develop autonomous vehicle solutions. These competitors include traditional industrial vehicle manufacturers (such as Crown Equipments automated forklifts or Toyota, Yale and Vecna Materials Handling), robotics providers (such as Seegrid Corporation for pallet and tow AMRs), as well as large corporate competitors that provide a broad range of software, service, and logistics solutions across many markets. These competitors are also working to advance technology, reliability, and innovation in their development of new and improved solutions. We will continue to face competition from existing competitors and new companies entering the industrial autonomy landscape. Many of our competitors either have technical or strategic barriers that limit their product offerings to specific deployment environments, operations protocols, or vehicle form factors. It is our belief that it will take a substantial period of time to develop features that satisfy the dynamic needs of industry customers. Additionally, larger corporate competitors are likely to encounter roadblocks due to competitive overlap with end customers, limiting their ability to address the needs of the broader industrial market. With specific regard to manufacturing and distribution, a number of competitors have already begun to deploy products, but we believe the benefits stemming from our modular software-centric approach, technical expertise in the area of autonomous vehicles, and the ubiquitous applicability of EAS gives us the potential to displace current offerings and capture a significant share of this rapidly growing market. **Governmental and Environmental Regulations** Regulatory considerations contribute to our current strategic position that targets enterprise customers with operations mostly confined to private property. This decreases our exposure to regulations, which mitigates some deployment risks. Typically, we will satisfy regulatory requirements by adhering to the protocols of the site operator (the end customer). The regulatory environment for autonomous industrial vehicles is still being developed. In 2016, the United States Department of Transportation (US DoT) issued regulations that require the submission of documentation covering specific topics related to autonomy and government regulators, but these regulations are targeted towards road vehicles. As the autonomous industrial vehicle regulatory environment continues to develop, it will be imperative not only to comply with applicable standards but to be an active participant in the development of new standards. Outside of government standards, third party organizations, industrial workplace advocates, and industry groups have and will continue to impose self-regulatory standards. In certain cases, these standards may be contractually applicable to our systems, products, and operations. Thus, we expect and prepare to comply with various standards, including Occupational Safety and Health Administration (OSHA), International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), or American National Standards Institute (ANSI) on a case-by-case basis. U.S. and international regulations related to data privacy are also of great importance to our companys products, operations, and culture. Like the autonomous vehicle regulatory environment, the regulatory framework for data privacy, protection, and security worldwide is continuously evolving and developing. As a result, interpretation and implementation standards and enforcement practices are likely to remain fluid for the foreseeable future. As our company expands its operations, the collection, use, and protection of any and all data assets will be internally scrutinized to ensure compliance with this changing landscape. Decreasing the environmental impact of industrial vehicles is a high priority. Research has shown that equipment utilization rate, configuration, and operational consistency have a strong effect on the emissions released by industrial vehicle equipment (Source: Journal of the Air & Waste Management Association). A key focus of Cyngns EAS will be working to minimize the environmental impact of industrial vehicles through new data insights that can contribute to more sustainable practices. Our historic vehicle platforms have primarily been electric vehicles (EV). While electric drivetrains are not a requirement for DriveMods technology, EVs are often an application requirement since the vehicles operate alongside humans in enclosed spaces. **** **Intellectual Property** Our ability to drive impact and growth within the autonomous industrial vehicle market largely depends on our ability to obtain, maintain, and protect our intellectual property and all other property rights related to our products and technology. To accomplish this, we utilize a combination of patents, trademarks, copyrights, and trade secrets as well as employee and third-party non-disclosure agreements, licenses, and other contractual obligations. In addition to protecting our intellectual property and other assets, our success also depends on our ability to develop our technology and operate without infringing, misappropriating, or otherwise violating the intellectual property and property rights of third parties, customers, and partners. 14 Our software stack has over 30 subsystems, including those designed for perception, mapping & localization, decision making, planning, and control. As of March 26, 2026, we have 24 granted U.S. patents and submitted 2 pending U.S. patent and expect to continue to file additional patent applications with respect to our technology in the future. **Corporate Social Responsibility and Sustainability** Our mission is to deliver the benefits of autonomous industrial vehicle technology to enhance the safety and operational efficiency of materials handling in a cost-effective method in supply chain logistics. We seek to make the movement of goods in warehouse settings safer, faster, cheaper while reducing greenhouse gas emissions through greater operating efficiencies. **** **Human Capital Resources** Our team is composed of energetic, motivated and highly experienced visionaries. They include machine vision, AI, and autonomous software engineers from the greatest universities in the world. Together with a highly talented and skilled support team, we solve real-world industrial applications in autonomy. As of March 26, 2026, we had 62 full-time employees. The majority of our employees are based in Silicon Valley, California. Our core values include focus on impact, display curiosity, communicate proactively, apply good judgment, and demonstrate selflessness. We believe these values encourage innovation and a team-oriented culture. Our employees have access to a wide range of training, different career paths, and, most importantly, challenging and purposeful work. Our culture is also built on diversity, inclusion, camaraderie, and celebration. We organize regular team building activities and public recognition forums to celebrate our diversity and invest in strong relationships. In addition to a positive culture and career development, we offer a robust benefits package. This package includes a flexible vacation policy, access to a 401(k) plan, premier health plan options and numerous voluntary benefits for employees and their dependents. **Corporate History** The Company was incorporated in the State of Delaware on February 1, 2013, under the original name Cyanogen, Inc. or Cyanogen. The Company started as a venture funded company with offices in Seattle and Palo Alto, aimed at commercializing CyanogenMod, direct to consumers and through collaborations with mobile phone manufacturers. CyanogenMod was an open-source operating system for mobile devices, based on the Android mobile platform. Cyanogen released multiple versions of its mobile operating system and collaborated with an ecosystem of companies including mobile phone OEMs, content providers and leading technology partners from 2013 to 2015. In 2016 the Companys management and board of directors, determined to pivot its product focus and commercial direction from the mobile device and telecom space to industrial and commercial autonomous driving with the hiring of Lior Tal in June 2016 to serve as the companys chief operating officer. Mr. Tal, a seasoned executive of startup firms where prior to joining the company, co-founded Snaptu which later was acquired by Facebook (currently known as Meta Platforms, Inc.), as well as held various leadership roles at Actimize, DiskSites and Odigo; all of these companies which were also later acquired. Mr. Tal was promoted to chief executive officer in October 2016 and continues to serve in this role along with chairman of the board. In May 2017, the Company changed its name to Cyngn Inc. **** **Available Information** Our principal business address is 1344 Terra Bella Avenue, Mountain View, CA 94043. We maintain our corporate website at *https://cyngn.com*(this website address is not intended to function *as a hyperlink and the information contained on our website is not intended to be a part of this Annual Report*). We make available free of charge on https://investors.cyngn.com/ our annual, quarterly, and current reports, and amendments to those reports if any, as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. We may from time to time provide important disclosures to investors by posting them in the Investor Relations section of our website. Our common stock is quoted on the Nasdaq under the symbol CYN. We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the SEC) and are subject to the requirements of the Securities and Exchange Act of 1934, as amended (the Exchange Act). These filings are available to the public on the Internet at the SECs website at http://www.sec.gov. 15 **Item 1A. Risk Factors** **Risks Related to Our Technology, Business, and Industry** **** **Autonomous driving is an emerging technology and involves significant risks and uncertainties.** We develop and deploy a suite of autonomous driving software products that are compatible with existing sensors and hardware to enable autonomous driving on industrial vehicle platforms manufactured and designed by OEMs and other third-party industrial vehicle suppliers. Our autonomous driving technology is highly dependent on internally developed software, as well as on partnerships with third parties such as industrial OEMs and other suppliers. We partner with OEMs that are seeking to manufacture purpose-built industrial vehicles capable of incorporating our autonomous driving technology. Collaborative partnerships are established through mutually beneficial, non-binding memorandums of understanding or partnership agreements for the purpose of joint go-to-market efforts. In addition to OEMs, we depend on other third parties to produce hardware components, and, in some cases adjacent software solutions, that support our core suite of autonomous driving software products and tools. The timely development and performance of our autonomous driving programs is dependent on the materials, cooperation, and quality delivered by these partners. Further, we do not control the initial design of the industrial vehicles we work with and therefore have limited influence over the production and design of systems for braking, gear shifting, and steering. There can be no assurance that these systems and supporting technologies can be developed and validated at the high reliability standard required for deployment of autonomous industrial vehicles using our technology in a cost-effective and timely manner. Our dependence on these relationships exposes us to the risk that components manufactured by OEMs or other suppliers could contain defects that would cause our autonomous driving technology not to operate as intended. Our autonomous driving technology is available for production release and is currently being licensed to customers. We plan to continue our scaled commercialization throughout 2025 and beyond. Although we believe that our algorithms, data analysis and processing, and artificial intelligence technology are promising, we cannot assure you that our technology will achieve the necessary reliability for scaled commercialization of autonomous industrial vehicles. For example, we are still improving our technology in terms of handling edge cases, unique environments, and discrete objects. There can be no assurance that our data analytics and artificial intelligence could predict every single potential issue that may arise during the operation of an autonomous industrial vehicle utilizing our autonomous vehicle technology. Furthermore, the release and adoption of EAS and our other technologies and products may not be successful and may take longer than anticipated. If the development of EAS and our other technologies and products is delayed or customers do not adopt and buy our solutions to the extent we anticipate, our business and operating results will be adversely impacted. **** **We have a limited operating history in a new market and face significant challenges as our industry is rapidly evolving.** You should consider our business and prospects in light of the risks and challenges we face as a new entrant into a novel industry, including, among other things, with respect to our ability to: | | | design, integrate, and deploy safe, reliable, and quality autonomous vehicle software products and tools for industrial vehicles with our partners on an ongoing basis; | | | | | navigate an evolving and complex regulatory environment; | | | | | successfully produce with OEM partners a line of purpose-built autonomous industrial vehicles on the timeline we estimate; | | | | | improve and enhance our software and autonomous technology; | | | | | establish and expand our customer base; | | 16 | | | successfully market our autonomous driving solutions and our other products and services; | | | | | properly price our products and services; | | | | | improve and maintain our operational efficiency; | | | | | maintain a reliable, secure, high-performance, and scalable technology infrastructure; | | | | | attract, retain, and motivate talented employees; | | | | | anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and | | | | | build a well-recognized and respected brand. | | If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected. There are also a number of additional challenges to the execution and adoption of autonomous vehicle technology in industrial markets, many of which are not within our control, including market acceptance of autonomous driving, governmental licensing requirements, concerns regarding data security and privacy, actual and threatened litigation (whether or not a judgment is rendered against us), and the general perception that an autonomous vehicle is not safe because there is no human driver. There can be no assurance that the market will accept our technology, in which case our future business, results of operations and financial condition could be adversely affected. The autonomous industrial vehicle industry is in its early stages and is rapidly evolving. Our autonomous driving technology has not yet been commercialized at scale. We cannot assure you that we will be able to adjust to changing market or regulatory conditions quickly or cost-effectively. If we fail to do so, our business, results of operations, and financial condition will be adversely affected. **Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business.** Investors should be aware of the difficulties normally encountered by a relatively new enterprise that is beginning to scale its business, many of which are beyond our control, including unknown future challenges and opportunities, substantial risks and expenses in the course of entering new markets and undertaking marketing activities. The likelihood of our success must be considered in light of these risks, expenses, complications, delays, and the competitive environment in which we operate. There is, therefore, substantial uncertainty that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital, or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including securing market acceptance for our product and service offerings, scaling up our infrastructure and headcount. We may encounter unforeseen expenses, difficulties, or delays in connection with our growth. In addition, as a result of the capital-intensive nature of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenue to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment. Our future business depends in large part on our ability to continue to develop and successfully commercialize our suite of software products and tools. Our ability to develop, deliver, and commercialize at scale our technology to support or perform autonomous operation of industrial vehicles is still unproven. Our technology suite is currently available on tuggers for production release. However, this technology will need to be continually developed and enhanced for further scaled commercialization. Continued enhancement of our autonomous driving technology is and will be subject to risks, including with respect to: | | | our ability to continue to enhance our data analytics and software technology; | | | | | designing, developing, and securing necessary components on acceptable terms and in a timely manner; | | 17 | | | our ability to attract and retain customers; | | | | | our ability to pay for research and development costs; | | | | | our ability to attract, recruit, hire, and train skilled employees; | | | | | our ability to fund the development and commercialization of our technology; and | | | | | our ability to enter into strategic relationships with key members in the industrial vehicles and industrial automation industries and component suppliers. | | **** **We operate in a highly competitive market and will face competition from both established competitors and new market entrants.** The market for autonomous industrial vehicles and industrial automation solutions is highly competitive. Many companies are seeking to develop autonomous driving and delivery solutions. Competition in these markets is based primarily on technology, innovation, quality, safety, reputation, and price. Our future success will depend on our ability to further develop and protect our technology in a timely manner and to stay ahead of existing and new competitors. Our competitors in this market are working towards commercializing autonomous driving technology and may have substantial financial, marketing, research and development, and other resources. In addition, we also face competition from traditional industrial vehicle and solution companies. Traditional vehicle and solution providers operating with human drivers are still the predominant operators in the market. Because of the long history of such traditional companies serving our potential customers and industries, there may be many constituencies in the market that would resist a shift towards autonomous industrial vehicles, which could include lobbying and marketing campaigns, particularly because our technology will displace machine operators and drivers. In addition, the market leaders in our target industries, such as Industrial Material Handling, may start, or have already started, pursuing large scale deployment of autonomous industrial vehicle technology on their own. These companies may have more operational and financial resources than we do. We cannot guarantee that we will be able to effectively compete with them. We may also face competition from component suppliers and other technology and industrial solution companies if they decide to expand vertically and develop their own autonomous industrial vehicles, some of whom have significantly greater resources than we do. We do not know how close these competitors are to commercializing autonomous driving systems. Many established and new market participants have entered or have announced plans to enter the autonomous industrial vehicle market. Most of these participants have significantly greater financial, manufacturing, marketing, and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale, and support of their products. If existing competitors or new entrants commercialize earlier than expected, our competitive advantage could be adversely affected. **Business collaboration with third parties is subject to risks and these relationships may not lead to significant revenue.** Strategic business relationships are and will continue to be an important factor in the growth and success of our business. We have alliances and partnerships, through mutually beneficial non-binding memoranda of understanding or partnering arrangements with other companies in the industrial equipment, automation and automotive industries to help us in our efforts to continue to enhance our technology, commercialize our solutions, and drive market acceptance. Collaboration with these third parties is subject to risks, some of which are outside our control. For example, certain agreements with our partners grant our partner or us the right to terminate such agreements for cause or without cause. If any of our collaborations with third parties are terminated, it may delay or prevent our efforts to deploy our software products and tools on purpose-built autonomous industrial vehicles at scale. In addition, such agreements may contain certain exclusivity provisions which, if triggered, could preclude us from working with other businesses with superior technology or with whom we may prefer to partner with for other reasons. We could experience delays to the extent our partners do not meet agreed upon timelines or experience capacity constraints. We could also experience disagreement in budget or funding for joint development projects. There is also a risk of other potential disputes with partners in the future, including with respect to intellectual property rights. Our ability to successfully commercialize could also be adversely affected by perceptions about the quality of our or our partners vehicles or products. 18 **Risks Related to Our Financial Position and Need for Additional Capital** **** **Losses for the foreseeable future.** We incurred net losses of $23.5 million and $33.3 million for the years ended December 31, 2025, and 2024, respectively. We have not recognized a substantial amount of revenue to date, and we had an accumulated deficit of $216.8 million and $193.4 million as of December 31, 2025 and December 31, 2024, respectively. We have developed and tested our autonomous driving technology but there can be no assurance that it will be commercially successful at scale. Our potential profitability is dependent upon a number of factors, many of which are beyond our control. If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease. We expect the rate at which we will incur losses to be significantly higher in future periods as we: | | | design, develop, and deploy our autonomous vehicle software products and tools on industrial vehicle platforms with OEM partners and end customers. | | | | | seek to achieve and commercialize deployments of level 4 autonomy for industrial vehicles; | | | | | seek to expand our commercial deployments, on a nationwide basis in the United States and internationally; | | | | | expand our design, development, maintenance, and repair capabilities; | | | | | respond to competition in the autonomous driving market and from traditional industrial solution providers; | | | | | respond to evolving regulatory developments in the nascent autonomous industrial vehicle and industrial automation markets; | | | | | increase our sales and marketing activities; and | | | | | increase our general and administrative functions to support our growing operations and for being a public reporting company. | | Because we will incur the costs and expenses from these efforts before we receive any substantial revenue, our losses in future periods will be significant. In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenue, which would further increase our losses. In particular, we expect to incur substantial and potentially increasing research and development (R&D) costs as we continue to develop and enhance EAS and other technology and products for commercialization. While our R&D costs were $12.5 million and $11.3 million during the years ended December 31, 2025 and 2024, respectively, and are likely to grow in the future, we have minimal recurring revenues. Further, because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future. Our R&D program may not produce successful results, and our new products may not achieve market acceptance, create additional revenue, or become profitable. **We have a limited operating history, which makes it difficult to forecast our future results of operations.** We were founded in 2013. As a result of our limited operating history, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our historical performance should not be considered indicative of our future performance. Further, in future periods, our revenue growth could fluctuate for a number of reasons, including shifts in our offering and revenue mix, slowing demand for our offering, increasing competition, decreased effectiveness of our sales and marketing organization, and our sales and marketing efforts to acquire new customers, failure to retain existing customers, changing technology, a decrease in the growth of our overall market, or our failure, for any reason, to continue to take advantage of growth opportunities. We anticipate that we will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described in this Annual Report. 19 If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. **We expect fluctuations in our financial results making it difficult to project future results.** Our results of operations may fluctuate in the future due to a variety of factors, many of which are outside of our control. As a result, our past results may not be indicative of our future performance. In addition to the other risks described herein, factors that may affect our results of operations include the following: | | | changes in our revenue mix and related changes in revenue recognition; | | | | | changes in actual and anticipated growth rates of our revenue, customers, and key operating metrics; | | | | | fluctuations in demand for or pricing of our product offerings; | | | | | our ability to attract new customers; | | | | | our ability to retain our existing customers, particularly large customers; | | | | | customers and potential customers opting for alternative products, including developing their own in-house solutions; | | | | | investments in new offerings, features, and functionality; | | | | | fluctuations or delays in development, release, or adoption of new features and functionality for our offering; | | | | | delays in closing sales which may result in revenue being pushed into the next quarter; | | | | | changes in customers budgets and in the timing of their budget cycles and purchasing decisions; | | | | | our ability to control costs; | | | | | the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses; | | | | | timing of hiring personnel for our research and development and sales and marketing organizations; | | | | | the amount and timing of costs associated with recruiting, educating, and integrating new employees and retaining and motivating existing employees; | | | | | the effects of acquisitions and their integration; | | | | | general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; | | | | | the impact of new accounting pronouncements; | | 20 | | | changes in revenue recognition policies that impact our technology license revenue; | | | | | changes in regulatory or legal environments that may cause us to incur, among other things, expenses associated with compliance; | | | | | the impact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period; | | | | | the impact of global events, including the outbreak of war or conflicts | | | | | health epidemics or pandemics, such as the COVID-19 pandemic; | | | | | changes in the competitive dynamics of our market, including consolidation among competitors or customers; and | | | | | significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our offering. | | Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly. If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our common stock could decline substantially, and we could face costly lawsuits, including securities class action suits. **We may need to raise additional funds and these funds may not be available to us on attractive terms when we need them, or at all.** The commercialization of autonomous vehicles is capital intensive. This includes autonomous industrial vehicles outfitted with our technology and purpose-built autonomous industrial vehicles manufactured by OEMs we intend to partner with. To date, we have financed our operations primarily through the issuance of equity securities in private and public placements. We may need to raise additional capital to continue to fund our commercialization activities, sales and marketing efforts, enhancement of our technology and to improve our liquidity position. Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market volatility, investor acceptance of our business plan, regulatory requirements and the successful development of our autonomous technology. These factors may make the timing, amount, terms, and conditions of such financing unattractive or unavailable to us. We may raise these additional funds through the issuance of equity, equity related, or debt securities. To the extent that we raise additional financing by issuing equity securities or convertible debt securities, our stockholders may experience substantial dilution, and to the extent we engage in debt financing, we may become subject to restrictive covenants that could limit our flexibility in conducting future business activities. Financial institutions may request credit enhancement such as third-party guarantee and pledge of equity interest in order to extend loans to us. We cannot be certain that additional funds will be available to us on attractive terms when required, or at all. If we cannot raise additional funds when we need them, our financial condition, results of operations, business, and prospects could be materially adversely affected. **We have incurred significant losses and continue to manage our cash resources to support our ongoing operations.** The Company incurred net losses of approximately $23.5 million and $33.3 million for the years ended December 31, 2025, and 2024, respectively. In addition, the Company had accumulated deficits of approximately $216.8 million and $193.4 million as of December 31, 2025 and December 31, 2024, respectively, and net cash used in operating activities was approximately $23.6 million and $19.2 million for the year ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Companys cash and cash equivalents balance was approximately $1.0 million and the short-term investments balance was $33.7 million. As of December 31, 2024, the Companys unrestricted cash and cash equivalents balance was $23.6 million and no short-terms investments. 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 consolidated financial statements were issued. 21 **We may be subject to risks associated with potential future acquisitions.** Although we have no current acquisition plans, if appropriate opportunities arise, we may acquire additional assets, products, technology or businesses that are complementary to our existing business. Any future acquisitions and the subsequent integration of new assets and businesses would require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations, and consequently our results of operations and financial condition. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant. **Risks Related to Our Business Operations** **** **Our success depends largely on the continued services of our senior management team, technical engineers, and certain key employees.** We rely on our executive officers and key employees in the areas of business strategy, research and development, marketing, sales, services, and general and administrative functions. From time to time, there may be changes in our executive management team or key employees resulting from the hiring or departure of executives or key employees, which could disrupt our business. We do not maintain key-man insurance for any member of our senior management team or any other employee. None of the employment agreements and offer letters with our executive officers or other key personnel require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers or key employees could have a serious adverse effect on our business. To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense in the technology industry, especially for engineers with high levels of experience in artificial intelligence and designing and developing autonomous driving related algorithms. Furthermore, it can be difficult to recruit personnel from other geographies to relocate to our California location. We may also need to recruit highly qualified technical engineers internationally and therefore subject us to the compliance of relevant immigration laws and regulations. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have and can offer more attractive compensation packages for new employees. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or our company have breached their legal obligations, resulting in a diversion of our time and resources and potentially in litigation. In addition, job candidates and existing employees often consider the value of the share incentive awards they receive in connection with their employment. If the perceived value of our share awards declines, it may adversely affect our ability to recruit and retain highly skilled employees. If we fail to attract new personnel on a timely basis or fail to retain and motivate our current personnel, we may not be able to commercialize and then expand our solutions and services in a timely manner and our business and future growth prospects could be adversely affected. **If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.** We expect to invest in our growth for the foreseeable future. Any growth in our business is expected to place a significant strain on not only our managerial, administrative, operational, and financial resources, but also our infrastructure. We plan to continue to expand our operations in the future. Our success will depend in part on our ability to manage this growth effectively and execute our business plan. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures. 22 We rely heavily on information technology (IT) systems to manage critical business functions. To manage our growth effectively, we must continue to improve and expand our infrastructure, including our IT, financial, and administrative systems and controls. In particular, we may need to significantly expand our IT infrastructure as the amount of data we store and transmit increases over time, which will require that we both utilize existing IT products and adopt new technology. If we are not able to scale our IT infrastructure in a cost-effective and secure manner, our ability to offer competitive solutions will be harmed and our business, financial condition, and operating results may suffer. We must also continue to manage our employees, operations, finances, research and development, and capital investments efficiently. Our productivity and the quality of our solutions may be adversely affected if we do not integrate and train our new employees quickly and effectively or if we fail to appropriately coordinate across our executive, research and development, technology, service development, analytics, finance, human resources, marketing, sales, operations, and customer support teams. As we continue to grow, we will incur additional expenses, and our growth may continue to place a strain on our resources, infrastructure, and ability to maintain the quality of our solutions. If we do not adapt to meet these evolving challenges, or if the current and future members of our management team do not effectively manage our growth, the quality of our solutions may suffer and our corporate culture may be harmed. Failure to manage our future growth effectively could cause our business to suffer, which, in turn, could have an adverse impact on our business, financial condition, and operating results. **We may be subject to product liability or warranty claims that could result in significant direct or indirect costs, including reputational harm, increased insurance premiums or the need to self-insure, which could adversely affect our business and operating results.** Our technology is used for autonomous driving, which presents the risk of significant injury, including fatalities. We may be subject to claims if one of our or a customers industrial vehicles is involved in an accident and persons are injured or purport to be injured or if property is damaged. Any insurance that we carry may not be sufficient or it may not apply to all situations. If we experience such an event or multiple events, our insurance premiums could increase significantly or insurance may not be available to us at all. Further, if insurance is not available on commercially reasonable terms, or at all, we might need to self-insure. In addition, lawmakers or governmental agencies could pass laws or adopt regulations that limit the use of autonomous driving or industrial automation technology or increase liability associated with its use. Any of these events could adversely affect our brand, relationships with users, operating results, or financial condition. **If our autonomous driving software fails to perform as expected our ability to market, sell or lease our autonomous driving software could be harmed.** Our autonomous industrial vehicle software products and tools as well as the vehicles, sensors, and hardware they utilize and are deployed on may contain defects in design and manufacture that may cause them not to perform as expected or require repair. For example, our autonomous vehicle software will require modification and updates over the life of the vehicle it is deployed on. Software products are inherently complex and often contain defects and errors when first introduced. There can be no assurance that we will be able to detect and fix any defects in the industrial vehicles hardware or software prior to commencing user sales or during the life of the vehicle. Autonomous industrial vehicles utilizing our suite of products and tools may not perform consistent with users expectations or consistent with other vehicles that may become available. Any product defects or any other failure of our software, supportive hardware, or deployment vehicle platform or to perform as expected could harm our reputation, result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results, and prospects. **If we are unable to establish and maintain confidence in our long-term business prospects among users, securities and industry analysts, and within our industries, or are subject to negative publicity, then our financial condition, operating results, business prospects, and access to capital may suffer materially.** Users may be less likely to purchase or use our technology and the industrial vehicles it is deployed on if they are not convinced that our business will succeed or that our service and support and other operations will continue in the long term. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, in order to build and maintain our business, we must maintain confidence among users, suppliers, securities and industry analysts, and other parties in our long-term financial viability and business prospects. Maintaining such confidence may be particularly complicated by certain factors including those that are largely outside of our control, such as our limited operating history at scale, user unfamiliarity with our solutions, any delays in scaling manufacturing, delivery, and service operations to meet demand, competition and uncertainty regarding the future of autonomous vehicles, and our performance compared with market expectations**.** 23 **Natural disasters, outbreaks of infectious diseases, terrorist attacks, wars and threats of war may negatively impact our operations, revenue, costs, and stock price.** Natural disasters such as earthquakes, floods, severe weather conditions, outbreaks of infectious diseases in addition to COVID-19 or other catastrophic events may severely affect our operations or those of our suppliers and customers. Acts of terrorism, as well as events occurring in response or connection to them, including potential future terrorist attacks, rumors or threats of war, actual military conflicts or trade disruptions impacting our domestic or foreign customers or suppliers, may negatively impact our operations by causing, among other things, delays, or losses in the delivery of supplies or finished goods and decreased sales of our products. More generally, any of these events could cause consumer confidence and spending to decrease and/or result in increased volatility in the worldwide financial markets and economy. They also could result in economic recession either globally or in the markets in which we operate. Any of these occurrences could have a significant adverse impact on our business. **International trade policies, including tariffs, sanctions and trade barriers, may adversely affect our business, financial condition, results of operations and prospects.** Beginning in our fiscal year 2025, significant new and expanded tariffs, reciprocal tariffs and other trade restrictions have been imposed with selective tariff exemptions impacting global trade. Current or future tariffs or other restrictive trade measures may raise the costs of raw materials, components or finished goods, which may adversely impact both our product offerings and our operational expenses. Such cost increases may reduce our margins and require us to increase prices, which could harm our competitive position, reduce customer demand and damage customer relationships. Trade disputes, trade restrictions, tariffs and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations. Ongoing tariff policies, trade restrictions and macroeconomic uncertainty have and may continue to contribute to volatility in the price of our common stock. Ongoing uncertainty regarding trade policies may also complicate our short- and long-term strategic planning, and that of our partners and customers, including decisions regarding hiring, product strategy, capital investment, supply chain design and geographic expansion. While we continue to monitor trade developments, the ultimate impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, results of operations, financial condition and prospects. **We have a material weakness in our internal control over financial reporting, and our inability to remediate this weakness or otherwise implement and maintain effective internal control over financial reporting, or the inability of our independent registered public accounting firm to provide an unqualified report thereon, could have a material adverse effect on us.** If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results. As a result, our stakeholders could lose confidence in our financial reporting, which could adversely affect the results of our business and our enterprise value. In connection with our assessment of internal control over financial reporting, we identified two material weaknesses in our internal control over financial reporting as of December 31, 2025 (see Item 9A. *Controls and Procedures*for additional detail). The deficiencies above led to two misstatements, one of which was corrected prior to the issuance of the prior years financial statements, and the other lead to the restatement of the Affected Periods. These material weaknesses create a reasonable possibility that material misstatements to our consolidated financial statements may not be prevented or detected in a timely manner. Accordingly, management concluded that the Companys internal control over financial reporting was not effective as of December 31, 2025. The disclosure of these material weaknesses, even if quickly remediated, could reduce the markets confidence in our financial statements and harm our enterprise value. 24 **Risks Related to Our Intellectual Property, Information Technology and Data Privacy** **** **We may become subject to litigation brought by third parties claiming infringement, misappropriation or other violation by us of their intellectual property rights.** The industry in which our business operates is characterized by a large number of patents, some of which may be of questionable scope, validity or enforceability, and some of which may appear to overlap with other issued patents. As a result, there is a significant amount of uncertainty in the industry regarding patent protection and infringement. In recent years, there has been significant litigation globally involving patents and other intellectual property rights. Third parties may in the future assert, that we have infringed, misappropriated or otherwise violated their intellectual property rights. As we face increasing competition and as a public company, the possibility of intellectual property rights claims against us grows. Such claims and litigation may involve one or more of our competitors focused on using their patents and other intellectual property to obtain competitive advantage, or patent holding companies or other adverse intellectual property rights holders who have no relevant product revenue, and therefore our own pending patents and other intellectual property rights may provide little or no deterrence to these rights holders in bringing intellectual property rights claims against us. There may be intellectual property rights held by others, including issued or pending patents and trademarks, that cover significant aspects of our technologies or business methods, and we cannot assure that we are not infringing or violating, and have not infringed or violated, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the future. In addition, because patent applications can take many years until the patents issue, there may be applications now pending of which we are unaware, which may later result in issued patents that our products may infringe. We expect that in the future we may receive notices that claim we or our collaborators have misappropriated or misused other parties intellectual property rights, particularly as the number of competitors in our market grows. To defend ourselves against any intellectual property claims brought by third parties, whether with or without merits, can be time-consuming and could result in substantial costs and a diversion of our resources. These claims and any resulting lawsuits, if resolved adversely to us, could subject us to significant liability for damages, impose temporary or permanent injunctions against our products, technologies or business operations, or invalidate or render unenforceable our intellectual property. If our technology is determined to infringe a valid and enforceable patent, or if we wish to avoid potential intellectual property litigation on any alleged infringement, misappropriation or other violation of third party intellectual property rights, we may be required to do one or more of the following: (i) cease development, sales, or use of our products that incorporate or use the asserted intellectual property right; (ii) obtain a license from the owner of the asserted intellectual property right, which may be unavailable on commercially reasonable terms, or at all, or which may be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us; (iii) pay substantial royalties or other damages; or (iv) redesign our technology or one or more aspects or systems of our autonomous industrial vehicles to avoid any infringement or allegations thereof. The aforementioned options sometimes may not be commercially feasible. Additionally, in our ordinary course of business, we agree to indemnify our customers, partners, and other commercial counterparties for any infringement arising out of their use of our intellectual property, along with providing standard indemnification provisions, so we may face liability to our users, business partners or third parties for indemnification or other remedies in the event that they are sued for infringement. We may also in the future license third party technology or other intellectual property, and we may face claims that our use of such in-licensed technology or other intellectual property infringes, misappropriates or otherwise violates the intellectual property rights of others. In such cases, we will seek indemnification from our licensors. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses. 25 We also may not be successful in any attempt to redesign our technology to avoid any alleged infringement. A successful claim of infringement against us, or our failure or inability to develop and implement non-infringing technology, or license the infringed technology on acceptable terms and on a timely basis, could materially adversely affect our business and results of operations. Furthermore, such lawsuits, regardless of their success, would likely be time-consuming and expensive to resolve and would divert managements time and attention from our business, which could seriously harm our business. Also, such lawsuits, regardless of their success, could seriously harm our reputation with users and in the industry at large. **Our business may be adversely affected if we are unable to adequately establish, maintain, protect, and enforce our intellectual property and proprietary rights or prevent third parties from making unauthorized use of our technology and other intellectual property rights.** Our intellectual property is an essential asset of our business. Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of our competitive advantage, and a decrease in our revenue which would adversely affect our business prospects, financial condition, and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property. We rely on a combination of intellectual property rights, such as patents, trademarks, copyrights, and trade secrets (including know-how), in addition to employee and third-party nondisclosure agreements, intellectual property licenses, and other contractual rights, to establish, maintain, protect, and enforce our rights in our technology, proprietary information, and processes. Intellectual property laws and our procedures and restrictions provide only limited protection and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. If we fail to protect our intellectual property rights adequately, we may lose an important advantage in the markets in which we compete. While we take measures to protect our intellectual property, such efforts may be insufficient or ineffective, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. Other parties may also independently develop technologies that are substantially similar or superior to ours. We also may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. However, the measures we take to protect our intellectual property from unauthorized use by others may not be effective and there can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services, or technologies that are substantially similar or superior to ours and that compete with our business. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property. Any litigation initiated by us concerning the violation by third parties of our intellectual property rights is likely to be expensive and time-consuming and could lead to the invalidation of, or render unenforceable, our intellectual property, or could otherwise have negative consequences for us. Furthermore, it could result in a court or governmental agency invalidating or rendering unenforceable our patents or other intellectual property rights upon which the suit is based. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our managements attention and resources, could delay the introduction and implementation of new technologies, result in our substituting inferior or more costly technologies into our products or injure our reputation. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. If we fail to meaningfully establish, maintain, protect, and enforce our intellectual property and proprietary rights, our business, operating results, and financial condition could be adversely affected. **Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.** Changes in U.S. Patent law may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. For example, the Leahy-Smith America Invents Act (the AIA) enacted in September 2011, resulted in significant changes in patent legislation. An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned from a first-to-invent to a first-to-file system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. Under a first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier. A third party that files a patent application in the United States Patent and Trademark Office (USPTO) after that date but before us could therefore be awarded a patent covering an invention of ours even if we made the invention before it was made by the third party. Circumstances could prevent us from promptly filing patent applications on our inventions. 26 The AIA also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, *inter partes* review, and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. The AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable for business methods. As such, we do not know the degree of future protection that we will have on our technologies, products, and services. While we will endeavor to try to protect our technologies, products, and services with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time-consuming, expensive, and sometimes unpredictable. Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years, such as Impression Products, Inc. v. Lexmark International, Inc., Association for Molecular Pathology v. Myriad Genetics, Inc., Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Alice Corporation Pty. Ltd. v. CLS Bank International, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. **Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.** We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular patent application, or if we are the first party to file such a patent application. If another party has filed a patent application to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent applications that we file will issue, or that our issued patents will be broad enough to protect our proprietary rights or otherwise afford protection against competitors with similar technology. In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability. Our competitors may challenge or seek to invalidate our issued patents, or design around our issued patents, which may adversely affect our business, prospects, financial condition or operating results. Also, the costs associated with enforcing patents, confidentiality and invention agreements, or other intellectual property rights may make aggressive enforcement impracticable. 27 **We may not be able to protect our intellectual property rights throughout the world.** Filing, prosecuting, maintaining, defending, and enforcing patents and other intellectual property rights on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection or other intellectual property rights to develop their own products and may export otherwise infringing, misappropriating, or violating products to territories where we have patent or other intellectual property protection, but enforcement rights are not as strong as those in the United States. These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of some countries do not favor the enforcement of patents and other intellectual property rights, which could make it difficult for us to stop the infringement, misappropriation, or other violation of our intellectual property rights generally. Proceedings to enforce our intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Many countries, including European Union countries, India, Japan, and China, have compulsory licensing laws under which a patent owner may be compelled under specified circumstances to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In those countries, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license, which could adversely affect our business, financial condition, results of operations, and prospects. **In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes, and know-how.** We rely on proprietary information (such as trade secrets, know-how, and confidential information) to protect intellectual property that may not be patentable, or that we believe is best protected by means that do not require public disclosure. We generally seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services, or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants, contractors, scientific advisors, and third parties. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our trade secrets or proprietary information and, even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. We have limited control over the protection of trade secrets used by our third-party manufacturers and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, our proprietary information may otherwise become known or be independently developed by our competitors or other third parties. To the extent that our employees, consultants, contractors, and other third parties use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection for our proprietary information could adversely affect our competitive business position. Furthermore, laws regarding trade secret rights in certain markets where we operate may afford little or no protection to our trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that trade secret to compete with us. If any of our trade secrets were to be disclosed (whether lawfully or otherwise) to or independently developed by a competitor or other third party, it could have a material adverse effect on our business, operating results, and financial condition. 28 We also rely on physical and electronic security measures to protect our proprietary information, but we cannot guarantee that these security measures provide adequate protection for such proprietary information or will never be breached. There is a risk that third parties may obtain unauthorized access to and improperly utilize or disclose our proprietary information, which would harm our competitive advantages. We may not be able to detect or prevent the unauthorized access to or use of our information by third parties, and we may not be able to take appropriate and timely steps to mitigate the damages (or the damages may not be capable of being mitigated or remedied). **We utilize open-source software, which may pose particular risks to our proprietary software, technologies, products, and services in a manner that could harm our business.