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Neonode(NEON) - 2022 Q4 - Earnings Call Transcript
2023-03-09 18:54
Neonode Inc. (NASDAQ:NEON) Q4 2022 Earnings Conference Call March 9, 2023 10:00 AM ET Company Participants Jesper von Koch - Redeye AB Urban Forssell - Chief Executive Officer Fredrik Nihl??n - Chief Financial Officer Conference Call Participants Jesper von Koch - Redeye Jesper von Koch Hi, and welcome to Neonode???s Q4 2022 Earnings Call hosted by Redeye. We will today start with a company presentation and also a presentation of the Q4 results followed by a Q&A session by me and the companies of their anal ...
Neonode(NEON) - 2022 Q4 - Annual Report
2023-03-09 14:20
PART I [Business](index=5&type=section&id=Item%201.%20BUSINESS) Neonode Inc. provides optical sensing solutions through zForce technology licensing and Touch Sensor Module sales, targeting automotive, printer, and contactless touch markets - The company operates through **zForce optical sensing technology licensing** to OEMs and **Touch Sensor Module (TSM) manufacturing and sales**[19](index=19&type=chunk)[20](index=20&type=chunk) - As of December 31, 2022, Neonode held **35 technology license agreements** and **10 TSM reseller agreements**[21](index=21&type=chunk)[26](index=26&type=chunk) - Strategic goals include leading **contactless touch interfaces** for elevators and kiosks, maintaining **optical touch licensing leadership** in printers and automotive, and entering the **automotive driver monitoring market**[36](index=36&type=chunk)[37](index=37&type=chunk) Revenue by Market Segment (as % of Total Revenue) | Market Segment | 2022 | 2021 | | :--- | :--- | :--- | | Automotive (license fees) | 27% | 27% | | Consumer electronics (license fees) | 51% | 55% | | TSMs (products) | 18% | 16% | | Non-recurring engineering | 4% | 2% | Revenue by Geographic Region (as % of Total Revenue) | Geographic Region | 2022 | 2021 | | :--- | :--- | :--- | | U.S. | 33% | 39% | | Japan | 31% | 33% | | South Korea | 15% | 15% | | Switzerland | 7% | 1% | | Germany | 5% | 5% | | Other | 9% | 7% | - The company faces competition from **resistive and capacitive touch solutions**, **camera-based gesture detection**, and **driver monitoring software providers** like SmartEye and Seeing Machines[52](index=52&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) Intellectual Property Portfolio as of Dec 31, 2022 | Jurisdiction | Issued Patents | Pending Patents | | :--- | :--- | :--- | | United States | 48 | 9 | | Europe | 11 | 5 | | Japan | 7 | 1 | | China | 6 | 1 | | South Korea | 6 | 1 | | **Total** | **78** | **18** | - Research and development expenses were **$4.0 million in 2022** and **$3.5 million in 2021**[61](index=61&type=chunk) - As of December 31, 2022, the company employed **55 individuals** and **7 consultants**[65](index=65&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces significant risks including historical net losses, customer and supplier dependency, intellectual property challenges, and potential stock dilution - The company has a history of **substantial net losses** and may require additional capital, potentially leading to **significant stockholder dilution**[70](index=70&type=chunk)[71](index=71&type=chunk) - In 2022, **four customers generated approximately 68% of consolidated net revenues**, indicating significant concentration risk[72](index=72&type=chunk) - Reliance on component suppliers like **Texas Instruments and ST Microelectronics** for ASICs poses supply chain disruption risks from quality or availability issues[76](index=76&type=chunk)[77](index=77&type=chunk) - Limited hardware manufacturing experience subjects the sensor module business to risks in **component sourcing, production capacity, and sales channel establishment**[80](index=80&type=chunk)[81](index=81&type=chunk) - The company is highly dependent on its **senior management team**, including CEO Dr. Urban Forssell and CFO Fredrik Nihlén[89](index=89&type=chunk) - Significant business in foreign currencies, primarily the **Swedish Krona**, exposes the company to unhedged **currency exchange rate risks**[94](index=94&type=chunk) - The two largest stockholders, also board members, hold approximately **one-fourth of outstanding voting stock**, creating ownership concentration impacting stockholder votes[103](index=103&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - No unresolved staff comments were reported[108](index=108&type=chunk) [Properties](index=23&type=section&id=Item%202.