Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Neonode Inc. | ||
Entity Central Index Key | 87,050 | ||
Trading Symbol | NEON | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 20,230,934 | ||
Entity Common Stock, Shares Outstanding | 8,800,313 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 6,555 | $ 5,796 |
Accounts receivable and unbilled revenues, net | 1,830 | 1,010 |
Projects in process | 1 | |
Inventory | 1,219 | 1,154 |
Prepaid expenses and other current assets | 890 | 1,836 |
Total current assets | 10,494 | 9,797 |
Investment in joint venture | 3 | 3 |
Property and equipment, net | 2,484 | 3,327 |
Other assets | 261 | |
Total assets | 13,242 | 13,127 |
Current liabilities: | ||
Accounts payable | 501 | 509 |
Accrued payroll and employee benefits | 902 | 1,081 |
Accrued expenses | 265 | 177 |
Deferred revenues | 75 | 1,248 |
Current portion of capital lease obligations | 570 | 568 |
Total current liabilities | 2,313 | 3,583 |
Capital lease obligation, net of current portion | 1,133 | 1,681 |
Total liabilities | 3,446 | 5,264 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Series B Preferred stock, 54,425 shares authorized with par value of $0.001; 82 and 83 shares issued and outstanding at December 31, 2018 and 2017, 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, 10,000,000 shares authorized, with par value of $0.001; 8,800,313 and 5,859,414 shares issued and outstanding at December 31, 2018 and 2017, respectively | 9 | 6 |
Additional paid-in capital | 197,507 | 192,861 |
Accumulated other comprehensive loss | (456) | (99) |
Accumulated deficit | (185,222) | (183,745) |
Total Neonode Inc. stockholders’ equity | 11,838 | 9,023 |
Noncontrolling interests | (2,042) | (1,160) |
Total stockholders’ equity | 9,796 | 7,863 |
Total liabilities and stockholders’ equity | $ 13,242 | $ 13,127 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 8,800,313 | 5,859,414 |
Common stock, shares outstanding | 8,800,313 | 5,859,414 |
Series B Preferred stock | ||
Preferred stock, shares authorized | 54,425 | 54,425 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 82 | 83 |
Preferred stock, shares outstanding | 82 | 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, 2018 | Dec. 31, 2017 | |
Revenues: | ||
License fees | $ 7,954 | $ 8,684 |
Sensor modules | 227 | 814 |
Non-recurring engineering | 357 | 743 |
Total revenues | 8,538 | 10,241 |
Cost of revenues: | ||
Sensor modules | 638 | 1,758 |
Non-recurring engineering | 283 | 585 |
Total cost of revenues | 921 | 2,343 |
Total gross margin | 7,617 | 7,898 |
Operating expenses: | ||
Research and development | 5,278 | 6,078 |
Sales and marketing | 1,995 | 2,772 |
General and administrative | 4,221 | 4,524 |
Total operating expenses | 11,494 | 13,374 |
Operating loss | (3,877) | (5,476) |
Other expense | ||
Interest expense | (49) | (75) |
Other expense | (3) | |
Total other expense | (52) | (75) |
Loss before provision for income taxes | (3,929) | (5,551) |
Provision for (benefit from) income taxes | 13 | (56) |
Net loss including noncontrolling interests | (3,942) | (5,495) |
Less: Net loss attributable to noncontrolling interests | 882 | 790 |
Net loss attributable to Neonode Inc. | $ (3,060) | $ (4,705) |
Loss per common share: | ||
Basic and diluted loss per share | $ (0.52) | $ (0.89) |
Basic and diluted – weighted average number of common shares outstanding | 5,884 | 5,289 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss including noncontrolling interests | $ (3,942) | $ (5,495) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (357) | 72 |
Comprehensive loss | (4,299) | (5,423) |
Less: Comprehensive loss attributable to noncontrolling interests | 882 | 790 |
Comprehensive loss attributable to Neonode Inc. | $ (3,417) | $ (4,633) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Series B Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Neonode Inc. Stockholders' Equity | Noncontrolling Interests | Total |
Balances at Dec. 31, 2016 | $ 5 | $ 183,711 | $ (171) | $ (179,040) | $ 4,505 | $ (370) | $ 4,135 | |
Balances, shares at Dec. 31, 2016 | 83 | 4,884 | ||||||
Stock option compensation expense to employees | 72 | 72 | 72 | |||||
Proceeds from sale of common stock, net of offering costs | $ 1 | 9,078 | 9,079 | 9,079 | ||||
Proceeds from sale of common stock, net of offering costs, shares | 975 | |||||||
Foreign currency translation adjustment | 72 | 72 | 72 | |||||
Net loss | (4,705) | (4,705) | (790) | (5,495) | ||||
Balances at Dec. 31, 2017 | $ 6 | 192,861 | (99) | (183,745) | 9,023 | (1,160) | 7,863 | |
Balances, shares at Dec. 31, 2017 | 83 | 5,859 | ||||||
Stock option compensation expense to employees | 29 | 29 | 29 | |||||
Conversion of Series B Preferred Stock to common stock | ||||||||
Conversion of Series B Preferred Stock to common stock, shares | (1) | |||||||
Proceeds from sale of common stock, net of offering costs | $ 3 | 4,617 | 4,620 | 4,620 | ||||
Proceeds from sale of common stock, net of offering costs, shares | 2,941 | |||||||
Adjustment related to adoption of ASC 606 revenue recognition | 1,583 | 1,583 | 1,583 | |||||
Foreign currency translation adjustment | (357) | (357) | (357) | |||||
Net loss | (3,060) | (3,060) | (882) | (3,942) | ||||
Balances at Dec. 31, 2018 | $ 9 | $ 197,507 | $ (456) | $ (185,222) | $ 11,838 | $ (2,042) | $ 9,796 | |
Balances, shares at Dec. 31, 2018 | 82 | 8,800 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss (including noncontrolling interests) | $ (3,942) | $ (5,495) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 29 | 72 |
Depreciation and amortization | 1,008 | 953 |
Loss on disposal of property and equipment | 6 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 481 | 542 |
Projects in process | 1 | (1) |
Inventory | (142) | (372) |
Prepaid expenses and other current assets | 556 | 293 |
Accounts payable and accrued expenses | 41 | (896) |
Deferred revenues | (897) | (677) |
Net cash used in operating activities | (2,859) | (5,581) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (236) | (656) |
Proceeds from sale of property and equipment | 4 | |
Net cash used in investing activities | (232) | (656) |
Cash flow from financing activities: | ||
Proceeds from issuance of common stock and warrants, net of offering costs | 4,620 | 9,079 |
Proceeds from note payable | 1,713 | |
Payments on note payable | (1,713) | |
Principal payments on capital lease obligations | (551) | (438) |
Net cash provided by financing activities | 4,069 | 8,641 |
Effect of exchange rate changes on cash | (219) | (84) |
Net change in cash | 759 | 2,320 |
Cash at beginning of year | 5,796 | 3,476 |
Cash at end of year | 6,555 | 5,796 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 49 | 73 |
Cash paid for income taxes | 13 | 219 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchase of equipment with capital lease obligations | $ 169 | $ 1,287 |
Nature of the Business and Oper
Nature of the Business and Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [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 ) (sold December 27, 2018); NEON Technology Inc. (U.S.) (dissolved November 19, 2018); and Neonode Americas Inc. (U.S.) (dissolved November 19, 2018). 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 the fourth quarter of 2016, Neonode started to manufacture and sell AirBar. In December 2017, we began selling embedded sensors modules that incorporate Neonode technology. Liquidity We incurred net losses of approximately $3.1 million and $4.7 million for the years ended December 31, 2018 and 2017, respectively, and had an accumulated deficit of approximately $185.2 million as of December 31, 2018. In addition, we used cash in operating activities of approximately $2.9 million and $5.6 million for the years ended December 31, 2018 and 2017, respectively. In March 2017, we filed a $20 million shelf registration statement with the SEC that became effective on March 24, 2017. Subject to the availability of sufficient shares of authorized common stock, we may from time to time issue shares of our common stock under our shelf registration 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. Our shelf registration statement will expire on March 24, 2020. December 2018 Private Placement On December 28, 2018, we entered into a Securities Purchase Agreement with foreign investors as part of a non-brokered private placement pursuant to which we issued a total of 2,940,767 shares of common stock at $1.60 per share for a purchase price of $4.6 million in net proceeds. The common stock issued in the private placement is not registered for resale and we are not required under the Securities Purchase Agreement to register the issued stock for resale. The purchasers in the private placement included Neonode directors, Ulf Rosberg and Andreas Bunge, and members of management and certain employees of the company, including Chief Executive Officer, Hakan Persson, and Chief Financial Officer, Lars Lindqvist. The Neonode directors and members of management and employees individually purchased an aggregate of approximately $2 millions of common stock as part of the private placement. In addition, existing major shareholder, Peter Lindell, also purchased shares. Mr. Lindell and Mr. Rosberg are now each a beneficial owner of approximately 18% of Neonode common stock as a result of the private placement. August 2017 Private Placement In August 2017, we entered into a Securities Purchase Agreement with accredited investors as part of a private placement pursuant to which we issued a total of 975,000 shares of common stock at $10.00 per share, and warrants, for of an aggregate purchase price of $9.75 million in gross proceeds. We received approximately $9.1 million in net proceeds. Under the terms of the 2017 Securities Purchase Agreement, we also issued warrants (the “2017 Warrants”) to investors in the private placement to purchase up to a total of 325, 000 shares of common stock at an exercise price of $20.00 per share. The 2017 Warrants became exercisable on August 8, 2018 and will expire on August 8, 2020. If the 2017 Warrants are fully exercised, we will receive approximately $6.5 million in proceeds. There are no registration rights associated with the securities to be issued and sold pursuant to the 2017 Securities Purchase Agreement. 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, sensor module, non-recurring engineering fees and AirBar sales will enable us to reduce our operating losses in 2019. 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 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. 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, 2018 | |
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. The consolidated balance sheets at December 31, 2018 and 2017 and the consolidated statements of operations, comprehensive loss and cash flows for the years ended 2018 and 2017 include our accounts and those of our wholly owned subsidiaries as well as Pronode 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: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price of performance obligations, variable consideration, and other obligations such as product returns and refunds, and product warranties; provisions for uncollectible receivables; 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 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 U.S., Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the U.S. 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 is 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. 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 as of December 31, 2018 and 2017. 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. Costs capitalized in projects in process were $1,000 as of December 31, 2017. There were no costs capitalized in projects in process as of December 31, 2018. Inventory Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out method (“FIFO”) valuation method. 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. During the fourth quarter of 2017, after a comprehensive evaluation of our AirBar business we recorded a $1.1 million write-down, included in our cost of goods sold, to reduce our AirBar specific component and finished goods inventory to estimated net realizable value and to revalue the purchase price from the initial order of one component by $0.12 each. The component was originally valued at an average price basis but due to slow selling inventory, we revalued at a higher specific price. The total price adjustment related to this component included in cost of sales was approximately $0.1 million. In addition, we recorded a $0.1 million write-down related to this component repricing which is included in our Research and Development expense. We also recorded a $0.5 million write-off related to production development units, included in inventory, which is included in our Research and Development expense. As of December 31, 2018, the Company’s inventory consists primarily of components that will be used in the manufacturing of our sensor modules. We segregate inventory for reporting purposes by raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods are as follows: December 31, December 31, 2018 2017 Raw materials $ 246 164 Work-in-Process 220 231 Finished goods 753 759 Ending inventory $ 1,219 1,154 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, 2018. 