Greetings. Welcome to Cyngn’s Fourth Quarter and Year End 2021 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to your host, Carolyne Sohn of The Equity Group. Thank you. You may begin..

Thank you, operator and hello everyone. Thank you for joining us. The press release announcing Cyngn’s results for the fourth quarter and year ended December 31st, 2021, is available at the Investors section of the company’s website at investors.cyngn.com.

A replay of this broadcast will also be made available on the website after the conclusion of this call.

Of note for those of you who have dialed into the call by phone, we are planning to broadcast a short video presentation before management's prepared remarks and encourage you to also log into the webcasts to be able to see Cyngn's technology and action and hear some of the things that companies' customers are saying about how Cyngn is revolutionizing the way they operate.

You will also have some time to access the webcast now as I go over the Safe Harbor information. To do so please go to the Events and Presentations' page of the company's IR site at investors.cyngn.com.

Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will and include, among other things, statements regarding the company’s continued development of the Enterprise Autonomy Suite or EAS and its components, growth strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, as well as the impact of the COVID-19 pandemic on the company's business, operations, and financial results.

Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ dramatically from those projected. There can be no assurance that those expectations will prove to be correct.

Information about the risks associated with investing in Cyngn is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision.

The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise, except as required by law. On today’s call, the company’s Chairman and CEO, Lior Tal will discuss recent operating highlights.

Chief Financial Officer, Don Alvarez will follow with a review of the company’s financials for the fourth quarter and year end 2021. Lior will return to make a few concluding remarks before opening the floor for questions. With that, let's begin with the video presentation. Thanks everyone. [Video Presentation].

To discuss the most recent development here at Cyngn, what they mean in terms of our progress, and how we see the next several months ahead? Since January, we have made several announcements that represents significant milestones on the path to commercialization of the enterprise autonomous suite, or autonomous driving system.

These include pilot deployment with select customers, strategical operations and joint ventures with technology and vehicle manufacturers and talent acquisition.

The video we just shared demonstrate we have completely changed the way in which customers like Global Logistics & Fulfillment or GL&F in Columbia, a vehicle manufacturer are looking at the role of automation will play in tomorrow's material handling space.

It is not only an effective way to address the major issue facing these enterprises today, such as skilled labor shortage and high cost, but automation is something they can begin to incorporate into their operations today.

In January, GL&F chose Cyngn as its exclusive industrial automation solution provider, following a series of pilot deployments in the second half of 2021. Those deployments include the DriveMod, our self-driving technology integrated into our partner Columbia Stockchasers.

Over the past several months, GL&F has been leveraging Cyngn areas to streamline its operation, along with team members to focus on their most mission-critical tasks and benefit from unprecedented visibility into its core business with Cyngn Insight, our customer facing data analytics and fleet management interfaces.

With our help, the customer has identified applications for autonomous vehicles across its expanding footprint, including additional locations in Nevada and California. We're excited to work closely with the GL&F on additional deployment this year as they look to bring new facilities online.

In order to fulfill the demand for autonomous vehicles of GL&F and other upcoming customers, Columbia Vehicle Group has kicked off production of autonomy-ready Columbia Stockchasers powered by DriveMod. This enables us to streamline the process of making our self-driving solutions available to more customers in additional facilities.

These new Stockchasers will be integrated with Cyngn DriveMod kit for which we filed the patent application last month.

Our DriveMod kit is a turnkey system that contains advanced sensors and hardware components, streamlining both the retrofit of industrial vehicles the customer already own, as well as installation or two vehicles coming directly off of the assembly line.

It is truly scalable for upgrading standards industrial vehicles into tomorrow's autonomous vehicles, allowing for faster deployment, simpler maintenance, and lower overall cost of ownership.

We are actively in talks to continue expanding upon our existing network of key strategic partners, which will enable us to leverage the strength dealer network, servicing capabilities, encompass the organization already well established in the material handling space.

The work we're doing now will help us develop our initial core pay customer base, they will serve as the foundational path to recurring revenues. In February, we announced another very exciting key partnership.

Cyngn is now working closely with Greenland Technologies, a manufacturer of electric industrial vehicles and drivetrain systems for material handling machinery and vehicles to bring our self-driving vehicle capabilities to Greenland, Portland.

In doing so, Greenland Forklift will be able to switch easily between fully autonomous, manual, and remotely control mode. Forklifts are one of the most ubiquitous industrial vehicles in the U.S. today, with over 850,000 being utilized in warehouses and fulfillment centers around the country.

According to OSHA, approximately 11% of these forklifts will be involved in an accident of which nearly half will result in serious injury. Cyngn is committed to increasing employee safety by helping to reduce the number of accidents at our customer facility using advanced autonomy and exercise safety technologies.

Vehicles that operate autonomously also increase safety by being able to operate at night or under conditions that would be dangerous to be.

In addition to cost and productivity gains, autonomous driving and electrification will play a central role in helping enterprises achieve their ESG and sustainability goals as they transition to zero emission vehicles that are operated by intelligent systems like DriveMod. We are excited to be part of this industrial transformation.

To summarize, deploying our autonomous solutions to select customers, strengthening our strategic partnerships, and attracting top talent to our organization represents major milestones towards our successful productization and commercialization of EAS, which will translate into scale deployment and recurring revenues.

