Neonode (NASDAQ: NEON) Q1 2026 revenue grows while losses continue
Rhea-AI Filing Summary
Neonode Inc. reported higher revenue but continued losses for the quarter ended March 31, 2026. Total revenue was $614,000, up from $513,000 a year earlier, driven mainly by increased license fees. Gross margin remained very high at 99.3%, reflecting its asset‑light licensing model.
The company recorded a net loss from continuing operations of $1.9 million, similar to the prior year, or $0.11 per share. Cash and cash equivalents were $23.2 million, and management believes this is sufficient to fund operations for at least twelve months. Working capital totaled $22.3 million.
Neonode continues to focus on software-based machine perception solutions, primarily for automotive and IT & industrial markets, with Japan representing a large share of revenue. The company maintains an at-the-market equity program it has not used this quarter and is working to remediate previously identified material weaknesses in internal control over financial reporting.
Positive
- None.
Negative
- None.
Key Figures
Key Terms
At The Market Offering Agreement financial
non-recurring engineering financial
discontinued operations financial
Material Weaknesses regulatory
global intangible low-taxed income financial
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from ________ to ________
Commission File No.
NEONODE INC.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of | (IRS Employer |
| | N/A | |
| (Address of principal executive offices) | (Zip code) |
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | | The |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes
The number of shares of the registrant’s common stock outstanding as of May 12, 2026 was
NEONODE INC.
Quarterly Report on Form 10-Q
For the Fiscal Quarter Ended March 31, 2026
TABLE OF CONTENTS
| PART I FINANCIAL INFORMATION |
1 |
|
| Item 1 |
Financial Statements (Unaudited) |
1 |
| Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 |
1 |
|
| Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 |
2 |
|
| Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2026 and 2025 |
3 |
|
| Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025 |
4 |
|
| Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 |
5 |
|
| Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
|
| Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 |
| Item 3 |
Quantitative and Qualitative Disclosures about Market Risk |
23 |
| Item 4 |
Controls and Procedures |
23 |
| PART II OTHER INFORMATION |
24 |
|
| Item 1 |
Legal Proceedings |
24 |
| Item 1A |
Risk Factors |
24 |
| Item 2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
24 |
| Item 3 |
Defaults Upon Senior Securities |
24 |
| Item 4 |
Mine Safety Disclosures |
24 |
| Item 5 |
Other Information |
24 |
| Item 6 |
Exhibits |
24 |
| SIGNATURES |
25 |
|
| EXHIBITS |
||
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
NEONODE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)
| March 31, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable and unbilled revenues, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operations | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and employee benefits | ||||||||
| Accrued expenses | ||||||||
| Contract liabilities | ||||||||
| Current portion of finance lease obligations | ||||||||
| Current portion of operating lease obligations | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Finance lease obligations, net of current portion | ||||||||
| Operating lease obligations, net of current portion | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 4) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, shares authorized, with par value of $; shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively. | ||||||||
| Common stock, shares authorized, with par value of $; and shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NEONODE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| Three months ended March 31, |
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| 2026 |
2025 |
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| Revenues: |
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| License fees |
$ | $ | ||||||
| Non-recurring engineering |
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| Total revenues |
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| Cost of revenues: |
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| Non-recurring engineering |
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| Total cost of revenues |
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| Gross margin |
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| Operating expenses: |
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| Research and development |
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| Sales and marketing |
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| General and administrative |
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| Total operating expenses |
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| Operating loss |
( |
) | ( |
) | ||||
| Other income, net |
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| Loss before provision for income taxes |
( |
) | ( |
) | ||||
| Provision for (benefit from) income taxes |
( |
) | ||||||
| Loss from continuing operations |
( |
) | ( |
) | ||||
| Income from discontinued operations |
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| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Income (loss) per common share: |
||||||||
| Basic and diluted loss per share from continuing operations |
$ | ( |
) | $ | ( |
) | ||
| Basic and diluted income per share from discontinued operations |
||||||||
| Basic and diluted net loss per share⁽ᵃ⁾ |
$ | ( |
) | $ | ( |
) | ||
| Basic and diluted – weighted average number of common shares outstanding |
||||||||
| (a) |
May not sum due to rounding. |
The accompanying notes are an integral part of these condensed consolidated financial statements.
