Neonode (NEON) 10-Q 14 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 11, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	Neonode Inc.
Entity Central Index Key	0000087050
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		10,782,999
Entity Filer Number	1-35526
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	DE

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash	$ 1,773	$ 2,357
Accounts receivable and unbilled revenue, net	738	1,324
Projects in process		8
Inventory	1,077	1,030
Prepaid expenses and other current assets	562	715
Total current assets	4,150	5,434
Investment in joint venture	3	3
Property and equipment, net	1,208	1,583
Operating lease right-of-use assets	227	416
Total assets	5,588	7,436
Current liabilities:
Accounts payable	476	555
Accrued payroll and employee benefits	1,104	960
Accrued expenses	320	541
Deferred revenues	101	67
Short term borrowing	967
Short-term tax credits	563
Current portion of finance lease obligations	517	568
Current portion of operating lease obligations	181	332
Total current liabilities	4,229	3,023
Finance lease obligations, net of current portion	393	508
Operating lease obligations, net of current portion	20	58
Total liabilities	4,642	3,589
Commitments and contingencies
Stockholders’ equity:
Common stock, 15,000,000 shares authorized, with par value of $0.001; 9,171,154 shares issued and outstanding at June 30, 2020 and December 31, 2019	9	9
Additional paid-in capital	197,543	197,543
Accumulated other comprehensive loss	(662)	(639)
Accumulated deficit	(193,142)	(190,520)
Total Neonode Inc. stockholders’ equity	3,748	6,393
Noncontrolling interests	(2,802)	(2,546)
Total stockholders’ equity	946	3,847
Total liabilities and stockholders’ equity	$ 5,588	$ 7,436

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, shares authorized	15,000,000	15,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	9,171,154	9,171,154
Common stock, shares outstanding	9,171,154	9,171,154

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
HMI Solutions	$ 678	$ 1,469	$ 1,860	$ 3,411
HMI Products	80	241	192	311
Total revenues	758	1,710	2,052	3,722
Cost of revenues:
HMI Solutions			1	5
HMI Products	123	71	166	167
Total cost of revenues	123	71	167	172
Total gross margin	635	1,639	1,885	3,550
Operating expenses:
Research and development	1,043	1,452	2,038	2,711
Sales and marketing	648	491	1,193	940
General and administrative	700	1,010	1,499	1,881
Total operating expenses	2,391	2,953	4,730	5,532
Operating loss	(1,756)	(1,314)	(2,845)	(1,982)
Other expense:
Interest expense	7	9	14	19
Total other expense	7	9	14	19
Provision for income taxes	(1,763)	(1,323)	(2,859)	(2,001)
(Benefits from) provision for income taxes	3	7	19	13
Net loss including noncontrolling interests	(1,766)	(1,330)	(2,878)	(2,014)
Less: Net loss attributable to noncontrolling interests	154	66	256	177
Net loss attributable to Neonode Inc.	$ (1,612)	$ (1,264)	$ (2,622)	$ (1,837)
Loss per common share:
Basic and diluted loss per share	$ (0.18)	$ (0.14)	$ (0.29)	$ (0.21)
Basic and diluted – weighted average number of common shares outstanding	9,171	8,801	9,171	8,800

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (1,766)	$ (1,330)	$ (2,878)	$ (2,014)
Other comprehensive income (loss):
Foreign currency translation adjustments	64	26	(23)	(155)
Comprehensive loss	(1,702)	(1,304)	(2,901)	(2,169)
Less: Comprehensive loss attributable to noncontrolling interests	154	66	256	177
Comprehensive loss attributable to Neonode Inc.	$ (1,548)	$ (1,238)	$ (2,645)	$ (1,992)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 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, 2018		$ 9	$ 197,507	$ (456)	$ (185,222)	$ 11,838	$ (2,042)	$ 9,796
Balances, shares at Dec. 31, 2018	82	8,800
Foreign currency translation adjustment				(181)		(181)		(181)
Net loss					(573)	(573)	(111)	(684)
Balances at Mar. 31, 2019		$ 9	197,507	(637)	(185,795)	11,084	(2,153)	8,931
Balances, shares at Mar. 31, 2019	82	8,800
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
Foreign currency translation adjustment								(155)
Net loss								(2,014)
Balances at Jun. 30, 2019		$ 9	197,507	(611)	(187,059)	9,846	(2,219)	7,627
Balances, shares at Jun. 30, 2019	80	8,801
Balances at Mar. 31, 2019		$ 9	197,507	(637)	(185,795)	11,084	(2,153)	8,931
Balances, shares at Mar. 31, 2019	82	8,800
Conversion of series B Preferred Stock to Common Stock
Conversion of series B Preferred Stock to Common Stock, shares	(2)	1
Foreign currency translation adjustment				26		26		26
Net loss					(1,264)	(1,264)	(66)	(1,330)
Balances at Jun. 30, 2019		$ 9	197,507	(611)	(187,059)	9,846	(2,219)	7,627
Balances, shares at Jun. 30, 2019	80	8,801
Conversion of series B Preferred Stock to Common Stock
Conversion of series B Preferred Stock to Common Stock, shares	80	10
Foreign currency translation adjustment				(145)		(145)		(145)
Net loss					(1,086)	(1,086)	(113)	(1,199)
Balances at Sep. 30, 2019		$ 9	197,507	(756)	(188,145)	8,615	(2,332)	6,283
Balances, shares at Sep. 30, 2019		8,811
Common stock issued upon exercise of common stock warrants			36			36		36
Common stock issued upon exercise of common stock warrants, shares		360
Foreign currency translation adjustment				117		117		117
Net loss					(2,375)	(2,375)	(214)	(2,589)
Balances at Dec. 31, 2019		$ 9	197,543	(639)	(190,520)	6,393	(2,546)	3,847
Balances, shares at Dec. 31, 2019		9,171
Foreign currency translation adjustment				(87)		(87)		(87)
Net loss					(1,010)	(1,010)	(102)	(1,112)
Balances at Mar. 31, 2020		$ 9	197,543	(726)	(191,530)	5,296	(2,648)	2,648
Balances, shares at Mar. 31, 2020		9,171
Balances at Dec. 31, 2019		$ 9	197,543	(639)	(190,520)	6,393	(2,546)	3,847
Balances, shares at Dec. 31, 2019		9,171
Foreign currency translation adjustment								(23)
Net loss								(2,878)
Balances at Jun. 30, 2020		$ 9	197,543	(662)	(193,142)	3,748	(2,802)	946
Balances, shares at Jun. 30, 2020		9,171
Balances at Mar. 31, 2020		$ 9	197,543	(726)	(191,530)	5,296	(2,648)	2,648
Balances, shares at Mar. 31, 2020		9,171
Foreign currency translation adjustment				64		64		64
Net loss					(1,612)	(1,612)	(154)	(1,766)
Balances at Jun. 30, 2020		$ 9	$ 197,543	$ (662)	$ (193,142)	$ 3,748	$ (2,802)	$ 946
Balances, shares at Jun. 30, 2020		9,171

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss (including noncontrolling interests)	$ (2,878)	$ (2,014)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense		19
Depreciation and amortization	373	439
Amortization of operating lease right-of-use assets	183	189
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue, net	588	24
Projects in process	7	(8)
Inventory	(42)	(5)
Prepaid expenses and other current assets	155	118
Accounts payable and accrued expenses	(169)	1
Deferred revenues	33	(14)
Operating lease obligations	(178)	(224)
Net cash used in operating activities	(1,928)	(1,475)
Cash flows from investing activities:
Purchase of property and equipment	(7)	(77)
Net cash used in investing activities	(7)	(77)
Cash flows from financing activities:
Proceeds from short-term borrowings	966
Proceeds from short-term tax credits	542
Principal payments on finance lease obligations	(164)	(272)
Net cash provided by (used in) financing activities	1,344	(272)
Effect of exchange rate changes on cash	7	(93)
Net decrease in cash	(584)	(1,917)
Cash at beginning of period	2,357	6,555
Cash at end of period	1,773	4,638
Supplemental disclosure of cash flow information:
Cash paid for income taxes	19	13
Cash paid for interest	$ 13	$ 19

