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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2024
NEONODE INC.
(Exact name of issuer of securities held pursuant to the plan)
Commission File Number 001-35526
| Delaware | 94-1517641 | |
| (State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) |
Karlavägen 100, 115 26 Stockholm, Sweden
(Address of Principal Executive Office, including Zip Code)
+46 (0) 702958519
Registrant’s telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.001 per share | NEON | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 8, 2024, Neonode Inc. (the “Company”) reported its earnings for the three months ended June 30, 2024 (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibits 99.1 is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Earnings Release of the Company dated August 8, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
| Date: August 8, 2024 | NEONODE INC. | |
| By: | /s/ Fredrik Nihlén | |
| Name: | Fredrik Nihlén | |
| Title: | Interim President and Chief Executive Office and Chief Financial Officer | |
2
Exhibit 99.1
Press Release
For Release, 09:10AM EDT August 8, 2024
Neonode Reports Quarter Ended June 30, 2024 Financial Results
STOCKHOLM, SWEDEN, August 8, 2024 — Neonode Inc. (NASDAQ: NEON) (“Neonode” or the “Company”) today reported financial results for the three and six months ended June 30, 2024.
FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED JUNE 30, 2024:
| ● | Revenues of $1.4 million, an increase of 18.7% compared to the same period in the prior year. |
| ● | Operating expenses of $2.7 million, a decrease of 1.6% compared to the same period in the prior year. |
| ● | Net loss of $1.7 million, or $0.11 per share, compared to $1.5 million, or $0.10 per share, for the same period in the prior year. |
| ● | Cash used by operations of $1.2 million compared to $0.6 million for the same period in the prior year. |
| ● | Cash and accounts receivable of $14.4 million as of June 30, 2024 compared to $17.1 million as of December 31, 2023. |
FINANCIAL SUMMARY FOR THE SIX MONTHS ENDED JUNE 30, 2024:
| ● | Revenue of $2.4 million, a decrease of 0.6% compared to the same period in the prior year. |
| ● | Operating expenses of $5.6 million, an increase of 0.9% compared to the same period in the prior year. |
| ● | Net loss of $3.8 million, or $0.25 per share, compared to $2.9 million, or $0.19 per share, for the same period in the prior year. |
| ● | Cash used by operations of $3.1 million compared to $2.3 million for the same period in the prior year. |
COMMENTS OF THE INTERIM PRESIDENT AND CHIEF EXECUTIVE OFFICER (“CEO”) AND CHIEF FINANCIAL OFFICER (“CFO”)
“Our revenues increased in the second quarter of 2024 compared to the same quarter last year. Non-recurring engineering revenues increased and were mainly attributable to the ongoing Driver Monitoring System (“DMS”) project with the Original Equipment Manufacturer (“OEM”) of commercial vehicles customer that was announced at the end of last year. Product sales also increased in the second quarter compared to the same quarter last year, mainly as a result of last time buy orders from customers to secure supplies, following our decision to focus solely on licensing going forward and to phase out our products business. Licensing revenues decreased compared to the same quarter last year, mainly due to the demand for our legacy customers’ products being lower. Gross margin in the second quarter of 2024 compared to the same quarter last year declined and was the result of increased cost of revenue due to increased product sales and non-recurring revenues combined with decreased licensing revenues. Although our operating expenses decreased in the second quarter of 2024 compared to the same quarter last year, the decline in gross margin led to a higher net loss,” said Fredrik Nihlén, Neonode’s interim President and CEO and CFO.
“Our driver and in-cabin monitoring solutions keep attracting attention, which is positive. We find this promising and believe that our solution is not only competitive but also scalable and flexible, making the solution attractive to both commercial vehicle and passenger car manufacturers. We also keep seeing interesting licensing opportunities for our touch and touchless human-machine interaction offerings in addition to the first touch sensor module technology license agreement announced earlier this year,” concluded Mr. Nihlén.