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, 2018, 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 (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying consolidated statements of operations and were $(58,000) and $(84,000) during the years ended December 31, 2018 and 2017, respectively. Foreign currency translation gains or (losses) were $(357,000) and $72,000 during the years ended December 31, 2018 and 2017, respectively. Concentration of Credit and Business Risks Our customers are located in United States, Europe and Asia. As of December 31, 2018, four customers represented approximately 67% of our consolidated accounts receivable. As of December 31, 2017, two customers represented approximately 69% of our consolidated accounts receivable. Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2018 are as follows. ● Hewlett-Packard Company – 35% ● Epson – 14% ● Canon – 12% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2017 are as follows. ● Hewlett-Packard Company – 28% ● Canon – 17% ● Bosch – 10% The Company conducts business in the United States, Europe and Asia. At December 31, 2018, the Company maintained approximately $2,537,000, $7,187,000 and $72,000 of its net assets in the United States, Europe and Asia, respectively. At December 31, 2017, the Company maintained approximately $2,373,000, $5,418,000 and $72,000 of its net assets in the United States, Europe and Asia, respectively. Revenue Recognition We recognize revenue when control of products is transferred to our customers, and when services are completed and accepted by our customers; the amount of revenue we recognize reflects the consideration we expect to receive for those products or services. Our contracts with customers may include combinations of products and services, for example, a contract that includes products and related engineering services. We structure our contracts such that distinct performance obligations, such as product sales or license fees, and related engineering services, are clearly defined in each contract. Sales of license fees and AirBar and sensor modules are on a per-unit basis; therefore, we generally satisfy performance obligations as units are shipped to our customers. Non-recurring engineering service performance obligations are satisfied as work is performed and accepted by our customers. We recognize revenue net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat all product shipping and handling charges (regardless of when they occur) as activities to fulfill the promise to transfer goods, therefore we treat all shipping and handling charges as expenses. Licensing Revenues: We earn revenue from licensing our 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 to us 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. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when the license is made available to the customer and the customer has a right to use that license. At the end of each reporting period, we record unbilled license fees, using prior royalty revenue data by customer to make accurate estimates of those royalties. Explicit return rights are not offered to customers. There have been no returns through December 31, 2018. Engineering Services: For technology license or sensor module contracts that require modification or customization of the underlying technology to adapt that technology to customer use, we determine whether the technology license or sensor module, and engineering consulting services represent separate performance obligations. We perform our analysis on a contract-by-contract basis. If there are separate performance obligations, we determine the standalone selling price (“SSP”) of each separate performance obligation to properly recognize revenue as each performance obligation is satisfied. We provide engineering consulting services to our customers under a signed Statement of Work (“SOW”). Deliverables and payment terms are specified in each SOW. We generally charge an hourly rate for engineering services, and we recognize revenue as engineering services specified in contracts are completed and accepted by our customers. Any upfront payments we receive for future non-recurring engineering services are recorded as unearned revenue until that revenue is earned. We believe that recognizing non-recurring engineering services revenues as progress towards completion of engineering services and customer acceptance of those services occurs best reflects the economics of those transactions, because engineering services as tracked in our systems correspond directly with the value to our customers of our performance completed to date. Hours performed for each engineering project are tracked and reflect progress made on each project and are charged at a consistent hourly rate. Revenues from engineering services contracts that are short-term in nature are recorded when those services are complete and accepted by customers. Revenues from engineering services contracts with substantive defined deliverables for which payment terms in the SOW are commensurate with the efforts required to produce such deliverables are recognized as they are completed and accepted by customers. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the years ended December 31, 2018 and 2017, no losses related to SOW projects were recorded. Optical Sensor Modules Revenues: We earn revenue from sales of sensor modules hardware products 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 through distributors or directly to end users. These distributors are generally given business terms that allow them to return unsold inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs. Our sales agreements generally provide customers with limited rights of return and warranty provisions. The timing of revenue recognition related to AirBar modules depends upon how each sale is transacted - either point-of-sale or through distributors. We recognize revenue for AirBar modules sold point-of-sale (online sales and other direct sales to customers) when we provide the promised product to the customer. Because we generally use distributors to provide AirBar and sensor modules to our customers, however, we analyze the terms of distributor agreements to determine when control passes from us to our distributors. For sales of AirBar and sensor modules sold through distributors, revenues are recognized when our distributors obtain control over our products. Control passes to our distributors when we have a present right to payment for products sold to distributors, the distributors have legal title to and physical possession of products purchased from us, and the distributors have significant risks and rewards of ownership of products purchased. 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. Under U.S. GAAP, companies may make reasonable aggregations and approximations of returns data to accurately estimate returns. Our AirBar returns and warranty experience to date has enabled us to make reasonable returns estimates, which are supported by the fact that our product sales involve homogenous transactions. The reserve for future sales returns is recorded as a reduction of our accounts receivable and revenue and was insignificant as of December 31, 2018 and 2017. 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. The following table presents disaggregated revenues by market for the years ended December 31, 2018 and 2017 (dollars in thousands): Year ended Year ended Amount Percentage Amount Percentage Net license revenues from automotive $ 1,627 19 % $ 2,148 21 % Net license revenues from consumer electronics 6,327 74 % 6,536 64 % Net revenues from sensor modules 227 3 % 814 8 % Net revenues from non-recurring engineering 357 4 % 743 7 % $ 8,538 100 % $ 10,241 100 % Significant Judgments Our contracts with customers may include promises to transfer multiple products and services to a customer, particularly when one of our customers contracts with us for a product and related engineering services fees for customizing that product for our customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment. Judgment may also be required to determine the SSP for each distinct performance obligation identified, although we generally structure our contracts such that performance obligations and pricing for each performance obligation are specifically addressed. We currently have no outstanding contracts with multiple performance obligations; however, we recently negotiated a contract that may include multiple performance obligations in the future. Judgment is also required to determine when control of products passes from us to our distributors, as well as the amounts of product that may be returned to us. Our products are sold with a right of return, and we may provide other credits or incentives to our customers, which could result in variability when determining the amount of revenue to recognize. At the end of each reporting period, we use product returns history and additional information that becomes available to estimate returns and credits. We do not recognize revenue if it is probable that a significant reversal of any incremental revenue would occur. Finally, judgment is required to determine the amount of unbilled license fees at the end of each reporting period. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when we have an unconditional right to receive future payments from customers, and we record unearned deferred revenue when we receive prepayments or upfront payments for goods or services from our customers. The following table presents accounts receivable and deferred revenues as of December 31, 2018 and 2017 (dollars in thousands): December 31, December 31, Accounts receivable and unbilled revenue $ 1,830 $ 1,010 Deferred revenues 75 1,248 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled revenues (contract assets), and customer advances and deposits or deferred revenue (contract liabilities) on the consolidated balance sheets. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets; contract assets are generally classified as current. The Company sometimes receives advances or deposits from its customers before revenue is recognized, which are reported as contract liabilities and are generally classified as current. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The opening balance of current accounts receivable, net of allowance for doubtful accounts, was $2.2 million as of January 1, 2018. As of December 31, 2018, and 2017, accounts receivable, net of allowance for doubtful accounts, were $1.8 million and $1.0 million, respectively, and are included in current assets on our consolidated balance sheets. There are no long-term accounts receivable related to contracts. The opening balance of deferred revenues was $0.9 million as of January 1, 2018. As of December 31, 2018, and December 31, 2017, deferred revenues were $75,000 and $1.2 million, respectively, and are included in current liabilities on our consolidated balance sheets. There are no long-term liabilities related to contracts. We do not anticipate impairment of our contract asset related to license fee revenues, given the creditworthiness of our customers whose invoices comprise the balance in that asset account. We will continue to monitor the timeliness of receipts from those customers, however, to assess whether the contract asset has been impaired. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. The balance in the allowance for doubtful accounts was $149,000 as of December 31, 2018 and 2017. Payment terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees and sensor modules to our resellers and distributors. Where revenue recognition timing differs from invoice timing, we have determined that our contracts do not include a significant financing component. Our intent is to provide our customers with consistent invoicing terms for the convenience of our customers, not to receive financing from our customers. Costs to Obtain Contracts We record the incremental costs of obtaining a contract with a customer as an asset, if we expect the benefit of those costs to cover a period greater than one year. We currently have no incremental costs that must be capitalized. We expense as incurred costs of obtaining a contract when the amortization period of those costs would have been less than or equal to one year. 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 $ 35 $ 11 Provisions for warranty issued (18 ) 24 Balance at end of period $ 17 $ 35 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 consist primarily of prepayments for license fees, and other products or services for which we have been paid in advance, and earn the revenue when we transfer control of the product or service. Deferred revenues may also include upfront payments for consulting services to be performed in the future, such as non-recurring engineering services. We defer license fees until we have met all accounting requirements for revenue recognition, which is when a license is made available to a customer and that customer has a right to use the license. Engineering development fee revenues are deferred until engineering services have been completed and accepted by our customers. We defer AirBar and sensor modules revenues until distributors sell the products to their end customers. The following table presents our deferred revenues by segment (in thousands) Years ended December 31, 2018 2017 Deferred license fees $ - $ 1,089 Deferred AirBar revenues 59 137 Deferred sensor modules revenues 16 22 $ 75 $ 1,248 The opening balance of deferred revenues after adjustment pursuant to ASC 606 was $0.9 million as of January 1, 2018. Changes in deferred revenues were as follows (in thousands): December 31, 2018 Balances Impact of Revenue As Deferred revenues $ 213 $ (138 ) $ 75 Contracted revenue not yet recognized was $75,000 as of December 31, 2018; we expect to recognize approximately 100% of that revenue over the next twelve months. 