** We use open-source software in our products and services and anticipate using open-source software in the future. We utilize a distribution of the open-source Linux system, and tools such as ROS (open-source publish-subscribe tool) in the technical stack. Professional open-source license scanning systems such as WhiteSource and ScanCode are used in both places. Both Continuous Integration and Continuous Deployment (CI/CD) level open-source scan and overall system opensource scan is performed to protect the systems and our intellectual property. In the event that our scanning and open-source check protocols fail, the Company could be negatively affected Some open-source software licenses require those who distribute open-source software as part of their own software products to publicly disclose all or part of the source code to such software product or to make available any modifications or derivative works of the open-source code on unfavorable terms or at no cost. This could result in our proprietary software being made available in the source code form and/or licensed to others under open-source licenses, which could allow our competitors or other third parties to use our proprietary software freely without spending the development effort, and which could lead to a loss of the competitive advantage of our proprietary technologies and, as a result, sales of our products and services. The terms of many open-source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services or retain our ownership of our proprietary intellectual property. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of, or alleging breach of, the applicable open-source license. These claims could result in litigation and could require us to make our proprietary software source code freely available, purchase a costly license, or cease offering the implicated products or services unless and until we can re-engineer them to avoid breach of the applicable open-source software licenses or potential infringement. This re-engineering process could require us to expend significant additional research and development resources, and we cannot guarantee that we will be successful. Additionally, the use of certain open-source software can lead to greater risks than use of third-party commercial software, as open-source licensors generally do not provide warranties or controls on the origin of software. There is typically no support available for open-source software, and we cannot ensure that the authors of such open-source software will implement or push updates to address security risks or will not abandon further development and maintenance. Many of the risks associated with the use of open-source software, such as the lack of warranties or assurances of title, non-infringement, or performance, cannot be eliminated, and could, if not properly addressed, negatively affect our business. We have processes to help alleviate these risks, including a review process for screening requests from our developers for the use of open-source software, but we cannot be sure that all open-source software is identified or submitted for approval prior to use in our products and services. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our ownership of proprietary intellectual property, the security of our vehicles, or our business, results of operations, and financial condition. **** **Unauthorized control or manipulation of systems in autonomous industrial vehicles may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products, cancellation of contracts with future OEM or supplier partners.** There have been reports of vehicles of certain automotive OEMs being hacked to grant access to and operation of the vehicles to unauthorized persons. Our autonomous vehicle software products and tools as well as the vehicles they are deployed on contain or will contain complex IT systems and are designed with built-in data connectivity. We are in the process of and will continue implementing security measures intended to prevent unauthorized access to our information technology networks and systems. However, hackers may attempt to gain unauthorized access to modify, alter, and use such networks and systems to gain control of, or to change the functionality of the autonomous industrial vehicles running our software, user interface and performance characteristics, or to gain access to data stored in or generated by our products. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers, there can be no assurance that we will be able to anticipate, or implement adequate measures to protect against, these attacks. Any such security incidents could result in unexpected control of or changes to the vehicles functionality and safe operation and could result in legal claims or proceedings and negative publicity, which would negatively affect our brand and harm our business, prospects, financial condition, and operating results. **** 29 **** **Our information technology systems or data, or those of our service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.** We continue to expand our information technology systems as our operations grow, such as product data management, procurement, inventory management, production planning and execution, sales, service and logistics, financial, tax and regulatory compliance systems. This includes the implementation of new internally developed systems and the deployment of such systems in the U.S. and abroad. While, we maintain information technology measures designed to protect us against intellectual property theft, data breaches, sabotage and other external or internal cyber-attacks or misappropriation, our systems and those of our service providers are potentially vulnerable to malware, ransomware, viruses, denial-of-service attacks, phishing attacks, social engineering, computer hacking, unauthorized access, exploitation of bugs, defects and vulnerabilities, breakdowns, damage, interruptions, system malfunctions, power outages, terrorism, acts of vandalism, security breaches, security incidents, inadvertent or intentional actions by employees or other third parties, and other cyber-attacks. To the extent any security incident results in unauthorized access or damage to or acquisition, use, corruption, loss, destruction, alteration or dissemination of our data, including intellectual property and personal information, or our products, or for it to be believed or reported that any of these occurred, it could disrupt our business, harm our reputation, compel us to comply with applicable data breach notification laws, subject us to time consuming, distracting and expensive litigation, regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of database contents, or otherwise subject us to liability under laws, regulations and contractual obligations, including those that protect the privacy and security of personal information. This could result in increased costs to us and result in significant legal and financial exposure and/or reputational harm. We also rely on service providers, and similar incidents relating to their information technology systems could also have a material adverse effect on our business. Our ability to monitor our service providers security measures is limited, and, in any event, malicious third parties may be able to circumvent those security measures. Further, the implementation, maintenance, segregation and improvement of these systems require significant management time, support and cost, and there are inherent risks associated with developing, improving and expanding our core systems as well as implementing new systems and updating current systems, including disruptions to the related areas of business operation. These risks may affect our ability to manage our data and inventory, procure parts or supplies or manufacture, sell, deliver and service products, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations. Moreover, if we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted, our ability to accurately and/or timely report our financial results could be impaired and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results. Moreover, our proprietary information, including intellectual property and personal information, could be compromised or misappropriated and our reputation may be adversely affected. If these systems or their functionality do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions. 30 **The costs to comply with, or our actual or perceived failure to comply with, changing U.S. and foreign laws related to data privacy, security and protection, could adversely affect our financial condition, operating results, and our reputation.** In operating our business and providing services and solutions to clients, we collect, use, store, transmit, and otherwise process employee, partner, and customer data, including personal data, in and across multiple jurisdictions. We use the electronic systems within the autonomous industrial vehicles that log information about each industrial vehicles use in order to aid us in vehicle diagnostics, repair, and maintenance, as well as to help us collect data regarding operators use patterns and preference in order to help us customize and optimize the driving and operating experiences. The integrated autonomous industrial vehicles leveraging our software products and tools may also collect personal information of drivers, operators and passengers, such as a voice command of a person, in order to aid the manual operation of our industrial vehicles. When our autonomy enabled industrial vehicles are in operation, the camera, LiDAR, and other sensing components of the vehicles will collect site and route view, mapping data, landscape images, and other LiDAR information, which may include personal information such as license plate numbers of other vehicles, facial features of pedestrians, appearance of individuals, GPS data, geolocation data, in order train the data analytics and artificial intelligence technology equipped in our industrial vehicles for the purpose of identifying different objects, and predicting potential issues that may arise during the operation of our integrated industrial vehicles. We plan to utilize systems and applications that are spread over the globe, requiring us to regularly move data across national borders. As a result, we are subject to a variety of laws and regulations in the United States, and other foreign jurisdictions as well as contractual obligations, regarding data privacy, protection, and security. Some of these laws and regulations require obtaining data subjects consent to the collection and use of their data, honoring data subjects request to delete their data or limit the processing of their data, providing notifications in the event of a data breach, and setting up the proper legal mechanisms for cross-border data transfers. Some customers may refuse to provide consent to our collection and use of their personal information, or may restrict our use of such personal information, and in some cases it is not feasible to obtain consent from data subjects in the general public whose personal information may be captured by our autonomous industrial vehicles, all of which may hinder our ability to train our data analytics and artificial intelligence technology, and may harm the competitiveness of our technology. In many cases, these laws and regulations apply not only to the collection and processing of personal information from third parties with whom we do not have any contractual relationship, but also to the sharing or transfer of information between or among us, our subsidiaries and other third parties with which we have commercial relationships, such as our service providers, partners, and customers. The regulatory framework for data privacy, protection, and security worldwide is continuously evolving and developing and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. In particular, some of these laws and regulations may require us to store certain categories of data collected from individuals residing in a jurisdiction only on servers physically located in such jurisdiction, and may further require us to conduct security assessments and/or adopt other cross-border data transfer mechanisms in order to transfer such data outside of such jurisdiction. With the continuously evolving and rapidly changing privacy regulatory regime, our ability to freely transfer data among our affiliates and with our partners in different jurisdictions may be impeded, or we may need to incur significant costs in order to comply with such requirements. In addition, the number of high-profile data breaches at major companies continues to accelerate, which will likely lead to even greater regulatory scrutiny. The scope and interpretation of the laws and regulations that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. For example, the E.U. General Data Protection Regulation (the GDPR), which became effective in May 2018, greatly increased the European Commissions jurisdictional reach of its laws and added a broad array of requirements for handling personal data with respect to EU data subjects. EU member states are tasked under the GDPR to enact, and have enacted, certain implementing legislation that adds to and/or further interprets the GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. The GDPR, together with national legislation, regulations and guidelines of the EU member states and the United Kingdom governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, use, retain, protect, disclose, transfer, and otherwise process personal data with respect to EU and UK data subjects. In particular, the GDPR includes obligations and restrictions concerning the consent and rights of individuals to whom the personal data relates, the transfer of personal data out of the European Economic Area or the United Kingdom, security breach notifications and the security and confidentiality of personal data. Among other stringent requirements, the GDPR restricts transfers of data outside of the EU to third countries deemed to lack adequate privacy protections (such as the U.S.), unless an appropriate safeguard specified by the GDPR is implemented. A July 16, 2020 decision of the Court of Justice of the European Union invalidated a key mechanism for lawful data transfer to the U.S. and called into question the viability of its primary alternative. As such, the ability of companies to lawfully transfer personal data from the EU to the U.S. is presently uncertain. Other countries have enacted or are considering enacting similar cross-border data transfer rules or data localization requirements. These developments could limit our ability to launch our products in the EU and other foreign markets. The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or 20 million, whichever is greater. Such fines are in addition to any civil litigation claims by data subjects. Much remains unknown with respect to how to interpret and implement the GDPR and guidance on implementation and compliance practices is often updated or otherwise revised. Given the breadth and depth of changes in data protection obligations, including classification of data and our commitment to a range of administrative, technical and physical controls to protect data and enable data transfers outside of the EU and the United Kingdom, our compliance with the GDPRs requirements will continue to require time, resources and review of the technology and systems we use to satisfy the GDPRs requirements, including as EU member states enact their legislation. Further, while the United Kingdom enacted the Data Protection Act 2018 in May 2018 that supplements the GDPR, and has publicly announced that it will continue to regulate the protection of personal data in the same way post-Brexit, Brexit has created uncertainty with regard to the future of regulation of data protection in the United Kingdom. 31 The U.S. federal government and various states and governmental agencies also have adopted or are considering adopting various laws, regulations, and standards regarding the collection, use, retention, security, disclosure, transfer, and other processing of sensitive and personal information. In addition, many states in which we operate have laws that protect the privacy and security of sensitive and personal information. Certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information than federal, international, or other state laws, and such laws may differ from each other, which may complicate compliance efforts. State laws are changing rapidly and there is discussion in Congress of a new federal data protection and privacy law to which we would become subject if it is enacted. All of these evolving compliance and operational requirements impose significant costs that are likely to increase over time, may require us to modify our data processing practices and policies, and may divert resources from other initiatives and projects. Furthermore, non-compliance with data privacy laws and regulations, or a major breach of our network security and systems, could have serious negative consequences for our businesses and future prospects, including possible fines, penalties, and damages, reduced customer demand for our products, and harm to our reputation and brand, all of which may have a material and adverse impact on our business, financial condition, and operating results. We make public statements about our use and disclosure of personal information through our privacy policy, information provided on our website and press statements. Also, we enter into contracts with third parties (such as our partners and clients) that contain provisions regarding the collection, sharing, and processing of personal information. Although we endeavor to comply with our public statements and documentation as well as our contractual and other privacy-related obligations, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policy and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices. In addition, from time to time, concerns may be expressed about whether our products and services compromise the privacy of clients and others. Any concerns about our data privacy and security practices (even if unfounded), or any failure, real or perceived, by us to comply with our posted privacy policies, contractual obligations, or any legal or regulatory requirements, standards, certifications, or orders, or other privacy or consumer protection-related laws and regulations applicable to us, could cause our clients to reduce their use of our autonomous industrial vehicles and could affect our financial condition, operating results, and our reputation, and may result in governmental or regulatory investigations, enforcement actions, regulatory fines, criminal compliance orders, litigations, breach of contract claims, or public statements against us by government regulatory authorities, our partners and/or clients, data subjects, consumer advocacy groups, or others, all of which could be costly and have an adverse effect on our business. Furthermore, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase. Non-compliance could result in proceedings against us by data protection authorities, governmental entities or others, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, penalties, judgments, and negative publicity, and may otherwise affect our financial condition, operating results, and our reputation. Given the complexity of operationalizing the GDPR and other data privacy and security laws and regulations to which we are subject, the maturity level of proposed compliance frameworks and the relative lack of guidance in the interpretation of the numerous requirements of the GDPR and other data privacy and security laws and regulations to which we are subject, we may not be able to respond quickly or effectively to regulatory, legislative, and other developments, and these changes may in turn impair our ability to offer our existing or planned products and services and/or increase our cost of doing business. In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, including changes in laws, regulations, and standards or new interpretations or applications of existing laws, regulations and standards, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, loss of export privileges, or severe criminal or civil sanctions, all of which may affect our financial condition, operating results, and our reputation. Unauthorized access or disclosure of personal or other sensitive or confidential data of Company (including data about third parties which the Company possesses), whether through systems failure, employee negligence, fraud, or misappropriation, by the Company, our service providers or other parties with whom we do business (if they fail to meet the standards we impose, or if their systems on which our data is stored experience any data breaches or security incidents) could also subject us to significant litigation, monetary damages, regulatory enforcement actions, fines, and criminal prosecution in one or more jurisdictions. 32 **Risks Related to our Common Stock** **** **There is a limited market for our common stock that may make it more difficult to dispose of your stock.** **** Our common stock is currently listed on the Nasdaq Capital Market under the symbol CYN. There is a limited trading market for our common stock. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell shares of our common stock, or the prices at which holders may be able to sell their common stock. **Future sales of our common stock in the public market could cause the market price of our common stock to decline.** Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing equity holders have substantial unrecognized gains on the value of the equity they hold based upon the price of our initial public offering, and therefore, they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our common stock. **Our stock price may be volatile, and the value of our common stock may decline.** Prior to our initial public offering in October 2021, there was no public market for our common stock and our common stock is not actively traded. The lack of an active market for our common stock may impair investors ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the market value of their shares and may result in significant price and volume fluctuations. The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: | | | actual or anticipated fluctuations in our financial condition or results of operations; | | | | | variance in our financial performance from expectations of securities analysts; | | | | | changes in the pricing of the solutions on our platforms; | | | | | changes in our projected operating and financial results; | | | | | changes in laws or regulations applicable to our technology; | | | | | announcements by us or our competitors of significant business developments, acquisitions or new offerings; | | | | | sales of shares of our common stock by us or our shareholders; | | 33 | | | significant data breaches, disruptions to or other incidents involving our technology; | | | | | our involvement in litigation; | | | | | future sales of our common stock by us or our stockholders; | | | | | changes in senior management or key personnel; | | | | | the trading volume of our common stock; | | | | | changes in the anticipated future size and growth rate of our market; | | | | | general economic and market conditions; and | | | | | other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events. | | Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of our common stock. In addition, technology stocks have historically experienced high levels of volatility. In the past, companies who have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our managements attention. **Future securities issuances could result in significant dilution to our stockholders and impair the market price of our common stock.** Future issuances of shares of our common stock could depress the market price of our common stock and result in dilution to existing holders of our common stock. Also, to the extent outstanding options and warrants to purchase our shares of our common stock are exercised or options or other equity-based awards are issued or become vested, there will be further dilution. The amount of dilution could be substantial depending upon the size of the issuances or exercises. Furthermore, we may issue additional equity securities that could have rights senior to those of our common stock. **We anticipate that we will need to raise additional capital, and our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders.** We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products or technologies and issue equity securities to pay for any such acquisition or investment. We may not be able to obtain additional capital if and when needed on terms acceptable to us, or at all. Further, if we do raise additional capital, it may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline. **We do not intend to pay cash dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.** We have never declared or paid any cash dividends on our capital stock, and, subject to the discretionary dividend policy described in the section entitled Dividend Policy of this Annual Report, we do not intend to pay any cash dividends in the foreseeable future. On September 29, 2023, our board of directors declared a one-time special dividend of 10% on our issued and outstanding shares of our common stock to holders of record on October 23, 2023. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, you may need to rely on sales of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on your investment. 34 **We are an emerging growth company, and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.** We are an emerging-growth company, as defined in the JOBS Act, and we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, 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. Pursuant to Section 107 of the Jumpstart Our Business Startups (JOBS) Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements will not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards. We will remain an emerging-growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our initial public offering; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates. We cannot predict if investors will find our common stock less attractive as a result of choosing to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations will not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile. **Anti-takeover provisions in our charter documents may discourage our acquisition by a third party, which could limit our stockholders opportunity to sell their shares, at a premium.** Our amended and restated certificate of incorporation includes provisions that could limit the ability of others to acquire control of our company. These provisions could have the effect of depriving our stockholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control in a tender offer or similar transaction. Among other things, the charter documents will provide: | | | certain amendments to our bylaws that will require the approval of two-thirds of the combined vote of our then-outstanding shares of our common stock; and | | | | | our board of directors has the authority, without further action by our stockholders, to issue preferred stock in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional, or special rights, and the qualifications, limitations, or restrictions, including dividend rights, conversion rights, voting rights, terms. | | **** **Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and federal court within the State of Delaware as the exclusive forum for certain types of actions and proceedings that our stockholders may initiate, which could limit a stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.** Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be exclusive forums for any: | | | derivative action or proceeding brought on our behalf; | | 35 | | | action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; | | | | | action asserting a claim against us, our directors or officers or employees arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or amended and restated bylaws; or | | | | | other action asserting a claim against us, our directors or officers or employees that is governed by the internal affairs doctrine. | | This choice of forum provision does not apply to actions brought to enforce a duty or liability created under the Exchange Act. Our amended and restated certificate of incorporation to be in effect after this offering also provides that the federal district courts of the United States are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We intend for this provision to apply to any complaints asserting a cause of action under the Securities Act despite the fact that Section 22 of the Securities Act creates concurrent jurisdiction for the federal and state courts over all actions brought to enforce any duty or liability created by the Securities Act or the rules and regulations promulgated thereunder. There is uncertainty as to whether a court would enforce such a provision with respect to claims under the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above. These choice of forum provisions may limit a stockholders ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. **General Risk Factors** **The restatement of our previously issued financial statements for the Affected Periods has resulted in unanticipated costs, stockholder litigation and regulatory actions, and may adversely affect investor confidence, our stock price, our ability to raise capital in the future and our reputation.