Press Release
For Release, 09:10AM ET February 28, 2024
Neonode Reports 2023 Financial Results
STOCKHOLM, SWEDEN, February 28, 2024 — Neonode Inc. (NASDAQ: NEON) today reported financial
results for the fiscal year ended December 31, 2023.
FINANCIAL SUMMARY FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023:
• Revenue of $4.4 million, a decrease of 21.5% compared to the prior year.
• Operating expenses of $10.7 million, an increase of 4.9% compared to the prior year.
• Net loss of $10.1 million, or $0.66 per share, compared to $4.9 million, or $0.36 per share, for the prior
year.
• Cash used by operations of $6.3 million, compared to $6.8 million for the prior year.
• Cash and accounts receivable of $17.1 million as of December 31, 2023 compared to $16.3 million for
the prior year-end.
THE CEO’S COMMENTS
“The decrease in our sales revenues 2023 was a disappointment. In particular, the negative development of our
Touch Sensor Module (“TSM”) product business was unsatisfactory and led us to the decision to sharpen our
strategy and focus on licensing going forward, as announced on December 12, 2023. We are currently phasing
out our TSM product business and will close our production unit in Kungsbacka, Sweden, later this year.
Existing customers and value-added resellers are offered to place last-time-buy orders for TSMs for delivery
during Q1 and Q2. In parallel, we are offering customers to license the TSM technology to set up their own
TSM production, which several customers have responded positively to,” said Dr. Urban Forssell, Neonode’s
CEO.
“Our licensing revenues were also lower in 2023 than in the previous year. This is mainly due to our legacy
customers’ product sales slowing down in Q3 and Q4, combined with high inventory levels at some customers.
The breakthrough driver monitoring software win with a leading commercial vehicle manufacturer, which we
announced on December 6, 2023, was the result of several years’ dedicated work by our commercial and
technical teams and is a stepping stone for us in our quest to revitalize and grow our licensing business,”
continued Dr. Forssell.
“We are pleased to see that our recent driver monitoring software win has boosted the interest in our driver and
in-cabin monitoring solution among other vehicle manufacturers and tier 1 system suppliers. We are currently
working hard to capitalize on this momentum. We also see interesting opportunities with our head-up display
obstruction solution and with our touch and touchless human-machine interaction offerings. In summary, we are
optimistic about the future growth potential for our business. We are also confident that our new, sharpened
strategy with a full focus on licensing will help us increase our efficiency and reach a positive cash flow in
shorter time than with our previous strategy that combined licensing with product sales,” concluded Dr. Forssell.
FINANCIAL OVERVIEW FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023
Net revenues for fiscal 2023 were $4.4 million, a 21.5% decrease compared to 2022. License revenues were
$3.8 million, a decrease of 14.9% compared to 2022. The decrease is caused by lower sales volumes for our
customers during 2023.
Revenues from product sales for fiscal 2023 were $0.6 million, a 37.7% decrease compared to 2022, mainly due
to low customer demand.
Revenues from non-recurring engineering for fiscal 2023 were $26,000, an 87.3% decrease compared to 2022,
mainly due to fewer projects.
Gross margin related to products was negative 630.6% for fiscal 2023 compared to 22.0% in 2022. The gross
margin for products in 2023 is impacted by one-time costs related to a customer claim, impairment loss on
inventory and a loss on an earlier purchase commitment.
Our operating expenses increased by 4.9% for fiscal 2023 compared to 2022, primarily due to higher marketing
costs, professional fees, and payroll and related costs.
Net loss attributable to Neonode for fiscal 2023 was $10.1 million, or $0.66 per share, compared to a net loss of
$4.9 million, or $0.36 per share for 2022. Cash used by operations was $6.3 million in fiscal 2023 compared to
$6.8 million for 2022. The decrease is primarily the result of fewer components purchased in 2023.
Cash and accounts receivable totaled $17.7 million and working capital was $16.8 million as of December 31,
2023, compared to $16.3 million and $19.1 million as of December 31, 2022, respectively.
For more information, please contact:
Chief Financial Officer
Fredrik Nihlén
E-mail: fredrik.nihlen@neonode.com
Phone: +46 703 97 21 09
Chief Executive Officer
Urban Forssell
E-mail: urban.forssell@neonode.com
Phone: +46 734 10 03 59
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 R&D 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
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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
(In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable and unbilled revenues, net
Inventory
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets, net
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
Finance lease obligations, net of current portion
Operating lease obligations, net of current portion
Total liabilities
Commitments and contingencies
Stockholders’ equity:
As of
December 31,
2023
As of
December 31,
2022
$
$
$
16,155 $
917
610
938
18,620
340
54
19,014 $
440 $
941
354
10
33
54
1,832
19
-
1,851
14,816
1,448
3,827
707
20,798
282
118
21,198
334
951
200
36
95
83
1,699
46
35
1,780
Common stock, 25,000,000 shares authorized, with par value of $0.001;
15,359,481 and 14,455,765 shares issued and outstanding at December 31,
2023 and 2022, respectively
Additional paid-in capital
Accumulated other comprehensive loss
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
15
235,158
(396 )
(217,614 )
17,163
19,014 $
14
227,235
(340 )
(207,491 )
19,418
21,198
$
NEONODE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Revenues:
License fees
Products
Non-recurring engineering
Total revenues
Cost of revenues:
Products
Non-recurring engineering
Loss on purchase commitment
Total cost of revenues
Total gross (loss) margin
Operating expenses:
Research and development
Sales and marketing
General and administrative
Total operating expenses
Operating loss
Other income:
Interest income, net
Other income
Total other income
Loss before provision for income taxes
Provision for income taxes
Net loss including noncontrolling interests
Less: net loss attributable to noncontrolling interests
Net loss attributable to Neonode Inc.