%20PROPERTIES) As of December 31, 2022, the company leases corporate headquarters in Stockholm and a workshop in Kungsbacka, Sweden - The company leases **corporate headquarters in Stockholm** and a **workshop in Kungsbacka, Sweden**[109](index=109&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any pending legal proceedings - The company is **not a party to any pending legal proceedings**[110](index=110&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - This disclosure item is **not applicable**[111](index=111&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq under 'NEON', with **37 stockholders of record** as of February 8, 2023 - The company's common stock is listed on the **Nasdaq Stock Market** under the symbol **NEON**[114](index=114&type=chunk) - As of February 8, 2023, there were **37 stockholders of record**[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In FY2022, total revenue decreased slightly to **$5.67 million**, while operating loss improved to **$5.3 million**, supported by **$14.8 million** cash Financial Results Summary (in thousands) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$5,670** | **$5,836** | **(2.8)%** | | License fees | $4,470 | $4,787 | (6.6)% | | Products | $995 | $955 | 4.2% | | Non-recurring engineering | $205 | $94 | 118.1% | | **Total Gross Margin** | **$4,866** | **$4,881** | **(0.3)%** | | **Total Operating Expenses** | **$10,152** | **$11,988** | **(15.3)%** | | **Operating Loss** | **$(5,286)** | **$(7,107)** | **(25.6)%** | | **Net loss attributable to Neonode Inc.** | **$(4,883)** | **$(6,450)** | **(24.3)%** | | **Net loss per share** | **$(0.36)** | **$(0.54)** | **(33.3)%** | - The **decrease in 2022 license fees** was primarily due to **component shortages** in printer and automotive markets, with recovery noted in the second half[161](index=161&type=chunk) - **Sales and marketing expenses decreased by 28.4%** and **General and administrative expenses decreased by 25.8%** in 2022, reducing operating loss[168](index=168&type=chunk)[170](index=170&type=chunk) - The company ended 2022 with **$14.8 million in cash**, down from **$17.4 million in 2021**, with working capital stable at **$19.1 million**[188](index=188&type=chunk) - Net cash used in operating activities was **$6.8 million for 2022**, an improvement from **$7.7 million in 2021**[189](index=189&type=chunk)[191](index=191&type=chunk) - The company raised approximately **$4.7 million in 2022** and an additional **$7.9 million in January 2023** through its At-the-Market (ATM) offering program[198](index=198&type=chunk)[199](index=199&type=chunk)[373](index=373&type=chunk) [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 the company - This disclosure item is **not applicable**[204](index=204&type=chunk) [Financial Statements and Supplementary Data](index=38&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for FY2022 and FY2021, with the auditor's report identifying unbilled licensing revenues as a critical audit matter - The section includes **audited consolidated financial statements** and the report from **KMJ Corbin & Company LLP**, the independent registered public accounting firm[206](index=206&type=chunk)[207](index=207&type=chunk) - The auditor's report identifies **"Accounting for Licensing Revenues" as a Critical Audit Matter** due to subjective judgments in estimating unbilled royalties[212](index=212&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$21,198** | **$22,992** | | Cash | $14,816 | $17,383 | | Total current assets | $20,798 | $22,032 | | **Total Liabilities** | **$1,780** | **$3,155** | | Total current liabilities | $1,699 | $2,973 | | **Total Stockholders' Equity** | **$19,418** | **$19,837** | - The company incurred net losses of **$4.9 million in 2022** and **$6.5 million in 2021**, resulting in an **accumulated deficit of $207.5 million** as of December 31, 2022[233](index=233&type=chunk) - On October 1, 2022, the company acquired the remaining **49% of Pronode Technologies AB**, making it a wholly-owned subsidiary[244](index=244&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=76&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - No changes or disagreements with accountants were reported[375](index=375&type=chunk) [Controls and Procedures](index=76&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) As of December 31, 2022, management concluded that disclosure controls and internal control over financial reporting were effective, with no material changes reported - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of December 31, 2022[375](index=375&type=chunk) - Management concluded that **internal control over financial reporting was effective** as of December 31, 2022, based on COSO framework criteria[380](index=380&type=chunk) - No material changes to **internal control over financial reporting** occurred during the fourth quarter of 2022[377](index=377&type=chunk) [Other Information](index=76&type=section&id=Item%209B.