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spk07: Greetings and welcome to Syngin'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. Press star 1 on your touchstone phone to queue up for a question now. To remove your question, you can press star 2 on your touchstone phone. If anyone should require operator assistance during the conference, please press star 0 on your telephone. Please note that this conference is being recorded. I will now turn the conference over to your host, Caroline Sohn of the Equity Group. Thank you. You may begin.
spk05: Thank you, Operator, and hello, everyone. Thank you for joining us. The press release announcing Syngin's results for the fourth quarter and year ended December 31, 2021, is available at the Investors section of the company's website at investors.syngin.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 webcast to be able to see Syngin's technology in action and hear some of the things the company's customers are saying about how Syngin 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.syngin.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 Syngin is included in the 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 marketing conditions, or otherwise, except as required by law. On today's call, the company's chairman and CEO, Lira Tal, will discuss recent operating highlights. Chief Financial Officer Dawn Alvarez will follow with a review of the company's financials for fourth quarter and year-end 2021. Lira 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.
spk08: Hello, my name is Lior Tal and I'm the CEO of Syngen. For the past few months, we've been developing our partnership with the Columbia Vehicle Group, a leading industrial vehicle manufacturer. Their stock chaser is one of the most widely used industrial vehicles in the material handling space. You can find it in thousands of industrial sites throughout the U.S. and across the world. By adding St. John's DriveMod autonomous vehicle technology to stock chasers and other industrial vehicles, we're transforming the way material handling and logistic organizations get work done. Our autonomous vehicles help them overcome labor shortages, increase safety, and reduce their costs. In November, we deployed autonomous stock chasers to a warehouse operated by Global Logistics and Fulfillment. For our earning call today, we thought it would be useful to get representatives from both Global Logistics and Fulfillment and Columbia to tell you a little bit more about the Syngent Partnership, our autonomous vehicle technology, and the value these relationships are already bringing to both organizations. Please enjoy.
spk04: My name is Greg Breckley. I'm the Director of Business Development at Columbia.
spk03: I'm Ken Morris. I'm the Vice President at Global Logistics and Fulfillment.
spk04: The challenges we're seeing a lot of our customers facing today are related to supply chain. We're facing that as a manufacturer as well.
spk03: Like a lot of logistics companies, one of the things that we're dealing with is the rapid growth in the industry. and higher labor costs are a major issue, making sure that we can find and grow in the space that we need, as well as just providing more innovative services to our customers.
spk04: Columbia realized that our customers were looking for additional solutions that we currently couldn't offer. We began looking for a partner that could provide autonomous solutions, and Syngen was top of the list. We sat through an interview process and selected Syngen from a number of different robotics companies we interviewed.
spk03: When we started the pilot project here in our facility, I wasn't sure what to expect. That's the reality. We received a big crate. It was opened up by the folks from Syngin, and inside is this amazing high-tech piece of equipment normally we would take a lot of our our product that we're packing for our customers and someone would you know manually or sometimes we use a forklift to to take it to the shipping location and in our facility and in this case we actually had set up the route so that it would pass by that fulfillment team so they could easily every Every 15, 20, 30 minutes, they could drop their product on it and have it directly taken to our shipping area.
spk04: Prior to autonomy, every phase of pick and pack needed an employee, both in the picking on the shelves, the transporting, horizontal material handling, and the unloading at the other end. With autonomy, we no longer need the employee in the middle. Employees can stay focused on picking and packing parts where they make a 3PL the most money.
spk03: You know, one of the, I guess, surprising things for us or for me when we did this project, I didn't realize how quickly the team would actually start becoming accustomed to the autonomous vehicle. It got to be the point that when the pilot was over, a lot of our team basically looked around and said, hey, where's the vehicle? Where's the vehicle? And so they not only were able to... helped to program it to make sure that it stopped a certain amount of time and were able to load up their products easily onto it, but really did kind of work it into their daily operations and were using it enough that they complained about it when the pilot stopped.
spk04: I think some of the things that make it so wonderful for us to work with Syngin are the people. We're a relationships-driven company and finding another company that's full of real people has been great. Additionally, the speed to action has been phenomenal.
spk03: You know, I think that one of the important things for logistics companies like ours to think about is how we are going to integrate innovations into our industry.
spk04: An autonomous vehicle really unlocks the opportunity for us to address labor challenges that we have never been able to address. Our vehicles have always needed an operator. Not needing an operator has opened an endless possibility of opportunities for us.
spk03: Being able to have the chance to work with Syngin on an autonomous vehicle implementation is something that really opens our eyes up to the possibilities. And it's part of what we are expecting to plan for in the future as well.
