Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 08, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Neonode, Inc | ||
Entity Central Index Key | 87,050 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 54,766,962 | ||
Entity Common Stock, Shares Outstanding | 48,844,503 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 3,476 | $ 3,082 |
Accounts receivable, net | 1,548 | 1,346 |
Projects in process | 158 | |
Inventory | 696 | |
Prepaid expenses and other current assets | 1,949 | 747 |
Total current assets | 7,669 | 5,333 |
Investment in joint venture | 3 | |
Property and equipment, net | 2,031 | 594 |
Total assets | 9,703 | 5,927 |
Current liabilities: | ||
Accounts payable | 1,286 | 965 |
Accrued payroll and employee benefits | 1,001 | 932 |
Accrued expenses | 172 | 382 |
Deferred revenues | 1,921 | 1,475 |
Current portion of capital lease obligations | 228 | 57 |
Total current liabilities | 4,608 | 3,811 |
Capital lease obligation, net of current portion | 960 | 283 |
Total liabilities | 5,568 | 4,094 |
Commitments and contingencies | ||
Stockholders' equity | ||
Series B Preferred stock, 54,425 shares authorized with par value of $0.001; 83 shares issued and outstanding at December 31, 2016 and 2015, respectively. (In the event of dissolution, each share of Series B Preferred stock has a liquidation preference equal to par value of $0.001 over the shares of common stock) | ||
Common stock, 70,000,000 shares authorized at December 31, 2016 and 2015, respectively, with par value of $0.001; 48,844,503 and 43,805,586 shares issued and outstanding at December 31, 2016 and 2015, respectively | 49 | 44 |
Additional paid-in capital | 183,667 | 175,504 |
Accumulated other comprehensive (loss) income | (171) | 46 |
Accumulated deficit | (179,040) | (173,749) |
Total Neonode Inc. stockholders' equity | 4,505 | 1,845 |
Noncontrolling interests | (370) | (12) |
Total stockholders' equity | 4,135 | 1,833 |
Total liabilities and stockholders' equity | $ 9,703 | $ 5,927 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 48,844,503 | 43,805,586 |
Common stock, shares outstanding | 48,844,503 | 43,805,586 |
Series B Preferred Stock | ||
Preferred stock, shares authorized | 54,425 | 54,425 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 83 | 83 |
Preferred stock, shares outstanding | 83 | 83 |
Preferred stock, liquidation preference | $ 0.001 | $ 0.001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
License fees | $ 8,350 | $ 7,045 | $ 3,156 |
Sensor modules sales | 149 | ||
Non-recurring engineering | 1,714 | 4,070 | 1,584 |
Total revenues | 10,213 | 11,115 | 4,740 |
Cost of revenues: | |||
Sensor module | 54 | ||
Non-recurring engineering | 1,284 | 3,780 | 1,509 |
Total cost of revenues | 1,338 | 3,780 | 1,509 |
Total gross margin | 8,875 | 7,335 | 3,231 |
Operating expenses: | |||
Research and development | 7,069 | 6,279 | 7,373 |
Sales and marketing | 2,857 | 3,753 | 3,250 |
General and administrative | 4,093 | 4,999 | 6,799 |
Total operating expenses | 14,019 | 15,031 | 17,422 |
Operating loss | (5,144) | (7,696) | (14,191) |
Other expense, net: | |||
Interest expense | (47) | (18) | (14) |
Other expense, net | (91) | (28) | (16) |
Total other expense, net | (138) | (46) | (30) |
Loss before provision for income taxes | (5,282) | (7,742) | (14,221) |
Provision for income taxes | 367 | 93 | 13 |
Net loss including noncontrolling interests | (5,649) | (7,835) | (14,234) |
Less: Net loss attributable to noncontrolling interests | 358 | 15 | |
Net loss attributable to Neonode Inc. | $ (5,291) | $ (7,820) | $ (14,234) |
Loss per common share: | |||
Basic and diluted loss per share | $ (0.12) | $ (0.19) | $ (0.36) |
Basic and diluted - weighted average number of common shares outstanding | 45,690 | 41,202 | 39,532 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Comprehensive Loss [Abstract] | |||
Net loss including noncontrolling interests | $ (5,649) | $ (7,835) | $ (14,234) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (217) | (103) | 138 |
Comprehensive loss | (5,866) | (7,938) | (14,096) |
Less: Comprehensive loss attributable to noncontrolling interests | 358 | 15 | |
Comprehensive loss attributable to Neonode Inc. | $ (5,508) | $ (7,923) | $ (14,096) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Series B Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Neonode Inc. Stockholders' Equity | Noncontrolling Interests |
Balances at Dec. 31, 2013 | $ 6,348 | $ 38 | $ 157,994 | $ 11 | $ (151,695) | $ 6,348 | ||
Balances, shares at Dec. 31, 2013 | 83 | 37,934 | ||||||
Stock option compensation expense to employees, directors and vendors | 1,729 | 1,729 | 1,729 | |||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs | 9,253 | $ 2 | 9,251 | 9,253 | ||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs, shares | 2,500 | |||||||
Common stock issued upon exercise of common stock warrants | 36 | 36 | 36 | |||||
Common stock issued upon exercise of common stock warrants, shares | 21 | |||||||
Foreign currency translation adjustment | 138 | 138 | 138 | |||||
Net loss | (14,234) | (14,234) | (14,234) | |||||
Balances at Dec. 31, 2014 | 3,270 | $ 40 | 169,010 | 149 | (165,929) | 3,270 | ||
Balances, shares at Dec. 31, 2014 | 83 | 40,455 | ||||||
Stock option compensation expense to employees, directors and vendors | 1,075 | 1,075 | 1,075 | |||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs | 5,422 | $ 3 | 5,419 | 5,422 | ||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs, shares | 3,200 | |||||||
Common stock issued upon exercise of common stock warrants | 1 | $ 1 | 1 | |||||
Common stock issued upon exercise of common stock warrants, shares | 151 | |||||||
Foreign currency translation adjustment | (103) | (103) | (103) | |||||
Noncontrolling interests Pronode initial contribution | 3 | 3 | ||||||
Net loss | (7,835) | (7,820) | (7,820) | (15) | ||||
Balances at Dec. 31, 2015 | 1,833 | $ 44 | 175,504 | 46 | (173,749) | 1,845 | (12) | |
Balances, shares at Dec. 31, 2015 | 83 | 43,806 | ||||||
Stock option compensation expense to employees, directors and vendors | 255 | 255 | 255 | |||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs | 7,913 | $ 5 | 7,908 | 7,913 | ||||
Proceeds from sale of common stock and pre-funded warrants, net of offering costs, shares | 5,027 | |||||||
Common stock issued upon exercise of common stock warrants | ||||||||
Common stock issued upon exercise of common stock warrants, shares | 12 | |||||||
Foreign currency translation adjustment | (217) | (217) | (217) | |||||
Net loss | (5,649) | (5,291) | (5,291) | (358) | ||||
Balances at Dec. 31, 2016 | $ 4,135 | $ 49 | $ 183,667 | $ (171) | $ (179,040) | $ 4,505 | $ (370) | |
Balances, shares at Dec. 31, 2016 | 83 | 48,845 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net loss (including noncontrolling interests) | $ (5,649) | $ (7,835) | $ (14,234) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation expense | 255 | 1,075 | 1,729 |
Bad debt expense | 167 | ||
Depreciation and amortization | 360 | 187 | 202 |
Loss on disposal of property and equipment | 91 | 28 | 16 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (204) | (239) | (304) |
Projects in process | 158 | 38 | 530 |
Inventory | (737) | ||
Prepaid expenses and other current assets | (1,316) | (263) | (60) |
Accounts payable and accrued expenses | 343 | 871 | 363 |
Deferred revenues | 447 | (1,925) | (233) |
Net cash used in operating activities | (6,252) | (8,063) | (11,824) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (987) | (198) | (115) |
Investment in joint venture | (3) | ||
Proceeds from sale of property and equipment | 5 | 7 | |
Net cash used in investing activities | (985) | (198) | (108) |
Cash flow from financing activities: | |||
Proceeds from exercise of warrants | 36 | ||
Proceeds from issuance of common stock and pre-funded warrants, net of offering costs | 7,913 | 5,422 | 9,253 |
Contributions from noncontrolling interests | 3 | ||
Principal payments on capital lease obligations | (116) | (57) | (34) |
Net cash provided by financing activities | 7,797 | 5,368 | 9,255 |
Effect of exchange rate changes on cash | (166) | (154) | (9) |
Net change in cash | 394 | (3,047) | (2,686) |
Cash at beginning of year | 3,082 | 6,129 | 8,815 |
Cash at end of year | 3,476 | 3,082 | 6,129 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 48 | 18 | 14 |
Cash paid for income taxes | 367 | 93 | 5 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Purchase of equipment with capital lease obligation | $ 983 | $ 530 |
Nature of the Business and Oper
Nature of the Business and Operations | 12 Months Ended |
Dec. 31, 2016 | |
Nature of the Business and Operations [Abstract] | |
Nature of the Business and Operations | 1. Nature of the Business and Operations Background and Organization Neonode Inc. (“we”, “us”, “our”, or the “Company”) was incorporated in the State of Delaware in 1997 as the parent of Neonode AB, a company founded in February 2004 and incorporated in Sweden. On December 29, 2008, we entered into a share exchange agreement with AB Cypressen nr 9683 (renamed Neonode Technologies AB), a Swedish engineering company, and Neonode Technologies AB became our wholly owned subsidiary. In 2013, we established additional wholly owned subsidiaries: Neonode Japan Inc. (Japan); Neno User Interface Solutions AB (Sweden); NEON Technology Inc. (U.S.); and Neonode Americas Inc. (U.S.). In 2014, we established one additional wholly owned subsidiary: Neonode Korea Ltd. (South Korea). In 2015, we established one additional wholly owned subsidiary: Neonode Taiwan Ltd. (Taiwan). In 2015, we established Pronode Technologies AB, a majority-owned subsidiary of Neonode Technologies AB. In 2016, we entered into a joint venture, named Neoeye AB, between SMART EYE AB and our subsidiary Neonode Technologies AB. Operations Neonode Inc., collectively with its subsidiaries is referred to as “Neonode”, develops and licenses user interfaces and optical touch technology to Original Equipment Manufacturers (“OEMs”) and Tier 1 suppliers who embed the Neonode technology into devices that they produce and sell. In 2016, Neonode started to manufacture and sell standardized embedded sensors that incorporate Neonode technology. Reclassifications Accrued payroll and employee benefits as of December 31, 2015 is now reported under its own caption, separate from accrued expenses, in the accompanying consolidated balance sheet, in order to conform to the current period presentation. Liquidity We incurred net losses of approximately $5.3 million, $7.8 million and $14.2 million for the years ended December 31, 2016, 2015 and 2014, respectively, and had an accumulated deficit of approximately $179.0 million as of December 31, 2016. In addition, we used cash in operating activities of approximately $6.3 million, $8.1 million and $11.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. In June 2014, we filed a shelf registration statement with the SEC that became effective on June 12, 2014. As of December 31, 2016, there were 1,800,000 shares remaining for issuance under this existing shelf registration statement. This shelf registration statement will expire on June 12, 2017. We may from time to time issue shares of our common stock under an effective shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in a prospectus supplement and any other offering materials, at the time of the offering. We intend to file a new shelf registration statement with the SEC concurrent with the filing of this Annual Report. Upon its effectiveness, this new shelf registration statement will allow us to offer and sell common stock in one or more offerings with an aggregate offering price of up to $20 million. On October 13, 2015, we issued 3,200,000 shares of our common stock from our shelf registration statement to investors in connection with an equity financing transaction. We sold the stock at $1.90 per share and raised approximately $6.1 million gross and received approximately $5.4 million in cash, net of direct offering costs including underwriting discounts and legal, audit and other regulatory costs of approximately $0.7 million. In August 2016, we entered into a Securities Purchase Agreement with institutional and accredited investors as part of a private placement pursuant to which we issued a total of 8,627,352 shares of common stock, as described below, and warrants for an aggregate purchase price of $7.9 million in net proceeds. The total number of shares included (i) an aggregate of 427,352 shares at $1.17 per share to Thomas Eriksson, Chief Executive Officer of Neonode, and Remo Behdasht, SVP AirBar Devices at Neonode for gross proceeds of approximately $500,000, (ii) an aggregate of 4,600,000 shares at a price of $1.00 per share to outside investors for gross proceeds of $4,600,000, and (iii) up to 3,600,000 shares issuable upon exercise of warrants (the “Pre-Funded Warrants”) by outside investors for which we received $3,564,000 pre-funded in proceeds and will receive up to $36,000 in proceeds upon future cash exercises. Under the terms of the August 2016 Securities Purchase Agreement, we issued warrants (the “Purchase Warrants”) to all investors in the private placement to purchase up to a total of 4,313,676 shares of common stock at an exercise price of $1.12 per share. The Purchase Warrants became exercisable February 17, 2017 and will expire February 17, 2022. None of the Purchase Warrants have been exercised as of March 10, 2017. If the warrants are fully exercised, we will receive approximately $4.8 million in proceeds. The consolidated financial statements included herein 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 evaluated the significance of the Company’s operating loss and determined that the Company’s current operating plan and sources of capital would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern. We expect our revenues from license fees, non-recurring engineering fees and AirBar sales will enable us to reduce our operating losses in 2017. We have received purchase orders from our distributors for AirBar and entered into an agreement with an OEM customer for our sensor modules. In addition, we have improved the overall cost efficiency of our operations, as a result of the transition from providing our customers a full custom design solution to providing standardized sensor modules which require limited to no custom design work. We intend to continue to implement various measures to improve our operational efficiencies. No assurances can be given that management will be successful in meeting its revenue targets and reducing its operating loss. As described above, upon the exercise of the Purchase Warrants issued in August 2016, we will receive up to approximately $4.8 million in proceeds. These Purchase Warrants are presently exercisable and are “in-the-money.” As also described above, concurrent with the filing of this Annual Report, we intend to file a new shelf registration statement with the SEC concurrent with the filing of this Annual Report. Upon its effectiveness, this new shelf registration statement will allow us to offer and sell common stock in one or more offerings with an aggregate offering price of up to $20 million. In the future, we may require sources of capital in addition to cash on hand 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. No assurances can be given 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, if funds are available, 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting policies | 2. Summary of Significant Accounting policies Principles of Consolidation The 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, as well as Pronode Technologies AB, a 51% majority owned subsidiary of Neonode Technologies AB. The remaining 49% of Pronode Technologies AB is owned by Propoint AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to sell engineering services within the automotive markets. All inter-company accounts and transactions have been eliminated in consolidation. Neonode consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50% of the voting rights, and variable interest entities (“VIEs”) in which Neonode is the primary beneficiary. In June 2016, we entered into a Joint Venture (“JV”) with a Swedish based eye-tracking company SMART EYE AB to develop multi-chip modules for the consumer and automotive markets. The name of this JV is Neoeye AB (“Neoeye”). We use the equity method of accounting to record our investments in the common stock of each entity in which Neonode has the ability to exercise significant influence, but does not own a majority equity interest. Under the equity method, our investment is originally included in equity interests at cost, and is adjusted to recognize our share of net earnings or losses of the investee, in our consolidated balance sheets; our share of net income (loss) is reported in our consolidated statements of operations according to our equity ownership in each entity. The consolidated statements of operations, comprehensive loss and cash flows for the year ended December 31, 2014 include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden) and Neonode Korea Ltd. (South Korea). The consolidated balance sheets at December 31, 2016 and 2015 and the consolidated statements of operations, comprehensive loss and cash flows for the years then ended include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd. (Taiwan), as well as Pronode Technologies AB (Sweden), a 51% majority owned subsidiary of Neonode Technologies AB. Estimates The preparation of financial statements in conformity with U.S. GAAP requires making estimates and assumptions that affect, at the date of the financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant estimates include, but are not limited to, provisions for uncollectible receivables and sales returns, warranty liabilities, the achievement of substantive milestones and vendor-specific objective evidence (“VSOE”) of fair value for purposes of revenue recognition (or deferral of revenue), net realizable value of inventory, recoverability of capitalized project costs and long-lived assets, the valuation allowance related to our deferred tax assets, and the fair value of options and warrants issued for stock-based compensation. Cash We have not had any liquid investments other than normal cash deposits with bank institutions to date. The Company considers all highly liquid investments with original maturities of three months of less to be cash equivalents. Concentration of Cash Balance Risks Cash balances are maintained at various banks in the United States, Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the United States the U.S. Federal Deposit Insurance Corporation, provides basic deposit coverage with limits up to $250,000 per owner. The Swedish government provides insurance coverage up to 100,000 Euro per customer and covers deposits in all types of accounts. The Japanese government provides insurance coverage up to 10,000,000 Yen per customer. The Korea Deposit Insurance Corporation provides insurance coverage up to 50,000,000 Won per customer. The Central Deposit Insurance Corporation in Taiwan provides insurance coverage up to 3,000,000 Taiwan Dollar per customer. At times, deposits held with financial institutions may exceed the amount of insurance provided. Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable are stated at net realizable value. Our policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments. Credit limits are established through a process of reviewing the financial history and stability of each customer. Where appropriate, we obtain credit rating reports and financial statements of the customer when determining or modifying its credit limits. We regularly evaluate the collectability of our trade receivable balances based on a combination of factors. When a customer’s account balance becomes past due, we initiate dialogue with the customer to determine the cause. If it is determined that the customer will be unable to meet its financial obligation, such as in the case of a bankruptcy filing, deterioration in the customer’s operating results or financial position or other material events impacting its business, we record a specific allowance to reduce the related receivable to the amount we expect to recover. Should all efforts fail to recover the related receivable, we will write-off the account. We also record an allowance for all customers based on certain other factors including the length of time the receivables are past due and historical collection experience with customers. Our allowance for doubtful accounts was approximately $149,000 and $167,000 as of December 31, 2016 and 2015, respectively. Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. There were no costs capitalized in projects in process as of December 31, 2016. Costs capitalized in projects in process were $158,000 as of December 31, 2015. Inventory Inventory is stated at the lower of cost, computed using the first-in, first-out method (“FIFO”) and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of December 31, 2016, the Company’s inventory consists primarily of components that will be used in the manufacturing of our first sensor module, AirBar. We segregate inventory for reporting purposes by raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods at December 31 are as follows: December 31, 2016 Raw materials $ 522 Work-in-Process 42 Finished goods 132 Ending inventory $ 696 Investment in JV We have invested $3,000, a 50% interest in Neoeye AB (see above). We account for our investment using the equity method of accounting since the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the investee and will be recognized in the consolidated statements of operations and will also be adjusted by contributions to and distributions from Neoeye. The Company is not required to guarantee any obligations of the JV. There have been no operations of Neoeye through December 31, 2016. Neoeye, as an unconsolidated equity investee, will recognize revenue from technology license agreements at the time a contract is entered into, the license method is determined (paid-in-advance or on-going royalty), performance obligations under the license agreement are satisfied, and the realization of revenue is assured, which is generally upon the receipt of the license proceeds. Neoeye may at times enter into license agreements whereby contingent revenues are recognized as one or more contractual milestones have been met. We review our investment in Neoeye to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors we consider in our determination are the financial condition, operating performance and near term prospects of Neoeye. If a decline in value is deemed to be other than temporary, we would recognize an impairment loss. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon estimated useful lives of the assets as follows: Estimated useful lives Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years Equipment purchased under a capital lease is depreciated over the term of the lease, if that lease term is shorter than the estimated useful life. Upon retirement or sale of property and equipment, cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are reflected in the consolidated statement of operations. Maintenance and repairs are charged to expense as incurred. Long-Lived Assets We assess any impairment by estimating the future cash flow from the associated asset in accordance with relevant accounting guidance. If the estimated undiscounted future cash flow related to these assets decreases or the useful life is shorter than originally estimated, we may incur charges for impairment of these assets. As of December 31, 2016, we believe there was no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or sufficient demand for our products and services will continue, which could result in impairment of long-lived assets in the future. 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, the South Korean Won and the Taiwan Dollar. The translation from Swedish Krona, Japanese Yen, South Korean Won or the Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the 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 income (loss). Gains or (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying consolidated statements of operations and were $74,000, $62,000 and ($37,000) during the years ended December 31, 2016, 2015 and 2014, respectively. Foreign currency translation gains or (losses) were ($217,000), ($103,000) and $138,000 during the years ended December 31, 2016, 2015 and 2014, respectively. Concentration of Credit and Business Risks Our customers are located in United States, Europe and Asia. As of December 31, 2016, three customers represented approximately 59% of our consolidated accounts receivable. As of December 31, 2015, three customers represented approximately 78% of our consolidated accounts receivable. Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2016 are as follows. ● Hewlett-Packard Company – 38% ● Amazon – 11% ● Autoliv – 11% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2015 are as follows. ● Hewlett-Packard Company – 25% ● Autoliv – 21% ● Amazon – 14% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2014 are as follows. ● Hewlett-Packard Company – 24% ● KOBO Inc. – 10% ● Leap Frog Enterprises Inc. – 11% ● Sony Corporation – 10% The Company conducts business in the United States, Europe and Asia. At December 31, 2016, the Company maintained approximately $2,189,000, $1,872,000 and $74,000 of its net assets (liabilities) in the United States, Europe and Asia, respectively. At December 31, 2015, the Company maintained approximately $2,533,000, ($909,000) and $209,000 of its net assets (liabilities) in the United States, Europe and Asia, respectively. Revenue Recognition Licensing Revenues: We derive revenue from the licensing of internally developed intellectual property (“IP”). We enter into IP licensing agreements that generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements may include license fees relating to our IP and royalties payable following the distribution by our licensees of products incorporating the licensed technology. The license for our IP has standalone value and can be used by the licensee without maintenance and support. We follow U.S. GAAP for revenue recognition as per unit royalty products are distributed or licensed by our customers. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when: (1) we enter into a legally binding arrangement with a customer for the license of technology; (2) the customer distributes or licenses the products; (3) the customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is reasonably assured. Our customers report to us the quantities of products distributed or licensed by them after the end of the reporting period stipulated in the contract, generally 30 to 45 days after the end of the month or quarter. We recognize licensing revenue in the period in which royalty reports are received, rather than the period in which the products are distributed or to which the license relates. Explicit return rights are not offered to customers. There have been no returns through December 31, 2016. Engineering Services: We may sell engineering consulting services to our customers on a flat rate or hourly rate basis. We recognize revenue from these services when all of the following conditions are met: (1) evidence existed of an arrangement with the customer, typically consisting of a purchase order or contract; (2) our services were performed and risk of loss passed to the customer; (3) we completed all of the necessary terms of the contract; (4) the amount of revenue to which we were entitled was fixed or determinable; and (5) we believed it was probable that we would be able to collect the amount due from the customer. To the extent that one or more of these conditions has not been satisfied, we defer recognition of revenue. Generally, we recognize revenue as the engineering services stipulated under the contract are completed and accepted by our customers. Engineering services are performed under a signed Statement of Work (“SOW”) with a customer. The deliverables and payment terms stipulated under the SOW provide guidance on the project revenue recognition. Revenues from contracts that are short-term in nature and related costs that are difficult to estimate are accounted for under the completed contract method. Revenues from contracts with substantive defined milestones that we have determined are reasonable, relevant to all the deliverables and payment terms in the SOW that are commensurate with the efforts required to achieve the milestones are recognized under the milestone recognition method. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the year ended December 31, 2015, $165,000 was recorded as cost of sales due to expected losses related to two SOW projects. In the years ended December 31, 2016 and 2014, no losses related to SOW projects were recorded. Optical Sensor Modules Revenues: We derive revenue from the sales of sensor modules hardware products sold directly to our OEM and Tier 1 supplier customers who embed our hardware into their products and from sales of branded consumer products that incorporate our sensor modules sold to distributors or directly to end users. These distributors are generally given business terms that allow them to return a portion of inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs. We enter into sales agreements that generally provide customers with limited rights of return and warranty provisions. U.S. GAAP allows companies to make reasonable aggregations and approximations of returns data with regard to returns. Our returns and warranty experience to date has enabled us to make reasonable returns estimates, which are further supported by the fact that our product sales involve homogenous transactions. Revenue is recognized when all of the following criteria have been met: ● Persuasive evidence of an arrangement exists. Contracts, Internet commerce agreements, and customer purchase orders are generally used to determine the existence of an arrangement. ● Delivery has occurred. Shipping documents and customer acceptance, when applicable, are used to verify delivery. ● The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. ● Collectibility is reasonably assured. We assess collectibility based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. As our business and offerings are expected to evolve over time, our pricing practices may be required to be modified accordingly, which could result in changes in selling prices. We make sales to distributors and revenue from distributors is recognized based on a sell-through basis using sales and inventory information provided by these distributors. Under the sell-through basis, accounts receivable are recognized and inventory is relieved upon shipment to the distributor as title to the inventory is transferred upon shipment, at which point we have a legally enforceable right to collection under normal terms. The associated sales and cost of sales are deferred and are included in deferred revenues in the consolidated balance sheet. When the related product is sold by our distributors to their end customers, at which time the ultimate price we receive is known, we recognize previously deferred revenues as sales and cost of sales. Distributors participate in various cooperative marketing and other incentive programs, and we maintain estimated accruals and allowances for these programs. If actual credits received by distributors under these programs were to deviate significantly from our estimates, which are based on historical experience, our revenue could be adversely affected. A reserve for future sales returns is established based on historical trends in product return rates. The reserve for future sales returns as of December 31, 2016 was $0.1 million and was recorded as a reduction of our accounts receivable and revenue. If the actual future returns were to deviate from the historical data on which the reserve had been established, our revenue could be adversely affected. Product Warranty The following table summarizes the activity related to the product warranty liability (in thousands): Year ended December 31, December 31, Balance at beginning of period $ - $ - Provisions for warranty issued 11 - Balance at end of period $ 11 $ - The Company accrues for warranty costs as part of its cost of sales of sensor modules based on estimated costs. The Company’s products are generally covered by a warranty for a period of 12 to 36 months from the customer receipt of the product. Deferred Revenues We defer license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. As of December 31, 2016 and 2015, we have $1.8 million and $1.1 million, respectively, of deferred license fee revenue related to prepayments for future license fees from four and two customers, respectively. We defer AirBar revenues until distributors sell the AirBar to their end customers. As of December 31, 2016, we had $0.1 million of deferred revenue from our AirBar sales. As of December 31, 2015, there was no deferred revenue from AirBar sales. As of December 31, 2016 there were no deferred engineering development fees and a total of $0.4 million of deferred engineering development fee from one customer as of December 31, 2015. Advertising Advertising costs are expensed as incurred. We will classify any reseller marketing allowances related to AirBar in general as sales expense unless we can define an identifiable benefit to us from the reseller marketing allowance. Advertising costs amounted to approximately $299,000, $328,000 and $172,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Research and Development Research and development (“R&D”) costs are expensed as incurred. R&D costs consist mainly of personnel related costs in addition to some external consultancy costs such as testing, certifying and measurements. Stock-Based Compensation Expense We measure the cost of employee services received in exchange for an award of equity instruments, including share options, based on the estimated fair value of the award on the grant date, and recognize the value as compensation expense over the period the employee is required to provide services in exchange for the award, usually the vesting period, net of estimated forfeitures. We account for equity instruments issued to non-employees at their estimated fair value. The measurement date for the estimated fair value for the equity instruments issued is determined at the earlier of (1) the date at which a commitment for performance by the consultant or vendor is reached, or (2) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instruments is primarily recognized over the term of the consulting agreement. The estimated fair value of the stock-based compensation is periodically re-measured and income or expense is recognized during the vesting term. When determining stock-based compensation expense involving options and warrants, we determine the estimated fair value of options and warrants using the Black-Scholes option pricing model. Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the 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 December 31, 2016 and 2015. 