Interim Period Reporting

Interim Period Reporting	6 Months Ended
	Jun. 30, 2020
Interim Period Reporting [Abstract]
Interim Period Reporting	1. Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements include all adjustments consisting of normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods presented. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of results for a full fiscal year or any other period. The accompanying condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019 have been prepared by us, pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally contained in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Operations Neonode Inc., collectively with its subsidiaries is referred to as “Neonode”, develops optical touch and gesture control solutions for human interaction with devices and remote sensing solutions for driver monitoring and cabin monitoring features in automotive and other applications. Our operations from January 1, 2020 focused on three different business areas, human machine interface (“HMI”) Solutions, HMI Products and Remote Sensing Solutions. In HMI Solutions, Neonode offers customized optical touch and gesture control solutions for many different markets and segments. In HMI Products, the Company provides plug-and-play sensor modules that enable touch on any surface, in-air touch, and gesture control for a wide range of applications. In Remote Sensing Solutions, Neonode offers driver and cabin monitoring solutions for vehicles based on the Company’s flexible, scalable and hardware-agnostic software platform. Liquidity We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net losses of approximately $1.6 million and $2.6 million and $1.3 million and $1.8 million for the three and six months ended June 30, 2020 and 2019, respectively, and had an accumulated deficit of approximately $193.1 million and $190.5 million as of June 30, 2020 and December 31, 2019, respectively. In addition, operating activities used cash of approximately $1.9 million and $1.5 million for the six months ended June 30, 2020 and 2019, respectively. On June 17, 2020, the Company entered into short-term loan facilities (the “Loan Agreements”) with entities beneficially owned by each of Ulf Rosberg and Peter Lindell, directors of Neonode (the “Directors”). Pursuant to the Loan Agreements, each Director made 16,145,000 SEK (Swedish Krona), which is approximately $1.7 million in U.S. dollars, principal amount available to the Company. As of June 30, 2020, the Company has made an initial drawdown of an aggregate of approximately $1.0 million under the Loan Agreements. On August 5, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with institutional and accredited investors as part of a private placement (the “Private Placement”). The closing of the Private Placement occurred on August 7, 2020. Pursuant to the Securities Purchase Agreement, Neonode issued a total of 1,611,845 shares of common stock (the “Common Shares”) at a price of $6.50 per Common Share, and a total of 3,415 shares with a conversion price of $6.50 per share and a stated value of $1,000 of Series C-1 convertible preferred stock (the “Series C-1 Preferred Shares”) and Series C-2 convertible preferred stock (the “Series C-2 Preferred Shares”), for an aggregate purchase price of $13.9 million in gross proceeds. The Series C-1 Preferred Shares and Series C-2 Preferred Shares are substantially the same, except the conversion of the Series C-2 Preferred Shares requires additional shareholder approval in accordance with Nasdaq listing rules. Ulf Rosberg and Peter Lindell, directors of Neonode, and Urban Forssell the Chief Executive Officer of Neonode (together, the “Insiders”) purchased an aggregate of $3.05 million of the Series C-2 Preferred Shares pursuant to the Securities Purchase Agreement. Further, pursuant to the Securities Purchase Agreement, Neonode agreed to issue an additional 1,034 shares of Series C-2 Preferred Shares to the Directors, Ulf Rosberg and Peter Lindell, to repay an aggregate of $1.03 million of outstanding indebtedness owed to them under Loan Agreements. The net proceeds of the Private Placement will be used for working capital purposes. On August 6, 2020, in connection with the Private Placement, Neonode designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the “Series C-1 Certificate of Designation”) with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the “Series C-2 Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series C-1 Preferred Shares and Series C-2 Preferred Shares (together, the “Preferred Shares”) are convertible into 684,378 shares of Neonode common stock, subject to adjustment and limitations as provided in the Series C-1 Certificate of Designation and the Series C-2 Certificate of Designation. The Series C-1 Preferred Shares and the Series C-2 Preferred Shares have no voting rights, however, under certain circumstances provided therein, the Company may not alter, change or amend the Series C-1 Certificate of Designation and Series C-2 Certificate of Designation without the affirmative vote of a majority of the then outstanding Series C-1 Preferred Shares and Series C-2 Preferred Shares, respectively. The holders of the Preferred Shares are entitled to receive dividends at the rate per share of 5% per annum, payable quarterly and on the conversion date. In the event of any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Shares will participate pari passu with the holders of the Company’s common stock, on an as-converted basis. In connection with the Securities Purchase Agreement, Neonode entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which Neonode will file a registration statement with the SEC relating to the offer and sale by the holders of the Common Shares, and the shares of common stock underlying the Preferred Shares. Pursuant to the Registration Rights Agreement, Neonode is obligated to file the registration statement within 30 calendar days and to use reasonable best efforts to cause the registration statement to be declared effective within 75 calendar days or 105 calendar days in the case of a full review by the SEC. Failure to meet those and related obligations, or failure to maintain the effective registration of the Common Shares and the shares of common stock underlying the Preferred Shares will subject Neonode to payment for liquidated damages. In connection with the Private Placement, Neonode paid a fee to a placement agent of $659,070. The condensed 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 cash position after the August 2020 Private Placement, current operating plan and sources of potential capital would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern. We expect our revenues from our three business areas will enable us to reduce our operating losses in coming years. In addition, 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	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of Neonode Inc. and its wholly owned subsidiaries, 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 2X Communication AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to manufacture and sell our sensor modules. All inter-company accounts and transactions have been eliminated in consolidation. Neonode consolidates entities in which it has a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50% of the voting rights. The condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 and the condensed consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for the three and six months ended June 30, 2020 and 2019 include our accounts and those of our wholly owned subsidiaries as well as Pronode Technologies AB. Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires making estimates and judgments 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 and judgments. Significant estimates and judgments include, but are not limited to: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, the standalone selling price of performance obligations, and transaction prices and assessing transfer of control; measuring variable consideration and other obligations such as product returns and refunds, and product warranties; provisions for uncollectible receivables; determining the net realizable value of inventory; recoverability of capitalized project costs and long-lived assets; for leases, determining whether a contract contains a lease, allocating consideration between lease and non-lease components, determining incremental borrowing rates, and identifying reassessment events, such as modifications; the valuation allowance related to our deferred tax assets; and the fair value of options issued for stock-based compensation. Cash and Cash Equivalents 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 $85,000 as of June 30, 2020 and December 31, 2019, respectively. Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. Costs capitalized in projects in process were $0 and $8,000 as of June 30, 2020 and December 31, 2019, respectively. Inventory Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out ("FIFO") valuation method. Net realizable value is the estimated selling price 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. Due to the low sell-through of our AirBar products, management has decided to reserve work-in-process for AirBar components, as well as AirBar-related raw materials. Management has further decided to reserve for a portion of AirBar finished goods, depending on type of AirBar and in which location it is stored. To protect our manufacturing partner from losses in relation to AirBar production, we agreed to secure the value of the inventory with a bank guarantee covering the production of 20,000 AirBars. Excess inventory was purchased from our manufacturing partner in 2019 and has been fully reserved. In total, the AirBar reserve was $0.7 million and $0.8 million as of June 30, 2020 and December 31, 2019. The Company's inventory consists primarily of components that will be used in the manufacturing of our sensor modules. We classify inventory for reporting purposes as raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods are as follows (in thousands): June 30, December 31, 2020 2019 Raw materials $ 446 $ 396 Work-in-process 180 186 Finished goods 451 448 Ending inventory $ 1,077 $ 1,030 Investment in Joint Venture We invested $3,000 in a 50% interest in Neoeye AB. We account for our investment using the equity method of accounting because the investment provides us the ability to exercise significant influence, but not control, over the investee. We are not required to guarantee any obligations of the joint venture and there have been no operations of Neoeye through June 30, 2020. 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 finance lease is recognized 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 condensed consolidated statement of operations. Maintenance and repairs are charged to expense as incurred. Right of Use Assets A right-of-use asset represents a lessee's right to use a leased asset for the term of the lease. Our right-of-use assets generally consist of operating leases for buildings and finance leases for manufacturing equipment. Right-of-use assets are measured initially at the present value of the lease payments, plus any lease payments made before a lease began and any initial direct costs, such as commissions paid to obtain a lease. Right-of-use assets are subsequently measured at the present value of the remaining lease payments, adjusted for incentives, prepaid or accrued rent, and any initial direct costs not yet expensed. Long-lived Asset Recoverability We assess the recoverability of long-lived assets by estimating the future cash flow from the associated assets 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 June 30, 2020, 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 and 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). Foreign currency translation gains (losses) were $64,000 and $(23,000) and $26,000 and $(155,000) during the three and six months ended June 30, 2020 and 2019, respectively. Gains (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations and were $(63,000) and $(14,000) during the three and six months ended June 30, 2020, respectively, compared to $(57,000) and $114,000 during the same periods in 2019, respectively. Concentration of Credit and Business Risks Our customers are located in U.S., Europe and Asia. As of June 30, 2020, four customers represented approximately 79% of our consolidated accounts receivable and unbilled revenues. As of December 31, 2019, three customers represented approximately 72% of our consolidated accounts receivable and unbilled revenues. Customers who accounted for 10% or more of our net revenues during the three months ended June 30, 2020 are as follows: ● Epson – 35% ● Hewlett Packard Company – 27% ● Alpine – 12% Customers who accounted for 10% or more of our net revenues during the six months ended June 30, 2020 are as follows: ● Alpine – 17% ● Epson – 24% ● Hewlett Packard Company – 33% Customers who accounted for 10% or more of our net revenues during the three months ended June 30, 2019 are as follows: ● Hewlett Packard Company – 45% ● Epson – 11% ● Alpine – 13% ● Bosch – 11% Customers who accounted for 10% or more of our net revenues during the six months ended June 30, 2019 are as follows: ● Hewlett Packard Company – 41% ● Epson – 14% ● Alpine – 12% ● Bosch – 10% 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 fulfil the promise to transfer goods, therefore we treat all shipping and handling charges as expenses. Revenues from our business areas derive from three different revenue streams, license fees, non-recurring engineering fees and the sale of sensor modules. 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 June 30, 2020. 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. During the three and six months ended June 30, 2020 and 2019, 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 (AirBar) that incorporate our sensor modules sold through distributors. 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, 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 June 30, 2020 and 2019. 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 tables present disaggregated revenues by market for the three and six months ended June 30, 2020 and 2019 (dollars in thousands): Three months ended Three months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 140 21 % $ 440 30 % Net revenues from consumer electronics 538 79 % 1,029 70 % $ 678 100 % $ 1,469 100 % HMI Products Net revenues from automotive $ 7 9 % $ - - % Net revenues from medical 47 59 % 40 17 % Net revenues from distributors and other 26 32 % 201 83 % $ 80 100 % $ 241 100 % Six months ended Six months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 541 29 % $ 936 27 % Net revenues from consumer electronics 1,319 71 % 2,475 73 % $ 1,860 100 % $ 3,411 100 % HMI Products Net revenues from automotive $ 15 8 % $ 1 - % Net revenues from medical 103 54 % 60 19 % Net revenues from distributors and other 74 38 % 250 81 % $ 192 100 % $ 311 100 % Significant Judgments Our contracts with customers may include promises to transfer multiple products and services to a customer, particularly when the contract is 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. 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. Judgment is further 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 June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, Accounts receivable and unbilled revenue $ 738 $ 1,324 Deferred revenues 101 67 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 which 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. 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. Our allowance for doubtful accounts was approximately $85,000 as of June 30, 2020 and December 31, 2019. 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): June 30, December 31, Balance at beginning of period $ 24 $ 17 Provisions for warranty issued 10 7 Balance at end of period $ 34 $ 24 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. The following table presents our deferred revenues (in thousands): June 30, December 31, Deferred revenues HMI Solutions $ 45 $ 37 Deferred revenues HMI Products 56 30 $ 101 $ 67 During the three and six months ended June 30, 2020, the Company recognized revenues of approximately $6,000 and $32,000, respectively, related to contract liabilities outstanding at the beginning of the year. Advertising Advertising costs are expensed as incurred. Advertising costs for the three and six months ended June 30, 2020 and 2019 amounted to approximately $9,000 and $16,000 and $29,000 and $48,000, respectively. Research and Development Research and development ("R&D") costs are expensed as incurred. R&D costs consist primarily of personnel related costs in addition to 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 The Company recognizes noncontrolling interests as equity in the condensed consolidated financial statements separate from the parent company's equity. Noncontrolling interests' partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to non-controlling interests is included in consolidated net income (loss) on the face of the condensed consolidated statements of operations. Changes in a parent entity's ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the condensed consolidated statement of stockholders' equity, if presented, or in the notes to condensed 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; and (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 June 30, 2020 and December 31, 2019. 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 paid or payable for the current period. We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of June 30, 2020, and December 31, 2019, we had no unrecognized tax benefits. Net Loss per Share Net loss per share amounts has been computed based on the weighted average number of shares of common stock outstanding during the three and six months ended June 30, 2020 and 2019, respectively. 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 the three and six months ended June 30, 2020 and 2019 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 9). Other Comprehensive Income (Loss) Our other 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 condensed consolidated balance sheets. 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 condensed consolidated statements of operations was as follows: Six months ended 2020 2019 Swedish Krona 9.68 9.31 Japanese Yen 108.26 110.03 South Korean Won 1,205.88 1,146.39 Taiwan Dollar 30.01 30.97 Exchange rate for the consolidated balance sheets was as follows: As of June 30, December 31, 2020 2019 Swedish Krona 9.31 9.34 Japanese Yen 107.81 108.66 South Korean Won 1,201.06 1,154.56 Taiwan Dollar 29.44 30.00 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, accrued expenses and short-term borrowings and are deemed to approximate fair value due to their short maturities. New Accounting Pronouncements In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Tax Reclass of Presentation in our Condensed Consolidated Statements of Operations Since January 1, 2020, we have allocated revenue to our new business areas - HMI Solutions, HMI Products and Remote Sensing Solutions - rather than by our revenue streams - license fees, sensor module sale and non-recurring engineering fees. The presentation in our condensed consolidated statements of operations has bee

