Cyngn (CYN) risk factors, FY2025 10-K

Risks Related to Our Technology, Business, and Industry

1. 01Autonomous driving is an emerging technology and involves significant risks and uncertainties
2. 02We have a limited operating history in a new market and face significant challenges as our industry is rapidly evolving
3. 03Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business
4. 04Our future business depends in large part on our ability to continue to develop and successfully commercialize our suite of software products and tools. Our ability to develop, deliver, and commercialize at scale our technology to support or perform autonomous operation of industrial vehicles is still unproven
5. 05We operate in a highly competitive market and will face competition from both established competitors and new market entrants
6. 06Business collaboration with third parties is subject to risks and these relationships may not lead to significant revenue

Risks Related to Our Financial Position and Need for Additional Capital

1. 07Losses for the foreseeable future21% rewritten
2. 08We have a limited operating history, which makes it difficult to forecast our future results of operations
3. 09We expect fluctuations in our financial results making it difficult to project future results
4. 10We may need to raise additional funds and these funds may not be available to us on attractive terms when we need them, or at all
5. 11We have incurred significant losses and continue to manage our cash resources to support our ongoing operationsNew
6. 12We may be subject to risks associated with potential future acquisitions

Risks Related to Our Business Operations

1. 13Our success depends largely on the continued services of our senior management team, technical engineers, and certain key employees
2. 14If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges
3. 15We may be subject to product liability or warranty claims that could result in significant direct or indirect costs, including reputational harm, increased insurance premiums or the need to self-insure, which could adversely affect our business and operating results
4. 16If our autonomous driving software fails to perform as expected our ability to market, sell or lease our autonomous driving software could be harmed
5. 17If we are unable to establish and maintain confidence in our long-term business prospects among users, securities and industry analysts, and within our industries, or are subject to negative publicity, then our financial condition, operating results, business prospects, and access to capital may suffer materially25% rewritten
6. 18Natural disasters, outbreaks of infectious diseases, terrorist attacks, wars and threats of war may negatively impact our operations, revenue, costs, and stock priceNew
7. 19Beginning in our fiscal year 2025, significant new and expanded tariffs, reciprocal tariffs and other trade restrictions have been imposed with selective tariff exemptions impacting global tradeNew

Risks Related to Our Intellectual Property, Information Technology and Data Privacy

1. 20We may become subject to litigation brought by third parties claiming infringement, misappropriation or other violation by us of their intellectual property rights
2. 21Our business may be adversely affected if we are unable to adequately establish, maintain, protect, and enforce our intellectual property and proprietary rights or prevent third parties from making unauthorized use of our technology and other intellectual property rights
3. 22Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products
4. 23Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours
5. 24We may not be able to protect our intellectual property rights throughout the world
6. 25In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes, and know-how
7. 26We utilize open-source software, which may pose particular risks to our proprietary software, technologies, products, and services in a manner that could harm our business
8. 27Unauthorized control or manipulation of systems in autonomous industrial vehicles may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products, cancellation of contracts with future OEM or supplier partners
9. 28The costs to comply with, or our actual or perceived failure to comply with, changing U.S. and foreign laws related to data privacy, security and protection, could adversely affect our financial condition, operating results, and our reputation

Risks Related to our Common Stock

1. 29There is a limited market for our common stock that may make it more difficult to dispose of your stock
2. 30Future sales of our common stock in the public market could cause the market price of our common stock to decline
3. 31Our stock price may be volatile, and the value of our common stock may decline
4. 32Future securities issuances could result in significant dilution to our stockholders and impair the market price of our common stock
5. 33We anticipate that we will need to raise additional capital, and our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders
6. 34We do not intend to pay cash dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
7. 35We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
8. 36Anti-takeover provisions in our charter documents may discourage our acquisition by a third party, which could limit our stockholders’ opportunity to sell their shares, at a premium
9. 37The restatement of our previously issued financial statements for the Affected Periods has resulted in unanticipated costs, stockholder litigation and regulatory actions, and may adversely affect investor confidence, our stock price, our ability to raise capital in the future and our reputationNew