** **** We incurred unanticipated costs for accounting and legal fees in connection with the restatement of our financial statements for the fiscal year ended December 31, 2024. The restatement may erode investor confidence in our company, our financial reporting, accounting practices and processes, and may raise reputational issues for our business. The restatement may also negatively impact the trading price of our securities and make it more difficult for us to raise capital on acceptable terms, or at all. In addition, the restatement and related material weaknesses in our internal control over financial reporting may result in stockholder litigation against us and adverse regulatory consequences. These and any future regulatory consequences, litigation, claims or disputes, whether successful or not, could subject us to additional costs, divert the attention of our management, or impair our reputation. Each of these consequences could have a material adverse effect on our business, results of operations and financial condition. **Item 1B. Unresolved Staff Comments** None. 36 **Item 1C. Cybersecurity** *Risk management and strategy* We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. *Managing Material Risks & Integrated Overall Risk Management* We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team works closely with our IT department to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. *Oversee Third-party Risk* Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third-parties. *Risks from Cybersecurity Threats* We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. **Item 2. Properties** Our corporate headquarters is located in Mountain View, California and acts as the main operational facility for our vehicle engineering, software engineering and business units. We lease our corporate headquarters which contains approximately 39,600 square feet. We believe that our office space is adequate for our current needs and, should we need additional space, we believe we will be able to obtain additional space on commercially reasonable terms. **Item 3. Legal Proceedings** We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates are involved in a proceeding adverse to our business or have a material interest adverse to our business. **Item 4. Mine Safety Disclosures** Not Applicable. 37 **** **PART II** **Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities** **Information with Respect to our Common Stock** Our common stock is traded on The Nasdaq Capital Market, LLC, or Nasdaq, and began trading under the symbol CYN on October 20, 2021. **Holders of Record** **** As of December 31, 2025, we had 55 shareholders of record. **Dividend Policy** We have not declared or paid cash dividends on our common stock and have no present intention of paying any cash dividends on our common stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. On September 29, 2023, our board of directors declared a one-time special stock dividend of 10% on our issued and outstanding shares of our common stock to holders of record on October 23, 2023. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. **Recent Sales of Unregistered Securities** **** None. **Issuer Purchases of Equity Securities** The Company did not repurchase any of its equity securities during its fiscal year ended December 31, 2025. **Item 6. [Reserved]** **Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations** *The objective of this Managements Discussion and Analysis is to allow investors to view the Company from managements perspective, considering items that would have a material impact on future operations. The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition as of and during the years ended December 31, 2025 and 2024 and should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in or implied by these forward-looking statements as a result of several factors, including those discussed in the section captioned Risk Factors included under Part I, Item 1A and elsewhere in this Annual Report. See also the section captioned Forward-Looking Statements in this Annual Report.* **Overview** We are an autonomous vehicle 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. 38 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 operating 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 purpose 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. 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. These deployments typically result in revenue based on the overall scope of the project and the integrated solution delivered. Following deployment, we continue to generate revenue through ongoing access to and use of our Enterprise Autonomy Suite (EAS), which includes software-enabled functionality, monitoring, updates, and support. These arrangements provide customers with continuous access to our evolving autonomous vehicle capabilities and are generally structured over a contractual term during which the customer receives and consumes the benefits of the integrated solution. 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 2025. We also had limited paid deployments in 2025 that offset some of the ongoing R&D costs of continually developing EAS. 39 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 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. **Critical Accounting Policies and Estimates and Judgements** Our 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 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 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 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. **** 40 **** **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. Capitalized software development costs are amortized using the greater of (a) the amount computed using the ratio that current gross revenue for a product bear to total of current and anticipated future gross revenue for that product or (b) the straight-line method, beginning upon commercial release of the product, and continuing over the remaining estimated economic life of the product, not to exceed three years to five years and recorded as cost of revenue. Amortization will begin when the product or enhancement is available for general release to customers. No amortization has begun for externally sold software, as the software enhancement is still in development. Management evaluates the useful lives of these assets on a quarterly basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. No impairment charges were associated with the Companys sold, leased or otherwise marketed software for the year ended December 31, 2025. During the year ended December 31, 2025, management completed a review of the Companys capitalized software development projects. Based on this review, management determined that projects previously capitalized as developed software no longer met the criteria for capitalization underASC 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, 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 managements current expectations about the timing and certainty of future technological milestones. The change in estimate was accounted for prospectivelyin accordance with ASC 250,Accounting Changes and Error Corrections,and did not require restatement of prior-period financial statements. For the year ended December 31, 2025, the Company recognized a total of $1.4 million related to costs originally capitalized in 2024 and $1.2 million related to costs capitalized during the first two quarters of 2025 as research and development expense resulting from this change. **Common Stock Warrants** **** The Company issued to its lead underwriter in the Companys initial public offering consummated in October 2021, (the IPO), warrants to purchase up to 9 shares of its common stock, exercisable at a price per share of $40,650 and expiring on October 19, 2026. Additionally, in connection with the Private Placement offering completed on April 29, 2022, the Company issued warrants to purchase 426 shares of its common stock, exercisable at a price per share of $140,625 and expiring on April 29, 2027. The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, depending on the specific terms of the warrant agreement. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the valuation as equity instruments in consideration of the cashless settlement provisions in the warrant agreements. 41 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 Companys 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 issuers 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 Companys consolidated statements of operations under other income (expense). After shareholder approval on January 30, 2025, the strike price and the number of equity shares are now fixed. Therefore, in accordance with ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the consolidated balance sheet as of December 31, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025. **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 Companys common stock, expected price volatility of the common stock, expected term, risk-free interest rates, and expected dividend yield. **Results of Operations** **Revenue** We derive revenue from EAS subscriptions with relative add-on offerings such as hardware revenue and other revenue (i.e., deployment costs). Revenue from these subscriptions and add-ons are recognized monthly over the service contract life, beginning at the time that a customer acknowledges acceptance of the service. During 2025, the Company recognized $0.2 million of revenue, substantially all related to EAS subscriptions and hardware revenue. During 2024, the Company recognized $0.4 million of revenue, substantially all related to EAS subscriptions and hardware revenue. **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 2025, the Company reported cost of revenue of $0.1 million consisting primarily of deployment costs related to personnel costs and travel expenses. During 2024, the Company reported cost of revenue of $0.5 million consisting primarily of deployment costs, related to personnel costs, travel expenses and associated hardware costs to specific customers. 42 **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 Companys 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 year ended December 31, 2025 increased by $1.2 million or 10.7% to $12.5 million from $11.3 million for the year ended December 31, 2024. The increase is primarily attributable to personnel related costs and expanded leased space. **General and Administrative** General, and administrative expense consist primarily of personnel costs, facilities expenses, depreciation and amortization, travel, and advertising costs. General and administrative expenses increased by approximately $1.9 million or 16.7% to $13.3 million for the year ended December 31, 2025 from $11.4 million for the year ended December 31, 2024. The increase primarily relates to additional executive bonuses and advertising. **Interest income (Expenses), net** Interest income (expense), net increased by $1.3 million to $0.2 million for the year ended December 31, 2025 from ($1.1 million) for the year ended December 31, 2024. Interest income consists primarily of interest earned of $0.2 million from the Companys interest-bearing bank accounts. **Other Income (Expenses), net** Other income (expense), net increased by $12.7 million to $2.2 million for the year ended December 31, 2025 from ($10.5 million) for the year ended December 31, 2024. Other income consists primarily of fair value remeasurement of $1.1 million and realized gains earned on the Companys short-term investments of $0.9 million. **Liquidity and Capital Resources** The Companys principal source of liquidity is its cash and current maturities of short-term investments. Short-term investments consist of placements in U.S. government securities with original maturities between three to nine months. As of December 31, 2025, the Company had unrestricted cash of approximately $0.1 million and short-terms investments of $33.7 million. As of December 31, 2024, the Company had unrestricted cash of approximately $23.6 million and no short-terms investments. On April 23, 2024, the Company entered into an underwritten agreement with Aegis Capital Corp. (Aegis), pursuant to which Aegis acted as the Companys 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. 43 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. 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 agents 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 $15.9 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, 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 $13.7 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, 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 Companys 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. In October 2025, the Company sold an aggregate of 935,114 shares of common stock pursuant to the Sales Agreement for gross proceeds of $5,778,031. The Company paid a commission of $173,341 to Aegis Capital Corp., representing 3% of the gross proceeds, and $131,990 in issuance costs resulting in net proceeds of approximately $5,472,691. The shares were issued at a par value of $0.00001 per share. The par value of the shares issued was recorded as common stock, with the excess of net proceeds over par value recorded as additional paid-in capital. 44 The Companys 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. 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 consolidated financial statements were issued. *Cash Flows* *Operating activities* Net cash used in operating activities for the year ended December 31, 2025 was $23.6 million, an increase of approximately $4.4 million or 22.8% compared to $19.2 million for the year ended December 31, 2024. The increase is primarily attributed to an increase in inventory related to tuggers, the fair value remeasurement of the warranty liabilities, and the security deposit for the new office location. *Investing activities* Net cash used in investing activities for the year ended December 31, 2025 was $34.1 million, an increase of approximately $37.1 million compared to net cash provided by investing activities of $2.9 million for the year ended December 31, 2024. The increase consists of short-term investment maturities of $54.5 million, which were offset by short-term investment purchases of approximately $87.4 million, R&D-related hardware equipment purchases of approximately $1.2 million, and approximately $0.03 million in acquisition of intangible assets. *Financing activities* Net cash provided by financing activities for the year ended December 31, 2025 was $35.1 million, a decrease of approximately $1.2 million compared to $36.3 million for the year ended December 31, 2024. The decrease is due to the following net proceeds received in each year: | | | December31, 2025 | | | December31, 2024 | | | | Proceeds from at-the-market equity financing, net of issuance costs | | $ | 5,472,701 | | | $ | - | | | | Proceeds from public issuance of common stock, net of offering costs | | | 29,611,677 | | | | - | | | | ATM, from May 2023 to July 2024 | | | - | | | | 6,789,427 | | | | Placement agent agreement, December 8, 2023 | | | - | | | | - | | | | Proceeds from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | | | - | | | | 13,811,014 | | | | Proceeds from issuance of warrants | | | - | | | | 18,260,852 | | | | Proceeds from the Notes, net of issuance costs | | | - | | | | 1,801,265 | | | | Repayment of the Notes | | | - | | | | (4,375,000 | ) | | | Total financings | | $ | 35,084,378 | | | $ | 36,287,558 | | | 45 **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. **Item 7A. Quantitative and Qualitative Disclosures About Market Risk** As a Smaller Reporting Company, this Item and the related disclosure is not required. **Item 8. Financial Statements and Supplementary Data** 46 **** **Report of Independent Registered Public Accounting Firm** **** To the Stockholders and Board of Directors of CYNGN Inc. **Opinion on the Financial Statements** **** We have audited the accompanying consolidated balance sheet of CYNGN Inc. (the Company) as of December 31, 2025, the related consolidated statements of operations, stockholders equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. **Basis for Opinion** **** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ CBIZ CPAs P.C. CBIZ CPAs P.C. We have served as the Companys auditor since 2021 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C. effective November 1, 2024). San Francisco, California March 26, 2026 PCAOB ID NUMBER 199 F-1 **Report of Independent Registered Public Accounting Firm** **** To the Stockholders and Board of Directors of CYNGN Inc. **Opinion on the Financial Statements** **** We have audited the accompanying consolidated balance sheet of CYNGN Inc. (the Company) as of December 31, 2024, the related consolidated statements of operations, stockholders deficit and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. **Restatement of 2024 Financial Statements** **** As discussed in Note 15 to the financial statements, the accompanying financial statements as of December 31, 2024 and for the year then ended, have been restated to correct misstatements surrounding the Companys accounting for warrant liabilities. **Explanatory Paragraph Going Concern** **** The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. **Basis for Opinion** **** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Companys auditor from 2021 through 2025. San Francisco, CA ****March 6, 2025 except for the effects of the restatement discussed in Note 15 to the consolidated financial statements, as to which the date is November 14, 2025 **** PCAOB ID NUMBER 688 **** F-2 **CYNGN INC. AND SUBSIDIARIES** **CONSOLIDATED BALANCE SHEETS** | | | | | | December31, | | | | | | December31, 2025 | | | 2024 Restated | | | | ASSETS | | | | | | | | | CURRENT ASSETS | | | | | | | | | Cash and cash equivalents | | $ | 990,023 | | | $ | 23,617,733 | | | | Short-term investments | | | 33,736,091 | | | | | | | | Accounts and other receivables | | | 1,544,213 | | | | 1,222,891 | | | | Inventory | | | 2,039,655 | | | | 150,241 | | | | Prepaid expenses and other current assets | | | 1,518,430 | | | | 592,090 | | | | TOTAL CURRENT ASSETS | | | 39,828,412 | | | | 25,582,955 | | | | | | | | | | | | | | | NON-CURRENT ASSETS | | | | | | | | | | | Property and equipment, net | | | 3,268,196 | | | | 2,319,402 | | | | Right-of-use asset, net | | | 5,971,800 | | | | 297,918 | | | | Intangible assets, net | | | 466,223 | | | | 1,895,074 | | | | Security Deposit | | | 518,584 | | | | | | | | TOTAL ASSETS | | $ | 50,053,215 | | | $ | 30,095,349 | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | | | CURRENT LIABILITIES | | | | | | | | | | | Accounts payable | | $ | 217,439 | | | $ | 247,778 | | | | Deferred revenue | | | 1,658,015 | | | | 769,180 | | | | Accrued expenses and other current liabilities | | | 2,615,734 | | | | 2,105,036 | | | | Current operating lease liability | | | 312,365 | | | | 317,344 | | | | TOTAL CURRENT LIABILITIES | | | 4,803,553 | | | | 3,439,338 | | | | | | | | | | | | | | | Non-current operating lease liability | | | 6,495,256 | | | | | | | | Warrant liability | | | | | | | 27,703,927 | | | | TOTAL LIABILITIES | | | 11,298,809 | | | | 31,143,265 | | | | | | | | | | | | | | | Commitments and contingencies (Note 12) | | | | | | | | | | | | | | | | | | | | | | STOCKHOLDERS EQUITY (DEFICIT) | | | | | | | | | | | Common stock, Par $0.00001; 400,000,000 and 200,000,000 shares authorized as of December 31, 2025 and December 31, 2024; 7,974,380 and 199,110 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively | | | 80 | | | | 2 | | | | Additional paid-in capital | | | 255,576,797 | | | | 192,305,280 | | | | Accumulated deficit | | | (216,822,471 | ) | | | (193,353,198 | ) | | | TOTAL STOCKHOLDERS EQUITY (DEFICIT) | | | 38,754,406 | | | | (1,047,916 | ) | | | | | | | | | | | | | | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | | $ | 50,053,215 | | | $ | 30,095,349 | | | The accompanying notes are an integral part of these consolidated financial statements. F-3 **CYNGN INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF OPERATIONS** **** | | | Year Ended December 31, | | | | | | 2025 | | | 2024 Restated | | | | | | | | | | | | | REVENUE | | $ | 218,976 | | | $ | 368,138 | | | | COSTS AND EXPENSES | | | | | | | | | | | Cost of revenue | | | 135,749 | | | | 535,708 | | | | Research and development | | | 12,468,687 | | | | 11,259,641 | | | | General and administrative | | | 13,302,781 | | | | 11,400,864 | | | | TOTAL COSTS AND EXPENSES | | | 25,907,217 | | | | 23,196,213 | | | | LOSS FROM OPERATIONS | | | (25,688,241 | ) | | | (22,828,075 | ) | | | | | | | | | | | | | | OTHER INCOME (EXPENSE), NET | | | | | | | | | | | Interest income (expense), net | | | 197,429 | | | | (1,117,546 | ) | | | Warrant liability issuance costs | | | | | | | (1,739,148 | ) | | | Change in fair value of warrant liability | | | 1,136,677 | | | | (5,359,780 | ) | | | Loss on issuance of warrants | | | | | | | (2,344,147 | ) | | | Other income (expense), net | | | 884,862 | | | | 53,117 | | | | TOTAL OTHER INCOME (EXPENSE), NET | | | 2,218,968 | | | | (10,507,504 | ) | | | | | | | | | | | | | | NET LOSS | | $ | (23,469,273 | ) | | $ | (33,335,579 | ) | | | | | | | | | | | | | | Net loss per share attributable to common stockholders, basic and diluted | | $ | (5.17 | ) | | $ | (2,521.41 | ) | | | | | | | | | | | | | | Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | | | 4,540,481 | | | | 13,221 | | | The accompanying notes are an integral part of these consolidated financial statements. F-4 **CYNGN INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)** | | | Preferred Stock | | | Common Stock | | | Additional Paid-in | | | Accumulated | | | Total Stockholders | | | | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Equity | | | | Balance as of December 31, 2023 | | | | | | | | | | | 5,147 | | | $ | | | | $ | 170,652,808 | | | $ | (160,017,619 | ) | | $ | 10,635,189 | | | | Issuance of at-the-market common stock, net of issuance costs $138,572 | | | | | | | | | | | 4,275 | | | | | | | | 6,789,427 | | | | | | | | 6,789,427 | | | | Exercise of stock options and vesting of restricted stock units | | | | | | | | | | | 11 | | | | | | | | (597 | ) | | | | | | | (597 | ) | | | Issuance of common stock and pre-funded warrants and exercise of pre-funded warrants in connection with the private and public offerings, net of offering costs $1,864,594 | | | | | | | | | | | 189,677 | | | | 2 | | | | 12,414,451 | | | | | | | | 12,414,453 | | | | Stock-based compensation | | | | | | | | | | | | | | | | | | | 2,449,191 | | | | | | | | 2,449,191 | | | | Net loss | | | | | | | | | | | | | | | | | | | | | | | (33,335,579 | ) | | | (33,335,579 | ) | | | Balance as of December 31, 2024 | | | | | | | | | | | 199,110 | | | $ | 2 | | | $ | 192,305,280 | | | $ | (193,353,198 | ) | | $ | (1,047,916 | ) | | | Issuance of at-the-market common stock, net of issuance costs | | | | | | | | | | | 935,114 | | | | 10 | | | | 5,472,691 | | | | | | | | 5,472,701 | | | | Exercise of stock options and vesting of restricted stock units | | | | | | | | | | | 15 | | | | | | | | | | | | | | | | | | | | Reclassification of Series A warrants to equity in connection with the public offering | | | | | | | | | | | | | | | | | | | 7,634,428 | | | | | | | | 7,634,428 | | | | Exercise of Series B warrants in connection with the public offering, net of issuance costs | | | | | | | | | | | 1,552,796 | | | | 16 | | | | 18,931,781 | | | | | | | | 18,931,797 | | | | Issuance of common stock in connection with the public offering | | | | | | | | | | | 5,287,345 | | | | 52 | | | | 29,611,625 | | | | | | | | 29,611,677 | | | | Stock-based compensation | | | | | | | | | | | | | | | | | | | 1,620,992 | | | | | | | | 1,620,992 | | | | Net loss | | | | | | | | | | | | | | | | | | | | | | | (23,469,273 | ) | | | (23,469,273 | ) | | | Balance as of December 31, 2025 | | | | | | $ | | | | | 7,974,380 | | | $ | 80 | | | $ | 255,576,797 | | | $ | (216,822,471 | ) | | $ | 38,754,406 | | | The accompanying notes are an integral part of these consolidated financial statements. F-5 **CYNGN INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF CASH FLOWS** | | | Year Ended December 31, | | | | | | 2025 | | | 2024 Restated | | | | CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | Net loss | | $ | (23,469,273 | ) | | $ | (33,335,579 | ) | | | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | Depreciation and amortization | | | 1,189,794 | | | | 669,409 | | | | Stock-based compensation | | | 1,620,992 | | | | 2,449,191 | | | | Realized gain on short-term investments | | | (85,117 | ) | | | | | | | Accretion on short-term investments | | | (776,163 | ) | | | (113,072 | ) | | | Loss on disposed assets | | | 16,607 | | | | | | | | Patent impairment | | | | | | | 118,831 | | | | Change in fair value of warrant liability | | | (1,136,677 | ) | | | 5,359,780 | | | | Change in estimate of capitalized software | | | 1,425,689 | | | | | | | | Warrant liability issuance costs | | | | | | | 1,739,148 | | | | Loss on issuance of warrants | | | | | | | 2,344,147 | | | | Accretion of interest and amortization of debt issuance costs | | | | | | | 1,177,174 | | | | Changes in operating assets and liabilities: | | | | | | | | | | | Accounts and other receivables | | | (321,322 | ) | | | (452,006 | ) | | | Inventory | | | (1,889,414 | ) | | | (150,241 | ) | | | Prepaid expenses, operating lease right-of-use assets, and other current assets | | | (1,421,910 | ) | | | (44,035 | ) | | | Accounts payable | | | (30,339 | ) | | | 50,815 | | | | Deferred revenue | | | 888,834 | | | | (667,680 | ) | | | Accrued expenses, lease liabilities, and other current liabilities | | | 411,643 | | | | 1,658,037 | | | | NET CASH USED IN OPERATING ACTIVITIES | | | (23,576,656 | ) | | | (19,196,081 | ) | | | | | | | | | | | | | | CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | Purchase of property and equipment | | | (1,230,536 | ) | | | (1,051,481 | ) | | | Acquisition of intangible asset | | | (29,061 | ) | | | (954,229 | ) | | | Disposal of assets | | | | | | | 265,940 | | | | Purchase of short-term investments | | | (87,387,311 | ) | | | (7,562,761 | ) | | | Proceeds from maturity of short-term investments | | | 54,512,501 | | | | 12,237,761 | | | | NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | | | (34,134,407 | ) | | | 2,935,230 | | | | | | | | | | | | | | | CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | Proceeds from at-the-market equity financing, net of issuance costs | | | 5,472,701 | | | | 6,789,427 | | | | Proceeds from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants, net of issuance costs | | | 29,611,677 | | | | 13,811,014 | | | | Issuance costs from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | | | (1,025 | ) | | | | | | | Proceeds from issuance of warrants | | | | | | | 18,260,852 | | | | Proceeds from the Notes, net of issuance costs | | | | | | | 1,801,265 | | | | Repayment of the Notes | | | | | | | (4,375,000 | ) | | | Issuance costs for stock dividend and restricted stock units | | | | | | | (597 | ) | | | NET CASH PROVIDED BY FINANCING ACTIVITIES | | | 35,083,353 | | | | 36,286,961 | | | | | | | | | | | | | | | Net increase (decrease) in cash and cash equivalents | | | (22,627,710 | ) | | | 20,026,110 | | | | Cash and cash equivalents, beginning of year | | | 23,617,733 | | | | 3,591,623 | | | | Cash and cash equivalents, end of year | | $ | 990,023 | | | $ | 23,617,733 | | | | | | | | | | | | | | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW: | | | | | | | | | | | Cash paid during the period for interest and taxes | | $ | | | | $ | | | | | | | | | | | | | | | | SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | | | | | | | | | | | Acquisition of right-of-use asset in exchange for new operating lease obligation | | | 6,589,332 | | | | | | | | Acquisition of property and equipment included in accounts payable and accrued expenses | | | 1,875 | | | | | | | | | | | | | | | | | | The accompanying notes are an integral part of these consolidated financial statements. F-6 **CYNGN INC. AND SUBSIDIARIES** **Notes to Consolidated Financial Statements** **** **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) 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 Companys stockholders voted to authorize the Companys 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 Companys 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 Companys stockholders voted to authorize the Companys 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 Companys 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 consolidated financial statements and notes to the 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 $23.5 million and $33.3 million for the years ended December 31, 2025 and 2024, respectively. Accumulated deficit amounted to approximately $216.8 million and $193.4 million as of December 31, 2025 and December 31, 2024, respectively. Net cash used in operating activities was approximately $23.6 million and $19.2 million for the year ended December 31, 2025 and 2024, respectively. The Companys 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. As of December 31, 2025, the Companys unrestricted cash and cash equivalents balance was approximately $1.0 million and short-term investments of approximately $33.7 million. As of December 31, 2024, the Companys cash and cash equivalents balance was approximately $23.6 million and no short-terms investments. 