Short Term Borrowings

Short Term Borrowings	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Short Term Borrowings	3. Short-Term Borrowings During the six months ended June 30, 2020, the Company was granted a credit from the Swedish Tax Authority covering social charges and staff withholding taxes relating to January through March 2020 payroll, as part of Swedish governmental COVID-19 support. The total amount is $563,000 and the credit is for 12 months but can be repaid earlier if desired. There is a 1.25% annual non-deductible interest and a credit fee of 0.2% from the seventh month of the granted credit. On June 17, 2020, the Company entered into short-term loan facilities (the "Loan Agreements") with entities beneficially owned by each of Ulf Rosberg and Peter Lindell, directors of Neonode (the "Directors"). Pursuant to the Loan Agreements, each entity owned by the Director made approximately $1.7 million in U.S. dollars, principal amount available to the Company. Subsequent to entering into the Loan Agreements, the Company made an initial drawdown of an aggregate of approximately $1.0 million. Each of the Loan Agreements provides for a credit fee of 0.75% per annum, calculated on a daily basis from the date of the Loan Agreement, and any outstanding amount incurs interest at a fixed rate of 3.25% per annum, calculated on a daily basis from the drawdown date. Drawdowns under the Loan Agreements will be unavailable upon the earlier to occur of the execution of a capital raise by Neonode or December 31, 2020. If the Company completes a capital raise before December 31, 2020, any outstanding amount under the Loan Agreements, including any credit fee and interest, becomes payable as soon as practicably possible after such capital raise. If a capital raise is not completed by December 31, 2020, or if the funds from the capital raise are insufficient to repay the full outstanding amount under the Loan Agreements, then the outstanding amount under the Loan Agreements, including any credit fee and interest, is due and payable on February 28, 2021. On August 7, 2020, Neonode completed the above-mentioned capital raise and issued 1,034 shares of the Company's Preferred Shares to the entities owned by the Directors, Ulf Rosberg and Peter Lindell, to repay the indebtedness and accrued interest. As a result, the related Loan Agreements were terminated in accordance with their terms.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2020
Equity [Abstract]
Stockholders' Equity	4. Stockholders' Equity Common Stock During the three and six months ended June 30, 2020, there were no activities that affected common stock. Preferred Stock As of June 30, 2020, we had one class of preferred stock. There were no activities that affected preferred stock during the three and six months ended June 30, 2020. On August 6, 2020, in connection with the closing of a private placement, the Company designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-1 Certificate of Designation") with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-2 Certificate of Designation") with the Secretary of State of the State of Delaware. The Series C-1 Preferred Shares and Series C-2 Preferred Shares (together, the "Preferred Shares") are convertible into 684,378 shares of Neonode common stock, subject to adjustment and limitations as provided in the Series C-1 Certificate of Designation and the Series C-2 Certificate of Designation. The holders of the Preferred Shares are entitled to receive dividends at the rate per share of 5% per annum, payable quarterly and on the conversion date. In the event of any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Shares will participate pari passu with the holders of the Company's common stock, on an as-converted basis. Warrants As of June 30, 2020 and December 31, 2019, the Company had 756,368 warrants to purchase common stock outstanding.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	5. Stock-Based Compensation There was no stock-based compensation expense for the three and six months ended June 30, 2020 and 2019 and there is no remaining unrecognized expense related to stock options as of June 30, 2020. The estimated fair value of stock-based awards is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term and forfeiture rate of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior, as well as expected behavior on outstanding options. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of our stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. Stock Options We have adopted equity incentive plans for which stock options and restricted stock awards are available to grant to employees, consultants and directors. 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. As of June 30, 2020, we had two equity incentive plans: ● The 2006 Equity Incentive Plan (the "2006 Plan"); and ● The 2015 Stock Incentive Plan (the "2015 Plan"). Both the 2006 Plan and the 2015 Plan have terminated with respect to additional awards. However, shares issuable pursuant to previously awarded stock options may still be exercised in accordance with their terms. A summary of the combined activity under all of the stock option plans is set forth below: Number of Weighted Outstanding at January 1, 2020 52,500 $ 27.51 Cancelled (1,000 ) 62.10 Outstanding at June 30, 2020 51,500 $ 26.84 The aggregate intrinsic value of the 51,500 stock options that are outstanding, vested and expected to vest as of June 30, 2020 was $0. For the three and six months ended June 30, 2020 and 2019, we recorded no compensation expense related to the vesting of stock options. The fair value of the stock-based compensation was calculated using the Black-Scholes option pricing model as of the date of grant of the stock option. During the three and six months ended June 30, 2020, we did not grant any options to purchase shares of our common stock to employees or members of our board of directors. 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.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	6. 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 because 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 June 30, 2020 and December 31, 2019. 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 regarding 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 June 30, 2020 and December 31, 2019. One of our manufacturing partners has previously purchased material for the final assembly of AirBars. To protect the manufacturer from losses in relation to AirBar production, we agreed to secure the value of the inventory in a bank guarantee. The initial guarantee was for $345,000 and valid until December 31, 2019. Since the sale of AirBars has been lower than expected, a major part of the inventory at the manufacturer remained unused when the due date of the bank guarantee neared. In November 2019, we agreed to purchase the excess AirBar inventory for approximately $141,000 and in conjunction with this, the bank guarantee was decreased to $210,000 and is valid until December 31, 2020. Management's judgment is that the bank guarantee is a contingent guarantee and management will record a liability when it is probable we will have to purchase the inventory. As of August 14, 2020, management's judgment is that we will sell the remaining AirBars during 2020 and thereby purchase the components and the assembly service from the manufacturing partner throughout the year. No liability has been recorded for the period ended June 30, 2020. Patent Assignment On May 6, 2019, the Company assigned a portfolio of patents to Aequitas Technologies LCC. The portfolio contains two patent families comprising nine U.S. patents, five non-U.S. patents and three pending U.S. patent applications. The assignment provides the Company the right to share potential proceeds generated from a licensing and monetization program. As per June 30, 2020 there has been no proceeds from the agreement. On June 8, 2020, Neonode Smartphone LLC, a subsidiary of Aequitas Technologies LLC, filed patent infringement lawsuits against Apple Inc., and Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc., respectively, in Western District of Texas, USA. On July 11, 2020, Aequitas assigned 10 patents belonging to the one of the patent families back to Neonode as they decided not to enforce them. Non-Recurring Engineering Development Costs On April 25, 2013, we entered into an Analog Device Development Agreement with an effective date of December 6, 2012 (the "NN1002 Agreement") with Texas Instruments ("TI") pursuant to which TI agreed to integrate our intellectual property into an application-specific integrated circuit ("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 June 30, 2020, we had made no payments to TI under the NN1002 Agreement.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Segment Information	7. Segment Information We have one reportable segment, which is comprised of the touch technology licensing and sensor module business. All of our sales for the three and six months ended June 30, 2020 and 2019, respectively, were to customers located in the U.S., Europe and Asia. The Company reports revenues from external customers based on the country where the customer is located. The following table presents net revenues by geographic area for the three and six months ended June 30, 2020 and 2019, respectively, (dollars in thousands): Three months ended Three months ended Amount Percentage Amount Percentage United States $ 265 35 % $ 898 53 % Japan 360 48 % 417 24 % Germany 24 3 % 185 11 % Switzerland 52 7 % 40 2 % China 15 2 % 53 3 % Taiwan 9 1 % (22 ) -1 % Other 33 4 % 139 8 % $ 758 100 % $ 1,710 100 % Six months ended Six months ended Amount Percentage Amount Percentage United States $ 854 42 % $ 1,962 53 % Japan 834 41 % 1,017 27 % Germany 144 7 % 371 10 % Switzerland 107 5 % 57 2 % China 49 2 % 128 3 % Taiwan 9 - % 18 0 % Other 55 3 % 169 5 % $ 2,052 100 % $ 3,722 100 % The following table presents our total assets by geographic region as of June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, U.S. $ 1,041 $ 2,898 Sweden 4,440 4,430 Asia 107 108 Total $ 5,588 $ 7,436

