Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | CYNGN INC. | |
Trading Symbol | CYN | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 33,993,964 | |
Amendment Flag | false | |
Entity Central Index Key | 0001874097 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40932 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2007094 | |
Entity Address, Address Line One | 1015 O’Brien Dr | |
Entity Address, City or Town | Menlo Park | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94025 | |
City Area Code | (650) | |
Local Phone Number | 924-5905 | |
Title of 12(b) Security | Common stock, $0.00001 | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 3,055,843 | $ 10,536,273 |
Restricted cash | 50,000 | |
Short-term investments | 9,063,675 | 12,064,337 |
Prepaid expenses and other current assets | 1,134,255 | 1,126,137 |
Total current assets | 13,253,773 | 23,776,747 |
Property and equipment, net | 1,191,275 | 884,000 |
Right of use asset, net | 553,919 | 371,189 |
Intangible assets, net | 556,778 | 473,076 |
Total Assets | 15,555,745 | 25,505,012 |
Current liabilities | ||
Accounts payable | 305,403 | 155,943 |
Accrued expenses and other current liabilities | 751,190 | 854,920 |
Operating lease liability, current portion | 557,108 | 376,622 |
Total liabilities (all current) | 1,613,701 | 1,387,485 |
Commitments and contingencies (Note 12) | ||
Stockholders’ Equity | ||
Preferred stock, $0.00001, 10 million shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 | ||
Common stock, Par $0.00001; 100,000,000 shares authorized, 33,830,900 and 33,684,864 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 338 | 337 |
Additional paid-in capital | 161,653,902 | 159,847,229 |
Accumulated deficit | (147,712,196) | (135,730,039) |
Total stockholders’ equity | 13,942,044 | 24,117,527 |
Total Liabilities and Stockholders’ Equity | $ 15,555,745 | $ 25,505,012 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10 | 10 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,830,900 | 33,684,864 |
Common stock, shares outstanding | 33,830,900 | 33,684,864 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 550,952 | $ 1,423,752 | ||
Costs and expenses | ||||
Cost of revenue | 462,624 | 1,079,318 | ||
Research and development | 3,737,818 | 2,255,666 | 6,767,874 | 3,936,811 |
General and administrative | 2,845,922 | 2,357,247 | 5,916,841 | 4,494,763 |
Total costs and expenses | 7,046,364 | 4,612,913 | 13,764,033 | 8,431,574 |
Loss from operations | (6,495,412) | (4,612,913) | (12,340,281) | (8,431,574) |
Other income, net | ||||
Interest income (expense), net | 18,891 | (1,607) | 65,793 | (1,986) |
Other income | 123,122 | 2,559 | 292,331 | 2,560 |
Total other income , net | 142,013 | 952 | 358,124 | 574 |
Net loss | $ (6,353,399) | $ (4,611,961) | $ (11,982,157) | $ (8,431,000) |
Net loss per share attributable to common stockholders, basic (in Dollars per share) | $ (0.19) | $ (0.15) | $ (0.36) | $ (0.29) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in Shares) | 33,794,325 | 30,706,235 | 33,748,799 | 28,682,245 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net loss per share attributable to common stockholders’, diluted | $ (0.19) | $ (0.15) | $ (0.36) | $ (0.29) |
Weighted-average shares used in computing net loss per share attributable to common stockholders’, diluted | 33,794,325 | 30,706,235 | 33,748,799 | 28,682,245 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 265 | $ 138,740,827 | $ (116,493,530) | $ 22,247,562 | |
Balance (in Shares) at Dec. 31, 2021 | 26,487,680 | ||||
Exercise of stock options | $ 6 | 97,652 | 97,658 | ||
Exercise of stock options (in Shares) | 636,041 | ||||
Issuance of common stock and pre-funded warrants in connection with the private placement offering, net of offering costs | $ 38 | 11,989,471 | 11,989,509 | ||
Issuance of common stock and pre-funded warrants in connection with the private placement offering, net of offering costs (in Shares) | 3,790,322 | ||||
Issuance of common warrants at fair value in connection with the private placement | 6,132,436 | 6,132,436 | |||
Issuance of common stock upon exercise of pre-funded warrants | $ 27 | 2,635 | 2,662 | ||
Issuance of common stock upon exercise of pre-funded warrants (in Shares) | 2,661,921 | ||||
Stock-based compensation | 1,233,712 | 1,233,712 | |||
Net loss | (8,431,000) | (8,431,000) | |||
Balance at Jun. 30, 2022 | $ 336 | 158,196,733 | (124,924,530) | 33,272,539 | |
Balance (in Shares) at Jun. 30, 2022 | 33,575,334 | ||||
Balance at Mar. 31, 2022 | $ 271 | 139,349,848 | (120,312,569) | 19,037,550 | |
Balance (in Shares) at Mar. 31, 2022 | 27,104,430 | ||||
Exercise of stock options | 8,773 | 8,773 | |||
Exercise of stock options (in Shares) | 19,291 | ||||
Issuance of common stock and pre-funded warrants in connection with the private placement offering, net of offering costs | $ 38 | 11,989,471 | 11,989,509 | ||
Issuance of common stock and pre-funded warrants in connection with the private placement offering, net of offering costs (in Shares) | 3,790,322 | ||||
Issuance of common warrants at fair value in connection with the private placement | 6,132,436 | 6,132,436 | |||
Issuance of common stock upon exercise of pre-funded warrants | $ 27 | 2,635 | 2,662 | ||
Issuance of common stock upon exercise of pre-funded warrants (in Shares) | 2,661,921 | ||||
Stock-based compensation | 713,570 | 713,570 | |||
Net loss | (4,611,961) | (4,611,961) | |||
Balance at Jun. 30, 2022 | $ 336 | 158,196,733 | (124,924,530) | 33,272,539 | |
Balance (in Shares) at Jun. 30, 2022 | 33,575,334 | ||||
Balance at Dec. 31, 2022 | $ 337 | 159,847,229 | (135,730,039) | 24,117,527 | |
Balance (in Shares) at Dec. 31, 2022 | 33,684,864 | ||||
Exercise of stock options and vesting of restricted stock units | $ 1 | 8,066 | 8,067 | ||
Exercise of stock options and vesting of restricted stock units (in Shares) | 146,036 | ||||
Stock-based compensation | 1,798,607 | 1,798,607 | |||
Net loss | (11,982,157) | (11,982,157) | |||
Balance at Jun. 30, 2023 | $ 338 | 161,653,902 | (147,712,196) | 13,942,044 | |
Balance (in Shares) at Jun. 30, 2023 | 33,830,900 | ||||
Balance at Mar. 31, 2023 | $ 337 | 160,778,972 | (141,358,797) | 19,420,512 | |
Balance (in Shares) at Mar. 31, 2023 | 33,719,592 | ||||
Exercise of stock options and vesting of restricted stock units | $ 1 | 1,222 | 1,223 | ||
Exercise of stock options and vesting of restricted stock units (in Shares) | 111,308 | ||||
Stock-based compensation | 873,708 | 873,708 | |||
Net loss | (6,353,399) | (6,353,399) | |||
Balance at Jun. 30, 2023 | $ 338 | $ 161,653,902 | $ (147,712,196) | $ 13,942,044 | |
Balance (in Shares) at Jun. 30, 2023 | 33,830,900 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (11,982,157) | $ (8,431,000) |
Depreciation and amortization | 474,990 | 229,102 |
Stock-based compensation | 1,798,607 | 1,233,712 |
Realized gain on short-term investments | (291,555) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses, operating lease right-of-use assets, and other current assets | (473,047) | (902,512) |
Accounts payable | 149,460 | 131,260 |
Accrued expenses, lease liabilities, and other current liabilities | 76,756 | 736,805 |
Net cash used in operating activities | (10,246,946) | (7,002,633) |
Cash flows from investing activities | ||
Purchase of property and equipment | (481,777) | (410,289) |
Acquisition of intangible asset | (101,991) | (153,550) |
Purchase of short-term investments | (17,011,782) | (27,000,000) |
Proceeds from maturity of short-term investments | 20,304,000 | |
Net cash provided by (used in) investing activities | 2,708,450 | (27,563,839) |
Cash flows from financing activities | ||
Proceeds from private placement offering, net of offering costs | 18,121,945 | |
Proceeds from exercise of pre-funded warrants | 2,662 | |
Proceeds from exercise of stock options | 8,066 | 97,658 |
Net cash provided by financing activities | 8,066 | 18,222,265 |
Net decrease in cash and restricted cash | (7,530,430) | (16,344,207) |
Cash and restricted cash, beginning of period | 10,586,273 | 21,995,981 |
Cash and restricted cash, end of period | 3,055,843 | 5,651,774 |
Reconciliation of cash and restricted cash, end of period: | ||
Cash | 3,055,843 | 5,601,774 |
Restricted cash | 50,000 | |
Total cash and restricted cash | 3,055,843 | 5,651,774 |
Supplemental disclosure of cash flow: | ||
Cash paid during the period for interest and taxes | ||
Supplemental disclosure of non-cash activities: | ||
Recognition of operating lease right-of-use assets and operating lease liabilities | 464,929 | 824,292 |
Change in deferred rent associated with ASC 842 | 58,676 | |
Acquisition of property and equipment included in accounts payable and accrued expenses | $ 22,185 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2023 | |