Loss per common share:
Basic and diluted loss per share
Years Ended
December 31,
2023
December 31,
2022
$
3,803 $
620
26
4,449
4,168
12
362
4,542
4,470
995
205
5,670
776
28
-
804
(93 )
4,866
3,833
2,455
4,363
3,963
2,034
4,155
10,651
(10,744 )
10,152
(5,286 )
730
6
736
100
21
121
(10,008 )
(5,165 )
115
(10,123 )
-
(10,123 )
118
(5,283 )
400
(4,883 )
$
(0.66 ) $
(0.36 )
Basic and diluted – weighted average number of common shares outstanding
15,322
13,632
NEONODE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
Years Ended
December 31,
2023
December 31,
2022
Net loss including noncontrolling interests
$
(10,123 ) $
(5,283 )
Other comprehensive income:
Foreign currency translation adjustments
Other comprehensive loss
Less: comprehensive loss attributable to noncontrolling interests
Comprehensive loss attributable to Neonode Inc.
(56 )
(10,179 )
-
(10,179 ) $
68
(5,215 )
400
(4,815 )
$
NEONODE INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
Commo
n
Stock
Shares
Issued
Commo
n
Stock
Amount
Addition
al
Paid-in
Capital
Accumulated
Other
Comprehensi
ve
Income
(Loss)
Total
Neonode
Inc.
Stockholder
s’
Equity
Accumulat
ed
Deficit
Noncontrolli
ng
Interests
Total
Stockholder
s’
Equity
13,576
14 226,880
(408 ) (202,608 )
23,878
(4,041 )
19,837
886
- 4,686
4
-
122
-
-
-
4,686
-
4,686
-
122
-
122
(10 )
-
(12 )
-
-
(12 )
-
(12 )
-
- (4,441 )
-
-
(4,441 )
4,441
-
-
-
-
-
-
-
68
-
-
(4,883 )
68
(4,883 )
-
(400 )
68
(5,283 )
14,456 $
14 $ 227,235 $
(340 ) $ (207,491 ) $
19,418 $
- $
19,418
903
1 7,865
-
-
58
-
-
-
7,866
-
7,866
-
58
-
58
-
-
-
-
-
-
(56 )
-
-
(10,123 )
(56 )
(10,123 )
-
-
(56 )
(10,123 )
15,359 $
15 $ 235,158 $
(396 ) $ (217,614 ) $
17,163 $
- $
17,163
Balances,
January
31, 2022
Issuance of
shares for
cash, net of
offering
costs
Stock-based
compensati
on
Repurchase
and
retirement
of stock
Acquisition
of
remaining
shares
Pronode
Foreign
currency
translation
adjustment
Net loss
Balances,
December
31, 2022
Issuance of
shares for
cash, net of
offering
costs
Stock-based
compensati
on
Foreign
currency
translation
adjustment
Net loss
Balances,
December
31, 2023
NEONODE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended
December 31,
2023
December 31,
2022
Cash flows from operating activities:
Net loss (including noncontrolling interests)
Adjustments to reconcile net loss to net cash used in operating activities:
$
(10,123 ) $
(5,283 )
Stock-based compensation expense
Depreciation and amortization
Amortization of operating lease right-of-use assets
Inventory impairment loss
Recoveries of bad debt
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue, net
Inventory
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 flow from financing activities:
Proceeds from issuance of common stock, net of offering costs
Repurchase of common stock
Principal payments on finance lease obligations
Net cash provided by financing activities
58
95
65
3,572
-
539
(395 )
(201 )
173
(26 )
(65 )
(6,308 )
122
120
399
-
(46 )
(136 )
(1,133 )
37
(460 )
(65 )
(363 )
(6,808 )
(123 )
(123 )
(52 )
(52 )
7,866
-
(89 )
7,777
4,686
(12 )
(165 )
4,509
Effect of exchange rate changes on cash and cash equivalents
(7 )
(216 )
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes
Supplemental disclosure of non-cash investing and financial activities:
Right-of-use asset obtained in exchange for finance lease obligations
Acquisition of Pronode shares
1,339
14,816
16,155 $
(2,567 )
17,383
14,816
9 $
115 $
9
132
- $
- $
24
4,441
$
$
$
$
$