Neonode(NEON)

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Neonode Reports Quarter Ended June 30, 2024 Financial Results
Prnewswire· 2024-08-08 13:23
STOCKHOLM, Aug. 8, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) ("Neonode" or the "Company") today reported financial results for the three and six months ended June 30, 2024. FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED JUNE 30, 2024: Revenues of $1.4 million, an increase of 18.7% compared to the same period in the prior year. Operating expenses of $2.7 million, a decrease of 1.6% compared to the same period in the prior year. Net loss of $1.7 million, or $0.11 per share, compared to $1.5 million, or $ ...
Neonode Announces Adjournment of Reconvened Annual Meeting of Stockholders
Prnewswire· 2024-06-25 20:25
The following files are available for download: The Annual Meeting will reconvene on July 5, 2024 at 3:00 p.m. local time at Neonode's principal executive office located at Karlavägen 100, 115 26 Stockholm, Sweden to provide its stockholders additional time to vote on the proposals described in the proxy statement filed with the Securities and Exchange Commission on April 26, 2024. No changes have been made in the proposals to be voted on by stockholders at the Annual Meeting. For more information or questi ...
Neonode Announces Adjournment of Reconvened Annual Meeting of Stockholders
Prnewswire· 2024-06-25 20:23
STOCKHOLM, June 25, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON), announced today that its 2024 Annual Meeting of Stockholders (the "Annual Meeting"), which was reconvened to June 25, 2024, was called to order and again adjourned without any business being conducted due to a lack of the required quorum. The record date for determining stockholder eligibility to vote at the Annual Meeting will remain the close of business on April 22, 2024. Proxies previously submitted will be voted at the Annual Meeting ...
Neonode Announces Adjournment of Annual Meeting of Stockholders
Prnewswire· 2024-06-11 20:59
STOCKHOLM, June 11, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) announced today that its 2024 Annual Meeting of Stockholders (the "Annual Meeting"), held on June 11, 2024 at 3:00 p.m. local time at Neonode's principal executive office located at Karlavägen 100, 115 26 Stockholm, Sweden, was convened and adjourned without any business being conducted, due to a lack of the required quorum. For more information or questions, please contact: CONTACT: The Annual Meeting will reconvene on June 25, 2024 at 3: ...
Neonode Announces Adjournment of Annual Meeting of Stockholders
Prnewswire· 2024-06-11 20:57
The record date for determining stockholder eligibility to vote at the Annual Meeting will remain the close of business on April 22, 2024. Proxies previously submitted will be voted at the Annual Meeting unless properly revoked, and stockholders who have already submitted a proxy or otherwise voted need not take any action. CONTACT: https://news.cision.com/neonode/r/neonode-announces-adjournment-of-annual-meeting-ofstockholders,c3999335 The Annual Meeting will reconvene on June 25, 2024 at 3:00 p.m. local t ...
Neonode Signs First License Agreement for Touch Sensor Module ("TSM") Technology
prnewswire.com· 2024-05-22 13:41
STOCKHOLM, May 22, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) is pleased to announce the first license agreement for its Touch Sensor Module ("TSM") technology following the decision in December 2023 to transform its TSM business to a licensing business model. YesAR has selected the Neonode TSM technology for the development and manufacturing of holographic infotainment solutions. The agreement includes an upfront technology access fee and future royalties. To further strengthen its offering, YesAR, a ...
Neonode Reports Quarter Ended March 31, 2024 Financial Results
Prnewswire· 2024-05-08 13:40
STOCKHOLM, May 8, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) ("Neonode" or the "Company") today reported financial results for the three months ended March 31, 2024. FINANCIAL SUMMARY FOR THE QUARTER ENDED MARCH 31, 2024: Revenue of $1.0 million, a decrease of 19.1% compared to the same period in the prior year. Operating expenses of $2.9 million, an increase of 3.3% compared to the same period in the prior year. Net loss of $2.1 million, or $0.14 per share, compared to $1.4 million, or $0.09 p ...
Neonode(NEON) - 2024 Q1 - Quarterly Report
2024-05-08 13:20
PART I FINANCIAL INFORMATION This part provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Q1 2024 [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Neonode Inc.'s unaudited condensed consolidated financial statements for Q1 2024 and 2023, including balance sheets, income statements, and cash flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, including assets, liabilities, and equity, as of March 31, 2024, and December 31, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $14,274 | $16,155 | | Total current assets | $16,593 | $18,620 | | Total assets | $16,921 | $19,014 | | Total current liabilities | $1,862 | $1,832 | | Total liabilities | $1,874 | $1,851 | | Total stockholders' equity | $15,047 | $17,163 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss for the three months ended March 31, 2024, and 2023 Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenues | $1,014 | $1,253 | | Total cost of revenues | $397 | $47 | | Total gross margin | $617 | $1,206 | | Total operating expenses | $2,871 | $2,778 | | Operating loss | $(2,254) | $(1,572) | | Net loss | $(2,084) | $(1,425) | | Basic and diluted loss per share | $(0.14) | $(0.09) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement presents the net loss and other comprehensive income/loss components for the three months ended March 31, 2024, and 2023 Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(2,084) | $(1,425) | | Foreign currency translation adjustments | $(34) | $35 | | Other comprehensive loss | $(2,118) | $(1,390) | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement tracks changes in stockholders' equity, including net loss, stock-based compensation, and share issuances, for the periods presented Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | December 31, 2023 | March 31, 2024 | | :--------------------------------- | :---------------- | :------------- | | Total Stockholders' Equity | $17,163 | $15,047 | | Net loss for the period | - | $(2,084) | | Stock-based compensation | - | $2 | | Foreign currency translation adjustment | - | $(34) | | Metric | December 31, 2022 | March 31, 2023 | | :--------------------------------- | :---------------- | :------------- | | Total Stockholders' Equity | $19,418 | $25,912 | | Net loss for the period | - | $(1,425) | | Stock-based compensation | - | $18 | | Issuance of shares for cash, net of offering costs | - | $7,866 | | Foreign currency translation adjustment | - | $35 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024, and 2023 Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(1,915) | $(1,698) | | Net cash (used in) provided by financing activities | $(9) | $7,838 | | Net change in cash and cash equivalents | $(1,881) | $6,165 | | Cash and cash equivalents at end of period | $14,274 | $20,981 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, financial performance, and significant events impacting the financial statements [Note 1. Interim Period Reporting & Operations Overview](index=9&type=section&id=Note%201.