%20OTHER%20INFORMATION) The company reports no other information for this item - No other information was reported for this item[382](index=382&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=76&type=section&id=Item%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable to the company - This disclosure item is **not applicable**[382](index=382&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=77&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 proxy statement - Information is incorporated by reference from the **definitive proxy statement for the 2023 Annual Meeting of Stockholders**[384](index=384&type=chunk) [Executive Compensation](index=77&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Information concerning executive compensation is incorporated by reference from the 2023 proxy statement - Information is incorporated by reference from the **definitive proxy statement for the 2023 Annual Meeting of Stockholders**[385](index=385&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=77&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information concerning security ownership is incorporated by reference from the 2023 proxy statement - Information is incorporated by reference from the **definitive proxy statement for the 2023 Annual Meeting of Stockholders**[386](index=386&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=77&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information concerning related party transactions and director independence is incorporated by reference from the 2023 proxy statement - Information is incorporated by reference from the **definitive proxy statement for the 2023 Annual Meeting of Stockholders**[387](index=387&type=chunk) [Principal Accounting Fees and Services](index=77&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information concerning principal accounting fees and services is incorporated by reference from the 2023 proxy statement - Information is incorporated by reference from the **definitive proxy statement for the 2023 Annual Meeting of Stockholders**[388](index=388&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=78&type=section&id=Item%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists financial statements filed under Item 8 and provides a detailed list of all exhibits filed with the Annual Report - The **consolidated financial statements are filed under Item 8** of the report[391](index=391&type=chunk) - A detailed list of exhibits is provided, including **corporate governance documents, material contracts, and Sarbanes-Oxley certifications**[394](index=394&type=chunk) [Form 10-K Summary](index=79&type=section&id=Item%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a Form 10-K summary - No Form 10-K summary has been provided[395](index=395&type=chunk)
Neonode(NEON) - 2022 Q3 - Earnings Call Transcript
2022-11-10 18:29
Neonode Inc. (NASDAQ:NEON) Q3 2022 Earnings Conference Call November 10, 2022 10:00 AM ET Company Participants Urban Forssell - Chief Executive Offier Fredrik Nihlen - Chief Financial Officer Conference Call Participants Jesper von Koch - Redeye Jesper von Koch Hi, and welcome the Q3 2022 Neonode Earnings Call. And we???ll start today with a company presentation and a walk through of the financial results, but the company???s CEO and CFO. Then we have a few minutes for Q&A hosted by me and -- both me and th ...
Neonode(NEON) - 2022 Q3 - Quarterly Report
2022-11-10 14:21
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 ☐ Transition report pursuant to section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from ________ to ________ Commission file number 1-35526 NEONODE INC. (Exact name of registrant as specified in its charter) | Delaware | 94-1517641 | | --- | --- | | (S ...
Neonode(NEON) - 2022 Q2 - Earnings Call Presentation
2022-08-15 16:59
( neonode® Q2 2022 Earnings Call August 11, 2022 2022-08-11 1 © Neonode 2001-2022 · www.neonode.com · Nasdaq (NEON) Today's Presenters Urban Forssell CEO Fredrik Nihlén CFO 2022-08-11 2 © Neonode 2001-2022 · www.neonode.com · Nasdaq (NEON) Legal Disclaimer This presentation contains, and related oral and written statements of Neonode Inc. (the "Company") and its management may contain, forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forwardlooking state ...
Neonode(NEON) - 2022 Q2 - Earnings Call Transcript
2022-08-11 18:44
Neonode Inc. (NASDAQ:NEON) Q2 2022 Earnings Conference Call August 11, 2022 10:00 AM ET Company Participants Urban Forssell ??? Chief Executive Officer Fredrik Nihlen ??? Chief Financial Officer Conference Call Participants Jesper von Koch ??? Redeye Unidentified Company Representative Hi, and welcome to Neonode???s Q2 2022 Earnings Call. Today, we???ll start with the with company presentation, which is then followed by questions-and-answer sessions led by me and the other covering analysts. And the analyst ...
Neonode(NEON) - 2022 Q2 - Quarterly Report
2022-08-11 13:21
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2022 ☐ Transition report pursuant to section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from ________ to ________ Commission file number 1-35526 NEONODE INC. (Exact name of registrant as specified in its charter) | Delaware | 94-1517641 | | --- | --- | | (State ...