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 $120,000 and $602,000 for the years ended December 31, 2018 and 2017, 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. We account for equity instruments issued to non-employees at their estimated fair value. 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 We recognize any noncontrolling interest, also known as a minority interest, as a separate line item in equity in the consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to us. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. We include the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the consolidated statements of operations. 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, 2018 and 2017. 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, 2018 and 2017, 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, 2018 and 2017. We effected a 1-for-10 reverse stock split on October 1, 2018. All shares of common stock and potential common stock equivalents in the calculations used to determine weighted average number of shares of common stock outstanding have been adjusted to reflect the effects of the reverse stock split for all periods presented. 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, 2018 and 2017 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 13). Other Comprehensive Income (Loss) Our comprehensive income (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 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, 2018 2017 Swedish Krona 8.70 8.54 Japanese Yen 110.43 112.15 South Korean Won 1,100.50 1,128.65 Taiwan Dollar 30.15 30.41 Exchange rate for the consolidated balance sheets was as follows: Years ended December 31, 2018 2017 Swedish Krona 8.87 8.21 Japanese Yen 109.69 112.65 South Korean Won 1,113.63 1,066.31 Taiwan Dollar 30.61 29.66 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 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [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, 2018 2017 Prepaid insurance $ 168 $ 136 Prepaid rent 41 68 VAT receivable 176 336 Prepaid inventory 120 494 Advances to suppliers 155 545 Other 230 257 Total prepaid expenses and other current assets $ 890 $ 1,836 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consist of the following (in thousands): As of December 31, 2018 2017 Computers, software, furniture and fixtures $ 1,407 $ 1,313 Equipment under capital lease 3,525 3,590 Less accumulated depreciation and amortization (2,448 ) (1,576 ) Property and equipment, net $ 2,484 $ 3,327 Depreciation and amortization expense was $1.0 million for each of the years ended December 31, 2018 and 2017, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consist of the following (in thousands): As of December 31, 2018 2017 Accrued returns and warranty $ 17 $ 35 Accrued consulting fees and other 248 142 Total accrued expenses $ 265 $ 177 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [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 2018 and 2017. The three levels of the fair value hierarchy are described as follows: Level 1: Applies to assets or liabilities for which there are observable quoted prices 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 included in Level 1. We had no Level 2 assets or liabilities. Level 3: Applies to assets or liabilities for which inputs are unobservable, and those inputs that are significant to the measurement of the fair value of the assets or liabilities. We had no Level 3 assets or liabilities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock As a result of the reverse stock split, every ten shares of issued and outstanding common stock were converted into one share of common stock, without any change in the par value per share. No fractional shares were issued, therefore shareholders entitled to receive a fractional share in connection with the reverse stock split received a cash payment instead. There was no financial impact to the Company’s condensed consolidated financial statements. All shares and per share information in this Form 10-K has been retroactively adjusted for all periods presented to reflect the reverse stock split, including reclassifying any amount equal to the reduction in par value of common stock to additional paid-in capital. On November 23, 2018, a holder of 1 share of Series B Preferred stock converted into 132 shares of our common stock. On December 28, 2018, a Securities Purchase Agreement was entered into with foreign investors, as part of a non-brokered private placement pursuant to which a total of 2,940,767 shares of common stock were issued. See Note 1 for more information. In August 2017, a Securities Purchase Agreement was entered into with accredited investors, as part of a private placement pursuant to which a total of 975,000 shares of common stock were issued. See Note 1 for more information. Warrants and Other Common Stock Activity During the years ended December 31, 2018 and 2017, there were no warrants exercised. A summary of all warrant activity is set forth below: Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average January 1, 2017 791,368 $ 6.19 5.13 Issued 325,000 20.00 - December 31, 2017 1,116,368 $ 10.18 3.68 Issued - - - Expired/forfeited - - - Exercised - - - Outstanding and exercisable, December 31, 2018 1,116,368 $ 10.18 2.68 Outstanding Warrants to Purchase Common Stock as of December 31, 2018: Description Issue Date Exercise Shares Expiration August 2016 Prefunded Warrants (1) 08/16/16 $ 10.00 360,000 02/16/22 August 2016 Purchase Warrants 08/17/16 $ 11.20 431,368 02/17/22 August 2017 Purchase Warrants 08/08/17 $ 20.00 325,000 08/08/20 Total Warrants Outstanding 1,116,368 (1) Under the terms of the prefunded warrants, the warrant holder prepaid $9.90 of the original $10.00 warrant per share exercise price at the time of issuance of the warrant. The remaining $0.10 exercise price is required to be paid in full prior to the issuance of any common stock under the terms of the prefunded warrant agreement. As a result of the December 2018 private placements and previous warrants, we have issued or reserved 27,305 more than our available shares of authorized common stock, even though a total of 333,334 warrants cannot be legally exercised. We automatically come into compliance on April 26, 2019, when 44,300 stock options are expired because their original issuance terms is reached, and we anticipate proposing an increase in our authorized common stock at our 2019 Annual Meeting of Stockholders. The estimated fair value of warrants that would be reclassified as a result of the insufficient authorized shares was determined to be insignificant. 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, 2018: Shares of Preferred Stock Not Exchanged as of December 31, 2018 Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at December 31, 2018 Series B Preferred Stock 82 132.07 10,830 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 8. 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 certain options granted to certain Swedish employees, 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, 210,000 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, 2018, 30,000 stock options were granted under the 2015 Plan. Accordingly, as of December 31, 2018, we had two equity incentive plans: ● The 2006 Equity Incentive Plan (the “2006 Plan”). ● The 2015 Equity Incentive Plan (the “2015 Plan”). The following table summarizes information with respect to all options to purchase shares of common stock outstanding under the 2006 Plan and the 2015 Plan at December 31, 2018: Options Outstanding Range of Exercise Price Number Outstanding and exercisable at 12/31/18 Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ 0 - $ 15.00 32,500 2.46 $ 14.95 $ 15.01 - $ 42.50 55,300 0.76 $ 40.62 $ 42.51 - $ 62.10 12,000 1.60 $ 59.60 99,800 1.41 $ 34.55 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, 2017 184,600 $ 43.90 $ - Options granted - - - Options exercised - - - Options cancelled or expired (9,000 ) 82.10 - Options outstanding – December 31, 2017 175,600 $ 41.99 2.18 - Options granted 30,000 15.00 - Options exercised - - - Options cancelled or expired (105,800 ) 41.36 - Options outstanding and vested – December 31, 2018 99,800 $ 34.55 1.41 $ - There were 30,000 stock options granted during the years ended December 31, 2018. No stock options were granted in 2017. The assumptions used to value stock options granted to directors, employees and consultants during the year ended December 31, 2018 are as follows: For the year ended December 31, 2018 Annual dividend yield - Expected life (years) 1.5 Risk-free interest rate 2.19 % Expected volatility 71.12 % During the years ended December 31, 2018 and 2017, we recorded $29,000 and $72,000, 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. 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. Stock-Based Compensation The stock-based compensation expense for the years ended December 31, 2018 and 2017 reflects the estimated fair value of the vested portion of options granted to directors, employees and non-employees. Years ended December 31, 2018 2017 (In thousands) Research and development $ - $ - Sales and marketing 6 50 General and administrative 23 22 Stock-based compensation expense $ 29 $ 72 There is no remaining unrecognized expense related to stock options as of December 31, 2018. 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 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, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. 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, 2018 and 2017. 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, 2018 and 2017. 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 our intellectual property into an Application Specific Integrated Circuit (“ASIC”). The NN1001 ASIC only can be sold by Texas Instruments exclusively to our licensees. 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. Through December 31, 2015, all payments under the NN1001 Agreement have been made. On April 25, 2013, we entered into an Analog Device Development Agreement with an effective date of December 6, 2012 (the “NN1002 Agreement”) with Texas Instruments (“TI”) pursuant to which TI agreed to integrate our intellectual property into an ASIC. Under the terms of the NN1002 Agreement, we agreed to pay TI $500,000 of non-recurring engineering costs at the rate of $0.25 per ASIC for each of the first 2 million ASICs sold. As of December 31, 2018, we had made no payments to TI under the NN1002 Agreement. On December 4, 2014, we entered into an Analog Device Development Agreement (the “NN1003 Agreement”) with STMicroelectronics International N.V. (“STMicro”) pursuant to which STMicro agreed to integrate our intellectual property into an ASIC. The NN1003 ASIC only can be sold by STMicro exclusively to our licensees. Under the terms of the NN1003 Agreement, we agreed to reimburse STMicro up to $835,000 of non-recurring engineering costs. As of December 31, 2018, we paid a total of $835,000 under the NN1003 agreement. Operating Leases On August 22, 2016, we entered into a lease of office space located at 2880 Zanker Road, San Jose, CA 95134. The lease is renewed monthly. On October 1, 2016 we entered into a lease of office space located at 405 Elpulimento Shinjuku, 6-7-1, Shinjuku-ku, Tokyo, Japan. The lease is valid through September 30, 2020 and can be terminated with two months’ written notice before the termination date. On July 1, 2014, Neonode Technologies AB entered into a lease for 7,007 square feet of office space located at Storgatan 23C, Stockholm, Sweden. The lease is extended on a yearly basis unless written notice three months prior to expiration date. On December 1, 2015, Pronode Technologies AB entered into a lease agreement for 9,040 square feet of workshop located at Faktorvägen 17, Kungsbacka, Sweden. The lease is valid through December 9, 2020 and can be terminated with nine months’ written notice before the termination date. In January 2015, our subsidiary Neonode Korea Ltd. entered into a lease agreement located at B-1807, Daesung D-Polis. 