Description of Business [Abstract] | |
Description of Business | 1. Description of Business Cyngn Inc., together with its subsidiaries (collectively, “Cyngn” or the “Company”), was incorporated in Delaware in 2013. Cyngn Singapore PTE. LTD., a Singaporean limited company organized in 2015 and Cyngn Philippines, Inc., a Philippine corporation incorporated in 2018 are wholly owned subsidiaries. The Company is headquartered in Menlo Park, CA. Cyngn develops autonomous driving software that can be deployed on multiple vehicle types in various environments. The Company has been operating autonomous vehicles in production environments. Built and tested in difficult and diverse real-world environments, the self-driving system (“DriveMod”), fleet management system, and Software Development Kit combine to create a full-stack advanced autonomy solution designed to be modular, extendable, and safe. The Company operates one business segment. Private Placement Offering On April 28, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited and institutional investors for a private placement offering (“Private Placement”) of the Company’s common stock (the “Common Stock”) and pre-funded warrants (the “Pre-Funded Warrants”) and warrants exercisable for Common Stock (the “Common Warrants”). Pursuant to the Purchase Agreement, the Company sold (i) 3,790,322 shares of its Common Stock together with Common Warrants to purchase up to 3,790,322 shares of Common Stock, and (ii) 2,661,291 Pre-Funded Warrants with each Pre-Funded Warrant exercisable for one share of Common Stock, together with Common Warrants to purchase up to 2,661,291 shares of Common Stock. The Common Warrants totaled 6,451,613. The Company allocated the proceeds between the Common Stock, Pre-Funded Warrants, and Common Warrants on a relative fair value basis and recorded the amount allocated to the Common Warrants within additional paid-in capital on the accompanying consolidated balance sheet as the Common Warrants met all the criteria for equity classification. As the Common Warrants were equity classified, they do not require subsequent remeasurement after the issuance (see Note 7. Capital Structure). The Pre-Funded Warrants were exercised in full in May 2022 at a nominal exercise price of $0.001. Each share of Common Stock and accompanying Common Warrant were sold together at a combined offering price of $3.10, and each Pre-Funded Warrant and accompanying Common Warrant were sold together at a combined offering price of $3.09. The Common Warrants have an exercise price of $2.98 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance. The Common Warrants contain standard adjustments to the exercise price including for stock splits, stock dividends, rights offerings and pro rata distributions. There were no Common Warrants exercised as of December 31, 2022 (see Note 8. Capital Structure). The Private Placement closed on April 29, 2022. The Company received gross proceeds of approximately $20 million before deducting transaction related expenses payable by the Company. All qualified legal, accounting, registration and other direct costs related to the Private Placement were offset against the gross proceeds. The Company is using the net proceeds to fund its cash needs. Liquidity The Company has incurred losses from operations since inception. The Company incurred net losses of approximately $12.0 million and $8.4 million for the six months ended June 30, 2023 and 2022, respectively. Accumulated deficit amounted to approximately $147.7 million and $135.7 million as of June 30, 2023 and December 31, 2022, respectively. Net cash used in operating activities was approximately $10.2 million and $7.0 million for the six months ended June 30, 2023 and 2022, respectively. The Company’s liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors and borrow funds to fund its general operations, research and development activities, and capital expenditures. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating costs and expenses, to generate positive operating cash flows and obtaining funds from outside sources to generate positive financing cash flows. As of June 30, 2023, the Company’s unrestricted cash balance was $3.1 million, and its short-term investments balance was $9.1 million. As of December 31, 2022, the Company’s balance of cash was approximately $10.5 million, and the short-term investments balance was $12.1 million. Based on cash flow projections from operating and financing activities and the existing balance of cash and short-term investments, management is of the opinion that the Company has sufficient funds for sustainable operations, and it will be able to meet its payment obligations from operations and debt related commitments for at least one year from the issuance date of this quarterly report on its consolidated financial statements. Based on the above considerations, the Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of and for the six months ended June 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to applicable rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal years ended December 31, 2022, and 2021, which was filed with the SEC on March 17, 2023. The accompanying unaudited consolidated financial statements have been prepared on a consistent basis with the audited consolidated financial statements for the fiscal years ended December 31, 2022, and 2021, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. There have been no changes to the Company’s significant accounting policies described in its Annual Report on Form 10-K for the fiscal years ended December 31, 2022 and 2021 that have had a material impact on the consolidated financial statements and the related notes. The results reported for the interim period presented are not necessarily indicative of results that may be expected for any subsequent quarter or for the full year December 31, 2023. These unaudited consolidated financial statements include all adjustments and accruals that are necessary for a fair statement of all interim periods reported herein. Principles of Consolidation The consolidated financial statements include the accounts of Cyngn Inc. and its wholly owned subsidiaries. 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 financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates and judgments include but are not limited to warrants and share-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, which is placed with high-credit-quality financial institutions and at times exceeds federally insured limits. Cash maintained with domestic financial institutions generally exceed the Federal Deposit Insurance Corporation insurable limit. To date, the Company has not experienced any losses on its deposits of cash. Cyngn invests in U.S. Treasury securities and carries these at amortized cost and recognizes gains and losses when realized. Concentration of Supplier Risk The Company generally utilizes suppliers for outside development and engineering support. The Company does not believe that there is any significant supplier concentration risk as of June 30, 2023 and December 31, 2022. Cash, Restricted 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 June 30, 2023 and December 31, 2022, the Company had approximately $3.1 million and $10.5 million of cash, 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 Board’s (“FASB”) Accounting Standards Codification Topic (“ASC”) 320, “Investments – Debt and Equity Securities”, and recorded these securities at amortized cost on the accompanying consolidated balance sheet as of June 30, 2023 and December 31, 2022. Accounts Receivable Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts was zero as of June 30, 2023 and December 31, 2022. 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 Level 2 Level 3 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 Company’s cash, accounts payable and notes payable are reasonable estimates of their fair values due to their short-term nature. The fair values of the Company’s share-based compensation and underwriter warrants were based on observable inputs and assumptions used in Black-Scholes valuation models derived from independent external valuations. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Construction work in progress includes production costs and costs of materials used in the development of the Company’s autonomous driving software. Assets are held as construction work in progress until placed into service, at which date depreciation commences over the estimated useful lives of the respective assets. Depreciation is recorded on a straight-line basis over each asset’s estimated useful life. Repair and maintenance costs are expensed as incurred. Property and Equipment Useful life Computer and equipment 5 years Furniture and fixtures 7 years Leasehold improvements Shorter of 3 years or lease term Automobile 5 years Leases The Company accounts for leases in accordance with ASC Topic 842 (“ASC 842”), “Leases”. All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases. The Company recognized a “right-of-use” asset and lease liability in the consolidated balance sheets under ASC 842 on the office space lease that was amended and renewed in June 2023. On a prospective basis, 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. 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. On April 1, 2022, the Company entered into an agreement for exclusive rights to certain hardware and software products and the rights to subsequently sell the software products and accompanying services. The Company paid a purchase price of $100,000 for these rights. The Company evaluated if substantially all of the assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets to determine if the transaction should be accounted for as an asset acquisition. Since the only substantive assets acquired pertained to rights to the intellectual property, the entire purchase price was allocated to intellectual property and accounted for as intangible assets with a useful life of 15 years. In accordance with ASC 805-50, “Business Combination”, the agreement was treated a s 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. Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance as of June 30, 2023 and December 31, 2022 (see Note 11. Income Taxes). There are no uncertain tax positions that would require recognition in the financial statements. If the Company were to incur an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax would be reported as income taxes. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors. Convertible Preferred Stock The Company has applied the guidance in ASC 480-10-S99-3A, SEC Staff Announcement, “Classification and Measurement of Redeemable Securities”, and has classified all of its outstanding convertible preferred shares as permanent equity. The Company records shares of convertible preferred stock at their respective issuance price, net of issuance costs. The Company’s convertible preferred stock share’s redemption and conversion provisions are not exclusively at the option of the holder and are contingent on certain deemed liquidation events within the Company’s control (see Note 7. Capital Structure). Warrants The Company issued to its lead underwriter in the Company’s IPO warrants to purchase up to 140,000 shares of the Company’s common stock. In addition, the Company issued 6,451,613 Common 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 agreement. 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. 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. 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 Ordinary Shareholders 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 9. Net Loss per Share Attributable to Common Stockholders). Research and Development Expense Research and development expense consist primarily of outsourced engineering services, internal engineering and development expenses, materials, labor and stock-based compensation of Company personnel involved in the development of the Company’s products and services, and allocated lease costs based on the approximate square footage area used in research and development activities. Research and development costs are expensed as incurred. Selling, General, and Administrative Expense Selling, general, and administrative expense consist primarily of personnel costs, facilities expenses, depreciation and amortization, travel, and advertising costs. Commitments The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. There have been no such liabilities recorded by the Company as of June 30, 2023 and December 31, 2022. Segment Reporting The Company’s chief operating decision maker, its Chief Executive Officer, manages operations and business as one operating segment for the purposes of allocating resources, making operating decisions and evaluating financial performance. Revenue Recognition The Company enters into Non-Recurring Engineering (“NRE”) contracts that are principally comprised of engineering services related to customer-specific configuration of the DriveMod. Generally with respect to these NRE contracts, i) the determination of the contract price is based on labor and hardware costs estimated to achieve the required milestones specified in the contract; ii) payment under these arrangements are comprised of upfront payments due upon execution of the agreements as well as payments due upon the achievement of milestones specified in each arrangement; and iii) contain mutual termination clauses without penalty. The Company recognizes revenue from NRE contracts that are fully funded by customers and the sale of its products when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, by following a five-step process which includes i) identify the contract with a customer; ii) identify the performance obligations in the contract; iii) determine the transaction price; iv) allocate the transaction price to performance obligations in the contract and; v) recognize revenue when or as the Company satisfies a performance obligation. Each of the Company’s NRE arrangements are comprised of multi-phase deliverables recognized at a point in time upon completion and acceptance from the customer of each phase of the arrangement. Two domestic customers which are subsidiaries of global conglomerates represented 63.5% and 36.3% of revenue recognized for the three months ended June 30, 2023, and 38.6% and 61.1% for the six months ended June 30, 2023 associated with NRE contracts. In addition, these two customers represented 63.5% and 36.3% of accounts receivable at June 30, 2023 and 0% at December 31, 2022. Cost of Revenue Cost of revenue consists primarily of direct labor and related fringe benefits for internal engineering resources costs incurred for the completion of the contracts and hardware costs. Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which provides new guidance regarding the measurement and recognition of credit loss impairment for certain financial assets. The Company adopted this standard in the first quarter of 2023 and there was no impact on our consolidated financial statements upon adoption. As a result of this standard, the Company utilizes current and historical collection data as well as assess current economic conditions in order to determine expected trade credit losses on a prospective basis. The adoption of this standard did not result in any material impact to our allowance for doubtful accounts balance as of June 30, 2023. |
Revenue and Contracts with Cust
Revenue and Contracts with Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Contracts with Customers | 3. Revenue and Contracts with Customers Contract Balances Timing differences between revenue recognized, billings, and customer payments result in contract assets and liabilities. Contract assets represent revenue recognized in excess of customer billings. Contract liabilities represent payments received from customers in advance of satisfying performance obligations. The Company had no contract assets or liabilities as of June 30, 2023 and December 31, 2022. Deferred Contract Costs The Company defers costs associated with fulfilling its contracts if those costs meet all of the following criteria: (i) the costs relate directly to a contract, (ii) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and (iii) the costs are expected to be recovered. The Company had deferred contract costs totaling $0 and $0.1 million as of June 30, 2023 and December 31, 2022, respectively. Deferred contract costs are included in prepaid and other current assets in the consolidated balance sheets. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Financial Instruments The Company’s short-term investments consisted of U.S. government treasury bills, which are accounted for as held-to-maturity (“HTM”) securities. HTM securities are carried at amortized cost and, as a result, are not remeasured to fair value on a recurring basis. As of June 30, 2023 and December 31, 2022, the amortized cost of the Company’s U.S. government treasury bills totaled $9.1 million and $12.1 million, respectively, which approximated its fair value based on Level 1 inputs. All of the Company’s short-term investments will mature within one year of June 30, 2023. The Company does not expect a credit loss for its short-term investments. Property and Equipment, Net Property and equipment is comprised of the following: June 30, December 31, 2023 2022 Automobiles $ 399,087 $ 397,816 Furniture and fixtures 176,402 176,402 Computer and equipment 423,665 380,457 Leasehold improvements 686,574 93,120 Construction work in progress 203,133 359,289 Property and equipment, gross 1,888,861 1,407,084 Less: accumulated depreciation (697,586 ) (523,084 ) Total property and equipment, net $ 1,191,275 $ 884,000 Depreciation expense for the three months ended June 30, 2023 and 2022 was $93,039 and $24,330, respectively, and for the six months ended June 30, 2023 and 2022 was $174,502 and 45,405, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are comprised of the following: June 30, December 31, 2022 Credit card payable $ 10,873 $ 5,194 Accrued expenses 181,742 283,118 Accrued payroll 558,575 566,608 Total accrued expenses and other current liabilities $ 751,190 $ 854,920 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 5. Leases The Company leases its office space in Menlo Park, California, under a lease agreement which expired in February 2022 and was subsequently renewed and amended for a 15-month term that expires in May 2024. Monthly payments are approximately $48,000. The lease includes non-lease components (i.e., common area maintenance costs) that are paid separately from rent based on actual costs incurred. The Company’s future lease payments under non-cancellable leases as of June 30, 2023, which are presented as lease liabilities on the Company’s consolidated balance sheet, are as follows: Period Operating Remainder of 2023 $ 568,445 Less: imputed interest (11,337 ) Present value of lease liabilities, all current $ 557,108 Weighted-average remaining lease term (in years) 1.00 Weighted-average discount rate 1.84 % Lease expense under the Company’s operating lease was $149,261 and $157,869 for the three months ended June 30, 2023 and 2022, respectively, and $291,847 and $235,968 for the six months ended June 30, 2023 and 2022, respectively. The amortization of the operating lease right-of-use assets totaled $144,177 and $133,998 for the three months ended June 30, 2023 and 2022, respectively and $282,199 and $181,110 for the six months ended June 30, 2023 and 2022, respectively. The weighted-average discount rate is based on the implicit interest rate of the present value of the remaining lease payments and the remaining lease term. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, Net [Abstract] | |
Intangible Assets, Net | 6. Intangible Assets, Net The gross carrying amount and accumulated amortization of separately identifiable intangible assets are as follows: As of June 30, 2023 Gross Accumulated Net Patents $ 465,813 $ (25,313 ) $ 440,500 Trademark 45,000 (21,500 ) 23,500 Rights to intellectual property 100,000 (7,222 ) 92,778 Total intangible assets $ 610,813 $ (54,035 ) $ 556,778 As of December 31, 2022 Gross Accumulated Net Patents $ 363,821 $ (11,856 ) $ 351,965 Trademark 45,000 (20,000 ) 25,000 Rights to intellectual property 100,000 (3,889 ) 96,111 Total intangible assets $ 508,821 $ (35,745 ) $ 473,076 Amortization expense for each of the three months ended June 30, 2023 and 2022 was $9,742 and $1,720, respectively, and for the six months ended June 30, 2023 and 2022 was $18,289 and $2,587, respectively. Estimated amortization expense for all intangible assets subject to amortization in future years is expected to be: Years ended December 31, Amortization Remainder 2023 $ 20,361 2024 38,446 2025 38,446 2026 38,446 2027 38,446 Thereafter 382,633 Total $ 556,778 |
Capital Structure
Capital Structure | 6 Months Ended |
Jun. 30, 2023 | |
Capital Structure [Abstract] | |
Capital Structure | 7. Capital Structure Common Stock As of June 30, 2023 and December 31, 2022, the Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.00001 per share. As of June 30, 2023 and December 31, 2022, the Company had 33,830,900 and 33,684,864 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. Convertible 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 June 30, 2023 and December 31, 2022, there were no Warrants The following warrants were outstanding as of June 30, 2023, all of which contain standard anti-dilution protections in the event of subsequent rights offerings, stock splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s common stock or capital structure, and none of which have any participating rights for any losses: Securities into which warrants are convertible Warrants Exercise Expiration Fair Common stock (Initial Public Offering; see Note 1) 140,000 $ 9.375 October 2026 $ 170,397 Common stock (Private Placement; see Note 1) 6,451,613 $ 2.98 April 2027 6,132,436 Total 6,591,613 $ 6,302,833 The Company accounts for warrants in accordance with ASC 480, “Distinguishing Liabilities from Equity”, depending on the specific terms of the warrant agreement. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the valuation as equity instruments in consideration of the cashless settlement provisions in the warrant agreements. The warrants are not marked-to-market each reporting period, and thus there is no impact to earnings. Any future exercises of the warrants will be recorded as cash received and recorded in cash, with a corresponding increase to common stock and additional paid-in capital in stockholders’ equity. The Company used the following assumptions: Initial Private Warrants 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 % |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 6 Months Ended |
Jun. 30, 2023 | |
Net Loss Per Share Attributable to Common Stockholders [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 8. Net Loss Per Share Attributable to Common Stockholders The following table summarizes the computation of basic and diluted loss per share: Three months Ended 2023 2022 Net loss attributable to common stockholders $ (6,353,399 ) $ (4,611,961 ) Basic and diluted weighted average common shares outstanding 33,794,325 30,706,235 Loss per share: Basic and diluted $ (0.19 ) $ (0.15 ) Six months Ended 2023 2022 Net loss attributable to common stockholders $ (11,982,157 ) $ (8,431,000 ) Basic and diluted weighted average common shares outstanding 33,748,799 28,682,245 Loss per share: Basic and diluted $ (0.36 ) $ (0.29 ) 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. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation Expense [Abstract] | |
Stock-based Compensation Expense | 9. Stock-based Compensation Expense Stock-Based Compensation The Company uses stock-based compensation, including restricted stock units, to provide long-term performance incentives for its employees and board directors. The Company measures employee and director stock-based compensation awards based on the award’s estimated fair value on the date of grant. Forfeitures are recognized as they occur. Expense associated with these awards is recognized using the straight-line attribution method over the requisite service period for stock options, restricted stock units (“RSUs”) and restricted stock and is reported in our consolidated statements of stockholders’ equity. The fair value of the Company’s stock options is estimated, using the Black-Scholes option-pricing model. The resulting fair value is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award. The Company has elected to recognize forfeitures as they occur. Stock options generally vest over 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 Company’s common stock. ● Expected volatility. ● Expected term. Staff Accounting Bulletin, Topic 14 ● Risk-free interest rate. ● Estimated dividend yield. Equity Incentive Plans In February 2013, the Company’s Board of Directors adopted the 2013 Equity Incentive Plan (“2013 Plan”). The 2013 Plan authorizes the award of stock options, stock appreciation rights, restricted stock awards, stock appreciation rights, RSUs, performance awards, and other stock or cash awards. In October 2021, the Company’s Board of Directors adopted the Cyngn Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan replaces the 2013 Plan. However, awards outstanding under the 2013 Plan will continue to be governed by their existing terms. As of June 30, 2023 and December 31, 2022, approximately 2.2 million and 3.6 million 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 Company’s stock options outstanding as well as stock options vested and exercisable as of June 30, 2023, and activity during the year then ended: Shares Weighted-average exercise Weighted-average remaining Aggregate Outstanding as of December 31, 2022 14,715,110 $ 1.23 7.84 $ 2,571,013 Granted 2,341,000 1.03 Exercised (23,750 ) 0.34 15,523 Cancelled/forfeited (1,066,045 ) $ 1.75 Outstanding as of June 30, 2023 15,966,315 $ 1.17 7.60 $ 7,548,582 Vested and expected