FINANCIAL OVERVIEW FOR THE QUARTER ENDED JUNE 30, 2024
Revenues for the quarter ended June 30, 2024 were $1.4 million, an 18.7% increase compared to the same period in 2023. License revenues were $0.6 million, a decrease of 43.9% compared to the same period in 2023. The decrease was caused by lower sales volumes for our customers during the second quarter of 2024 compared to the same quarter in 2023.
Revenues from product sales for the quarter ended June 30, 2024 were $0.6 million, a 641.7% increase compared to the same period in 2023, mainly due to last time buy orders from customers.
Revenues from non-recurring engineering for the second quarter of 2024 were $0.2 million, a 750.0% increase compared to the same period in 2023, mainly attributable to the DMS project with the commercial vehicle OEM customer that was announced at the end of last year.
Gross margin related to products was 26.0% for the second quarter of 2024 compared to 66.7% in the same period in 2023. The gross margin for products for the second quarter in 2024 was impacted by a one-time cost of $8,000 related to an impairment loss on inventory due to the phasing out of the manufacturing of touch sensor modules.
Our operating expenses decreased by 1.6% for the second quarter of 2024 compared to the same period in 2023, primarily due to lower payroll and related costs offset by higher professional fees.
Net loss for the second quarter of 2024 was $1.7 million, or $0.11 per share, compared to a net loss of $1.5 million, or $0.10 per share for the same period in 2023. Cash used by operations was $1.2 million in the second quarter of 2024 compared to $0.6 million for the same period in 2023. The increase is primarily the result of component purchases in the second quarter of 2024 and the timing of customer payments.
Cash and accounts receivable totaled $14.4 million and working capital was $13.2 million as of June 30, 2024, compared to $17.1 million and $16.8 million as of December 31, 2023, respectively.
For more information, please contact:
Interim President and Chief Executive Officer and Chief Financial Officer
Fredrik Nihlén
E-mail: fredrik.nihlen@neonode.com
Phone: +46 703 97 21 09
About Neonode
Neonode Inc. (NASDAQ:NEON) is a publicly traded company, headquartered in Stockholm, Sweden and established in 2001. The Company provides
advanced optical sensing solutions for contactless touch, touch, gesture control, and in-cabin monitoring. Building on experience acquired
during years of advanced research and development and technology licensing, Neonode’s technology is currently deployed in more
than 90 million products, and the Company holds more than 100 patents worldwide. Neonode’s customer base includes some of the world’s
best-known Fortune 500 companies in the consumer electronics, office equipment, automotive, elevator, and self-service kiosk markets.
NEONODE and the NEONODE logo are trademarks of Neonode Inc. registered in the United States and other countries.
For further information please visit www.neonode.com (In thousands, except share and per share amounts)
Follow us at:
Cision
Safe Harbor
Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to our expectations for growth and the growing demand for our products, future performance or future events. These statements are based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown risks, uncertainties and other factors that may cause Neonode’s actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements.
These risks, uncertainties, and factors include risks related to our reliance on the ability of our customers to design, manufacture and sell their products with our touch technology, the length of a customer’s product development cycle, our dependence and our customers’ dependence on suppliers, the global economy generally and other risks discussed under “Risk Factors” and elsewhere in Neonode’s public filings with the SEC from time to time, including Neonode’s annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no assurance that its expectations will be fulfilled. Forward-looking statements are made as of today’s date, and Neonode undertakes no duty to update or revise them.