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Leases	8. Leases We have operating leases for our corporate offices and our manufacturing facility, and finance leases for equipment. Our leases have remaining lease terms of three months to 2.25 years, and our two primary operating leases include options to extend the leases for one to three years. Those operating leases also include options to terminate the leases within one year. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities. Our corporate office lease is automatically renewed at a cost increase of 2% on a yearly basis unless we provide written notice three months prior to expiration date. We report operating leased assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use those buildings in our business. Our finance leases represent manufacturing equipment. We report the manufacturing equipment, as well as finance lease current and noncurrent obligations on our balance sheets. Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate. The components of lease expense were as follows (in thousands): Three Months Six Months Ended Operating lease cost (1) $ 123 $ 242 Finance lease cost: Amortization of leased assets $ 152 $ 303 Interest on lease liabilities 5 12 Total finance lease cost $ 157 $ 315 (1) Includes short term lease costs of $27,000 and $51,000 for the three and six months ended June 30, 2020, respectively. Three Months Ended Six Months Ended Operating lease cost (1) $ 153 $ 309 Finance lease cost: Amortization of leased assets $ 157 $ 318 Interest on lease liabilities 8 18 Total finance lease cost $ 165 $ 336 (1) Includes short term lease costs of $32,000 and $66,000 for the three and six months ended June 30, 2019, respectively. Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended Six Months Ended Cash paid for amounts included in leases: Operating cash flows from operating leases $ (92 ) $ (183 ) Operating cash flows from finance leases (5 ) (12 ) Financing cash flows from finance leases (32 ) (164 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases - - Three months ended Six months ended 2019 2019 Cash paid for amounts included in leases: Operating cash flows from operating leases $ (67 ) $ (189 ) Operating cash flows from finance leases (8 ) (18 ) Financing cash flows from finance leases (135 ) (272 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases - - Supplemental balance sheet information related to leases was as follows (in thousands): June 30, December 31, Operating leases Operating lease right-of-use assets $ 227 $ 416 Current portion of operating lease obligations $ 181 $ 332 Operating lease liabilities, net of current portion 20 58 Total operating lease liabilities $ 201 $ 390 Finance leases Property and equipment, at cost $ 3,360 $ 3,348 Accumulated depreciation (2,280 ) (1,956 ) Property and equipment, net $ 1,080 $ 1,392 Current portion of finance lease obligations $ 517 $ 568 Finance lease liabilities, net of current portion 393 508 Total finance lease liabilities $ 910 $ 1,076 June 30, December 31, Weighted Average Remaining Lease Term Operating leases 0.8 years 1.2 years Finance leases 1.1 years 1.6 years Weighted Average Discount Rate: Operating leases (2) 5 % 5 % Finance leases 2 % 2 % (2) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019 A summary of future minimum payments under non-cancellable operating lease commitments as of June 30, 2020 is as follows (in thousands): Years ending December 31, Total 2020 (remaining months) $ 146 2021 59 205 Less imputed interest (4 ) Total lease liabilities $ 201 The following is a schedule of minimum future rentals on the non-cancellable finance leases as of June 30, 2020 (in thousands): Year ending December 31, Total 2020 (remaining months) $ 175 2021 666 2022 79 2023 8 Total minimum payments required: 928 Less amount representing interest: (18 ) Present value of net minimum lease payments: 910 Less current portion (517 ) $ 393

Net Loss per Share

Net Loss per Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Net Loss per Share	9. Net Loss per Share Basic net loss per common share for the three and six months ended June 30, 2020 and 2019 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. Diluted loss per common share is computed by dividing net loss attributable to Neonode Inc. by the weighted average number of shares of common stock and common stock equivalents outstanding. Potential common stock equivalents of approximately 0 and 0 outstanding stock options and 0 million and 0.3 million outstanding stock warrants under the treasury stock method, and 0 and 11,000 shares issuable upon conversion of preferred stock are excluded from the diluted earnings per share calculation for the three and six months ended June 30, 2020 and 2019, respectively, due to their anti-dilutive effect. (in thousands, except per share amounts) Three months ended 2020 2019 BASIC AND DILUTED Weighted average number of common shares outstanding 9,171 8,801 Net loss attributable to Neonode Inc. $ (1,612 ) $ (1,264 ) Net loss per share - basic and diluted $ (0.18 ) $ (0.14 ) (in thousands, except per share amounts) Six months ended 2020 2019 BASIC AND DILUTED Weighted average number of common shares outstanding 9,171 8,880 Net loss attributable to Neonode Inc. $ (2,622 ) $ (1,837 ) Net loss per share - basic and diluted $ (0.29 ) $ (0.21 )

