Q1 2022 CYNGN Inc Earnings Call

Greetings and welcome to Syngenta.

First quarter 2022 financial results call.

At this time all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

I will now turn the call over to our host Carolyne Sohn of the equity group. Thank you you may begin.

Thank you operator, and Hello, everyone. Thank you for joining us.

Press release announcing its results for the first quarter ended March 31, 2022, it's available at the investors section of the company's website at investors that Finjan dotcom.

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 the short video towards the beginning of management's prepared remarks, and encourage you to also log into the webcast to be able to see the commercial of rethinking the tracker product, which launched last week.

You will have a few minutes 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 and investors that surgeon dotcom.

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 plant outlook and will and include among other things statements regarding the company's continued development of the enterprise autonomy suite or E N and its components.

Expectations regarding sales and or revenues from these being a tracker.

Gross strategy ability to deliver sustainable long term value.

To respond to the changing environment operational fell again as long 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 Xinjiang 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 Burak Hal will discuss recent operating highlights Chief Financial Officer, Don outbreak will follow with a review of the company's financials for the first quarter of 2022.

Well, we are will return to make a few concluding remarks before opening the floor for questions with that I will turn it over to New York. Please go ahead.

Thank you Caroline and good afternoon, everyone.

I'm joined today, but don't know Bruce our Chief Financial Officer, and Ben Landon, Our Vice President of business development.

This morning to commemorate our recent IPO I had the pleasure of being joined by number of colleagues partners and supporters of our company to ring. The opening bell at domestic soccer team here in New York.

The Wonderful reminder, all the people who have been involved and it worked so tirelessly, forcing them to become publicly traded autonomous vehicle technology company. It is today.

Six years ago, when we started developing drive mode autonomous driving solutions for industrial and commercial use cases, we knew it could revolutionize industry by solving huge problems organizations are facing quite rapidly increasing operational cost and accidents. It results from human error.

What's the last two years and the global content make you've shown US is how critical industrial automation and intelligence are to ensure continuity of operations automation can overcome labor shortage and global supply chain disruption.

On today's call we will highlight the most recent developments here at kindred, what they mean in terms of our progress and how we see the next several months ahead.

On that note, let's begin with a brief video presentation. The showcase isn't finished record new product that we launched just last week as part of stringent inside our data and analytics suite, let's take a look at how we printed correct addresses some of the issues that caused supply chain disruption.

In today's economy, when you run a business you run it everywhere don't you wish you had an easy way to keep track of all of this introducing infinite tracker infinite tracker is the world's longest lasting set it and forget it asset tracker abuses in international Sim card to connect to GPS and go in this order.

On this not to mention this to give you a global visibility on everything that makes your business run wherever your business is running.

And finished tracker comes loaded with key sensors, we're talking an accelerometer to track speeds and a thermometer to track temperature, which means you'll not only know where your stuff is but also whether it's kind of arrive in one piece and finish tracker is also in Iot gateway. It connects to all sorts of Bluetooth devices to deliver.

Even more information to you and your team.

The most important thing about and finish rocker. The battery last 15 years, that's right 15, and you never have to charge it like ever longest lasting chat set it and forget it you get the idea infinite tracker asset tracking to the ends of the Earth with a battery that last 15 years.

Learn more at Finjan Dot com slash infinite tracker.

Infinite records of compact GPS asset tracking device and Iot gateway. It can be assessed through just about any asset such as shipping containers pellets equipment or vehicles infinite record global Sim card pushes data to the cloud for me built in sensors or tethered Bluetooth devices anywhere in the world.

Enabling users to correct exact location speed temperature, even direction of travel through St. James in screening trucker web portal or through integration with other asset management system via API.

While most similar devices on the market today require frequent battery recharge for replacement in Phoenix record can last up to 15 years.

As we continue to explore opportunities that could bring additional data insights to the industrial domain on which we are focused.

Factory fulfillment logistics construction and mining.

We immediately recognizing <unk> is the perfect complement to drive and Finjan insight as part of the Es familiar product.

We believe getting finished record present singer with a near term opportunity to begin generic generating revenues. We also believe that this product has significant potential for continued growth over the long term, especially E. Commerce continued to grow and the need for global fulfillment experience with.

We've begun offering in Phoenix record through account based enterprise sales and shown partners that will act as value added resellers.

And we're pleased to report that we have already received our first booking for the product with a strategic customer in resource.

We see significant opportunities that we will be pursuing with large multibillion dollar corporations.

Moving onto our core autonomous vehicle product we.

We were excited to officially launch production of drive market are fully equipped autonomous vehicle hardware integration module.

Drive market contains all the advanced sensors and hardware needed for ABB technology integration.

We filed the patent application for driving went back in February when he began coming off the assembly line in early April .

While we have been working closely with Columbia vehicle group to develop drive market, where their stock trades for vehicles. The kit technology can easily be adapted to fit other industrial vehicle brands and models. This is just the beginning of what we believe to be syngenta opportunity to lead the rapid adoption of turnkey solutions for both retrofits and new industrial vehicles.

Installation can be done quickly and easily with no special training required.

That in mind manufacturers and logistics company can begin to reap the benefits of autonomy such as increased productivity improved safety and lower operational costs to date.

On April 29, we announced the closing of a private placement funding transaction of $20 million priced at the market.