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 consolidated financial statements were issued. F-7 **2. Summary of Significant Accounting Policies** **Basis of Presentation** The accompanying consolidated financial statements as of and for the years ended December 31, 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). The consolidated financial statements include all normal adjustments necessary for a fair presentation of the Companys financial position at December 31, 2025 and 2024, and operating results and cash flows for the periods presented. **Principles of Consolidation** The 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 consolidated financial statements. **** **Use of Estimates** The preparation of 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 Companys significant estimates and judgments include but are not limited to internal-use software, 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. **Reclassifications** **** Certain prior period balances for the consolidated financial statement for December 31, 2024 have been reclassified to conform with the current year presentation. These reclassifications relate to inventory and accounts and other receivables that were previously presented as prepaid expenses and other current assets, as well as deferred revenue that was previously presented as accrued expenses and other current liabilities. These reclassifications had no impact on previously reported net loss, total assets, or total shareholders equity. **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 December 31, 2025 and December 31, 2024. **** **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 December 31, 2025 and December 31, 2024, the Company had approximately $1.0 million of cash and $33.7 million in short-term investments and $23.6 million of cash and no short-term investments, respectively. 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 Boards (FASB) Accounting Standards Codification Topic (ASC) 320, Investments - Debt and Equity Securities*,* and recorded these securities at amortized cost on the accompanying consolidated balance sheets as of December 31, 2025 and December 31, 2024. F-8 **Accounts and Other 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 zero as of December 31, 2025 and December 31, 2024. In addition, the Company utilizes current and historical collection data as well as assesses current economic conditions in order to determine expected trade credit losses on a prospective basis. No credit losses were recorded as of December 31, 2025 and December 31, 2024. Other receivables primarily consist of Employee Retention Credit (ERC) claims related to 2020 and 2021. **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 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 Companys cash and accounts receivable are reasonable estimates of their fair values due to their short-term nature. The fair values of the Companys share-based compensation and underwriter warrants were based on observable inputs and assumptions used in Black-Scholes valuation models derived from independent external valuations. **** **Inventory** Inventory consists of autonomous vehicle units, including tuggers equipped with DriveMod Kits (DMKs), which are integrated with the Companys proprietary Enterprise Autonomy Suite (EAS) software and sold to customers as part of a fully integrated autonomous vehicle solution. Substantially all assembly and integration activities are performed by third-party suppliers prior to receipt; therefore, the Company classifies its inventory as finished goods and does not maintain separate classifications for raw materials or work in process. Inventory is stated at the lower of cost or net realizable value. Cost is determined using the specific identification method, as each autonomous vehicle is individually serialized and tracked, and the Company is able to identify the specific cost associated with each unit. The specific cost of each vehicle is transferred to deferred costs upon deployment. F-9 The Company periodically reviews inventory for excess quantities, obsolescence, or other indicators that the carrying value may not be recoverable. If the carrying value of inventory exceeds its net realizable value, the Company records a write-down to net realizable value, with the adjustment recognized in cost of goods sold. **** **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 Companys 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. Depreciation is recorded on a straight-line basis over each assets estimated useful life. Repair and maintenance costs are expensed as incurred. | Property and Equipment | | Useful life | | | Automobiles (DMV-registered) | | 5 years | | | Machinery, tools and equipment | | 5 years | | | Computers and equipment | | 5 years | | | Internal-use software | | 3 to 5 years | | | Furniture and fixtures | | 7 years | | | Leasehold improvements | | Shorter of 3 years or lease term | | **** **Operating Leases** The Company accounts for leases in accordance with 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 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 three to five years. There is judgment involved in the determination of the useful life. Amortization of the software asset will begin when the software is substantially complete and ready for its intended use. No amortization has begun for the internal use software, as the projects are still in the application development phase. Management evaluates the useful lives of these assets on a quarterly basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. No impairment charges were associated with the Companys internal-use software for the years ended December 31, 2025 and 2024. F-10 **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 Companys 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 three years to five years and recorded as cost of revenue. During the year ended December 31, 2025, management completed a review of the Companys 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, 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 managements 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 year ended December 31, 2025, the Company recognized a total of $1.4 million related to costs originally capitalized in 2024 and $1.2 million related to costs capitalized during the first two quarters of 2025 as research and development expense resulting from this change. **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 15 years. 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. F-11 For the year ended December 31, 2024, the Company determined the existence of an impairment associated with the Companys intangible asset Patents and accordingly recorded an impairment charge of $118,831 (see Note 6. Intangible Assets). For the year ended December 31, 2025, there were no impairment charges. **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 Companys lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance as of December 31, 2025 and December 31, 2024 (see Note 11. Income Taxes). There are no uncertain tax positions that would require recognition in the 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. Managements 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. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 expands the annual disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. The Company has adopted this guidance on a prospective basis, which did not have a significant impact on the Companys consolidated financial statements. **Common Stock Warrants** **** The Company issued to its lead underwriter in the Companys IPO warrants to purchase up to 9 shares of the Companys common stock. In addition, the Company issued 426 common stock warrants as a part of the private placement offering. The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the warrants 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 estimated fair value of the Companys 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 issuers 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 Companys 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. The Company concluded that these warrants are indexed to the Companys own stock, require settlement in a fixed number of shares, and do not contain provisions that could require net cash settlement or settlement in a variable number of shares. Additionally, the warrant agreements do not include provisions that would require the Company to transfer assets. Accordingly, the warrants meet the criteria for equity classification. Therefore, in accordance with ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the consolidated balance sheet as of December 31, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025 (see Note 7. Capital Structure). F-12 **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**)**. **** **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 Companys 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. **** **General and Administrative Expense** **** 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 years ended December 31, 2025 and 2024 were $512,017 and $237,396, respectively. **** **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 (see Note 12. Commitments and Contingencies). **** **Segment Reporting** **** The Company operates as one operating segment. The Companys 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 one operating segment for the purposes of allocating resources, making operating decisions and evaluating financial performance. The one operating segment generates revenues from subscriptions to its Enterprise Autonomy Service (EAS), product sales or leases of hardware, and other professional services (i.e., deployment 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 Companys one segment, the executive management team use revenue and net loss to allocate resources, both reported on the Consolidated Statement of Operations as Revenue and Net loss. The executive management team also uses revenue and net loss, along with non-financial inputs and qualitative information, to evaluate the Companys performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. The measure of segment assets is reported on the Consolidated Balance Sheet as Total assets. **** F-13 **** **Revenue Recognition** **** The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company generates revenue from vehicle units, including tuggers equipped with DriveMod Kits (DMKs), which are integrated with the Companys proprietary Enterprise Autonomy Suite (EAS) software, or leases of hardware, and other professional services. These offerings are highly interdependent and integrated to provide customers with a fully functional autonomous industrial vehicle solution. Because these components are not separately identifiable from one another in the context of the contract, the Company accounts for these combined goods and services as a single performance obligation. ** *General Recognition Principle.* The Company recognizes revenue when control of the combined autonomous vehicle and software solution is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods and services. *Method of Measuring Progress.*Revenue associated with the Companys integrated autonomous vehicle solution is generally recognized over time because the customer simultaneously receives and consumes the benefits provided by the Companys performance as the services are performed. The Company measures progress toward satisfaction of the performance obligation using an output method based on the passage of time, recognizing revenue ratably over the contractual term, which is typically three years. In accordance with ASC 606-10-55-17 through 55-18, the output method reflects the pattern in which control of the promised goods and services is delivered to the customer, who receives continuous access to the integrated autonomous vehicle functionality, including the software-enabled operation, monitoring, updates, and support necessary for the system to function as intended. Management believes that recognizing revenue on a straight-line basis over the contract period faithfully depicts the Companys performance in transferring control of the integrated solution, as the customer receives and consumes the benefits of the solution evenly throughout the contract term. *Payment Terms.* Payment terms vary by customer and contract but generally do not exceed 90 days. *Discounts.* The Company may offer pricing discounts to certain customers, primarily to establish relationships with new customers. These discounts are reflected in the contractual transaction price at contract inception. Revenue is recognized based on the discounted contract price and is accounted for in the same manner as other contracts. The Company recognizes revenue from these arrangements ratably over the contract term, consistent with the pattern in which the customer receives and consumes the benefits of the integrated autonomous vehicle solution. ** *Stand-Alone Selling prices*. The Company also applies judgment in estimating stand-alone selling prices when allocating the transaction price to performance obligations. Stand-alone selling prices are generally determined based on observable prices when available or, when not directly observable, are estimated using managements assessment of expected pricing for similar goods and services and market conditions. ** *Material Rights and Renewal Options.* The Companys 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 represent a separate performance obligation, requires judgment. The Company evaluates the pricing of each option to determine whether it reflects the stand-alone selling price for the underlying goods or services or whether it provides the customer with a discount that would not be available without entering into the initial contract. In certain legacy customer contracts, the Company has provided customers with the option to extend the contract term for an additional one-year period. Management evaluates these renewal provisions to determine whether they provide a material right by comparing the renewal pricing to the expected stand-alone selling price of the services at the time of renewal. This assessment requires judgment and includes consideration of expected pricing for similar services, historical pricing practices, and market conditions. If a material right exists, the Company allocates a portion of the transaction price to the option and recognizes the related revenue when the option is exercised or expires. *Significant financing component.* In certain arrangements, the Company receives payment from a customer either before or after the performance obligation has been satisfied. The Companys contracts with customer prepayment terms do not include a significant financing component because the prepayment terms are designed to provide customers with contractual protections and billing convenience, not to provide financing to the customer or receive financing from the customer. F-14 *Contract modifications.*The Company may modify contracts to offer customers additional products or services. Each of the additional products and services is evaluated to determine whether it is distinct from the goods or services transferred prior to 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 for the modified goods or services, the Company accounts for the modification either (i) on a prospective basis if the remaining goods and services are distinct from those already transferred, or (ii) on a cumulative catch-up basis if the remaining goods and services are not distinct from those already transferred. *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). In making this determination, the Company considers several factors, including whether the Company is primarily responsible for fulfilling the promise to provide the specified goods or services, bears inventory risk before the goods are transferred, and has discretion in establishing pricing for the specified goods or services. 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 the Companys role is to supply hardware to the dealer, the Company does not obtain control of the hardware before it is transferred to the end-user and is not primarily responsible for the dealers fulfillment to end-users. Accordingly, hardware revenue in these arrangements 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. *Cost to Obtain a Contract.*The Company capitalizes incremental costs incurred to obtain contracts, principally sales commissions and third-party referral fees. These costs are amortized on a straight-line basis over the contractual term and recognized in general and administrative expenses. ** *Costs to Fulfill a Contract*. The Company capitalizes such costs when they are (i) incremental to obtaining that specific contract, (ii) expected to be recovered, and (iii) subject to an amortization period exceeding one year. Capitalized fulfillment costs are amortized on a straight-line basis over the expected period of benefit, which corresponds to the contractual term, and are recognized in cost of revenue. The Company evaluates capitalized fulfillment costs for impairment at each reporting date. Deferred contract costs totaled $767,007 and $120,793 as of December 31, 2025 and 2024, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. Amortization of deferred contract costs recognized in cost of revenue during the years ended December 31, 2025 and 2024 was $106,480 and $21,413, respectively. No impairment losses were recognized in either period. *Taxes collected from customers*. The Company collects and remits certain taxes assessed by governmental authorities on its revenue transactions, including sales, use, value-added, and excise taxes. These taxes are presented on a net basis and excluded from reported revenue. Shipping and handling fees billed to customers are included in net sales; the related costs are included in cost of revenue. *Judgments and estimates.*Accounting for contracts recognized over time requires judgment in estimating the transaction price, the measure of progress, and expected contract 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. F-15 **Concentration of Credit Risk** The following table sets forth the percentages of total revenue for customers that represent 10% or more of the respective amounts for the year ended December 31, 2025 and 2024, respectively. | | | 2025 | | | 2024 | | | | Customer A | | | 17.1 | % | | | * | | | | Customer B | | | 36.8 | % | | | * | | | | Customer C | | | 11.5 | % | | | 73.2 | % | | | Customer D | | | 19.1 | % | | | * | | | | Customer E | | | 12.3 | % | | | * | | | | * | Below 10% | | There was $209,452 from these customers in accounts receivable as of December 31, 2025 and $274,699 from these customers in accounts receivable as of December 31, 2024. **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. **** **Recent Accounting Standards** **** In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires the disaggregated disclosure of certain income statement items. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company has not adopted this standard early and is currently evaluating the impact of this amendment on its consolidated financial statements. **** **3. Revenue and Contracts with Customers** **** **Contract Balances** **** Timing differences between revenue recognized, billings, and customer payments result in contract assets and contract liabilities. Contract assets represent revenue recognized in excess of amounts billed to customers. Contract liabilities represent payments received from customers in advance of satisfying the related performance obligations. The Companys contract balances consist primarily of accounts receivable and deferred revenue (contract liabilities). Accounts receivable represents the Companys unconditional rights to consideration for goods and services transferred to customers. Contract liabilities represent amounts billed or collected in advance of satisfying performance obligations and are recognized as revenue as the related performance obligations are satisfied. As of December 31, 2025 and 2024, deferred revenue related to tugger sales totaled $1,658,015 and $769,180, respectively. **Revenue Recognized from Prior Period Contract Liabilities** **** During the years ended December 31, 2025 and 2024, the Company recognized revenue of $128,387 and $1,500, respectively, that was included in deferred revenue at the beginning of each respective period. The Company did not recognize material revenue during the periods presented from performance obligations satisfied (or partially satisfied) in prior periods other than amounts previously included in deferred revenue. **Remaining Performance Obligations** **** As of December 31, 2025, the remaining performance obligations on existing contracts are $1,658,015, approximately 25% of which is expected to be recognized in 2026, 36% in 2027, 28% in 2028, and the remainder thereafter. This amount corresponds to the Companys contract liability balance as of December 31, 2025, as all remaining obligations relate to the passage of time on active contracts. For the years ended December 31, 2025 and 2024, revenue was $218,976 and $368,138, respectively. F-16 **** **4. Balance Sheet Components** **** **Financial Instruments** Funds in the Companys investment brokerage account were held in cash equivalents, consisting of a money market account, along with short-term investments consisting of U.S. government treasury bills, which are accounted for as held-to-maturity (HTM) securities, and classified as Level 1 in the hierarchy of fair value measurements. HTM securities are carried at amortized cost and, as a result, are not remeasured to fair value on a recurring basis. All of the Companys short-term investments will mature within one year of December 31, 2025. The Company does not expect a credit loss for its short-term investments. **** | | | December31, 2025 | | | December31, 2024 | | | | Financial assets | | Level | | | Amount | | | Level | | | Amount | | | | Cash equivalents: | | | | | | | | | | | | | | | | | | | Money market account | | | 1 | | | $ | 929,165 | | | | 1 | | | $ | 23,274,834 | | | | Short-term investments: | | | | | | | | | | | | | | | | | | | U.S. government treasury bills | | | 1 | | | | 33,736,091 | | | | 1 | | | | | | | | | | | | | | $ | 34,665,255 | | | | | | | $ | 23,274,834 | | | **Inventory** **** Inventory is stated at the lower of cost or net realizable value. Cost is determined using the specific identification method, as each autonomous vehicle is individually serialized and tracked, allowing the Company to identify the specific cost associated with each unit. The specific cost of each vehicle is transferred to deferred costs upon deployment. As of December 31, 2025 and 2024, inventory totaled $2.0 million and $0.2 million, respectively. **Prepaid expenses and other current assets** Prepaid expenses and other current assets are comprised of the following: | | | December31, 2025 | | | December31, 2024 | | | | Prepaid Expenses | | $ | 668,090 | | | $ | 303,803 | | | | Short-term Deposits | | | 75,006 | | | | 160,149 | | | | Other current assets | | | 775,334 | | | | 128,138 | | | | Total prepaid and expenses and other current assets | | $ | 1,518,430 | | | $ | 592,090 | | | **Property and Equipment, Net** Property and equipment were reclassified to better reflect their appropriate categories within the fixed asset register. These reclassifications did not have a significant impact on the overall asset values or depreciation expense. Property and equipment is comprised of the following: | | | December31, | | | December31, | | | | | | 2025 | | | 2024 | | | | Automobiles (DMV-registered) | | $ | 28,862 | | | $ | 128,862 | | | | Machinery, tools and equipment | | | 692,459 | | | | 660,155 | | | | Computers and equipment | | | 488,552 | | | | 389,007 | | | | Capitalized software | | | 1,592,092 | | | | 950,832 | | | | Furniture and fixtures | | | 73,494 | | | | 66,182 | | | | Leasehold improvements | | | 175,417 | | | | 221,977 | | | | Testing equipment (Work in Progress) | | | 896,147 | | | | 687,986 | | | | Property and equipment, gross | | | 3,947,023 | | | | 3,105,001 | | | | Less: accumulated depreciation and amortization | | | (678,827 | ) | | | (785,599 | ) | | | Total property and equipment, net | | $ | 3,268,196 | | | $ | 2,319,402 | | | Depreciation expense for the years ended December 31, 2025 and 2024 was $234,909 and $214,494, respectively. **Accounts Payable** Accounts payable includes independent director fees payable of $42,500 and $28,333 as of December 31, 2025 and 2024, respectively. **Deferred Revenue** Deferred revenue consists primarily of amounts billed to customers for tugger sales and related services for which revenue has not yet been recognized. Revenue is recognized as the Company satisfies its performance obligations in accordance with its revenue recognition policy. As of December 31, 2025 and 2024, deferred revenue related to tugger sales totaled $1,658,015 and $769,180, respectively. F-17 **Accrued Expenses and Other Current Liabilities** Accrued expenses and other current liabilities are comprised of the following: | | | December31, 2025 | | | December31, 2024 | | | | Credit card payable | | $ | 16,169 | | | $ | 2,050 | | | | Accrued expenses | | | 563,770 | | | | 788,948 | | | | Accrued payroll | | | 2,035,795 | | | | 1,314,038 | | | | Total accrued expenses and other current liabilities | | $ | 2,615,734 | | | $ | 2,105,036 | | | **5. Operating Leases** **** Operating lease right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist of the fixed payments under the arrangement, less any lease incentives, such as tenant improvement allowances. Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-of-use (ROU) assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. As the implicit rate of the leases is not determinable, the Company uses an incremental borrowing rate (IBR) based on the information available at the lease commencement date in determining the present value of lease payments. Rather than relying on a single rate source, the Company evaluated three data points calculated from the three standard methods to determine a reasonable, supportable, and entity-specific IBR consistent with ASC 842. Based on this analysis, the rate applied is the median of the available supportable rates, which reflects a secured borrowing assumption and balances entity-specific credit risk and market benchmarks. Lease expenses are recognized on a straight-line basis over the lease term. 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 $104,478. The lease includes common area maintenance costs that are paid separately from rent based on actual costs incurred. The Companys previous lease in Menlo Park, California ended in May 2025. The Company also leases storage containers from a third-party provider for use on-site in Mountain View, California, at a monthly rate of $141 per unit. These arrangements are on a month-to-month basis and are cancelable upon thirty (30) days notice. Under the short-term lease practical expedient of ASC 842, the Company does not recognize right-of-use assets or lease liabilities for these arrangements, and instead, lease payments are expensed as incurred. The Companys right-of-use asset, net balance as of December 31, 2025 and 2024, respectively are presented on the Companys consolidated balance sheets. The Companys future lease payments under the non-cancellable lease as of December 31, 2025, which are presented as lease liabilities on the Companys consolidated balance sheet, are as follows: | For the year ended December 31, | | | Operating Lease | | | | 2026 | | | | 692,000 | | | | 2027 | | | | 1,434,193 | | | | 2028 | | | | 1,506,260 | | | | 2029 | | | | 1,551,040 | | | | 2030 | | | | 1,598,594 | | | | 2031 | | | | 1,367,166 | | | | Less: imputed interest | | | | (1,341,632 | ) | | | Present value of lease liability | | | $ | 6,807,621 | | | | | | December 31, | | | | | | 2025 | | | 2024 | | | | Weighted-average remaining lease term (in years) | | | 5.83 | | | | 0.42 | | | | Weighted-average discount rate | | | 5.60 | % | | | 4.87 | % | | Lease expense was $1,170,932 and $678,037 for the years ended December 31, 2025 and 2024, respectively. The amortization of the operating lease right-of-use assets, which is included in the lease expense, totaled $915,451 and $694,373 for the years ended December 31, 2025 and 2024, respectively. The weighted average discount rate is based on the incremental borrowing rate that is utilized to present value the remaining lease payments over the lease term. F-18 **6. Intangible Assets, Net** The gross carrying amount and accumulated amortization of separately identifiable intangible assets are as follows: | | | As of December 31, 2025 | | | | | | Gross Carrying Amount | | | Accumulated Amortization | | | Fair Market Value Adjustment | | | Impairment | | | Net Carrying Amount | | | | Patents | | $ | 521,302 | | | $ | (71,079 | ) | | $ | - | | | $ | - | | | $ | 450,223 | | | | Trademark | | | 45,000 | | | | (29,000 | ) | | | - | | | | - | | | | 16,000 | | | | Total intangible assets | | $ | 566,302 | | | $ | (100,079 | ) | | $ | - | | | $ | - | | | $ | 466,223 | | | | | | As of December 31, 2024 | | | | | | Gross Carrying Amount | | | Accumulated Amortization | | | Fair Market Value Adjustment | | | Impairment | | | Net Carrying Amount | | | | Developed software | | $ | 1,425,689 | | | $ | - | | | $ | - | | | $ | - | | | $ | 1,425,689 | | | | Patents | | | 611,072 | | | | (41,856 | ) | | | - | | | | (118,831 | ) | | | 450,385 | | | | Trademark | | | 45,000 | | | | (26,000 | ) | | | - | | | | - | | | | 19,000 | | | | Total intangible assets | | $ | 2,081,761 | | | $ | (67,856 | ) | | $ | - | | | $ | (118,831 | ) | | $ | 1,895,074 | | | Amortization expense for each of the years ended December 31, 2025 and 2024 was $32,223 and $24,739, respectively. There was no amortization expense for the developed software for the years ended December 31, 2025 and 2024. 