Neonode (NEON) 8-K Results of Operations and Financial Condition

Exhibit 99.1

 

Press Release

For Release, 09:10AM EDT August 10, 2023

Neonode Reports Quarter Ended June 30, 2023 Financial Results

STOCKHOLM, SWEDEN, August 10, 2023 — Neonode Inc. (NASDAQ: NEON) today reported financial results for the three and six months ended June 30, 2023.

FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED JUNE 30, 2023:

● Revenue of $1.2 million, a decrease of 5.3% compared to the same period in the prior year.

● Operating expenses of $2.8 million, a decrease of 1.9% compared to the same period in the prior year.

● Net loss of $1.5 million, or $0.10 per share, compared to $1.5 million, or $0.11 per share, for the same period in the prior year.

● Cash used by operations of $0.6 million compared to $2.9 million for the same period in the prior year.

● Cash and accounts receivable of $21.6 million as of June 30, 2023 compared to $16.3 million as of December 31, 2022.

FINANCIAL SUMMARY FOR THE SIX MONTHS ENDED JUNE 30, 2023:

● Revenue of $2.5 million, a decrease of 5.1% compared to the same period in the prior year.

● Operating expenses of $5.6 million, an increase of 1.4% compared to the same period in the prior year.

● Net loss of $2.9 million, or $0.19 per share, compared to $2.9 million, or $0.22 per share, for the same period in the prior year.

● Cash used by operations of $2.3 million compared to $5.2 million for the same period in the prior year.

THE CEO’S COMMENTS

“Our licensing revenues in Q2 were at the same level as in Q1 and 15% higher than in the same period last year, showing good stability. Our product sales revenues in Q2 were low and much below expectations, which we are addressing with different kinds of activities and changes in our strategies and tactics to ensure that we come back to a growth path for this business in the coming quarters”, said Dr. Urban Forssell, Neonode’s CEO.

“The changes we have started to implement include an increased focus on markets and sectors where we have good traction, supported by intensified marketing – both online and through participation in tradeshows and other types of events – to create beachheads from which we may continue to grow our licensing and products businesses. To help us drive these changes and become more effective in our marketing and sales efforts we have recruited experienced core competence to strengthen our sales and engineering teams in Stockholm. We remain optimistic about our ability to grow our business and return to profitability,” concluded Dr. Forssell.

FINANCIAL OVERVIEW FOR THE QUARTER ENDED JUNE 30, 2023

Net revenues for the quarter ended June 30, 2023 were $1.2 million, a 5.3% decrease compared to the same period in 2022. For the 2023 period, license revenues were $1.1 million, an increase of 14.8% compared to the 2022 period. The increase is primarily volume related as the global supply chain challenges related to semiconductor supply shortages that hampered our printer and automotive customers’ production and sales for the last two years have improved and the demand for our customers’ products remains strong.

Revenues from product sales for the quarter ended June 30, 2023 were $0.1 million, a 60.0% decrease compared to the same period in 2022. The reason for the decrease is mainly low customer demand, which we are addressing with focused marketing and sales campaigns and updates to our partner network.

Gross margin related to products was 66.7% for the second quarter of 2023 compared to 55.7% in the same period in 2022. The gross margin for products is higher for lower order volumes and also varies with the product mix.

Our operating expenses decreased by 1.9% for the second quarter of 2023 compared to the same period in 2022, primarily due to lower payroll and related costs.

Net loss attributable to Neonode for the three months ended June 30, 2023 was $1.5 million, or $0.10 per share, compared to a net loss of $1.5 million, or $0.11 per share, for the same period in 2022. Cash used by operations was $0.6 million in the second quarter of 2023 compared to $2.9 million for the same period in 2022. The decrease is primarily the result of less component purchases.

Cash and accounts receivable totaled $21.6 million and working capital was $24.0 million as of June 30, 2023 compared to $16.3 million and $19.1 million as of December 31, 2022, respectively.