to vest at June 30, 2023 15,966,315 $ 1.17 7.60 $ 7,548,582 Vested and exercisable at June 30, 2023 7,527,990 $ 0.88 5.80 $ 5,823,641 The following table summarizes information about the Company’s RSUs as of June 30, 2023, and activity during the year then ended: Shares Weighted- Unvested shares at December 31, 2022 216,036 $ 5.52 RSUs granted 108,000 1.05 RSUs vested (122,286 ) 5.52 RSUs forfeited - - Unvested Shares at June 30, 2023 201,750 $ 3.13 The fair value of a stock option is estimated using an option-pricing model that takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate for the expected term of the option. The Company has used the simplified method in calculating the expected term of all option grants based on the vesting period and contractual term. Compensation costs related to share-based payment transactions are recognized in the financial statements upon satisfaction of the requisite service or vesting requirements. The weighted average per share grant-date fair value of options granted during the six months June 30, 2023 and 2022 was $0.56 and $0.77, respectively. The following weighted average assumptions were used in estimating the grant date fair values in June 30, 2023 and 2022: June 30, 2023 2022 Fair value of common stock $ 1.03 $ 1.95 Expected term (in years) 6.02 6.06 Risk-free rate 3.61 % 2.49 % Expected volatility 52.72 % 36.23 % Dividend yield 0 % 0 % We recorded stock-based compensation expense from stock options and RSUs of approximately $873,707 and $713,570, during the three months ended June 30, 2023 and 2022, respectively, and $1,798,607 and $1,233,712, during the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, total stock-based compensation cost related to outstanding unvested stock options that are expected to vest was approximately $8.1 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 3.1 years. Income tax benefits recognized from stock-based compensation expense recognized for the six months ended June 30, 2023 were immaterial due to cumulative losses and valuation allowances. |
Retirement Savings Plan
Retirement Savings Plan | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Savings Plan [Abstract] | |
Retirement Savings Plan | 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. Cyngn, Inc. did not offer and has not provided a company match for its 401(k) Plan. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes For the three and six months ended June 30, 2023 and 2022, the Company recorded income tax expense of $0. The effective tax rate is 0% for the three and six months ended June 30, 2023 and 2022. For financial reporting purposes, the Company’s effective tax rate used for the interim periods is based on the estimated full-year income tax rate. For the three and six months ended June 30, 2023, the Company’s effective tax rate differs from the statutory rate, primarily due to a valuation allowance recorded against the net deferred tax asset balance. Currently the Company is not under examination by any taxing authority. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings The Company is subject to legal and regulatory actions that arise from time to time. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. There is no material pending or threatened litigation against the Company that remains outstanding as of June 30, 2023 and December 31, 2022. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | 13. Risks and Uncertainties The Company’s business operations, operating results, and financial condition are vulnerable to certain risks and uncertainties including: ● Inflation and its related impact on costs and expenditures on domestic and foreign-sourced materials and services; ● Rising interest rates and its impact on the equity markets, investment valuations, and interest rate-sensitive calculations such as discount rate assumptions used in cash flow projections and going-concern assessments; ● Effects of the Russia-Ukraine conflict such as possible cyberattacks and potential disruptions in the banking systems and capital markets and the supply chain; and ● Other factors beyond its control such as natural disasters, terrorism, civil unrest, infectious diseases and pandemics including COVID-19 and its variants. The Company is unable to predict and quantify at this time the extent of the related potential adverse effects but continuously monitors these risks and uncertainties on its future operations and financial performance. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events The Company performed a review of events subsequent to the balance sheet date through the date the consolidated financial statements were issued and determined that there were no such events requiring recognition or disclosure in the consolidated financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of and for the six months ended June 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to applicable rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal years ended December 31, 2022, and 2021, which was filed with the SEC on March 17, 2023. The accompanying unaudited consolidated financial statements have been prepared on a consistent basis with the audited consolidated financial statements for the fiscal years ended December 31, 2022, and 2021, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. There have been no changes to the Company’s significant accounting policies described in its Annual Report on Form 10-K for the fiscal years ended December 31, 2022 and 2021 that have had a material impact on the consolidated financial statements and the related notes. The results reported for the interim period presented are not necessarily indicative of results that may be expected for any subsequent quarter or for the full year December 31, 2023. These unaudited consolidated financial statements include all adjustments and accruals that are necessary for a fair statement of all interim periods reported herein. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cyngn Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated upon consolidation. |
Foreign Currency Translation | 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 | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates and judgments include but are not limited to warrants and share-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. |
Concentration of Credit Risk | 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 | 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 June 30, 2023 and December 31, 2022. |
Cash, Restricted Cash and Short-term Investments | Cash, Restricted 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 June 30, 2023 and December 31, 2022, the Company had approximately $3.1 million and $10.5 million of cash, 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 Board’s (“FASB”) Accounting Standards Codification Topic (“ASC”) 320, “Investments – Debt and Equity Securities”, and recorded these securities at amortized cost on the accompanying consolidated balance sheet as of June 30, 2023 and December 31, 2022. |
Accounts Receivable | Accounts Receivable Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts was zero as of June 30, 2023 and December 31, 2022. |
Fair Value Measurements | 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 Level 2 Level 3 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 Company’s cash, accounts payable and notes payable are reasonable estimates of their fair values due to their short-term nature. The fair values of the Company’s share-based compensation and underwriter warrants were based on observable inputs and assumptions used in Black-Scholes valuation models derived from independent external valuations. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Construction work in progress includes production costs and costs of materials used in the development of the Company’s autonomous driving software. Assets are held as construction work in progress until placed into service, at which date depreciation commences over the estimated useful lives of the respective assets. Depreciation is recorded on a straight-line basis over each asset’s estimated useful life. Repair and maintenance costs are expensed as incurred. Property and Equipment Useful life Computer and equipment 5 years Furniture and fixtures 7 years Leasehold improvements Shorter of 3 years or lease term Automobile 5 years |
Leases | Leases The Company accounts for leases in accordance with ASC Topic 842 (“ASC 842”), “Leases”. All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases. The Company recognized a “right-of-use” asset and lease liability in the consolidated balance sheets under ASC 842 on the office space lease that was amended and renewed in June 2023. On a prospective basis, 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. |
