Neonode Announces Anticipated Financial Proceeds from Patent Lawsuit Settlement

Rhea-AI Summary

Neonode (NASDAQ: NEON) announced anticipated proceeds from a patent lawsuit settlement between Samsung Electronics and Neonode Smartphone LLC (Aequitas Sub). While not directly involved in the lawsuit, Neonode expects to receive net proceeds of $15-20 million based on its 50% share agreement from a 2019 patent assignment to Aequitas Technologies LLC.

The settlement stems from a June 2020 lawsuit filed by Aequitas Sub against Samsung for patent infringement. The case was dismissed on September 2, 2025, following the settlement. A separate patent infringement case against Apple Inc. remains pending. The company's Board has not yet decided on the use of the settlement proceeds.

Positive

• Expected net proceeds of $15-20 million from the Samsung patent settlement
• Company maintains 50% share in potential future patent monetization proceeds
• Ongoing potential for additional revenue from pending Apple patent litigation

Negative

• Final proceeds subject to tax implications and other financial considerations
• No clear strategy announced for use of settlement proceeds
• Company not directly involved in litigation control or decisions

Insights

Patent Litigation Specialist

Neonode to receive $15-20M from Samsung patent settlement despite not being a direct litigant, significantly boosting its financial position.

Neonode's announcement represents a significant financial windfall that will materially impact its balance sheet. The company is set to receive between $15 million to $20 million in net proceeds from the settlement between Samsung and Aequitas Smartphone LLC, despite not being a direct party to the litigation. This amount comes after deducting brokerage fees, legal expenses, and taxes.

The settlement stems from Neonode's strategic 2019 patent assignment deal with Aequitas, which entitled Neonode to 50% of any net proceeds from monetization efforts. What makes this particularly noteworthy is the financial structure of the agreement - Neonode effectively outsourced the litigation risk while maintaining significant upside exposure.

For context, this settlement represents just one potential revenue stream from the patent portfolio. The disclosure mentions ongoing litigation against Apple in Northern California (case 3:21-cv-08872), suggesting additional monetization opportunities remain active. The Board hasn't yet determined how these proceeds will be allocated, leaving open possibilities for reinvestment in operations, debt reduction, or shareholder returns.

This settlement validates Neonode's intellectual property strategy. Rather than bearing the substantial costs and uncertainties of direct patent litigation, the company leveraged a third party's litigation expertise while maintaining a substantial financial interest. For a technology company in competitive markets, such non-operational income can provide crucial financial flexibility.

STOCKHOLM, Sept. 3, 2025 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) (the "Company" or "Neonode") today announced that it has been informed of its anticipated proceeds from a settlement of the lawsuit between Neonode Smartphone LLC ("Aequitas Sub", a subsidiary of Aequitas Technologies LLC, an unrelated third party) and Samsung Electronics Co. Ltd. ("Samsung") (Civil Action No. 6:20-cv-00507) pertaining to the alleged infringement of certain patents assigned by Neonode to Aequitas Technologies LLC ("Aequitas") in 2019. While Neonode was not a party to the lawsuit, as discussed further below, the Company is entitled to 50 percent of any net proceeds from the settlement pursuant to the terms of the Assignment Agreement, dated May 6, 2019, between the Company and Aequitas (the "Assignment Agreement").

Based on settlement details shared with the Company and subject to assessment by third parties, Neonode expects to receive net proceeds of approximately US$15 million to US$20 million after deducting a brokerage fee payable by the Company in connection with the original assignment to Aequitas and estimated legal fees, taxes and other expenses. The Company will continue to evaluate the tax implications and other financial considerations that may affect the net amount available to the Company.

As of September 3, 2025, no decision has been made by Neonode's Board of Directors (the "Board") on the expected use of proceeds from the settlement.

Background Information

As previously disclosed in the Company's Current Report on Form 8-K filed with Securities and Exchange Commission (SEC) on May 8, 2019, the Company assigned a portfolio of patents to Aequitas, an unrelated third party. The assignment provides the Company the right to share in the potential net proceeds generated from a possible licensing and monetization program that Aequitas may enter into. Under the terms of the assignment, net proceeds mean gross proceeds less out of pocket expenses and legal fees paid by Aequitas. The Company's share would also be net of a brokerage fee payable by the Company in connection with the original assignment to Aequitas.

A lawsuit was filed on June 8, 2020 by Aequitas Sub against Samsung Electronics Co. Ltd. (Civil Action No. 6:20-cv-00507) in the United States District Court for the Western District of Texas (the "Court") alleging infringement of certain patents previously assigned by the Company to Aequitas. Aequitas Sub is a subsidiary of Aequitas Technologies LLC and is not affiliated with Neonode Inc.

The court dismissed the case on September 2, 2025 following a settlement between Aequitas Sub and Samsung.

The separate patent infringement litigation brought by Aequitas Sub against Apple Inc. (assigned docket number 3:21-cv-08872) remains pending in the United States District Court for the Northern District of California.

For more information, please contact:

CONTACT:

Chief Financial Officer
Fredrik Nihlén
E-mail: fredrik.nihlen@neonode.com
Phone: +46 703 97 21 09

President and Chief Executive Officer
Pierre Daniel Alexus
E-mail: daniel.alexus@neonode.com
Phone: +46 767 60 29 90

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/neonode/r/neonode-announces-anticipated-financial-proceeds-from-patent-lawsuit-settlement,c4229257

The following files are available for download:

https://mb.cision.com/Main/17297/4229257/3648126.pdf	Neonode Announces Anticipated Financial Proceeds from Patent Lawsuit Settlement
https://news.cision.com/neonode/i/neonode-announces-anticipated-proceeds-lawsuit,c3466738	neonode-announces-anticipated-proceeds-lawsuit

SOURCE Neonode

View original content:https://www.prnewswire.com/news-releases/neonode-announces-anticipated-financial-proceeds-from-patent-lawsuit-settlement-302545756.html

SOURCE Neonode

FAQ

How much money will Neonode (NEON) receive from the Samsung patent settlement?

Neonode expects to receive net proceeds of $15-20 million after deducting brokerage fees, legal fees, taxes, and other expenses.

What was the patent lawsuit between Samsung and Neonode about?

The lawsuit was filed by Aequitas Sub (not Neonode directly) against Samsung Electronics regarding alleged infringement of patents that Neonode had previously assigned to Aequitas Technologies in 2019.

Does Neonode have any other pending patent litigation?

Yes, there is a separate patent infringement case brought by Aequitas Sub against Apple Inc. (docket number 3:21-cv-08872) pending in the United States District Court for the Northern District of California.

How will Neonode use the settlement proceeds?

As of September 3, 2025, no decision has been made by Neonode's Board of Directors regarding the expected use of the settlement proceeds.

What is Neonode's relationship with Aequitas in the patent litigation?

Neonode assigned its patent portfolio to Aequitas in 2019 with an agreement to receive 50% of net proceeds from any potential licensing and monetization programs, but is not directly involved in the litigation.