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 income taxes represents the net change in deferred tax amounts, plus income taxes payable for the current period. We follow U.S. GAAP related to uncertain tax positions, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. As a result, we did not recognize a liability for unrecognized tax benefits. As of December 31, 2016 and 2015, we had no unrecognized tax benefits. Net Loss per Share Net loss per share amounts have been computed based on the weighted-average number of shares of common stock outstanding during the years ended December 31, 2016, 2015 and 2014. Net loss per share, assuming dilution amounts from common stock equivalents, is computed based on the weighted-average number of shares of common stock and potential common stock equivalents outstanding during the period. The weighted-average number of shares of common stock and potential common stock equivalents used in computing the net loss per share for years ended December 31, 2016, 2015 and 2014 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 14). Other Comprehensive Income (Loss) Our comprehensive loss includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the consolidated balance sheets, as accumulated other comprehensive income (loss). Cash Flow Information Cash flows in foreign currencies have been converted to U.S. Dollars at an approximate weighted-average exchange rate for the respective reporting periods. The weighted-average exchange rate for the consolidated statements of operations was as follows: Years ended December 31, 2016 2015 2014 Swedish Krona 8.55 8.43 6.86 Japanese Yen 108.75 121.03 105.84 South Korean Won 1,157.14 1,130.22 1,050.63 Taiwan Dollar 32.22 31.73 - Exchange rate for the consolidated balance sheets was as follows: Years ended December 31, 2016 2015 Swedish Krona 9.07 8.42 Japanese Yen 116.97 120.36 South Korean Won 1,205.11 1,174.67 Taiwan Dollar 32.28 32.84 Fair Value of Financial Instruments We disclose the estimated fair values for all financial instruments for which it is practicable to estimate fair value. Financial instruments including cash, accounts receivable, accounts payable and accrued expenses and are deemed to approximate fair value due to their short maturities. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330)” (“ASU 2015-11”). The amendments in ASU 2015-11 require that an entity measure inventory within the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in this update more closely align the measurement of inventory in accounting principles generally accepted in the United States of America with the measurement of inventory in International Financial Reporting Standards. ASU 2015-11 is effective for annual and interim periods beginning on or after December 15, 2016. The amendments in this update should be applied prospectively with early application permitted as of the beginning of the interim or annual reporting period. The Company adopted the provisions of ASU 2015-11 effective September 1, 2016 and the adoption did not have a material impact on our consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-07, “Investments- Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”). ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for years beginning after December 15, 2016. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplified certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments”, (“ASU 2016-13”). The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financ |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | 3. Prepaid Expenses and Other Current Assets Prepaid expense and other current assets consist of the following (in thousands): As of December 31, 2016 2015 Prepaid insurance $ 125 $ 119 Prepaid rent 46 52 VAT receivable 247 337 Prepaid inventory 715 - Advances to suppliers 596 - Other 220 239 Total prepaid expenses and other current assets $ 1,949 $ 747 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consist of the following (in thousands): As of December 31, 2016 2015 Computers, software, furniture and fixtures $ 930 $ 637 Equipment under capital lease 1,661 428 Less accumulated depreciation and amortization (560 ) (471 ) Property and equipment, net $ 2,031 $ 594 Depreciation and amortization expense was $360,000, $187,000 and $202,000 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consist of the following (in thousands): As of December 31, 2016 2015 Accrued returns and warranty $ 11 $ - Accrued consulting fees and other 161 382 Total accrued expenses $ 172 $ 382 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements Accounting guidance defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements about fair value measurements. The accounting guidance does not mandate any new fair value measurements and is applicable to assets and liabilities that are required to be recorded at fair value under other accounting pronouncements. There were no assets or liabilities recorded at fair value on a recurring basis in 2016 and 2015. The three levels of the fair value hierarchy are described as follows: Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) in active markets for identical assets and liabilities. We had no Level 1 assets or liabilities. Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are included in Level 1 observable, either directly or indirectly. We had no Level 2 assets or liabilities. Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. We had no Level 3 assets or liabilities. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Revenue [Abstract] | |
Deferred Revenue | 7. Deferred Revenue We defer the license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. As of December 31, 2016 and 2015, we have $1.8 million and $1.1 million, respectively, of deferred license fee revenue related to prepayments for future license fees from four and two customers, respectively. We defer AirBar revenues until distributors sell the AirBar to their end customers. As of December 31, 2016, we had $0.1 million of deferred revenue from our AirBar sales. As of December 31, 2015, there was no deferred revenue from AirBar sales. As of December 31, 2016 there were no deferred engineering development fees and a total of $0.4 million of deferred engineering development fee from one customer as of December 31, 2015. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Common Stock Securities Purchase Agreement In August 2016, Neonode entered into the Securities Purchase Agreement with institutional and accredited investors as part of a private placement pursuant to which Neonode agreed to issue a total of 8,627,352 shares of Neonode common stock, as described below, and warrants for an aggregate purchase price of $7.9 million in net proceeds. The total number of shares includes (i) an aggregate of 427,352 Employee Investor Shares at $1.17 per share for gross proceeds of approximately $500,000, (ii) an aggregate of 4,600,000 Outside Investor Shares at a price of $1.00 per share for gross proceeds of $4,600,000, and (iii) up to 3,600,000 Pre-Funded Warrant Shares issuable upon exercise of the Pre-Funded Warrants for which Neonode received $3,564,000 pre-funded in gross proceeds. The Pre-Funded Warrants were issued to certain outside investors whose purchase of shares of Neonode common stock would make them the beneficial owners of more than 9.99% of the outstanding common stock of Neonode. Each of the Pre-Funded Warrants were pre-funded upon closing of the private placement at $0.99 per Pre-Funded Warrant Share and have an exercise price of $0.01 per Pre-Funded Warrant Share. The Pre-Funded Warrants are immediately exercisable upon issuance and will not expire prior to exercise. Warrants and Other Common Stock Activity In addition to the Pre-Funded Warrants described above, under the terms of the Securities Purchase Agreement, Neonode issued the Purchase Warrants to all investors in the private placement to purchase up to a total of 4,313,676 shares of Neonode common stock at an exercise price of $1.12 per share. The Purchase Warrants will expire five and one-half years from issuance and are non-exercisable for the first six months. The terms of the Purchase Warrants require that exercise may only be for cash and not on a cashless basis unless, after a period of six months from closing of the private placement. During the year ended December 31, 2016, a warrant holder exercised warrants to purchase 80,000 shares of common stock using the cashless exercise provisions allowed in the warrant and received 11,565 shares of our common stock. During the year ended December 31, 2015, we issued 3,200,000 shares of our common stock to investors in connection with an equity financing transaction. These shares of common stock were a portion of the 5,000,000 shares previously registered in 2014 under a shelf registration statement. We issued the stock at $1.90 per share and raised approximately $6.1 million gross and received approximately $5.4 million in cash, net of direct offering costs including underwriting discounts and legal, audit and other regulatory costs of approximately $0.7 million. Per Bystedt (Chairman of our Board of Directors), Thomas Eriksson (our Chief Executive Officer and a member of our Board of Directors), and Mats Dahlin (a member of our Board of Directors) purchased an aggregate of 157,893 shares of common stock in the offering at the public offering price per share for an aggregate purchase price of approximately $300,000. During the year ended December 31, 2015, warrant holders exercised warrants to purchase 280,000 shares of common stock using the cashless net exercise provision allowed in the warrant and received 150,234 shares of our common stock. During the year ended December 31, 2014, we sold 2,500,000 shares of our common stock at a price of $4.00 per share to an accredited institutional investor for an aggregate purchase price of $10,000,000 in gross proceeds and net proceeds of approximately $9.3 million after expenses and fees, including a $600,000 placement agent fee. In addition, we issued a warrant to purchase up to an aggregate of 2,500,000 shares of our common stock at an exercise price of $5.09 per share that expired on November 15, 2015. In addition, we issued to the placement agent a warrant to acquire up to an aggregate of 75,000 shares of our common stock that also expired on November 15, 2015. During the year ended December 31, 2014, warrant holders exercised warrants to purchase 17,000 shares of common stock using the cashless net exercise provision allowed in the warrant and received 10,053 shares of our common stock. In addition, warrant holders exercised warrants to purchase 11,500 shares of common stock at an exercise price of $3.13 per share for total cash proceeds of approximately $36,000. A summary of all warrant activity is set forth below: Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life January 1, 2014 828,573 2.39 2.06 Issued 2,575,000 5.09 - Expired/forfeited (40,000 ) 3.98 - Exercised (28,500 ) 2.85 - December 31, 2014 3,335,073 4.45 0.93 Issued - - - Expired/forfeited (2,591,000 ) 5.06 - Exercised (280,000 ) 1.30 - December 31, 2015 464,073 3.02 0.19 Issued (Prefunded) 3,600,000 0.01 - Issued (Purchase) 4,313,676 1.12 Expired/forfeited (384,073 ) 3.13 - Exercised (80,000 ) 2.00 - Outstanding and exercisable, December 31, 2016 7,913,676 $ 0.62 5.13 Outstanding Warrants to Purchase Common Stock as of December 31, 2016: Description Issue Date Exercise Shares Expiration August 2016 Prefunded Warrants 08/16/16 $ 1.00 3,600,000 02/16/22 August 2016 Purchase Warrants 08/17/16 $ 1.12 4,313,676 02/17/22 Total Warrants Outstanding 7,913,676 Preferred Stock The terms of our Series B Preferred stock are as follows: Dividends and Distributions The holders of shares of Series B Preferred stock are entitled to participate with the holders of our common stock with respect to any dividends declared on the common stock in proportion to the number of shares of common stock issuable upon conversion of the shares of Series B Preferred stock held by them. Liquidation Preference In the event of any liquidation, dissolution, or winding up of our operations, either voluntary or involuntary, subject to the rights of the Series B Preferred stock and Senior Preferred stock, shall be entitled to receive, after any distribution to the holders of senior preferred stock and prior to and in preference to any distribution to the holders of common stock, $0.001 for each share of Series B Preferred stock then outstanding. Voting The holders of shares of Series B Preferred stock have one vote for each share of Series B Preferred stock held by them. Conversion Initially, each share of Series B Preferred stock was convertible into one share of our common stock. On March 31, 2009, our stockholders approved a resolution to increase the authorized share capital, and to increase the conversion ratio to 132.07 shares of our common stock for each share of Series B Preferred stock. Conversion of Preferred Stock Issued to Common Stock The following table summarizes the amounts as of December 31, 2016: Shares of Preferred Stock Not Exchanged as of December 31, 2016 Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at December 31, 2016 Series B Preferred Stock 83 132.07 10,962 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation We have adopted equity incentive plans for which stock options and restricted stock awards are available to grant to employees, consultants and directors. Except for 265,000 options issued to certain Swedish employees during 2015, all employee, consultant and director stock options granted under our stock option plans have an exercise price equal to the market value of the underlying common stock on the grant date. There are no vesting provisions tied to performance conditions for any options, as vesting for all outstanding option grants was based only on continued service as an employee, consultant or director. All of our outstanding stock options and restricted stock awards are classified as equity instruments. Stock Options During the year ended 2015, our shareholders approved the Neonode Inc. 2015 Stock Incentive Plan (the “2015 Plan”) which replaces our 2006 Equity Incentive Plan (the “2006 Plan”). Under the 2015 Plan, 2,100,000 shares of common stock have been reserved for awards, including nonqualified stock option grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2015 Plan are set by our compensation committee at its discretion. During the year ended December 31, 2016, 25,000 stock options were granted under the 2015 Plan. Accordingly, as of December 31, 2016, we had two equity incentive plans: ● The 2006 Equity Incentive Plan (the “2006 Plan”). ● The 2015 Equity Incentive Plan (the “2015 Plan”). We also had one non-employee director stock option plan as of December 31, 2016: ● The 2001 Non-Employee Director Stock Option Plan (the “Director Plan”), which expired for new awards in March 2011. The following table summarizes information with respect to all options to purchase shares of common stock outstanding under the 2006 Plan, the 2015 Plan and the Director Plan at December 31, 2016: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at 12/31/16 Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number Exercisable at 12/31/16 Weighted Average Exercise Price $ 1.44 - $ 3.50 200,000 5.30 $ 2.85 147,083 $ 2.78 $ 3.51 - $ 5.00 1,426,000 2.85 $ 4.23 1,426,000 $ 4.23 $ 5.01 - $ 6.50 130,000 3.63 $ 5.98 129,166 $ 5.98 $ 6.51 - $ 8.21 90,000 0.02 $ 8.21 90,000 $ 8.21 1,846,000 3.03 $ 4.39 1,792,249 $ 4.43 A summary of the combined activity under all of the stock option plans is set forth below: Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Shares Price (in years) Value Options outstanding – January 1, 2014 1,600,583 $ 5.22 Options granted 405,200 6.31 Options exercised - - Options cancelled or expired (296,383 ) 5.46 Options outstanding – December 31, 2014 1,709,400 4.92 Options granted 605,000 3.57 Options exercised - - Options cancelled or expired (130,283 ) 6.03 Options outstanding – December 31, 2015 2,184,117 4.48 Options granted 25,000 1.44 Options exercised - - Options cancelled or expired (363,117 ) 4.73 Options outstanding – December 31, 2016 1,846,000 $ 4.39 3.03 $ 10,000 Options exercisable and expected to vest – December 31, 2016 1,846,000 $ 4.39 3.03 $ 10,000 The assumptions used to value stock options granted to directors, employees and consultants during the years ended December 31, 2016, 2015 and 2014 are as follows: For the year ended December 31, 2016 Annual dividend yield - Expected life (years) 3.5 Risk-free interest rate 0.83 % Expected volatility 65.46 % For the year ended December 31, 2015 Annual dividend yield - Expected life (years) 2.97 Risk-free interest rate 0.47% - 1.41 % Expected volatility 60.07% - 72.33 % For the year ended December 31, 2014 Annual dividend yield - Expected life (years) 3.5 Risk-free interest rate 0.28% - 1.47 % Expected volatility 60.68% - 108.75 % During the years ended December 31, 2016, 2015 and 2014, we recorded $0.3 million, $1.1 million and $1.7 million, respectively, of compensation expense related to the vesting of stock options. The estimated fair value of the stock-based compensation was calculated using the Black-Scholes option pricing model as of the grant date of the stock option. Options granted under the Director Plan vest over a one to four-year period, expire five to seven years after the date of grant and have exercise prices reflecting market value of the shares of our common stock on the date of grant. Stock options granted under the 2006 and 2015 Plans are exercisable over a maximum term of ten years from the date of grant, vest in various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant. During the year ended December 31, 2016, we granted options to purchase 25,000 shares of our common stock to employees with total grant date estimated fair value of $17,000 computed using the Black-Scholes option pricing model. The weighted-average grant date fair value of the options granted during year ended December 31, 2016 was $0.67 per share. During the year ended December 31, 2015, we granted options to purchase 515,000 shares of our common stock to employees and an option to purchase 90,000 shares of our common stock to four members of our board of directors with total grant date estimated fair value of $0.8 million computed using the Black-Scholes option pricing model. The weighted-average grant date fair value of the options granted during year ended December 31, 2015 was $1.24 per share. During the year ended December 31, 2014, we granted options to purchase 395,200 shares of our common stock to employees and an option to purchase 10,000 shares of our common stock to a former member of our board of directors with total grant date estimated fair value of $1.3 million computed using the Black-Scholes option pricing model. The weighted-average grant date fair value of the options granted during year ended December 31, 2014 was $3.14 per share. Stock-Based Compensation The stock-based compensation expense for the years ended December 31, 2016, 2015 and 2014 reflects the estimated fair value of the vested portion of options granted to directors, employees and non-employees. (In thousands) Years ended December 31, 2016 2015 2014 Research and development $ 48 $ 484 $ 510 Sales and marketing 150 296 353 General and administrative 57 295 866 Stock-based compensation expense $ 255 $ 1,075 $ 1,729 (In thousands) Remaining unrecognized expense at Stock-based compensation $ 84 The remaining unrecognized expense related to stock options will be recognized on a straight line basis monthly as compensation expense over the remaining vesting period which approximates 1.1 years. The estimated fair value of stock-based awards is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term and forfeiture rate of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior, as well as expected behavior on outstanding options. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of our stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods, and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Indemnities and Guarantees Our bylaws require that we indemnify each of our executive officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited. However, we have a directors’ and officers’ liability insurance policy that should enable us to recover a portion of future amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal and we have no liabilities recorded for these agreements as of December 31, 2016 and 2015. We enter into indemnification provisions under our agreements with other companies in the ordinary course of business, typically with business partners, contractors, customers and landlords. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by us with regard to intellectual property rights. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these indemnification provisions as of December 31, 2016 and 2015. Non-Recurring Engineering Development Costs On February 4, 2011, we entered into an Analog Device Development Agreement with an effective date of January 24, 2010 (the “NN1001 Agreement”) with Texas Instruments pursuant to which Texas Instruments agreed to integrate Neonode’s intellectual property into an Application Specific Integrated Circuit (“ASIC”). The NN1001 ASIC only can be sold by Texas Instruments exclusively to licensees of Neonode. Under the terms of the NN1001 Agreement, we agreed to reimburse Texas Instruments $500,000 of non-recurring engineering development costs based on shipments of the NN1001. Under the terms of the NN1001 Agreement, we also agreed to reimburse Texas Instruments a non-recurring engineering fee of $0.08 per unit for each of the first one million units sold and $0.05 for the next eight million units sold. During the years ended December 31, 2015 and 2014, approximately $20,000 and $93,000, respectively of non-recurring engineering expense related to the NN1001 Agreement is included in research and development in the consolidated statements of operations. Through December 31, 2015, all payments under the NN1001 Agreement have been made. On April 25, 2013, we entered into an additional Analog Device Development Agreement with an effective date of December 6, 2012 (the “NN1002 Agreement”) with Texas Instruments pursuant to which Texas Instruments agreed to integrate Neonode’s intellectual property into an ASIC. The NN1002 ASIC only can be sold by Texas Instruments exclusively to licensees of Neonode. Under the terms of the NN1002 Agreement, we agreed to reimburse Texas Instruments up to $500,000 of non-recurring engineering costs based on shipments of the NN1002. Under the terms of the NN1002 Agreement, we also agreed to reimburse Texas Instruments a non-recurring engineering fee of $0.25 per unit for each of the first two million units sold. The NN1002 began shipping to customers in 2015. As of December 31, 2016, we had made no payments under the NN1002 Agreement. On December 4, 2014, we entered into an additional Analog Device Development Agreement (the “NN1003 Agreement”) with ST Microelectronics International N.V pursuant to which ST Microelectronics agreed to integrate Neonode’s intellectual property into an ASIC. The NN1003 ASIC only can be sold by ST Microelectronics exclusively to licensees of Neonode. Under the terms of the NN1003 Agreement, we agreed to reimburse ST Microelectronics up to $885,000 of non-recurring engineering costs as follows: ● $235,000 at the feasibility review and contract signature (paid on January 20, 2015) ● $300,000 on completion of tape-out (paid on October 31, 2015) ● $300,000 on completion on product validation ($100,000 paid and $200,000 accrued as of December 31, 2016) Under the terms of the NN1003 Agreement, we also agreed to reimburse ST Microelectronics a non-recurring engineering fee of $5.00 per each of the first 10,000 units sold. As of December 31, 2016, we had paid and aggregate of $635,000 under the NN1003 Agreement. Operating Leases We lease office space located at 2880 Zanker Road, San Jose, California. The annual payment for this space equates to approximately $15,000. This lease was effective on August 22, 2016 and can be terminated with one month’s notice. Our subsidiary Neonode Technologies AB leases 7,007 square feet of office space located at Storgatan 23C, Stockholm, Sweden. The annual payment for this space is approximately $400,000 per year including property tax (excluding VAT). This lease is valid through November 30, 2017. The lease can be extended on a yearly basis. Neonode Technologies AB’s majority-owned subsidiary Pronode Technologies AB leases 9,040 square feet of workshop located at Faktorvägen 17, Kungsbacka, Sweden. The annual payment for this space equates to approximately $88,000 per year. The lease is valid through December 9, 2017. Our subsidiary Neonode Japan K.K. leases office space located at 405 Elpulimento Shinjuku, 6-7-1, Shinjuku-ku, Tokyo. The annual payment for this space equates to approximately $24,000 per year. The lease can be terminated with one month’s notice. Our subsidiary Neonode Korea Ltd. entered into a lease agreement located at B-1807, Daesung D-Polis. 543-1, Seoul, South Korea in January, 2015. The annual payment for this space equates to approximately $8,000 per year. We can terminate the lease with 2 months written notice. Our subsidiary Neonode Taiwan Ltd. entered into a lease agreement located at Rm. 2406, International Trade Building, Keelung Rd., Sec.1, Taipei, Taiwan. The annual payment for this space equates to approximately $13,000 per year. The lease is renewed every three months unless termination is notified. For the years ended December 31, 2016, 2015 and 2014, we recorded approximately $852,000, $641,000 and $633,000, respectively, for rent expense. We believe our existing facilities are in good condition and suitable for the conduct of our business. A summary of future minimum payments under non-cancellable operating lease commitments as of December 31, 2016 is as follows (in thousands): Years ending December 31, Total 2017 $ 450 2018 - 2019 - $ 450 Equipment Subject to Capital Lease In April 2014, we entered into a lease for certain specialized milling equipment. Under the terms of the lease agreement we are obligated to purchase the equipment at the end of the original 6 year lease term for 10% of the original purchase price of the equipment. In accordance with relevant accounting guidance the lease is classified as a capital lease. The lease payments and depreciation period began on July 1, 2014 when the equipment went into service. The implicit interest rate of the lease is 4% per annum. Between the second and the fourth quarters of 2016, we entered into six leases for component production equipment. Under the terms of five of the lease agreements we are obligated to purchase the equipment at the end of the original 3-5 year lease terms for 5-10% of the original purchase price of the equipment. In accordance with relevant accounting guidance the leases are classified as capital leases. The lease payments and depreciation periods began between June and November 2016 when the equipment went into service. The implicit interest rate of the leases is currently approximately 3% per annum. One of the leases is a hire-purchase agreement where the equipment is required to be paid off after 5 years. In accordance with relevant accounting guidance the lease is classified as a capital lease. The lease payments and depreciation period began on July 1, 2016 when the equipment went into service. The implicit interest rate of the lease is currently approximately 3% per annum. The following is a schedule of minimum future rentals on the non-cancelable capital leases as of December 31, 2016 (in thousands): Year ending December 31, Total 2017 $ 262 2018 261 2019 258 2020 265 2021 241 Total minimum payments required: 1,287 Less amount representing interest: (99 ) Present value of net minimum lease payments: 1,188 Less current portion (228 ) $ 960 Equipment under capital lease $ 1,661 Less: accumulated depreciation (225 ) Net book value $ 1,436 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information [Abstract] | |
Segment Information | 11. Segment Information Our Company has one reportable segment, which is comprised of the touch technology licensing and sensor module business. The following table presents net revenues by geographic region for the years ended December 31, 2016, 2015 and 2014 (dollars in thousands): 2016 Amount Percentage Net revenues from customers in the U.S. $ 5,806 57 % Net revenue from customers in Europe 2,434 24 % Net revenues from customers in Asia 1,973 19 % Total $ 10,213 100 % 2015 Amount Percentage Net revenues from customers in the U.S. $ 6,177 56 % Net revenues from customers in Europe 2,987 27 % Net revenues from customers in Asia 1,951 17 % Total $ 11,115 100 % 2014 Amount Percentage Net revenues from customers in the U.S. $ 2,833 60 % Net revenues from customers in Europe 228 5 % Net revenues from customers in Asia 1,679 35 % Total $ 4,740 100 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 12. Income Taxes Loss before income taxes was distributed geographically for the years ended December 31, as follows (in thousands): 2016 2015 2014 Domestic $ (4,459 ) $ (7,783 ) $ (13,993 ) Foreign (823 ) 41 (228 ) Total $ (5,282 ) $ (7,742 ) $ (14,221 ) The provision for income taxes is as follows for the years ended December 31 (in thousands): 2016 2015 2014 Current Federal $ - $ - $ - State 2 2 3 Foreign 365 91 10 Change in deferred Federal (1,604 ) (2,466 ) (4,213 ) Federal valuation allowance 1,604 2,466 4,213 State (197 ) (252 ) (460 ) State valuation allowance 197 252 460 Foreign (161 ) 6 64 Foreign valuation allowance 161 (6 ) (64 ) Total current $ 367 $ 93 $ 13 The differences between our effective income tax rate and the U.S. federal statutory federal income tax rate for the years ended December 31, are: 2016 2015 2014 Amounts at statutory tax rates 34 % 34 % 34 % Foreign losses taxed at different rates (3 )% - (1 )% Foreign withholding tax (4 )% - - Stock-based compensation - (1 )% (2 )% Other - (1 )% (1 )% Total 27 % 32 % 30 % Valuation allowance (35 )% (33 )% (31 )% Effective tax rate (8 )% (1 )% (1 )% Significant components of the deferred tax asset balances at December 31 are as follows (in thousands): 2016 2015 Deferred tax assets: Accruals $ 126 $ 1,109 Stock compensation 1,466 1,352 Net operating losses 20,015 17,190 Basis difference in fixed assets 13 7 Total deferred tax assets $ 21,620 $ 19,658 Valuation allowance (21,620 ) (19,658 ) Total net deferred tax assets $ - $ - Valuation allowances are recorded to offset certain deferred tax assets due to management’s uncertainty of realizing the benefits of these items. Management applies a full valuation allowance for the accumulated losses of Neonode Inc., and its subsidiaries, since it is not determinable using the “more likely than not” criteria that there will be any future benefit of our deferred tax assets. This is mainly due to our history of operating losses. As of December 31, 2016, we had federal, state and foreign net operating losses of $56.0 million, $22.3 million and $0.5 million, respectively. The federal loss carryforward begins to expire in 2028, the California loss carryforward begins to expire in 2030 and the foreign loss carryforward is indefinite. Utilization of the net operating loss and tax credit carryforwards is subject to an annual limitation due to the ownership percentage change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of the net operating losses and tax credit carryforwards before utilization. As of December 31, 2016, we had not completed the determination of the amount to be limited under the provision. As of December 31, 2016, we did not recognize $547,000 and $28,000 of federal and state deferred tax assets relating to excess tax benefits for stock-based compensation deductions. Unrecognized deferred tax benefits will be accounted for as a credit to additional paid-in capital when realized through a reduction in income taxes payable. We follow the provisions of accounting guidance which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. There were no unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014. We follow the policy to classify accrued interest and penalties as part of the accrued tax liability in the provision for income taxes. For the years ended December 31, 2016, 2015 and 2014 we did not recognize any interest or penalties related to unrecognized tax benefits. Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2016 and 2015, we had no accrued interest and penalties related to uncertain tax matters. As of December 31, 2016, we had no uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. We file income tax returns in the U.S. federal jurisdiction, California, Sweden, Japan, South Korea and Taiwan. The 2008 through 2015 tax years are open and may be subject to potential examination in one or more jurisdictions. We are not currently under any federal, state or foreign income tax examinations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 13. Employee Benefit Plans We participate in a number of individual defined contribution pension plans for our employees in Sweden. We contribute five percent (5%) of the employee’s annual salary to these pension plans. For the Swedish Management we contribute up to fifteen percent (15%) of the employee’s annual salary. Contributions relating to these defined contribution plans for the years ended December 31, 2016, 2015 and 2014 were $398,000, $306,000 and $249,000, respectively. We match U.S. employee contributions to a 401(k) retirement plan up to a maximum of six percent (6%) of an employee’s annual salary. Contributions relating to the matching 401(k) contributions for the years ended December 31, 2016, 2015 and 2014 were $33,000, $89,000 and $81,000, respectively. In Taiwan, we contribute six percent (6%) of the employee’s annual salary to a pension fund which agrees with Taiwan’s newly made Labor Pension Act. Contributions relating to the Taiwanese pension fund for the year ended December 31, 2016 and 2015 were $10,000 and $10,000, respectively. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | 14. Net Loss per Share Basic net loss per common share for the years ended December 31, 2016, 2015 and 2014 was computed by dividing the net loss attributable to Neonode Inc. for the relevant period by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share is computed by dividing net loss attributable to Neonode Inc. for the relevant period by the weighted average number of shares of common stock and common stock equivalents outstanding during the year. Potential common stock equivalents of approximately 5.1 million, 13,000 and 0.3 million outstanding stock warrants, 11,000, 11,000 and 11,000 shares issuable upon conversion of preferred stock, 4,000, 7,000 and 24,000 stock options are excluded from the diluted earnings per share calculation for the years ended December 31, 2016, 2015 and 2014, respectively, due to their anti-dilutive effect. (In thousands, except per share amounts) Years ended December 31, 2016 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 45,690 41,202 39,532 Net loss attributable to Neonode Inc. $ (5,291 ) $ (7,820 ) $ (14,234 ) Net loss per share basic and diluted $ (0.12 ) $ (0.19 ) $ (0.36 ) |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information [Abstract] | |