%20Interim%20Period%20Reporting%20%26%20Operations%20Overview) This note details Neonode's business, strategic shift to licensing, financial performance, and going concern assessment - Neonode develops advanced optical sensing solutions for contactless touch, touch, gesture sensing, and object detection, along with machine perception solutions using machine learning algorithms[25](index=25&type=chunk) - The company announced a sharpened strategy in December 2023 to focus solely on the licensing business, phasing out the TSM product business[25](index=25&type=chunk)[44](index=44&type=chunk) Net Losses and Cash Flow from Operations (in thousands) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net losses | $(2,084) | $(1,425) | | Cash used in operating activities | $(1,915) | $(1,698) | - As of March 31, 2024, the company had an accumulated deficit of approximately **$219.7 million**[26](index=26&type=chunk) - Management believes the current operating plan and potential capital sources, including the ATM Facility, are sufficient to alleviate going concern concerns[28](index=28&type=chunk)[29](index=29&type=chunk) - During the three months ended March 31, 2023, the company sold **903,716 shares** under the ATM facility, generating **$7,866,000** in net proceeds. No shares were sold under the ATM facility in Q1 2024[28](index=28&type=chunk)[101](index=101&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, including revenue recognition, inventory, and customer concentrations - Due to the strategic shift to a licensing-only business, the company impaired TSM-related inventories by **$3.6 million** for FY2023 and an additional **$0.3 million** in Q1 2024, as the TSM product business will be phased out[44](index=44&type=chunk) Customer Concentration (Accounts Receivable and Net Revenues) | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Top 4 customers % of A/R | 64.8% | 76.4% | | Customer (Q1 2024) | % of Net Revenues | | :----------------- | :---------------- | | Hewlett-Packard Company | 24.8% | | Alps Alpine | 18.4% | | Seiko Epson | 15.7% | | Customer (Q1 2023) | % of Net Revenues | | :----------------- | :---------------- | | Hewlett-Packard Company | 30.7% | | Seiko Epson | 20.2% | | Alps Alpine | 14.7% | | LG | 13.7% | Contract Liabilities (Deferred Revenues) (in thousands) | Source | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Deferred revenues license fees | $75 | $2 | | Deferred revenues products | $7 | $8 | | Deferred revenues non-recurring engineering | $- | $- | | Total Contract Liabilities | $82 | $10 | Advertising and R&D Expenses (in thousands) | Expense Category | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------- | :-------------------------------- | :-------------------------------- | | Advertising costs | $175 | $54 | | R&D costs | $895 | $802 | - The company fully reserved its net deferred tax assets as of March 31, 2024, and December 31, 2023, due to uncertainty of future pre-tax income[86](index=86&type=chunk) - The company is evaluating the impact of new accounting pronouncements: ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures)[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 3. Stockholders' Equity](index=20&type=section&id=Note%203.%20Stockholders'%20Equity) This note details the company's ATM facility, common stock, and preferred stock, including share issuance activities - The company has an At-the-Market (ATM) facility allowing the sale of up to **$25 million** of common stock through B. Riley Securities, with a **3.0%** commission[96](index=96&type=chunk)[97](index=97&type=chunk) - During the three months ended March 31, 2024, no shares were sold under the ATM Facility. In the same period of 2023, **903,716 shares** were sold, generating **$7,866,000** in net proceeds[101](index=101&type=chunk) - The aggregate market value of outstanding common stock held by non-affiliates was approximately **$26.7 million** as of February 28, 2024, reducing the ATM offering limit to **$8,901,792**[99](index=99&type=chunk)[188](index=188&type=chunk) - As of March 31, 2024, and December 31, 2023, the company had **25,000,000 shares** of common stock authorized and **15,359,481 shares** issued and outstanding. No preferred stock was issued or outstanding[100](index=100&type=chunk)[102](index=102&type=chunk) [Note 4. Stock-Based Compensation](index=21&type=section&id=Note%204.%20Stock-Based%20Compensation) This note outlines equity incentive plans and the stock-based compensation expense recognized for the period Stock-Based Compensation Expense (in thousands) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Stock-based compensation expense | $2 | $18 | - As of March 31, 2024, and December 31, 2023, the company had no outstanding stock options[111](index=111&type=chunk) [Note 5. Commitments and Contingencies](index=22&type=section&id=Note%205.%20Commitments%20and%20Contingencies) This note discusses legal proceedings, indemnities, patent litigation, and NRE agreements - The company is not aware of any pending or threatened litigation matters that would have a material impact on its operations[113](index=113&type=chunk) - In 2019, the company assigned a patent portfolio to Aequitas Technologies LLC, which subsequently filed infringement complaints against Apple and Samsung. One patent was invalidated (under appeal), and a judgment in favor of Samsung is also under appeal[116](index=116&type=chunk)[117](index=117&type=chunk) - Under a 2013 agreement with Texas Instruments (TI) for ASIC integration, the company agreed to pay **$500,000** in non-recurring engineering costs at **$0.25 per ASIC** for the first **2 million ASICs** sold. No payments have been made to TI as of March 31, 2024[118](index=118&type=chunk)[183](index=183&type=chunk) [Note 6. Segment Information](index=23&type=section&id=Note%206.