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, 2025 provided such indication. 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 year ended December 31, 2024, the Company recorded a $118,831 impairment charge under gain (loss) on disposal assets, which is included in other income (expense) on its consolidated statement of operations, to adjust the expiring assets salvage value of zero. 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 December 31, 2025 and December 31, 2024. During the year ended December 31, 2025, management completed a review of the Companys 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, 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 managements 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 year ended December 31, 2025, the Company recognized a total of $1.4 million related to costs originally capitalized in 2024 and $1.2 million related to costs capitalized during the first two quarters of 2025 as research and development expense resulting from this change. F-19 Estimated amortization expense for all intangible assets subject to amortization in future years is expected to be: | Years ended December 31, | | Amortization | | | | 2026 | | $ | 33,772 | | | | 2027 | | | 33,772 | | | | 2028 | | | 33,772 | | | 2029 | | | 33,772 | | | | Thereafter | | | 331,135 | | | | Total | | $ | 466,223 | | | **** **7. Capital Structure** **Common Stock** **** As of December 31, 2025 and 2024, the Company is authorized to issue 400,000,000 and 200,000,000 shares of common stock, respectively, with a par value of $0.00001 per share. As of December 31, 2025 and 2024, the Company had 7,974,380 and 199,110 shares of common stock issued and outstanding, respectively. Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that the Company may designate in the future. **Preferred Stock** **** In October 2021, the Company amended its Certificate of Incorporation and revised the number of preferred stock shares authorized for issuance to 10,000,000 shares at a par value of $0.00001. As of December 31, 2025 and December 31, 2024, there were no shares of preferred stock issued and outstanding. **Reverse Stock Split** **** On June 25, 2024, the Companys stockholders voted to authorize the Companys 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 Companys 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 Companys stockholders voted to authorize the Companys 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 Companys 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. The Companys primary reasons for effecting the reverse stock splits was to increase the per share price of our common stock to meet Nasdaqs minimum bid price requirement for continued listing on Nasdaq. **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, 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 $ of $7.49999 per Pre-Funded Warrant. 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 June 30, 2025. The Company received net proceeds of approximately $13.7 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, including the placement agent fees. 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, 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 $ of $5.00999 per pre-funded warrant. 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 June 27, 2025. The Company received net proceeds of approximately $15.9 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, including the placement agent fees. F-20 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 $0.00001 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 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 December 31, 2024. 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 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 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 December 23, 2024. The net proceeds to the Company from the Offering were approximately $18.2 million, after deducting placement agents fees and the payment of other estimated offering expenses associated with the offering that are payable by the Company. At issuance, the aggregate fair value of the warrant liabilities exceeded the net proceeds received in the transaction. The Company needed the net proceeds in order to continue to run operations. Accordingly, the Company recognized a loss on issuance of warrants of approximately $2.3 million in its consolidated statement of operations for the year ended December 31, 2024. This amount reflects the excess of the fair value of the warrant liabilities over the residual proceeds allocable to the other securities issued in the transaction. Subsequently, the warrant liabilities will continue to be remeasured at fair value through earnings until they are exercised, expire, or are otherwise settled. After shareholder approval on January 30, 2025, the strike price and the number of equity shares are now fixed. Therefore, in accordance with ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the consolidated balance sheet as of December 31, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025. In addition, approximately $1.7 million of offering-related issuance costs attributable to the warrant liabilities were recorded as expense in the period. On April 23, 2024, the Company entered into an underwritten Agreement with Aegis Capital Corp. (Aegis), pursuant to which Aegis acted as the Companys 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 $0.15. 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 Company determined the fair value of the Series A and Series B warrants using the Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuers equity shares in the warrant agreements. 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. **At the Market Equity Financing** **** 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 Companys 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. As of December 31, 2025, a total of 935,114 shares of common stock were sold through Aegis Capital Corp. under the Sales Agreement. As of December 31, 2025, the Company has received net proceeds of $5,472,691 after payment of commission fees of $173,341 and other related expenses of $131,990. F-21 **** **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 $4,375,000 (the Notes), and received proceeds before expenses of $3,500,000. The Notes matured on February 12, 2025, with 20% interest rate. As consideration for entering into the SPA, we issued a total of 2,701 shares of common stock of the Company to the Purchasers on November 13, 2024. The common stock and the Notes were recorded at the relative fair values in accordance with ASC 470-20-25-2. The placement agent fee and other offering expenses were allocated based on the aforementioned fair values as a reduction to the carrying amount of the debt and a reduction of the equity in accordance with ASC 505-10. The amortization of the debt discount and issuance costs was recorded in interest income (expense) on the consolidated statement of operations. As of December 31, 2024, the Notes were paid in full. **Common Stock Warrants** **** The following warrants were outstanding as of December 31, 2025, each of which is exercisable on a one-for-one basis for shares of the Companys common stock (i.e., one warrant for one share). All warrants 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 Companys 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. In addition, on March 31, 2025, the Company reclassified the Series A warrants from liability to equity upon determining that the warrants no longer required liability classification. | Securities into which warrants are convertible | | Warrants outstanding | | | Exercise Price | | | Expiration Date | | Fair value | | | | Common stock (Initial Public Offering) | | | 9 | | | $ | 40,650 | | | October 2026 | | $ | 170,397 | | | | Common stock (Private Placement) | | | 426 | | | $ | 140,625 | | | April 2027 | | | 6,071,114 | | | | Common stock (Series A) | | | 517,598 | | | $ | 48.30 | | | January 2030 | | | 7,634,428 | | | | Total | | | 518,033 | | | | | | | | | $ | 13,875,939 | | | 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 Companys 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) | | | 9 | | | $ | 40,650 | | | October 2026 | | $ | 170,397 | | | | Common stock (Private Placement) | | | 426 | | | $ | 140,625 | | | April 2027 | | | 6,071,114 | | | | Common stock (Series A) | | | 277,778 | | | $ | 90 | | | January 2030 | | | 6,581,789 | | | | Common stock (Series B) | | | 82,816 | | | $ | 301.875 | | | July 2027 | | | 21,122,138 | | | | Total | | | 361,029 | | | | | | | | | $ | 33,945,438 | | | The Company accounts for warrants in accordance with ASC 480,*Distinguishing Liabilities from Equity*, depending on the specific terms of the warrant agreement. The Companydetermined the fair value of the Initial Public Offering and Private Placement warrantsusing 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. F-22 The Company used the following assumptions for December 31, 2025 and 2024: | | | Initial Public Offering Warrants(Oct 2021) | | | Private Placement Warrants (Apr 2022) | | | | Fair value of underlying securities | | $ | 2.88 | | | $ | 1.37 | | | | Expected volatility | | | 51.0 | % | | | 45.0 | % | | | Expected term (in years) | | | 5.0 | | | | 5.0 | | | | Risk-free interest rate | | | 1.13 | % | | | 2.92 | % | | 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. As such, the Series A warrants were reclassified to equity and remeasured utilizing the Black Scholes model with the following assumptions: | | | Series A Warrants | | | | Fair value of underlying securities | | $ | 14.75 | | | | Expected volatility | | | 183.38 | % | | | Expected term (in years) | | | 4.96 | | | | Risk-free interest rate | | | 4.30 | % | | 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 | | $ | 6.01 32.19 | | | | Expected volatility | | | 162.99 190.53 | % | | | Expected term (in years) | | | 2.46 2.49 | | | | Risk-free interest rate | | | 4.18 4.30 | % | | 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 issuers 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 | | $ | 0.85 | | | $ | 0.85 | | | | Expected volatility | | | 161.78 | % | | | 161.78 | % | | | Expected term (in years) | | | 5.0 | | | | 5.0 | | | | Risk-free interest rate | | | 4.29 | % | | | 4.29 | % | | F-23 **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 these stock dividends. The following table summarizes the computation of basic and diluted loss per share: | | | Years Ended December 31, | | | | | | 2025 | | | 2024 Restated | | | | Net loss attributable to common stockholders | | $ | (23,469,273 | ) | | $ | (33,335,579 | ) | | | | | | | | | | | | | | Basic and diluted weighted average common shares outstanding | | | 4,540,481 | | | | 13,221 | | | | | | | | | | | | | | | Loss per share: | | | | | | | | | | | Basic and diluted | | $ | (5.17 | ) | | $ | (2,521.41 | ) | | 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. Unless otherwise expressly provided in this Annual Report, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents set forth herein relating to our common stock have been adjusted to give effect to a reverse stock split of our common stock in a ratio of 1-for-100 effected on July 3, 2024 and 1-for-150 effected on February 18, 2025. **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 awards 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 consolidated statements of stockholders equity. The fair value of the Companys 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 four years and have a contractual term of ten years. 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 Companys common stock. Because there was no public market for Cyngns 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 Companys 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. | | F-24 | | Expected volatility. Because the Companys 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 zero, as the Company does not currently intend to declare dividends in the foreseeable future. | | **** **Equity Incentive Plans** In February 2013, the Companys 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 Companys 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 Companys 2021 Equity Incentive Plan to increase the number of shares authorized for issuance by 334 shares of common stock. In June 2024, the shareholders of the Company approved an amendment to allow an annual increase to the 2021 Plan equal to the least of (i) 15% of the outstanding common stock on a fully diluted basis as of the end of the Companys immediately preceding fiscal year, or (ii) such lesser amount as determined by the Board. In December 2025, the shareholders of the Company approved an amendment to the Companys 2021 Equity Incentive Plan to increase the number of shares authorized for issuance by 4,000,000 shares of common stock. As of December 31, 2025 and December 31, 2024, approximately 55,770 and 614 shares of common stock were reserved and available for issuance under the 2021 Plan, respectively. Options issued under the Plans generally vest based on continuous service provided by the option holder over a four-year period. Compensation expense related to these options is recognized on a straight-line basis over the four-year period based upon the fair value at the grant date. The following table summarizes information about the Companys stock options outstanding as well as stock options vested and exercisable as of December 31, 2025, and activity during the year end then ended: | | | Shares | | | Weighted- average exercise price | | | Weighted- average remaining contractual term (years) | | | Aggregate intrinsic value | | | | Outstanding as of December 31, 2024 | | | 1,151 | | | $ | 14,665.36 | | | | 7.37 | | | $ | - | | | | Granted | | | - | | | | - | | | | | | | | - | | | | Exercised | | | - | | | | - | | | | | | | | - | | | | Cancelled/forfeited | | | (227 | ) | | | 19,438.45 | | | | | | | | | | | | Outstanding as of December 31, 2025 | | | 924 | | | $ | 13,475.78 | | | | 4.41 | | | $ | - | | | | Vested and expected to vest at December 31, 2025 | | | 924 | | | $ | 13,475.78 | | | | 4.41 | | | $ | - | | | | Vested and exercisable at December 31, 2025 | | | 764 | | | $ | 13,264.58 | | | | 3.95 | | | $ | - | | | F-25 The following table summarizes information about the Companys RSUs as of December 31, 2025, and activity during the year then ended: | | | Shares | | | Weighted- average grant date fair value | | | | Unvested shares at December 31, 2024 | | | 20 | | | $ | 21,957.75 | | | | RSUs granted | | | - | | | | - | | | | RSUs vested | | | (20 | ) | | | (21,957.75 | ) | | | RSUs forfeited | | | - | | | | - | | | | Unvested Shares at December 31, 2025 | | | - | | | $ | - | | | 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. There were no shares issued in 2025, therefore no fair value was determined. The weighted average per share grant-date fair value of options granted during the year ended December 31, 2025 and 2024 was $0 and $5.59, respectively. The following weighted average assumptions were used in estimating the grant date fair values in December 31, 2025 and 2024: | | | December 31, | | | | | | 2025 | | | 2024 | | | | Fair value of common stock | | $ | 0.00 | | | $ | 1,521.00 | | | | Expected term (in years) | | | - | | | | 6.02 | | | | Risk-free rate | | | 0 | % | | | 3.96 | % | | | Expected volatility | | | 0 | % | | | 54.76 | % | | | Dividend yield | | | 0 | % | | | 0 | % | | We recorded stock-based compensation expense from stock options and RSUs of approximately $1,620,992 and $2,449,191, during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, total stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $1.4 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 1.3 years. Income tax benefits recognized from stock-based compensation expense recognized for the year ended December 31, 2025 were immaterial due to cumulative losses and valuation allowances. F-26 **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** **** Domestic and international pre-tax loss consists of the following: | | | December 31, | | | | | | 2025 | | | 2024 Restated | | | | United States | | | (23,469,273 | ) | | | (33,335,579 | ) | | | International | | | - | | | | - | | | | Loss before income taxes | | | (23,469,273 | ) | | | (33,335,579 | ) | | For the years ended December 31, 2025 and 2024, income tax expense attributable to operations is immaterial. Income tax expense differed from the amount computed by applying the federal statutory income tax rate of 21% to pretax income for the years ended December 31, 2025 and 2024 as a result of the following: | | | December 31, 2025 | | | | | | Amount | | | Percent | | | | US Federal Statutory Tax Rate | | $ | (4,928,547 | ) | | | 21.00 | % | | | State and Local Income Taxes (1) | | | (211,513 | ) | | | 0.90 | | | | Foreign Tax Effects | | | - | | | | 0.00 | | | | Tax Credits | | | (1,010,247 | ) | | | 4.30 | | | | Change in Valuation Allowance | | | 4,421,241 | | | | (18.84 | ) | | | Nontaxable or Nondeductible Items | | | | | | | | | | | Section 162m Limitation | | | 262,808 | | | | (1.12 | ) | | | Warrant Revaluation | | | 248,946 | | | | (1.06 | ) | | | Other permanent differences | | | 236,687 | | | | (1.01 | ) | | | Change in unrecognized tax benefits | | | 303,074 | | | | (1.29 | ) | | | Other Reconciling Items | | | | | | | | | | | Deferred True Up | | | 622,366 | | | | (2.65 | ) | | | Other | | | 55,184 | | | | (0.24 | ) | | | Total | | $ | - | | | | 0.00 | % | | | (1) | For the year ended December 31, 2025, state and local income taxes in California made up the majority (greater than 50 percent) of the tax effect in this category. | | F-27 | | | December 31, 2024 | | | | Federal tax at statutory rate | | $ | (6,142,980 | ) | | | State income taxes | | | (218,456 | ) | | | Stock based compensation | | | 180,319 | | | | Foreign taxes | | | - | | | | Tax credits | | | (1,039,015 | ) | | | Nondeductible items | | | 26,970 | | | | Valuation allowance | | | 5,327,801 | | | | Deferred true up | | | 1,165,581 | | | | Rate change | | | 717,809 | | | | Other items | | | (18,029 | ) | | | Total | | $ | - | | | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 are as following: | | | December 31, | | | | | | 2025 | | | 2024 | | | | Deferred tax assets: | | | | | | | | | Net operating loss carryforwards | | $ | 41,820,615 | | | $ | 36,178,997 | | | | Research and development credits | | | 7,713,764 | | | | 7,006,591 | | | | Intangibles | | | 616,331 | | | | 880,481 | | | | Fixed assets | | | (365,067 | ) | | | (181,103 | ) | | | Stock based compensation | | | 27,813 | | | | 452,339 | | | | Accruals and reserves | | | 441,240 | | | | 281,367 | | | | Deferred revenue | | | 155,914 | | | | 21,751 | | | | Lease liability | | | 1,491,200 | | | | 69,025 | | | | Capitalized research costs | | | 3,761,293 | | | | 5,280,797 | | | | Other | | | 223 | | | | 8,639 | | | | Gross deferred tax assets | | | 55,663,326 | | | | 49,998,884 | | | | Valuation allowance | | | (54,355,211 | ) | | | (49,934,084 | ) | | | Total deferred tax assets | | | 1,308,115 | | | | 64,800 | | | | Deferred tax liabilities: | | | | | | | | | | | Right of use asset | | | (1,308,115 | ) | | | (64,800 | ) | | | Deferred project costs | | | | | | | - | | | | Total deferred tax liabilities | | | (1,308,115 | ) | | | (64,800 | ) | | | Net deferred tax assets | | $ | - | | | | - | | | Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Companys management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2025, the Company has provided a valuation allowance against the Companys U.S. net deferred tax assets. The net change in the valuation allowance for the years ended December 31, 2025 and 2024 was an increase of $4,421,241 and $5,327,800, respectively. As of December 31, 2025, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $161,732,697 and $120,845,916, respectively, which will begin to expire in 2034 and 2035 with $126,395,500 of our federal net operating loss carryforward lasting indefinitely. As of December 31, 2025, the Company had federal and state research credit carryforwards of approximately $7,526,906 and $4,421,211, respectively. The federal research credit carryforwards will begin to expire in 2033 while the California research credits carry forward have an indefinite life. F-28 The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an ownership change of a corporation. Accordingly, a companys ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (IRC Section 382). Events which may cause limitations in the amount of the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions. Effective for tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize such costs over a period of five or fifteen years. While it is possible that Congress may modify, defer, or repeal such provision, we have no assurance that the provision will be modified, deferred or repealed. This legislation has accelerated the utilization of our net operating losses in the U.S., but it has not impacted our current tax obligations. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, and the Consolidated Appropriations Act, 2021 were passed into law and provide additional economic stimulus to address the impact of the COVID-19 pandemic, including among other items, several U.S. income tax provisions related to, among other things, net operating loss carrybacks, alternative minimum tax credits, modifications to interest expense limitations, and an option to defer payroll tax payments for a limited period. In 2023, we assessed our eligibility to claim a refund of employer taxes available under the Employee Retention Credit provisions of the CARES Act. For the year ended December 31, 2023, we calculated eligible credits of approximately $763,624 provided by the CARES Act, which have been recognized as offsets to salaries costs in operating expenses. As of December 31, 2025 and 2024, the aggregate eligible credit amount has been accrued as a receivable on our consolidated balance sheets. The following table reflects changes in gross unrecognized tax benefits: | | | December 31, | | | | | | 2025 | | | 2024 | | | | Balance at beginning of year | | $ | 3,002,825 | | | $ | 2,545,189 | | | | Increase in balance related to tax positions taken during the current year | | | 303,074 | | | | 445,293 | | | | Increase in balance related to tax positions taken during prior years | | | - | | | | 12,343 | | | | Decrease in balance related to prior year tax positions | | | - | | | | - | | | | Decrease in balance related to settlement with tax authorities | | | - | | | | - | | | | Balance at end of year | | $ | 3,305,899 | | | $ | 3,002,825 | | | As of December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $3,305,899 and $3,002,825, respectively, which does not include any reserved interest or penalties. As of December 31, 2025, $3,305,899 of the total unrecognized tax benefits, if recognized, would have an impact on the Companys effective tax rate. The Company estimates that there will be no material changes in its uncertain tax positions in the next 12 months. The Companys has not recorded any interest or penalties related to its unrecognized tax benefits for 2025 or 2024. The Company files income tax returns in the U.S. federal and various state jurisdictions with varying statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2021 for federal purposes and 2020 for state purposes, except in certain limited circumstances. However, due to the fact that the Company had loss and credits carried forward in some jurisdictions, certain items attributable to technically closed years are still subject to adjustment by the relevant taxing authority through an adjustment to tax attributes carried forward to open years. The Companys NOL and credit carryforwards from all years may be subject to adjustment for three (or four for certain states) following the year in which utilized. The Company does not anticipate that any potential tax adjustments will have a significant impact on our financial position or results of operations. F-29 **12. Commitments and Contingencies** **** **Legal Proceedings** From time to time, the Company may become involved in legal proceedings arising in the ordinary course of 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. 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 $59,760in damages, plus interest, attorneys fees, and costs. The matter is in its early stages, and the Company is evaluating the claims and intends to respond accordingly. The Company has recorded an accrual of approximately $33,000 in connection with the foregoing matters . 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 employees internal reporting. To avoid litigation and minimize costs, the Company has agreed in principle, subject to final documentation, to a one-time payment of $80,000to settle a contract dispute, which payment is included in accrued expenses as of December 31, 2025. Under the terms of a settlement agreement with a former placement agent, the Company may be obligated to pay a maximum of $2.3million cash fee and issue370,114warrants to purchase shares of the Companys common stock in connection with the June 27 Offering and the June 26 Offering. However, the Company has informed the former placement agent that it does not believe there is a basis for these obligations. The Company has not received a response from the former placement agent and a resolution has not been reached as of the date of this filing. Since the Company is contesting the matter and it has not accrued any liability related to it. While an unfavorable outcome is reasonably possible, the Company is unable to estimate the possible loss at this time. 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 is inherently uncertain. To avoid litigation and minimize costs, the Company agreed in principle, subject to final documentation, to a one-time payment of $500,000 to settle a contract dispute, of which payment was included in accrued expenses as of December 31, 2024 and paid out in March 2025. There was no other material pending or threatened litigation against the Company that remains outstanding as of December 31, 2025. **13. Risks and Uncertainties** **** The Companys 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. | | F-30 **** 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** **** *ATM* **** As of March 19, 2026, the Company has sold 3,922,113 additional shares under the ATM Sales Agreement, for net proceeds of $9,166,427 after payment of commission and fees of $283,498. *Registered Direct Offering* On March 16, 2026, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering, 1,686,788 shares of its common stock, par value $0.00001 per share at a purchase price of $1.93 per share and 3,313,212 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $ of $1.92999 per Pre-Funded Warrant. 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 March 17, 2026. The Company received net proceeds of approximately $8.8 million from the offering, after deducting the estimated offering expenses payable by the Company of $0.85 million, including the placement agent fees. **15. Restatement of Previously Issued Audited Financial Statements** The Company restated its previously reported financial statements for each of the period ended December 31, 2024. The adjustment resulted in an increase to warrant liability by $12.7 million, a decrease in equity balance by $12.7 million and an adjustment from operating activities to financing activities on the statement of cash flow as of December 31, 2024. The Company recognized a loss on the issuance of the Warrants of approximately $2.3 million and offering-related issuance costs of approximately $1.7 million as of December 31, 2024. 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 | | | 15,012,361 | | | | 12,691,566 | | | | 27,703,927 | | | | Total liabilities | | | 18,501,699 | | | | 12,641,566 | | | | 31,143,265 | | | | Additional paid-in capital | | | 200,863,551 | | | | (8,558,271 | ) | | | 192,305,280 | | | | Accumulated deficits | | | (189,269,903 | ) | | | (4,083,295 | ) | | | (193,353,198 | ) | | | Total stockholders equity (deficit) | | | 11,593,650 | | | | (12,641,566 | ) | | | (1,047,916 | ) | | | Statement of Operations | | As Previously Reported | | | Adjustments | | | As Restated | | | | Warrant liability issuance costs | | | 0 | | | | (1,739,148 | ) | | | (1,739,148 | ) | | | Loss on issuance of warrants | | | 0 | | | | (2,344,147 | ) | | | (2,344,147 | ) | | | Total other income (expenses), net | | | (6,424,209 | ) | | | (4,083,295 | ) | | | (10,507,504 | ) | | | Net loss | | | (29,252,284 | ) | | | (4,083,295 | ) | | | (33,335,579 | ) | | | Net loss per share attributable to common stockholders, basic and diluted | | | (2,212.56 | ) | | | (308.85 | ) | | | (2,521.41 | ) | | F-31 | Statement of Stockholders Equity (Deficit) | | 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 | | | 20,972,722 | | | | (8,558,270 | ) | | | 12,414,453 | | | | Net loss | | | (29,252,284 | ) | | | (4,083,295 | ) | | | (33,335,579 | ) | | | Statement of Cash Flows | | As Previously Reported | | | Adjustments | | | As Restated | | | | Net loss | | | (29,252,284 | ) | | | (4,083,295 | ) | | | (33,335,579 | ) | | | Loss on issuance of warrants | | | 0 | | | | 2,344,147 | | | | 2,344,147 | | | | Warrant issuance costs | | | 0 | | | | 1,739,148 | | | | 1,739,148 | | | | Accrued expenses, lease liabilities, and other current liabilities | | | 10,642,938 | | | | (9,652,581 | ) | | | 990,357 | | | | Net cash used in operating activities | | | 9,493,500 | | | | 9,702,581 | | | | 19,196,081 | | | | Proceeds from public issuance of common stock and pre-funded warrants and exercise of pre-funded warrants | | | 22,369,285 | | | | (8,558,271 | ) | | | 13,811,014 | | | | Proceeds from issuance of warrants | | | 0 | | | | 18,260,852 | | | | 18,260,852 | | | | Net cash provided by financing activities | | | 26,584,380 | | | | 9,702,581 | | | | 36,286,961 | | | 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 $50,000 for issuance costs on an equity transaction, resulting in a decrease in accounts payable and an increase in additional paid-in-capital. The Company also corrected for an immaterial reallocation of proceeds from equity issuances among common stock, common warrants, and pre-funded warrants, related to a previous issuance in 2022, resulting in a reclassification within additional paid-in-capital sub-accounts of $88,024. This correction has no impact on total additional paid-in-capital, net loss, or total stockholders equity. The Company believes the adjustments were not material to any prior period, individually or in the aggregate. | Balance Sheet | | As Previously Reported | | | Adjustments | | | As Restated | | | | Accounts Payable | | | 297,778 | | | | (50,000 | ) | | | 247,778 | | | | Statement of Cash Flows | | As Previously Reported | | | Adjustments | | | As Restated | | | | Accounts Payable | | | 100,815 | | | | (50,000 | ) | | | 50,815 | | | F-32 **Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure** There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and their respective interim periods. Information required by this item is incorporated by reference to the Companys Current Report on Form 8-K filed on April 25, 2025. **Item 9A. Controls and Procedures** **Managements 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 December 31, 2025, the end of our fiscal year covered by this report. 