Quarterly Financial Information | 15. Quarterly Financial Information For the Quarter Ended March 31, June 30, September 30, December 31, (unaudited, in thousands except per share amounts) 2016 Net Revenues $ 3,132 $ 2,574 $ 1,639 $ 2,868 Cost of revenues 595 385 33 325 Gross margin 2,537 2,189 1,606 2,543 Net loss attributable to Neonode Inc. (1,367 ) (1,331 ) (2,162 ) (431 ) Net loss per basic and diluted common share $ (0.03 ) $ (0.03 ) $ (0.05 ) $ (0.01 ) 2015 Net Revenues $ 2,263 $ 2,776 $ 3,113 $ 2,963 Cost of revenues 338 737 909 1,796 Gross margin 1,925 2,039 2,204 1,167 Net loss attributable to Neonode Inc. (2,072 ) (1,792 ) (1,368 ) (2,588 ) Net loss per basic and diluted common share $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (0.06 ) 2014 Net Revenues $ 1,014 $ 865 $ 1,126 $ 1,735 Cost of revenues 166 452 422 469 Gross margin 848 413 704 1,266 Net loss attributable to Neonode Inc. (4,008 ) (3,874 ) (3,245 ) (3,107 ) Net loss per basic and diluted common share $ (0.11 ) $ (0.10 ) $ (0.08 ) $ (0.08 ) Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II - Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (All dollar amounts expressed in thousands of U.S. dollars) Balance at Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Year Year ended December 31, 2016 Allowance for doubtful accounts $ 167 $ - $ - $ (18 ) $ 149 Deferred tax asset valuation allowance $ 19,658 $ - $ 1,962 $ - $ 21,620 Year ended December 31, 2015 Allowance for doubtful accounts $ 167 $ - $ - $ - $ 167 Deferred tax asset valuation allowance $ 16,946 $ - $ 2,712 $ - $ 19,658 Year ended December 31, 2014 Allowance for doubtful accounts $ 167 $ - $ - $ 167 Deferred tax asset valuation allowance $ 12,335 $ - $ 4,611 $ - $ 16,946 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The 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, as well as Pronode Technologies AB, a 51% majority owned subsidiary of Neonode Technologies AB. The remaining 49% of Pronode Technologies AB is owned by Propoint AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to sell engineering services within the automotive markets. All inter-company accounts and transactions have been eliminated in consolidation. Neonode consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50% of the voting rights, and variable interest entities (“VIEs”) in which Neonode is the primary beneficiary. In June 2016, we entered into a Joint Venture (“JV”) with a Swedish based eye-tracking company SMART EYE AB to develop multi-chip modules for the consumer and automotive markets. The name of this JV is Neoeye AB (“Neoeye”). We use the equity method of accounting to record our investments in the common stock of each entity in which Neonode has the ability to exercise significant influence, but does not own a majority equity interest. Under the equity method, our investment is originally included in equity interests at cost, and is adjusted to recognize our share of net earnings or losses of the investee, in our consolidated balance sheets; our share of net income (loss) is reported in our consolidated statements of operations according to our equity ownership in each entity. The consolidated statements of operations, comprehensive loss and cash flows for the year ended December 31, 2014 include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden) and Neonode Korea Ltd. (South Korea). The consolidated balance sheets at December 31, 2016 and 2015 and the consolidated statements of operations, comprehensive loss and cash flows for the years then ended include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd. (Taiwan), as well as Pronode Technologies AB (Sweden), a 51% majority owned subsidiary of Neonode Technologies AB. |
Estimates | Estimates The preparation of financial statements in conformity with U.S. GAAP requires making estimates and assumptions that affect, at the date of the financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant estimates include, but are not limited to, provisions for uncollectible receivables and sales returns, warranty liabilities, the achievement of substantive milestones and vendor-specific objective evidence (“VSOE”) of fair value for purposes of revenue recognition (or deferral of revenue), net realizable value of inventory, recoverability of capitalized project costs and long-lived assets, the valuation allowance related to our deferred tax assets, and the fair value of options and warrants issued for stock-based compensation. |
Cash | Cash We have not had any liquid investments other than normal cash deposits with bank institutions to date. The Company considers all highly liquid investments with original maturities of three months of less to be cash equivalents. |
Concentration of Cash Balance Risks | Concentration of Cash Balance Risks Cash balances are maintained at various banks in the United States, Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the United States the U.S. Federal Deposit Insurance Corporation, provides basic deposit coverage with limits up to $250,000 per owner. The Swedish government provides insurance coverage up to 100,000 Euro per customer and covers deposits in all types of accounts. The Japanese government provides insurance coverage up to 10,000,000 Yen per customer. The Korea Deposit Insurance Corporation provides insurance coverage up to 50,000,000 Won per customer. The Central Deposit Insurance Corporation in Taiwan provides insurance coverage up to 3,000,000 Taiwan Dollar per customer. At times, deposits held with financial institutions may exceed the amount of insurance provided. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable are stated at net realizable value. Our policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments. Credit limits are established through a process of reviewing the financial history and stability of each customer. Where appropriate, we obtain credit rating reports and financial statements of the customer when determining or modifying its credit limits. We regularly evaluate the collectability of our trade receivable balances based on a combination of factors. When a customer’s account balance becomes past due, we initiate dialogue with the customer to determine the cause. If it is determined that the customer will be unable to meet its financial obligation, such as in the case of a bankruptcy filing, deterioration in the customer’s operating results or financial position or other material events impacting its business, we record a specific allowance to reduce the related receivable to the amount we expect to recover. Should all efforts fail to recover the related receivable, we will write-off the account. We also record an allowance for all customers based on certain other factors including the length of time the receivables are past due and historical collection experience with customers. Our allowance for doubtful accounts was approximately $149,000 and $167,000 as of December 31, 2016 and 2015, respectively. |
Projects in Process | Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. There were no costs capitalized in projects in process as of December 31, 2016. Costs capitalized in projects in process were $158,000 as of December 31, 2015. |
Inventory | Inventory Inventory is stated at the lower of cost, computed using the first-in, first-out method (“FIFO”) and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of December 31, 2016, the Company’s inventory consists primarily of components that will be used in the manufacturing of our first sensor module, AirBar. We segregate inventory for reporting purposes by raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods at December 31 are as follows: December 31, 2016 Raw materials $ 522 Work-in-Process 42 Finished goods 132 Ending inventory $ 696 |
Investment in JV | Investment in JV We have invested $3,000, a 50% interest in Neoeye AB (see above). We account for our investment using the equity method of accounting since the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the investee and will be recognized in the consolidated statements of operations and will also be adjusted by contributions to and distributions from Neoeye. The Company is not required to guarantee any obligations of the JV. There have been no operations of Neoeye through December 31, 2016. Neoeye, as an unconsolidated equity investee, will recognize revenue from technology license agreements at the time a contract is entered into, the license method is determined (paid-in-advance or on-going royalty), performance obligations under the license agreement are satisfied, and the realization of revenue is assured, which is generally upon the receipt of the license proceeds. Neoeye may at times enter into license agreements whereby contingent revenues are recognized as one or more contractual milestones have been met. We review our investment in Neoeye to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors we consider in our determination are the financial condition, operating performance and near term prospects of Neoeye. If a decline in value is deemed to be other than temporary, we would recognize an impairment loss. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon estimated useful lives of the assets as follows: Estimated useful lives Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years Equipment purchased under a capital lease is depreciated over the term of the lease, if that lease term is shorter than the estimated useful life. Upon retirement or sale of property and equipment, cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are reflected in the consolidated statement of operations. Maintenance and repairs are charged to expense as incurred. |
Long-Lived Assets | Long-Lived Assets We assess any impairment by estimating the future cash flow from the associated asset in accordance with relevant accounting guidance. If the estimated undiscounted future cash flow related to these assets decreases or the useful life is shorter than originally estimated, we may incur charges for impairment of these assets. As of December 31, 2016, we believe there was no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or sufficient demand for our products and services will continue, which could result in impairment of long-lived assets in the future. |
Foreign Currency Translation and Transaction Gains and Losses | 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, the South Korean Won and the Taiwan Dollar. The translation from Swedish Krona, Japanese Yen, South Korean Won or the Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the 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 income (loss). Gains or (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying consolidated statements of operations and were $74,000, $62,000 and ($37,000) during the years ended December 31, 2016, 2015 and 2014, respectively. Foreign currency translation gains or (losses) were ($217,000), ($103,000) and $138,000 during the years ended December 31, 2016, 2015 and 2014, respectively. |
Concentration of Credit and Business Risks | Concentration of Credit and Business Risks Our customers are located in United States, Europe and Asia. As of December 31, 2016, three customers represented approximately 59% of our consolidated accounts receivable. As of December 31, 2015, three customers represented approximately 78% of our consolidated accounts receivable. Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2016 are as follows. ● Hewlett-Packard Company – 38% ● Amazon – 11% ● Autoliv – 11% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2015 are as follows. ● Hewlett-Packard Company – 25% ● Autoliv – 21% ● Amazon – 14% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2014 are as follows. ● Hewlett-Packard Company – 24% ● KOBO Inc. – 10% ● Leap Frog Enterprises Inc. – 11% ● Sony Corporation – 10% The Company conducts business in the United States, Europe and Asia. At December 31, 2016, the Company maintained approximately $2,189,000, $1,872,000 and $74,000 of its net assets (liabilities) in the United States, Europe and Asia, respectively. At December 31, 2015, the Company maintained approximately $2,533,000, ($909,000) and $209,000 of its net assets (liabilities) in the United States, Europe and Asia, respectively. |
Revenue Recognition | Revenue Recognition Licensing Revenues: We derive revenue from the licensing of internally developed intellectual property (“IP”). We enter into IP licensing agreements that generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements may include license fees relating to our IP and royalties payable following the distribution by our licensees of products incorporating the licensed technology. The license for our IP has standalone value and can be used by the licensee without maintenance and support. We follow U.S. GAAP for revenue recognition as per unit royalty products are distributed or licensed by our customers. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when: (1) we enter into a legally binding arrangement with a customer for the license of technology; (2) the customer distributes or licenses the products; (3) the customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is reasonably assured. Our customers report to us the quantities of products distributed or licensed by them after the end of the reporting period stipulated in the contract, generally 30 to 45 days after the end of the month or quarter. We recognize licensing revenue in the period in which royalty reports are received, rather than the period in which the products are distributed or to which the license relates. Explicit return rights are not offered to customers. There have been no returns through December 31, 2016. Engineering Services: We may sell engineering consulting services to our customers on a flat rate or hourly rate basis. We recognize revenue from these services when all of the following conditions are met: (1) evidence existed of an arrangement with the customer, typically consisting of a purchase order or contract; (2) our services were performed and risk of loss passed to the customer; (3) we completed all of the necessary terms of the contract; (4) the amount of revenue to which we were entitled was fixed or determinable; and (5) we believed it was probable that we would be able to collect the amount due from the customer. To the extent that one or more of these conditions has not been satisfied, we defer recognition of revenue. Generally, we recognize revenue as the engineering services stipulated under the contract are completed and accepted by our customers. Engineering services are performed under a signed Statement of Work (“SOW”) with a customer. The deliverables and payment terms stipulated under the SOW provide guidance on the project revenue recognition. Revenues from contracts that are short-term in nature and related costs that are difficult to estimate are accounted for under the completed contract method. Revenues from contracts with substantive defined milestones that we have determined are reasonable, relevant to all the deliverables and payment terms in the SOW that are commensurate with the efforts required to achieve the milestones are recognized under the milestone recognition method. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the year ended December 31, 2015, $165,000 was recorded as cost of sales due to expected losses related to two SOW projects. In the years ended December 31, 2016 and 2014 no losses related to SOW projects were recorded. Optical Sensor Modules Revenues: We derive revenue from the sales of sensor modules hardware products sold directly to our OEM and Tier 1 supplier customers who embed our hardware into their products and from sales of branded consumer products that incorporate our sensor modules sold to distributors or directly to end users. These distributors are generally given business terms that allow them to return a portion of inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs. We enter into sales agreements that generally provide customers with limited rights of return and warranty provisions. U.S. GAAP allows companies to make reasonable aggregations and approximations of returns data with regard to returns. Our returns and warranty experience to date has enabled us to make reasonable returns estimates, which are further supported by the fact that our product sales involve homogenous transactions. Revenue is recognized when all of the following criteria have been met: ● Persuasive evidence of an arrangement exists. Contracts, Internet commerce agreements, and customer purchase orders are generally used to determine the existence of an arrangement. ● Delivery has occurred. Shipping documents and customer acceptance, when applicable, are used to verify delivery. ● The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. ● Collectibility is reasonably assured. We assess collectibility based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. As our business and offerings are expected to evolve over time, our pricing practices may be required to be modified accordingly, which could result in changes in selling prices. We make sales to distributors and revenue from distributors is recognized based on a sell-through basis using sales and inventory information provided by these distributors. Under the sell-through basis, accounts receivable are recognized and inventory is relieved upon shipment to the distributor as title to the inventory is transferred upon shipment, at which point we have a legally enforceable right to collection under normal terms. The associated sales and cost of sales are deferred and are included in deferred revenues in the consolidated balance sheet. When the related product is sold by our distributors to their end customers, at which time the ultimate price we receive is known, we recognize previously deferred revenues as sales and cost of sales. Distributors participate in various cooperative marketing and other incentive programs, and we maintain estimated accruals and allowances for these programs. If actual credits received by distributors under these programs were to deviate significantly from our estimates, which are based on historical experience, our revenue could be adversely affected. A reserve for future sales returns is established based on historical trends in product return rates. The reserve for future sales returns as of December 31, 2016 was $0.1 million and was recorded as a reduction of our accounts receivable and revenue. If the actual future returns were to deviate from the historical data on which the reserve had been established, our revenue could be adversely affected. |