These clients, especially in this volatile market, we will ensure we have the necessary resources to execute on our go to market plan. We continue working with our strategic partners on additional select deployment, while building out our team with top talent, both of which are key to successful productivity issue and commercialization of <unk>.

We remain on track to deliver scale deployment and recurring revenues. According to our original timeline and are excited about what's to come.

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

Thanks Pierre.

Quickly go over the financial highlights for the first quarter of 2022 additional details can be found in the earnings press release that was issued earlier today as well as in the Form 10-Q, which we anticipate filing with the SEC. This week.

As many of you know we are pre revenue company and as such did not generate any revenue for the three months ended March 31, 2022 and 2021.

We do however, anticipate the start of revenue generation in the coming quarters, particularly with the launch of infinite tracker.

For the first quarter ended March 31, 2022, total operating expenses were $3 8 million compared to $1 $5 million.

For the same quarter of the prior year. This increase was primarily due to a $1 5 million increase in G&A expenses related to noncash stock based compensation as well as costs incurred for additional personnel and professional services to support our status as a public company.

Additional occupancy costs related to the expansion of our Menlo Park offices also contributed to the increase in G <unk> expenses.

We also incurred $700000 increase in R&D expenses.

Also related to noncash stock based compensation costs incurred for additional engineering staff and contractors allocated occupancy costs and R&D related travel.

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 our R&D efforts.

We reported a net loss of $3 $8 million for the quarter of.

For the first quarter of 2022 compared to a net loss of $1 5 million in the prior year quarter as a result of it.

Total increase in Opex.

For the quarter ended March 31, 2022, net loss per share on a basic and diluted basis was <unk> 14.

Based on approximately $26 9 million weighted shares outstanding.

This compares to a net loss.

Per share on a basic and diluted basis of $1 63 per share based on approximately 1 million weighted average shares in the prior year quarter.

Turning to the balance sheet, we had $18 5 million in cash and cash equivalents as of March 31, 2022, which compares to $21 9 million at the end of 2021.

Our working capital was $18 2 million compared to $22 1 million at the end of 2021 and total stockholders' equity was 19 million compared to $22 2 million at December 31 2021.

As Lee mentioned earlier, we completed a private placement at the end of April which result resulted in net proceeds of approximately $18 1 billion after deducting underwriter fees and other offering expenses.

Clothing, including the proceeds from this transaction pro forma cash and cash equivalents, including restricted cash.

Working capital and total stockholders' equity.

As of March 31, 2022.

Was $36 6 million.

$36 3 million and $37 2 million respectively.

Following the private placement were well capitalized and strongly positioned to execute on our strategic initiatives in the quarters to come.

I would now like to turn it back over to Leila.

We are.

Thank you dawn.

It has been a very busy first four months of 2022.

And I expect nothing less than the remainder of the first half of the year. We appreciate the ongoing support of all our stakeholders and look forward to reporting more significant milestones this coming quarter with that operator, let's open it up for Q&A.

Thank you.

Ladies and gentlemen at this time, we will conduct a question and answer session.

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One moment, please while we poll for questions.

Our first question comes from Rommel Dionisio with <unk> capital. Please state your question.

Thank you good afternoon, Yeah, two parter, one obviously you've been busy on these announcements so I wonder if it's possible to just share the initial feedback <unk> gotten from the marketplace on drive Mod kits for.

For several weeks.

The second part of my question is between this and an extensive track or how do you guys think about ramping up the marketing effort now in terms of hiring or spending personnel to begin to really aggressively market those products. Thank you.

Yeah.

Hey, Rob This is Ben Landon here, let me answer those in reverse order.

The.

You've touched exactly on what our focus is with independent tracker moving forward. It is to scale up the sales and marketing effort to increase the sales effort moving forward. So that we are placing more of those products with customers.

It will very much be focused on traditional marketing avenues, ranging from ads to account based sales. We are staffing up the sales team to support that so so you've exactly keyed into what the focus more on fitness tracker is for the next several months.

And in terms of the acceptance of drive Mod kit.

I can't tell you exactly how the market has responded you'd have to look to pick up those signals for yourself, but I can say that it certainly has resonated with our partners, who we are working again towards scaling up our vehicle builds with so that we can increase the number of vehicles that are we.

Are deploying with customers.

According to the plan that we have laid out for 2022, 2023, and leading into 2024 and seeing those numbers increase and drive market plays a significant role in enabling us to scale that effort up efficiently and build hardware. So that we can get the software out operating on the vehicles with customer.

<unk>.

Okay. Thanks, very much and look forward to seeing upcoming announcements. Thanks.

Thanks, Ron.

Yes.

Thank you and just a reminder to ask a question at this time press Star one on your telephone keypad will pause for a few moments.

Okay.

And ladies and gentlemen, there appears to be no additional questions. At this time I'll turn the floor back to management for closing remarks. Thank you.

Thank you all for your time today, we're always open to conversation with investors and welcome people to our offices in Menlo Park could you find yourself in the Silicon Valley.

We plan to be at the H C. Wainwright conference down in Miami later, this month and hope to see some of you. There. Please feel free to reach out to us or our Investor relations firm the equity group with any additional questions. We look forward to speaking to you again on our next quarterly call. Thank you very much.

Thank you and with that that concludes today's conference. All parties may now disconnect have a great day.