NEONODE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
(In thousands)
| Three months ended March 31, |
||||||||
| 2026 |
2025 |
|||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Other comprehensive income (loss): |
||||||||
| Foreign currency translation adjustments |
( |
) | ||||||
| Total other comprehensive income (loss) |
( |
) | ||||||
| Comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NEONODE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
(In thousands)
For the three months ended March 31, 2026 and 2025
| Common Stock Shares Issued |
Common Stock Amount |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders' Equity |
|||||||||||||||||||
| Balances, December 31, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Foreign currency translation adjustment |
- | |||||||||||||||||||||||
| Net loss |
- | ( |
) | ( |
) | |||||||||||||||||||
| Balances, March 31, 2026 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Common Stock Shares Issued |
Common Stock Amount |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders' Equity |
|||||||||||||||||||
| Balances, December 31, 2024 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Foreign currency translation adjustment |
- | ( |
) | ( |
) | |||||||||||||||||||
| Net loss |
- | ( |
) | ( |
) | |||||||||||||||||||
| Balances, March 31, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NEONODE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| Three months ended March 31, |
||||||||
| 2026 |
2025 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
||||||||
| Amortization of operating lease right-of-use assets |
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| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable and unbilled revenues, net |
( |
) | ( |
) | ||||
| Prepaid expenses and other current assets |
( |
) | ||||||
| Accounts payable, accrued payroll and employee benefits, and accrued expenses |
( |
) | ||||||
| Contract liabilities |
||||||||
| Operating lease obligations |
( |
) | ( |
) | ||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
( |
) | ( |
) | ||||
| Net cash used in investing activities |
( |
) | ( |
) | ||||
| Cash flows from financing activities: |
||||||||
| Principal payments on finance lease obligations |
( |
) | ( |
) | ||||
| Net cash used in financing activities |
( |
) | ( |
) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
( |
) | ( |
) | ||||
| Net change in cash and cash equivalents |
( |
) | ( |
) | ||||
| Cash and cash equivalents at beginning of period |
||||||||
| Cash and cash equivalents at end of period |
$ | $ | ||||||
| Supplemental disclosure of cash flow information: |
||||||||
| Cash paid for income taxes |
$ | $ | ||||||
| Supplemental disclosure of non-cash investing and financial activities: |
||||||||
| Property and equipment obtained in exchange for finance lease obligations |
$ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NEONODE INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
1. Organization and Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Neonode Inc. and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared by us, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally contained in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recently Issued Accounting Pronouncement Adopted
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which amends ASC 326-20 to provide a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years, with early adoption permitted, and should be applied on a prospective basis. The adoption did not have a material impact on our condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Pending Adoption
In December 2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12"). ASU 2025-12 makes incremental improvements to the Accounting Standards Codification and U.S. GAAP. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). The amendments clarify and reorganize existing interim reporting guidance, including the scope of Topic 270 and interim disclosure requirements, and introduce a disclosure principle requiring entities to disclose material events or changes occurring since the most recent annual reporting period. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which aims to modernize financial reporting by updating how entities recognize and disclose costs incurred for software developed for internal use. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2024-03.
Foreign Currency Translation and Transaction Gains and Losses
The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won. The translation from Swedish Krona, Japanese Yen and South Korean Won to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the condensed consolidated balance sheet date and for income statement accounts using a weighted-average exchange rate during the period. Gains or (losses) resulting from translation are included as a separate component of accumulated other comprehensive loss. Foreign currency translation gain (loss) was $
Liquidity
We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net income for combined continuing and discontinued operations of approximately $
The condensed consolidated financial statements included in this report have been prepared on a going concern basis, which contemplates continuity of operations and the realization of assets and the repayment of liabilities in the ordinary course of business.
Management has prepared an operating plan and believes that the Company has sufficient cash to meet its obligations as they come due for a year from the date the condensed consolidated financial statements were issued.
Concentration of Credit and Business Risks
Our customers are located in the United States, Europe and Asia.
As of March 31, 2026, of our customers represented approximately
As of December 31, 2025, of our customers represented approximately
Customers who accounted for 10.0% or more of our net revenues during the three months ended March 31, 2026 are as follows:
| ● | Seiko Epson – | |
| ● | NEXTY Electronics Corporation – | |
| ● | Commercial Vehicle OEM – | |
| ● | Hewlett-Packard – |
Customers who accounted for 10.0% or more of our net revenues during the three months ended March 31, 2025 are as follows:
| ● | Seiko Epson – | |
| ● | Alps Alpine – | |
| ● | Hewlett-Packard – |
Revenues
The following tables present the net revenues distribution by geographical area and market (in thousands):
| Three months ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Amount | Percentage | Amount | Percentage | |||||||||||||
| North America: | ||||||||||||||||
| Net revenues from IT & Industrial | $ | % | $ | % | ||||||||||||
| $ | % | $ | % | |||||||||||||
| Asia Pacific: | ||||||||||||||||
| Net revenues from Automotive | $ | % | $ | % | ||||||||||||
| Net revenues from IT & Industrial | % | % | ||||||||||||||
| $ | % | $ | % | |||||||||||||
| Europe, Middle East and Africa: | ||||||||||||||||
| Net revenues from Automotive | $ | % | $ | % | ||||||||||||
| $ | % | $ | % | |||||||||||||
Contract Balances
Timing of revenue recognition may differ from the timing of invoice and receipt of consideration. We record a receivable or unbilled revenue when we have an unconditional right to receive consideration from customers. Contract assets represent revenue recognized for performance to date when the right to consideration is conditional on something other than the passage of time. We record contract liabilities when we receive prepayments or upfront payments ahead of performance.
The following table presents our accounts receivable, net, contract assets, and contract liabilities (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| Accounts receivable and unbilled revenues, net | $ | $ | ||||||
| Contract liabilities (deferred revenues) | ||||||||
Payment terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees. Where revenue recognition timing differs from invoice timing, we have determined that our contracts do not include a significant financing component. Applying the practical expedient in Topic 606, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. Our intent is to provide our customers with consistent invoicing terms for the convenience of our customers, not to provide financing to our customers.
