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On November 4, 2025, the Audit Committee (the "Audit Committee") of the Board of Directors (the "Board") and the Board of Cyngn Inc. (the "Company"), after discussion with the Company's senior management, concluded that the Company's previously issued audited financial statements included in the Company's audited consolidated financial statements as of and for the fiscal year ended December 31, 2024, originally included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the "SEC") on March 6, 2025, and the unaudited condensed consolidated financial statements as of and for the periods ended March 31, 2025 and June 30, 2025, originally included in the Company's Quarterly Reports on Form 10-Q filed with the SEC on May 8, 2025 and August 6, 2025, respectively, (collectively the "Prior Financial Statements") should no longer be relied upon and should be restated due to an error in the Company's accounting for the Series A Warrants (the "Series A Warrants") and the Series B Warrants (the "Series B Warrants" and together with the Series A Warrants, the "Warrants") issued by the Company pursuant to the terms of that certain Securities Purchaser Agreement dated December 20, 2024 (the "Purchase Agreement"). Accordingly, investors should no longer rely upon the Company's previously released Prior Financial Statements. In addition, investors should no longer rely upon the earnings release for the periods noted and other communications relating to the Prior Financial Statements.
The error resulted in an estimated increase to warrant liability by $12.7 million, a decrease in equity balance by $12.7 million and a reclassification from operating activities to financing activities on the statement of cash flow as of December 31, 2024. The Company estimates that it will recognize a loss on the issuance of the Warrants of approximately $2.3 million and offering-related issuance costs of approximately $1.7 million as of December 31, 2024. The error also resulted in a material change to the quarterly financial statements due to the cumulative effect. The estimated impact of the error on the quarterly financials is an increase of $402 thousand to additional paid-in-capital and a decrease of $3.7 million in net loss. The error has no impact on total cash, revenue, or operating performance.
Posted In: CYN