Neonode(NEON) - 2022 Q1 - Earnings Call Presentation
2022-05-16 17:40
( neonode® Q1 2022 Earnings Call May 11, 2022 2022-05-12 1 © Neonode 2001-2022 · www.neonode.com · Nasdaq (NEON) Today's Presenters Urban Forssell CEO Fredrik Nihlén CFO 2022-05-12 2 © Neonode 2001-2022 · www.neonode.com · Nasdaq (NEON) This presentation contains, and related oral and written statements of Neonode Inc. (the "Company") and its management may contain, forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forwardlooking statements include inform ...
Neonode(NEON) - 2022 Q1 - Earnings Call Transcript
2022-05-12 17:22
Financial Data and Key Metrics Changes - Total revenues for Q1 2022 reached $1.3 million, a decrease of 21% compared to the same period in 2021 [10] - License revenues for Q1 2022 were $1.1 million, down from $1.3 million in Q1 2021, primarily due to component shortages in the printer and automotive markets [10] - Product revenues for Q1 2022 were $147,000, an increase of 20% compared to the previous quarter [11] - Gross margin for products was 65% in Q1 2022, an increase of 41 percentage points compared to the same period last year [13] - Operating expenses decreased by 12% compared to Q1 2021, mainly due to lower professional fees and depreciation [14] - Net loss attributed to Neonode Inc. was $1.4 million, compared to $1.6 million for the same period in 2021 [16] Business Line Data and Key Metrics Changes - The product business primarily targets customers in the elevator and interactive kiosk segments, with potential in industrial automation and medical equipment [20] - The licensing business has historically focused on e-readers, printers, and automotive customers, with growth potential seen in the automotive segment and military avionics [21] Market Data and Key Metrics Changes - The company is experiencing challenges due to COVID-19 lockdowns, particularly in China, which affects customer operations and supply chains [59] - The geopolitical situation and economic uncertainties, including the war in Ukraine, are indirectly impacting customer behavior and production capabilities [60] Company Strategy and Development Direction - The company aims to transform human-machine interaction through innovative touch and contactless solutions, focusing on technology licensing and product sales [18] - The strategy launched in 2020 emphasizes B2B growth, revitalizing the licensing business while expanding product sales [19] - The company is optimistic about future growth in the licensing business, particularly in automotive and avionics sectors, despite long development cycles [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges indirect pressures from COVID-19 and supply chain issues but remains optimistic about overall trends and customer engagement [67][68] - The company believes it is well-positioned to expand its product business and grow its licensing revenue, with a strong pipeline of opportunities in Asia and North America [61] Other Important Information - The company has secured significant component stock to stabilize production costs and has improved pricing strategies to enhance margins [72] - The gross margin has shown consistent improvement due to cost management and pricing adjustments [75][76] Q&A Session Summary Question: Progress on major projects for 2022 - Management confirmed ongoing positive developments with elevator OEMs and 7-Eleven Japan, with no indications of project delays [64][65][66] Question: Revenue ramp-up outlook for 2022 - Management noted indirect pressures from COVID-19 and supply chain issues but remains confident in a positive revenue trend [67][68] Question: Impact of increased input costs - The company has secured component stock and has not faced major cost increases, although some customers are experiencing challenges [72] Question: Drivers of gross margin improvement - Management highlighted cost management and pricing strategy adjustments as key factors in improving gross margins [75][76]
Neonode(NEON) - 2022 Q1 - Quarterly Report
2022-05-11 13:21
[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section details the company's unaudited financial statements, management's discussion, and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Neonode Inc. for the three months ended March 31, 2022, and 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from $23.0 million at the end of 2021 to $21.3 million as of March 31, 2022, primarily due to a reduction in cash Balance Sheet Summary | | March 31, 2022 (Unaudited, in thousands) | December 31, 2021 (Audited, in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $20,535 thousand | $22,032 thousand | | **Total Assets** | $21,307 thousand | $22,992 thousand | | **Total Current Liabilities** | $2,639 thousand | $2,973 thousand | | **Total Liabilities** | $2,835 thousand | $3,155 thousand | | **Total Stockholders' Equity** | $18,472 thousand | $19,837 thousand | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2022, total revenues decreased to $1.32 million, while net loss improved slightly to $1.38 million Statements of Operations Summary | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | $1,318 thousand | $1,665 thousand | | **Total Gross Margin** | $1,258 thousand | $1,388 thousand | | **Operating Loss** | $(1,391) thousand | $(1,629) thousand | | **Net Loss attributable to Neonode Inc.