Product Warranty | Product Warranty The following table summarizes the activity related to the product warranty liability (in thousands): Year ended December 31, December 31, Balance at beginning of period $ - $ - Provisions for warranty issued 11 - Balance at end of period $ 11 $ - The Company accrues for warranty costs as part of its cost of sales of sensor modules based on estimated costs. The Company’s products are generally covered by a warranty for a period of 12 to 36 months from the customer receipt of the product. |
Deferred Revenues | Deferred Revenues We defer license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed and royalty reports are received. Engineering development fee revenues are deferred until such time as the engineering work has been completed and accepted by our customers. As of December 31, 2016 and 2015, we have $1.8 million and $1.1 million, respectively, of deferred license fee revenue related to prepayments for future license fees from four and two customers, respectively. We defer AirBar revenues until distributors sell the AirBar to their end customers. As of December 31, 2016, we had $0.1 million of deferred revenue from our AirBar sales. As of December 31, 2015, there was no deferred revenue from AirBar sales. As of December 31, 2016 there were no deferred engineering development fees and a total of $0.4 million of deferred engineering development fee from one customer as of December 31, 2015. |
Advertising | Advertising Advertising costs are expensed as incurred. We will classify any reseller marketing allowances related to AirBar in general as sales expense unless we can define an identifiable benefit to us from the reseller marketing allowance. Advertising costs amounted to approximately $299,000, $328,000 and $172,000 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Research and Development | Research and Development Research and development (“R&D”) costs are expensed as incurred. R&D costs consist mainly of personnel related costs in addition to some external consultancy costs such as testing, certifying and measurements. |
Stock-Based Compensation Expense | Stock-Based Compensation Expense We measure the cost of employee services received in exchange for an award of equity instruments, including share options, based on the estimated fair value of the award on the grant date, and recognize the value as compensation expense over the period the employee is required to provide services in exchange for the award, usually the vesting period, net of estimated forfeitures. We account for equity instruments issued to non-employees at their estimated fair value. The measurement date for the estimated fair value for the equity instruments issued is determined at the earlier of (1) the date at which a commitment for performance by the consultant or vendor is reached, or (2) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instruments is primarily recognized over the term of the consulting agreement. The estimated fair value of the stock-based compensation is periodically re-measured and income or expense is recognized during the vesting term. When determining stock-based compensation expense involving options and warrants, we determine the estimated fair value of options and warrants using the Black-Scholes option pricing model. |
Noncontrolling Interests | Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss |
Income Taxes | Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the 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 December 31, 2016 and 2015. 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 income taxes represents the net change in deferred tax amounts, plus income taxes payable for the current period. We follow U.S. GAAP related to uncertain tax positions, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. As a result, we did not recognize a liability for unrecognized tax benefits. As of December 31, 2016 and 2015, we had no unrecognized tax benefits. |
Net Loss per Share | Net Loss per Share Net loss per share amounts have been computed based on the weighted-average number of shares of common stock outstanding during the years ended December 31, 2016, 2015 and 2014. Net loss per share, assuming dilution amounts from common stock equivalents, is computed based on the weighted-average number of shares of common stock and potential common stock equivalents outstanding during the period. The weighted-average number of shares of common stock and potential common stock equivalents used in computing the net loss per share for years ended December 31, 2016, 2015 and 2014 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 14). |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Our comprehensive loss includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the consolidated balance sheets, as accumulated other comprehensive income (loss). |
Cash Flow Information | Cash Flow Information Cash flows in foreign currencies have been converted to U.S. Dollars at an approximate weighted-average exchange rate for the respective reporting periods. The weighted-average exchange rate for the consolidated statements of operations was as follows: Years ended December 31, 2016 2015 2014 Swedish Krona 8.55 8.43 6.86 Japanese Yen 108.75 121.03 105.84 South Korean Won 1,157.14 1,130.22 1,050.63 Taiwan Dollar 32.22 31.73 - Exchange rate for the consolidated balance sheets was as follows: Years ended December 31, 2016 2015 Swedish Krona 9.07 8.42 Japanese Yen 116.97 120.36 South Korean Won 1,205.11 1,174.67 Taiwan Dollar 32.28 32.84 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We disclose the estimated fair values for all financial instruments for which it is practicable to estimate fair value. Financial instruments including cash, accounts receivable, accounts payable and accrued expenses and are deemed to approximate fair value due to their short maturities. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330)” (“ASU 2015-11”). The amendments in ASU 2015-11 require that an entity measure inventory within the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in this update more closely align the measurement of inventory in accounting principles generally accepted in the United States of America with the measurement of inventory in International Financial Reporting Standards. ASU 2015-11 is effective for annual and interim periods beginning on or after December 15, 2016. The amendments in this update should be applied prospectively with early application permitted as of the beginning of the interim or annual reporting period. The Company adopted the provisions of ASU 2015-11 effective September 1, 2016 and the adoption did not have a material impact on our consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-07, “Investments- Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”). ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for years beginning after December 15, 2016. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplified certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments”, (“ASU 2016-13”). The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of inventory | December 31, 2016 Raw materials $ 522 Work-in-Process 42 Finished goods 132 Ending inventory $ 696 |
Schedule of estimated useful lives of property and equipment | Estimated useful lives Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years |
Schedule of activity related to the product warranty liability | Year ended December 31, December 31, Balance at beginning of period $ - $ - Provisions for warranty issued 11 - Balance at end of period $ 11 $ - |
Schedule of weighted average exchange rate for consolidated statements of operations | Years ended December 31, 2016 2015 2014 Swedish Krona 8.55 8.43 6.86 Japanese Yen 108.75 121.03 105.84 South Korean Won 1,157.14 1,130.22 1,050.63 Taiwan Dollar 32.22 31.73 - |
Schedule of exchange rate for consolidated balance sheets | Years ended December 31, 2016 2015 Swedish Krona 9.07 8.42 Japanese Yen 116.97 120.36 South Korean Won 1,205.11 1,174.67 Taiwan Dollar 32.28 32.84 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of prepaid expense and other current assets | As of December 31, 2016 2015 Prepaid insurance $ 125 $ 119 Prepaid rent 46 52 VAT receivable 247 337 Prepaid inventory 715 - Advances to suppliers 596 - Other 220 239 Total prepaid expenses and other current assets $ 1,949 $ 747 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | As of December 31, 2016 2015 Computers, software, furniture and fixtures $ 930 $ 637 Equipment under capital lease 1,661 428 Less accumulated depreciation and amortization (560 ) (471 ) Property and equipment, net $ 2,031 $ 594 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses [Abstract] | |
Schedule of accrued expenses | As of December 31, 2016 2015 Accrued returns and warranty $ 11 $ - Accrued consulting fees and other 161 382 Total accrued expenses $ 172 $ 382 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Class Of Stock [Line Items] | |
Summary of all warrant activity | Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life January 1, 2014 828,573 2.39 2.06 Issued 2,575,000 5.09 - Expired/forfeited (40,000 ) 3.98 - Exercised (28,500 ) 2.85 - December 31, 2014 3,335,073 4.45 0.93 Issued - - - Expired/forfeited (2,591,000 ) 5.06 - Exercised (280,000 ) 1.30 - December 31, 2015 464,073 3.02 0.19 Issued (Prefunded) 3,600,000 0.01 - Issued (Purchase) 4,313,676 1.12 Expired/forfeited (384,073 ) 3.13 - Exercised (80,000 ) 2.00 - Outstanding and exercisable, December 31, 2016 7,913,676 $ 0.62 5.13 |
Schedule of conversion of preferred stock issued to common stock | Shares of Preferred Stock Not Exchanged as of December 31, 2016 Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at December 31, 2016 Series B Preferred Stock 83 132.07 10,962 |
Warrant [Member] | |
Class Of Stock [Line Items] | |
Summary of all stock option plans / warrant activity | Description Issue Date Exercise Shares Expiration August 2016 Prefunded Warrants 08/16/16 $ 1.00 3,600,000 02/16/22 August 2016 Purchase Warrants 08/17/16 $ 1.12 4,313,676 02/17/22 Total Warrants Outstanding 7,913,676 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of options outstanding by exercise price range | Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at 12/31/16 Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number Exercisable at 12/31/16 Weighted Average Exercise Price $ 1.44 - $ 3.50 200,000 5.30 $ 2.85 147,083 $ 2.78 $ 3.51 - $ 5.00 1,426,000 2.85 $ 4.23 1,426,000 $ 4.23 $ 5.01 - $ 6.50 130,000 3.63 $ 5.98 129,166 $ 5.98 $ 6.51 - $ 8.21 90,000 0.02 $ 8.21 90,000 $ 8.21 1,846,000 3.03 $ 4.39 1,792,249 $ 4.43 |
Summary of assumptions used to value stock options granted to employees and directors | For the year ended December 31, 2016 Annual dividend yield - Expected life (years) 3.5 Risk-free interest rate 0.83 % Expected volatility 65.46 % For the year ended December 31, 2015 Annual dividend yield - Expected life (years) 2.97 Risk-free interest rate 0.47% - 1.41 % Expected volatility 60.07% - 72.33 % For the year ended December 31, 2014 Annual dividend yield - Expected life (years) 3.5 Risk-free interest rate 0.28% - 1.47 % Expected volatility 60.68% - 108.75 % |
Summary of stock-based compensation expense | Years ended December 31, 2016 2015 2014 Research and development $ 48 $ 484 $ 510 Sales and marketing 150 296 353 General and administrative 57 295 866 Stock compensation expense $ 255 $ 1,075 $ 1,729 Remaining unrecognized expense at Stock-based compensation $ 84 |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of all stock option plans / warrant activity | Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Shares Price (in years) Value Options outstanding – January 1, 2014 1,600,583 $ 5.22 Options granted 405,200 6.31 Options exercised - - Options cancelled or expired (296,383 ) 5.46 Options outstanding – December 31, 2014 1,709,400 4.92 Options granted 605,000 3.57 Options exercised - - Options cancelled or expired (130,283 ) 6.03 Options outstanding – December 31, 2015 2,184,117 4.48 Options granted 25,000 1.44 Options exercised - - Options cancelled or expired (363,117 ) 4.73 Options outstanding – December 31, 2016 1,846,000 $ 4.39 3.03 $ 10,000 Options exercisable and expected to vest – December 31, 2016 1,846,000 $ 4.39 3.03 $ 10,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Summary of future minimum payments under non-cancellable operating lease commitments | Years ending December 31, Total 2017 $ 450 2018 - 2019 - $ 450 |
Schedule of minimum future rentals on the non-cancelable capital leases | Year ending December 31, Total 2017 $ 262 2018 261 2019 258 2020 265 2021 241 Total minimum payments required: 1,287 Less amount representing interest: (99 ) Present value of net minimum lease payments: 1,188 Less current portion (228 ) $ 960 |
Schedule of equipment under capital lease | Equipment under capital lease $ 1,661 Less: accumulated depreciation (225 ) Net book value $ 1,436 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information [Abstract] | |
Summary of net revenues by geographic region | 2016 Amount Percentage Net revenues from customers in the U.S. $ 5,806 57 % Net revenue from customers in Europe 2,434 24 % Net revenues from customers in Asia 1,973 19 % Total $ 10,213 100 % 2015 Amount Percentage Net revenues from customers in the U.S. $ 6,177 56 % Net revenues from customers in Europe 2,987 27 % Net revenues from customers in Asia 1,951 17 % Total $ 11,115 100 % 2014 Amount Percentage Net revenues from customers in the U.S. $ 2,833 60 % Net revenues from customers in Europe 228 5 % Net revenues from customers in Asia 1,679 35 % Total $ 4,740 100 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Summary of loss before income taxes by geographically | 2016 2015 2014 Domestic $ (4,459 ) $ (7,783 ) $ (13,993 ) Foreign (823 ) 41 (228 ) Total $ (5,282 ) $ (7,742 ) $ (14,221 ) |
Summary of provision for income taxes | 2016 2015 2014 Current Federal $ - $ - $ - State 2 2 3 Foreign 365 91 10 Change in deferred Federal (1,604 ) (2,466 ) (4,213 ) Federal valuation allowance 1,604 2,466 4,213 State (197 ) (252 ) (460 ) State valuation allowance 197 252 460 Foreign (161 ) 6 64 Foreign valuation allowance 161 (6 ) (64 ) Total current $ 367 $ 93 $ 13 |
Summary of effective income tax rate and the U.S. federal statutory federal income tax rate | 2016 2015 2014 Amounts at statutory tax rates 34 % 34 % 34 % Foreign losses taxed at different rates (3 )% - (1 )% Foreign withholding tax (4 )% - - Stock-based compensation - (1 )% (2 )% Other - (1 )% (1 )% Total 27 % 32 % 30 % Valuation allowance (35 )% (33 )% (31 )% Effective tax rate (8 )% (1 )% (1 )% |
Summary of significant components of the deferred tax asset | 2016 2015 Deferred tax assets: Accruals $ 126 $ 1,109 Stock compensation 1,466 1,352 Net operating losses 20,015 17,190 Basis difference in fixed assets 13 7 Total deferred tax assets $ 21,620 $ 19,658 Valuation allowance (21,620 ) (19,658 ) Total net deferred tax assets $ - $ - |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net Loss Per Share [Abstract] | |
Summary of basic and diluted for net loss per share | (In thousands, except per share amounts) Years ended December 31, 2016 2015 2014 BASIC AND DILUTED Weighted average number of common shares outstanding 45,690 41,202 39,532 Net loss attributable to Neonode Inc. $ (5,291 ) $ (7,820 ) $ (14,234 ) Net loss per share basic and diluted $ (0.12 ) $ (0.19 ) $ (0.36 ) |
Quarterly Financial Informati35
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information [Abstract] | |
Summary of quarterly financial information | For the Quarter Ended March 31, June 30, September 30, December 31, (unaudited, in thousands except per share amounts) 2016 Net Revenues $ 3,132 $ 2,574 $ 1,639 $ 2,868 Cost of revenues 595 385 33 325 Gross margin 2,537 2,189 1,606 2,543 Net loss attributable to Neonode Inc. (1,367 ) (1,331 ) (2,162 ) (431 ) Net loss per basic and diluted common share $ (0.03 ) $ (0.03 ) $ (0.05 ) $ (0.01 ) 2015 Net Revenues $ 2,263 $ 2,776 $ 3,113 $ 2,963 Cost of revenues 338 737 909 1,796 Gross margin 1,925 2,039 2,204 1,167 Net loss attributable to Neonode Inc. (2,072 ) (1,792 ) (1,368 ) (2,588 ) Net loss per basic and diluted common share $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (0.06 ) 2014 Net Revenues $ 1,014 $ 865 $ 1,126 $ 1,735 Cost of revenues 166 452 422 469 Gross margin 848 413 704 1,266 Net loss attributable to Neonode Inc. (4,008 ) (3,874 ) (3,245 ) (3,107 ) Net loss per basic and diluted common share $ (0.11 ) $ (0.10 ) $ (0.08 ) $ (0.08 ) |
Nature of the Business and Op36
Nature of the Business and Operations (Details) - USD ($) | Oct. 13, 2015 | Aug. 31, 2016 | Jun. 30, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Nature of the Business and Operations (Textual) | ||||||||||||||||||
Net loss (including noncontrolling interests) | $ (431,000) | $ (2,162,000) | $ (1,331,000) | $ (1,367,000) | $ (2,588,000) | $ (1,368,000) | $ (1,792,000) | $ (2,072,000) | $ (3,107,000) | $ (3,245,000) | $ (3,874,000) | $ (4,008,000) | $ (5,291,000) | $ (7,820,000) | $ (14,234,000) | |||
Accumulated deficit | $ (179,040,000) | $ (173,749,000) | (179,040,000) | (173,749,000) | ||||||||||||||
Net cash used in operating activities | (6,252,000) | (8,063,000) | (11,824,000) | |||||||||||||||
Issuance of common stock | 3,200,000 | |||||||||||||||||
Net proceeds from issuance of common stock | $ 7,913,000 | $ 5,422,000 | $ 9,253,000 | |||||||||||||||
Shares price per share | $ 4 | $ 4 | ||||||||||||||||
Price per share | $ 1.90 | |||||||||||||||||
Stock issued for cash | $ 6,100,000 | |||||||||||||||||
Cash | 5,400,000 | |||||||||||||||||
Direct offering cost | $ 700,000 | |||||||||||||||||
Issuance of shares remaining for under our existing shelf registration statement | 1,800,000 | 1,800,000 | ||||||||||||||||
Shelf registration statement, expire date | Jun. 12, 2017 | |||||||||||||||||
Aggregate of common stock offering price | $ 20,000,000 | $ 20,000,000 | ||||||||||||||||
Employee Investor Shares [Member] | ||||||||||||||||||
Nature of the Business and Operations (Textual) | ||||||||||||||||||