543-1, Seoul, South Korea. The lease may be cancelled with 2 months’ notice. On December 1, 2015, Neonode Taiwan Ltd. entered into a lease agreement located at Rm. 2406, International Trade Building, Keelung Rd., Sec.1, Taipei, Taiwan. The lease is renewed monthly. For the years ended December 31, 2018 and 2017, we recorded approximately $687,000 and $681,000, 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, 2018 is as follows (in thousands): Years ending December 31, Total 2019 $ 457 2020 89 2021 3 $ 549 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 six-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 three to five-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 these leases is approximately 3% per annum. One of the leases is a hire-purchase agreement where the equipment is required to be paid off after five 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 approximately 3% per annum. In 2017, we entered into a lease for component production equipment. Under the terms of the lease agreement the lease will be renewed with one year at the time at the end of the original four-year lease term. In accordance with relevant accounting guidance the lease is classified as a capital lease. The lease payments and depreciation periods began in May 2017 when the equipment went into service. The implicit interest rate of this lease is approximately 1.5% per annum. In 2018, we entered into an additional lease for component production equipment. Under the terms of the lease agreement the lease will be renewed with one year at the time at the end of the original four-year lease term. In accordance with relevant accounting guidance the lease is classified as a capital lease. The lease payments and depreciation periods began in August 2018 when the equipment went into service. The implicit interest rate of this lease is approximately 1.5% per annum. The following is a schedule of minimum future rentals on the non-cancelable capital leases as of December 31, 2018 (in thousands): Year ending December 31, Total 2019 $ 602 2020 616 2021 502 2022 39 Total minimum payments required $ 1,759 Less amount representing interest (56 ) Present value of net minimum lease payments $ 1,703 Less current portion (570 ) $ 1,133 Equipment under capital lease $ 3,525 Less: accumulated depreciation (1,391 ) Net book value $ 2,134 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 10. Segment Information Our Company has one reportable segment, which is comprised of the touch technology licensing and sensor module business. We report revenues from external customers based on the country where the customer is located. The following table presents net revenues by geographic region for the years ended December 31, 2018, and 2017 (dollars in thousands): 2018 Amount Percentage United States $ 4,247 50 % Japan 2,877 34 % Germany 803 9 % China 221 3 % Taiwan 189 2 % South Korea 48 1 % Other 153 1 % Total $ 8,538 100 % 2017 Amount Percentage United States $ 4,187 41 % Japan 2,800 27 % Germany 1,188 12 % China 737 7 % Sweden 515 5 % Taiwan 268 3 % South Korea 176 2 % Singapore 147 1 % Canada 89 1 % Other 134 1 % Total $ 10,241 100 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Loss before income taxes was distributed geographically for the years ended December 31, as follows (in thousands): 2018 2017 Domestic $ (1,583 ) $ (2,302 ) Foreign (2,348 ) (3,249 ) Total $ (3,931 ) $ (5,551 ) The provision (benefit) for income taxes is as follows for the years ended December 31 (in thousands): 2018 2017 Current Federal $ - $ - State 2 2 Foreign 11 (58 ) Change in deferred Federal (109 ) 6,780 Federal valuation allowance 109 (6,780 ) State (1 ) 104 State valuation allowance 1 (104 ) Foreign (322 ) (453 ) Foreign valuation allowance 322 453 Total current $ 13 $ (56 ) 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: 2018 2017 Amounts at statutory tax rates 21 % 34 % Federal tax reform – deferred rate change - (170 )% Accounting method adoption - 11 % Foreign losses taxed at different rates (1 )% (7 )% Foreign withholding tax - 1 % Stock-based compensation (7 ) - Other (2 )% (1 )% Total 11 % (132 )% Valuation allowance (11 )% 133 % Effective tax rate - % 1 % Significant components of the deferred tax asset balances at December 31 are as follows (in thousands): 2018 2017 Deferred tax assets: Accruals $ 71 $ 111 Stock compensation 567 789 Net operating losses 14,982 14,288 Basis difference in fixed assets - - Total deferred tax assets $ 15,620 $ 15,188 Valuation allowance (15,620 ) (15,188 ) 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, 2018, we had federal, state and foreign net operating losses of $59.7 million, $20.0 million and $4.7 million, respectively. The federal loss carryforward begins to expire in 2028, and the California loss carryforward begins to expire in 2030. The foreign loss carryforward, which is generated in Sweden, does not expire. 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, 2018, we had not completed the determination of the amount to be limited under the provision. We follow the provisions of accounting guidance which includes a two-step approach to recognizing, derecognizing and measuring uncertain tax positions. There were no unrecognized tax benefits for the years ended December 31, 2018 and 2017. 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, 2018 and 2017 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, 2018 and 2017, we had no accrued interest and penalties related to uncertain tax matters. As of December 31, 2018, 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 2017 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, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 12. 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, 2018 and 2017 were $413,000 and $368,000, 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, 2018 and 2017 were $6,000 and $6,000, respectively. In Taiwan, we contribute six percent (6%) of the employee’s annual salary to a pension fund which agrees with Taiwan’s Labor Pension Act. Contributions relating to the Taiwanese pension fund for the years ended December 31, 2018 and 2017 were $4,000 and $4,000, respectively. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Loss per common share: | |
Net Loss per Share | 13. Net Loss per Share Basic net loss per common share for the years ended December 31, 2018 and 2017 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 350,000 and 415,000 outstanding stock warrants, 11,000 and 11,000 shares issuable upon conversion of preferred stock and 0 and 0 stock options are excluded from the diluted earnings per share calculation for the years ended December 31, 2018 and 2017, respectively, due to their anti-dilutive effect. (In thousands, except per share amounts) Years ended December 31, 2018 2017 BASIC AND DILUTED Weighted average number of common shares outstanding 5,884 5,289 Net loss attributable to Neonode Inc. $ (3,060 ) $ (4,705 ) Net loss per share basic and diluted $ (0.52 ) $ (0.89 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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. The consolidated balance sheets at December 31, 2018 and 2017 and the consolidated statements of operations, comprehensive loss and cash flows for the years ended 2018 and 2017 include our accounts and those of our wholly owned subsidiaries as well as Pronode 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: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price of performance obligations, variable consideration, and other obligations such as product returns and refunds, and product warranties; provisions for uncollectible receivables; 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 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 U.S., Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the U.S. 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 Accounts receivable is 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. 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 as of December 31, 2018 and 2017. |
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. Costs capitalized in projects in process were $1,000 as of December 31, 2017. There were no costs capitalized in projects in process as of December 31, 2018. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out method (“FIFO”) valuation method. 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. During the fourth quarter of 2017, after a comprehensive evaluation of our AirBar business we recorded a $1.1 million write-down, included in our cost of goods sold, to reduce our AirBar specific component and finished goods inventory to estimated net realizable value and to revalue the purchase price from the initial order of one component by $0.12 each. The component was originally valued at an average price basis but due to slow selling inventory, we revalued at a higher specific price. The total price adjustment related to this component included in cost of sales was approximately $0.1 million. In addition, we recorded a $0.1 million write-down related to this component repricing which is included in our Research and Development expense. We also recorded a $0.5 million write-off related to production development units, included in inventory, which is included in our Research and Development expense. As of December 31, 2018, the Company’s inventory consists primarily of components that will be used in the manufacturing of our sensor modules. We segregate inventory for reporting purposes by raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods are as follows: December 31, December 31, 2018 2017 Raw materials $ 246 164 Work-in-Process 220 231 Finished goods 753 759 Ending inventory $ 1,219 1,154 |
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, 2018. 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, 2018, 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 (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying consolidated statements of operations and were $(58,000) and $(84,000) during the years ended December 31, 2018 and 2017, respectively. Foreign currency translation gains or (losses) were $(357,000) and $72,000 during the years ended December 31, 2018 and 2017, 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, 2018, four customers represented approximately 67% of our consolidated accounts receivable. As of December 31, 2017, two customers represented approximately 69% of our consolidated accounts receivable. Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2018 are as follows. ● Hewlett-Packard Company – 35% ● Epson – 14% ● Canon – 12% Customers who accounted for 10% or more of our net revenues during the year ended December 31, 2017 are as follows. ● Hewlett-Packard Company – 28% ● Canon – 17% ● Bosch – 10% The Company conducts business in the United States, Europe and Asia. At December 31, 2018, the Company maintained approximately $2,537,000, $7,187,000 and $72,000 of its net assets in the United States, Europe and Asia, respectively. At December 31, 2017, the Company maintained approximately $2,373,000, $5,418,000 and $72,000 of its net assets in the United States, Europe and Asia, respectively. |
Revenue Recognition | Revenue Recognition We recognize revenue when control of products is transferred to our customers, and when services are completed and accepted by our customers; the amount of revenue we recognize reflects the consideration we expect to receive for those products or services. Our contracts with customers may include combinations of products and services, for example, a contract that includes products and related engineering services. We structure our contracts such that distinct performance obligations, such as product sales or license fees, and related engineering services, are clearly defined in each contract. Sales of license fees and AirBar and sensor modules are on a per-unit basis; therefore, we generally satisfy performance obligations as units are shipped to our customers. Non-recurring engineering service performance obligations are satisfied as work is performed and accepted by our customers. We recognize revenue net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat all product shipping and handling charges (regardless of when they occur) as activities to fulfill the promise to transfer goods, therefore we treat all shipping and handling charges as expenses. Licensing Revenues: We earn revenue from licensing our 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 to us 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. For technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize technology license revenue when the license is made available to the customer and the customer has a right to use that license. At the end of each reporting period, we record unbilled license fees, using prior royalty revenue data by customer to make accurate estimates of those royalties. Explicit return rights are not offered to customers. There have been no returns through December 31, 2018. Engineering Services: For technology license or sensor module contracts that require modification or customization of the underlying technology to adapt that technology to customer use, we determine whether the technology license or sensor module, and engineering consulting services represent separate performance obligations. We perform our analysis on a contract-by-contract basis. If there are separate performance obligations, we determine the standalone selling price (“SSP”) of each separate performance obligation to properly recognize revenue as each performance obligation is satisfied. We provide engineering consulting services to our customers under a signed Statement of Work (“SOW”). Deliverables and payment terms are specified in each SOW. We generally charge an hourly rate for engineering services, and we recognize revenue as engineering services specified in contracts are completed and accepted by our customers. Any upfront payments we receive for future non-recurring engineering services are recorded as unearned revenue until that revenue is earned. We believe that recognizing non-recurring engineering services revenues as progress towards completion of engineering services and customer acceptance of those services occurs best reflects the economics of those transactions, because engineering services as tracked in our systems