** | $(1,380) thousand | $(1,568) thousand | | **Basic and Diluted Loss per Share** | $(0.10) | $(0.14) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities resulted in a net use of $2.3 million for Q1 2022, decreasing the cash position to $15.1 million Statements of Cash Flows Summary | Cash Flow Activity | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(2,279) thousand | $(1,990) thousand | | **Net cash used in investing activities** | $(5) thousand | $(62) thousand | | **Net cash used in financing activities** | $(61) thousand | $(148) thousand | | **Net decrease in cash** | $(2,257) thousand | $(2,328) thousand | | **Cash at end of period** | $15,126 thousand | $8,145 thousand | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies, business operations, liquidity, revenue recognition, and other financial statement items - The company develops advanced optical sensing solutions for contactless touch, gesture sensing, and scene analysis, marketing its zForce and MultiSensing technology platforms to various markets including office equipment, automotive, and medical[26](index=26&type=chunk) - Neonode has incurred significant operating losses since inception, with a net loss of approximately **$1.4 million** for Q1 2022, cash used in operating activities of **$2.3 million**, and an accumulated deficit of **$204.0 million** as of March 31, 2022[28](index=28&type=chunk) - As of March 31, 2022, five customers represented approximately **85%** of consolidated accounts receivable, with major customers accounting for over **10%** of net revenues including Hewlett-Packard (**32%**), Seiko Epson (**17%**), LG (**15%**), and Alps Alpine (**11%**)[56](index=56&type=chunk)[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial results, noting a revenue decrease due to component shortages and lockdowns, but an improved operating loss [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Total net revenues for Q1 2022 decreased by 20.8% to $1.32 million, while operating loss improved due to lower expenses Results of Operations Summary | Metric | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (in thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,318k | $1,665k | $(347)k | (20.8)% | | License fees | $1,104k | $1,295k | $(191)k | (14.7)% | | Products | $147k | $355k | $(208)k | (58.6)% | | **Total Gross Margin** | $1,258k | $1,388k | $(130)k | (9.4)% | | **Total Operating Expenses** | $2,649k | $3,017k | $(368)k | (12.2)% | | **Operating Loss** | $(1,391)k | $(1,629)k | $238k | (14.6)% | | **Net loss attributable to Neonode Inc.** | $(1,380)k | $(1,568)k | $188k | (12.0)% | - The decrease in total net revenues was mainly caused by component shortages within the printer and automotive industries and COVID-19 related lockdowns in the APAC region[154](index=154&type=chunk) - Gross margin improved to **95%** for Q1 2022 from **83%** in Q1 2021, with product gross margin specifically increasing significantly to **65%** from **24%** in the prior year period[159](index=159&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position decreased to $15.1 million, with management believing current capital is sufficient for the next twelve months - As of March 31, 2022, the company had cash of **$15.1 million**, down from **$17.4 million** at December 31, 2021, with working capital at **$17.9 million**[180](index=180&type=chunk)[181](index=181&type=chunk) - Net cash used in operating activities was **$2.3 million** for Q1 2022, primarily due to a net loss of **$1.4 million** and an increase in inventory of **$1.1 million**[184](index=184&type=chunk)[186](index=186&type=chunk) - The company has an At-the-Market (ATM) offering program allowing it to sell up to **$25 million** of common stock, though no shares were sold under this facility during Q1 2022[194](index=194&type=chunk)[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is noted as not applicable in the report - The company states that quantitative and qualitative disclosures about market risk are not applicable[202](index=202&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the company's disclosure controls and procedures as effective, with no material changes in internal control over financial reporting - Based on an evaluation as of March 31, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[203](index=203&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[205](index=205&type=chunk) [PART II OTHER INFORMATION](index=41&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and exhibits filed with the report [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any pending legal proceedings but may become subject to them in the ordinary course of business - As of the filing date, Neonode Inc. is not a party to any pending legal proceedings[208](index=208&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes from the risk factors previously disclosed in its Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2021 Annual Report on Form 10-K[209](index=209&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - The exhibits filed with this report include corporate governance documents, Sarbanes-Oxley certifications by the Principal Executive Officer and Principal Financial Officer, and interactive data files (Inline XBRL)[210](index=210&type=chunk)