Long-Lived Assets and Finite Lived Intangibles | 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. On April 1, 2022, the Company entered into an agreement for exclusive rights to certain hardware and software products and the rights to subsequently sell the software products and accompanying services. The Company paid a purchase price of $100,000 for these rights. The Company evaluated if substantially all of the assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets to determine if the transaction should be accounted for as an asset acquisition. Since the only substantive assets acquired pertained to rights to the intellectual property, the entire purchase price was allocated to intellectual property and accounted for as intangible assets with a useful life of 15 years. In accordance with ASC 805-50, “Business Combination”, the agreement was treated a s 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. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance as of June 30, 2023 and December 31, 2022 (see Note 11. Income Taxes). There are no uncertain tax positions that would require recognition in the financial statements. If the Company were to incur an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax would be reported as income taxes. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors. |
Convertible Preferred Stock | Convertible Preferred Stock The Company has applied the guidance in ASC 480-10-S99-3A, SEC Staff Announcement, “Classification and Measurement of Redeemable Securities”, and has classified all of its outstanding convertible preferred shares as permanent equity. The Company records shares of convertible preferred stock at their respective issuance price, net of issuance costs. The Company’s convertible preferred stock share’s redemption and conversion provisions are not exclusively at the option of the holder and are contingent on certain deemed liquidation events within the Company’s control (see Note 7. Capital Structure). |
Warrants | Warrants The Company issued to its lead underwriter in the Company’s IPO warrants to purchase up to 140,000 shares of the Company’s common stock. In addition, the Company issued 6,451,613 Common 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 agreement. 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. |
Stock-based Compensation | 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. 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 Ordinary Shareholders | Net Loss Per Share Attributable to Ordinary Shareholders 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 9. Net Loss per Share Attributable to Common Stockholders). |
Research and Development Expense | Research and Development Expense Research and development expense consist primarily of outsourced engineering services, internal engineering and development expenses, materials, labor and stock-based compensation of Company personnel involved in the development of the Company’s products and services, and allocated lease costs based on the approximate square footage area used in research and development activities. Research and development costs are expensed as incurred. |
Selling, General, and Administrative Expense | Selling, General, and Administrative Expense Selling, general, and administrative expense consist primarily of personnel costs, facilities expenses, depreciation and amortization, travel, and advertising costs. |
Commitments | Commitments The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. There have been no such liabilities recorded by the Company as of June 30, 2023 and December 31, 2022. |
Segment Reporting | Segment Reporting The Company’s chief operating decision maker, its Chief Executive Officer, manages operations and business as one operating segment for the purposes of allocating resources, making operating decisions and evaluating financial performance. |
Revenue Recognition | Revenue Recognition The Company enters into Non-Recurring Engineering (“NRE”) contracts that are principally comprised of engineering services related to customer-specific configuration of the DriveMod. Generally with respect to these NRE contracts, i) the determination of the contract price is based on labor and hardware costs estimated to achieve the required milestones specified in the contract; ii) payment under these arrangements are comprised of upfront payments due upon execution of the agreements as well as payments due upon the achievement of milestones specified in each arrangement; and iii) contain mutual termination clauses without penalty. The Company recognizes revenue from NRE contracts that are fully funded by customers and the sale of its products when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, by following a five-step process which includes i) identify the contract with a customer; ii) identify the performance obligations in the contract; iii) determine the transaction price; iv) allocate the transaction price to performance obligations in the contract and; v) recognize revenue when or as the Company satisfies a performance obligation. Each of the Company’s NRE arrangements are comprised of multi-phase deliverables recognized at a point in time upon completion and acceptance from the customer of each phase of the arrangement. Two domestic customers which are subsidiaries of global conglomerates represented 63.5% and 36.3% of revenue recognized for the three months ended June 30, 2023, and 38.6% and 61.1% for the six months ended June 30, 2023 associated with NRE contracts. In addition, these two customers represented 63.5% and 36.3% of accounts receivable at June 30, 2023 and 0% at December 31, 2022. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of direct labor and related fringe benefits for internal engineering resources costs incurred for the completion of the contracts and hardware costs. |
Recent Accounting Standards | Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which provides new guidance regarding the measurement and recognition of credit loss impairment for certain financial assets. The Company adopted this standard in the first quarter of 2023 and there was no impact on our consolidated financial statements upon adoption. As a result of this standard, the Company utilizes current and historical collection data as well as assess current economic conditions in order to determine expected trade credit losses on a prospective basis. The adoption of this standard did not result in any material impact to our allowance for doubtful accounts balance as of June 30, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment estimated useful life | Property and Equipment Useful life Computer and equipment 5 years Furniture and fixtures 7 years Leasehold improvements Shorter of 3 years or lease term Automobile 5 years |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Components [Abstract] | |
Schedule of property and equipment | June 30, December 31, 2023 2022 Automobiles $ 399,087 $ 397,816 Furniture and fixtures 176,402 176,402 Computer and equipment 423,665 380,457 Leasehold improvements 686,574 93,120 Construction work in progress 203,133 359,289 Property and equipment, gross 1,888,861 1,407,084 Less: accumulated depreciation (697,586 ) (523,084 ) Total property and equipment, net $ 1,191,275 $ 884,000 |
Schedule of accrued expenses and other current liabilities | June 30, December 31, 2022 Credit card payable $ 10,873 $ 5,194 Accrued expenses 181,742 283,118 Accrued payroll 558,575 566,608 Total accrued expenses and other current liabilities $ 751,190 $ 854,920 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of future lease payments under non-cancellable leases | The Company’s future lease payments under non-cancellable leases as of June 30, 2023, which are presented as lease liabilities on the Company’s consolidated balance sheet, are as follows: Period Operating Remainder of 2023 $ 568,445 Less: imputed interest (11,337 ) Present value of lease liabilities, all current $ 557,108 Weighted-average remaining lease term (in years) 1.00 Weighted-average discount rate 1.84 % |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, Net [Abstract] | |
Schedule of gross carrying amount and accumulated amortization of separately identifiable intangible assets | As of June 30, 2023 Gross Accumulated Net Patents $ 465,813 $ (25,313 ) $ 440,500 Trademark 45,000 (21,500 ) 23,500 Rights to intellectual property 100,000 (7,222 ) 92,778 Total intangible assets $ 610,813 $ (54,035 ) $ 556,778 As of December 31, 2022 Gross Accumulated Net Patents $ 363,821 $ (11,856 ) $ 351,965 Trademark 45,000 (20,000 ) 25,000 Rights to intellectual property 100,000 (3,889 ) 96,111 Total intangible assets $ 508,821 $ (35,745 ) $ 473,076 |
