Core Insights - Neonode Inc. has been awarded the 2025 Just Auto Excellence Award in the Innovation - Driver Monitoring Software category, recognizing its contributions to automotive safety and driver experience through its Hands-on-wheel application [1][2][3] Group 1: Award Recognition - The Just Auto Excellence Awards highlight outstanding achievements in the automotive industry, with Neonode's driver monitoring software receiving high marks for innovation, impact, novelty, and value [3][4] - The award reflects Neonode's commitment to advancing automotive technology and enhancing driver safety [2][4] Group 2: Product Features and Technology - Neonode's Driver Monitoring Software accurately detects hand positions on the steering wheel, ensuring driver engagement in semi-autonomous vehicles, which is crucial for road safety [6] - The software utilizes Neonode's proprietary MultiSensing® technology and synthetic data to train neural networks, showcasing advanced computer vision and AI capabilities [6] - It complies with EU General Safety Regulation (GSR) and Euro NCAP requirements, aligning with essential safety frameworks in automotive design [6] - The solution is cost-effective, integrating seamlessly with existing in-cabin cameras without the need for additional hardware [6] - Customizable hand gestures allow drivers to control vehicle features easily, enhancing the overall user experience [6] - The software is adaptable to any steering wheel and can be deployed as a standalone or integrated solution, providing flexibility in the automotive market [6]

STOCKHOLM, March 24, 2025 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) (the 'Company' or 'Neonode') today announced the appointment of Daniel Alexus as its new President and Chief Executive Officer, effective March 31, 2025. "Neonode is at a very important stage of its journey toward reshaping its business and becoming a profitable company focused on licensing proprietary technologies to leading suppliers and OEMs, and we are very pleased to welcome Daniel Alexus as the new President and CEO of the company. ...

Core Viewpoint - Neonode Inc. is transitioning from manufacturing Touch Sensor Modules to focusing on technology licensing, with expectations of future license revenues from ongoing customer projects [3][4]. Financial Summary - Revenues from continuing operations for fiscal 2024 were $3.1 million, an 18.8% decrease compared to 2023 [5]. - License revenues were $2.7 million, a decrease of 29.3% compared to 2023, primarily due to lower demand from legacy customers in printer and passenger car touch applications [5]. - Revenues from non-recurring engineering for fiscal 2024 were $0.4 million, a significant increase of 1,519.2% compared to 2023, driven by a DMS project with a commercial vehicle OEM and a new agreement with NEXTY Electronics [6]. Operating Performance - Operating expenses from continuing operations for fiscal 2024 were $9.5 million, a slight decrease of 0.2% compared to 2023 [6]. - Loss from continuing operations for fiscal 2024 was $5.9 million, or $0.37 per share, compared to a loss of $5.1 million, or $0.33 per share for 2023 [7]. Cash Flow and Financial Position - Cash used by operations was $5.6 million in fiscal 2024, down from $6.3 million in 2023, mainly due to reduced component purchases following the phaseout of TSM manufacturing [7]. - As of December 31, 2024, cash and accounts receivable totaled $17.2 million, compared to $16.8 million at the end of 2023, with working capital remaining stable at $16.1 million [8].