correspond directly with the value to our customers of our performance completed to date. Hours performed for each engineering project are tracked and reflect progress made on each project and are charged at a consistent hourly rate. Revenues from engineering services contracts that are short-term in nature are recorded when those services are complete and accepted by customers. Revenues from engineering services contracts with substantive defined deliverables for which payment terms in the SOW are commensurate with the efforts required to produce such deliverables are recognized as they are completed and accepted by customers. Estimated losses on all SOW projects are recognized in full as soon as they become evident. In the years ended December 31, 2018 and 2017, no losses related to SOW projects were recorded. Optical Sensor Modules Revenues: We earn revenue from sales of sensor modules hardware products 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 through distributors or directly to end users. These distributors are generally given business terms that allow them to return unsold inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs. Our sales agreements generally provide customers with limited rights of return and warranty provisions. The timing of revenue recognition related to AirBar modules depends upon how each sale is transacted - either point-of-sale or through distributors. We recognize revenue for AirBar modules sold point-of-sale (online sales and other direct sales to customers) when we provide the promised product to the customer. Because we generally use distributors to provide AirBar and sensor modules to our customers, however, we analyze the terms of distributor agreements to determine when control passes from us to our distributors. For sales of AirBar and sensor modules sold through distributors, revenues are recognized when our distributors obtain control over our products. Control passes to our distributors when we have a present right to payment for products sold to distributors, the distributors have legal title to and physical possession of products purchased from us, and the distributors have significant risks and rewards of ownership of products purchased. 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. Under U.S. GAAP, companies may make reasonable aggregations and approximations of returns data to accurately estimate returns. Our AirBar returns and warranty experience to date has enabled us to make reasonable returns estimates, which are supported by the fact that our product sales involve homogenous transactions. The reserve for future sales returns is recorded as a reduction of our accounts receivable and revenue and was insignificant as of December 31, 2018 and 2017. 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. The following table presents disaggregated revenues by market for the years ended December 31, 2018 and 2017 (dollars in thousands): Year ended Year ended Amount Percentage Amount Percentage Net license revenues from automotive $ 1,627 19 % $ 2,148 21 % Net license revenues from consumer electronics 6,327 74 % 6,536 64 % Net revenues from sensor modules 227 3 % 814 8 % Net revenues from non-recurring engineering 357 4 % 743 7 % $ 8,538 100 % $ 10,241 100 % |
Significant Judgments | Significant Judgments Our contracts with customers may include promises to transfer multiple products and services to a customer, particularly when one of our customers contracts with us for a product and related engineering services fees for customizing that product for our customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment. Judgment may also be required to determine the SSP for each distinct performance obligation identified, although we generally structure our contracts such that performance obligations and pricing for each performance obligation are specifically addressed. We currently have no outstanding contracts with multiple performance obligations; however, we recently negotiated a contract that may include multiple performance obligations in the future. Judgment is also required to determine when control of products passes from us to our distributors, as well as the amounts of product that may be returned to us. Our products are sold with a right of return, and we may provide other credits or incentives to our customers, which could result in variability when determining the amount of revenue to recognize. At the end of each reporting period, we use product returns history and additional information that becomes available to estimate returns and credits. We do not recognize revenue if it is probable that a significant reversal of any incremental revenue would occur. Finally, judgment is required to determine the amount of unbilled license fees at the end of each reporting period. |
Contract Balances | Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when we have an unconditional right to receive future payments from customers, and we record unearned deferred revenue when we receive prepayments or upfront payments for goods or services from our customers. The following table presents accounts receivable and deferred revenues as of December 31, 2018 and 2017 (dollars in thousands): December 31, December 31, Accounts receivable and unbilled revenue $ 1,830 $ 1,010 Deferred revenues 75 1,248 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled revenues (contract assets), and customer advances and deposits or deferred revenue (contract liabilities) on the consolidated balance sheets. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets; contract assets are generally classified as current. The Company sometimes receives advances or deposits from its customers before revenue is recognized, which are reported as contract liabilities and are generally classified as current. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The opening balance of current accounts receivable, net of allowance for doubtful accounts, was $2.2 million as of January 1, 2018. As of December 31, 2018, and 2017, accounts receivable, net of allowance for doubtful accounts, were $1.8 million and $1.0 million, respectively, and are included in current assets on our consolidated balance sheets. There are no long-term accounts receivable related to contracts. The opening balance of deferred revenues was $0.9 million as of January 1, 2018. As of December 31, 2018, and December 31, 2017, deferred revenues were $75,000 and $1.2 million, respectively, and are included in current liabilities on our consolidated balance sheets. There are no long-term liabilities related to contracts. We do not anticipate impairment of our contract asset related to license fee revenues, given the creditworthiness of our customers whose invoices comprise the balance in that asset account. We will continue to monitor the timeliness of receipts from those customers, however, to assess whether the contract asset has been impaired. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. The balance in the allowance for doubtful accounts was $149,000 as of December 31, 2018 and 2017. Payment terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees and sensor modules to our resellers and distributors. Where revenue recognition timing differs from invoice timing, we have determined that our contracts do not include a significant financing component. Our intent is to provide our customers with consistent invoicing terms for the convenience of our customers, not to receive financing from our customers. |
Costs to Obtain Contracts | Costs to Obtain Contracts We record the incremental costs of obtaining a contract with a customer as an asset, if we expect the benefit of those costs to cover a period greater than one year. We currently have no incremental costs that must be capitalized. We expense as incurred costs of obtaining a contract when the amortization period of those costs would have been less than or equal to one year. |
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 $ 35 $ 11 Provisions for warranty issued (18 ) 24 Balance at end of period $ 17 $ 35 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 Deferred revenues consist primarily of prepayments for license fees, and other products or services for which we have been paid in advance, and earn the revenue when we transfer control of the product or service. Deferred revenues may also include upfront payments for consulting services to be performed in the future, such as non-recurring engineering services. We defer license fees until we have met all accounting requirements for revenue recognition, which is when a license is made available to a customer and that customer has a right to use the license. Engineering development fee revenues are deferred until engineering services have been completed and accepted by our customers. We defer AirBar and sensor modules revenues until distributors sell the products to their end customers. The following table presents our deferred revenues by segment (in thousands) Years ended December 31, 2018 2017 Deferred license fees $ - $ 1,089 Deferred AirBar revenues 59 137 Deferred sensor modules revenues 16 22 $ 75 $ 1,248 The opening balance of deferred revenues after adjustment pursuant to ASC 606 was $0.9 million as of January 1, 2018. Changes in deferred revenues were as follows (in thousands): December 31, 2018 Balances Impact of Revenue As Deferred revenues $ 213 $ (138 ) $ 75 Contracted revenue not yet recognized was $75,000 as of December 31, 2018; we expect to recognize approximately 100% of that revenue over the next twelve months. |
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 $120,000 and $602,000 for the years ended December 31, 2018 and 2017, 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. We account for equity instruments issued to non-employees at their estimated fair value. 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 We recognize any noncontrolling interest, also known as a minority interest, as a separate line item in equity in the consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to us. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. We include the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the consolidated statements of operations. 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, 2018 and 2017. 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, 2018 and 2017, 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, 2018 and 2017. We effected a 1-for-10 reverse stock split on October 1, 2018. All shares of common stock and potential common stock equivalents in the calculations used to determine weighted average number of shares of common stock outstanding have been adjusted to reflect the effects of the reverse stock split for all periods presented. 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, 2018 and 2017 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 13). |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Our comprehensive income (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 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, 2018 2017 Swedish Krona 8.70 8.54 Japanese Yen 110.43 112.15 South Korean Won 1,100.50 1,128.65 Taiwan Dollar 30.15 30.41 Exchange rate for the consolidated balance sheets was as follows: Years ended December 31, 2018 2017 Swedish Krona 8.87 8.21 Japanese Yen 109.69 112.65 South Korean Won 1,113.63 1,066.31 Taiwan Dollar 30.61 29.66 |
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”) 2014-09, “ Revenues from Contracts with Customers (Topic 606) We adopted the new standard on January 1, 2018. For cost and time efficiency purposes, we used the modified retrospective (“cumulative-effect”) approach to implement the new revenue recognition standard. We elected to apply that approach only to contracts not substantially complete at January 1, 2018. We may from time to time negotiate contract modifications to contracts with our customers. While using the cumulative-effect approach for our revenue recognition implementation, we found that there was one contract that was modified before the beginning of the earliest reporting period presented. We elected to not apply the practical expedient related to contract modification because that contract was the only contract modified during the past several years, and we determined that the modified contract in substance represented a new contract for a new product. Therefore, the original contract and contract modification were treated as separate contracts for purposes of contract analysis. Use of the cumulative-effect approach required us to make an opening adjustment to equity rather than recast prior year financial data; therefore, comparability of financial statements was impacted. The most significant impact of the standard going forward relates to our accounting for license fee revenues. In prior years, we recognized license fee revenues after receipt of royalty reports from our customers; those royalty reports were often subject to reporting lags of five days to three months. We have requested that our customers provide more timely license fee royalty reports (with a maximum one-month lag), and we estimate any license fee revenue still subject to lag reporting. We use our royalty history with each customer to most accurately estimate the remaining royalties not yet reported to us at the end of each reporting period. There was no adjustment related to AirBar and sensor modules; however, there will be