For more information, please contact:

Chief Financial Officer

Fredrik Nihlén

E-mail: fredrik.nihlen@neonode.com

Phone: +46 703 97 21 09

Chief Executive Officer

Urban Forssell

E-mail: urban.forssell@neonode.com

Phone: +46 734 10 03 59

About Neonode

Neonode Inc. (NASDAQ:NEON) is a publicly traded company, headquartered in Stockholm, Sweden and established in 2001. The company provides advanced optical sensing solutions for contactless touch, touch, gesture control, and in-cabin monitoring. Building on experience acquired during years of advanced R&D and technology licensing, Neonode’s technology is currently deployed in more than 80 million products and the company holds more than 100 patents worldwide. Neonode’s customer base includes some of the world’s best-known Fortune 500 companies in the consumer electronics, office equipment, automotive, elevator, and self-service kiosk markets.

NEONODE and the NEONODE logo are trademarks of Neonode Inc. registered in the United States and other countries.

For further information please visit www.neonode.com

Follow us at:

Cision

LinkedIn

Twitter

2

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to our expectations for growth and the growing demand for our products, future performance or future events. These statements are based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown risks, uncertainties and other factors that may cause Neonode’s actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements.

These risks, uncertainties, and factors include risks related to our reliance on the ability of our customers to design, manufacture and sell their products with our touch technology, the length of a customer’s product development cycle, our dependence and our customers’ dependence on suppliers, the COVID-19 pandemic, the global economy generally and other risks discussed under “Risk Factors” and elsewhere in Neonode’s public filings with the SEC from time to time, including Neonode’s annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no assurance that its expectations will be fulfilled. Forward-looking statements are made as of today’s date, and Neonode undertakes no duty to update or revise them.

3

NEONODE INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	June 30,			December 31,
	2023			2022
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	20,291		$	14,816
Accounts receivable and unbilled revenues, net		1,301			1,448
Inventory		3,671			3,827
Prepaid expenses and other current assets		660			707
Total current assets		25,923			20,798
Property and equipment, net		289			282
Operating lease right-of-use assets, net		83			118
Total assets	$	26,295		$	21,198
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	508		$	334
Accrued payroll and employee benefits		848			951
Accrued expenses		468			200
Contract liabilities		22			36
Current portion of finance lease obligations		54			95
Current portion of operating lease obligations		66			83
Total current liabilities		1,966			1,699
Finance lease obligations, net of current portion		31			46
Operating lease obligations, net of current portion		17			35
Total liabilities		2,014			1,780
Commitments and contingencies
Stockholders’ equity:
Common stock, 25,000,000 shares authorized, with par value of $0.001; 15,359,481 and 14,455,765 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		15			14
Additional paid-in capital		235,135			227,235
Accumulated other comprehensive loss		(446	)		(340	)
Accumulated deficit		(210,423	)		(207,491	)
Total stockholders’ equity		24,281			19,418
Total liabilities and stockholders’ equity	$	26,295		$	21,198

4

NEONODE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Revenues:
License fees	$	1,094		$	953		$	2,242		$	2,057
Products		84			210			186			357
Non-recurring engineering		22			104			25			171
Total revenues		1,200			1,267			2,453			2,585
Cost of revenues:
Products		28			93			75			144
Non-recurring engineering		9			17			9			26
Total cost of revenues		37			110			84			170
Total gross margin		1,163			1,157			2,369			2,415
Operating expenses:
Research and development		1,063			1,146			1,865			2,169
Sales and marketing		689			644			1,281			1,260
General and administrative		1,038			1,053			2,422			2,063
Total operating expenses		2,790			2,843			5,568			5,492
Operating loss		(1,627	)		(1,686	)		(3,199	)		(3,077	)
Other income (expense):
Interest income (expense), net		169			(4	)		327			(6	)
Other income		-			21			-			21
Total other income, net		169			17			327			15
Loss before provision for income taxes		(1,458	)		(1,669	)		(2,872	)		(3,062	)
Provision for income taxes		49			28			60			72
Net loss including noncontrolling interests		(1,507	)		(1,697	)		(2,932	)		(3,134	)
Less: net loss attributable to noncontrolling interests		-			149			-			206
Net loss attributable to Neonode Inc.	$	(1,507	)	$	(1,548	)	$	(2,932	)	$	(2,928	)
Loss per common share:
Basic and diluted loss per share	$	(0.10	)	$	(0.11	)	$	(0.19	)	$	(0.22	)
Basic and diluted – weighted average number of common shares outstanding		15,359			13,578			15,285			13,577