Contract Liabilities
Contract liabilities (deferred revenues) consist primarily of prepayments for license fees, and other services that we have been paid in advance. We earn the revenue when we transfer control of the service. Deferred revenues may also include upfront payments for consulting services to be performed in the future, such as non-recurring engineering services.
The following table presents our deferred revenues by source (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| Deferred revenues license fees | $ | $ | ||||||
| Deferred revenues non-recurring engineering | ||||||||
| $ | $ | |||||||
During the three months ended March 31, 2026 and 2025, the Company recognized revenues of approximately $
Income Taxes
We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the condensed consolidated financial statements or tax returns. We estimate income taxes based on rates in effect in each of the jurisdictions in which we operate. Deferred income tax assets and liabilities are determined based upon differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The realization of deferred tax assets is based on historical tax positions and expectations about future taxable income. Valuation allowances are recorded against net deferred tax assets when, in our opinion, realization is uncertain based on the “more likely than not” criteria of the accounting guidance.
Based on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of March 31, 2026 and December 31, 2025. In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred tax asset would increase income in the period such determination was made. The provision for or benefit from income taxes represents the net change in deferred tax amounts, plus income taxes paid or payable for the current period.
We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of March 31, 2026 and December 31, 2025, we had
On July 4, 2025, new U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or the "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The enactment of the OBBBA does not have a material impact on our results from operations for the current period nor do we expect the OBBBA to have a material impact on our results from operations in future periods.
2. Discontinued Operations
During the fourth quarter of 2023 the Company decided to phase out the product business and as a consequence terminate production at the Pronode Technologies AB facilities in Kungsbacka, Sweden. Subsequently, we commenced the phase out of our TSM product business during the first quarter of 2024 through licensing of the TSM technology to strategic partners or outsourcing. In May 2024, we stopped producing TSMs and started to shut down the factory. The facility lease terminated as of September 30, 2024 and was not renewed.
The Company concluded that the termination of TSM manufacturing met the criteria for discontinued operations. As a result, this business has been reclassified to discontinued operations in these condensed consolidated financial statements for all periods presented.
Assets and Liabilities of Discontinued Operations
Assets and liabilities of discontinued operations are presented separately in the condensed consolidated balance sheets for all periods presented. On March 31, 2026 and December 31, 2025, these balances consisted of assets and liabilities of the Company’s Products business.
The following table presents a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the assets and liabilities of discontinued operations as presented on the Company’s condensed consolidated balance sheets (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| ASSETS OF DISCONTINUED OPERATIONS | ||||||||
| Current assets of discontinued operations: | ||||||||
| Accounts receivable and unbilled revenues, net | $ | $ | ||||||
| Total current assets of discontinued operations | ||||||||
| Total assets of discontinued operations | $ | $ | ||||||
Income (Loss) from Discontinued Operations
Discontinued operations for the three months ended March 31, 2026 and 2025, respectively, consists of results from the Company’s products business.
The following table provides details about the major classes of line items constituting “Income (loss) from discontinued operations” as presented on the Company’s condensed consolidated statements of operations (in thousands):
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| Products | $ | $ | ||||||
| Total revenues | ||||||||
| Gross margin | ||||||||
| Operating income (loss) | ||||||||
| Loss before provision for income taxes | ||||||||
| Net income | $ | $ | ||||||
Cash Flows Information
There were no amounts recorded for depreciation, amortization, capital expenditures or significant operating and investing noncash items of discontinued operations for the three months ended March 31, 2026 and 2025, respectively.
3. Stockholders’ Equity
At-the-Market Facility
On June 4, 2024, we entered into an At The Market Offering Agreement (the “Ladenburg Sales Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) with respect to an “at the market” offering program (the “Ladenburg ATM Facility”), under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, up to approximately $
Pursuant to the Ladenburg Sales Agreement, we may sell the shares through Ladenburg by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us (including any price or size limits or other customary parameters or conditions we may impose). We will pay Ladenburg a commission of
We are not obligated to sell any shares under the Ladenburg Sales Agreement. The offering of shares pursuant to the Ladenburg Sales Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through Ladenburg, of all of the shares of our common stock subject to the Ladenburg Sales Agreement and (ii) termination of the Ladenburg Sales Agreement in accordance with its terms.
4. Commitments and Contingencies
Legal
The Company is subject to legal proceedings and claims that may arise in the ordinary course of business. The Company is not aware of any pending or threatened litigation matters at this time that would have a material impact on the operations of the Company.
5. Net Loss per Share
Basic net loss per share of common stock for the three months ended March 31, 2026 and 2025 was computed by dividing the net income (loss) attributable to common stockholders of the Company for the relevant period by the weighted average number of shares of common stock outstanding. Diluted loss per share of common stock is computed by dividing net loss attributable to common stockholders of the Company for the relevant period by the weighted average number of shares of common stock and common stock equivalents outstanding excluding potential common stock equivalents that are anti-dilutive.
The Company had
| Three months ended March 31, | ||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | ||||||
| BASIC AND DILUTED | ||||||||
| Weighted average number of common shares outstanding | ||||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Income from discontinued operations | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share from continuing operations - basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Income per share from discontinued operations - basic and diluted | ||||||||
| Net loss per share - basic and diluted(a) | $ | ( | ) | $ | ( | ) | ||
| (a) | May not sum due to rounding. |
6. Segment Information
The Company operates as operating segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating loss and net loss to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the allocation of budget between cost of revenues, research and development, sales and marketing, and general and administrative expenses.