Revenue Performance - Total net revenues decreased by 18.8% to $3.1 million in 2024 from $3.8 million in 2023, primarily due to lower license revenues offset by higher non-recurring engineering revenues [113]. - License fees revenue fell by 29.3% to $2.7 million in 2024, driven by reduced demand from legacy customers in printer and passenger car touch applications [115]. - Non-recurring engineering revenues surged by 1,519.2% to $0.4 million in 2024, attributed to a new project with a commercial vehicle OEM and an agreement with NEXTY Electronics [115]. Financial Performance - Gross margin decreased to 96.3% in 2024 from 99.7% in 2023, reflecting an increase in non-recurring engineering projects [116]. - The net loss for 2024 was $5.9 million, compared to a net loss of $5.1 million in 2023, reflecting ongoing operational challenges [123]. - The accumulated deficit increased to approximately $224.1 million as of December 31, 2024, from $217.6 million in 2023, highlighting ongoing financial strain [132]. Expenses - Research and development expenses decreased by 10.1% to $3.4 million in 2024, mainly due to lower payroll and related costs [117]. - General and administrative expenses increased by 15.3% to $3.8 million in 2024, primarily due to higher payroll and professional fees [120]. - The company recorded rent expenses of approximately $449,000 and $428,000 for the years ended December 31, 2024 and 2023, respectively [141]. Liquidity and Capital Resources - Cash and cash equivalents as of December 31, 2024, were $16.4 million, slightly up from $16.2 million in 2023, indicating stable liquidity [124]. - Working capital remained unchanged at $16.1 million as of December 31, 2024, compared to the previous year [125]. - The company sold an aggregate of 1,423,441 shares of common stock under the Ladenburg ATM Facility, generating net proceeds of $5.8 million after expenses [149]. - For the year ended December 31, 2023, the company sold 903,716 shares under the previous ATM Facility, resulting in net proceeds of $7.9 million [150]. - The company may require additional capital sources beyond cash on hand and the ATM Facility to continue operations and implement its strategy [151]. - There are no assurances that the company will successfully obtain additional financing on reasonable terms, which could negatively impact its business and financial condition [152]. - The company has no off-balance sheet financing arrangements that could affect its liquidity or capital resources [139]. Operational Commitments - The company has a lease for 6,684 square feet of office space in Stockholm, Sweden, valid through November 2026 [140]. - The company has a commission obligation of 3.0% on gross sales price per share sold under the Ladenburg Sales Agreement [147]. Foreign Exchange Risk - The company is subject to foreign currency exchange rate risk due to its foreign subsidiaries operating in local currencies such as the Swedish Krona, Japanese Yen, and South Korean Won [153]. Engineering Agreements - The company has entered into a non-recurring engineering development agreement with Texas Instruments, agreeing to pay $500,000 for engineering costs based on ASIC sales [143].

Revenue Performance - Revenues from continuing operations for fiscal 2024 were $3.1 million, an 18.8% decrease compared to 2023[5] - License revenues were $2.7 million, a decrease of 29.3% compared to 2023, primarily due to lower demand from legacy customers[5] - Revenues from non-recurring engineering for fiscal 2024 were $0.4 million, a 1,519.2% increase compared to 2023, driven by the DMS project with a commercial vehicle OEM[6] Operating Expenses and Losses - Operating expenses from continuing operations for fiscal 2024 were $9.5 million, a slight decrease of 0.2% compared to 2023[7] - Loss from continuing operations for fiscal 2024 was $5.9 million, or $0.37 per share, compared to a loss of $5.1 million, or $0.33 per share in 2023[9] - Cash used by operations was $5.6 million in fiscal 2024, down from $6.3 million in 2023[9] Cash and Liquidity - Cash and accounts receivable totaled $17.2 million as of December 31, 2024, compared to $16.8 million at the end of 2023[10] - Cash flows from operating activities showed a net cash used of $5,592 million, a slight improvement from $6,308 million in the previous year[23] - Cash and cash equivalents at the end of the year increased to $16,427 million from $16,155 million, reflecting a net increase of $272 million[23] Inventory and Asset Management - Inventory impairment loss significantly decreased to $357 million from $3,572 million, indicating improved inventory management[23] - Right-of-use asset obtained in exchange for operating lease obligations was valued at $668 million, indicating ongoing investment in operational capacity[23] Financing Activities - Proceeds from the issuance of common stock, net of offering costs, amounted to $5,796 million, down from $7,866 million in the previous year[23] - The company experienced a net cash provided by financing activities of $5,779 million, compared to $7,777 million in the previous year, showing a decrease in financing inflows[23] Strategic Focus and Developments - The company is focusing on technology licensing, with ongoing development of MultiSensing® and zForce® platforms to enhance market position[3] - Neonode announced a contract with a leading commercial vehicle OEM for a MultiSensing driver monitoring system, indicating a shift towards automotive safety applications[4] - The company aims to secure more licensing opportunities for its innovative technologies, reflecting a strategic pivot from manufacturing to licensing[10] Tax and Interest Expenses - Cash paid for interest decreased to $1 million from $9 million, indicating reduced financing costs[23] - Cash paid for income taxes decreased to $15 million from $115 million, reflecting improved tax efficiency[23] Net Loss Improvement - Net loss for the year ended December 31, 2024, improved to $6,466 million from $10,123 million in 2023, representing a reduction of approximately 36.5%[23]