%20Segment%20Information) This note provides revenue and asset breakdowns by geographic area for the company's single reportable segment - The company has one reportable segment: technology licensing and products business[119](index=119&type=chunk) Net Revenues by Geographic Area (in thousands) | Geographic Area | Three months ended March 31, 2024 (Amount) | Three months ended March 31, 2024 (Percentage) | Three months ended March 31, 2023 (Amount) | Three months ended March 31, 2023 (Percentage) | | :---------------- | :----------------------------------------- | :--------------------------------------------- | :----------------------------------------- | :--------------------------------------------- | | Japan | $391 | 38.6% | $449 | 35.8% | | United States | $338 | 33.3% | $471 | 37.6% | | France | $79 | 7.8% | $172 | 13.7% | | South Korea | $69 | 6.8% | $- | -% | | Germany | $64 | 6.3% | $111 | 8.9% | | Sweden | $54 | 5.3% | $- | -% | | Other | $19 | 1.9% | $50 | 4.0% | | Total | $1,014 | 100.0% | $1,253 | 100.0% | Total Assets by Geographic Region (in thousands) | Geographic Region | March 31, 2024 | December 31, 2023 | | :---------------- | :------------- | :---------------- | | United States | $13,817 | $16,084 | | Sweden | $3,064 | $2,888 | | Asia | $40 | $42 | | Total | $16,921 | $19,014 | [Note 7. Leases](index=23&type=section&id=Note%207.%20Leases) This note details the company's operating and finance leases, including expenses, cash flows, and future commitments Lease Expense (in thousands) | Lease Type | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $136 | $127 | | Finance lease cost | $29 | $5 | Supplemental Cash Flow Information Related to Leases (in thousands) | Cash Flow Type | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Operating cash flows from operating leases | $(17) | $(16) | | Financing cash flows from finance leases | $(9) | $(28) | Supplemental Balance Sheet Information Related to Leases (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $34 | $54 | | Total operating lease liabilities | $34 | $54 | | Total finance lease liabilities | $41 | $52 | Weighted Average Lease Terms and Discount Rates | Metric | March 31, 2024 | March 31, 2023 | | :--------------------------------- | :------------- | :------------- | | Operating leases (Remaining Lease Term) | 0.5 years | 1.5 years | | Finance leases (Remaining Lease Term) | 1.1 years | 1.4 years | | Operating leases (Discount Rate) | 5.0% | 5.0% | | Finance leases (Discount Rate) | 2.6% | 2.5% | Future Minimum Lease Payments (in thousands) | Year ending December 31, | Operating Lease Commitments | Finance Lease Commitments | | :----------------------- | :-------------------------- | :------------------------ | | 2024 | $35 | $23 | | 2025 | $- | $19 | | Total Lease Liabilities | $34 | $41 | [Note 8. Net Loss per Share](index=26&type=section&id=Note%208.%20Net%20Loss%20per%20Share) This note presents the basic and diluted net loss per common share calculations for the reported periods Net Loss per Share (in thousands, except per share amounts) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Weighted average number of common shares outstanding | 15,359 | 15,209 | | Net loss attributable to Neonode Inc. | $(2,084) | $(1,425) | | Net loss per share – basic and diluted | $(0.14) | $(0.09) | - The company had no potential common stock equivalents for the three months ended March 31, 2024 and 2023, as their effect would be anti-dilutive[129](index=129&type=chunk) [Note 9. Subsequent Events](index=26&type=section&id=Note%209.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, specifically leadership changes - On April 10, 2024, Dr. Forssell was discharged from his position as President and CEO and will serve as a Senior Advisor until December 31, 2024[131](index=131&type=chunk) - Fredrik Nihlén, the Chief Financial Officer, was appointed Interim President and CEO effective immediately[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for Q1 2024 [Forward Looking Statements](index=27&type=section&id=Forward%20Looking%20Statements) This section highlights the inherent risks and uncertainties associated with the company's forward-looking statements - The report contains forward-looking statements identified by words like 'believe,' 'anticipate,' 'expect,' 'intend,' 'goal,' 'plan,' and similar expressions[133](index=133&type=chunk) - Forward-looking statements involve inherent risks and uncertainties, including a history of losses, dependence on limited customers, reliance on component suppliers, and global economic conditions[133](index=133&type=chunk) [Overview of Business](index=27&type=section&id=Overview%20of%20Business) This section describes Neonode's technology platforms, strategic shift to licensing, and current license agreements - Neonode provides advanced optical sensing solutions (touch, contactless touch, gesture sensing) and machine perception software using zForce and MultiSensing technology platforms[135](index=135&type=chunk) - The company's sharpened strategy, announced in December 2023, focuses solely on the licensing business, with plans to phase out the TSM product business in 2024[25](index=25&type=chunk)[140](index=140&type=chunk) - As of March 31, 2024, Neonode had **34 valid technology license agreements**, with **10 licensing customers** currently shipping products embedding its technology[136](index=136&type=chunk)[137](index=137&type=chunk) - The company offers non-recurring engineering (NRE) services related to application development and proof-of-concept projects for its TSMs and technology platforms[141](index=141&type=chunk)[142](index=142&type=chunk) - Global conflicts (Ukraine, Israel-Gaza) are noted as potential sources of economic and financial uncertainty, impacting supply chains and market volatility[143](index=143&type=chunk) [Revenue Streams Analysis](index=29&type=section&id=Revenue%20Streams%20Analysis) This section analyzes the changes in license fees, product sales, and non-recurring engineering revenues for Q1 2024 Revenue Performance (in thousands, except percentages) | Revenue Category | Q1 2024 Amount | Q1 2023 Amount | Variance in Dollars | Variance in Percent | | :----------------- | :------------- | :------------- | :------------------ | :------------------ | | License fees | $773 | $1,148 | $(375) | (32.7)% | | Products | $200 | $102 | $98 | 96.1% | | Non-recurring engineering | $41 | $3 | $38 | 1,266.7% | | Total Revenue | $1,014 | $1,253 | $(239) | (19.1)% | - The decrease in license fees was mainly due to lower demand for legacy customers' products, resulting in high inventory levels at some customers[148](index=148&type=chunk) - The increase in product revenues was primarily due to customers securing TSM inventory after receiving news about the company phasing out TSM manufacturing[149](index=149&type=chunk) - The significant increase in non-recurring engineering revenues was the result of a potential TSM licensing project following the company's strategic shift[150](index=150&type=chunk) Net Revenues by Market (in thousands) | Market | Q1 2024 Amount | Q1 2023 Amount | | :---------------- | :------------- | :------------- | | Automotive | $337 | $445 | | IT & Industrial | $677 | $808 | [Operating Performance and Expenses](index=31&type=section&id=Operating%20Performance%20and%20Expenses) This section details changes in gross margin, R&D, sales and marketing, and general and administrative expenses for Q1 2024 Gross Margin and Operating Expenses (in thousands, except percentages) | Metric | Q1 2024 Amount | Q1 2024 % of Revenue | Q1 2023 Amount | Q1 2023 % of Revenue | | :----------------- | :------------- | :------------------- | :------------- | :------------------- | | Total gross margin | $617 | 60.8% | $1,206 | 96.2% | | Product gross margin | (90.0)% | - | 53.9% | - | | R&D expenses | $895 | 88.3% | $802 | 64.0% | | Sales and marketing | $816 | 80.5% | $592 | 47.2% | | General and administrative | $1,160 | 114.4% | $1,384 | 110.5% | | Net loss | $(2,084) | (205.5)% | $(1,425) | (113.7)% | - The product gross margin for Q1 2024 was significantly impacted by a **$278,000** write-down on inventory due to the phasing out of TSM manufacturing[152](index=152&type=chunk) - R&D expenses increased primarily due to higher product development costs[154](index=154&type=chunk) - Sales and marketing expenses increased mainly due to participation in technology events[155](index=155&type=chunk) - General and administrative expenses decreased primarily due to lower professional fees[157](index=157&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, cash flows, and future capital needs Liquidity and Working Capital (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $14,274 | $16,155 | | Working capital | $14,731 | $16,788 | - Net cash used in operating activities for the three months ended March 31, 2024, was **$1.9 million**[164](index=164&type=chunk) - Net cash provided by financing activities for the three months ended March 31, 2023, was **$7.8 million**, primarily from the issuance of common stock under the ATM Facility[166](index=166&type=chunk) - The company has incurred significant operating losses and negative cash flows from operations since inception, with an accumulated deficit of approximately **$219.7 million** as of March 31, 2024[167](index=167&type=chunk) - Management believes current capital, including the ATM Facility, is sufficient for operations for the next twelve months, but may require additional capital through equity investments or debt arrangements if operations do not become cash flow positive[168](index=168&type=chunk)[169](index=169&type=chunk) - The ATM Facility's aggregate offering amount was reduced to **$8,901,792** as of February 27, 2024, due to the market value of common stock held by non-affiliates being below **$75.0 million**[188](index=188&type=chunk) - The company is exposed to foreign currency exchange rate risk due to its foreign subsidiaries' functional currencies (Swedish Krona, Japanese Yen, South Korean Won, Taiwan Dollar)[171](index=171&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) This section outlines the company's accounting policies requiring significant judgment, particularly in revenue recognition - Significant judgment is required in revenue recognition for contracts with multiple performance obligations, including determining standalone selling prices (SSP)[189](index=189&type=chunk) - Judgment is also needed to determine when control of products passes to distributors and to estimate product returns and other credits[190](index=190&type=chunk) - Determining the amount of unbilled license fees at the end of each reporting period also requires judgment[191](index=191&type=chunk) - There have been no other changes from the critical accounting policies previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the period - This item is not applicable[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2024[194](index=194&type=chunk) - There were no material changes in the company's internal control over financial reporting during the three months ended March 31, 2024[196](index=196&type=chunk) PART II OTHER INFORMATION This part includes legal proceedings, risk factors, equity sales, other information, and a list of exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any pending legal proceedings expected to materially impact its operations - The company is not a party to any pending legal proceedings that would have a material impact on its operations[199](index=199&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section states there have been no material changes to the risk factors previously disclosed in the annual report - There have been no material changes from the risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[200](index=200&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[201](index=201&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report for the period - No other information to report[204](index=204&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents and certifications Key Exhibits Filed | Exhibit | Description | | :-------- | :---------- | | 3.1 | Restated Certificate of Incorporation of Neonode Inc. | | 3.2 | Amended and Restated Bylaws | | 4.1 | Description of registrant's Common Stock | | 31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 | | 31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 | | 32** | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101.INS | Inline XBRL Instance Document. | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | SIGNATURES This section contains the official signatures, confirming the due authorization and filing of the Quarterly Report on Form 10-Q - The report was signed on May 8, 2024, by Fredrik Nihlén, Interim President and Chief Executive Officer and Chief Financial Officer[209](index=209&type=chunk)
Neonode(NEON) - 2024 Q1 - Quarterly Results
2024-05-08 13:18