The following table presents key financial information with respect to the Company’s single operating segment (in thousands):
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Costs and expenses(a): | ||||||||
| Cost of revenues | ||||||||
| Product R&D | ||||||||
| General and administrative, including rent | ||||||||
| Payroll and related | ||||||||
| Professional fees and IP | ||||||||
| Marketing and travel | ||||||||
| Total costs and expenses | ||||||||
| Other segment items(b) | ( | ) | ||||||
| Other income, net | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for (benefit from) income taxes | ( | ) | ||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| (a) | The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision-maker. |
| (b) | Other segment items primarily include depreciation and amortization, payroll and related - re-allocated to cost of revenues, and stock options expense. |
The following table presents the long-lived assets property and equipment and right-of-use assets by geographic area (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| United States | $ | $ | ||||||
| Sweden | ||||||||
| Total | $ | $ | ||||||
We report revenues from external customers based on the country where the customer is located. The following table presents net revenues by country (in thousands):
| Three months ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Amount | Percentage | Amount | Percentage | |||||||||||||
| Japan | $ | % | $ | % | ||||||||||||
| Sweden | % | % | ||||||||||||||
| Germany | % | % | ||||||||||||||
| China | % | % | ||||||||||||||
| Other | % | % | ||||||||||||||
| $ | % | $ | % | |||||||||||||
| United States | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
7. Subsequent Events
On April 22, 2026, Neonode Technologies AB extended the lease agreement of the office space located at Karlavägen 100, Stockholm, Sweden and adjusted the square feet from
No other subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. For example, statements in this Quarterly Report regarding our plans, strategy and focus areas are forward-looking statements. You can identify some forward-looking statements by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “goal,” “plan,” and similar expressions. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to our history of losses since inception, our dependence on a limited number of customers, our reliance on our customers’ ability to design, manufacture and sell products that incorporate our touch technology, the length of a product development and release cycle, our and our customers’ reliance on component suppliers, the difficulty in verifying royalty amounts owed to us, our ability to remain competitive in response to new technologies, our dependence on key members of our management and development team, the costs to defend, as well as risks of losing, patents and intellectual property rights, our ability to obtain adequate capital to fund future operations, and general economic conditions, including inflation, or other effects related to future pandemics or epidemics, or geopolitical conflicts such as the ongoing war in Ukraine or the Gaza Strip. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” and elsewhere in this Quarterly Report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in our publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the date of this Quarterly Report. Because actual events or results may differ materially from those discussed in or implied by forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statement. We do not undertake responsibility to update or revise any of these factors or to announce publicly any revision to forward-looking statements, whether as a result of new information, future events or otherwise.
The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report and consolidated financial statements for the year ended December 31, 2025 included in our most recent Annual Report on Form 10-K. All information in the following discussion and analysis present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented unless otherwise stated.
Neonode Inc., collectively with its subsidiaries, is referred to in this Form 10-Q as “Neonode”, “we”, “us”, “our”, “registrant”, or “Company”.
Overview
Neonode provides software solutions for machine perception that feature advanced machine learning algorithms to detect and track persons and objects in video streams from cameras and other types of imagers. We base our machine perception solutions on our MultiSensing® technology platform. We market and sell our solutions to customers mainly in the automotive market. However, our solution can also be used in many other markets, and we plan to expand our solutions into new markets in the future.
Neonode also provides advanced optical sensing solutions for touch, contactless touch, and gesture sensing using our zForce® technology platform. In September 2025, we made the strategic decision to transition the zForce platform into maintenance mode. We are no longer selling the zForce technology to new customers but will continue supporting existing customers in various markets and segments such as office equipment, automotive, industrial automation, medical, military, and avionics.
Licensing
We license our MultiSensing and zForce technology to Original Equipment Manufacturers (“OEMs”) and automotive Tier 1 suppliers who embed our technology into products that they develop, manufacture and sell. Since 2010, our licensing customers have sold over 95 million devices that use our patented technology.
As of March 31, 2026, we had 36 valid technology license agreements with global OEMs, Original Design Manufacturers (“ODMs”) and automotive Tier 1 suppliers.
Our licensing customer base is primarily in the automotive and printer segments. Ten of our licensing customers are currently shipping products that embed our technology. We anticipate current customers will continue to ship products with our technology in 2026 and in future years. We also expect to expand our customer base with a number of new customers who will be looking to ship new products incorporating our MultiSensing technologies as they complete final product development and release cycles. We typically earn our license fees on a per unit basis when our customers ship products using our technology, but in the future, we may use other business models as well.
Non-recurring Engineering Services
We also offer non-recurring engineering (“NRE”) services related to application development linked to our technology platform on a flat rate or hourly rate basis.
Typically, our licensing customers require engineering support during the development and initial manufacturing phase for their products using our technology.