a change in the timing of revenue recognition in the future. The timing of revenue recognition related to our AirBar and sensor modules depends upon how each sale is transacted - either point-of-sale or through distributors. Revenue recognition timing for AirBar modules sold point-of-sale (online sales and other direct sales to consumers) remains unchanged; revenue is recognized when we provide the promised product to the customer. In prior years, we did not recognize revenues related to our AirBar and sensor modules sold through distributors until those products were sold through to end customers. For sales of AirBar and sensor modules through distributors, revenues are now recognized when our distributors obtain control over our products; control passes to our distributors depending upon a number of factors. Although we are entitled to an optional exemption from disclosure of variable consideration related to AirBar and sensor modules under the new standard, we plan to continue to disclose variable consideration related to sales of AirBar and sensor modules. There was no cumulative adjustment related to non-recurring engineering fees, because all outstanding engineering projects were completed as of December 31, 2017. The following table summarizes the impact of the new revenue standard on the Company’s condensed consolidated statement of operations for 2018 and consolidated balance sheet as of December 31, 2018: 2018 Balances Impact As Revenue License fees $ 7,889 $ 65 $ 7,954 Sensor modules 227 - 227 Non-recurring engineering 357 - 357 Total Revenues $ 8,473 $ 65 $ 8,538 2018 Balances Impact As Assets Accounts receivable and unbilled revenue, net $ 320 $ 1,510 $ 1,830 Liabilities Deferred revenues $ 213 $ (138 ) $ 75 Equity Accumulated deficit $ (186,870 ) $ 1,648 $ (185,222 ) Adoption of the new standard resulted in an increase in accounts receivable and unbilled revenue, due to an adjustment to equity to record license fees that had not yet been reported, as well as a reduction of deferred revenues, due to an adjustment to equity to apply license fee prepayments to revenues. Adoption of the new revenue recognition standard had no impact on cash provided by or used in operating, financing, or investing activities on our condensed consolidated statements of cash flows. We implemented internal controls effective January 1, 2018 to ensure that we properly evaluate our contracts and review assumptions we make for revenue estimates, and we assessed the impact of the new accounting standard related to revenue recognition on our consolidated financial statements to facilitate our adoption of the new standard on January 1, 2018. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) The effective date of the new lease standard (ASC 842) is January 1, 2019, and we adopted the new standard on that date. Our lease standard implementation plan has been reviewed and approved by executive management. We are using the required modified retrospective approach, which allows us to make any necessary transition adjustments at January 1, 2019. We elected the optional transition method, which allows us to continue to use disclosures required by the prior standard during 2019, the year of adoption. There are also several practical expedients available to make the transition more efficient and cost-effective for companies. We elected the package of three practical expedients available to us; doing so will allow us to not reassess existing leases. We currently have a limited number of leased capital assets, all of which will be classified as finance leases under the new lease standard. We maintain a lease inventory for those assets; they are currently reported on our consolidated balance sheets and will continue to be reported on our consolidated balance sheets under the new standard. We also have a small number of leases which are currently classified as operating leases; we analyzed those leases, and will include two material operating leases on our consolidated balance sheets beginning January 1, 2019. We do not anticipate any equity adjustment related to our implementation of the new standard, and we will continue to provide disclosures related to leases. Because of the small number of assets we lease, we do not need to make systems changes to comply with the new standard. We plan to continue to track leased assets outside of our accounting systems. We do not expect material changes in financial ratios, leasing practices, or tax reporting. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments-Credit Losses (Topic 326) In July 2018, the FASB issued ASU No. 2018-09, “ Codification Improvements (Topic 740, among others) Income Taxes (Topic 740) In October 2016, the FASB issued ASU No. 2016-16, “ Intra-Entity Transfers of Assets Other Than Inventory |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of inventory | December 31, December 31, 2018 2017 Raw materials $ 246 164 Work-in-Process 220 231 Finished goods 753 759 Ending inventory $ 1,219 1,154 |
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 disaggregated revenues by market | Year ended Year ended Amount Percentage Amount Percentage Net license revenues from automotive $ 1,627 19 % $ 2,148 21 % Net license revenues from consumer electronics 6,327 74 % 6,536 64 % Net revenues from sensor modules 227 3 % 814 8 % Net revenues from non-recurring engineering 357 4 % 743 7 % $ 8,538 100 % $ 10,241 100 % |
Schedule of accounts receivable and deferred revenues | December 31, December 31, Accounts receivable and unbilled revenue $ 1,830 $ 1,010 Deferred revenues 75 1,248 |
Schedule of activity related to the product warranty liability | Year ended December 31, December 31, Balance at beginning of period $ 35 $ 11 Provisions for warranty issued (18 ) 24 Balance at end of period $ 17 $ 35 |
Schedule of deferred revenues by segment | Years ended December 31, 2018 2017 Deferred license fees $ - $ 1,089 Deferred AirBar revenues 59 137 Deferred sensor modules revenues 16 22 $ 75 $ 1,248 |
Schedule of changes in deferred revenues | December 31, 2018 Balances Impact of Revenue As Deferred revenues $ 213 $ (138 ) $ 75 |
Schedule of weighted average exchange rate for consolidated statements of operations | Years ended December 31, 2018 2017 Swedish Krona 8.70 8.54 Japanese Yen 110.43 112.15 South Korean Won 1,100.50 1,128.65 Taiwan Dollar 30.15 30.41 |
Schedule of exchange rate for consolidated balance sheets | Years ended December 31, 2018 2017 Swedish Krona 8.87 8.21 Japanese Yen 109.69 112.65 South Korean Won 1,113.63 1,066.31 Taiwan Dollar 30.61 29.66 |
Schedule of impact of the new revenue standard | 2018 Balances Impact As Revenue License fees $ 7,889 $ 65 $ 7,954 Sensor modules 227 - 227 Non-recurring engineering 357 - 357 Total Revenues $ 8,473 $ 65 $ 8,538 2018 Balances Impact As Assets Accounts receivable and unbilled revenue, net $ 320 $ 1,510 $ 1,830 Liabilities Deferred revenues $ 213 $ (138 ) $ 75 Equity Accumulated deficit $ (186,870 ) $ 1,648 $ (185,222 ) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expense and other current assets | As of December 31, 2018 2017 Prepaid insurance $ 168 $ 136 Prepaid rent 41 68 VAT receivable 176 336 Prepaid inventory 120 494 Advances to suppliers 155 545 Other 230 257 Total prepaid expenses and other current assets $ 890 $ 1,836 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of December 31, 2018 2017 Computers, software, furniture and fixtures $ 1,407 $ 1,313 Equipment under capital lease 3,525 3,590 Less accumulated depreciation and amortization (2,448 ) (1,576 ) Property and equipment, net $ 2,484 $ 3,327 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | As of December 31, 2018 2017 Accrued returns and warranty $ 17 $ 35 Accrued consulting fees and other 248 142 Total accrued expenses $ 265 $ 177 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Class of Stock [Line Items] | |
Summary of all warrant activity | Outstanding and exercisable Warrants Weighted Average Exercise Price Weighted Average January 1, 2017 791,368 $ 6.19 5.13 Issued 325,000 20.00 - December 31, 2017 1,116,368 $ 10.18 3.68 Issued - - - Expired/forfeited - - - Exercised - - - Outstanding and exercisable, December 31, 2018 1,116,368 $ 10.18 2.68 |
Schedule of conversion of preferred stock issued to common stock | Shares of Preferred Stock Not Exchanged as of December 31, 2018 Conversion Ratio Shares of Common Stock after Conversion of all Outstanding Shares of Preferred Stock Not yet Exchanged at December 31, 2018 Series B Preferred Stock 82 132.07 10,830 |
Warrant [Member] | |
Class of Stock [Line Items] | |
Summary of all stock option plans / warrant activity | Outstanding Warrants to Purchase Common Stock as of December 31, 2018: Description Issue Date Exercise Shares Expiration August 2016 Prefunded Warrants (1) 08/16/16 $ 10.00 360,000 02/16/22 August 2016 Purchase Warrants 08/17/16 $ 11.20 431,368 02/17/22 August 2017 Purchase Warrants 08/08/17 $ 20.00 325,000 08/08/20 Total Warrants Outstanding 1,116,368 (1) Under the terms of the prefunded warrants, the warrant holder prepaid $9.90 of the original $10.00 warrant per share exercise price at the time of issuance of the warrant. The remaining $0.10 exercise price is required to be paid in full prior to the issuance of any common stock under the terms of the prefunded warrant agreement. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of options outstanding by exercise price range | Options Outstanding Range of Exercise Price Number Outstanding and exercisable at 12/31/18 Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ 0 - $ 15.00 32,500 2.46 $ 14.95 $ 15.01 - $ 42.50 55,300 0.76 $ 40.62 $ 42.51 - $ 62.10 12,000 1.60 $ 59.60 99,800 1.41 $ 34.55 |
Summary of assumptions used to value stock options granted to employees and directors | For the year ended December 31, 2018 Annual dividend yield - Expected life (years) 1.5 Risk-free interest rate 2.19 % Expected volatility 71.12 % |
Summary of stock-based compensation expense | Years ended December 31, 2018 2017 (In thousands) Research and development $ - $ - Sales and marketing 6 50 General and administrative 23 22 Stock-based compensation expense $ 29 $ 72 |
Employee Stock Option [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, 2017 184,600 $ 43.90 $ - Options granted - - - Options exercised - - - Options cancelled or expired (9,000 ) 82.10 - Options outstanding – December 31, 2017 175,600 $ 41.99 2.18 - Options granted 30,000 15.00 - Options exercised - - - Options cancelled or expired (105,800 ) 41.36 - Options outstanding and vested – December 31, 2018 99,800 $ 34.55 1.41 $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future minimum payments under non-cancellable operating lease commitments | Years ending December 31, Total 2019 $ 457 2020 89 2021 3 $ 549 |
Schedule of minimum future rentals on the non-cancelable capital leases | Year ending December 31, Total 2019 $ 602 2020 616 2021 502 2022 39 Total minimum payments required $ 1,759 Less amount representing interest (56 ) Present value of net minimum lease payments $ 1,703 Less current portion (570 ) $ 1,133 |
Schedule of equipment under capital lease | Equipment under capital lease $ 3,525 Less: accumulated depreciation (1,391 ) Net book value $ 2,134 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of net revenues by geographic region | 2018 Amount Percentage United States $ 4,247 50 % Japan 2,877 34 % Germany 803 9 % China 221 3 % Taiwan 189 2 % South Korea 48 1 % Other 153 1 % Total $ 8,538 100 % 2017 Amount Percentage United States $ 4,187 41 % Japan 2,800 27 % Germany 1,188 12 % China 737 7 % Sweden 515 5 % Taiwan 268 3 % South Korea 176 2 % Singapore 147 1 % Canada 89 1 % Other 134 1 % Total $ 10,241 100 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of loss before income taxes by geographically | 2018 2017 Domestic $ (1,583 ) $ (2,302 ) Foreign (2,348 ) (3,249 ) Total $ (3,931 ) $ (5,551 ) |
Summary of provision for income taxes | 2018 2017 Current Federal $ - $ - State 2 2 Foreign 11 (58 ) Change in deferred Federal (109 ) 6,780 Federal valuation allowance 109 (6,780 ) State (1 ) 104 State valuation allowance 1 (104 ) Foreign (322 ) (453 ) Foreign valuation allowance 322 453 Total current $ 13 $ (56 ) |
Summary of effective income tax rate and the U.S. federal statutory federal income tax rate | 2018 2017 Amounts at statutory tax rates 21 % 34 % Federal tax reform – deferred rate change - (170 )% Accounting method adoption - 11 % Foreign losses taxed at different rates (1 )% (7 )% Foreign withholding tax - 1 % Stock-based compensation (7 ) - Other (2 )% (1 )% Total 11 % (132 )% Valuation allowance (11 )% 133 % Effective tax rate - % 1 % |
Summary of significant components of the deferred tax asset | 2018 2017 Deferred tax assets: Accruals $ 71 $ 111 Stock compensation 567 789 Net operating losses 14,982 14,288 Basis difference in fixed assets - - Total deferred tax assets $ 15,620 $ 15,188 Valuation allowance (15,620 ) (15,188 ) Total net deferred tax assets $ - $ - |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loss per common share: | |
Summary of basic and diluted for net loss per share | (In thousands, except per share amounts) Years ended December 31, 2018 2017 BASIC AND DILUTED Weighted average number of common shares outstanding 5,884 5,289 Net loss attributable to Neonode Inc. $ (3,060 ) $ (4,705 ) Net loss per share basic and diluted $ (0.52 ) $ (0.89 ) |
Nature of the Business and Op_2