Issuance of common stock | 427,352 | |||||||||||||||||
Net proceeds from issuance of common stock | $ 500,000 | |||||||||||||||||
Shares price per share | $ 1.17 | |||||||||||||||||
Outside Investor Shares [Member] | ||||||||||||||||||
Nature of the Business and Operations (Textual) | ||||||||||||||||||
Issuance of common stock | 4,600,000 | |||||||||||||||||
Net proceeds from issuance of common stock | $ 4,600,000 | |||||||||||||||||
Shares price per share | $ 1 | |||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||
Nature of the Business and Operations (Textual) | ||||||||||||||||||
Issuance of common stock | 8,627,352 | |||||||||||||||||
Net proceeds from issuance of common stock | $ 7,900,000 | |||||||||||||||||
Description of securities purchase agreement | (iii) up to 3,600,000 shares issuable upon exercise of warrants (the "Pre-Funded Warrants") by outside investors for which we received $3,564,000 pre-funded in proceeds and will receive up to $36,000 in proceeds upon future cash exercises. | |||||||||||||||||
Warrants expiration, date | Feb. 17, 2022 | |||||||||||||||||
Proceeds from issuance of warrants | $ 4,800,000 | |||||||||||||||||
Purchase Warrants [Member] | ||||||||||||||||||
Nature of the Business and Operations (Textual) | ||||||||||||||||||
Issuance of common stock | 4,313,676 | |||||||||||||||||
Shares price per share | $ 1.12 | $ 1.12 | ||||||||||||||||
Proceeds from issuance of warrants | $ 4,800,000 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies [Abstract] | ||
Raw materials | $ 522 | |
Work-in-Process | 42 | |
Finished goods | 132 | |
Ending inventory | $ 696 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2016 | |
Computer equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | P3Y |
Furniture and fixtures [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | P5Y |
Equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | P7Y |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | ||
Balance at beginning of period | ||
Provisions for warranty issued | 11 | |
Balance at end of period | $ 11 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details 3) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Swedish Krona [Member] | |||
Weighted average exchange rate for consolidated statements of operations | |||
Weighted-average exchange rate for consolidated statements of operations | 8.55 | 8.43 | 6.86 |
Japanese Yen [Member] | |||
Weighted average exchange rate for consolidated statements of operations | |||
Weighted-average exchange rate for consolidated statements of operations | 108.75 | 121.03 | 105.84 |
South Korean Won [Member] | |||
Weighted average exchange rate for consolidated statements of operations | |||
Weighted-average exchange rate for consolidated statements of operations | 1,157.14 | 1,130.22 | 1,050.63 |
Taiwan Dollar [Member] | |||
Weighted average exchange rate for consolidated statements of operations | |||
Weighted-average exchange rate for consolidated statements of operations | 32.22 | 31.73 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Details 4) | Dec. 31, 2016 | Dec. 31, 2015 |
Swedish Krona [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 9.07 | 8.42 |
Japanese Yen [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 116.97 | 120.36 |
South Korean Won [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 1,205.11 | 1,174.67 |
Taiwan Dollar [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 32.28 | 32.84 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)Customers | Dec. 31, 2015USD ($)Customers | Dec. 31, 2014USD ($) | Dec. 31, 2016JPY (¥) | Dec. 31, 2016SEK | Dec. 31, 2016TWD | Dec. 31, 2016KPW | |
Summary of Significant Accounting Policies (Textual) | |||||||
Noncontrolling interest owned by Pronode Technologies AB | 51.00% | 51.00% | 51.00% | 51.00% | 51.00% | ||
Noncontrolling interest owned by Propoint AB | 49.00% | 49.00% | 49.00% | 49.00% | 49.00% | ||
Basic deposit coverage limits per owner and customer | $ 250,000 | ¥ 10,000,000 | SEK 100,000 | TWD 3,000,000 | KPW 50,000,000 | ||
Allowance for doubtful accounts | 149,000 | $ 167,000 | |||||
Costs capitalized in projects in process | 158,000 | ||||||
Foreign currency translation included in general and administrative expense | 74,000 | 62,000 | $ (37,000) | ||||
Foreign currency translation adjustments | (217,000) | (103,000) | 138,000 | ||||
Cost of sales | 165,000 | ||||||
Advertising costs | $ 299,000 | 328,000 | $ 172,000 | ||||
Noncontrolling interest, Description | Noncontrolling interests' partners have less than 50% share of voting rights at any one of the subsidiary level companies. | ||||||
Future sales returns | $ 100,000 | ||||||
Investment in joint venture | $ 3,000 | ||||||
Subsidiaries [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Noncontrolling interest, Description | The consolidated balance sheets at December 31, 2016 and 2015 and the consolidated statements of operations, comprehensive loss and cash flows for the years then ended include our accounts and those of our wholly owned subsidiaries, Neonode Technologies AB (Sweden), Neonode Americas Inc. (U.S.), Neonode Japan Inc. (Japan), NEON Technology Inc. (U.S.), Neno User Interface Solutions AB (Sweden), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd. (Taiwan), as well as Pronode Technologies AB (Sweden), a 51% majority owned subsidiary of Neonode Technologies AB. | ||||||
Minimum [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 20.00% | ||||||
Maximum [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 50.00% | ||||||
Accounts Receivable [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 59.00% | 78.00% | |||||
Number of customers | Customers | 3 | 3 | |||||
Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 10.00% | 10.00% | 10.00% | ||||
Hewlett Packard [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 38.00% | 25.00% | 24.00% | ||||
KOBO Inc [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 10.00% | ||||||
Leap Frog Enterprises Inc [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 11.00% | ||||||
Sony Corporation [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 10.00% | ||||||
Amazon Inc [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 11.00% | 14.00% | |||||
Autoliv [Member] | Sales Revenue, Net [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Concentration risk, Percentage | 11.00% | 21.00% | |||||
Two customer [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Deferred license fee | $ 1,100,000 | ||||||
Number of customers | Customers | 2 | ||||||
Four customer [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Deferred license fee | $ 1,800,000 | ||||||
Number of customers | Customers | 4 | ||||||
One customer [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Deferred license fee | $ 400,000 | ||||||
Number of customers | Customers | 1 | ||||||
AirBar sales [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Deferred revenue | $ 100,000 | ||||||
United States [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Net assets (liabilities) | 2,189,000 | 2,533,000 | |||||
Europe [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Net assets (liabilities) | 1,872,000 | (909,000) | |||||
Asia [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Net assets (liabilities) | $ 74,000 | $ 209,000 |
Prepaid Expenses and Other Cu43
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of prepaid expense and other current assets | ||
Prepaid insurance | $ 125 | $ 119 |
Prepaid rent | 46 | 52 |
VAT receivable | 247 | 337 |
Prepaid Inventory | 715 | |
Advances To Suppliers | 596 | |
Other | 220 | 239 |
Total prepaid expenses and other current assets | $ 1,949 | $ 747 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of property and equipment | ||
Equipment under capital lease | $ 1,661 | $ 428 |
Less accumulated depreciation and amortization | (560) | (471) |
Property and equipment, net | 2,031 | 594 |
Computers, software, furniture and fixtures [Member] | ||
Schedule of property and equipment | ||
Computers, software, furniture and fixtures | $ 930 | $ 637 |
Property and Equipment (Detai45
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment (Textual) | |||
Depreciation and amortization expense | $ 360 | $ 187 | $ 202 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of accrued expenses | ||
Accrued returns and warranty | $ 11 | |
Accrued consulting fees and other | 161 | 382 |
Total accrued expenses | $ 172 | $ 382 |
Deferred Revenue (Details)
Deferred Revenue (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)Customers | Dec. 31, 2015USD ($)Customers | |
Deferred Revenue (Textual) | ||
Deferred license fee revenue | $ 1,921 | $ 1,475 |
Prepayments from Future License Fees [Member] | ||
Deferred Revenue (Textual) | ||
Deferred license fee revenue | $ 1,800 | $ 1,100 |
Number of customer | Customers | 4 | 2 |
Deferred Engineering Development Fees [Member] | ||
Deferred Revenue (Textual) | ||
Deferred license fee revenue | $ 400 | |
Number of customer | Customers | 1 | |
AirBar sales [Member] | ||
Deferred Revenue (Textual) | ||
Deferred license fee revenue | $ 100 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of all stock option plans | ||||
Number of Shares/Warrants, Options Outstanding, Beginning Balance | 464,073 | 3,335,073 | 828,573 | |
Warrants, Issued (Prefunded) | 3,600,000 | |||
Warrants, Issued (Purchase) | 4,313,676 | 2,575,000 | ||
Warrants, Expired/forfeited | (384,073) | (2,591,000) | (40,000) | |
Number of Shares, Options Exercised | (80,000) | (280,000) | (28,500) | |
Number of Shares/Warrants, Options Outstanding, Ending Balance | 7,913,676 | 464,073 | 3,335,073 | 828,573 |
Weighted Average Exercise Price, Options Outstanding, Beginning Balance | $ 3.02 | $ 4.45 | $ 2.39 | |
Weighted Average Exercise Price, Issued (Prefunded) | 0.01 | |||
Weighted Average Exercise Price, Issued (Purchase) | 1.12 | 5.09 | ||
Weighted Average Exercise Price,Options Expired/forfeited | 3.13 | 5.06 | 3.98 | |
Weighted Average Exercise Price, Options Exercised | 2 | 1.30 | 2.85 | |
Weighted Average Exercise Price, Options Outstanding, Ending Balance | $ 0.62 | $ 3.02 | $ 4.45 | $ 2.39 |
Weighted Average Remaining Contractual Life, Outstanding and exercisable | 5 years 1 month 17 days | 2 months 9 days | 11 months 5 days | 2 years 22 days |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Aug. 17, 2016 |
Exercise Price | $ / shares | $ 1.12 |
Shares | shares | 7,913,676 |
Expiration Date | Feb. 17, 2022 |
August 2016 Prefunded Warrants [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Aug. 16, 2016 |
Exercise Price | $ / shares | $ 1 |
Shares | shares | 3,600,000 |
Expiration Date | Feb. 16, 2022 |
August 2016 Purchase Warrants [Member] | |
Summary of outstanding warrants to purchase common stock | |
Issue Date | Aug. 17, 2016 |
Exercise Price | $ / shares | $ 1.12 |
Shares | shares | 4,313,676 |
Expiration Date | Feb. 17, 2022 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - Series B Preferred Stock [Member] | 12 Months Ended |
Dec. 31, 2016shares | |
Schedule of conversion of preferred stock issued to common stock | |
Shares of Preferred Stock Not Exchanged | 83 |
Conversion Ratio | 132.07 |
Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged | 10,962 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | Oct. 13, 2015USD ($)$ / sharesshares | Aug. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares |
Stockholders Equity (Textual) | |||||
Issuance of common stock | $ | $ 10,000,000 | ||||
Issuance of common stock, shares | 2,500,000 | ||||
Shares price per share | $ / shares | $ 4 | ||||
Proceeds from sale of stock after expenses and fees | $ | $ 9,300,000 | ||||
Placement agent fee | $ | $ 600,000 | ||||
Warrants issued to purchase shares of common stock | 2,500,000 | ||||
Direct offering cost | $ | $ 700,000 | ||||
Cash | $ | $ 5,400,000 | ||||
Price per share | $ / shares | $ 1.90 | ||||
Stock issued for cash | $ | $ 6,100,000 | ||||
Exercise price | $ / shares | $ 5.09 | ||||
Warrants issued to placement agent | 75,000 | ||||
Issuance costs | $ | $ 700,000 | ||||
Issuance of common stock, shares | 3,200,000 | ||||
Net proceeds from issuance of common stock | $ | $ 7,913,000 | $ 5,422,000 | $ 9,253,000 | ||
Employee Investor Shares [Member] | |||||
Stockholders Equity (Textual) | |||||
Shares price per share | $ / shares | $ 1.17 | ||||
Issuance of common stock, shares | 427,352 | ||||
Net proceeds from issuance of common stock | $ | $ 500,000 | ||||
Outside Investor Shares [Member] | |||||
Stockholders Equity (Textual) | |||||
Shares price per share | $ / shares | $ 1 | ||||
Issuance of common stock, shares | 4,600,000 | ||||
Net proceeds from issuance of common stock | $ | $ 4,600,000 | ||||
Pre-Funded Warrant Shares [Member] | |||||
Stockholders Equity (Textual) | |||||
Securities purchase agreement, description | (iii) up to 3,600,000 Pre-Funded Warrant Shares issuable upon exercise of the Pre-Funded Warrants for which Neonode received $3,564,000 pre-funded in gross proceeds. The Pre-Funded Warrants were issued to certain outside investors whose purchase of shares of Neonode common stock would make them the beneficial owners of more than 9.99% of the outstanding common stock of Neonode. Each of the Pre-Funded Warrants were pre-funded upon closing of the private placement at $0.99 per Pre-Funded Warrant Share and have an exercise price of $0.01 per Pre-Funded Warrant Share. The Pre-Funded Warrants are immediately exercisable upon issuance and will not expire prior to exercise. | ||||
Series B Preferred Stock [Member] | |||||
Stockholders Equity (Textual) | |||||
Preferred stock conversion ratio per share of common stock | 132.07 | ||||
Preferred stock, liquidation preference | $ / shares | $ 0.001 | $ 0.001 | |||
Conversion of shares | 10,962 | ||||
Preferred stock voting rights description | The holders of shares of Series B Preferred stock have one vote for each share of Series B Preferred stock held by them. | ||||
Preferred stock conversion description | Each share of Series B Preferred stock was convertible into one share of our common stock. | ||||
Securities Purchase Agreement [Member] | |||||
Stockholders Equity (Textual) | |||||
Securities purchase agreement, description | (iii) up to 3,600,000 shares issuable upon exercise of warrants (the "Pre-Funded Warrants") by outside investors for which we received $3,564,000 pre-funded in proceeds and will receive up to $36,000 in proceeds upon future cash exercises. | ||||
Proceeds from issuance of warrants | $ | $ 4,800,000 | ||||
Issuance of common stock, shares | 8,627,352 | ||||
Net proceeds from issuance of common stock | $ | $ 7,900,000 | ||||
Thomas Eriksson [Member] | |||||
Stockholders Equity (Textual) | |||||
Aggregate shares of common stock, shares | 157,893 | ||||
Aggregate purchase price of common stock, value | $ | $ 300,000 | ||||
Per Bystedt [Member] | |||||
Stockholders Equity (Textual) | |||||
Aggregate shares of common stock, shares | 157,893 | ||||
Aggregate purchase price of common stock, value | $ | $ 300,000 | ||||
Mats Dahlin [Member] | |||||
Stockholders Equity (Textual) | |||||
Aggregate shares of common stock, shares | 157,893 | ||||
Aggregate purchase price of common stock, value | $ | $ 300,000 | ||||
Common Stock [Member] | |||||
Stockholders Equity (Textual) | |||||
Warrants issued to purchase shares of common stock | 280,000 | ||||
Cash | $ | $ 5,400,000 | ||||
Common stock, capital shares reserved for future issuance | 5,000,000 | ||||
Price per share | $ / shares | $ 1.90 | ||||
Stock issued for cash | $ | $ 6,100,000 | ||||
Common stock purchased by exercise of warrants | 150,234 | ||||
Issuance of common stock, shares | 5,027,000 | 3,200,000 | 2,500,000 | ||
Warrant [Member] | |||||
Stockholders Equity (Textual) | |||||
Warrants issued to purchase shares of common stock | 17,000 | ||||
Additional warrants issued to purchase shares of common stock | 80,000 | 11,500 | |||
Exercise price | $ / shares | $ 3.13 | ||||
Common stock purchased by exercise of warrants | 11,565 | 10,053 | |||
Proceeds from issuance of warrants | $ | $ 36,000 | ||||
Warrant [Member] | Securities Purchase Agreement [Member] | |||||
Stockholders Equity (Textual) | |||||
Warrants issued to purchase shares of common stock | 4,313,676 | ||||
Exercise price | $ / shares | $ 1.12 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of options outstanding by exercise price range | |||
Options Exercisable, Weighted Average Exercise Price | $ 0.67 | $ 1.24 | $ 3.14 |
Stock Options [Member] | |||
Summary of options outstanding by exercise price range | |||
Options Outstanding, Number Outstanding at 12/31/16 | 1,846,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 11 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 4.39 | ||
Options Exercisable, Number Exercisable at 12/31/16 | 1,792,249 | ||
Options Exercisable, Weighted Average Exercise Price | $ 4.43 | ||
Stock Options [Member] | Range one [Member] | |||
Summary of options outstanding by exercise price range | |||
Range of Exercise Price, Lower Range Limit | 1.44 | ||
Range of Exercise Price, Upper Range Limit | $ 3.50 | ||
Options Outstanding, Number Outstanding at 12/31/16 | 200,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 5 years 3 months 18 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 2.85 | ||
Options Exercisable, Number Exercisable at 12/31/16 | 147,083 | ||
Options Exercisable, Weighted Average Exercise Price | $ 2.78 | ||
Stock Options [Member] | Range two [Member] | |||
Summary of options outstanding by exercise price range | |||
Range of Exercise Price, Lower Range Limit | 3.51 | ||
Range of Exercise Price, Upper Range Limit | $ 5 | ||
Options Outstanding, Number Outstanding at 12/31/16 | 1,426,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 2 years 10 months 6 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 4.23 | ||
Options Exercisable, Number Exercisable at 12/31/16 | 1,426,000 | ||