Financial Performance - Total revenues for Q3 2024 were $838,000, a slight decrease from $840,000 in Q3 2023[8] - License fees contributed $731,000 to revenues in Q3 2024, down from $836,000 in Q3 2023, representing a decrease of approximately 12.6%[8] - The net loss for Q3 2024 was $1,087,000, compared to a net loss of $1,266,000 in Q3 2023, indicating an improvement of about 14.1%[9] - The company reported a gross margin of $815,000 for Q3 2024, compared to $840,000 in Q3 2023, showing a decline of about 3%[8] - Total revenues for the three months ended September 30, 2024, were $0.8 million, a decrease of 0.2% compared to $0.8 million for the same period in 2023[72] - License fees for the three months ended September 30, 2024, were $0.7 million, down 12.6% from $0.8 million in the same period of 2023[74] - Total revenues for the nine months ended September 30, 2024, were $2.5 million, a decrease of 21.0% compared to $3.1 million for the same period in 2023[72] - License fees for the nine months ended September 30, 2024, were $2.1 million, down 31.2% from $3.1 million in the same period in 2023[74] Operating Expenses - Operating expenses for Q3 2024 totaled $2,040,000, a decrease from $2,097,000 in Q3 2023, reflecting a reduction of approximately 2.7%[8] - Total operating expenses for the three months ended September 30, 2024, were $2.04 million, a decrease of 2.7% compared to $2.1 million in the same period of 2023[72] - The company reported an operating loss of $4.84 million for the nine months ended September 30, 2024, compared to an operating loss of $3.93 million in the same period of 2023, representing an increase of 23.1%[72] - General and administrative expenses for Q3 2024 were $0.7 million, a decrease of 12.5% from $0.8 million in Q3 2023, while expenses for the nine months ended September 30, 2024, increased by 8.0% to $2.7 million compared to $2.5 million in the same period in 2023[81] Cash and Liquidity - Cash and cash equivalents increased to $17,599,000 as of September 30, 2024, up from $16,155,000 at the end of 2023, representing an increase of approximately 8.9%[7] - Cash and cash equivalents at the end of the period were $17.6 million as of September 30, 2024, compared to $18.5 million at the end of the previous quarter[13] - As of September 30, 2024, cash and cash equivalents were $17.6 million, an increase from $16.2 million as of December 31, 2023, indicating improved liquidity[87] - Net cash used in operating activities for the nine months ended September 30, 2024, was $4.4 million, primarily due to a net loss of $4.9 million[88] Accumulated Deficit - The accumulated deficit as of September 30, 2024, was $222,480,000, compared to $217,614,000 at the end of 2023, indicating an increase in the deficit of approximately 2.6%[7] - The company incurred an accumulated deficit of approximately $222.5 million as of September 30, 2024, compared to $217.6 million as of December 31, 2023[92] Discontinued Operations - The company decided to phase out the TSM product business, terminating production at Pronode Technologies AB facilities in Sweden, with the facility lease ending on September 30, 2024[23] - As of September 30, 2024, total current assets of discontinued operations amounted to $364,000, including accounts receivable of $178,000 and inventory of $172,000[27] - Total current liabilities of discontinued operations were $142,000, with accounts payable and accrued payroll each at $50,000[27] - For the three months ended September 30, 2024, the net loss from discontinued operations was $44,000, compared to a net loss of $204,000 for the same period in 2023[29] Legal and Compliance - A material weakness in internal controls over financial reporting was identified, related to insufficient segregation of duties and lack of IT general controls[126] - The company is committed to remediating the identified material weakness through training, policy enhancements, and improved documentation[127] - The management is actively developing a remediation plan to address the material weakness, which could impact the accuracy of financial statements if not resolved[135] - The company is not currently involved in any pending legal proceedings, but may face claims in the ordinary course of business[131] Strategic Initiatives - The company has shifted its strategy to focus solely on the licensing business, allowing customers to license its technology for bespoke products[17] - The company anticipates that current customers will continue to ship products incorporating its technology in 2024 and expects to expand its customer base with new clients[64] - The company entered into an At The Market Offering Agreement with Ladenburg Thalmann & Co. Inc. to issue and sell up to approximately $10 million of shares of common stock[50] - The company raised approximately $5.8 million in net proceeds from the issuance of 1,423,441 shares of common stock during the three months ending September 30, 2024[19] Foreign Currency Impact - The company experienced a foreign currency translation adjustment loss of $61, impacting cash and cash equivalents[13] - The company reported foreign currency translation losses of $(30,000) for the three months ended September 30, 2024, compared to $(96,000) for the same period in 2023[33] Research and Development - Research and development expenses remained stable at $0.8 million for the three months ended September 30, 2024, consistent with the same period in 2023[78] Customer Concentration - As of September 30, 2024, five customers represented approximately 94.8% of consolidated accounts receivable, up from three customers representing 77.8% as of December 31, 2023[34]