Schedule of estimated amortization expense for all intangible assets | Years ended December 31, Amortization Remainder 2023 $ 20,361 2024 38,446 2025 38,446 2026 38,446 2027 38,446 Thereafter 382,633 Total $ 556,778 |
Capital Structure (Tables)
Capital Structure (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Capital Structure [Abstract] | |
Schedule of securities into which warrants are convertible | Securities into which warrants are convertible Warrants Exercise Expiration Fair Common stock (Initial Public Offering; see Note 1) 140,000 $ 9.375 October 2026 $ 170,397 Common stock (Private Placement; see Note 1) 6,451,613 $ 2.98 April 2027 6,132,436 Total 6,591,613 $ 6,302,833 |
Schedule of fair value of warrants | The Company used the following assumptions: Initial Private Warrants 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 % |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Net Loss Per Share Attributable to Common Stockholders [Abstract] | |
Schedule of basic and diluted loss per share | The following table summarizes the computation of basic and diluted loss per share: Three months Ended 2023 2022 Net loss attributable to common stockholders $ (6,353,399 ) $ (4,611,961 ) Basic and diluted weighted average common shares outstanding 33,794,325 30,706,235 Loss per share: Basic and diluted $ (0.19 ) $ (0.15 ) Six months Ended 2023 2022 Net loss attributable to common stockholders $ (11,982,157 ) $ (8,431,000 ) Basic and diluted weighted average common shares outstanding 33,748,799 28,682,245 Loss per share: Basic and diluted $ (0.36 ) $ (0.29 ) |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation Expense [Abstract] | |
Schedule of stock options vested and exercisable | The following table summarizes information about the Company’s stock options outstanding as well as stock options vested and exercisable as of June 30, 2023, and activity during the year then ended: Shares Weighted-average exercise Weighted-average remaining Aggregate Outstanding as of December 31, 2022 14,715,110 $ 1.23 7.84 $ 2,571,013 Granted 2,341,000 1.03 Exercised (23,750 ) 0.34 15,523 Cancelled/forfeited (1,066,045 ) $ 1.75 Outstanding as of June 30, 2023 15,966,315 $ 1.17 7.60 $ 7,548,582 Vested and expected to vest at June 30, 2023 15,966,315 $ 1.17 7.60 $ 7,548,582 Vested and exercisable at June 30, 2023 7,527,990 $ 0.88 5.80 $ 5,823,641 |
Schedule of restricted stock units and activity | The following table summarizes information about the Company’s RSUs as of June 30, 2023, and activity during the year then ended: Shares Weighted- Unvested shares at December 31, 2022 216,036 $ 5.52 RSUs granted 108,000 1.05 RSUs vested (122,286 ) 5.52 RSUs forfeited - - Unvested Shares at June 30, 2023 201,750 $ 3.13 |
Schedule of weighted average fair value of each grant estimated on grant date | The following weighted average assumptions were used in estimating the grant date fair values in June 30, 2023 and 2022: June 30, 2023 2022 Fair value of common stock $ 1.03 $ 1.95 Expected term (in years) 6.02 6.06 Risk-free rate 3.61 % 2.49 % Expected volatility 52.72 % 36.23 % Dividend yield 0 % 0 % |
Description of Business (Detail
Description of Business (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Apr. 29, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Description of Business (Details) [Line Items] | ||||
Stock purchase agreement | Pursuant to the Purchase Agreement, the Company sold (i) 3,790,322 shares of its Common Stock together with Common Warrants to purchase up to 3,790,322 shares of Common Stock, and (ii) 2,661,291 Pre-Funded Warrants with each Pre-Funded Warrant exercisable for one share of Common Stock, together with Common Warrants to purchase up to 2,661,291 shares of Common Stock. | |||
Exercise price per share (in Dollars per share) | $ 2.98 | |||
Offering price per share (in Dollars per share) | $ 3.09 | |||
Exercisable expires term | 5 years | |||
Net losses | $ 12 | $ 8.4 | ||
Accumulated deficit | 147.7 | $ 135.7 | ||
Net cash used in operating activities | $ 10.2 | $ 7 | ||
Private Placement [Member] | ||||
Description of Business (Details) [Line Items] | ||||
Gross proceeds | $ 20 | |||
Warrant [Member] | ||||
Description of Business (Details) [Line Items] | ||||
Common warrants (in Shares) | 6,451,613 | |||
Warrant [Member] | Private Placement [Member] | ||||
Description of Business (Details) [Line Items] | ||||
Exercise price per share (in Dollars per share) | $ 0.001 | |||
Offering price per share (in Dollars per share) | $ 3.1 | |||
Liquidity [Member] | ||||
Description of Business (Details) [Line Items] | ||||
Unrestricted cash and cash equivalents | $ 3.1 | |||
Short-term investments | $ 9.1 | 12.1 | ||
Cash | $ 10.5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 01, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Cash (in Dollars) | $ 3,100,000 | $ 3,100,000 | $ 10,500,000 | |
Patents and trademarks, term | 15 years | |||
Purchase price of rights (in Dollars) | $ 100,000 | |||
Useful life for intangible asset | 15 years | |||
Percentage of accounts receivable. | 0% | |||
IPO [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Common stock purchase (in Shares) | 140,000 | |||
Common Warrants (in Shares) | 6,451,613 | 6,451,613 | ||
One Customer [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Revenue percentage | 63.50% | 38.60% | ||
Percentage of accounts receivable. | 63.50% | 63.50% | ||
Two Customer [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Revenue percentage | 36.30% | 61.10% | ||
Percentage of accounts receivable. | 36.30% | 36.30% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life | 6 Months Ended |
Jun. 30, 2023 | |
Computer and equipment [Member] | |
Schedule of property and equipment estimated useful life [Line Items] | |
Property and Equipment, Useful Life | 5 years |
Furniture and fixtures [Member] | |
Schedule of property and equipment estimated useful life [Line Items] | |
Property and Equipment, Useful Life | 7 years |
Leasehold improvements [Member] | |
Schedule of property and equipment estimated useful life [Line Items] | |
Property and Equipment, Useful Life | Shorter of 3 years or lease term |
Automobile [Member] | |
Schedule of property and equipment estimated useful life [Line Items] | |
Property and Equipment, Useful Life | 5 years |
Revenue and Contracts with Cu_2
Revenue and Contracts with Customers (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Deferred contract costs | $ 0 | $ 0.1 |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Balance Sheet Components [Abstract] | |||||
Treasury bills | $ 9,100,000 | $ 9,100,000 | $ 12,100,000 | ||
Depreciation expense | $ 93,039 | $ 24,330 | $ 174,502 | $ 45,405 |
Balance Sheet Components (Det_2
Balance Sheet Components (Details) - Schedule of property and equipment - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Property and Equipment [Abstract] | ||
Automobiles | $ 399,087 | $ 397,816 |
Furniture and fixtures | 176,402 | 176,402 |
Computer and equipment | 423,665 | 380,457 |
Leasehold improvements | 686,574 | 93,120 |
Construction work in progress | 203,133 | 359,289 |
Property and equipment, gross | 1,888,861 | 1,407,084 |
Less: accumulated depreciation | (697,586) | (523,084) |
Total property and equipment, net | $ 1,191,275 | $ 884,000 |
Balance Sheet Components (Det_3
Balance Sheet Components (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Accrued Expenses and Other Current Liabilities [Abstract] | ||
Credit card payable | $ 10,873 | $ 5,194 |
Accrued expenses | 181,742 | 283,118 |
Accrued payroll | 558,575 | 566,608 |
Total accrued expenses and other current liabilities | $ 751,190 | $ 854,920 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Monthly payments | $ 48,000 | |||
Operating lease | $ 149,261 | $ 157,869 | 291,847 | $ 235,968 |
Operating lease right-of-use assets | $ 144,177 | $ 133,998 | $ 282,199 | $ 181,110 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of future lease payments under non-cancellable leases - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Future Lease Payments Under Non Cancellable Leases [Abstract] | ||
Remainder of 2023 | $ 568,445 | |
Less: imputed interest | (11,337) | |
Present value of lease liabilities, all current | $ 557,108 | $ 376,622 |
Weighted-average remaining lease term (in years) | 1 year | |
Weighted-average discount rate | 1.84% |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Intangible Assets, Net [Abstract] | ||||
Amortization expense | $ 9,742 | $ 1,720 | $ 18,289 | $ 2,587 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of gross carrying amount and accumulated amortization of separately identifiable intangible assets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 610,813 | $ 508,821 |
