Cyngn Inc.

Thank you to everyone on the call for joining us today. The press release announcing Syngin's results for the first quarter ended March 31st, 2023 is available at the investor section of the company's website at investors.syngin.com. A replay of this broadcast will also be made available on the website approximately one hour after the conclusion of this call. 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 provisions 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 its commercial products, expectations regarding sales and all revenues, growth strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, and operational focus. 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 this engine 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 first quarter of 2023. Lior will then return to make a few concluding remarks before opening the floor for questions. And with that, I will turn the call over to Lior.

Thanks, Graham. Good afternoon, everyone. Today, I'm pleased to be reporting the significant progress we have made this quarter on our mission to bring autonomy to industrial vehicles, which is a total addressable market of over $200 billion globally. For those in the call who are still learning what we do, I'll start with a brief overview, and I encourage you to visit the website and especially our blog at blog.syngin.com for more information. Syngin is focused on solving the challenges associated with labor shortage, high cost of labor, and the cost of accidents that arise from human error and negatively impact the global economy. We address these challenges with AI, robotics, and data to produce self-driving software that can be applied to any vehicle to help industrial organizations get work done consistently, efficiently, and safely. As a developer and user of artificial intelligence, we're excited to see that the AI world has come to an inflection point with the wider community now using and seeing the value of AI. We've been developing advanced learning-based algorithms for self-driving for many years. We believe the large-scale adoption of this technology is the future of the industrial world. The foundation of our technology is our Enterprise Autonomy Suite, or EAS. This is a suite of intelligent fleet management and analytic software that allows customers to manage the complex AI and robotics technology and delegate the driving of those vehicles to our self-driving solution known as DriveMon, using simple tools and interfaces. Across the different technologies that comprise EAS, Syngent has seven issued U.S. patents, 18 non-provisional patent applications, of which six have already been allowed, and 20 pending PCT international applications. Syngent's autonomous solution is available on new vehicles purchased from our OEM partners with the solution integrated offline, but importantly is also available as a retrofit on existing industrial feeds using our turnkey hardware solutions. The patent-spending drive mode kit for commercially released autonomous stock chaser solution can be installed in just a matter of hours. Drive mode kit is an important element of our go-to-market strategy and allows for scalable deployment for existing or new vehicles. By developing a fast, economical, retrofit package for existing vehicles, our drive mode kit can simplify the transition to autonomous vehicles for companies that already have a fleet vehicle. We estimate Syngent's significant market opportunity at more than $200 billion a year based on the estimated cost of employing drivers for approximately 5 million material handling vehicles that operate worldwide. According to publicly available data, the global average annual cost to employ an individual to drive one of these vehicles is over $40,000. This is an expense that could be eliminated with Syngent's technology. The cost of labor and therefore the value of automation is significantly higher in Western economies, and specifically in North America, which is where we're focusing our current sales efforts. But even with the high cost of labor, industrial organizations, especially from the manufacturing and logistics, tell us that if they could hire more people now, they would do it without hesitation. But the shortages in the labor market prevent them. Firms in the warehousing, manufacturing, and logistics space have high fixed costs as a percentage of their overheads and the tight labor market makes it very difficult for them to run the most effective operation. By using autonomy to operate their vehicles, customers can redeploy existing workers to more productive tasks and optimize their operation, improving efficiency and profitability. In addition, these improvements don't factor in the increased productivity that autonomous operations of industrial vehicles allow. Our EAS solution doesn't require breaks or vacations, It's never distracted and doesn't require periodic training as human operators do, which allows for more efficient driving. Syngent's technology is also safer. It doesn't become distracted or break the rules. It follows guidelines strictly and ensures that safety is prioritized, reducing the expense of accidents and downtime from human error. In a study conducted last year at a business using our vehicle autonomy solutions, Syngent's technology improved the productivity of the operation by up to 33%. Unlike self-driving robot taxis on public roads and highway AV trucking companies that are still years away from any large-scale commercial deployment, we are bringing autonomy to industrial vehicles used in private facilities today. Our stock chaser solution is commercially available, ready to ship, and being actively deployed to customers and prospective customers. We signed our first commercial contract for the deployment of stock chasers with U.S. Continental for deployment in their Southern California facility at the end of 2022, and this deployment went live in the first quarter of 2023. With fully autonomous stock chasers towing goods throughout the USC site, the deployment includes autonomous navigation, both indoors and outdoors, as products are moved between buildings on the site. Indoor and outdoor navigation is a differentiating feature of DriveMod's advanced autonomy capabilities. During the first quarter, we brought our first head of sales on board. Chris Wright has a wealth of experience in the industrial automation space, and he's already developing the sales funnel for the Stock Chaser solution. We're seeing promising interest in our Stock Chaser drive mode since we ramped up our sales effort. Many firms in the industrial automation industry are in the process of developing a single solution for a particular use case. Syngent, however, has developed a software foundation that is vehicle agnostic and can be deployed on almost any industrial use case. Therefore, our commercial development focus is also on ensuring we are expanding our solution to more areas of customer demand. We have a paid deployment engagement with the leading manufacturer of building materials, using commercial and residential properties. It uses thousands of forklifts in its global operations. This project will expand the capabilities of EAS and our drive mode solution to the most widely used industrial vehicle in the world. Forklift autonomy is a significant commercial opportunity, and we're excited that not only have we successfully validated development milestones and triggered payment under the development contract, but we have also increased the scope and size of the contract following these successful demonstrations. We're targeting a 2024 release, the commercial version of the forklift autonomy solution. Another track of our product commercialization strategy is the expansion of EAS to the mining industry for an engagement with a tier one OEM in the space. The mining industry is an early adopter of automation technology and readily accepts the productivity and safety benefits of vehicle automation. We're delighted to achieve state-of-the-art results with a novel application of a key drive on subsystem in the mining domain and receive extremely positive feedback from our development partner. The commercial version of our mining solution is expected to follow the four-click solution into the market. As we move increasingly into commercialization mode, we continue to develop our leadership and management team. Last month, we welcomed on board Sean Stetson as Vice President of Engineering and Felix Singh as Vice President of Engineering Services. Sean has over 20 years' experience of commercializing emerging technologies and will be responsible for overseeing all hardware and software development on the engineering team as we expand the commercialization of our EIS capabilities. Felix also has over 20 years of experience in robotics, automation, and technology, and will be responsible for quality assurance, customer success and support, and streamlining development processes through the company. With Sean, Felix, Chris, and several other extremely strong hires that we made recently, We have the core team that we need in place. Our management team has a wealth of experience as leaders in the industrial automation sector, and our concentration now will be on executing on the planet. We're already seeing the impact of our strengthened leadership team as we release the latest major EAS update this month. EAS 9.0 makes our customer proposition even more compelling by adding new features such as return to home automation, intelligent queuing, and additional vehicle insights. We'll continue to add features to our EAS platform, which is intended to help customers realize the full value of their autonomous fleet. The opportunity for Syngence technology is significant, and our focus on the rest of the year will be on identifying those customers with the right combination of unit requirements and site specifications that will allow us to get fast short-term wins and high long-term upside. We expect that our sales team will secure additional sales channels and deployments as we move into the second half of 2023. We also anticipate that we'll be disclosing the achievement of additional successful milestones on both our paid development projects as we move those towards commercially viable solutions. I look forward to updating you on all the commercial success as we move throughout the year. Finally, we filed a universal share of registration statement on Form S3 with the SEC at the start of the month. Once it becomes effective, it will provide St. John with flexibility to access the capital market in the future if circumstances arise that would make the sale of securities advantageous to the company and its stakeholders. To summarize, during the first quarter, we continued our focus on commercialization that I outlined on our last earning call. Our sales team is engaged with potential customers that we're confident will lead to additional commercial stock chaser deployments by the end of the year. We have met required milestones on the heavy industrial vehicle development project, and third, and perhaps most excitingly, we have not only met development milestones on the forklift project, but we have also extended and upsized the project to bring autonomy to this most widely used of industrial material handling vehicles. For the rest of the year, our objectives remain unchanged, and I look forward to updating you on our further success in future calls. With that, I will turn the call over to Don. Thanks, Ligar.