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	10. Subsequent Events We have evaluated subsequent events through the filing date of this Form 10-Q, and determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto other than as discussed elsewhere in the accompanying notes. The extent of COVID-19's effect on the Company's operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considered the rapidly evolving landscape. The Company is constantly analyzing the potential impacts to all of its business areas. At this time, it is not possible to determine the magnitude of the overall impact of COVID-19 on the Company. The situation could have a material adverse effect on the Company's condensed consolidated balance sheets, liquidity, and condensed consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows. The pandemic has, however, created an increased interest in the Company's technology, which allows germ-free contactless touch on any surface.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Neonode Inc. and its wholly owned subsidiaries, 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 2X Communication AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to manufacture and sell our sensor modules. All inter-company accounts and transactions have been eliminated in consolidation. Neonode consolidates entities in which it has a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50% of the voting rights. The condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 and the condensed consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the three and six months ended June 30, 2020 and 2019 include our accounts and those of our wholly owned subsidiaries as well as Pronode Technologies AB.
Estimates and Judgments	Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires making estimates and judgments 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 and judgments. Significant estimates and judgments include, but are not limited to: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, the standalone selling price of performance obligations, and transaction prices and assessing transfer of control; measuring variable consideration and other obligations such as product returns and refunds, and product warranties; provisions for uncollectible receivables; determining the net realizable value of inventory; recoverability of capitalized project costs and long-lived assets; for leases, determining whether a contract contains a lease, allocating consideration between lease and non-lease components, determining incremental borrowing rates, and identifying reassessment events, such as modifications; the valuation allowance related to our deferred tax assets; and the fair value of options issued for stock-based compensation.
Cash and cash equivalents	Cash and Cash Equivalents 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 $85,000 as of June 30, 2020 and December 31, 2019, respectively.
Projects in process	Projects in Process Projects in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our balance sheet as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. Costs capitalized in projects in process were $0 and $8,000 as of June 30, 2020 and December 31, 2019, respectively.
Inventory	Inventory Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out ("FIFO") valuation method. Net realizable value is the estimated selling price 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. Due to the low sell-through of our AirBar products, management has decided to reserve work-in-process for AirBar components, as well as AirBar-related raw materials. Management has further decided to reserve for a portion of AirBar finished goods, depending on type of AirBar and in which location it is stored. To protect our manufacturing partner from losses in relation to AirBar production, we agreed to secure the value of the inventory with a bank guarantee covering the production of 20,000 AirBars. Excess inventory was purchased from our manufacturing partner in 2019 and has been fully reserved. In total, the AirBar reserve was $0.7 million and $0.8 million as of June 30, 2020 and December 31, 2019. The Company's inventory consists primarily of components that will be used in the manufacturing of our sensor modules. We classify inventory for reporting purposes as raw materials, work-in-process, and finished goods. Raw materials, work-in-process, and finished goods are as follows (in thousands): June 30, December 31, 2020 2019 Raw materials $ 446 $ 396 Work-in-process 180 186 Finished goods 451 448 Ending inventory $ 1,077 $ 1,030
Investment in Joint Venture	Investment in Joint Venture We invested $3,000 in a 50% interest in Neoeye AB. We account for our investment using the equity method of accounting because the investment provides us the ability to exercise significant influence, but not control, over the investee. We are not required to guarantee any obligations of the joint venture and there have been no operations of Neoeye through June 30, 2020.
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 finance lease is recognized 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 condensed consolidated statement of operations. Maintenance and repairs are charged to expense as incurred.
Right of Use Assets	Right of Use Assets A right-of-use asset represents a lessee’s right to use a leased asset for the term of the lease. Our right-of-use assets generally consist of operating leases for buildings and finance leases for manufacturing equipment. Right-of-use assets are measured initially at the present value of the lease payments, plus any lease payments made before a lease began and any initial direct costs, such as commissions paid to obtain a lease. Right-of-use assets are subsequently measured at the present value of the remaining lease payments, adjusted for incentives, prepaid or accrued rent, and any initial direct costs not yet expensed.
Long-lived Asset Recoverability	Long-lived Asset Recoverability We assess the recoverability of long-lived assets by estimating the future cash flow from the associated assets 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 June 30, 2020, 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 and 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). Foreign currency translation gains (losses) were $64,000 and $(23,000) and $26,000 and $(155,000) during the three and six months ended June 30, 2020 and 2019, respectively. Gains (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations and were $(63,000) and $(14,000) during the three and six months ended June 30, 2020, respectively, compared to $(57,000) and $114,000 during the same periods in 2019, respectively.
Concentration of Credit and Business Risks	Concentration of Credit and Business Risks Our customers are located in U.S., Europe and Asia. As of June 30, 2020, four customers represented approximately 79% of our consolidated accounts receivable and unbilled revenues. As of December 31, 2019, three customers represented approximately 72% of our consolidated accounts receivable and unbilled revenues. Customers who accounted for 10% or more of our net revenues during the three months ended June 30, 2020 are as follows: ● Epson – 35% ● Hewlett Packard Company – 27% ● Alpine – 12% Customers who accounted for 10% or more of our net revenues during the six months ended June 30, 2020 are as follows: ● Alpine – 17% ● Epson – 24% ● Hewlett Packard Company – 33% Customers who accounted for 10% or more of our net revenues during the three months ended June 30, 2019 are as follows: ● Hewlett Packard Company – 45% ● Epson – 11% ● Alpine – 13% ● Bosch – 11% Customers who accounted for 10% or more of our net revenues during the six months ended June 30, 2019 are as follows: ● Hewlett Packard Company – 41% ● Epson – 14% ● Alpine – 12% ● Bosch – 10%
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 fulfil the promise to transfer goods, therefore we treat all shipping and handling charges as expenses. Revenues from our business areas derive from three different revenue streams, license fees, non-recurring engineering fees and the sale of sensor modules. 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 June 30, 2020. 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. During the three and six months ended June 30, 2020 and 2019, 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 (AirBar) that incorporate our sensor modules sold through distributors. 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, 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 June 30, 2020 and 2019. 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 tables present disaggregated revenues by market for the three and six months ended June 30, 2020 and 2019 (dollars in thousands): Three months ended Three months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 140 21 % $ 440 30 % Net revenues from consumer electronics 538 79 % 1,029 70 % $ 678 100 % $ 1,469 100 % HMI Products Net revenues from automotive $ 7 9 % $ - - % Net revenues from medical 47 59 % 40 17 % Net revenues from distributors and other 26 32 % 201 83 % $ 80 100 % $ 241 100 % Six months ended Six months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 541 29 % $ 936 27 % Net revenues from consumer electronics 1,319 71 % 2,475 73 % $ 1,860 100 % $ 3,411 100 % HMI Products Net revenues from automotive $ 15 8 % $ 1 - % Net revenues from medical 103 54 % 60 19 % Net revenues from distributors and other 74 38 % 250 81 % $ 192 100 % $ 311 100 %
Significant Judgments	Significant Judgments Our contracts with customers may include promises to transfer multiple products and services to a customer, particularly when the contract is 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. 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. Judgment is further 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 June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, Accounts receivable and unbilled revenue $ 738 $ 1,324 Deferred revenues 101 67 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 which 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. 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. Our allowance for doubtful accounts was approximately $85,000 as of June 30, 2020 and December 31, 2019. 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): June 30, December 31, Balance at beginning of period $ 24 $ 17 Provisions for warranty issued 10 7 Balance at end of period $ 34 $ 24 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. The following table presents our deferred revenues (in thousands): June 30, December 31, Deferred revenues HMI Solutions $ 45 $ 37 Deferred revenues HMI Products 56 30 $ 101 $ 67 During the three and six months ended June 30, 2020, the Company recognized revenues of approximately $6,000 and $32,000 respectively related to contract liabilities outstanding at the beginning of the year.
Advertising	Advertising Advertising costs are expensed as incurred. Advertising costs for the three and six months ended June 30, 2020 and 2019 amounted to approximately $9,000 and $16,000 and $29,000 and $48,000, respectively.
Research and Development	Research and Development Research and development ("R&D") costs are expensed as incurred. R&D costs consist primarily of personnel related costs in addition to 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 The Company recognizes noncontrolling interests as equity in the condensed consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to non-controlling interests is included in consolidated net income (loss) on the face of the condensed consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the condensed consolidated statement of stockholders’ equity, if presented, or in the notes to condensed 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; and (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 June 30, 2020 and December 31, 2019. 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 paid or payable for the current period. We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of June 30, 2020, and December 31, 2019, we had no unrecognized tax benefits.
Net Loss per Share	Net Loss per Share Net loss per share amounts has been computed based on the weighted average number of shares of common stock outstanding during the three and six months ended June 30, 2020 and 2019, respectively. 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 the three and six months ended June 30, 2020 and 2019 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 8).
Other Comprehensive Income (Loss)	Other Comprehensive Income (Loss) Our other 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 condensed consolidated balance sheets.
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 condensed consolidated statements of operations was as follows: Six months ended 2020 2019 Swedish Krona 9.68 9.31 Japanese Yen 108.26 110.03 South Korean Won 1,205.88 1,146.39 Taiwan Dollar 30.01 30.97 Exchange rate for the consolidated balance sheets was as follows: As of June 30, December 31, 2020 2019 Swedish Krona 9.31 9.34 Japanese Yen 107.81 108.66 South Korean Won 1,201.06 1,154.56 Taiwan Dollar 29.44 30.00
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, accrued expenses and short-term borrowings and are deemed to approximate fair value due to their short maturities.
New Accounting Pronouncements	New Accounting Pronouncements In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Tax
Reclass of Presentation in our Condensed Consolidated Statements of Operations	Reclass of Presentation in our Condensed Consolidated Statements of Operations Since January 1, 2020, we have allocated revenue to our new business areas - HMI Solutions, HMI Products and Remote Sensing Solutions - rather than by our revenue streams - license fees, sensor module sale and non-recurring engineering fees. The presentation in our condensed consolidated statements of operations has been changed accordingly. Revenues from HMI Solutions include license fees and non-recurring engineering fees while HMI Products include sensor module sales and non-recurring engineering fees. We believe that future revenues from Remote Sensing Solutions will include license fees and non-recurring engineering fees.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Schedule of inventory	June 30, December 31, 2020 2019 Raw materials $ 446 $ 396 Work-in-process 180 186 Finished goods 451 448 Ending inventory $ 1,077 $ 1,030
Schedule of estimated useful lives of property and equipment	Computer equipment 3 years Furniture and fixtures 5 years Equipment 7 years
Schedule of disaggregated revenues	Three months ended Three months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 140 21 % $ 440 30 % Net revenues from consumer electronics 538 79 % 1,029 70 % $ 678 100 % $ 1,469 100 % HMI Products Net revenues from automotive $ 7 9 % $ - - % Net revenues from medical 47 59 % 40 17 % Net revenues from distributors and other 26 32 % 201 83 % $ 80 100 % $ 241 100 % Six months ended Six months ended Amount Percentage Amount Percentage HMI Solutions Net revenues from automotive $ 541 29 % $ 936 27 % Net revenues from consumer electronics 1,319 71 % 2,475 73 % $ 1,860 100 % $ 3,411 100 % HMI Products Net revenues from automotive $ 15 8 % $ 1 - % Net revenues from medical 103 54 % 60 19 % Net revenues from distributors and other 74 38 % 250 81 % $ 192 100 % $ 311 100 %
Schedule of prepayments or upfront payments for goods or services from our customers	June 30, December 31, Accounts receivable and unbilled revenue $ 738 $ 1,324 Deferred revenues 101 67
Schedule of activity related to the product warranty liability	June 30, December 31, Balance at beginning of period $ 24 $ 17 Provisions for warranty issued 10 7 Balance at end of period $ 34 $ 24
Schedule of deferred revenues	June 30, December 31, Deferred revenues HMI Solutions $ 45 $ 37 Deferred revenues HMI Products 56 30 $ 101 $ 67
Schedule of weighted average exchange rate for the condensed consolidated statements of operations	Six months ended 2020 2019 Swedish Krona 9.68 9.31 Japanese Yen 108.26 110.03 South Korean Won 1,205.88 1,146.39 Taiwan Dollar 30.01 30.97
Schedule of exchange rate for the consolidated balance sheets	As of June 30, December 31, 2020 2019 Swedish Krona 9.31 9.34 Japanese Yen 107.81 108.66 South Korean Won 1,201.06 1,154.56 Taiwan Dollar 29.44 30.00