NEONODE INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 13,107 | $ | 16,155 | ||||
| Accounts receivable and unbilled revenues, net | 1,246 | 917 | ||||||
| Inventory | 205 | 610 | ||||||
| Prepaid expenses and other current assets | 536 | 938 | ||||||
| Total current assets | 15,094 | 18,620 | ||||||
| Property and equipment, net | 83 | 340 | ||||||
| Operating lease right-of-use assets, net | 17 | 54 | ||||||
| Total assets | $ | 15,194 | $ | 19,014 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 321 | $ | 440 | ||||
| Accrued payroll and employee benefits | 1,271 | 941 | ||||||
| Accrued expenses | 207 | 354 | ||||||
| Contract liabilities | 51 | 10 | ||||||
| Current portion of finance lease obligations | 6 | 33 | ||||||
| Current portion of operating lease obligations | 17 | 54 | ||||||
| Total current liabilities | 1,873 | 1,832 | ||||||
| Finance lease obligations, net of current portion | - | 19 | ||||||
| Total liabilities | 1,873 | 1,851 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, 25,000,000 shares authorized, with par value of $0.001; 15,359,481 shares issued and outstanding at June 30, 2024 and December 31, 2023 | 15 | 15 | ||||||
| Additional paid-in capital | 235,161 | 235,158 | ||||||
| Accumulated other comprehensive loss | (462 | ) | (396 | ) | ||||
| Accumulated deficit | (221,393 | ) | (217,614 | ) | ||||
| Total stockholders’ equity | 13,321 | 17,163 | ||||||
| Total liabilities and stockholders’ equity | $ | 15,194 | $ | 19,014 | ||||
NEONODE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues: | ||||||||||||||||
| License fees | $ | 614 | $ | 1,094 | $ | 1,387 | $ | 2,242 | ||||||||
| Products | 623 | 84 | 823 | 186 | ||||||||||||
| Non-recurring engineering | 187 | 22 | 228 | 25 | ||||||||||||
| Total revenues | 1,424 | 1,200 | 2,438 | 2,453 | ||||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 461 | 28 | 841 | 75 | ||||||||||||
| Non-recurring engineering | 24 | 9 | 41 | 9 | ||||||||||||
| Total cost of revenues | 485 | 37 | 882 | 84 | ||||||||||||
| Total gross margin | 939 | 1,163 | 1,556 | 2,369 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 975 | 1,063 | 1,870 | 1,865 | ||||||||||||
| Sales and marketing | 544 | 689 | 1,360 | 1,281 | ||||||||||||
| General and administrative | 1,227 | 1,038 | 2,387 | 2,422 | ||||||||||||
| Total operating expenses | 2,746 | 2,790 | 5,617 | 5,568 | ||||||||||||
| Operating loss | (1,807 | ) | (1,627 | ) | (4,061 | ) | (3,199 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income, net | 140 | 169 | 320 | 327 | ||||||||||||
| Other expense | (17 | ) | - | (17 | ) | - | ||||||||||
| Total other income, net | 123 | 169 | 303 | 327 | ||||||||||||
| Loss before provision for income taxes | (1,684 | ) | (1,458 | ) | (3,758 | ) | (2,872 | ) | ||||||||
| Provision for income taxes | 11 | 49 | 21 | 60 | ||||||||||||
| Net loss | $ | (1,695 | ) | $ | (1,507 | ) | $ | (3,779 | ) | $ | (2,932 | ) | ||||
| Loss per common share: | ||||||||||||||||
| Basic and diluted loss per share | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.25 | ) | $ | (0.19 | ) | ||||
| Basic and diluted – weighted average number of common shares outstanding | 15,359 | 15,359 | 15,359 | 15,285 | ||||||||||||
NEONODE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net loss | $ | (1,695 | ) | $ | (1,507 | ) | $ | (3,779 | ) | $ | (2,932 | ) | ||||
| Other comprehensive loss: | ||||||||||||||||
| Foreign currency translation adjustments | (32 | ) | (141 | ) | (66 | ) | (106 | ) | ||||||||
| Other comprehensive loss | $ | (1,727 | ) | $ | (1,648 | ) | $ | (3,845 | ) | $ | (3,038 | ) | ||||
NEONODE INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
For the three and six months ended June 30, 2024 and 2023