Accumulated Amortization | (54,035) | (35,745) |
Net Carrying Amount | 556,778 | 473,076 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 465,813 | 363,821 |
Accumulated Amortization | (25,313) | (11,856) |
Net Carrying Amount | 440,500 | 351,965 |
Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 45,000 | 45,000 |
Accumulated Amortization | (21,500) | (20,000) |
Net Carrying Amount | 23,500 | 25,000 |
Rights to intellectual property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 100,000 | 100,000 |
Accumulated Amortization | (7,222) | (3,889) |
Net Carrying Amount | $ 92,778 | $ 96,111 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of estimated amortization expense for all intangible assets - Amortization [Member] | Jun. 30, 2023 USD ($) |
Intangible Assets, Net (Details) - Schedule of estimated amortization expense for all intangible assets [Line Items] | |
Remainder 2023 | $ 20,361 |
2024 | 38,446 |
2025 | 38,446 |
2026 | 38,446 |
2027 | 38,446 |
Thereafter | 382,633 |
Total | $ 556,778 |
Capital Structure (Details)
Capital Structure (Details) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 | Oct. 31, 2021 |
Capital Structure (Details) [Line Items] | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock, shares issued | 33,830,900 | 33,684,864 | |
Common stock, shares outstanding | 33,830,900 | 33,684,864 | |
Convertible preferred stock, shares authorized | 10 | 10 | |
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 | |
Preferred stock issued | |||
Preferred stock outstanding | |||
Convertible Preferred Stock [Member] | |||
Capital Structure (Details) [Line Items] | |||
Convertible preferred stock, shares authorized | 10,000,000 | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 |
Capital Structure (Details) - S
Capital Structure (Details) - Schedule of securities into which warrants are convertible | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Capital Structure (Details) - Schedule of securities into which warrants are convertible [Line Items] | |
Warrants outstanding | shares | 6,591,613 |
Fair value | $ | $ 6,302,833 |
Common Stock [Member] | Initial Public Offering [Member] | |
Capital Structure (Details) - Schedule of securities into which warrants are convertible [Line Items] | |
Warrants outstanding | shares | 140,000 |
Exercise Price | $ / shares | $ 9.375 |
Expiration Date | October 2026 |
Fair value | $ | $ 170,397 |
Common Stock [Member] | Private Placement [Member] | |
Capital Structure (Details) - Schedule of securities into which warrants are convertible [Line Items] | |
Warrants outstanding | shares | 6,451,613 |
Exercise Price | $ / shares | $ 2.98 |
Expiration Date | April 2027 |
Fair value | $ | $ 6,132,436 |
Capital Structure (Details) -_2
Capital Structure (Details) - Schedule of fair value of warrants | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Initial Public Offering Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of underlying securities (in Dollars) | $ 2.88 |
Expected volatility | 51% |
Expected term (in years) | 5 years |
Risk-free interest rate | 1.13% |
Private Placement Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of underlying securities (in Dollars) | $ 1.37 |
Expected volatility | 45% |
Expected term (in years) | 5 years |
Risk-free interest rate | 2.92% |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders (Details) - Schedule of basic and diluted loss per share - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Basic and Diluted Loss Per Share [Abstract] | ||||
Net loss attributable to common stockholders | $ (6,353,399) | $ (4,611,961) | $ (11,982,157) | $ (8,431,000) |
Basic weighted average common shares outstanding | 33,794,325 | 30,706,235 | 33,748,799 | 28,682,245 |
Loss per share: | ||||
Basic | $ (0.19) | $ (0.15) | $ (0.36) | $ (0.29) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders (Details) - Schedule of basic and diluted loss per share (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Basic and Diluted Loss Per Share [Abstract] | ||||
Diluted weighted average common shares outstanding | 33,794,325 | 30,706,235 | 33,748,799 | 28,682,245 |
Diluted | $ (0.19) | $ (0.15) | $ (0.36) | $ (0.29) |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stock-Based Compensation Expense (Details) [Line Items] | |||||
Fair value is recognized straight-line basis, description | 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. | ||||
Common stock issuance (in Shares) | 2.2 | 3.6 | |||
Weighted average per share grant-date fair value of options granted (in Dollars per share) | $ 0.56 | $ 0.77 | |||
Stock-based compensation expense from stock options | $ 873,707 | $ 713,570 | $ 1,798,607 | $ 1,233,712 | |
Weighted-average period | 3 years 1 month 6 days | ||||
Stock Options [Member] | |||||
Stock-Based Compensation Expense (Details) [Line Items] | |||||
Stock-based compensation unrecognized unvested stock options | $ 8,100,000 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense (Details) - Schedule of stock options vested and exercisable | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Schedule of stock options vested and exercisable [Abstract] | |
Shares, outstanding at beginning balance | shares | 14,715,110 |
Weighted- average exercise price, outstanding at beginning balance | $ / shares | $ 1.23 |
Weighted- average remaining contractual term (years), outstanding at beginning balance | 7 years 10 months 2 days |
Aggregate intrinsic value, outstanding at beginning balance | $ | $ 2,571,013 |
Shares, granted | shares | 2,341,000 |
Weighted- average exercise price, granted | $ / shares | $ 1.03 |
Aggregate intrinsic value, granted | $ | |
Shares ,exercised | shares | (23,750) |
Weighted- average exercise price, exercised | $ / shares | $ 0.34 |
Aggregate intrinsic value, exercised | $ | $ 15,523 |
Shares, cancelled/forfeited | shares | (1,066,045) |
Weighted- average exercise price, cancelled/forfeited | $ / shares | $ 1.75 |
Aggregate intrinsic value, cancelled/forfeited | $ | |
Shares, outstanding at ending balance | shares | 15,966,315 |
Weighted- average exercise price, outstanding at ending balance | $ / shares | $ 1.17 |
Weighted- average remaining contractual term (years), outstanding at ending balance | 7 years 7 months 6 days |
Aggregate intrinsic value, outstanding at ending balance | $ | $ 7,548,582 |
Shares, vested and expected to vest at ending balance | shares | 15,966,315 |
Weighted- average exercise price, vested and expected to vest at ending balance | $ / shares | $ 1.17 |
Weighted- average remaining contractual term (years), vested and expected to vest at ending balance | 7 years 7 months 6 days |
Aggregate intrinsic value, vested and expected to vest at ending balance | $ | $ 7,548,582 |
Shares, vested and exercisable at ending balance | shares | 7,527,990 |
Weighted- average exercise price, vested and exercisable at ending balance | $ / shares | $ 0.88 |
Weighted- average remaining contractual term (years), vested and exercisable at ending balance | 5 years 9 months 18 days |
Aggregate intrinsic value, vested and exercisable at ending balance | $ | $ 5,823,641 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense (Details) - Schedule of restricted stock units and activity | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Schedule of restricted stock units and activity [Abstract] | |
Shares, Unvested shares beginning balance | shares | 216,036 |
Weighted- average grant date fair value, beginning balance | $ / shares | $ 5.52 |
Shares, RSUs granted | shares | 108,000 |
Weighted- average grant date fair value, RSUs granted | $ / shares | $ 1.05 |
Shares, RSUs vested | shares | (122,286) |
Weighted- average grant date fair value, RSUs vested | $ / shares | $ 5.52 |
Shares, RSUs forfeited | shares | |
Weighted- average grant date fair value, RSUs forfeited | $ / shares | |
Shares, Unvested shares ending balance | shares | 201,750 |
Weighted- average grant date fair value, ending balance | $ / shares | $ 3.13 |
Stock-Based Compensation Expe_6
Stock-Based Compensation Expense (Details) - Schedule of weighted average fair value of each grant estimated on grant date - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of weighted average fair value of each grant estimated on grant date [Abstract] | ||
Fair value of common stock (in Dollars per share) | $ 1.03 | $ 1.95 |
Expected term (in years) | 6 years 7 days | 6 years 21 days |
Risk-free rate | 3.61% | 2.49% |
Expected volatility | 52.72% | 36.23% |
Dividend yield | 0% | 0% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes [Abstract] | ||||
Income tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
Effective tax rate | 0% | 0% | 0% | 0% |