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Schedule of the combined activity under all of the stock option plans	Number of Weighted Outstanding at January 1, 2020 52,500 $ 27.51 Cancelled (1,000 ) 62.10 Outstanding at June 30, 2020 51,500 $ 26.84

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Schedule of net revenues by geographic region	Three months ended Three months ended Amount Percentage Amount Percentage United States $ 265 35 % $ 898 53 % Japan 360 48 % 417 24 % Germany 24 3 % 185 11 % Switzerland 52 7 % 40 2 % China 15 2 % 53 3 % Taiwan 9 1 % (22 ) -1 % Other 33 4 % 139 8 % $ 758 100 % $ 1,710 100 % Six months ended Six months ended Amount Percentage Amount Percentage United States $ 854 42 % $ 1,962 53 % Japan 834 41 % 1,017 27 % Germany 144 7 % 371 10 % Switzerland 107 5 % 57 2 % China 49 2 % 128 3 % Taiwan 9 - % 18 0 % Other 55 3 % 169 5 % $ 2,052 100 % $ 3,722 100 %
Schedule of long-lived assets by geographic region	June 30, December 31, U.S. $ 1,041 $ 2,898 Sweden 4,440 4,430 Asia 107 108 Total $ 5,588 $ 7,436

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Schedule of components of lease expense	Three Months Six Months Ended Operating lease cost (1) $ 123 $ 242 Finance lease cost: Amortization of leased assets $ 152 $ 303 Interest on lease liabilities 5 12 Total finance lease cost $ 157 $ 315 (1) Includes short term lease costs of $27,000 and $51,000 for the three and six months ended June 30, 2020, respectively. Three Months Ended Six Months Ended Operating lease cost (1) $ 153 $ 309 Finance lease cost: Amortization of leased assets $ 157 $ 318 Interest on lease liabilities 8 18 Total finance lease cost $ 165 $ 336 (1) Includes short term lease costs of $32,000 and $66,000 for the three and six months ended June 30, 2019, respectively.
Schedule of supplemental cash flow information related to leases	Three Months Ended Six Months Ended Cash paid for amounts included in leases: Operating cash flows from operating leases $ (92 ) $ (183 ) Operating cash flows from finance leases (5 ) (12 ) Financing cash flows from finance leases (32 ) (164 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases - - Three months ended Six months ended 2019 2019 Cash paid for amounts included in leases: Operating cash flows from operating leases $ (67 ) $ (189 ) Operating cash flows from finance leases (8 ) (18 ) Financing cash flows from finance leases (135 ) (272 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases - -
Schedule of supplemental balance sheet information	June 30, December 31, Operating leases Operating lease right-of-use assets $ 227 $ 416 Current portion of operating lease obligations $ 181 $ 332 Operating lease liabilities, net of current portion 20 58 Total operating lease liabilities $ 201 $ 390 Finance leases Property and equipment, at cost $ 3,360 $ 3,348 Accumulated depreciation (2,280 ) (1,956 ) Property and equipment, net $ 1,080 $ 1,392 Current portion of finance lease obligations $ 517 $ 568 Finance lease liabilities, net of current portion 393 508 Total finance lease liabilities $ 910 $ 1,076 June 30, December 31, Weighted Average Remaining Lease Term Operating leases 0.8 years 1.2 years Finance leases 1.1 years 1.6 years Weighted Average Discount Rate: Operating leases (2) 5 % 5 % Finance leases 2 % 2 % (2) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019
Schedule of future minimum payments under non-cancellable operating lease commitments	Years ending December 31, Total 2020 (remaining months) $ 146 2021 59 205 Less imputed interest (4 ) Total lease liabilities $ 201
Schedule of minimum future rentals on the non-cancelable finance leases	Year ending December 31, Total 2020 (remaining months) $ 175 2021 666 2022 79 2023 8 Total minimum payments required: 928 Less amount representing interest: (18 ) Present value of net minimum lease payments: 910 Less current portion (517 ) $ 393

Net Loss per Share (Tables)

Net Loss per Share (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Schedule of basic and diluted for net loss per share	(in thousands, except per share amounts) Three months ended 2020 2019 BASIC AND DILUTED Weighted average number of common shares outstanding 9,171 8,801 Net loss attributable to Neonode Inc. $ (1,612 ) $ (1,264 ) Net loss per share - basic and diluted $ (0.18 ) $ (0.14 ) (in thousands, except per share amounts) Six months ended 2020 2019 BASIC AND DILUTED Weighted average number of common shares outstanding 9,171 8,880 Net loss attributable to Neonode Inc. $ (2,622 ) $ (1,837 ) Net loss per share - basic and diluted $ (0.29 ) $ (0.21 )

Interim Period Reporting (Detai

Interim Period Reporting (Details) - USD ($) $ in Thousands	Aug. 06, 2020	Aug. 05, 2020	Jun. 17, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Aug. 07, 2020	Dec. 31, 2019
Interim Period Reporting (Textual)
Net loss				$ (1,612)	$ (1,264)	$ (2,622)	$ (1,837)
Accumulated deficit				(193,142)		(193,142)			$ (190,520)
Net cash used in operating activities						(1,928)	$ (1,475)
Short-term loan facilities, description			Pursuant to the Loan Agreements, each Director made 16,145,000 SEK (Swedish Krona), which is approximately $1.7 million in U.S. dollars, principal amount available to the Company.
Initial drawdown				$ 1,000		$ 1,000
Subsequent Event [Member] | Private Placement [Member]
Interim Period Reporting (Textual)
Sell an aggregate shares of common stock	659,070
Description of shares of common stock	In connection with the Private Placement, Neonode designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-1 Certificate of Designation") with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-2 Certificate of Designation") with the Secretary of State of the State of Delaware.
Subsequent Event [Member] | Series C-1 Preferred Shares and Series C-2 Preferred Shares [Member]
Interim Period Reporting (Textual)
Description of shares of common stock	The Series C-1 Preferred Shares and Series C-2 Preferred Shares (together, the "Preferred Shares") are convertible into 684,378 shares of Neonode common stock, subject to adjustment and limitations as provided in the Series C-1 Certificate of Designation and the Series C-2 Certificate of Designation. The Series C-1 Preferred Shares and the Series C-2 Preferred Shares have no voting rights, however, under certain circumstances provided therein, the Company may not alter, change or amend the Series C-1 Certificate of Designation and Series C-2 Certificate of Designation without the affirmative vote of a majority of the then outstanding Series C-1 Preferred Shares and Series C-2 Preferred Shares, respectively. The holders of the Preferred Shares are entitled to receive dividends at the rate per share of 5% per annum, payable quarterly and on the conversion date. In the event of any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Shares will participate pari passu with the holders of the Company's common stock, on an as-converted basis.	The Series C-1 Preferred Shares and Series C-2 Preferred Shares are substantially the same, except the conversion of the Series C-2 Preferred Shares requires additional shareholder approval in accordance with Nasdaq listing rules. Ulf Rosberg and Peter Lindell, directors of Neonode, and Urban Forssell the Chief Executive Officer of Neonode (together, the "Insiders") purchased an aggregate of $3.05 million of the Series C-2 Preferred Shares pursuant to the Securities Purchase Agreement.
Registration rights agreement, description	In connection with the Securities Purchase Agreement, Neonode entered into a Registration Rights Agreement (the "Registration Rights Agreement") pursuant to which Neonode will file a registration statement with the SEC relating to the offer and sale by the holders of the Common Shares, and the shares of common stock underlying the Preferred Shares. Pursuant to the Registration Rights Agreement, Neonode is obligated to file the registration statement within 30 calendar days and to use reasonable best efforts to cause the registration statement to be declared effective within 75 calendar days or 105 calendar days in the case of a full review by the SEC. Failure to meet those and related obligations, or failure to maintain the effective registration of the Common Shares and the shares of common stock underlying the Preferred Shares will subject Neonode to payment for liquidated damages.
Subsequent Event [Member] | Series C-1 Preferred Shares and Series C-2 Preferred Shares [Member] | Private Placement [Member]
Interim Period Reporting (Textual)
Description of shares of common stock	In connection with the closing of a private placement, the Company designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-1 Certificate of Designation") with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-2 Certificate of Designation") with the Secretary of State of the State of Delaware.
Subsequent Event [Member] | Series C-2 Preferred Shares [Member]
Interim Period Reporting (Textual)
Description of shares of common stock		Pursuant to the Securities Purchase Agreement, Neonode agreed to issue an additional 1,034 shares of Series C-2 Preferred Shares to the Directors, Ulf Rosberg and Peter Lindell, to repay an aggregate of $1.03 million of outstanding indebtedness owed to them under Loan Agreements.
Subsequent Event [Member] | Securities Purchase Agreement [Member]
Interim Period Reporting (Textual)
Description of shares of common stock		The Securities Purchase Agreement, Neonode issued a total of 1,611,845 shares of common stock (the "Common Shares") at a price of $6.50 per Common Share, and a total of 3,415 shares with a conversion price of $6.50 per share and a stated value of $1,000 of Series C-1 convertible preferred stock (the "Series C-1 Preferred Shares") and Series C-2 convertible preferred stock (the "Series C-2 Preferred Shares"), for an aggregate purchase price of $13.9 million in gross proceeds.
Subsequent Event [Member] | Directors [Member]
Interim Period Reporting (Textual)
Issue of convertible preferred stock								1,033
Outstanding indebtedness								$ 1,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Raw materials	$ 446	$ 396
Work-in-process	180	186
Finished goods	451	448
Ending inventory	$ 1,077	$ 1,030