I'll now take you through a brief summary of our financials. During the first quarter, we reported our second successive revenue-generating quarter as a public company and booked 873,000 revenue, which was more than three times the revenue we reported in the fourth quarter of 2022. Substantially, all of the first quarter revenue was related to the two non-recurring engineering contracts that we signed with commercial partners to bring new vehicle types to the markets. We ultimately expect these contracts to yield more than the initially reported $1.6 million, largely due to continuation of the projects with additional phases and increased scope towards productization. First quarter total operating expenses were $6.1 million as compared to $3.8 million in the first quarter of 2022. The increase was primarily due to higher R&D costs related to additional headcount and contractors added over the past 12 months to support our technology. G&A expenses were also higher in the first quarter because of an increase in personnel related costs and additional expenses to support both the overall growth of the company as well as public company responsibilities. Net loss in the first quarter of 2023 was $5.6 million or 17 cents per basic and diluted share. This compares to a net loss of $3.8 million or $0.14 for basic and delivered share in the corresponding quarter of 2022. We ended the first quarter with unrestricted cash and short-term investments, totaling approximately $17 million. Working capital at the end of the quarter was $17.4 million, with stock flows equity of $19.4 million. Additional detail on all of these numbers can be found in our earnings press release that we issued earlier today and the 10Q that we anticipate filing with the SEC later this week. With that, I'd like to turn it back to Lior for his final remarks.