Nature of the Business and Operations (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Dec. 28, 2018 | Aug. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Nature of the Business and Operations (Textual) | |||||
Net loss (including noncontrolling interests) | $ (3,060,000) | $ (4,705,000) | |||
Accumulated deficit | (185,222,000) | (183,745,000) | |||
Net cash used in operating activities | (2,859,000) | (5,581,000) | |||
Net proceeds from issuance of common stock | $ 4,620,000 | $ 79,079,000 | |||
Shelf registration statement, expire date | Mar. 24, 2020 | ||||
Aggregate of common stock offering price | $ 20,000,000 | ||||
Securities Purchase Agreement [Member] | |||||
Nature of the Business and Operations (Textual) | |||||
Issuance of common stock | 2,940,767 | 975,000 | |||
Net proceeds from issuance of common stock | $ 4,600,000 | $ 9,100,000 | |||
Shares price per share | $ 1.60 | $ 10 | |||
Warrant issued to purchase shares of common stock | 325,000 | ||||
Description of warrants | The 2017 Warrants became exercisable on August 8, 2018 and will expire on August 8, 2020. | ||||
Proceeds from issuance of warrants | $ 9,750,000 | ||||
Aggregate of common stock offering price | $ 6,500,000 | ||||
Purchased common stock in private placement | $ 2,000,000 | ||||
Percentage of beneficial owner | 18.00% | ||||
Common stock at an exercise price | $ 20 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw materials | $ 246 | $ 164 |
Work-in-Process | 220 | 231 |
Finished goods | 753 | 759 |
Ending inventory | $ 1,219 | $ 1,154 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2018 | |
Computer Equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 3 years |
Furniture and Fixtures [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 5 years |
Equipment [Member] | |
Estimated useful lives of property and equipment | |
Estimated useful lives | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Net license revenues | $ 7,954 | $ 8,684 |
Net revenues | $ 8,538 | $ 10,241 |
Percentage of Net revenues | 100.00% | 100.00% |
Automotive [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net license revenues | $ 1,627 | $ 2,148 |
Percentage of Net license revenues | 19.00% | 21.00% |
Consumer electronics [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net license revenues | $ 6,327 | $ 6,536 |
Percentage of Net license revenues | 74.00% | 64.00% |
Sensor Modules [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net revenues | $ 227 | $ 814 |
Percentage of Net revenues | 3.00% | 8.00% |
Non Recurring Engineering [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net revenues | $ 357 | $ 743 |
Percentage of Net revenues | 4.00% | 7.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Accounts receivable and unbilled revenue | $ 1,830 | $ 1,010 |
Deferred revenues | $ 75 | $ 1,248 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 35 | $ 11 |
Provisions for warranty issued | (18) | 24 |
Balance at end of period | $ 17 | $ 35 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of Significant Accounting Policies [Line Items] | ||
Deferred license fees | $ 75 | $ 1,248 |
Deferred License Fees [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Deferred license fees | 1,089 | |
Deferred Airbar Revenues [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Deferred license fees | 59 | 137 |
Deferred Sensor Modules Revenues [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Deferred license fees | $ 16 | $ 22 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details 6) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred revenues | $ 75 | $ 1,248 |
Balances excluding revenue standard [Member] | ||
Deferred revenues | 213 | |
Impact of Revenue Standard [Member] | ||
Deferred revenues | $ (138) |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details 7) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Swedish Krona [Member] | ||
Weighted average exchange rate for consolidated statements of operations | ||
weighted-average exchange rate | 8.70 | 8.54 |
Japanese Yen [Member] | ||
Weighted average exchange rate for consolidated statements of operations | ||
weighted-average exchange rate | 110.43 | 112.15 |
South Korean Won [Member] | ||
Weighted average exchange rate for consolidated statements of operations | ||
weighted-average exchange rate | 1,100.50 | 1,128.65 |
Taiwan Dollar [Member] | ||
Weighted average exchange rate for consolidated statements of operations | ||
weighted-average exchange rate | 30.15 | 30.41 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details 8) | Dec. 31, 2018 | Dec. 31, 2017 |
Swedish Krona [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 8.87 | 8.21 |
Japanese Yen [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 109.69 | 112.65 |
South Korean Won [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 1,113.63 | 1,066.31 |
Taiwan Dollar [Member] | ||
Exchange Rate for Consolidated Balance Sheets | ||
Exchange rate for the consolidated balance sheets | 30.61 | 29.66 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Details 9) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | ||
License fees | $ 7,954 | $ 8,684 |
Sensor modules | 227 | 814 |
Non-recurring engineering | 357 | 743 |
Total Revenues | 8,538 | 10,241 |
ASSETS | ||
Accounts receivable and unbilled revenues, net | 1,830 | 1,010 |
Liabilities | ||
Deferred revenues | 75 | 1,248 |
Equity | ||
Accumulated deficit | (185,222) | $ (183,745) |
Balances excluding revenue standard [Member] | ||
Revenue | ||
License fees | 7,889 | |
Sensor modules | 227 | |
Non-recurring engineering | 357 | |
Total Revenues | 8,473 | |
ASSETS | ||
Accounts receivable and unbilled revenues, net | 320 | |
Liabilities | ||
Deferred revenues | 213 | |
Equity | ||
Accumulated deficit | (186,870) | |
Impact of Revenue Standard [Member] | ||
Revenue | ||
License fees | 65 | |
Sensor modules | ||
Non-recurring engineering | ||
Total Revenues | 65 | |
ASSETS | ||
Accounts receivable and unbilled revenues, net | 1,510 | |
Liabilities | ||
Deferred revenues | (138) | |
Equity | ||
Accumulated deficit | $ 1,648 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Dec. 31, 2018USD ($)Customers | Dec. 31, 2017USD ($)Customers$ / shares | |
Summary of Significant Accounting Policies (Textual) | ||
Finished goods | $ 753,000 | $ 759,000 |
Research and development | 5,278,000 | 6,078,000 |
Basic deposit coverage limits per owner and customer | 250,000 | |
Allowance for doubtful accounts | 149,000 | 149,000 |
Costs capitalized in projects in process | 1,000 | |
Foreign currency translation included in general and administrative expense | (163,000) | 84,000 |
Foreign currency translation adjustments | $ (357,000) | $ 72,000 |
Concentration risk, percentage | 100.00% | 100.00% |
Advertising costs | $ 120,000 | $ 602,000 |
Noncontrolling interest, Description | Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest. | |
Investment in joint venture | $ 3,000 | 3,000 |
Deferred revenues current | 75,000 | 1,248,000 |
Contract Assets [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Basic deposit coverage limits per owner and customer | 1,800,000 | 1,000,000 |
Current accounts receivable net of allowance for doubtful accounts | 2,200,000 | |
Contract Liabilities [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Deferred revenue | 75,000 | 1,200,000 |
Deferred revenues current | $ 900,000 | |
Pronode Technologies AB [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Noncontrolling interest owned by Propoint AB | 49.00% | |
Neonode Technologies AB [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Noncontrolling interest owned by Pronode Technologies AB | 51.00% | |
Europe [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Net assets (liabilities) | $ 7,187,000 | 5,418,000 |
Asia [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Net assets (liabilities) | 72,000 | 72,000 |
UNITED STATES | ||
Summary of Significant Accounting Policies (Textual) | ||
Net assets (liabilities) | 2,537,000 | $ 2,373,000 |
Sweden [Member] | Euro [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Basic deposit coverage limits per owner and customer | 100,000 | |
Japan [Member] | Yen [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Basic deposit coverage limits per owner and customer | 10,000,000 | |
Korea [Member] | Won [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Basic deposit coverage limits per owner and customer | 50,000,000 | |
Taiwan [Member] | Taiwan Dollar [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Basic deposit coverage limits per owner and customer | $ 3,000,000 | |
Sales Revenue, Net [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 10.00% | |
Accounts Receivable [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 66.00% | 69.00% |
Number of customers | Customers | 4 | 2 |
Bosch [Member] | Sales Revenue, Net [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 10.00% | 10.00% |
Airbar Sales [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Finished goods | $ 1,100,000 | |
Research and development | 1,100,000 | |
Cost of sales | $ 100,000 | |
Revalue of purchase price | $ / shares | $ 0.12 | |
Write off related product development units | $ 500,000 | |
Hewlett Packard [Member] | Sales Revenue, Net [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 35.00% | 28.00% |
Canon [Member] | Sales Revenue, Net [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 12.00% | 17.00% |
Epson [Member] | Sales Revenue, Net [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Concentration risk, percentage | 14.00% | |
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% |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of prepaid expense and other current assets | ||
Prepaid insurance | $ 168 | $ 136 |
Prepaid rent | 41 | 68 |
VAT receivable | 176 | 336 |
Prepaid inventory | 120 | 494 |
Advances to suppliers | 155 | 545 |
Other | 230 | 257 |
Total prepaid expenses and other current assets | $ 890 | $ 1,836 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of property and equipment | ||
Equipment under capital lease | $ 3,525 | $ 3,590 |
Less accumulated depreciation and amortization | (2,448) | (1,576) |
Property and equipment, net | 2,484 | 3,327 |
Computers, Software, Furniture and Fixtures [Member] | ||
Schedule of property and equipment | ||
Computers, software, furniture and fixtures | $ 1,407 | $ 1,313 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment (Textual) | ||
Depreciation and amortization expense | $ 1,008 | $ 953 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of accrued expenses | ||
Accrued returns and warranty | $ 17 | $ 35 |
Accrued consulting fees and other | 248 | 142 |
Total accrued expenses | $ 265 | $ 177 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of all stock option plans | |||
Number of Shares/Warrants, Options outstanding and exercisable, Beginning Balance | 1,116,368 | 791,368 | |
Warrants, Issued | 325,000 | ||
Warrants, Expired/forfeited | |||
Warrants, Exercised | |||
Number of Shares/Warrants, Options outstanding and exercisable Ending Balance | 1,116,368 | 1,116,368 | 791,368 |
Weighted Average Exercise Price, Options outstanding and exercisable, Beginning Balance | $ 10.18 | $ 6.19 | |
Weighted Average Exercise Price, Warrants Issued | 20 | ||
Weighted Average Exercise Price, Warrants Expired/forfeited | |||
Weighted Average Exercise Price, Warrants Exercised | |||
Weighted Average Exercise Price, Options outstanding and exercisable, Ending Balance | $ 10.18 | $ 10.18 | $ 6.19 |
Weighted Average Remaining Contractual Life, Outstanding | 2 years 8 months 5 days | 3 years 8 months 5 days | 5 years 1 month 16 days |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 12 Months Ended | |
Dec. 31, 2018$ / sharesshares | ||
Summary of outstanding warrants to purchase common stock | ||
Shares | 1,116,368 | |
August 2016 Prefunded Warrants [Member] | ||
Summary of outstanding warrants to purchase common stock | ||
Issue Date | Aug. 16, 2016 | [1] |
Exercise Price | $ / shares | $ 10 | [1] |
Shares | 360,000 | [1] |
Expiration Date | Feb. 16, 2022 | [1] |
August 2016 Purchase Warrants [Member] | ||
Summary of outstanding warrants to purchase common stock | ||
Issue Date | Aug. 17, 2016 | |
Exercise Price | $ / shares | $ 11.20 | |
Shares | 431,368 | |
Expiration Date | Feb. 17, 2022 | |
August 2017 Purchase Warrants [Member] | ||
Summary of outstanding warrants to purchase common stock | ||
Issue Date | Aug. 8, 2017 | |
Exercise Price | $ / shares | $ 20 | |
Shares | 325,000 | |
Expiration Date | Aug. 8, 2020 | |
[1] | Under the terms of the prefunded warrants, the warrant holder prepaid $9.90 of the original $10.00 warrant per share exercise price at the time of issuance of the warrant. The remaining $0.10 exercise price is required to be paid in full prior to the issuance of any common stock under the terms of the prefunded warrant agreement. |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - Series B Preferred Stock [Member] | 12 Months Ended |
Dec. 31, 2018shares | |
Schedule of conversion of preferred stock issued to common stock | |
Shares of preferred stock not exchanged | 82 |
Conversion ratio | 132.07 |
Shares of common stock after conversion of all outstanding shares of preferred stock not yet exchanged | 10,830 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 28, 2018 | Sep. 27, 2018 | Aug. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 23, 2018 | Mar. 31, 2009 | |
