Neonode Reports Quarter Ended September 30, 2025 Financial Results

Rhea-AI Summary

BlackRock closed‑end funds BMEZ, BSTZ, BTX announced distribution plan updates effective with the October 2025 distribution cycle (declaration 9/10/2025; ex‑date and record 10/15/2025; payable 10/31/2025). Each fund moves from a floating rate to a level monthly distribution at stated per‑share amounts: BMEZ $0.11000, BSTZ $0.16250, BTX $0.05250.

Estimated allocation data as of 8/29/2025 show large portions of recent distributions characterized as return of capital (BMEZ and BTX ~100% ROC for the reported periods; BSTZ shows long‑term gains). Reported annualized distribution rates (as of 7/31/2025) are BMEZ 13.04%, BSTZ 11.37%, BTX 12.32%. Boards may amend or suspend plans and distributions affect NAV.

Positive

• Level monthly distributions effective Oct 2025
• Stated per‑share rates: BMEZ $0.11000, BSTZ $0.16250, BTX $0.05250
• High annualized distribution rates: BMEZ 13.04%, BSTZ 11.37%, BTX 12.32%

Negative

• Estimated distributions for BMEZ and BTX were 100% return of capital as of 8/29/2025
• Each fund cut per‑share monthly payouts versus prior amounts (e.g., BMEZ -$0.05291)
• BTX five‑year NAV total return is -11.19% (to 7/31/2025)

Insights

Closed-end funds distribution analyst

Board set fixed monthly distributions, many paid as return of capital; NAV impact and tax characterization are key near-term issues.

The Funds moved from floating to level monthly distributions effective with the 10/15/2025 ex-date and payable 10/31/2025, with stated per-share monthly amounts of $0.11000 for BMEZ, $0.16250 for BSTZ, and $0.05250 for BTX. The announcement discloses estimated distribution source allocations through 08/29/2025 and for the fiscal year through 08/29/2025: BMEZ and BTX show 100% as return of capital in the latest estimates, while BSTZ shows 100% as long-term gains for the described periods. These are explicit, regulator-filed estimates rather than tax reporting figures.

The main dependencies and risks follow directly from those facts. A high proportion of distributions classified as return of capital reduces the Funds' net asset value when distributions exceed total return; the press text explicitly notes that such distributions "will reduce the Fund’s net asset value per share." The Board retains discretion to change or suspend the Plans, and final tax characterizations will be set after the fiscal year end; therefore tax treatment and NAV effects remain subject to later reclassification. Watch for the Form 1099-DIV after year-end and any Board amendments before year-end.

Concrete near-term items to monitor: the actual tax characterization in the calendar-year Form 1099-DIV (expected after the fiscal year), any Board updates to the Plan, and NAV movement in the weeks following the levelization (observable immediately and through the remainder of 2025). Given the disclosed per-share amounts and the 100% return-of-capital estimates for some Funds, these developments are materially relevant to shareholders' after-tax outcomes and NAV and merit close attention over the next one to three months.

STOCKHOLM, Nov. 6, 2025 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) ("Neonode" or the "Company") today reported financial results for the three and nine months ended September 30, 2025.

FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025:          

• Revenues from continuing operations of $0.4 million, a decrease of 48.7% compared to the same period in the prior year.  

• Operating expenses from continuing operations of $2.1 million, an increase of 4.0% compared to the same period in the prior year.

• Gain from patent assignment after brokerage fee of $15.5 million, which was paid in October 2025.

• Income from continuing operations of $13.9 million, or $0.83 per share, compared to a loss of $1.0 million, or $0.07 per share, for the same period in the prior year.

• Cash used by operations of $1.5 million, compared to $1.3 million for the same period in the prior year.

• Cash and accounts receivable of $12.2 million (excluding gain from patent assignment, which was paid in October 2025) as of September 30, 2025 compared to $17.2 million as of December 31, 2024.

FINANCIAL SUMMARY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025:

• Revenues from continuing operations of $1.5 million, a decrease of 37.1% compared to the same period in the prior year.

• Operating expenses from continuing operations of $7.3 million, an increase of 0.9% compared to the same period in the prior year.

• Gain from patent assignment of $15.5 million after brokerage fee, which was paid in October 2025.

• Income from continuing operations of $10.2 million, or $0.60 per share, compared to a loss of $4.4 million, or $0.28 per share, for the same period in the prior year. 

• Cash used by operations of $4.6 million, compared to $4.4 million for the same period in the prior year.

PATENT ASSIGNMENT HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025:

• Gains from the patent assignment to Aequitas Technologies LLC ("Aequitas") amounted to $15.5 million. in cash paid in October 2025. This amount represents the final outcome of the process by Neonode Smartphone LLC, an unrelated third party that is a subsidiary of Aequitas ("Aequitas Sub"), against Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc., excluding any potential tax recoveries.