Financial Performance - Revenues from continuing operations for Q3 2024 were $0.8 million, a decrease of 0.2% compared to Q3 2023[2] - Operating expenses from continuing operations for Q3 2024 were $2.0 million, a decrease of 2.7% compared to Q3 2023[2] - Net loss from continuing operations for Q3 2024 was $1.0 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.07 per share for Q3 2023[2][10] - Total revenues for the three months ended September 30, 2024, were $838,000, a slight decrease from $840,000 in the same period of 2023[17] - License fees contributed $731,000 to total revenues for the three months ended September 30, 2024, compared to $836,000 in the prior year, representing a decline of 12.5%[17] - Operating loss for the three months ended September 30, 2024, was $(1,225,000), slightly improved from $(1,257,000) in the same period of 2023[17] - Net loss for the three months ended September 30, 2024, was $(1,087,000), compared to $(1,266,000) for the same period in 2023, indicating a reduction in losses[19] - Basic and diluted loss per share from continuing operations for the three months ended September 30, 2024, was $(0.07), consistent with the prior year[17] Cash Flow and Liquidity - Cash used by operations in Q3 2024 was $1.3 million, down from $1.8 million in Q3 2023[3][10] - Cash and accounts receivable totaled $18.6 million as of September 30, 2024, compared to $17.1 million as of December 31, 2023[3][11] - Cash provided by investing activities was $153,000, a significant improvement from a cash outflow of $58,000 in the previous year[21] - Net cash provided by financing activities was $5,781,000, compared to $7,789,000 in the same period last year[21] - Cash and cash equivalents at the end of the period were $17,599,000, a decrease from $18,471,000 at the end of the previous year[21] - Cash paid for income taxes was $10,000, significantly lower than $95,000 in the previous year[21] - Cash paid for interest decreased to $1,000 from $8,000 year-over-year[21] Operating Expenses - Operating expenses from continuing operations for the nine months ended September 30, 2024 were $7.2 million, an increase of 2.9% compared to the same period in 2023[4] - Total operating expenses for the three months ended September 30, 2024, were $2,040,000, down from $2,097,000 in the same period of 2023, reflecting a decrease of 2.7%[17] - Research and development expenses for the three months ended September 30, 2024, were $822,000, nearly unchanged from $827,000 in the prior year[17] Equity and Deficit - The company reported total stockholders' equity of $18,000,000 as of September 30, 2024, an increase from $17,163,000 at the end of 2023[20] - The accumulated deficit as of September 30, 2024, was $(222,480,000), compared to $(217,614,000) at the end of 2023[20] Other Financial Metrics - Non-recurring engineering revenues for Q3 2024 were $0.1 million, a 2,575.0% increase compared to Q3 2023, mainly due to the DMS project[9] - Inventory impairment loss was recorded at $287,000, with no such loss reported in the previous year[21] - Changes in accounts receivable and unbilled revenues resulted in a net decrease of $105,000, compared to an increase of $512,000 in the prior year[21] Business Developments - The company has ongoing discussions with potential customers regarding Touch Sensor Module technology and MultiSensing® platform[4][5] - The company signed a TSM technology agreement with NEXTY Electronics for sensor development in Japan's amusement market[5]