Stockholders Equity (Textual) | |||||||
Common stock, shares authorized | 10,000,000 | 10,000,000 | |||||
Net proceeds from issuance of common stock | $ 4,620 | $ 79,079 | |||||
Common stock, Description | We have issued or reserved 27,305 more than our available shares of authorized common stock, even though a total of 333,334 warrants cannot be legally exercised. We automatically come into compliance on April 26, 2019, when 44,300 stock options are cancelled because their original issuance terms is reached and we anticipate proposing an increase in our authorized common stock at our 2019 Annual Meeting of Stockholders. | ||||||
Warrant agreement, description | Under the terms of the prefunded warrants, the warrant holder prepaid $9.90 of the original $10.00 warrant per share exercise price at the time of issuance of the warrant. The remaining $0.10 exercise price is required to be paid in full prior to the issuance of any common stock under the terms of the prefunded warrant agreement. | ||||||
Series B Preferred Stock [Member] | |||||||
Stockholders Equity (Textual) | |||||||
Preferred stock conversion ratio per share of common stock | 132 | 132.07 | |||||
Preferred stock, liquidation preference | $ 0.001 | $ 0.001 | |||||
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) | |||||||
Shares price per share | $ 1.60 | $ 10 | |||||
Warrants issued to purchase shares of common stock | 9,750,000 | ||||||
Aggregate shares of common stock, shares | 2,000,000 | ||||||
Issuance of common stock, shares | 2,940,767 | 975,000 | |||||
Net proceeds from issuance of common stock | $ 4,600 | $ 9,100 | |||||
Price per share | $ 20 | ||||||
Securities Purchase Agreement [Member] | Mr. Lindell and Mr. Rosberg [Member] | |||||||
Stockholders Equity (Textual) | |||||||
Beneficial percentage of common stock | 19.00% | ||||||
Common Stock [Member] | |||||||
Stockholders Equity (Textual) | |||||||
Issuance of common stock, shares | 2,941 | 975 | |||||
Common stock, Description | The Company also filed a certificate of second amendment to its restated certificate of incorporation with the state of Delaware to reduce the number of authorized shares of common stock from 100,000,000 to 10,000,000 shares |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of options outstanding by exercise price range | ||
Options Outstanding, Number Outstanding at 12/31/17 | 99,800 | |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 1 year 6 months 25 days | 1 year 6 months 25 days |
Options Outstanding, Weighted Average Exercise Price | $ 34.55 | |
Range One [Member] | ||
Summary of options outstanding by exercise price range | ||
Range of Exercise Price, Lower Range Limit | 0 | |
Range of Exercise Price, Upper Range Limit | $ 15 | |
Options Outstanding, Number Outstanding at 12/31/17 | 32,500 | |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 2 years 5 months 16 days | |
Options Outstanding, Weighted Average Exercise Price | $ 14.95 | |
Range Two [Member] | ||
Summary of options outstanding by exercise price range | ||
Range of Exercise Price, Lower Range Limit | 15.01 | |
Range of Exercise Price, Upper Range Limit | $ 42.50 | |
Options Outstanding, Number Outstanding at 12/31/17 | 55,300 | |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 1 year 4 months 28 days | |
Options Outstanding, Weighted Average Exercise Price | $ 40.62 | |
Range Three [Member] | ||
Summary of options outstanding by exercise price range | ||
Range of Exercise Price, Lower Range Limit | 42.51 | |
Range of Exercise Price, Upper Range Limit | $ 62.10 | |
Options Outstanding, Number Outstanding at 12/31/17 | 12,000 | |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 1 year 7 months 6 days | |
Options Outstanding, Weighted Average Exercise Price | $ 59.60 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of all stock option plans / warrant activity | ||
Number of Shares/Warrants, Options outstanding and exercisable, Beginning Balance | 175,600 | 184,600 |
Number of Shares, Options granted | ||
Number of Shares, Options exercised | ||
Number of Shares, Options cancelled or expired | (105,800) | (9,000) |
Number of Shares/Warrants, Options outstanding and exercisable Ending Balance | 99,800 | 175,600 |
Weighted Average Exercise Price, Options outstanding and exercisable, Beginning Balance | $ 41.99 | $ 43.90 |
Weighted Average Exercise Price, Options granted | 15 | |
Weighted Average Exercise Price, Options exercised | ||
Weighted Average Exercise Price, Options cancelled or expired | 41.36 | 82.10 |
Weighted Average Exercise Price, Options outstanding and exercisable, Ending Balance | $ 34.55 | $ 41.99 |
Options outstanding, Weighted Average Remaining Contractual Life (years) | 1 year 6 months 25 days | 1 year 6 months 25 days |
Options exercisable and expected to vest, Weighted Average Remaining Contractual Life (years) | 1 year 4 months 28 days | |
Options outstanding, Aggregate Intrinsic Value | ||
Options exercisable and expected to vest, Aggregate Intrinsic Value | ||
Weighted Average Exercise Price, Options exercisable and expected to vest, Ending Balance |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of assumptions used to value stock options granted to employees, directors and consultants | |
Annual dividend yield | |
Expected life (years) | 1 year 6 months |
Risk-free interest rate | 2.19% |
Expected volatility | 71.12% |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Research and development [Member] | ||
Summary of stock-based compensation expense | ||
Stock-based compensation expense | ||
General and administrative [Member] | ||
Summary of stock-based compensation expense | ||
Stock-based compensation expense | 23 | 22 |
Sales and marketing [Member] | ||
Summary of stock-based compensation expense | ||
Stock-based compensation expense | $ 6 | $ 50 |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | |
Stock-Based Compensation (Textual) | |||
Term of stock options description | 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. | ||
Warrant [Member] | |||
Stock-Based Compensation (Textual) | |||
Number of shares, options granted | 325,000 | ||
Employee Stock Option [Member] | |||
Stock-Based Compensation (Textual) | |||
Number of shares, options granted | |||
Share compensation expense | $ 72,000 | $ 72,000 | |
2015 Plan [Member] | Stock Options [Member] | Employee Stock Option [Member] | |||
Stock-Based Compensation (Textual) | |||
Aggregate shares of common stock, shares | 30,000 | 210,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 457 |
2,020 | 89 |
2,021 | 3 |
Total | $ 549 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,019 | $ 602 | |
2,020 | 616 | |
2,021 | 502 | |
2,022 | 39 | |
Total minimum payments required | 1,759 | |
Less amount representing interest | (56) | |
Present value of net minimum lease payments | 1,703 | |
Less current portion | (570) | $ (568) |
Capital lease noncurrent portion | $ 1,133 | $ 1,681 |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Equipment under capital lease | $ 3,525 | $ 3,590 |
Less: accumulated depreciation | (1,391) | |
Net book value | $ 2,134 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Textual) | Dec. 01, 2015ft² | Dec. 04, 2014USD ($) | Dec. 06, 2012USD ($)$ / shares | Apr. 30, 2014 | Feb. 04, 2011 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 01, 2014ft² |
Commitments and Contingencies (Textual) | ||||||||
Non-recurring engineering development costs contributed to TI | $ | $ 835,000 | $ 500,000 | $ 835,000 | |||||
Description of NRE cost contributed to TI | Non-recurring engineering costs at the rate of $0.25 per ASIC for each of the first 2 million ASICs sold. | |||||||
NRE fee contributed for each of first two million unit sold, Per unit | $ / shares | $ 0.25 | |||||||
Capital lease term | 6 years | 4 years | 4 years | |||||
Capital lease payment description | Under the terms of the lease agreement we are obligated to purchase the equipment at the end of the original six-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 three to five-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 these leases is approximately 3% per annum. One of the leases is a hire-purchase agreement where the equipment is required to be paid off after five 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 approximately 3% per annum. | ||||||
Capital lease interest rate | 4.00% | 1.50% | 1.50% | |||||
Rent expense | $ | $ 687,000 | $ 681,000 | ||||||
Pronode Technologies Ab [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Area of leased space (in square feet) | ft² | 9,040 | |||||||
Lease expiration date | Dec. 9, 2020 | |||||||
Neonode Technologies Ab [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Area of leased space (in square feet) | ft² | 7,007 | |||||||
Analog Device Development Agreement [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Non recurring engineering costs description | 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 $0.05 for the next eight million units sold. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 8,538 | $ 10,241 |
Revenues percentage | 100.00% | 100.00% |
United States [Member] | ||
Revenues | $ 4,247 | $ 4,187 |
Revenues percentage | 50.00% | 41.00% |
Japan [Member] | ||
Revenues | $ 2,877 | $ 2,800 |
Revenues percentage | 34.00% | 27.00% |
Germany [Member] | ||
Revenues | $ 803 | $ 1,188 |
Revenues percentage | 9.00% | 12.00% |
China [Member] | ||
Revenues | $ 221 | $ 737 |
Revenues percentage | 3.00% | 7.00% |
Taiwan [Member] | ||
Revenues | $ 189 | $ 268 |
Revenues percentage | 2.00% | 3.00% |
South Korea [Member] | ||
Revenues | $ 48 | $ 176 |
Revenues percentage | 1.00% | 2.00% |
Other [Member] | ||
Revenues | $ 153 | $ 134 |
Revenues percentage | 1.00% | 1.00% |
Sweden [Member] | ||
Revenues | $ 515 | |
Revenues percentage | 5.00% | |
Singapore [Member] | ||
Revenues | $ 147 | |
Revenues percentage | 1.00% | |
Canada [Member] | ||
Revenues | $ 89 | |
Revenues percentage | 1.00% |
Segment Information (Details Te
Segment Information (Details Textual) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segment Information (Textual) | |
Number of reportable segments | 1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of income (loss) before income taxes by geographically | ||
Domestic | $ (1,583) | $ (2,302) |
Foreign | (2,348) | (3,249) |
Total | $ (3,931) | $ (5,551) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Federal | ||
State | 2 | 2 |
Foreign | 11 | (58) |
Change in deferred | ||
Federal | (109) | 6,780 |
Federal valuation allowance | 109 | (6,780) |
State | (1) | 104 |
State valuation allowance | 1 | (104) |
Foreign | (322) | (453) |
Foreign valuation allowance | 322 | 453 |
Total current | $ 13 | $ (56) |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of reconciliation of Effective income tax rate and statutory federal income tax rate | ||
Amounts at statutory tax rates | 21.00% | 34.00% |
Federal tax reform - deferred rate change | (170.00%) | |
Accounting method adoption | 11.00% | |
Foreign losses taxed at different rates | (1.00%) | (7.00%) |
Foreign withholding tax | 1.00% | |
Stock-based compensation | 7.00% | |
Other | (2.00%) | (1.00%) |
Total | 11.00% | (132.00%) |
Valuation allowance | (11.00%) | 133.00% |
Effective tax rate | 1.00% |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accruals | $ 71 | $ 111 |
Stock compensation | 567 | 789 |
Net operating losses | 14,982 | 14,288 |
Basis difference in fixed assets | ||
Total deferred tax assets | 15,620 | 15,188 |
Valuation allowance | (15,620) | (15,188) |
Total net deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Taxes (Textual) | |
Open tax years | 2009 through 2017 |
Federal [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 59,700,000 |
Operating loss carryforwards, expiration date | Dec. 31, 2028 |
State [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 20,000,000 |
Operating loss carryforwards, expiration date | Dec. 31, 2030 |
Foreign [Member] | |
Income Taxes (Textual) | |
Operating loss carryforwards | $ 4,700,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. Employee 401K Pension Plan [Member] | ||
Employee Benefit Plans (Textual) | ||
Defined benefit plan contribution, amount | $ 6,000 | $ 6,000 |
Matching contributions by employer | 6.00% | 6.00% |
Pension plans for Swedish employees [Member] | ||
Employee Benefit Plans (Textual) | ||
Defined benefit plan contribution, amount | $ 413,000 | $ 368,000 |
Pension plans for Swedish employees [Member] | Minimum [Member] | ||
Employee Benefit Plans (Textual) | ||
Defined benefit plan contribution, percentage | 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% |
Pension Plans for Taiwan Employees [Member] | ||
Employee Benefit Plans (Textual) | ||
Defined benefit plan contribution, amount | $ 4,000 | $ 4,000 |
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 | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
BASIC AND DILUTED | ||
Weighted average number of common shares outstanding | 5,884 | 5,289 |
Net loss attributable to Neonode Inc. | $ (3,060) | $ (4,705) |
Net loss per share basic and diluted | $ (0.52) | $ (0.89) |
Net Loss Per Share (Details Tex
Net Loss Per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Convertible preferred stock [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 11,000 | 11,000 |
Stock options [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Warrants [Member] | ||
Net Loss Per Share (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 350,000 | 415,000 |