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1)	6 Months Ended
	Jun. 30, 2020
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	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Line Items]
Net revenues	$ 678	$ 1,469	$ 1,860	$ 3,411
Percentage of net revenues	100.00%	100.00%	100.00%	100.00%
HMI Solutions [Member] | Automotive [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 140	$ 440	$ 140	$ 936
Percentage of net revenues	21.00%	30.00%	29.00%	27.00%
HMI Solutions [Member] | Consumer electronics [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 538	$ 1,029	$ 1,319	$ 2,475
Percentage of net revenues	79.00%	70.00%	71.00%	73.00%
HMI Products [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 80	$ 241	$ 192	$ 311
Percentage of net revenues	100.00%	100.00%	100.00%	100.00%
HMI Products [Member] | Automotive [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 7	$ 0	$ 15	$ 1
Percentage of net revenues	9.00%		8.00%
HMI Products [Member] | Medical [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 47	$ 40	$ 103	$ 60
Percentage of net revenues	59.00%	17.00%	54.00%	19.00%
HMI Products [Member] | Distributors and other [Member]
Property, Plant and Equipment [Line Items]
Net revenues	$ 26	$ 201	$ 74	$ 250
Percentage of net revenues	32.00%	83.00%	38.00%	81.00%

Summary of Significant Accoun_7

Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Accounts receivable and unbilled revenue, net	$ 738	$ 1,324
Deferred revenues	$ 101	$ 67

Summary of Significant Accoun_8

Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Balance at beginning of period	$ 24	$ 17
Provisions for warranty issued	10	7
Balance at end of period	$ 34	$ 24

Summary of Significant Accoun_9

Summary of Significant Accounting Policies (Details 5) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies [Line Items]
Deferred revenues	$ 101	$ 67
Deferred revenues HMI Solutions [Member]
Summary of Significant Accounting Policies [Line Items]
Deferred revenues	45	37
Deferred revenues HMI Products [Member]
Summary of Significant Accounting Policies [Line Items]
Deferred revenues	$ 56	$ 30

Summary of Significant Accou_10

Summary of Significant Accounting Policies (Details 6)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Swedish Krona [Member]
Weighted-average exchange rate for the condensed consolidated statements of operations
Weighted-average exchange rate for statements of operations	9.68	9.31
Japanese Yen [Member]
Weighted-average exchange rate for the condensed consolidated statements of operations
Weighted-average exchange rate for statements of operations	108.26	110.03
South Korean Won [Member]
Weighted-average exchange rate for the condensed consolidated statements of operations
Weighted-average exchange rate for statements of operations	1,205.88	1,146.39
Taiwan Dollar [Member]
Weighted-average exchange rate for the condensed consolidated statements of operations
Weighted-average exchange rate for statements of operations	30.01	30.97

Summary of Significant Accou_11

Summary of Significant Accounting Policies (Details 7)	Jun. 30, 2020	Dec. 31, 2019
Swedish Krona [Member]
Exchange rate for the consolidated balance sheets
Exchange rate	9.31	9.34
Japanese Yen [Member]
Exchange rate for the consolidated balance sheets
Exchange rate	107.81	108.66
South Korean Won [Member]
Exchange rate for the consolidated balance sheets
Exchange rate	1,201.06	1,154.56
Taiwan Dollar [Member]
Exchange rate for the consolidated balance sheets
Exchange rate	29.44	30

Summary of Significant Accou_12

Summary of Significant Accounting Policies (Details Textual) $ in Thousands	3 Months Ended						6 Months Ended		12 Months Ended
	Jun. 30, 2020USD ($)	Mar. 31, 2020USD ($)	Dec. 31, 2019USD ($)	Sep. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Mar. 31, 2019USD ($)	Jun. 30, 2020USD ($)customers	Jun. 30, 2019USD ($)	Dec. 31, 2019USD ($)customers
Summary of Significant Accounting Policies (Textual)
Basic deposit coverage limits per owner and customer	$ 250						$ 250
Allowance for doubtful accounts	85		$ 85				85		$ 85
Costs capitalized in projects in process							0		8
Foreign currency translation adjustments	64	$ (87)	117	$ (145)	$ 26	$ (181)	(23)	$ (155)
Foreign currency transactions, general and administrative expenses	$ (63)				$ (57)		(14)	$ 114
Investment in joint venture							$ 3
Equity ownership percentage	50.00%						50.00%
Concentration risk, percentage	100.00%				100.00%		100.00%	100.00%
Advertising costs	$ 9				$ 29		$ 16	$ 48
Noncontrolling interest, description							Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies.
Recognized of Revenues	6						$ 32
Inventory reserve amount	700		$ 800				$ 700		$ 800
insurance coverage Description							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.
Initial drawdown	$ 1,000						$ 1,000
AirBar [Member]
Summary of Significant Accounting Policies (Textual)
Inventory description							To protect our manufacturing partner from losses in relation to AirBar production, we agreed to secure the value of the inventory with a bank guarantee covering the production of 20,000 AirBars. Excess inventory was purchased from our manufacturing partner in 2019 and has been fully reserved.
Accounts Receivable [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage							79.00%		72.00%
No. of customers | customers							4		3
Sales Revenue, Net [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	10.00%				10.00%		10.00%	10.00%
Sales Revenue, Net [Member] | Epson [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	35.00%				11.00%		24.00%	14.00%
Sales Revenue, Net [Member] | Hewlett Packard [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	27.00%				45.00%		33.00%	41.00%
Sales Revenue, Net [Member] | Alpine [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage	12.00%				13.00%		17.00%	12.00%
Sales Revenue, Net [Member] | Bosch [Member]
Summary of Significant Accounting Policies (Textual)
Concentration risk, percentage					11.00%
Sweden [Member] | Pronode Technologies AB [Member]
Summary of Significant Accounting Policies (Textual)
Noncontrolling interest owned by Pronode Technologies AB	51.00%						51.00%
Noncontrolling interest owned by Propoint AB	49.00%						49.00%

Short Term Borrowings (Details)

Short Term Borrowings (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Jun. 17, 2020	Jun. 30, 2020	Aug. 07, 2020
Total amount of credit		$ 563
Description of deductible interest		There is a 1.25% yearly non-deductible interest and a credit fee of 0.2% from the seventh month of the granted credit.
Subsequent Event [Member]
Shares issued			1,034
Loan Agreement [Member]
Description of loan agreements	Each of the Loan Agreements provides for a credit fee of 0.75% per annum, calculated on a daily basis from the date of the Loan Agreement, and any outstanding amount incurs interest at a fixed rate of 3.25% per annum, calculated on a daily basis from the drawdown date. Drawdowns under the Loan Agreements will be unavailable upon the earlier to occur of the execution of capital raise by Neonode or December 31, 2020. If the Company carries out a capital raise before December 31, 2020, any outstanding amount under the Loan Agreements, including any credit fee and interest, becomes payable as soon as practicably possible after such capital raise. If a capital raise does not occur by December 31, 2020, or if the funds from the capital raise are insufficient to repay the full outstanding amount under the Loan Agreements, then the outstanding amount under the Loan Agreements, including any credit fee and interest, is due and payable on February 28, 2021.
Directors [Member]
Description of loan agreements	The Company entered into short-term loan facilities (the "Loan Agreements") with entities beneficially owned by each of Ulf Rosberg and Peter Lindell, directors of Neonode (the "Directors"). Pursuant to the Loan Agreements, each entity owned by the Director made approximately $1.7 million in U.S. dollars, principal amount available to the Company. Subsequent to entering into the Loan Agreements, the Company made an initial drawdown of an aggregate of approximately $1.0 million.

