Executive Summary / Key Takeaways

• Industrial Autonomy at an Inflection Point: Cyngn Inc. ($CYN) is strategically positioned to capitalize on the estimated $200 billion industrial autonomous vehicle (AV) market, driven by persistent labor shortages, rising operational costs, and an urgent need for enhanced safety and efficiency in manufacturing and logistics.
• Differentiated Software-Centric Approach: Cyngn's Enterprise Autonomy Suite (EAS), featuring the modular DriveMod software and DriveMod Kit, offers a vehicle-agnostic, retrofit-friendly solution. This approach, bolstered by 23 U.S. patents and a recent collaboration with NVIDIA , provides a significant competitive advantage in adaptability and cost-effectiveness over traditional, hardware-dependent AV solutions.
• Accelerating Commercial Traction: The company is transitioning from development to scaled commercial deployments, evidenced by a pre-order of 100 DriveMod-enabled forklifts from Arauco, multiple tugger deployments with major automotive and CPG companies, and $1.3 million in new bookings in Q4 2024.
• Strengthened Financial Runway: Recent capital raises totaling approximately $27.4 million net in June 2025, combined with a prior $33 million raise in December 2024, have significantly bolstered Cyngn's cash position to $39.2 million. This provides a runway to fund operations and scale commercialization, with management identifying a clear path to cash flow breakeven.
• Execution and Risk Management are Key: While demonstrating strong technological progress and commercial momentum, Cyngn faces execution risks, including an unremediated material weakness in internal controls and a potential $2.3 million dispute with a former placement agent. Sustained growth and efficient capital deployment will be critical for long-term success.

The Industrial Autonomy Imperative: Setting the Scene for Cyngn

Cyngn Inc. is at the forefront of a transformative shift in industrial operations, addressing a global market for autonomous vehicles estimated to exceed $200 billion. This massive opportunity is fueled by critical industry challenges: pervasive labor shortages, escalating operational costs, and an imperative to enhance workplace safety. Industrial firms, particularly in manufacturing and logistics, are grappling with a scarcity of workers, with 92% of businesses reporting few or no applications for open positions in July 2023. This bottleneck, coupled with a 5.1% increase in civilian worker compensation costs in 2022, makes human-operated industrial vehicles an increasingly expensive and inefficient proposition.

Cyngn's mission is to empower industrial organizations to overcome these hurdles by deploying scalable, differentiated autonomous vehicle technology. Unlike the complex and highly variable environments of public roads, industrial sites offer rigid, controlled settings with trained personnel, making them ideal for earlier and more cost-effective AV adoption. This strategic focus allows Cyngn to deliver tangible benefits, including improved productivity, reduced human error, and enhanced safety, directly contributing to the adoption of Industry 4.0 principles.

Technological Bedrock: DriveMod and the Enterprise Autonomy Suite

At the heart of Cyngn's offering is its Enterprise Autonomy Suite (EAS), a full-stack solution designed for industrial environments. EAS comprises three core components:

• DriveMod: Cyngn's modular autonomous driving software, which is vehicle-agnostic and can be integrated into new vehicles from OEMs or retrofitted onto existing fleets using the proprietary DriveMod Kit. This flexibility is a key differentiator, allowing companies to transition to autonomy without replacing their entire vehicle investment. The DriveMod Kit can be installed in a matter of hours, simplifying deployment.
• Cyngn Insight: A customer-facing tool suite for monitoring and managing AV fleets, including remotely operated vehicles, and for generating, aggregating, and analyzing critical operational data.
• Cyngn Evolve: An internal tool suite and infrastructure that facilitates artificial intelligence (AI) and machine learning (ML) training, continuously enhancing Cyngn's algorithms and models. This includes a simulation framework for validating new software releases.

Cyngn's technological differentiation is underscored by its robust intellectual property portfolio, boasting 23 U.S. patents. The 23rd patent, "Modular Sensor System For Automated Guided Vehicles," highlights a system adaptable to various industrial machine geometries with minimal modifications. The 22nd patent, "System and Methods of Off-Board Centric Autonomous Driving Computation," introduces a cloud-based approach that offloads heavy computing tasks from the vehicle to the cloud. This innovation significantly reduces onboard hardware requirements, enabling lighter, more cost-effective AVs while supporting sophisticated driving algorithms and fleet management.