Global Conflicts
The ongoing war in Ukraine has impacted the global economy as the United States, the UK, the EU, and other countries have imposed broad export controls and financial and economic sanctions against Russia (a large exporter of commodities), Belarus, and specific areas of Ukraine, and may continue to impose additional sanctions or other measures. Russia may impose its own counteractive measures. We do not procure materials directly from Ukraine or Russia, but the war in Ukraine may further exacerbate ongoing supply chain disruptions that are occurring across the globe. While the precise effects on global economies from the war in Ukraine and related sanctions remain uncertain, there has been significant volatility in the financial markets, fluctuations in currency exchange rates, and an increase in energy and commodity prices globally. Should the wars continue or escalate, there may be various economic and security consequences including, but not limited to, additional supply shortages of different kinds; further increases in prices of commodities; significant disruptions in logistics infrastructure and telecommunications services; and risks relating to the unavailability of information technology systems and infrastructure. The resulting impacts on the global economy, financial markets, inflation, interest rates, and unemployment, among others, could adversely impact economic and financial conditions.
Results of Operations
A summary of our financial results is as follows (in thousands, except percentages):
| Three months ended March 31, | Variance in | |||||||||||||||
| 2026 |
2025 |
Dollars |
Percent |
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| Revenues: |
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| License fees |
$ | 592 | $ | 497 | $ | 95 | 19.1 | % | ||||||||
| Percentage of revenue |
96.4 | % | 96.9 | % | ||||||||||||
| Non-recurring engineering |
22 | 16 | 6 | 37.5 | % | |||||||||||
| Percentage of revenue |
3.6 | % | 3.1 | % | ||||||||||||
| Total revenues |
$ | 614 | $ | 513 | $ | 101 | 19.7 | % | ||||||||
| Cost of revenues: |
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| Non-recurring engineering |
4 | 9 | (5 | ) | (55.6 | )% | ||||||||||
| Percentage of revenue |
0.7 | % | 1.8 | % | ||||||||||||
| Total cost of revenues |
$ | 4 | $ | 9 | $ | (5 | ) | (55.6 | )% | |||||||
| Gross margin |
$ | 610 | $ | 504 | $ | 106 | 21.0 | % | ||||||||
| Operating expenses: |
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| Research and development |
$ | 905 | $ | 975 | $ | (70 | ) | (7.2 | )% | |||||||
| Percentage of revenue |
147.4 | % | 190.1 | % | ||||||||||||
| Sales and marketing |
608 | 642 | (34 | ) | (5.3 | )% | ||||||||||
| Percentage of revenue |
99.0 | % | 125.1 | % | ||||||||||||
| General and administrative |
1,168 | 852 | 316 | 37.1 | % | |||||||||||
| Percentage of revenue |
190.2 | % | 166.1 | % | ||||||||||||
| Total operating expenses |
$ | 2,681 | $ | 2,469 | $ | 212 | 8.6 | % | ||||||||
| Percentage of revenue |
436.6 | % | 481.3 | % | ||||||||||||
| Operating loss |
$ | (2,071 | ) | $ | (1,965 | ) | $ | (106 | ) | 5.4 | % | |||||
| Percentage of revenue |
(337.3 | )% | (383.0 | )% | ||||||||||||
| Other income, net |
209 | 155 | 54 | 34.8 | % | |||||||||||
| Percentage of revenue |
34.0 | % | 30.2 | % | ||||||||||||
| Provision for (benefit from) income taxes |
1 | (10 | ) | 11 | (110.0 | )% | ||||||||||
| Percentage of revenue |
0.2 | % | (1.9 | )% | ||||||||||||
| Loss from continuing operations |
$ | (1,863 | ) | $ | (1,800 | ) | $ | (63 | ) | 3.5 | % | |||||
| Percentage of revenue |
(303.4 | )% | (350.9 | )% | ||||||||||||
| Basic and diluted loss per share from continuing operations |
$ | (0.11 | ) | $ | (0.11 | ) | $ | - | - | % | ||||||
Revenues
All of our sales for the three months ended March 31, 2026 and 2025 were to customers located in the United States, Europe and Asia.
Total revenues were $0.6 million for the three months ended March 31, 2026, compared to $0.5 million for the same period in 2025. The increase in total revenues of 19.7% for the three months ended March 31, 2026, as compared to the same period in 2025, is mainly explained by higher license fees.
License Fees
Revenues from license fees were $0.6 million for the three months ended March 31, 2026, compared to $0.5 million for the same periods in 2025. The increase of 19.1% for the three months ended March 31, 2026, as compared to the same period in 2025, was mainly due to new license agreements.
Non-recurring Engineering
Revenues from non-recurring engineering were $22,000 for the three months ended March 31, 2026, compared to $16,000 for the same periods in 2025. Most of our non-recurring engineering revenues are related to application development and proof-of-concept projects related to our technology platforms. The increase of 37.5% for the three months ended March 31, 2026, as compared to the same period in 2025, was the result of increased delivery in projects.
The following tables presents the net revenues by market and revenue stream (in thousands):
| Three months ended March 31, |
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| 2026 |
2025 |
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| Amount |
Percentage |
Amount |
Percentage |
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| Automotive: |
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| License fees |
$ | 156 | 94.5 | % | $ | 178 | 95.7 | % | ||||||||
| Non-recurring engineering |
9 | 5.5 | % | 8 | 4.3 | % | ||||||||||
| $ | 165 | 100.0 | % | $ | 186 | 100.0 | % | |||||||||
| IT & Industrial: |
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| License fees |
$ | 436 | 97.1 | % | $ | 319 | 97.6 | % | ||||||||
| Non-recurring engineering |
13 | 2.9 | % | 8 | 2.4 | % | ||||||||||
| $ | 449 | 100.0 | % | $ | 327 | 100.0 | % | |||||||||
Gross Margin
Our gross margin was 99.3% for the three months ended March 31, 2026, compared to 98.2% for the same periods in 2025.