Core Viewpoint - Neonode Inc. reported its financial results for the three and nine months ended September 30, 2024, focusing solely on its licensing business after reclassifying its products business to discontinued operations [1]. Financial Summary for the Three Months Ended September 30, 2024 - Revenues from continuing operations were $0.8 million, a decrease of 0.2% compared to the same period in the prior year [2]. - Operating expenses from continuing operations were $2.0 million, a decrease of 2.7% compared to the same period in the prior year [2]. - Net loss from continuing operations was $1.0 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.07 per share, for the same period in the prior year [2]. - Cash used by operations was $1.3 million compared to $1.8 million for the same period in the prior year [2]. Financial Summary for the Nine Months Ended September 30, 2024 - Revenue from continuing operations was $2.5 million, a decrease of 21.0% compared to the same period in the prior year [4]. - Operating expenses from continuing operations were $7.2 million, an increase of 2.9% compared to the same period in the prior year [4]. - Net loss from continuing operations was $4.4 million, or $0.28 per share, compared to a net loss of $3.5 million, or $0.22 per share, for the same period in the prior year [4]. - Cash used by operations was $4.4 million compared to $4.1 million for the same period in the prior year [4]. Business Highlights for the Nine Months Ended September 30, 2024 - Ongoing discussions with potential customers regarding Touch Sensor Module (TSM) technology and the MultiSensing® platform [5]. - TSM technology agreement with NEXTY Electronics for sensor development and manufacturing of next-generation amusement machines for a leading manufacturer in Japan's amusement market [5]. - TSM technology agreement with YesAR to develop and build holographic infotainment solutions for customers in the automotive and elevator segments [5]. Financial Overview for the Quarter Ended September 30, 2024 - Revenues from continuing operations were $0.8 million, a 0.2% decrease compared to the same period in 2023 [8]. - License revenues were $0.7 million, a decrease of 12.6% compared to the same period in 2023, mainly due to lower demand from legacy customers [8]. - Revenues from non-recurring engineering for the third quarter were $0.1 million, a 2,575.0% increase compared to the same period in 2023, mainly due to the DMS project with a commercial vehicle OEM [9]. Cash and Accounts Receivable - Cash and accounts receivable totaled $18.6 million as of September 30, 2024, compared to $17.1 million as of December 31, 2023 [3]. - Working capital for continuing operations was $17.7 million as of September 30, 2024, compared to $16.1 million as of December 31, 2023 [11].

Core Insights - Neonode Inc. (NASDAQ: NEON) is characterized as a "different" kind of company compared to more traditional, conservative stocks [1] Group 1 - The mission of Grassroots Trading emphasizes providing objective, unbiased, and balanced research, focusing on small- to mid-cap companies [1] - Grassroots Trading aims to identify compelling investment opportunities in often overlooked small- to mid-cap companies while also expanding coverage to large- and mega-cap companies [1]

Core Points - Neonode Inc. has appointed Peter Kruk as a Class II director on its Board of Directors [1] - Peter Kruk is currently the CEO and a board member of NCAB Group AB, with extensive experience in global industrial companies [2] - Kruk expressed excitement about joining Neonode and contributing to its innovative technology [3] - Ulf Rosberg, Chairman of the Board, highlighted Kruk's management experience and knowledge of the automotive industry as valuable assets [3]