Financial Performance - Total revenues for Q1 2025 were $513,000, a decrease of 37% compared to $814,000 in Q1 2024[12] - License fees revenue decreased to $497,000 in Q1 2025 from $773,000 in Q1 2024, representing a decline of 36%[12] - Net loss for Q1 2025 was $1,733,000, an improvement from a net loss of $2,084,000 in Q1 2024[12] - Basic and diluted net loss per share improved to $(0.10) in Q1 2025 from $(0.14) in Q1 2024[12] - Net revenues for the three months ended March 31, 2025 were $513, a decrease from $814 in the same period of 2024, representing a decline of approximately 37%[54] - Loss from continuing operations was $1.8 million for the three months ended March 31, 2025, compared to a loss of $1.7 million for the same period in 2024[54] - The company reported a net loss per share of $0.10 for the three months ended March 31, 2025, compared to a net loss per share of $0.14 for the same period in 2024[51] - Total costs and expenses for the three months ended March 31, 2025 were $2.478 million, a decrease from $2.704 million in the same period of 2024[54] Assets and Liabilities - Total current assets decreased to $16,261,000 as of March 31, 2025, down from $17,685,000 as of December 31, 2024[10] - Total liabilities increased to $2,397,000 as of March 31, 2025, compared to $1,939,000 as of December 31, 2024[10] - Cash and cash equivalents at the end of Q1 2025 were $14,991,000, down from $16,427,000 at the end of 2024[20] - Working capital as of March 31, 2025, was $14.1 million, compared to $16.1 million as of December 31, 2024[82] - The accumulated deficit as of March 31, 2025, was approximately $225.8 million, compared to $224.1 million as of December 31, 2024[85] Operating Expenses - Operating expenses for Q1 2025 totaled $2,469,000, a decrease from $2,683,000 in Q1 2024[12] - Research and development expenses increased to $975,000 in Q1 2025 from $895,000 in Q1 2024[12] - Sales and marketing expenses decreased by 21.3% to $642,000 for the three months ended March 31, 2025, compared to $816,000 in the same period in 2024, primarily due to lower payroll costs[75] - General and administrative expenses were $852,000 for the three months ended March 31, 2025, down 12.3% from $972,000 in the same period in 2024, mainly due to reduced payroll costs[77] Revenue Sources - The company recognized revenues of approximately zero and $27,000 related to contract liabilities for the three months ended March 31, 2025 and 2024, respectively[34] - License fees revenue was $497,000 for the three months ended March 31, 2025, down 35.7% from $773,000 in the same period in 2024, primarily due to lower demand in printer and passenger car applications[69] - Non-recurring engineering revenue decreased by 61.0% to $16,000 for the three months ended March 31, 2025, compared to $41,000 for the same period in 2024, attributed to fewer projects[70] Cash Flow - Operating activities used cash of approximately $1.4 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively[28] - Net cash used in operating activities for the three months ended March 31, 2025, was $1.4 million, compared to $1.9 million for the same period in 2024[83] - Net cash used in investing activities for the three months ended March 31, 2025, was approximately $40,000, primarily for the purchase of property and equipment[84] Internal Controls and Risks - The company identified a material weakness in internal controls over financial reporting related to insufficient information technology general controls, specifically regarding the segregation of duties and management override risks[111] - A second material weakness was noted concerning the lack of sufficient controls to prevent material misstatements in income tax calculations, with plans to implement extended controls[112] - Management acknowledged that controls can only provide reasonable assurance of achieving control objectives, emphasizing the importance of cost-benefit evaluations in control design[113] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected the internal control[114] - The company is not currently involved in any pending legal proceedings, although it may face ordinary course business disputes[116] - There have been no material changes to the risk factors previously disclosed in the Annual Report for the year ended December 31, 2024[117] Future Outlook - The company anticipates continued shipments of products incorporating its technology by current customers and expects to expand its customer base in 2025[63] - The ongoing geopolitical conflicts, including the war in Ukraine, may impact supply chains and economic conditions, potentially affecting the company's operations[66] - The company may require additional capital sources to continue operations and implement its strategy if operations do not become cash flow positive[88]
Neonode(NEON) - 2025 Q1 - Quarterly Report