Our cost of revenues includes the direct cost of production of certain customer prototypes, costs of engineering personnel, engineering consultants to complete the engineering design contracts.
Research and Development
Research and development (“R&D”) expenses were $0.9 million for the three months ended March 31, 2026, compared to $1.0 million for the same periods in 2025. The decrease of 7.2% for the three months ended March 31, 2026 compared to the same period in 2025 was primarily related to lower cost for payroll and related costs.
R&D expenses primarily consist of personnel-related costs in addition to external consultancy costs, such as testing, certifying and measurements, along with costs related to developing and building new product prototypes.
Sales and Marketing
Sales and marketing expenses were $0.6 million for the three months ended March 31, 2026, compared to $0.6 million for the same periods in 2025. The decrease of 5.3% for the three months ended March 31, 2026 compared to the same period in 2025 was primarily related to lower advertising and travel expenses.
Our sales and marketing activities focus on OEM, ODM and Tier 1 customers who will license our technology.
General and Administrative
General and administrative expenses were $1.2 million for the three months ended March 31, 2026, compared to $0.9 million for the same period in 2025. The increase of 37.1% for the three months ended March 31, 2026, compared to the same period in 2025, was primarily related to higher professional fees due to tax analysis of the net income for 2025, higher payroll and related costs and the currency exchange effect.
Other Income
Other income was $0.2 million for the three months ended March 31, 2026, compared to $0.2 million for the same periods in 2025, respectively. The other income for the period was mainly related to interest income earned.
Income Taxes
Our effective tax rate was (0.1)% for the three months ended March 31, 2026, compared to 0.6% for the same periods in 2025, respectively. The tax rate is due to global intangible low-taxed income and change in valuation allowance.
Net Loss
As a result of the factors discussed above, we recorded a loss from continuing operations of $1.9 million for the three months ended March 31, 2026, and a loss of $1.8 million for the same periods in 2025.
Liquidity and Capital Resources
Our liquidity is dependent on many factors, including sales volume, operating profit and the efficiency of asset use and turnover. Our future liquidity will be affected by, among other things:
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licensing of our technology; |
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operating expenses; |
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timing of our OEM customer product shipments; |
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timing of payment for our technology licensing agreements; |
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gross profit margin; and |
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ability to raise additional capital, if necessary. |
As of March 31, 2026, we had cash and cash equivalents of $23.2 million, as compared to $25.4 million as of December 31, 2025. Based on our current cash position, and assuming currently planned expenditures and level of operations, we believe we have sufficient capital to fund operations for the twelve-month period subsequent to the date of this report.
Working capital (current assets less current liabilities) was $22.3 million as of March 31, 2026, compared to $24.1 million as of December 31, 2025.
Net cash used in operating activities for combined continuing and discontinued operations for the three months ended March 31, 2026, was $2.1 million and was primarily the result of a net loss of $1.9 million and approximately $0.1 million in non-cash operating expenses, comprised of depreciation and amortization and amortization of operating lease right-of-use assets and changes in operating assets and liabilities of $(0.4) million. Net cash used in operating activities for combined continuing and discontinued operations for the three months ended March 31, 2025, was $1.4 million and was primarily the result of a net loss of $1.7 million and approximately $91,000 in non-cash operating expenses, comprised of depreciation and amortization and amortization of operating lease right-of-use assets and changes in operating assets and liabilities of $282,000.
Net cash used in investing activities for the three months ended March 31, 2026, was approximately $13,000 and was primarily the result of purchase of property and equipment. Net cash used in investing activities for the three months ended March 31, 2025, was approximately $40,000 and was primarily the result of purchase of property and equipment.
Net cash used in financing activities for the three months ended March 31, 2026, was approximately $3,000 and was primarily the result of principal payments on finance leases. Net cash used in financing activities for the three months ended March 31, 2025, was approximately $2,000 and was primarily the result of principal payments on finance leases.
We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net loss for combined continuing and discontinued operations of approximately $1.9 million for the three months ended March 31, 2026, compared to a loss of $1.7 million for the same period in 2025, and had an accumulated deficit of approximately $217.5 million and $215.6 million as of March 31, 2026 and December 31, 2025, respectively.
In the future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility to continue operations and to implement our strategy. If our operations do not become cash flow positive, we may be forced to seek equity investments or debt arrangements. Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity. Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.
No assurances can be given, however, that we will be successful in obtaining such additional financing on reasonable terms, or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, results of operations and financial condition. In addition, no assurance can be given that stockholders will approve an increase in the number of our authorized shares of common stock if needed. The issuance of equity securities or securities convertible into equity could dilute the value of shares of our common stock and cause the market price to fall, and the issuance of debt securities could impose restrictive covenants that could impair our ability to engage in certain business transactions.
The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won. They are subject to foreign currency exchange rate risk. Any increase or decrease in the exchange rate of the U.S. Dollar compared to the Swedish Krona, Japanese Yen or South Korean Won will impact our future operating results.