With that, I'll turn it over to Don to review our financial results..

Thanks Lior. I'll quickly go over financial highlights for the fourth quarter and year ended 2021. Additional details can be found on an earnings press release that was issued earlier today, as well as in our Form 10-Q, which we anticipate filing with the SEC this week.

We are pre-revenue company and as such did not generate any revenue for the years ended December 31st, 2021 and 2020. For the fourth quarter ended December 31st, 2021, total operating expenses were $3.6 million compared to $2.3 million for the same quarter of the prior year.

The increase was primarily due to a $500,000 increase in R&D expense related to stock-based compensation and other costs incurred for additional engineering staff, and a $1.1 million increase in G&A expenses, also related to stock-based compensation, as well as costs incurred for additional personnel, professional services, and insurance necessary to support being a public company.

As we previously disclosed, we expect R&D cost to increase incrementally with each quarter as we work towards the appropriate level of engineering and other personnel to support the ongoing R&D cost of continuously developing EAS. We reported a net loss of $2.1 million for the 2021 fourth quarter, which is relatively flat from the prior year quarter.

The increase in total OpEx was offset by an increase in other income, which was primarily attributed to the forgiveness of PPP loans by the Small Business Administration, amounting to $1.6 million during the period.

Net loss per share on a basic and diluted basis was $0.10 based on approximately 20.4 million weighted average shares for the quarter ended December 31st, 2021. This compares to a net loss per share on a basic and diluted basis of $2.38 per share based on approximately 1 million weighted average shares outstanding in the prior year quarter.

For the year ended December 31st, 2021, total operating expenses were $9.4 million compared to $8.4 million in 2020. The increase was primarily due to a $1 million increase in stock-based compensation, as well as costs incurred for additional personnel and professional services necessary to support the company's IPO and becoming a public company.

This was partially offset by a $100,000 decrease in R&D expenses related to decrease in R&D personnel compared to the pre-COVID-19 headcount level. Our net loss was $7.8 million for the full year 2021 compared to a net loss of $8.3 million in the prior year.

As with the fourth quarter, this decrease was primarily the result of the $1.6 million increase in other income due to forgiveness of the PPP loans by the SBA during the year.

Net loss per share on a basic and diluted basis was $1.33 based on approximately 5.9 million weighted average shares outstanding for the full year 2021 compared to a net loss per share on a basic and diluted basis of $8.76 per share based on approximately 1 million weighted average shares in the prior year.

Turning to the balance sheet, we ended the year with $21.9 million in cash and cash equivalents, which includes the proceeds from our IPO. This compares to $6.1 million at the end of 2020. Our working capital was $22.1 million compared to $6.1 million at the end of 2020.

And total stockholders' equity was $22.2 million compared to $5.6 million at December 31st, 2020. Following our IPO, we are well-capitalized and well-positioned to execute on our strategic initiatives. I'll now turn it back over to Lior.

Lior?.

Thank you, Don. In short, lots of exciting developments here in Q1 this year. We anticipate more to come in the weeks and months ahead. We continue working closely with our customers and partners, and look forward to sharing news on additional partnerships and deployments as they come along. With that operator, let's open it up for Q&A..

Thank you. [Operator Instructions] Thank you. Our first question comes from Rommel Dionisio with Aegis Capital. Please state your question..

Good afternoon. Thanks for taking my question. You guys have obviously had a busy several weeks here with new partnerships with Columbia and with Greenland. I wonder if you could just -- first of all, discuss some of the increased business investments that you plan to put into place in the near-term given these two new partnership signings.

And second, maybe just feedback on, obviously seem two just in the last of release, significant acceleration of business activity, what the feedback has been? What's kind of driving-- key factors that are really been driving that? And how that might result in additional partnerships here over the next several weeks and months? Thank you very much..

Thanks Rommel. This is Ben, the VP of Business Development. So, we are leveraging these partnerships to do exactly what the demand that we're seeing out there is which is to provide additional access and solutions to the areas that that need autonomous vehicle products. So, we know of the supply chain shortages that are ongoing.

We know that there's difficulty hiring into these roles, these skilled labor roles, and that automating elements of these workflows are becoming a growing need just for companies to continue to be able to fulfill the demand that they're seeing from e-commerce and the like, the growing demand.

So, these are important milestones for us in taking products that are ready -- versions of EAS that are ready for commercialization for scale to end customers. GLF is a representative example of those customers.

And we are increasing the focus that we have and getting vehicles into the hands of customers like GLF, that's what we'll be doing for the continuation of 2022.

With these being the early proof points that as you heard in the video, that the products are delivering to the expectation that for example, a three PL, a fulfillment center like GLF has for automation for their current business needs..

Okay, that’s very helpful. Thanks Ben. Congratulations..

Thank you. [Operator Instructions] Thank you. And ladies and gentlemen, it seems we've reached the end of our question-and-answer session. I'll now I'll now turn the call over to Lior Tal for closing remarks..

Thank you all for your time today. We're always open to conversation with investors and welcome people to our offices in Menlo Park should you find yourself in the Silicon Valley. Please feel free to reach out to us on our Investor Relations part of the website or to The Equity Group with any additional questions.

We look forward to speaking to you all again in our next quarterly call. Thank you very much..

Thank you. Ladies and gentlemen, this concludes today's conference. All parties may disconnect. Have a great day..