Stockholders' Equity (Details)

Stockholders' Equity (Details) - shares	Aug. 06, 2020	Aug. 05, 2020	Aug. 07, 2020	Jun. 30, 2020	Dec. 31, 2019
Stockholders' Equity (Textual)
Warrants to purchase common stock outstanding				756,368	756,368
Subsequent Event [Member]
Stockholders' Equity (Textual)
Shares of Neonode common stock			1,034
Subsequent Event [Member] | Series C-1 Preferred Shares and Series C-2 Preferred Shares [Member]
Stockholders' Equity (Textual)
Description of shares of common stock	The Series C-1 Preferred Shares and Series C-2 Preferred Shares (together, the "Preferred Shares") are convertible into 684,378 shares of Neonode common stock, subject to adjustment and limitations as provided in the Series C-1 Certificate of Designation and the Series C-2 Certificate of Designation. The Series C-1 Preferred Shares and the Series C-2 Preferred Shares have no voting rights, however, under certain circumstances provided therein, the Company may not alter, change or amend the Series C-1 Certificate of Designation and Series C-2 Certificate of Designation without the affirmative vote of a majority of the then outstanding Series C-1 Preferred Shares and Series C-2 Preferred Shares, respectively. The holders of the Preferred Shares are entitled to receive dividends at the rate per share of 5% per annum, payable quarterly and on the conversion date. In the event of any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Shares will participate pari passu with the holders of the Company's common stock, on an as-converted basis.	The Series C-1 Preferred Shares and Series C-2 Preferred Shares are substantially the same, except the conversion of the Series C-2 Preferred Shares requires additional shareholder approval in accordance with Nasdaq listing rules. Ulf Rosberg and Peter Lindell, directors of Neonode, and Urban Forssell the Chief Executive Officer of Neonode (together, the "Insiders") purchased an aggregate of $3.05 million of the Series C-2 Preferred Shares pursuant to the Securities Purchase Agreement.
Subsequent Event [Member] | Private Placement [Member]
Stockholders' Equity (Textual)
Description of shares of common stock	In connection with the Private Placement, Neonode designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-1 Certificate of Designation") with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-2 Certificate of Designation") with the Secretary of State of the State of Delaware.
Subsequent Event [Member] | Private Placement [Member] | Series C-1 Preferred Shares and Series C-2 Preferred Shares [Member]
Stockholders' Equity (Textual)
Description of shares of common stock	In connection with the closing of a private placement, the Company designated (i) 365 shares of its authorized and unissued preferred stock as Series C-1 Preferred Shares by filing a Series C-1 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-1 Certificate of Designation") with the Secretary of State of the State of Delaware and (ii) 4,084 shares of its authorized and unissued preferred stock as Series C-2 Preferred Shares by filing a Series C-2 Certificate of Designation of Preferences, Rights and Limitations (the "Series C-2 Certificate of Designation") with the Secretary of State of the State of Delaware.
Shares of Neonode common stock	684,378
Dividends at the rate	5.00%

Stock-Based Compensation (Detai

Stock-Based Compensation (Details 1) - Stock Options [Member]	6 Months Ended
	Jun. 30, 2020$ / sharesshares
Summary of all stock option plans
Number of Options Outstanding, Beginning Balance | shares	51,500
Number of Options Outstanding, Cancelled | shares
Number of Options Outstanding, Ending Balance | shares	51,500
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares	$ 27.51
Weighted Average Exercise Price, Cancelled | $ / shares	62.10
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares	$ 26.84

Stock-Based Compensation (Det_2

Stock-Based Compensation (Details Textual) - Stock Option [Member] $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020USD ($)shares	Jun. 30, 2020USD ($)shares
Stock-Based Compensation (Textual)
Number of options outstanding | shares	51,500	51,500
Options outstanding, vested and expected to vest, aggregate intrinsic value	$ 0	$ 0
Share-based compensation expense	$ 0	$ 0
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.

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	1 Months Ended		6 Months Ended
	Nov. 30, 2019	Apr. 25, 2013	Jun. 30, 2020
Commitments and Contingencies (Textual)
Non-recurring engineering costs, description		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.
Guarantee, description	The bank guarantee was decreased to $210,000 and is valid until December 31, 2020.		The initial guarantee was for $345,000 and valid until December 31, 2019.
Inventory purchase	$ 141,000

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Summary of net revenues by geographic region
Total revenues	$ 758	$ 1,710	$ 2,052	$ 3,722
Revenues percentage	100.00%	100.00%	100.00%	100.00%
United States [Member]
Summary of net revenues by geographic region
Total revenues	$ 265	$ 898	$ 854	$ 1,962
Revenues percentage	35.00%	53.00%	42.00%	53.00%
Japan [Member]
Summary of net revenues by geographic region
Total revenues	$ 360	$ 417	$ 834	$ 1,017
Revenues percentage	48.00%	24.00%	41.00%	27.00%
Germany [Member]
Summary of net revenues by geographic region
Total revenues	$ 24	$ 185	$ 144	$ 371
Revenues percentage	3.00%	11.00%	7.00%	10.00%
Switzerland [Member]
Summary of net revenues by geographic region
Total revenues	$ 52	$ 40	$ 107	$ 57
Revenues percentage	7.00%	2.00%	5.00%	2.00%
China [Member]
Summary of net revenues by geographic region
Total revenues	$ 15	$ 53	$ 49	$ 128
Revenues percentage	2.00%	3.00%	2.00%	3.00%
Taiwan [Member]
Summary of net revenues by geographic region
Total revenues	$ 9	$ (22)	$ 9	$ 18
Revenues percentage	1.00%	(1.00%)		0.00%
Other [Member]
Summary of net revenues by geographic region
Total revenues	$ 33	$ 139	$ 55	$ 169
Revenues percentage	4.00%	8.00%	3.00%	5.00%

Segment Information (Details 1)

Segment Information (Details 1) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	$ 5,588	$ 7,436
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	1,041	2,898
Sweden [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	4,440	4,430
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	$ 107	$ 108

Segment Information (Details Te

Segment Information (Details Textual)	6 Months Ended
	Jun. 30, 2020segments
Segment Information (Textual)
No. of segments	1

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020		Jun. 30, 2019		Jun. 30, 2020		Jun. 30, 2019
Leases [Abstract]
Operating lease cost	$ 123	[1]	$ 153	[2]	$ 242	[1]	$ 309	[2]
Finance lease cost:
Amortization of leased assets	152		157		303		318
Interest on lease liabilities	5		8		12		18
Total finance lease cost	$ 157		$ 165		$ 315		$ 336
[1]	Includes short term lease costs of $27,000 and $51,000 for the three and six months ended June 30, 2020, respectively.
[2]	Includes short term lease costs of $32,000 and $66,000 for the three and six months ended June 30, 2019, respectively.

Leases (Details 1)

Leases (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Cash paid for amounts included in leases:
Operating cash flows from operating leases	$ (92)	$ (67)	$ (183)	$ (189)
Operating cash flows from finance leases	(5)	(8)	(12)	(18)
Financing cash flows from finance leases	(32)	(135)	(164)	(272)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases

Leases (Details 2)

Leases (Details 2) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Operating leases
Operating lease right-of-use assets	$ 227	$ 416
Current portion of operating lease obligations	181	332
Finance leases
Property and equipment, net	1,208	1,583
Current portion of finance lease obligations	517	568
Finance lease liabilities, net of current portion	393	508
Lease [Member]
Operating leases
Operating lease right-of-use assets	227	416
Current portion of operating lease obligations	181	332
Operating lease liabilities, net of current portion	20	58
Total operating lease liabilities	201	390
Finance leases
Property and equipment, at cost	3,360	3,348
Accumulated depreciation	(2,280)	(1,956)
Property and equipment, net	1,080	1,392
Current portion of finance lease obligations	517	568
Finance lease liabilities, net of current portion	393	508
Total finance lease liabilities	$ 910	$ 1,076

Leases (Details 3)

Leases (Details 3)		Jun. 30, 2020	Dec. 31, 2019
Weighted Average Remaining Lease Term
Operating leases		9 months 18 days	1 year 2 months 12 days
Finance leases		1 year 1 month 6 days	1 year 7 months 6 days
Weighted Average Discount Rate:
Operating leases	[1]	5.00%	5.00%
Finance leases		2.00%	2.00%
[1]	Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019

Leases (Details 4)

Leases (Details 4) - Operating Lease [Member] $ in Thousands	Jun. 30, 2020USD ($)
2020 (remaining months)	$ 146
2021	59
Total	205
Less imputed interest	(4)
Total lease liabilities	$ 201

Leases (Details 5)

Leases (Details 5) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Less current portion	$ (517)	$ (568)
Total	393	508
Lease [Member]
2020 (remaining months)	175
2021	666
2022	79
2023	8
Total minimum payments required:	928
Less amount representing interest:	(18)
Present value of net minimum lease payments:	910	1,076
Less current portion	(517)	(568)
Total	$ 393	$ 508

Leases (Details Textual)

Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases (Textual)
Operating lease, description			Our leases have remaining lease terms of three months to 2.25 years, and our two primary operating leases include options to extend the leases for one to three years. Those operating leases also include options to terminate the leases within one year.
Extended, description			Our corporate office lease is automatically renewed at a cost increase of 2% on a yearly basis unless we provide written notice three months prior to expiration date.
Short term lease costs	$ 27	$ 32	$ 51	$ 66

Net Loss per Share (Details)

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
BASIC AND DILUTED
Weighted average number of common shares outstanding	9,171	8,801	9,171	8,880
Net loss attributable to Neonode Inc.	$ (1,612)	$ (1,264)	$ (2,622)	$ (1,837)
Net loss per share - basic and diluted	$ (0.18)	$ (0.14)	$ (0.29)	$ (0.21)

Net Loss per Share (Details Tex

Net Loss per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Conversion Preferred Stock [Member]
Net Loss Per Share (Textual)
Antidilutive securities excluded from computation of earnings per share	0	11,000	0	11,000
Warrant [Member]
Net Loss Per Share (Textual)
Antidilutive securities excluded from computation of earnings per share	0	300,000	0	300,000
Stock Option [Member]
Net Loss Per Share (Textual)
Antidilutive securities excluded from computation of earnings per share	0	0	0	0