spk01: Good afternoon, everyone. This is Lior Tal, Chairman and CEO of Syngen.
spk09: I'm joined tonight by Dawn Alvarez, our Chief Financial Officer, and Ben Landon, our Vice President of Business Development. We're pleased to have the opportunity to discuss the most recent development here at Syngen, 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 represent significant milestones on the path to commercialization of the Enterprise Autonomy Suite our autonomous driving system. These include pilot deployments with select customers, strategic collaborations and joint ventures with technology and vehicle manufacturers, and talent acquisition. The video we just shared demonstrates we have completely changed the way in which customers like Global Logistics and Fulfillment, or GLNF, in Colombia, a vehicle manufacturer, are looking at the role automation will play in tomorrow's material handling space. It is not only an effective way to address major issues facing these enterprises today, such as skill labor shortage and high costs, but automation is something they can begin to incorporate into their operations today. In January, GLNF chose Syngen as its exclusive industrial automation solution provider, following a series of pilot deployments in the second half of 2021. Those deployments include a drive mod, our self-driving technology, integrated into our partner Columbia's StopChaser. Over the past several months, GLNS has been leveraging Syngent's EAS to streamline its operation, allowing its team members to focus on their most mission-critical tasks and benefit from unprecedented visibility into its core business with Syngent 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 GLNF team on additional deployments this year as they look to bring new facilities online. In order to fulfill the demand for autonomous vehicles of GLNF and other upcoming customers, Columbia Vehicle Group has kicked off production of autonomy-ready Columbia stock chasers powered by DriveOne. This enables us to streamline the process of making our self-driving solutions available to more customers and additional facilities. These new stock chasers will be integrated with Syngent's Drive Mode Kit, for which we filed the patent application last month. Our Drive Mode Kit is a turnkey system that contains advanced sensors and hardware components, streamlining both the retrofit of industrial vehicles the customer already owns, as well as installation onto vehicles coming directly off of the assembly line. It is truly scalable for upgrading standard industrial vehicles into tomorrow's autonomous systems, 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, and incumbency of organizations already well established in the material handling space. The work we are doing now will help us develop our initial core paying customer base that will serve as the foundational path to recurring revenues. In February, we announced another very exciting key partnership. Syngent 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 Forklift. In doing so, Greenland Forklift will be able to switch easily between fully autonomous, manual, and remotely controlled modes. 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. Finchen is committed to increasing employee safety by helping to reduce the number of accidents at our customer facilities. using advanced autonomy and active safety technologies. Vehicles that operate autonomously also increase safety by being able to operate at night or under conditions that would be dangerous to people. 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 if they transition to zero-emission vehicles that are operated by intelligent systems like DriveOn. 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.
spk02: Thanks, Lior. I'll quickly go over financial highlights for the fourth quarter and year ended 2021. Additional details can be found on our 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 a 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 expenses 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 costs to increase incrementally with each quarter as we work towards the appropriate level of engineering and other personnel to support the ongoing R&D costs 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 off-ex 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 10 cents, based on approximately 20.4 million weighted average shares for the quarter ended December 31, 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 of 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?
spk09: 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 deployment as they come along.
spk01: With that, operator, let's open it up for Q&A. Thank you. And at this time, we will be conducting our question and answer session.
spk07: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2. if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, press star 1 to ask a question. We'll pause for a few moments as we poll for questions.
spk01: Thank you.
spk07: Our first question comes from Romel Dionisio with Aegis Capital. Please state your question.
spk06: 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, you know, obviously seeing, too, just in the last several weeks, significant acceleration of business activity. What the feedback has been, what's kind of, you know, key factors that have really been driving that and how that might result in additional partnerships here over the next several weeks and months.
spk01: Thank you very much. Thanks, Rommel. This is Ben, the VP of Business Development.
spk10: So we... 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 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. GLS is a representative example of those customers. And we are increasing the focus that we have in getting vehicles into the hands of customers like GLS. 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 3PL, a fulfillment center like GLS has. for automation for their current business needs.
spk01: Okay, that's very helpful. Thanks, Ben. Congratulations.
spk07: Thank you. And another reminder, to ask a question at this time, press star 1 on your telephone keypad.
spk01: We'll pause for another few moments as we pull for questions. Thank you. Thank you.
spk07: And ladies and gentlemen, it seems we've reached the end of our question and answer session. I'll now turn the call over to Lior Tal for closing remarks.
spk09: Thank you all for your time today. We're always open to a 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 through 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.
spk07: Thank you. Ladies and gentlemen, this concludes today's conference. All parties may disconnect. Have a great day.
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