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 Commissions 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 companys 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 December 31, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are not effective as a result of the two material weaknesses as described below. **Managements Report on Internal Control over Financial Reporting** Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility on estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with managements authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth in the report entitled *Internal Control - Integrated Framework* published by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Our management has concluded that, as of December 31, 2025, our internal control over financial reporting was not effective as a result of the two material weaknesses as described below. Our management reviewed the results of their assessment with our Board of Directors. **Inherent Limitations on Effectiveness of Controls** Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 47 **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 Companys 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 Companys 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, third and fourth quarters of 2025. Thus, the effectiveness of the new control could not be tested and the material weakness remains unremediated as of December 31, 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 consolidated financial statements included in this report fairly present, in all material respects, the Companys 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 registrants annual or interim financial statements will not be prevented or detected on a timely basis by the companys 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. There can be no assurance 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 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. *Managements 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. **Item 9B. Other Information** **Rule 10b5-1 Trading Arrangement** **** During the three months ended December 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K. **Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections** Not applicable. 48 **** **PART III** **Item 10. Directors, Executive Officers and Corporate Governance** The following table sets forth the names and ages of our directors and executive officers. Our Board of Directors is currently comprised of four members. Our Board is divided into three classes of directors, each serving a staggered three-year term. At each annual meeting of stockholders, a class of directors is elected for a three-year term to succeed the class whose term is then expiring. Executive officers serve at the discretion of the Board of Directors and are appointed by the Board of Directors. | Name | | Age | | Position | | Class of Director | | | Lior Tal | | 52 | | Chief Executive Officer, Chairman of the Board of Directors and Director | | I | | | Donald Alvarez* | | 61 | | Chief Financial Officer and Director | | I | | | Natalie Russell | | 30 | | Chief Financial Officer | | - | | | Martin Petraitis | | 71 | | Vice President of Sales | | - | | | Ben Landen* | | 38 | | Vice President of Business Operations | | - | | | Karen Macleod | | 62 | | Director | | II | | | James McDonnell | | 71 | | Director | | II | | | Ran Makavy | | 51 | | Director | | III | | | Colleen Cunningham* | | 63 | | Director | | III | | | * | Donald Alvarez, Ben Landen, and Colleen Cunningham departed the Company in 2025. | | The principal occupations and business experience for the past five years (and, in some instances, for prior years) of each of our directors and executive officers are as follows: **Lior Tal** Mr. Tal has served as the Companys Chief Executive Officer and a Director since October 2016. From June 2016 to October 2016, Mr. Tal served as the Companys Chief Operating Officer. Prior to joining the Company, Mr. Tal was the director of international growth and partnerships at Facebook where he worked from April 2011 to June 2016. Mr. Tal co-founded Snaptu (acquired by Facebook) in September 2007 and was the vice president of business development until May 2011. During his time at Snaptu, Mr. Tal helped grow the user base from launch to tens of millions of users. Prior to co-founding Snaptu, Mr. Tal was a partner at Barzam, Tal, Lerer Attorneys at law & Patent attorneys from March 2004 to August 2007. Mr. Tal has also held leadership roles at Actimize (acquired by NICE), DiskSites (acquired by EMC), and Odigo (acquired by Comverse). Mr. Tal holds an LLB in Law and a BA in Business Management from Reichman University and an LLM in Law from Tel Aviv University. Mr. Tals executive and technology industry experience qualify him to serve on the Board. **Natalie Russell** Mrs. Russell has served as the Companys Chief Financial Officer since August12, 2025. She previously served as the Companys Interim Chief Financial Officer from June6, 2025 to August12, 2025. Mrs.Russell joined the Company in March2023 as Director of Accounting. Prior to joining the Company, Mrs.Russell was a Technical Accounting Manager at SOAProjects, Inc., from December2022 to March2023, where she specialized in technical accounting research and financial reporting for clients in the technology and life sciences industries. Mrs.Russell began her career in the audit and assurance practice of Ernst& Young from September2017 to December2022. Mrs.Russell is a Certified Public Accountant in the state of California. She holds a Bachelor of Science in Business Administration from the University of Dayton. 49 **Martin Petraitis** Mr.Petraitis has served as the Companys Vice President of Sales since November2024. On May6, 2025, the Companys Board named Mr.Petraitis as a named executive officer. Mr.Petraitis brings over two decades of leadership experience in scaling revenue within technology-drivensectors, including automation, SaaS, and manufacturing systems. Prior to joining the Company, Mr.Petraitis led sales at Heartland Automation from 2020 to 2024, where he successfully pivoted the company from product-basedofferings to high-value, solutions-focusedservices in the autonomous mobile robotics sector. His leadership in prior roles includes executive positions at Clearpath Robotics/OTTO Motors, from 2016 to 2020, Segue Manufacturing Services, from 2012 to 2016 and Brooks Automation from 1998 to 2006, where he scaled revenue to over $210M by championing strategic accounts and consultative sales methods. Mr.Petraitis holds an MSME and a BSME in mechanical engineering from the University of Colorado Boulder. **Non-Executive Directors** **** **Karen Macleod** Ms. Macleod has served as a member of the Board since July 2021. Ms. Macleod was the Founder and CEO of The Arete Group, LLC from 2015 to 2021. Ms. Macleod was the president of Tatum, Randstand Holdings NV Company from 2011 to 2014. Ms. Macleod was the president of Resources Connection, Inc. North America from 2004 to 2009 and previously served in other capacities after joining the company in 1996. From 1985 to 1994, Ms. Macleod was a senior manager at Deloitte. Ms. Macleod additionally has served on the board of directors of Track Group Inc. (OTCQX TRCK) since 2016 and currently chairs the Audit Committee. She also has served on the board of the Lakeland Hills YMCA since 2020 and currently serves on the Executive Committee and as Chair of the Finance Committee. Additionally, since 2024 Ms. Macleod has served on the Board and is Vice President of the Mountain Lakes Garden Club. Ms. Macleod served as a member of the board of directors and a member of the audit committee of the FWA of New York from 2018 to 2021. From 1998 to 2009, Ms. Macleod served on the board of directors of RGP (NASDAQ RGP). From 2006 to 2013, Ms. Macleod served on the board of directors of Overland Solutions. Ms. Macleod holds a B.A. in Business Economics from University of California, Santa Barbara. Ms. Macleods audit experience, Executive Leadership positions, prior and current board experience and her role serving on audit committees qualify her to serve on the Board. **** **James McDonnell** Mr. McDonnell has served as a member of the Board since September 2021. Mr. McDonnell was Senior Vice President of Sales and Marketing for Vispero, from 2017 to 2022. Mr. McDonnell was VP of sales at Honeywell from 2013 to 2017. Mr. McDonnell served on the board of Asetek from 2014 to 2019. Mr. McDonnell was SVP Sales & Marketing at Intermec from 2010 to 2013. Prior to this, Mr. McDonnell was an SVP and served in many executive sales and marketing roles at Hewlett-Packard from 1983 to 2009. Mr. McDonnell began his career at the General Electric Company from 1977 to 1983. Mr. McDonnell has a BS degree in Electrical engineering from Villanova University. Mr. McDonnells prior experiences in sales and marketing leadership within various technology companies and his experience in industrial markets qualify him to serve on the Board. **Ran Makavy** Mr. Makavy is a global business leader, investor, and professional board director with approximately 30 years experience in the engineering and product management arena. In 2007, he started a company called Snaptu and sold it to Facebook in 2011, led growth in emerging markets at Facebook, started internet.org, built the growth team at Lyft, then led the tech org and the ridesharing business and took the company public in 2019. He has invested in over sixty startup companies since 2013. Mr. Makavy currently serves as lead investor to the Ran Makavy Angel Investment Fund, and as an advisor to Passport Global, Dimension, Fora Travel, Argo, and Honeybook. Mr. Makavys prior board experiences and in business leadership within various ventures qualify him to serve on the Board. **** **Board Composition** Our board currently consists of four directors, Lior Tal, Ran Makavy, Karen Macleod, and James McDonnell. Mr. Makavy, Ms. Macleod and Mr. McDonnell are *independent directors* within the meaning of the Listing Rules (the Nasdaq Listing Rules) of the Nasdaq Stock Market. 50 **Family Relationships** No family relationships exist between any of our officers or directors. **Role of Board of Directors in Risk Oversight Process** The board of directors has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting by the Audit Committee. The purpose of the Audit Committee is to assist the board of directors in fulfilling its fiduciary oversight responsibilities relating to (1) the integrity of the Companys financial statements, (2) the effectiveness of the Companys internal control over financial reporting, (3) the Companys compliance with legal and regulatory requirements, and (4) the independent auditors qualifications and independence. Through its regular meetings with management, including the finance, legal and internal audit functions, the Audit Committee reviews and discusses all significant areas of our business and summarizes for the board of directors all areas of risk and the appropriate mitigating factors. In addition, our board of directors receives periodic detailed operating performance reviews from management. **Director Independence** The Board evaluates the independence of each nominee for election as a director of our Company in accordance with the Nasdaq Listing Rules. Pursuant to these rules, a majority of our Board must be independent directors within the meaning of the Nasdaq Listing Rules, and all directors who sit on our Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee must also be independent directors. **Committees of the Board of Directors** Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. **Audit Committee** The Audit Committee currently consists of Ran Makavy, Karen Macleod and James McDonnell, with Ms. Macleod serving as the Chairperson. Each of Mr. Makavy, Ms. Macleod and Mr. McDonnell, is independent under the rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market applicable to audit committee members. Our board of directors has determined that Ms. Macleod qualifies as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq Stock Market. As a result of Colleen Cunninghams resignation from our board of directors effective December 31, 2025, the Audit Committee does not currently meet Nasdaqs requirement that the audit committee be comprised of at least three independent directors. The Company is within the applicable cure period provided under Nasdaq Listing Rule 5605(c)(4) and intends to regain compliance within the prescribed timeframe. Our Audit Committee has the responsibility for, among other things, (i) selecting, retaining and overseeing our independent registered public accounting firm, (ii) obtaining and reviewing a report by independent auditors that describe the accounting firms internal quality control, and any materials issues or relationships that may impact the auditors, (iii) reviewing and discussing with the independent auditors standards and responsibilities, strategy, scope and timing of audits, any significant risks, and results, (iv) ensuring the integrity of the Companys financial statements, (v) reviewing and discussing with the Companys independent auditors any other matters required to be discussed by PCAOB Auditing Standard No. 1301, (v1) reviewing, approving and overseeing any transaction between the Company and any related person and any other potential conflict of interest situations, (vii) overseeing the Companys internal audit department, (v) reviewing, approving and overseeing related party transactions, and (viii) establishing and overseeing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters. **Compensation Committee** **** The members of our Compensation Committee are Mr. Makavy, Ms. Macleod and Mr. McDonnell, with Mr. McDonnell serving as the Chairperson. Our Compensation Committee has the responsibility for, among other things, (i) reviewing and approving the chief executive officers compensation based on an evaluation in light of corporate goals and objectives, (ii) reviewing and recommending to the Board the compensation of all other executive officers, (iii) reviewing and recommending to the Board incentive compensation plans and equity plans, (iv) reviewing and discussing with management the Companys Compensation Discussion and Analysis and related information to be included in the annual report on Form 10-K and proxy statements, and (v) reviewing and recommending to the Board for approval procedures relating to Say on Pay Votes. 51 **Nominating and Corporate Governance Committee** The members of our Nominating and Corporate Governance Committee are Mr. Makavy, Ms. Macleod and Mr. McDonnell, with Mr. Makavy serving as the Chairperson. Our Nominating and Corporate Governance Committee has the responsibility relating to assisting the Board in, among other things, (i) identifying and screening individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors, (ii) recommending to the Board the approval of nominees for director, (ii) developing and recommending to our board of directors a set of corporate governance guidelines, and (iv) overseeing the evaluation of our board of director. **Code of Business Conduct and Ethics** Our board of directors has adopted a Code of Business Conduct and Ethics (the Code). The Code applies to all of our directors, officers and employees. We have made the Code available on our website https://investors.cyngn.com/corporate-governance-documents/. We intend to disclose future amendments to, or waivers of, our Code, as and to the extent required by SEC regulations, at the same location on our website identified above or in public filings. **Indemnification Agreements** On October 29, 2021, the Board of Directors entered into indemnification agreements with each of its directors and executive officers (the D&O Indemnification Agreements). The D&O Indemnification Agreements provide that the Corporation will indemnify each of its directors, executive officers, and such other key employees against any and all expenses incurred by that director or executive officer because of his or her status as one of the Corporations directors or executive officers, to the fullest extent permitted by Delaware law and the Corporations amended and restated certificate of incorporation. In addition, the D&O Indemnification Agreements provide that, to the fullest extent permitted by Delaware law, the Corporation will advance all expenses incurred by its directors, executive officers, and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer, or key employee. **Limitation of Liability and Indemnification of Officers and Directors** Our certificate of incorporation, as amended and restated, limits the liability of directors to the maximum extent permitted by Delaware General Corporation Law (the DGCL). The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors. Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by law, and may indemnify employees and other agents. Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding. Our bylaws, subject to the provisions of the DGCL contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he or she reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act of 1933 as amended, or the Securities Act, may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. The limitation of liability and indemnification provisions in our bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders. Our results of operations and financial condition may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification. **Involvement in Certain Legal Proceedings** Our directors and executive officers have not been involved in any of the following events during the past ten years: | 1. | any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | | | 2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | | | 3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; | | 52 | 4. | being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | | | 5. | being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | | | 6. | being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | | **Insider Trading Policy** The Company has adopted an insider trading policy governing the purchase, sale, and/or other disposition of its securities by its directors, officers, employees and independent contractors that the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Company. Directors, executive officers, employees and other related persons may not buy, sell or engage in other transactions in the Companys shares while aware of material non-public information; buy or sell securities of other companies while aware of material non-public information about those companies that they became aware of as a result of business dealings between the Company and those companies; or disclose material non-public information to any unauthorized persons outside of the Company. The policy also restricts trading and other transactions for a limited group of Company employees (including executives and directors) to defined window periods that follow the Companys quarterly earnings releases. **Item 11. Executive Compensation** The following table provides information regarding the compensation earned by or paid to our named executive officers with respect to the years ended December 31, 2025 and 2024. **** **Summary Compensation Table** **** | Name and Principal Position | | Fiscal Year | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Award ($) | | | Non-Equity Incentive Plan Compensation | | | Non-Qualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | | | Lior Tal | | 2025 | | $ | 640,000 | | | $ | 2,440,000 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 2,080,000 | | | | CEO | | 2024 | | | 500,000 | | | | 1,000,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,500,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Natalie Russell(1) | | 2025 | | $ | 250,000 | | | $ | 20,833 | | | $ | | | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 270,833 | | | | CFO | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Martin Petraitis(2) | | 2025 | | $ | 200,000 | | | $ | 30,000 | | | $ | | | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 230,000 | | | | Vice President of Sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Donald Alvarez(3) | | 2025 | | $ | 136,154 | | | $ | | | | $ | | | | | - | | | $ | - | | | $ | - | | | $ | 150,000 | | | $ | 286,154 | | | | Former CFO | | 2024 | | | 300,000 | | | | 60,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 360,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ben Landen(4) | | 2025 | | $ | 196,346 | | | | | | | $ | - | | | | - | | | $ | - | | | $ | - | | | $ | 150,000 | | | $ | 346,346 | | | | Former VP of Business Development | | 2024 | | | 250,000 | | | | 50,000 | | | | - | | | | 24,800 | | | | - | | | | - | | | | - | | | | 324,800 | | | | (1) | Mrs. Russell was appointed as the Companys Chief Financial Officer on August 12, 2025. She previously served as the Companys Interim Chief Financial Officer from June 6, 2025 to August 12, 2025 and Director of Accounting from March 2023 to June 2025. | | | (2) | Mr. Petraitis was named an executive officer on May 6, 2025. | | | (3) | Mr. Alvarez resigned as the Companys Chief Financial Officer effective June 6, 2025. | | | (4) | Mr. Landen resigned as VP of Business Development effective October 24, 2025. | | 53 **** **Executive Employment Agreements** **** **Lior Tal** On January1, 2022, we entered into an employment agreement with our Chief Executive Officer, Lior Tal, which agreement superseded and replaced the offer letter entered into by and between the Company and Mr.Tal on April17, 2016. Pursuant to the Employment Agreement, as compensation for his services as Chief Executive Officer of the Company, Mr. Tal will receive: (1) a salary of $500,000 per annum (the Base Salary) and commensurate benefits; (2) eligibility, subject to Mr. Tals continued employment with the Company, to earn an annual performance based bonus in the target of 60% of his Base Salary; (3) eligibility, also subject to Mr. Tals continued employment with the Company, to participate in the Companys 2013 Equity Incentive Plan, the Company 2021 Incentive Plan, or any successor plan, subject to the terms of such plan; and (4) entitlement, also subject to Mr. Tals continued employment with the Company, to reimbursement for all reasonable and necessary out-of-pocket business, entertainment, and travel expenses incurred by Mr. Tal in connection with the performance of Mr. Tals duties as the Companys Chief Executive Officer and the Companys expense reimbursement policies and procedures. On February 24, 2025, the Compensation Committee of the Board of Directors of the Company approved a payment of $300,000 as a bonus, in accordance with Mr. Tals Employment Agreement. Additionally, the Compensation Committee approved a discretionary bonus payment of $700,000 to Mr. Tal. In the event the Company terminates Mr. Tals employment without Cause (as defined in the Employment Agreement) or if Mr. Tal resigns for Good Reason (as defined in the Employment Agreement) other than during the Protection Period (as defined below), and provided Mr. Tal complies with certain other conditions outlined in the Employment Agreement, the Company will pay Mr. Tal severance, as outlined in the Employment Agreement, comprising of: (a) the continued payment of his base salary for the first twelve months following the termination date, payable in accordance with the Companys standard payroll procedures; (b) a lump sum payment equal to the pro-rated amount of Mr. Tals target annual bonus for the year of termination; (c) reimbursement of Mr. Tal for medical, vision and dental coverage under Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or comparable state law (COBRA) for the first twelve months after the termination date; and (d) acceleration of the vesting of each of the Mr. Tals then-outstanding time-based equity awards as to 25% of the then-unvested shares subject to each such award, effective as of the termination date. In addition, pursuant to the Employment Agreement, if immediately prior to, on or within 12 months after a Change of Control (the Protection Period), the Company terminates Mr. Tals employment without Cause (as defined in the Employment Agreement), or if Mr. Tal resigns for Good Reason (as defined in the Employment Agreement) during the Protection Period, the Company will pay Mr. Tal severance, as outlined in the Employment Agreement, comprising of: (a) a lump sum payment equal to eighteen months of Mr. Tals base salary as in effect on the date of his termination; (b) a lump sum payment equal to 150% of Mr. Tals target annual bonus as in effect on the date of his termination, payable on the 60th day following the termination date; (c) reimbursement to Mr. Tal for medical, vision and dental coverage under COBRA for the first eighteen months after the termination date; and (d) acceleration of the vesting of each of the Mr. Tals then-outstanding time-based equity awards in full, effective as of the termination date. Mr. Tals receipt of any severance payments or benefits will be subject to Mr. Tals continuing to comply with the terms of that certain Confidential Information Agreement and the provisions of the Employment Agreement. On March 6, 2025, the Company entered into a letter agreement with Lior Tal, its CEO (the Letter Agreement), amending the Employment Agreement. Pursuant to the Letter Agreement, Mr. Tals Employment Agreement was amended to provide for (i) a modification of his annual base salary to $640,000 effective January 1, 2025, (ii) a modification of his annual bonus to be eligible to earn an annual performance bonus in the target amount of up to $640,000 (the Annual Bonus), (iii) Mr. Tal shall be eligible to earn a special bonus for performance for 2025 of up to $1,000,000 (2025 Special Bonus), payable in January 2026, and (iv) Mr. Tal shall be eligible to earn a time-based 2025-2026 special bonus of up to $1,600,000 (the 2025-2026 Special Bonus), payable in eight (8) quarterly installments of $200,000, with the first installment to be paid following Q1 2025, subject to such terms included in the Letter Agreement. Unless otherwise agreed in writing by the parties in a mutually executed amendment to the Employment Agreement, no special bonuses shall be paid after 2026, and the non-payment of any special bonus after 2026 shall not constitute Good Reason within the meaning of the Employment Agreement. Neither the 2025 Special Bonus nor the 2025-2026 Special Bonus shall be included in the Severance or the CIC Severance as such terms are defined in the Employment Agreement. 54 **Natalie Russell** On August 12, 2025, we entered into an offer letter (the Offer Letter) with our Chief Financial Officer. 