| Common Stock Shares Issued |
Common Stock Amount |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||
| Balances, December 31, 2023 | 15,359 | $ | 15 | $ | 235,158 | $ | (396 | ) | $ | (217,614 | ) | $ | 17,163 | |||||||||||
| Stock-based compensation | - | - | 2 | - | - | 2 | ||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | (34 | ) | - | (34 | ) | ||||||||||||||||
| Net loss | - | - | - | - | (2,084 | ) | (2,084 | ) | ||||||||||||||||
| Balances, March 31, 2024 | 15,359 | $ | 15 | $ | 235,160 | $ | (430 | ) | $ | (219,698 | ) | $ | 15,047 | |||||||||||
| Stock-based compensation | - | - | 1 | - | - | 1 | ||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | (32 | ) | - | (32 | ) | ||||||||||||||||
| Net loss | - | - | - | - | (1,695 | ) | (1,695 | ) | ||||||||||||||||
| Balances, June 30, 2024 | 15,359 | $ | 15 | $ | 235,161 | $ | (462 | ) | $ | (221,393 | ) | $ | 13,321 | |||||||||||
| Common Stock Shares Issued |
Common Stock Amount |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||
| Balances, December 31, 2022 | 14,456 | $ | 14 | $ | 227,235 | $ | (340 | ) | $ | (207,491 | ) | $ | 19,418 | |||||||||||
| Stock-based compensation | - | - | 18 | - | - | 18 | ||||||||||||||||||
| Issuance of shares for cash, net of offering costs | 903 | 1 | 7,865 | - | - | 7,866 | ||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | 35 | - | 35 | ||||||||||||||||||
| Net loss | - | - | - | - | (1,425 | ) | (1,425 | ) | ||||||||||||||||
| Balances, March 31, 2023 | 15,359 | $ | 15 | $ | 235,118 | $ | (305 | ) | $ | (208,916 | ) | $ | 25,912 | |||||||||||
| Stock-based compensation | - | - | 17 | - | - | 17 | ||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | (141 | ) | - | (141 | ) | ||||||||||||||||
| Net loss | - | - | - | - | (1,507 | ) | (1,507 | ) | ||||||||||||||||
| Balances, June 30, 2023 | 15,359 | $ | 15 | $ | 235,135 | $ | (446 | ) | $ | (210,423 | ) | $ | 24,281 | |||||||||||
NEONODE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six months ended June 30, |
||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (3,779 | ) | $ | (2,932 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation expense | 3 | 35 | ||||||
| Loss on disposal of assets | 18 | - | ||||||
| Depreciation and amortization | 40 | 37 | ||||||
| Amortization of operating lease right-of-use assets | 34 | 33 | ||||||
| Inventory impairment loss | 286 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and unbilled revenues, net | (344 | ) | 140 | |||||
| Inventory | 89 | 17 | ||||||
| Prepaid expenses and other current assets | 362 | 27 | ||||||
| Accounts payable, accrued payroll and employee benefits, and accrued expenses | 149 | 374 | ||||||
| Contract liabilities | 41 | (13 | ) | |||||
| Operating lease obligations | (34 | ) | (33 | ) | ||||
| Net cash used in operating activities | (3,135 | ) | (2,315 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (37 | ) | (36 | ) | ||||
| Proceeds from sale of property and equipment | 190 | - | ||||||
| Net cash used in investing activities | 153 | (36 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock, net of offering costs | - | 7,866 | ||||||
| Principal payments on finance lease obligations | (13 | ) | (52 | ) | ||||
| Net cash (used in) provided by financing activities | (13 | ) | 7,814 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (53 | ) | 12 | |||||
| Net change in cash and cash equivalents | (3,048 | ) | 5,475 | |||||
| Cash and cash equivalents at beginning of period | 16,155 | 14,816 | ||||||
| Cash and cash equivalents at end of period | $ | 13,107 | $ | 20,291 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for income taxes | $ | 21 | $ | 60 | ||||
| Cash paid for interest | $ | 1 | $ | 6 | ||||
7