Neonode Q1 2024 Financial Results Press Release [Financial and Operational Highlights](index=1&type=section&id=FINANCIAL%20AND%20OPERATIONAL%20HIGHLIGHTS) Neonode's Q1 2024 revenue fell 19.1% to $1.0 million, primarily from reduced licensing fees, leading to a wider $2.1 million net loss amidst a strategic business model transition Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Change vs. Q1 2023 | | :--- | :--- | :--- | | **Revenue** | $1.0 million | -19.1% | | **Operating Expenses** | $2.9 million | +3.3% | | **Net Loss** | $2.1 million | Increased from $1.4 million | | **Loss Per Share** | $0.14 | Increased from $0.09 | | **Cash Used by Operations** | $1.9 million | Increased from $1.7 million | Q1 2024 Revenue Breakdown (vs. Q1 2023) | Revenue Source | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **License Revenues** | $0.8 million | $1.1 million | -32.7% | | **Product Sales** | $0.2 million | $0.1 million | +96.1% | | **Non-recurring Engineering** | $41,000 | $3,000 | +1,266.7% | - The company is undergoing a **strategic change** to focus entirely on its **licensing business** and phase out its **products business**, which led to **increased product sales** from last-time buy orders[3](index=3&type=chunk) - Product gross margin was **negative 90.0%** due to a one-time inventory impairment loss related to the phasing out of touch sensor module manufacturing[7](index=7&type=chunk) - The company highlights **increased interest** in its **driver and in-cabin monitoring solutions** following an award from a leading commercial vehicle OEM[4](index=4&type=chunk) - Cash and accounts receivable totaled **$15.3 million** as of March 31, 2024, a decrease from **$17.1 million** as of December 31, 2023[11](index=11&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) Neonode's Q1 2024 consolidated financial statements reflect decreased total assets, a $2.1 million net loss, and $1.9 million cash used in operations [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Neonode's total assets decreased to $16.9 million as of March 31, 2024, primarily due to reduced cash, with stockholders' equity declining to $15.0 million Balance Sheet Summary (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $14,274 | $16,155 | | **Total current assets** | $16,593 | $18,620 | | **Total assets** | $16,921 | $19,014 | | **Total current liabilities** | $1,862 | $1,832 | | **Total liabilities** | $1,874 | $1,851 | | **Total stockholders' equity** | $15,047 | $17,163 | [Consolidated Statements of Operations](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Neonode's Q1 2024 total revenues decreased to $1.01 million, resulting in a wider operating loss of $2.25 million and a net loss of $2.08 million Statement of Operations Summary (in thousands, except per share data) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total revenues** | $1,014 | $1,253 | | **Total gross margin** | $617 | $1,206 | | **Total operating expenses** | $2,871 | $2,778 | | **Operating loss** | $(2,254) | $(1,572) | | **Net loss** | $(2,084) | $(1,425) | | **Basic and diluted loss per share** | $(0.14) | $(0.09) | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) Neonode's total comprehensive loss for Q1 2024 increased to $2.118 million, primarily due to the net loss and a negative foreign currency translation adjustment Comprehensive Loss Summary (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net loss** | $(2,084) | $(1,425) | | **Foreign currency translation adjustments** | $(34) | $35 | | **Other comprehensive loss** | $(2,118) | $(1,390) | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) Stockholders' equity decreased from $17.16 million to $15.05 million as of March 31, 2024, primarily due to the $2.08 million net loss - Total stockholders' equity decreased from **$17,163 thousand** on Dec 31, 2023, to **$15,047 thousand** on March 31, 2024, primarily driven by the quarterly net loss of **$2,084 thousand**[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities increased to $1.9 million in Q1 2024, with cash and equivalents decreasing to $14.3 million due to no significant financing activities Cash Flow Summary (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(1,915) | $(1,698) | | **Net cash (used in) provided by financing activities** | $(9) | $7,838 | | **Net change in cash and cash equivalents** | $(1,881) | $6,165 | | **Cash and cash equivalents at end of period** | $14,274 | $20,981 |
Neonode(NEON) - 2023 Q4 - Annual Report
2024-02-28 14:20
PART I [Item 1. BUSINESS](index=5&type=section&id=Item%201.%20BUSINESS) Neonode provides optical sensing and machine perception solutions, shifting focus to licensing business by phasing out TSM products in 2024 - Neonode provides advanced optical sensing solutions (touch, contactless touch, gesture) and machine perception software (detecting/tracking persons/objects in video streams) based on **zForce and MultiSensing platforms**[25](index=25&type=chunk) - In December 2023, Neonode announced a **new strategy** to fully focus on the **licensing business**, phasing out the TSM product business during 2024 through licensing or outsourcing[29](index=29&type=chunk)[41](index=41&type=chunk) - Since 2010, licensing customers have sold approximately **95 million products** featuring Neonode's technology As of December 31, 2023, there were **34 valid technology license agreements**[26](index=26&type=chunk)[31](index=31&type=chunk) Revenues by Market (Percentage of Total Revenues) | Market | 2023 | 2022 | | :----------------------------- | :----- | :----- | | Net license revenues from automotive | 35.1% | 27.4% | | Net license revenues from consumer electronics | 50.4% | 51.5% | | Net product revenues from TSMs | 13.9% | 17.5% | | Net non-recurring engineering services revenues | 0.6% | 3.6% | | Total | 100.0% | 100.0% | Revenues by Geographic Region (Percentage of Total Revenues) | Region | 2023 | 2022 | | :---------------- | :----- | :----- | | United States | 35.8% | 32.5% | | Japan | 33.5% | 30.7% | | South Korea | 11.3% | 15.2% | | Germany | 9.0% | 5.3% | | Switzerland | 5.0% | 7.0% | | China | 1.8% | 2.3% | | France | 1.5% | 3.4% | | Sweden | 1.2% | 2.7% | | Other | 0.9% | 0.9% | | Total | 100.0% | 100.0% | Intellectual Property (as of December 31, 2023) | Jurisdiction | No. of Reg. Designs | No. of Issued Patents | No. of Patents Pending | | :------------- | :------------------ | :-------------------- | :--------------------- | | United States | 5 | 53 | 10 | | Europe | - | 11 | 4 | | Japan | - | 7 | 2 | | China | - | 6 | 2 | | South Korea | - | 6 | 2 | | Total: | 5 | 83 | 20 | Research and Development Expenses | Year | Amount (in millions) | | :--- | :------------------- | | 2023 | $3.8 | | 2022 | $4.0 | | **Change (YoY)** | **-5.0%** | [Item 1A. RISK FACTORS](index=14&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces risks from historical losses, customer concentration, lengthy product development cycles, intense competition, and stock price volatility - Neonode has a history of substantial net losses since inception and may require additional capital, which might not be available on commercially attractive terms[75](index=75&type=chunk) - The company is highly dependent on a limited number of customers; in 2023, **three customers accounted for approximately 56.4% of consolidated net revenues** The new strategy focusing on licensing is likely to change customer composition and reduce the overall number of active engagements[77](index=77&type=chunk) - The development and release cycle for customer products is lengthy (**18-36 months**, longer for automotive) and unpredictable, potentially causing significant expenses without offsetting revenues or variable quarterly revenues[79](index=79&type=chunk) - The stock price has been volatile due to factors such as fluctuations in operating results, competitor announcements, strategic actions, new regulations, economic conditions, and changes in analyst recommendations[101](index=101&type=chunk)[104](index=104&type=chunk) [Item 1B. UNRESOLVED STAFF COMMENTS](index=22&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) No unresolved staff comments from the SEC [Item 1C. CYBERSECURITY](index=22&type=section&id=Item%201C.