• On September 15, 2025, the United States District Court for the Northern District of California granted a joint motion to lift the stay in the case between Aequitas Sub and Apple Inc. (assigned docket number 6:20-cv-00505-ADA). The legal proceedings between the two parties will now resume. 

THE CEO'S COMMENTS
 
"The third quarter of this year continued to reflect a decline in revenues from our legacy business, as demand in the printer and automotive infotainment segments remained subdued. While we anticipate these headwinds will persist until new customers transition from deployment to full production, we are proactively broadening our business opportunities and advancing our product roadmap. These initiatives are designed to support long-term, sustainable growth and we believe they will offset the downward trend in our legacy business," said Daniel Alexus, President & CEO of Neonode.
 
"For MultiSensing®, we're reinforcing our leadership in fully synthetic, data-driven HMI solutions, where our execution speed continues to differentiate us. We're delivering on existing projects, expanding strategic partnerships in the automotive market, and exploring new verticals where our technology can address narrow-vision challenges and scale quickly."
 
"In the third quarter, we made the strategic decision to transition the zForce® platform into maintenance mode, focusing on serving existing customers through the remainder of its product lifecycle. This decision was driven by market dynamics that have significantly narrowed the addressable market for the solution. Moving forward, we are aligning the company around future-proofing our MultiSensing AI computer vision platform for expanded deployment in the automotive sector and exploring additional application areas where MultiSensing can deliver meaningful value by solving real-world customer challenges," Mr. Alexus continued.
 
"In summary, revenues from our legacy business are declining faster than anticipated, and we continue to focus on securing new partnerships in our target market – automotive – to secure future growth and a pathway to long-term profitability," concluded Mr. Alexus.
 
FINANCIAL OVERVIEW FOR THE QUARTER ENDED SEPTEMBER 30, 2025
 
Revenues from continuing operations for the three months ended September 30, 2025 were $0.4 million, a decrease of 48.7% compared to the same period in 2024. License revenues were $0.4 million, a decrease of 44.5% compared to the same period in 2024. The decrease was mainly due to lower demand for our legacy customers' products within printer and passenger car touch applications. Revenues from non-recurring engineering for the three months ended September 30, 2025 were $24,000, a decrease of 77.6% compared to the same period in 2024.
 
Operating expenses from continuing operations for the three months ended September 30, 2025 were $2.1 million, an increase of 4.0% compared to the same period in 2024.
 
Gain from the patent assignment to Aequitas, including a brokerage fee payable by the Company in connection with the original assignment, were $15.5 million.
 
Income from continuing operations for the three months ended September 30, 2025 was $13.9 million, or $0.83 per share, compared to a loss from continuing operations of $1.0 million, or $0.07 per share for the same period in 2024.
 
Cash used by operations was $1.5 million in the third quarter of 2025 compared to $1.3 million for the same period in 2024. The increase was primarily due to a higher net loss, excluding the gain from the patent assignment.
 
Cash and accounts receivable totaled $12.2 million and working capital for continuing operations was $26.2 million as of September 30, 2025, compared to $17.2 million and $16.1 million as of December 31, 2024, respectively. Our financial position and liquidity provide stability and enable us to execute our strategy to secure more licensing opportunities for our innovative technologies.
 
For more information, please contact:

CONTACT:

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

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

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

https://news.cision.com/neonode/r/neonode-reports-quarter-ended-september-30--2025-financial-results,c4263212

The following files are available for download:

https://mb.cision.com/Main/17297/4263212/3769090.pdf	Neonode - 3Q 2025 Earnings Release
https://news.cision.com/neonode/i/neonode-3q-2025-earnings-release,c3485282	Neonode 3Q 2025 Earnings Release

FAQ

What distribution change did BMEZ announce for October 2025 (ticker BMEZ)?

BMEZ will switch to a level monthly distribution of $0.11000, effective with the October 2025 payable date.

How much is BSTZ's new monthly distribution and when is it payable (ticker BSTZ)?

BSTZ will pay a level monthly distribution of $0.16250, payable October 31, 2025.

What portion of recent BTX distributions are estimated to be return of capital (ticker BTX)?

As of the estimated allocations on August 29, 2025, BTX distributions are estimated to be 100% return of capital for the periods shown.

How do the funds' annualized distribution rates compare as of 7/31/2025?

Annualized distribution rates (7/31/2025): BMEZ 13.04%, BSTZ 11.37%, BTX 12.32%.

Will the boards be able to change the distribution plans for BMEZ, BSTZ, BTX?

Yes. Each fund's board may amend, suspend, or terminate a plan at any time if deemed in shareholders' best interest.

What tax reporting should shareholders expect for the 2025 distributions?

Final sources and tax characteristics will be determined after year end; shareholders will receive a Form 1099‑DIV for 2025.