Options Exercisable, Weighted Average Exercise Price | $ 4.23 | ||
Stock Options [Member] | Range three [Member] | |||
Summary of options outstanding by exercise price range | |||
Range of Exercise Price, Lower Range Limit | 5.01 | ||
Range of Exercise Price, Upper Range Limit | $ 6.50 | ||
Options Outstanding, Number Outstanding at 12/31/16 | 130,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 7 months 17 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 5.98 | ||
Options Exercisable, Number Exercisable at 12/31/16 | 129,166 | ||
Options Exercisable, Weighted Average Exercise Price | $ 5.98 | ||
Stock Options [Member] | Range four [Member] | |||
Summary of options outstanding by exercise price range | |||
Range of Exercise Price, Lower Range Limit | 6.51 | ||
Range of Exercise Price, Upper Range Limit | $ 8.21 | ||
Options Outstanding, Number Outstanding at 12/31/16 | 90,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 7 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 8.21 | ||
Options Exercisable, Number Exercisable at 12/31/16 | 90,000 | ||
Options Exercisable, Weighted Average Exercise Price | $ 8.21 |
Stock-Based Compensation (Det53
Stock-Based Compensation (Details 1) - Stock Options [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of all stock option plans / warrant activity | |||
Number of Shares/Warrants, Options Outstanding, Beginning Balance | 2,184,117 | 1,709,400 | 1,600,583 |
Number of Shares, Options Granted | 25,000 | 605,000 | 405,200 |
Number of Shares, Options Exercised | |||
Number of Shares, Options Cancelled or expired | (363,117) | (130,283) | (296,383) |
Number of Shares/Warrants, Options Outstanding, Ending Balance | 1,846,000 | 2,184,117 | 1,709,400 |
Weighted Average Exercise Price, Options Outstanding, Beginning Balance | $ 4.48 | $ 4.92 | $ 5.22 |
Weighted Average Exercise Price, Options Granted | 1.44 | 3.57 | 6.31 |
Weighted Average Exercise Price, Options Exercised | |||
Weighted Average Exercise Price,Options Expired/forfeited | 4.73 | 6.03 | 5.46 |
Weighted Average Exercise Price, Options Outstanding, Ending Balance | $ 4.39 | $ 4.48 | $ 4.92 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 11 days | ||
Options exercisable and expected to vest, Weighted Average Remaining Contractual Life (years) | 3 years 11 days | ||
Options outstanding, Aggregate intrinsic value | $ 10,000 | ||
Options exercisable and expected to vest, Aggregate intrinsic value | $ 10,000 | ||
Number of Shares/Warrants, Options exercisable and expected to vest, Ending Balance | 1,846,000 | ||
Weighted Average Exercise Price, Options exercisable and expected to vest, Ending balance | $ 4.39 |
Stock-Based Compensation (Det54
Stock-Based Compensation (Details 2) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of assumptions used to value stock options granted to employees,directors and consultants | |||
Annual dividend yield | |||
Expected life (years) | 3 years 6 months | 2 years 11 months 19 days | 3 years 6 months |
Risk-free interest rate | 0.83% | ||
Expected volatility | 65.46% | ||
Minimum [Member] | |||
Summary of assumptions used to value stock options granted to employees,directors and consultants | |||
Risk-free interest rate | 0.47% | 0.28% | |
Expected volatility | 60.07% | 60.68% | |
Maximum [Member] | |||
Summary of assumptions used to value stock options granted to employees,directors and consultants | |||
Risk-free interest rate | 1.41% | 1.47% | |
Expected volatility | 72.33% | 108.75% |
Stock-Based Compensation (Det55
Stock-Based Compensation (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of stock-based compensation expense | |||
Stock compensation expense | $ 255 | $ 1,075 | $ 1,729 |
Remaining unamortized expense of stock-based compensation | 84 | ||
Research and Development [Member] | |||
Summary of stock-based compensation expense | |||
Stock compensation expense | 48 | 484 | 510 |
Sales and Marketing [Member] | |||
Summary of stock-based compensation expense | |||
Stock compensation expense | 150 | 296 | 353 |
General and Administrative [Member] | |||
Summary of stock-based compensation expense | |||
Stock compensation expense | $ 57 | $ 295 | $ 866 |
Stock-Based Compensation (Det56
Stock-Based Compensation (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-Based Compensation (Textual) | |||||
Share-based compensation expense | $ 255,000 | $ 1,075,000 | $ 1,729,000 | ||
Weighted average grant date fair value | $ 0.67 | $ 1.24 | $ 3.14 | ||
Options granted to purchase of common stock to employee | 90,000 | 10,000 | |||
Options granted to purchase of common stock to board members | 25,000 | 515,000 | 395,200 | ||
Stock based compensation options granted to purchase of common stock to employee fair value | $ 17,000 | $ 800,000 | $ 1,300,000 | ||
Exercise price of the warrants | $ 1.12 | ||||
Proceeds from exercise of warrants | 36,000 | ||||
Term of stock options description | Options granted under the Director Plan vest over a one to four-year period, expire five to seven years after the date of grant and have exercise prices reflecting market value of the shares of our common stock on the date of grant. Stock options granted under the 2006 and 2015 Plans are exercisable over a maximum term of ten years from the date of grant, vest in various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant. | ||||
Private Placement [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Exercise price of the warrants | $ 0.99 | ||||
Swedish employees [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Number of shares, options granted | 265,000 | ||||
Stock Options [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Share-based compensation expense | $ 300,000 | $ 1,100,000 | $ 1,700,000 | ||
Weighted average grant date fair value | $ 4.43 | ||||
Vesting period | 1 year 1 month 6 days | ||||
Number of options outstanding | 1,846,000 | 2,184,117 | 1,709,400 | 1,600,583 | |
Number of shares, options granted | 25,000 | 605,000 | 405,200 | ||
2015 Plan [Member] | Stock Options [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Number of shares, options granted | 25,000 | ||||
Aggregate shares of common stock, shares | 2,100,000 | ||||
Warrant [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Vesting period | 1 year 1 month 6 days | ||||
Common stock issuable upon exercise of warrants | 11,565 | 10,053 | |||
Number of options outstanding | 7,913,676 | 464,073 | 3,335,073 | 828,573 | |
Number of shares, options granted | 3,600,000 |
Commitments and Contingencies57
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies [Abstract] | |
2,017 | $ 450 |
2,018 | |
2,019 | |
Total | $ 450 |
Commitments and Contingencies58
Commitments and Contingencies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies [Abstract] | ||
2,017 | $ 262 | |
2,018 | 261 | |
2,019 | 258 | |
2,020 | 265 | |
2,021 | 241 | |
Total minimum payments required: | 1,287 | |
Less amount representing interest: | (99) | |
Present value of net minimum lease payments: | 1,188 | |
Less current portion | (228) | $ (57) |
Capital lease noncurrent portion | $ 960 | $ 283 |
Commitments and Contingencies59
Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies [Abstract] | ||
Equipment under capital lease | $ 1,661 | $ 428 |
Less: accumulated depreciation | (225) | |
Net book value | $ 1,436 |
Commitments and Contingencies60
Commitments and Contingencies (Details Textual) | Dec. 04, 2014USD ($)$ / shares | Dec. 06, 2012USD ($)$ / shares | Jan. 24, 2010USD ($)$ / shares | Apr. 30, 2014 | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Commitments and Contingencies (Textual) | |||||||
Non-recurring engineering development costs contributed to TI | $ 885,000 | $ 500,000 | $ 500,000 | ||||
Description of NRE cost contributed to TI | Under the terms of the NN1002 Agreement we will reimburse Texas Instruments a non-recurring engineering fee of $0.25 per unit for each of the first two million units sold. | Under the terms of the NN1001 Agreement, we have reimbursed Texas Instruments a non-recurring engineering fee of $0.08 per unit for each of the first one million units sold and $0.05 for the next eight million units sold. | |||||
NRE cost contributed for each of first one million unit sold, Per unit | $ / shares | $ 0.08 | ||||||
NRE cost contributed for next eight million unit sold, Per unit | $ / shares | $ 0.05 | ||||||
NRE fee contributed for each of first two million unit sold, Per unit | $ / shares | $ 0.25 | ||||||
Non recurring expense included in product research and development | $ 20,000 | $ 93,000 | |||||
Non recurring engineering costs description | ● $235,000 at the feasibility review and contract signature (paid on January 20, 2015) ● $300,000 on completion of tape-out (paid on October 31, 2015) ● $300,000 on completion on product validation ($100,000 paid and $200,000 accrued as of December 31, 2016) | ||||||
Non recurring engineering fee of first ten thousands units sold, Per unit | $ / shares | $ 5 | ||||||
Annual lease payment | $ 15,000 | ||||||
Capital lease term | 6 years | ||||||
Capital lease payment description | Under the terms of the NN1003 Agreement, we also will reimburse STMicroelectronics a non-recurring engineering fee of $5.00 per each of the first 10,000 units sold. As of December 31, 2016, we had paid $635,000 under the NN1003 Agreement. | Under the terms of the lease agreement we are obligated to purchase the equipment at the end of the original 6 year lease term for 10% of the original purchase price of the equipment. | Under the terms of five of the lease agreements we are obligated to purchase the equipment at the end of the original 3-5 year lease terms for 5-10% of the original purchase price of the equipment. In accordance with relevant accounting guidance the leases are classified as capital leases. The lease payments and depreciation periods began between June and November 2016 when the equipment went into service. The implicit interest rate of the leases is currently approximately 3% per annum. One of the leases is a hire-purchase agreement where the equipment will be paid off after 5 years. In accordance with relevant accounting guidance the lease is classified as a capital lease. The lease payments and depreciation period began on July 1, 2016 when the equipment went into service. The implicit interest rate of the lease is currently approximately 3% per annum. | ||||
Capital lease interest rate | 4.00% | ||||||
Lease expiration date | Aug. 22, 2016 | Jul. 31, 2015 | |||||
Rent expense | $ 852,000 | $ 641,000 | $ 633,000 | ||||
Neonode Technologies AB [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Annual lease payment | $ 400,000 | ||||||
Area of leased space (in square feet) | ft² | 7,007 | ||||||
Lease expiration date | Nov. 30, 2017 | ||||||
Neonode Japan Inc [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Annual lease payment | $ 24,000 | ||||||
Neonode Korea Ltd [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Annual lease payment | 8,000 | ||||||
Neonode Taiwan Ltd [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Annual lease payment | $ 13,000 | ||||||
Pronode Technologies AB [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Area of leased space (in square feet) | ft² | 9,040 | ||||||
Lease expiration date | Dec. 9, 2017 | ||||||
Annual lease agreement | $ 88,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | $ 2,868 | $ 1,639 | $ 2,574 | $ 3,132 | $ 2,963 | $ 3,113 | $ 2,776 | $ 2,263 | $ 1,735 | $ 1,126 | $ 865 | $ 1,014 | $ 10,213 | $ 11,115 | $ 4,740 |
Revenues percentage | 100.00% | 100.00% | 100.00% | ||||||||||||
U.S. [Member] | |||||||||||||||
Revenues | $ 5,806 | $ 6,177 | $ 2,833 | ||||||||||||
Revenues percentage | 57.00% | 56.00% | 60.00% | ||||||||||||
Europe [Member] | |||||||||||||||
Revenues | $ 2,434 | $ 2,987 | $ 228 | ||||||||||||
Revenues percentage | 24.00% | 17.00% | 5.00% | ||||||||||||
Asia [Member] | |||||||||||||||
Revenues | $ 1,973 | $ 1,951 | $ 1,679 | ||||||||||||
Revenues percentage | 19.00% | 17.00% | 35.00% |
Segment Information (Details Te
Segment Information (Details Textual) | 12 Months Ended |
Dec. 31, 2016Segment | |
Segment Information (Textual) | |
Number of reportable segments | 1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of income (loss) before income taxes by geographically | |||
Domestic | $ (4,459) | $ (7,783) | $ (13,993) |
Foreign | (823) | 41 | (228) |
Total | $ (5,282) | $ (7,742) | $ (14,221) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
Federal | |||
State | 2 | 2 | 3 |
Foreign | 365 | 91 | 10 |
Change in deferred | |||
Federal | (1,604) | (2,466) | (4,213) |
Federal valuation allowance | 1,604 | 2,466 | 4,213 |
State | (197) | (252) | (460) |
State valuation allowance | 197 | 252 | 460 |
Foreign | (161) | 6 | 64 |
Foreign valuation allowance | 161 | (6) | (64) |
Total current | $ 367 | $ 93 | $ 13 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of reconciliation of Effective income tax rate and statutory federal income tax rate | |||
Amounts at statutory tax rates | 34.00% | 34.00% | 34.00% |
Foreign losses taxed at different rates | (3.00%) | (1.00%) | |
Foreign withholding tax | (4.00%) | ||
Stock-based compensation | (1.00%) | (2.00%) | |
Other | (1.00%) | (1.00%) | |
Total | 27.00% | 32.00% | 30.00% |
Valuation allowance | (35.00%) | (33.00%) | (31.00%) |
Effective tax rate | (8.00%) | (1.00%) | (1.00%) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Accruals | $ 126 | $ 1,109 |
Stock compensation | 1,466 | 1,352 |
Net operating losses | 20,015 | 17,190 |
Basis difference in fixed assets | 13 | 7 |
Total deferred tax assets | 21,620 | 19,658 |
Valuation allowance | (21,620) | (19,658) |
Total net deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Taxes (Textual) | |
Open tax years | 2008 through 2015 |
Federal [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 56,000,000 |
Operating loss carryforwards, expiration date | Dec. 31, 2028 |
Deferred tax assets related to excess tax benefits for stock based compensation | $ 547,000 |
State [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 22,300,000 |
Operating loss carryforwards, expiration date | Dec. 31, 2030 |
Deferred tax assets related to excess tax benefits for stock based compensation | $ 28,000 |
Foreign [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 500,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension plans for Swedish employees [Member] | |||
Employee Benefit Plans (Textual) | |||
Defined benefit plan contribution, Amount | $ 398,000 | $ 306,000 | $ 249,000 |
Pension plans for Swedish employees [Member] | Minimum [Member] | |||
Employee Benefit Plans (Textual) | |||
Defined benefit plan contribution, Percentage | 5.00% | 5.00% | 5.00% |
Pension plans for Swedish employees [Member] | Maximum [Member] | |||
Employee Benefit Plans (Textual) | |||
Defined benefit plan contribution, Percentage | 15.00% | 15.00% | 15.00% |
U.S. Employee 401K Pension Plan [Member] | |||
Employee Benefit Plans (Textual) | |||
Defined benefit plan contribution, Amount | $ 33,000 | $ 89,000 | $ 81,000 |
Matching contributions by employer | 6.00% | 6.00% | 6.00% |
Pension Plans for Taiwan Employees [Member] | |||
Employee Benefit Plans (Textual) | |||
Defined benefit plan contribution, Amount | $ 10,000 | $ 10,000 | |
Defined benefit plan contribution, Percentage | 6.00% | 6.00% |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
BASIC AND DILUTED | |||||||||||||||
Weighted average number of common shares outstanding | 45,690 | 41,202 | 39,532 | ||||||||||||
Net loss (including noncontrolling interests) | $ (431) | $ (2,162) | $ (1,331) | $ (1,367) | $ (2,588) | $ (1,368) | $ (1,792) | $ (2,072) | $ (3,107) | $ (3,245) | $ (3,874) | $ (4,008) | $ (5,291) | $ (7,820) | $ (14,234) |
Net loss per share basic and diluted | $ (0.01) | $ (0.05) | $ (0.03) | $ (0.03) | $ (0.06) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.08) | $ (0.08) | $ (0.10) | $ (0.11) | $ (0.12) | $ (0.19) | $ (0.36) |
Net Loss Per Share (Details Tex
Net Loss Per Share (Details Textual) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Option [Member] | |||
Net Loss Per Share (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | 4,000 | 7,000 | 24,000 |
Warrant [Member] | |||
Net Loss Per Share (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | 5,100,000 | 13,000 | 300,000 |
Convertible Preferred Stock [Member] | |||
Net Loss Per Share (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | 11,000 | 11,000 | 11,000 |
Quarterly Financial Informati71
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of selected quarterly financial information | |||||||||||||||
Net Revenues | $ 2,868 | $ 1,639 | $ 2,574 | $ 3,132 | $ 2,963 | $ 3,113 | $ 2,776 | $ 2,263 | $ 1,735 | $ 1,126 | $ 865 | $ 1,014 | $ 10,213 | $ 11,115 | $ 4,740 |
Cost of revenues | 325 | 33 | 385 | 595 | 1,796 | 909 | 737 | 338 | 469 | 422 | 452 | 166 | 1,338 | 3,780 | 1,509 |
Gross margin | 2,543 | 1,606 | 2,189 | 2,537 | 1,167 | 2,204 | 2,039 | 1,925 | 1,266 | 704 | 413 | 848 | 8,875 | 7,335 | 3,231 |
Net loss attributable to Neonode Inc. | $ (431) | $ (2,162) | $ (1,331) | $ (1,367) | $ (2,588) | $ (1,368) | $ (1,792) | $ (2,072) | $ (3,107) | $ (3,245) | $ (3,874) | $ (4,008) | $ (5,291) | $ (7,820) | $ (14,234) |
Net loss per basic and diluted common share | $ (0.01) | $ (0.05) | $ (0.03) | $ (0.03) | $ (0.06) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.08) | $ (0.08) | $ (0.10) | $ (0.11) | $ (0.12) | $ (0.19) | $ (0.36) |
Schedule II - Valuation and Q72
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 167 | $ 167 | |
Charged to Costs and Expenses | 167 | ||
Charged to Other Accounts | |||
Deductions | 18 | ||
Balance at End of Year | 149 | 167 | 167 |
Deferred tax asset valuation allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 19,658 | 16,946 | 12,335 |
Charged to Costs and Expenses | |||
Charged to Other Accounts | 1,962 | 2,712 | 4,611 |
Deductions | |||
Balance at End of Year | $ 21,620 | $ 19,658 | $ 16,946 |