%20CYBERSECURITY) The company has a comprehensive cybersecurity risk management process, with no material impact to date, but future effects are uncertain - Neonode has a comprehensive process for identifying, assessing, and managing cybersecurity risks, overseen by dedicated professionals and reviewed by executive leadership and the Board of Directors[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - Cybersecurity threats have not materially affected the company's business strategy, results of operations, or financial condition to date, but future material effects cannot be assured[111](index=111&type=chunk) [Item 2. PROPERTIES](index=22&type=section&id=Item%202.%20PROPERTIES) Neonode leases corporate headquarters in Stockholm (6,700 sq ft) and a workshop in Kungsbacka (9,000 sq ft) - Neonode leases a **6,700 sq ft corporate headquarters in Stockholm** and a **9,000 sq ft workshop in Kungsbacka, Sweden**[112](index=112&type=chunk) [Item 3. LEGAL PROCEEDINGS](index=22&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The company is not currently involved in any material legal proceedings - The company is not a party to any pending legal proceedings that would materially impact its operations[113](index=113&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=22&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to Neonode Inc PART II [Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=23&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Neonode's common stock trades on Nasdaq under "NEON," with 55 stockholders of record as of January 26, 2024 - Neonode's common stock is quoted on the Nasdaq Stock Market under the symbol "**NEON**"[116](index=116&type=chunk) - As of January 26, 2024, there were **55 stockholders of record**[116](index=116&type=chunk) - No recent sales of unregistered securities or issuer purchases of equity securities have occurred[118](index=118&type=chunk)[119](index=119&type=chunk) [Item 6. [RESERVED]](index=23&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved and contains no information [Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=Item%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition and results, highlighting increased net loss in 2023 due to lower revenues and TSM inventory write-downs [Overview](index=23&type=section&id=Overview) Neonode provides optical sensing and machine perception solutions, shifting focus to licensing business by phasing out TSM products - Neonode provides optical sensing solutions (touch, contactless touch, gesture) and machine perception software using **zForce and MultiSensing platforms** for various markets[121](index=121&type=chunk) - The company began licensing technology to OEMs and Tier 1 suppliers in 2010, with approximately **95 million devices sold by customers** incorporating its technology since then[122](index=122&type=chunk) - In December 2023, Neonode announced a new strategy to fully focus on the **licensing business**, phasing out the TSM product business during 2024[126](index=126&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation involves significant estimates and judgments, particularly for revenue, credit losses, inventory, and stock-based compensation - The preparation of financial statements requires significant estimates and judgments, including revenue recognition, credit losses, inventory valuation, and stock-based compensation[129](index=129&type=chunk)[130](index=130&type=chunk) - Revenue is recognized when control of products is transferred or services are completed and accepted License fees are earned on a per-unit basis or when the license is made available[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Inventory is stated at the lower of cost or net realizable value using FIFO A TSM inventory impairment charge of **$3.6 million** was recorded in 2023 due to the phase-out of the TSM product business[150](index=150&type=chunk)[151](index=151&type=chunk) - Research and development costs are expensed as incurred, primarily consisting of personnel-related and external consultancy costs[153](index=153&type=chunk) Deferred Revenues by Source (in thousands) | Source | 2023 | 2022 | | :----------------------------- | :--- | :--- | | Deferred revenues license fees | $2 | $20 | | Deferred revenues products | $8 | $9 | | Deferred revenues non-recurring engineering | $- | $7 | | **Total** | **$10** | **$36** | [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section details Neonode's financial performance, highlighting a significant increase in net loss for 2023 Summary of Financial Results (in thousands, except percentages) | Metric | 2023 | 2022 | Variance (Dollars) | Variance (Percent) | | :------------------------------------ | :----- | :----- | :----------------- | :----------------- | | **Revenues:** | | | | | | License fees | $3,803 | $4,470 | $(667) | (14.9)% | | Products | $620 | $995 | $(375) | (37.7)% | | Non-recurring engineering | $26 | $205 | $(179) | (87.3)% | | **Total revenues** | **$4,449** | **$5,670** | **$(1,221)** | **(21.5)%** | | **Cost of revenues:** | | | | | | Products | $4,168 | $776 | $3,392 | 437.1% | | Non-recurring engineering | $12 | $28 | $(16) | (57.1)% | | Loss on purchase commitment | $362 | $- | $362 | -% | | **Total cost of revenues** | **$4,542** | **$804** | **$3,738** | **464.9%** | | **Total gross (loss) margin** | **$(93)** | **$4,866** | **$(4,959)** | **(101.9)%** | | **Operating expenses:** | | | | | | Research and development | $3,833 | $3,963 | $(130) | (3.3)% | | Sales and marketing | $2,455 | $2,034 | $421 | 20.7% | | General and administrative | $4,363 | $4,155 | $208 | 5.0% | | **Total operating expenses** | **$10,651** | **$10,152** | **$499** | **4.9%** | | **Operating loss** | **$(10,744)** | **$(5,286)** | **$(5,458)** | **103.3%** | | Other income | $736 | $121 | $615 | 508.3% | | Provision for income taxes | $115 | $118 | $(3) | (2.5)% | | Less: net loss attributable to noncontrolling interests | $- | $400 | $(400) | (100.0)% | | **Net loss attributable to Neonode Inc.