The tangible benefits of Cyngn's technology are compelling. A study demonstrated up to a 33% improvement in productivity using Cyngn's solutions. The EAS 8.0 update delivered 138 new features and a 75% reduction in cloud computing costs, showcasing continuous innovation. Furthermore, the focus on industrial settings means less intensive computing and fewer sensors are required compared to public road AVs, translating into substantial cost savings for customers. The recent collaboration with NVIDIA , integrating NVIDIA's Isaac robotics platform with DriveMod, further validates Cyngn's cutting-edge AI capabilities and reinforces its mission to deliver real-world ROI to industrial operators.

Competitive Arena: Carving a Niche in a Giant's Shadow

The autonomous vehicle landscape is diverse, with players ranging from automotive giants to specialized software providers. Cyngn operates within this ecosystem, strategically carving a niche in industrial autonomy. While companies like Tesla and Mobileye (MBLY) focus on consumer automotive and ADAS, and NVIDIA provides foundational AI hardware and platforms, Cyngn differentiates itself through its singular focus on industrial applications and its software-centric, vehicle-agnostic approach.

Unlike competitors that often offer integrated, hardware-dependent solutions, Cyngn's DriveMod can be retrofitted onto existing vehicles or integrated into new OEM models. This modularity and flexibility are difficult for competitors to replicate, as it allows customers to leverage existing assets and avoid costly fleet overhauls. This approach is particularly appealing to industrial clients who operate diverse fleets and prioritize adaptability. Cyngn's "land and expand" strategy, where initial deployments lead to broader adoption across vehicle types and sites, aims to build a strong competitive moat by deeply embedding its technology within customer operations, making it increasingly difficult for new competitors to displace.

While Cyngn's financial scale and R&D budget are smaller compared to industry behemoths like NVIDIA , which boasts a 0.75 gross profit margin and 0.56 net profit margin, or Tesla (TSLA) with its 0.18 gross profit margin, Cyngn's specialized focus allows for a more targeted and efficient use of resources. Its ability to address specific industrial pain points, such as automating heavy loads with non-standard pallet pockets (a challenge previously unmet by other providers), demonstrates a lead in niche operational capabilities. The company's strategy of expanding globally through OEM partnerships, leveraging their existing footprint and support systems, further mitigates the need for a massive international sales force, allowing Cyngn to remain a more leveraged software company.

From Pilots to Pre-Orders: Commercial Traction and Strategic Partnerships

Cyngn's journey from early development to commercialization has gained significant momentum. After going public in October 2021, the company secured its first commercial contract with U.S. Continental in November 2022, deploying autonomous stockchasers for indoor and outdoor navigation in Q1 2023. This was followed by a second commercial stockchaser deployment with a Fortune 100 Heavy Equipment Manufacturer by July 2023.

The company has strategically expanded its vehicle compatibility. A partnership with Motrec in July 2023 integrated DriveMod into their MT-160 Tugger, capable of hauling up to 12,000 lbs. This has led to successful DriveMod Tugger deployments with five major automotive OEMs and Tier-1 suppliers across the U.S. and Mexico, and a contract with a global Fortune 500 automotive supplier in Q1 2025. In Q4 2024, Cyngn secured approximately $1.3 million in new bookings for DriveMod vehicles from direct sales.

A major commercial breakthrough occurred in August 2023 with a pre-order of 100 DriveMod-enabled Autonomous Forklifts from Arauco, a $7 billion global wood supplier. This order followed successful development work with BYD Forklifts, demonstrating Cyngn's ability to automate heavy loads with non-standard pallet pockets. This initial order represents only a fraction of Arauco's total fleet, signaling substantial long-term expansion potential. The company also continues to pursue opportunities in the mining sector, leveraging paid Non-Recurring Engineering (NRE) contracts to fund development towards commercial productization in 2024. To support its growing commercial efforts, Cyngn launched a Dealer Portal in June 2025, providing resources to its expanding dealer network across North and Central America.

Financial Performance: Growth Amidst Investment

Cyngn's financial results for the period ended June 30, 2025, reflect a company in a significant growth phase, albeit still operating at a net loss as it invests heavily in scaling. Revenue for the three months ended June 30, 2025, surged to $33,726 from $8,665 in the prior year, representing a 289.26% year-over-year increase. For the six months ended June 30, 2025, revenue reached $80,878, a remarkable 470.41% increase from $14,179 in the same period of 2024. This growth is primarily driven by EAS subscriptions, hardware sales, and the emergence of royalty revenue ($25,200 for the six months), indicating a shift from earlier reliance on NRE contracts, which generated $0 revenue in the current period.