Contractual Obligations and Off-Balance Sheet Arrangements
We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to affect our liquidity or capital resources other than the operating leases incurred in the normal course of business.
We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support. We do not engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected on the face of the condensed consolidated financial statements.
Operating Leases
Neonode Inc. operates solely through a virtual office in California.
On December 1, 2020, Neonode Technologies AB entered into a lease for 6,684 square feet of office space located at Karlavägen 100, Stockholm, Sweden. The lease agreement has been extended and is valid through January 2030, with premises adjusted from 6,684 square feet to 6,254 square feet. It is extended on a yearly basis unless written notice is provided nine months prior to the expiration date.
For total rent expense for combined continuing and discontinued operations, we recorded $126,000 for the three months ended March 31, 2026, compared to $104,000 for the same period in 2025.
Non-Recurring Engineering Development Costs
On April 25, 2013, we entered into an Analog Device Development Agreement with an effective date of December 6, 2012 (the “NN1002 Agreement”) with Texas Instruments (“TI”) pursuant to which TI agreed to integrate our intellectual property into an ASIC, which is used in our licensed technology. Under the terms of the NN1002 Agreement, we agreed to pay TI $500,000 of non-recurring engineering costs at the rate of $0.25 per ASIC for each of the first 2 million ASICs sold. As of March 31, 2026, we had made no payments to TI under the NN1002 Agreement.
At-the-Market Offering Program
On June 4, 2024, we entered into an At The Market Offering Agreement (the “Ladenburg Sales Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) with respect to an “at the market” offering program (the “Ladenburg ATM Facility”), under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, up to approximately $10 million of shares of our common stock.
Pursuant to the Ladenburg Sales Agreement, we may sell the shares through Ladenburg by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us (including any price or size limits or other customary parameters or conditions we may impose). We will pay Ladenburg a commission of 3.0% of the gross sales price per share sold under the Ladenburg Sales Agreement.
We are not obligated to sell any shares under the Ladenburg Sales Agreement. The offering of shares pursuant to the Ladenburg Sales Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through Ladenburg, of all of the shares of our common stock subject to the Ladenburg Sales Agreement and (ii) termination of the Ladenburg Sales Agreement in accordance with its terms.
During the three months ended March 31, 2026 and 2025, no shares were sold under the Ladenburg ATM Facility.
Patent Assignment
On May 6, 2019, the Company assigned a portfolio of patents to Aequitas Technologies LLC (“Aequitas”), an unrelated third party. The assignment provides the Company the right to share the potential net proceeds generated from 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 the Company’s own fees and expenses, including a brokerage fee payable by the Company in connection with the original assignment to Aequitas.
As reflected in publicly available court filings, on June 8, 2020, Aequitas Sub, filed complaints against Apple Inc. (“Apple”) (assigned docket number 6:20-cv-00505-ADA), and Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc. (collectively, “Samsung”) (assigned docket number 6:20-cv -00507-ADA; see also 6:23-cv-00204-ADA), in the Western District of Texas alleging infringement of two patents, U.S. Patent Nos. 8,095,879 and 8,812,993.
U.S. Patent No. 8,095,879
In November 2020, Samsung and Apple filed a petition for inter partes review of certain challenged claims in U.S. Patent No. 8,095,879, assigned proceeding number IPR2021-00144. As reflected in publicly available records, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (“PTAB”) denied the petition in June 2021. Apple and Samsung filed a request for rehearing, which was ultimately granted on December 3, 2021, and inter partes review was instituted. The court case against Apple was subsequently transferred to the Northern District of California in November 2021 and assigned docket number 3:21-cv-08872, which was subsequently stayed pending the PTAB’s decision. The case against Samsung in the Western District of Texas was likewise stayed pending PTAB ruling.
Meanwhile, in June 2021, Google LLC (“Google”) filed a separate petition with the PTAB seeking inter partes review of certain challenged claims in U.S. Patent No. 8,095,879, assigned proceeding number IPR2021-01041. As reflected in publicly available records, the PTAB granted the petition in January 2022.
The PTAB found in favor of Aequitas Sub and against Apple and Samsung in December 2022 in connection with the inter partes review proceedings, ruling that none of the challenged claims were unpatentable. The PTAB similarly held in favor of Aequitas Sub and against Google in January 2023. Apple and Samsung appealed to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) in February 2023 (assigned docket number 23-1464, and Google filed its appeal in the Federal Circuit in March 2023 (assigned docket number 23-1638. On July 18, 2024, the Federal Circuit affirmed the PTAB’s rulings, found in favor of Aequitas Sub and against Google and Apple/Samsung, and held that none of the challenged claims in U.S. Patent No. 8,095,879 are unpatentable.