5

NEONODE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Net loss	$	(1,507	)	$	(1,697	)	$	(2,932	)	$	(3,134	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(141	)		41			(106	)		74
Other comprehensive loss		(1,648	)		(1,656	)		(3,038	)		(3,060	)
Less: comprehensive loss attributable to noncontrolling interests		-			149			-			206
Other comprehensive loss attributable to Neonode Inc.	$	(1,648	)	$	(1,507	)	$	(3,038	)	$	(2,854	)

6

NEONODE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Neonode Inc. Stockholders’ Equity			Noncontrolling Interests		Total Stockholders’ Equity
Balances, December 31, 2022		14,456	$	14	$	227,235	$	(340	)	$	(207,491	)	$	19,418		$	-	$	19,418
Stock-based compensation		-		-		18		-			-			18			-		18
Issuance of shares for cash, net of offering costs		903		1		7,865		-			-			7,866			-		7,866
Foreign currency translation adjustment		-		-		-		35			-			35			-		35
Net loss		-		-		-		-			(1,425	)		(1,425	)		-		(1,425	)
Balances, March 31, 2023		15,359	$	15	$	235,118	$	(305	)	$	(208,916	)	$	25,912		$	-	$	25,912
Stock-based compensation		-		-		17		-			-			17			-		17
Foreign currency translation adjustment		-		-		-		(141	)		-			(141	)		-		(141	)
Net loss		-		-		-		-			(1,507	)		(1,507	)		-		(1,507	)
Balances, June 30, 2023		15,359	$	15	$	235,135	$	(446	)	$	(210,423	)	$	24,281		$	-	$	24,281

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Neonode Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balances, December 31, 2021		13,576	$	14	$	226,880	$	(408	)	$	(202,608	)	$	23,878		$	(4,041	)	$	19,837
Stock-based compensation		-		-		39		-			-			39			-			39
Foreign currency translation adjustment		-		-		-		33			-			33			-			33
Net loss		-		-		-		-			(1,380	)		(1,380	)		(57	)		(1,437	)
Balances, March 31, 2022		13,576	$	14	$	226,919	$	(375	)	$	(203,988	)	$	22,570		$	(4,098	)	$	18,472
Stock-based compensation		4		-		45		-			-			45			-			45
Foreign currency translation adjustment		-		-		-		41			-			41			-			41
Net loss		-		-		-		-			(1,548	)		(1,548	)		(149	)		(1,697	)
Balances, June 30, 2022		13,580	$	14	$	226,964	$	(334	)	$	(205,536	)	$	21,108		$	(4,247	)	$	16,861

7

NEONODE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six months ended June 30,
	2023			2022
Cash flows from operating activities:
Net loss (including noncontrolling interests)	$	(2,932	)	$	(3,134	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		35			84
Depreciation and amortization		37			87
Amortization of operating lease right-of-use assets		33			224
Recoveries of bad debt		-			(79	)
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue, net		140			253
Inventory		17			(2,312	)
Prepaid expenses and other current assets		27			232
Accounts payable, accrued payroll and employee benefits, and accrued expenses		374			(287	)
Contract liabilities		(13	)		12
Operating lease obligations		(33	)		(294	)
Net cash used in operating activities		(2,315	)		(5,214	)
Cash flows from investing activities:
Purchase of property and equipment		(36	)		(47	)
Net cash used in investing activities		(36	)		(47	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		7,866			-
Principal payments on finance lease obligations		(52	)		(99	)
Net cash provided by (used in) financing activities		7,814			(99	)
Effect of exchange rate changes on cash and cash equivalents		12			403
Net decrease in cash and cash equivalents		5,475			(4,957	)
Cash and cash equivalents at beginning of period		14,816			17,383
Cash and cash equivalents at end of period	$	20,291		$	12,426
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	60		$	2
Cash paid for interest	$	6		$	6
Supplemental disclosure of non-cash investing and financial activities:
Property and equipment obtained in exchange for lease obligations	$	-		$	24

8