Despite this revenue growth, Cyngn reported a net loss of $5.45 million for Q2 2025 and $13.04 million for the six months ended June 30, 2025. Cost of revenue decreased significantly to $28,758 for the six months ended June 30, 2025, from $128,698 in the prior year, reflecting improved operational efficiency. Research and Development (R&D) expenses decreased by 38.3% to $1.97 million in Q2 2025 and 35.8% to $4.08 million for the six months, primarily due to a decrease in personnel costs and the capitalization of software development. Conversely, General and Administrative (G&A) expenses increased by 36.4% to $3.55 million in Q2 2025 and 26.2% to $6.69 million for the six months, largely due to increased personnel-related costs. A notable $2.54 million change in fair value of warrant liability also impacted the six-month net loss.

Customer concentration remains a factor, with five customers accounting for 81.2% of total revenue for the six months ended June 30, 2025, highlighting the importance of key client relationships.

Capital and Liquidity: Fueling the Future

Cyngn has significantly strengthened its financial position to support its growth initiatives. As of June 30, 2025, the company held $31.3 million in unrestricted cash and $7.9 million in short-term investments, totaling $39.2 million. This substantial increase from $23.6 million in cash at the end of 2024 provides a robust liquidity runway.

The improved cash position is largely attributable to successful financing activities. In June 2025, Cyngn completed two registered direct offerings, raising approximately $27.4 million in net proceeds, following a $33 million capital raise in December 2024. These funds are earmarked for general corporate purposes and working capital, including scaling customer deployments.

While net cash used in operating activities increased to $12.77 million for the six months ended June 30, 2025, primarily due to increased inventory for tuggers and a new office security deposit, management remains confident in its ability to meet obligations for the next 12 months. The company has a clear pathway to profitability, estimating that approximately 500 EAS licenses at a blended average of $4,000 per month would achieve cash flow breakeven. The pre-order of 100 forklifts from Arauco represents a substantial step towards this goal, with the potential to far surpass the current cash burn rate from this customer alone, given the vastness of their total fleet.

Outlook and Risks: The Road Ahead

Cyngn's outlook is focused on accelerating commercialization and achieving scaled deployments in 2025. The company targets a 2024 release for its commercial forklift autonomy solution and expects the mining solution to follow. Annual R&D expenditures are projected to exceed 2024 levels, reflecting continued investment in technological advancement. The recent appointment of Natalie Russell as CFO, praised for her precision in complex accounting and leadership, is expected to further strengthen operational efficiency as the company scales.

Despite the promising outlook, investors should consider several key risks. Cyngn reported a material weakness in internal control over financial reporting related to ineffective oversight of third parties, which remained unremediated as of June 30, 2025. While management has revised processes, the effectiveness of new controls is yet to be fully tested. Additionally, the company is contesting a potential $2.3 million cash fee and 370,114 warrant issuance to a former placement agent, with the possible loss currently unestimable. Following reverse stock splits in July 2024 and February 2025 to maintain Nasdaq listing compliance, Cyngn is subject to a one-year monitoring period, with a risk of delisting if compliance is not sustained. Macroeconomic factors, including inflation, rising interest rates, and supply chain disruptions, also pose ongoing risks to costs and market conditions.

Conclusion

Cyngn stands at a pivotal juncture, poised to revolutionize industrial operations with its AI-powered autonomous vehicle technology. The company's software-centric, vehicle-agnostic approach, fortified by a growing patent portfolio and strategic partnerships with industry giants like NVIDIA (NVDA), provides a compelling competitive edge in a rapidly expanding market. Recent commercial wins, including the significant Arauco forklift pre-order and multiple tugger deployments, demonstrate increasing market acceptance and a clear path to scaled revenue generation.

While Cyngn continues to operate at a net loss as it invests in growth, its strengthened liquidity position, bolstered by recent capital raises, provides the necessary runway to execute its ambitious commercialization strategy. The company's ability to convert its substantial pipeline into recurring EAS license revenue, particularly through its "land and expand" strategy, will be key to achieving its stated cash flow breakeven target. Investors should closely monitor Cyngn's execution on its commercialization roadmap, its ability to mitigate operational risks, and its continued technological leadership as it seeks to unlock the immense potential of industrial autonomy.