As reflected in publicly available court records, on July 14, 2023, the United States District Court for the Western District of Texas entered its final claim constructions in the Samsung case (docket number 6:20-cv-507), and based on those claim constructions, entered judgment in favor of Samsung and against Aequitas Sub. Aequitas Sub filed an appeal with the Federal Circuit in August 2023 (assigned docket number 23-2304), and oral argument was held on June 6, 2024 As reflected on the public court docket, on August 20, 2024, the Federal Circuit issued its written opinion, reversing and remanding the case to the Western District of Texas for further proceedings. Specifically, the Federal Circuit held that claim 1 of the ‘879 patent was not indefinite. Mandate issued returning the case to the Western District of Texas on September 26, 2024. On November 5, 2024, Samsung filed its Answer to the Complaint. On June 13, 2025, the parties submitted a joint motion to stay all deadlines for thirty (30) days as the parties had reached a “settlement in principle.” On June 20, 2025, the Court granted the motion to stay and ordered that all deadlines be stayed until July 21, 2025. On July 17, 2025, the parties submitted a joint motion to extend the stay for an additional thirty days “so that the settlement agreement can be finalized and appropriate dismissal papers submitted.” On August 5, 2025, the Court granted the parties request to extend the stay until August 20, 2025. On August 29, 2025, following a settlement between Aequitas Sub and Samsung, the parties submitted a joint motion to vacate the claim construction order and to dismiss the matter with prejudice. On September 2, 2025, the Court granted the motion. As of September 2, 2025, the case in the Western District of Texas was closed.
The case against Apple remains pending in the United States District Court for the Northern District of California (docket number 21-cv-8872). On November 13, 2024, the Court granted the parties’ motion to continue the stay pending resolution of the Samsung case pending in the Western District of Texas (case number 20-cv-00507-ADA) by settlement or final judgment. On September 15, 2025 the Court lifted the stay upon stipulation of the parties. On October 27, 2025, the parties submitted a stipulated scheduling order for the remainder of the case. On December 15, 2025, the Court entered a modified order for scheduling. Among other dates, the Court ordered (i) a close of fact discovery on July 31, 2026, (ii) mediation by December 8, 2026, and (iii) trial by February 22, 2027. The Court also ordered claim construction briefing beginning March 27, 2026 and concluding April 17, 2026. Further, on February 10, 2026, the case was referred to private alternative dispute resolution to be completed by December 8, 2026. On April 2, 2026, Apple moved for summary judgment of invalidity for lack of written description. The motion has been fully briefed and is scheduled for oral argument on May 7, 2026. Additionally, as of April 17, 2026, claim construction briefing was completed, and on April 15, 2026, Apple also moved to serve amended invalidity contentions based on new information and case developments.
U.S. Patent No. 8,812,993
Based on information in public records, in November 2020, Samsung and Apple collectively sought inter partes review of certain claims in U.S. Patent No. 8,812,993 (assigned proceeding number IPR2021-00145). In June 2022, the PTAB invalidated U.S. Patent No. 8,812,993, which Aequitas Sub appealed to the Federal Circuit in August 2022 (assigned docket number 22-2134). The Federal Circuit affirmed the PTAB’s decision on June 11, 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2026 due to the material weaknesses in internal control over financial reporting that are described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Material Weaknesses
We identified material weaknesses in the design and operation of our internal controls over financial reporting in the “Control Activities” component of the Committee of Sponsoring Organizations (COSO) framework:
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We did not maintain information technology general controls, including user access, change management, and computer operation controls, to support the effective operation of financially significant systems; |
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We identified system limitations that do not facilitate proper segregation of duties within multiple systems and a lack of mitigating business process level controls to address the risk of management override of controls over the preparation and review of manual journal entries and in key accounting processes; and | |
| ● | There are lack of sufficient controls to prevent the risk of material misstatements in the income tax calculations and related disclosures. |
While neither of the deficiencies resulted in any material misstatements of our consolidated interim or annual financial statements, they do represent material weaknesses in our internal control over financial reporting.
Remediation Efforts to Address the Material Weaknesses
We are committed to maintaining a strong internal control environment and will implement corrective actions to support the remediation of the material weaknesses noted above. This includes, but is not limited to, providing training to process and control owners, enhancing relevant policies, procedures, guidelines and documentation templates, implementing new controls and improving documentation supporting existing controls, and enhancing segregation of duties.
We will not be able to fully remediate these material weaknesses until the applicable controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Our management will continue to monitor the effectiveness of our remediation plans in future periods and will make changes we determine to be appropriate.
In designing and evaluating disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
Except for the changes described to internal control above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceedings. From time to time, we may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business, including, but not limited to, employee, customer and vendor disputes.
Item 1A. Risk Factors
Except as described herein, there have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information
Item 6. Exhibits
| Exhibit # |
Description |
|
| 3.1 |
Restated Certificate of Incorporation of Neonode Inc., dated November 7, 2018 (incorporated by reference to Exhibit 3.14 of the registrant’s quarterly report on Form 10-Q (File No. 001-35526) filed on November 8, 2018) |
|
| 3.2 |
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 of the registrant’s current report on Form 8-K (File No. 001-35526) filed on March 10, 2023) |
|
| 4.1 |
Description of registrant’s Common Stock (incorporated by reference to Exhibit 4.1 to the registrant’s Form S-3 (No. 333-255964), filed on May 10, 2021) |
|
| 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. |
|
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * |
Filed herewith |
| ** |
Furnished herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NEONODE INC. |
||
| Date: May 13, 2026 |
By: |
/s/ Fredrik Nihlén |
| Fredrik Nihlén |
||
| Chief Financial Officer |
||
| (Principal Financial and Accounting Officer) |
||