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 Companys performance and her individual performance, subject to the Companys policy for paying bonus and the sole discretion of the Company. In connection with Mrs. Russells 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 officers employment without Cause (as defined in the Severance Agreement), or if the officer terminates its 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 Companys outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Companys assets. In the event that, the Company terminates the officers 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 officers then current base salary, plus (ii) the annual bonus, pro-rated based on the officers 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 officers 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 officers 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 officers termination of employment. All of the officers severance benefits are subject to her execution of a release in a form reasonably acceptable to the Company. **Ben Landen** On September 19, 2019, we entered into an immediately effective offer letter with Mr. Ben Landen. Pursuant to Mr. Landens offer letter, he will serve as our Senior Director of Business and Corporate Development. Mr. Landens offer letter shall continue until terminated by either the Company or Mr. Landen. Pursuant to Mr. Landens offer letter, he will receive (i) an annual base salary of $220,000, and (ii) an option to purchase 150,000 shares of the Companys common stock at an exercise price of $0.23 per share, which is based on the Board of Directors-approved fair market valuation as of March 31, 2019, as determined by an independent financial consultant. The option shall vest and become exercisable over a four-year period with 25% vesting on the one-year anniversary of Mr. Landens employment start date and the balance vesting equally after each additional one-month period for continuous service completed over the following 36 months, subject to and in accordance with the terms of the Companys 2013 Stock Incentive Plan. Mr. Landens options expire in November, 2029. The offer letter contains customary provisions relating to vacation, benefits, and non-compete. Subsequent to Mr. Landens offer letter on December 24, 2021, his annual base salary was increased to $250,000. Mr. Landens employment agreement terminated effective October 24, 2025. *Severance and Change of Control Agreements* We have entered into a Severance and Change of Control Agreement (the Severance Agreement) with Ben Landen, our Vice-President of Business Development. The Severance Agreement provides for a lump sum payment to the officer if the Company terminates the officers employment without Cause (as defined in the Severance Agreement), or if the officer terminates its 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 Companys outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Companys assets. 55 In the event that, other than during a Change of Control Period (as defined below), the Company terminates the officers employment without Cause (as defined in the Severance Agreement), or if the officer terminates his employment for Good Reason (as defined in the Severance Agreement), or in the event of a qualifying 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) (the Change of Control Period), then the Company shall pay the officer a lump sum amount equal to (i) six months of the officers then current base salary, plus (ii) the annual bonus the officer is eligible to receive for the calendar year in which the officers termination occurs assuming Company performance is achieved at target (100% for both Company and personal performance) and pro-rated based on the officers termination date, which will be payable within the period of time set forth in the Severance Agreement following the termination of employment, and (iii) 6 months of COBRA premium payments based on the coverages in effect as of the date of the officers termination of employment. All of the officers severance benefits are subject to his execution of a release in a form reasonably acceptable to the Company. Mr. Landens severance agreement terminated effective October 24, 2025. **** **Donald Alvarez** On May 28, 2021, we entered into an offer letter with Mr. Donald Alvarez, effective June 1, 2021. Pursuant to Mr. Alvarezs offer letter, he serves as our Chief Financial Officer. Mr. Alvarezs offer letter shall continue until terminated by either the Company or Mr. Alvarez. Pursuant to Mr. Alvarezs offer letter, he will receive (i) an annual base salary of $250,000 for his first year of employment, which annual base salary will increase to $300,000 upon the completion by the Company of an initial public offering, and (ii) a stock option to purchase 400,000 shares of the Companys common stock at an exercise price of $2.88 per share, which option shall vest and become exercisable over a four-year period with 25% vesting on the one-year anniversary of Mr. Alvarezs employment start date and the balance vesting equally after each additional one-month period for continuous service completed over the following 36 months, subject to and in accordance with the terms of the Companys 2013 Stock Incentive Plan. Mr. Alvarezs options will expire in June 2031. The offer letter contains customary provisions relating to vacation, benefits, and non-compete. Mr. Alvarezs employment agreement terminated effective June 6, 2025. **** *Severance and Change of Control Agreement* On May 15, 2024, we entered into a Severance and Change of Control Agreement (the Severance Agreement) with Donald Alvarez, the Chief Financial Officer of the Company. The Severance Agreement provides for a lump sum payment to the officer if the Company terminates the officers employment without Cause (as defined in the Severance Agreement), or if the officer terminates its 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 Companys outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Companys assets. In the event that, the Company terminates the officers employment without Cause (as defined in the Severance Agreement), or if the officer terminates his 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 officers then current base salary, plus (ii) the annual bonus, pro-rated based on the officers 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 officers 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 officers 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 officers termination of employment. All of the officers severance benefits are subject to his execution of a release in a form reasonably acceptable to the Company. Mr. Alvarezs severance agreement terminated effective June 6, 2025. 56 **** **Outstanding Equity Awards at Fiscal Year-End** The following table discloses information regarding outstanding equity awards granted or accrued as of December 31, 2025, for our named executive officers. | Outstanding Equity Awards | | | | | Option Awards | | | Stock Awards | | | Name | | Number of Securities Underlying Unexercised Options (#) Vested | | | Number of Securities Underlying Unexercised Options (#) Unvested | | | Option Exercise Price ($) | | | Option Expiration Date | | Number of Shares or Units of Stock that have not Vested (#) | | | Market Value of Shares or Units of Stock that have not Vested ($) | | | | Lior Tal (Chief Executive Officer) | | | 227 | | | | - | | | $ | 1,950 | | | 4/5/27; 3/22/28 | | | - | | | | - | | | | | | | 134 | | | | - | | | $ | 3,300 | | | 5/30/28 | | | - | | | | - | | | | | | | 86 | | | | 21 | | | $ | 43,200 | | | 7/25/31 | | | - | | | | - | | | | | | | 111 | | | | 41 | | | $ | 14,663 | | | 11/7/32 | | | - | | | | - | | | | | | | 33 | | | | 29 | | | $ | 3,758 | | | 11/6/33 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Natalie Russell Chief Financial Officer) | | | 2 | | | | 1 | | | $ | 12,602 | | | 8/07/33 | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **** **Compensation of Directors** Effective as of the first quarter of 2026, each independent, non-employee director will receive annual cash compensation of $250,000, payable in equal quarterly installments of $62,500, in lieu of the prior cash and equity components of the director compensation program. The all-cash structure will remain in effect until the Board, upon recommendation of the Compensation Committee of the Board, determines that equity-based compensation is again practicable. Previously, each of our independent directors received annual cash compensation of $35,000. In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee received an annual compensation of $20,000, $20,000 and $10,000, respectively; and the lead independent director received an annual cash compensation of $15,000. Each independent director received (i) an initial award of $270,000 in restricted stock units of the Company to which shall be awarded on May 1st of each fiscal year and which will vest monthly over three (3) years, and (ii) an annual award of $180,000 in restricted stock units of the Company, which shall be granted on May 1st of each fiscal year and which will vest in its entirety one (1) year from the grant date. 57 The following table sets forth the summary compensation information (described above) for each of our non-employee directors for the fiscal year ended December 31, 2025: | DIRECTOR COMPENSATION | | | Name | | Fees Earnedor Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | | | Karen Macleod | | | 255,000 | | | | 193.20 | | | | - | | | | - | | | | - | | | | - | | | | 255,193.20 | | | | Colleen Cunningham | | | 55,000 | | | | 193.20 | | | | - | | | | - | | | | - | | | | - | | | | 55,193.20 | | | | James McDonnell | | | 260,000 | | | | 193.20 | | | | - | | | | - | | | | - | | | | - | | | | 260,193.20 | | | (1) Ms. Cunningham resigned as a member of the board of directors effective December 31, 2025. **** **Actions to Recover Erroneously Awarded Compensation** At no time during the last fiscal year was the Company required to prepare an accounting restatement that required recovery of an erroneously awarded compensation pursuant to our Clawback Policy. **Policies and Practices related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information (MNPI)** The Company has a strict policy of not issuing options or allowing its insiders to conduct stock trades at times, subject to any allowable trades that might occur pursuant to a 10b5-1 Trading Plan, where MNPI is known or a material transaction is anticipated to occur. Each insider and employee of the Company is required to read and sign the Companys Insider Trading Policy, which prescribes certain set periods that prohibit insider trading. Other than as established for black-out periods associated with our quarterly and annual financial statement filings, our executive management will also issue notices of black-out trading periods if they are aware of material transactions which they anticipate closing. The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards instead, each grant is considered on a case-by-case basis to align with the Companys strategic objectives and to ensure the competitiveness of our compensation packages. In determining the timing and terms of an equity award, the Board or the Compensation Committee may consider MNPI to ensure that such grants are made in compliance with applicable laws and regulations. The Boards or the Compensation Committees procedures to prevent the improper use of MNPI in connection with the granting of equity awards include oversight by legal counsel and, where appropriate, delaying the grant of equity awards until the public disclosure of such MNPI. The Company is committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of MNPI for the purpose of affecting the value of executive compensation. The Company regularly reviews its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve the best interests of the Company and its stockholders. In the year ended December 31, 2024, no options were granted to our named executive officers within four business days prior to, or one business day following, the filing or furnishing of a periodic or current report by us that disclosed MNPI. 58 **Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters** The following table sets forth certain information with respect to the beneficial ownership of our voting securities as of February, 2026 by (i) any person or group beneficially owning more than 10% of any class of voting securities; (ii) our directors, and; (iii) each of our named executive officers; and (iv) all executive officers and directors as a group as of the date of February, 2026. The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. Unless otherwise indicated, the address of all listed stockholders is c/o Cyngn Inc., 1344 Terra Bella Avenue, Mountain View, CA 94043. | Name of Beneficial Owner | | Common Stock Beneficially Owned | | | Percentageof Common Stock(1) | | | | Directors and Officers: | | | | | | | | | Lior Tal(2) | | | 682 | | | | * | | | | Natalie Russell(3) | | | 3 | | | | * | | | | Martin Petraitis | | | 0 | | | | * | | | | Karen Macleod(4) | | | 11 | | | | * | | | | James McDonnell(5) | | | 10 | | | | * | | | | All Executive Officers and Directors as a Group (5 persons) | | | 706 | | | | * | % | | | | | | | | | | | | | | Beneficial owners of more than 5%: | | | | | | | | | | | Entities affiliated with Empery Asset Management, LP. (6) | | | 1,375,000 | | | | 10.10 | % | | | (1) | We have based our calculation of the percentage of beneficial ownership on 13,608,281 shares of common stock outstanding on March 19, 2026. We have deemed shares of common stock subject to stock options that are currently exercisable or exercisable within 60 days of March 19, 2026 to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. | | | (2) | Includes 34 shares of common stock held directly and 586 shares of common stock issuable upon the exercise of stock options that are exercisable within 60 days of March 19, 2026. | | | (3) | Represents shares of common stock underlying 2 options to purchase shares of common stock of the Company which are vested and currently exercisable and shares underlying options which will become exercisable within 60 days of March 19, 2026. | | | (4) | Includes 9shares of common stock held directly, and 2 option to purchase shares of common stock of the Company which are vested and currently exercisable and shares underlying options which will become exercisable within 60days ofMarch 19, 2026. | | | (5) | Includes 9shares of common stock held directly, and 1 option to purchase shares of common stock of the Company which are vested and currently exercisable and shares underlying options which will become exercisable within 60days ofMarch 19, 2026. | | | (6) | Represents 1,375,000 issued pursuant to that certain Securities Purchase Agreement from a registered direct offering closed on March 17, 2026, to three funds affiliated with Empery Asset Management, LP (Empery), for which Empery exercises voting and investment authority with respect to such securities. The principal business address for Empery Asset Management, LP 1 Rockefeller Plaza, Suite 1205, New York, New York 10020. | | **Securities Authorized for Issuance under Equity Compensation Plans** **** The following table summarizes the equity compensation plans under which our securities may be issued as of December 31, 2025 and does not include grants made or cancelled and options exercised after such date. The securities that may be issued consist solely of shares of our Common Stock and all plans were approved by stockholders of the Company. | Plan Category | | Number of securitiestobe issued upon exercise of outstanding options, warrants and rights (a) | | | Weighted- average exercise price of outstanding options, warrants and rights (b) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | | | | Equity compensation plans approved by security holders | | | 924 | | | $ | 13,475.78 | | | | - | | | 59 **Item 13. Certain Relationships and Related Transactions, and Director Independence** Other than as set forth below or under Item 11 (Executive Compensation), there has not been, nor is there any proposed transactions, where we were or will be a party in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets as at the year-end for the last two completed fiscal years, and to which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest. **Amended and Restated Investor Rights Agreement** We are parties to that certain second amended and restated investor rights agreement dated December 24, 2014, entered into with our certain of our stockholders, including an entity with which a former director is affiliated. These stockholders are entitled to rights with respect to the registration of their shares following our initial public offering on October 22, 2021. **Policies and Procedures for Related Party Transactions** We have adopted a formal, written related party transactions policy that provides that transactions with directors, officers and holders of five percent or more of our voting securities and their affiliates, each a related party must be approved by our audit committee. Pursuant to this policy, the audit committee will have the primary responsibility for reviewing and approving or disapproving related party transactions, which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed the lesser of (i)$120,000 or (ii)one percent of the average of our total assets for the last two completed fiscal years, and in which a related person has or will have a direct or indirect material interest. For purposes of this policy, a related person will be defined as a director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members. **Director Independence** **** The Board evaluates the independence of each nominee for election as a director of our Company in accordance with the Nasdaq Listing Rules. Pursuant to these rules, a majority of our Board must be independent directors within the meaning of the Nasdaq Listing Rules, and all directors who sit on our Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee must also be independent directors. Our board currently consists of three directors, Lior Tal, Karen Macleod, and James McDonnell. Ms. Macleod and Mr. McDonnell are *independent directors* within the meaning of the Listing Rules of the Nasdaq Stock Market. **Item 14. Principal Accountant Fees and Services** The following table summarizes the fees billed by CBIZ CPAs P.C. and Marcum LLP for the fiscal years ended December 31, 2025 December 31, 2024, inclusive of out-of-pocket expenses. All fees described below were pre-approved by the audit committee. | | | Year Ended December 31, | | | | Fee Category | | 2025 | | | 2024 | | | | Marcum LLP | | | | | | | | | Audit fees(1) | | $ | - | | | $ | 154,440 | | | | Audit-related fees(2) | | | - | | | | 114,400 | | | | Total Marcum LLPfees | | $ | - | | | $ | 268,840 | | | | CBIZ CPAs P.C. | | | | | | | | | Audit fees(1) | | $ | 249,080 | | | $ | 124,800 | | | | Audit-related fees(2) | | | 37,250 | | | | 55,120 | | | | Total CBIZ CPAs P.C. fees | | $ | 286,330 | | | $ | 179,920 | | | | | | | | | | | | | | | Total fees | | $ | 286,330 | | | $ | 448,760 | | | | (1) | Audit fees consist of fees for professional services rendered in connection with the annual audit of our consolidated financial statements, the review of our quarterly condensed consolidated financial statements and consultations on accounting matters directly related to the audit. | | | (2) | Audit-related fees consist of fees for professional services rendered in connection with the submission of our Registration Statements on Form S-8, Form S-3, Form S-1 and engagement administration. | | **** 60 **PART IV** **Item 15. Exhibits, Financial Statement Schedules** | a) | Financial Statements | | | 1) | Financial statements for our Company are listed in the index under Item 8 of this document. | | | 2) | All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto. | | | b) | Exhibits | | | Exhibit Number | | Description | | | 3.1 | | Fourth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.1 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.2 | | Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.2 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.3 | | Second Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.3 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.4 | | Third Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.4 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.5 | | Fourth Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.5 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.6 | | Fifth Amended and Restated Certificate of Incorporation of Registrant incorporated by reference to Exhibit 3.6 to the Companys Quarterly Report on Form 10-Q filed with the SEC on November 19, 2021. | | | 3.7 | | Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation of the Registrant, incorporated by reference to Exhibit 3.8 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-275530) filed with the SEC on November 28, 2023. | | | 3.8 | | Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on July 9, 2024. | | | 3.9 | | Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation dated January 30, 2025, incorporated by reference to Exhibit 3.9 to the Companys Annual Report on Form 10-K filed with the SEC on March 3, 2025. | | | 3.10 | | Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation dated February 7, 2025 incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on February 12, 2025. | | | 3.11 | | Amended and Restated Bylaws of Registrant, incorporated by reference to Exhibit 3.8 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 3.12 | | Amendment No. 1 to Amended and Restated Bylaws, effective May 7, 2024, incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on May 10, 2024. | | | 3.13 | | Amended and Restated Bylaws of Cyngn Inc., effective January 27, 2026, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on January 30, 2026. | | | 4.1* | | Description of Registrants Securities | | | 10.1 | | Offer Letter between the Company and Ben Landen dated as of September 18, 2019 incorporated by reference to Exhibit 10.2 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 10.2 | | Offer Letter between the Company and Donald Alvarez dated as of May 28, 2021 incorporated by reference to Exhibit 10.3 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | 61 | 10.3 | | 2013 Equity Incentive Plan incorporated by reference to Exhibit 10.4 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 10.4 | | 2021 Incentive Plan incorporated by reference to Exhibit 10.5 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 10.5 | | Amendment to 2021 Equity Incentive Plan incorporated by reference to Exhibit 4.2 to the Companys Registration Statement on Form S-8 filed with the SEC on January 31, 2024. | | | 10.6 | | Amendment to 2021 Equity Incentive Plan incorporated by reference to the Companys Proxy Statement filed with the Securities and Exchange Commission on May 21, 2024. | | | 10.7 | | Amendment to 2021 Equity Incentive Plan incorporated by reference to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2025. | | | 10.8 | | Second Amended and Restated Investors Rights Agreement dated as of December 24, 2014 incorporated by reference to Exhibit 10.6 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 10.9 | | Form of Indemnification Agreement to be entered into with the Registrant and each of its officers and directors incorporated by reference to Exhibit 10.7 to the Companys Amendment to the Registration Statement on Form S-1 (No. 333-259278) filed with the SEC on October 15, 2021. | | | 10.10 | | Employment Agreement by and between Cyngn Inc. and Lior Tal dated as of January 1, 2023 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on January 6, 2023. | | | 10.11 | | Engagement Letter dated April 27, 2022 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on April 29, 2022. | | | 10.12 | | Form of Securities Purchase Agreement incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on April 29, 2022. | | | 10.13 | | Form of Warrant incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed with the SEC on April 29, 2022. | | | 10.14 | | Form of Registration Rights Agreement incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed with the SEC on April 29, 2022. | | | 10.15 | | Form of Pre-Funded Warrants incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K filed with the SEC on April 29, 2022. | | | 10.16 | | ATM Sales Agreement by and between the Company and Virtu Americas LLC, dated May 31, 2023 incorporated by reference to Exhibit 1.2 to the Companys Registration Statement on Form S-3 filed with the SEC on May 31, 2023 | | | 10.17 | | Placement Agent Agreement between the Company and Aegis Capital Corp. dated December 8, 2023 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on December 11, 2023 | | | 10.18 | | Form of Pre-funded Warrant incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on December 11, 2023 | | | 10.19 | | Form of Severance and Change of Control Agreement incorporated by reference to Exhibit 10.17 to the Companys Annual Report on Form 10-K filed with the SEC on March 7, 2024. | | 62 | 10.20 | | Severance and Change of Control Agreement by and between Cyngn Inc. and Donald Alvarez dated May 15, 2024 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on May 17, 2024. | | | 10.21 | | Form of Securities Purchase Agreement dated November 12, 2024 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on November 12, 2024. | | | 10.22 | | Form of Note dated November 12, 2024 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on November 12, 2024. | | | 10.23 | | Form of Registration Rights Agreement dated November 12, 2024 incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed with the SEC on November 12, 2024. | | | 10.24 | | Form of Lock-Up Agreement incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed with the SEC on November 12, 2024. | | | 10.25 | | Form of Placement Agent Agreement incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K filed with the SEC on November 12, 2024. | | | 10.26 | | Form of Pre-funded Warrant incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on December 23, 2024. | | | 10.27 | | Form of Series A Warrant incorporated by reference to Exhibit 4.2 to the Companys Current Report on Form 8-K filed with the SEC on December 23, 2024. | | | 10.28 | | Form of Form of Series B Warrant incorporated by reference to Exhibit 4.3 to the Companys Current Report on Form 8-K filed with the SEC on December 23, 2024. | | | 10.29 | | Form of Securities Purchase Agreement incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on December 23, 2024. | | | 10.30 | | Placement Agent Agreement between the Company and Aegis Capital Corp. dated December 19, 2024 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on December 23, 2024. | | | 10.31 | | Form of Pre-funded Warrant incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on December 31, 2024. | | | 10.32 | | Form of Securities Purchase Agreement incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on December 31, 2024. | | | 10.33 | | Placement Agent Agreement between the Company and Aegis Capital Corp. dated December 30, 2024 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on December 31, 2024. | | | 10.34 | | Amendment to Employment Agreement by and between Cyngn Inc. and Lior Tal dated March 6, 2025 incorporated by reference to Exhibit 10.33 to the Companys Annual Report on Form 10-K filed with the SEC on March 6, 2025. | | | 10.35 | | Form of Pre-Funded Warrant incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on June 27, 2025. | | | 10.36 | | Form of Pre-Funded Warrant incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on June 30, 2025. | | | 10.37 | | Form of Securities Purchase Agreement by and between the Company and the Purchasers incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on June 27, 2025 | | | 10.38 | | Placement Agent Agreement between the Company and Aegis Capital Corp. dated June 26, 2025 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on June 27, 2025 | | | 10.39 | | Form of Securities Purchase Agreement by and between the Company and the Purchasers incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on June 30, 2025 | | | 10.40 | | Placement Agent Agreement between the Company and Aegis Capital Corp. dated June 26, 2025 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on June 30, 2025 | | | 10.41 | | 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 Companys Current Report on Form 8-K filed with the SEC on September 5, 2025. | | | 10.42 | | Offer Letter, dated August 12, 2025, between Cyngn Inc. and Natalie Russell, incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on August 15, 2025. | | 63 | 10.43 | | 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 Companys Current Report on Form 8-K filed with the SEC on August 15, 2025. | | | 19.1 | | Insider Trading Policy, effective October 14, 2021 incorporated by reference to Exhibit 19.1 to the Companys Annual Report on Form 10-K filed with the SEC on March 6, 2025. | | | 21.1 | | List of Subsidiaries of the Registrant incorporated by reference to Exhibit 21.1 to the Companys Annual Report on Form 10-K filed with the SEC on March 7, 2024. | | | 23.1* | | Consent of CBIZ CPAs P.C. | | | 23.2* | | Consent of Marcum LLP | | | 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. | | | 97 | | Cyngn Inc. Clawback Policy, effective November 7, 2023 incorporated by reference to Exhibit 97 to the Companys Annual Report on Form 10-K filed with the SEC on March 7, 2024. | | | 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. | | | * | Filed herewith. | | | ** | Furnished herewith. | | **Item 16. Form 10-K Summary** None. 64 **SIGNATURES** In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | CYNGN INC. | | | | | | | | | By: | /s/ Lior Tal | | | | | Lior Tal | | | | | Chief Executive Officer and Chairman of the Board | | | | | (Principal Executive Officer) | | | | | | | | Date: March 26, 2026 | By: | /s/ Natalie Russell | | | | | Natalie Russell | | | | | Chief Financial Officer | | | | | (Principal Financial and Accounting Officer) | | In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | Signature | | Title | | Date | | | | | | | | | | /s/ Lior Tal | | Chief Executive Officer and Director | | March 26, 2026 | | | Lior Tal | | (Principal Executive Officer) | | | | | | | | | | | | /s/ Natalie Russell | | Chief Financial Officer and Director | | March 26, 2026 | | | Natalie Russell | | (Principal Financial and Accounting Officer) | | | | | | | | | | | | /s/ Karen Macleod | | Director | | March 26, 2026 | | | Karen Macleod | | | | | | | | | | | | | | /s/ Ran Makavy | | Director | | March 26, 2026 | | | Ran Makavy | | | | | | | | | | | | | | /s/ James McDonnell | | Director | | March 26, 2026 | | | James McDonnell | | | | | | 65