** | **$(10,123)** | **$(4,883)** | **$(5,240)** | **107.3%** | | Net loss per share attributable to Neonode Inc. per share | $(0.66) | $(0.36) | $(0.30) | 83.3% | - Total net revenues decreased by **21.5% in 2023** compared to 2022, driven by lower revenues from license fees (**-14.9%**), product sales (**-37.7%**), and non-recurring engineering services (**-87.3%**)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - The combined total gross margin shifted from **85.8% in 2022 to a gross loss of (2.1)% in 2023**, primarily due to one-time costs of **$3.6 million for inventory write-down**, **$362,000 for loss on purchase commitment**, and **$143,000 for a customer claim** related to product sales[167](index=167&type=chunk) - Net loss attributable to Neonode Inc. more than doubled, increasing by **107.3% from $4.9 million in 2022 to $10.1 million in 2023**[161](index=161&type=chunk)[176](index=176&type=chunk) [Contractual Obligation and Off-Balance Sheet Arrangements](index=33&type=section&id=Contractual%20Obligation%20and%20Off-Balance%20Sheet%20Arrangements) The company has no off-balance sheet arrangements, only operating leases and a development agreement - Neonode has no special purpose entities or off-balance sheet financing arrangements, only operating leases in the normal course of business[177](index=177&type=chunk)[178](index=178&type=chunk) - The company leases office facilities in Stockholm (**6,684 sq ft**, lease extended through Nov 2024) and a workshop in Kungsbacka (**9,040 sq ft**, lease not to be renewed after Sep 2024)[181](index=181&type=chunk)[182](index=182&type=chunk) - Neonode has finance leases for component production equipment and soundproof office pods, with implicit interest rates around **1.5% to 3.0% per annum**[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - An Analog Device Development Agreement with Texas Instruments requires Neonode to pay **$500,000 in non-recurring engineering costs** at **$0.25 per ASIC** for the first **2,000,000 ASICs sold**; no payments have been made as of December 31, 2023[187](index=187&type=chunk)[340](index=340&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Neonode's cash position, working capital, and ability to fund operations and raise capital Cash and Cash Equivalents (in thousands) | Date | Amount | | :---------------- | :----- | | December 31, 2023 | $16,155 | | December 31, 2022 | $14,816 | | **Change (YoY)** | **+$1,339** | Working Capital (in thousands) | Date | Amount | | :---------------- | :----- | | December 31, 2023 | $16,800 | | December 31, 2022 | $19,100 | | **Change (YoY)** | **-$2,300** | Net Cash Used in Operating Activities (in thousands) | Year | Amount | | :--- | :----- | | 2023 | $(6,300) | | 2022 | $(6,800) | | **Change (YoY)** | **+$500** | - Neonode believes it has sufficient capital to fund operations for the next twelve months based on current cash and planned expenditures[189](index=189&type=chunk) - Under its At-the-Market (ATM) Offering Program, Neonode sold **903,716 shares in 2023**, generating net proceeds of **$7.87 million**, and **886,065 shares in 2022**, generating net proceeds of **$4.69 million**[199](index=199&type=chunk) - Future liquidity depends on technology licensing, TSM purchases, operating expenses, customer product shipments, payment timing, gross profit margin, and the ability to raise additional capital[193](index=193&type=chunk) [Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not applicable to Neonode Inc [Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=38&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents Neonode's audited consolidated financial statements and accompanying notes, confirmed by the independent auditor [Report of Independent Registered Public Accounting Firm](index=39&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an unqualified opinion, identifying licensing revenue accounting as a critical audit matter - The independent auditor, KMJ Corbin & Company LLP, issued an unqualified opinion, stating that the consolidated financial statements present fairly Neonode's financial position and results of operations in conformity with U.S. GAAP[209](index=209&type=chunk) - A critical audit matter identified was the accounting for licensing revenues, specifically management's evaluation of unbilled license revenues due to the lack of objectively verifiable evidence in the estimation process[215](index=215&type=chunk)[216](index=216&type=chunk) [Consolidated Balance Sheets as of December 31, 2023 and 2022](index=41&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20December%2031,%202023%20and%202022) This section presents the company's consolidated balance sheets, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (in thousands) | Item | Dec 31, 2023 | Dec 31, 2022 | | :------------------------------------------ | :----------- | :----------- | | **ASSETS** | | | | Cash and cash equivalents | $16,155 | $14,816 | | Accounts receivable and unbilled revenues, net | $917 | $1,448 | | Inventory | $610 | $3,827 | | Total current assets | $18,620 | $20,798 | | Property and equipment, net | $340 | $282 | | Total assets | $19,014 | $21,198 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $440 | $334 | | Accrued payroll and employee benefits | $941 | $951 | | Accrued expenses | $354 | $200 | | Contract liabilities | $10 | $36 | | Total current liabilities | $1,832 | $1,699 | | Total liabilities | $1,851 | $1,780 | | Total stockholders' equity | $17,163 | $19,418 | | Total liabilities and stockholders' equity | $19,014 | $21,198 | [Consolidated Statements of Operations for the years ended December 31, 2023 and 2022](index=42&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20years%20ended%20December%2031,%202023%20and%202022) This section presents the company's consolidated statements of operations, detailing revenues, expenses, and net loss Consolidated Statements of Operations (in thousands, except per share amounts) | Item | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Total revenues | $4,449 | $5,670 | | Total cost of revenues | $4,542 | $804 | | Total gross (loss) margin | $(93) | $4,866 | | Total operating expenses | $10,651 | $10,152 | | Operating loss | $(10,744) | $(5,286) | | Total other income | $736 | $121 | | Loss before provision for income taxes | $(10,008) | $(5,165) | | Provision for income taxes | $115 | $118 | | Net loss including noncontrolling interests | $(10,123) | $(5,283) | | Net loss attributable to Neonode Inc. | $(10,123) | $(4,883) | | Basic and diluted loss per share | $(0.66) | $(0.36) | | Basic and diluted – weighted average number of common shares outstanding | 15,322 | 13,632 | [Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023 and 2022](index=43&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20years%20ended%20December%2031,%202023%20and%202022) This section presents the company's consolidated statements of comprehensive loss, including net loss and other comprehensive income/loss Consolidated Statements of Comprehensive Loss (in thousands) | Item | 2023 | 2022 | | :------------------------------------------ | :------- | :------- | | Net loss including noncontrolling interests | $(10,123) | $(5,283) | | Foreign currency translation adjustments | $(56) | $68 | | Other comprehensive loss | $(10,179) | $(5,215) | | Comprehensive loss attributable to Neonode Inc. | $(10,179) | $(4,815) | [Consolidated Statements of Stockholders' Equity for the years ended December 31, 2023 and 2022](index=44&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20years%20ended%20December%2031,%202023%20and%202022) This section presents the company's consolidated statements of stockholders' equity, detailing changes in equity components Consolidated Statements of Stockholders' Equity (in thousands) | Item | Dec 31, 2023 | Dec 31, 2022 | | :------------------------------------------ | :----------- | :----------- | | Common Stock Issued (shares) | 15,359 | 14,456 | | Common Stock Amount | $15 | $14 | | Additional Paid-in Capital | $235,158 | $227,235 | | Accumulated Other Comprehensive Income (Loss) | $(396) | $(340) | | Accumulated Deficit | $(217,614) | $(207,491) | | Total Stockholders' Equity | $17,163 | $19,418 | [Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022](index=45&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20years%20ended%20December%2031,%202023%20and%202022) This section presents the company's consolidated statements of cash flows, detailing operating, investing, and financing activities Consolidated Statements of Cash Flows (in thousands) | Item | 2023 | 2022 | | :------------------------------------------ | :------- | :------- | | Net cash used in operating activities | $(6,308) | $(6,808) | | Net cash used in investing activities | $(123) | $(52) | | Net cash provided by financing activities | $7,777 | $4,509 | | Effect of exchange rate changes on cash and cash equivalents | $(7) | $(216) | | Net increase (decrease) in cash and cash equivalents | $1,339 | $(2,567) | | Cash and cash equivalents at end of year | $16,155 | $14,816 | [Notes to the Consolidated Financial Statements](index=46&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining accounting policies, significant estimates, and additional information for the financial statements - Neonode incurred net losses of **$10.1 million in 2023** and **$4.9 million in 2022**, with an accumulated deficit of **$217.6 million** as of December 31, 2023, and negative cash flows from operations[233](index=233&type=chunk) - The company sold **903,716 shares** under its ATM Facility in 2023 for net proceeds of **$7.87 million**, and **886,065 shares in 2022** for **$4.69 million**, to support liquidity[237](index=237&type=chunk) - A TSM inventory impairment charge of **$3.6 million** was recorded in 2023 due to the strategic decision to phase out the TSM product business[253](index=253&type=chunk) R&D Expenses (in thousands) | Year | Amount | | :--- | :----- | | 2023 | $3,833 | | 2022 | $3,963 | | **Change (YoY)** | **-3.3%** | Stock-Based Compensation Expense (in thousands) | Category | 2023 | 2022 | | :------------------------ | :--- | :--- | | Sales and marketing | $8 | $8 | | General and administrative | $50 | $114 | | **Total** | **$58** | **$122** | | **Change (YoY)** | **-52.5%** | | - The company's effective tax rate was **(1.1)% for 2023** and **(2.3)% for 2022**, with a full valuation allowance recorded against net deferred tax assets due to historical operating losses[175](index=175&type=chunk)[302](index=302&type=chunk) Net Loss Per Share (in thousands, except per share amounts) | Item | 2023 | 2022 | | :------------------------------------------ | :------- | :------- | | Weighted average number of common shares outstanding | 15,322 | 13,632 | | Net loss attributable to Neonode Inc. | $(10,123) | $(4,883) | | Net loss per share - basic and diluted | $(0.66) | $(0.36) | [Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=72&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) No changes in or disagreements with accountants on accounting and financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure[362](index=362&type=chunk) [Item 9A. CONTROLS AND PROCEDURES](index=72&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of December 31, 2023[362](index=362&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[367](index=367&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended December 31, 2023[364](index=364&type=chunk) [Item 9B. OTHER INFORMATION](index=72&type=section&id=Item%209B.%20OTHER%20INFORMATION) This item contains no other information [Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](index=72&type=section&id=Item%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable to Neonode Inc PART III [Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=73&type=section&id=Item%2010.%20DIRECTORS,%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[371](index=371&type=chunk) [Item 11. EXECUTIVE COMPENSATION](index=73&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[372](index=372&type=chunk) [Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=73&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[373](index=373&type=chunk) [Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=73&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS,%20AND%20DIRECTOR%20INDEPENDENCE) Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[374](index=374&type=chunk) [Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](index=73&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - Information for this item is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[375](index=375&type=chunk) PART IV [Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](index=74&type=section&id=Item%2015.%20EXHIBITS,%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists consolidated financial statements, notes inapplicable schedules, and provides a comprehensive list of exhibits - The consolidated financial statements are listed in the index and filed under Item 8[378](index=378&type=chunk) - Financial statement schedules are not applicable[379](index=379&type=chunk) - A detailed list of exhibits, including the Restated Certificate of Incorporation, Amended and Restated Bylaws, employment agreements, stock incentive plans, and various certifications, is provided[381](index=381&type=chunk) [Item 16. FORM 10-K SUMMARY](index=75&type=section&id=Item%2016.%20FORM%2010-K%20SUMMARY) This item indicates that no Form 10-K summary is provided [SIGNATURES](index=76&type=section&id=SIGNATURES) The report is signed by Neonode Inc.'s CFO, CEO, and Board of Directors as of February 28, 2024 - The report is signed by Fredrik Nihlén (CFO), Urban Forssell (President and CEO), and members of the Board of Directors, including Ulf Rosberg (Chairman), Per Löfgren, Peter Lindell, and Cecilia Edström, on February 28, 2024[384](index=384&type=chunk)[385](index=385&type=chunk)