What changed in this filing

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Item 1. Financial Statements

2025-05-14 compared with 2024-11-06 · 205 added, 325 removed, 203 unchanged (72% of the section changed)

Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share amounts)

September 30,

Current assets:

1 unchanged sentence

Accounts receivable and unbilled revenues, net

Contract assets

Prepaid expenses and other current assets

1 unchanged sentence

Total current assets

Non-current assets:

Property and equipment, net

Operating lease right-of-use assets, net

Noncurrent assets of discontinued operations

Total non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

6 unchanged sentences

Current portion of operating lease obligations

Current liabilities of discontinued operations

Total current liabilities

Non-current liabilities

Finance lease obligations, net of current portion

Noncurrent liabilities of discontinued operations

Operating lease obligations, net of current portion

Total non-current liabilities

Total liabilities

Commitments and contingencies

Commitments and contingencies (Note 4)

Stockholders’ equity:

Preferred stock, 1,000,000 shares authorized, with par value of $ 0.001 ;

no shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

Common stock, 25,000,000 shares authorized, with par value of $ 0.001 ;

16,782,922 and 15,359,481 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

16,782,922 and 16,782,922 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

Additional paid-in capital

8 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

Non-recurring engineering

3 unchanged sentences

Total cost of revenues

Total gross margin

Operating expenses:

4 unchanged sentences

Operating loss

Other income (expense):

Interest income, net

Other income (expense)

Total other income, net

Other income, net

Loss before provision for income taxes

Provision for income taxes

Net loss from continuing operations

Net loss from discontinued operations

Loss from continuing operations

Income (loss) from discontinued operations

Loss per common share:

1 unchanged sentence

Basic and diluted loss per share from discontinued operations

Basic and diluted loss per share

Basic and diluted net loss per share (a)

Basic and diluted – weighted average number of common shares outstanding

sum due to rounding.

The accompanying notes are an integral part of

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

LOSS (Unaudited)

(In thousands)

Three months ended

September 30,

Nine months ended

September 30,

Other comprehensive loss:

1 unchanged sentence

Other comprehensive loss

Comprehensive loss

The accompanying notes are an integral part of

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (Unaudited)

(In thousands)

For the three and nine months ended September

30, 2024 and 2023

For the three months ended March 31, 2025 and

Comprehensive

2 unchanged sentences

$ ( 224,080 )

Stock-based compensation

Foreign currency translation adjustment

1 unchanged sentence

$ ( 225,813 )

Stock-based compensation

Foreign currency translation adjustment

Balances, June 30, 2024

$ ( 221,393 )

Stock-based compensation

Issuance of shares for cash, net of offering costs

Foreign currency translation adjustment

Balances, September 30, 2024

$ ( 222,480 )

Comprehensive

Income (Loss)

Stockholders’

2 unchanged sentences

Stock-based compensation

Issuance of shares for cash, net of offering costs

Foreign currency translation adjustment

1 unchanged sentence

$ ( 219,698 )

Stock-based compensation

Foreign currency translation adjustment

Balances, June 30, 2023

$ ( 210,423 )

Stock-based compensation

Foreign currency translation adjustment

Balances, September 30, 2023

$ ( 211,689 )

The accompanying notes are an integral part of

2 unchanged sentences

(In thousands)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities:

1 unchanged sentence

Stock-based compensation expense

Loss on disposal of assets

Depreciation and amortization

10 unchanged sentences

Purchase of property and equipment

Proceeds from sale of property and equipment

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock, net of offering costs

Principal payments on finance lease obligations

Net cash provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

5 unchanged sentences

Cash paid for interest

Supplemental disclosure of non-cash investing and financial activities:

Property and equipment obtained in exchange for finance lease obligations

The accompanying notes are an integral part of

1 unchanged sentence

Notes to the Condensed Consolidated Financial

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 three and nine months ended September 30, 2024 and 2023 and cash flows for the nine

months ended September 30, 2024 and 2023 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 nine months ended September 30, 2024 and 2023 have been prepared by us, pursuant to

the rules and regulations of the United States 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 United

States (“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, 2023.

Neonode Inc., which is collectively

with its subsidiaries referred to as “Neonode” or the “Company” in this report, develops advanced optical sensing

solutions for contactless touch, touch, gesture sensing, and object detection and machine perception solutions using advanced machine

learning algorithms to detect and track persons and objects in video streams for cameras and other types of imagers.

We market and sell

our contactless touch, touch, and gesture sensing, and object detection products and solutions based on our zForce technology platform,

and our scene analysis solutions based on our MultiSensing technology platform.

We offer our solutions to customers in many different

markets and segments including, but not limited to, office equipment, automotive, industrial automation, medical, military and avionics.

With the new, sharpened strategy, announced in December 2023, we focus solely on the licensing business.

This allows customers to license

our unique and advanced technology to create bespoke products and solutions that bring value to end customers.

We have incurred significant operating losses and negative cash flows

from operations since our inception.

The Company incurred net losses of approximately $ 1.1 million and $ 4.9 million and $ 1.3 million and

$ 4.2 million for the three and nine months ended September 30, 2024 and September 30, 2023, respectively and had an accumulated deficit

of approximately $ 222.5 million and $ 217.6 million as of September 30, 2024 and December 31, 2023, respectively.

In addition, operating

activities used cash of approximately $ 4.4 million and $ 4.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The condensed consolidated

financial statements included in this report 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 negative cash flows from operations and determined that the Company’s current operating

plan and sources of liquidity would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern.

Management has prepared an operating plan and believes that the Company has sufficient cash to meet its obligations as they come due for

a year from the date the financial statements were issued.

During the three months ending September 30, 2024, we sold an aggregate of

1,423,441 shares of our common stock under the ATM Facility with aggregate net proceeds to us of $ 5.8 million, after payment of commissions

to Ladenburg and other expenses of $ 0.2 million.

In the future, we may require

additional sources of capital 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 to us on acceptable terms, or at all, we may

be unable to adequately fund our business plans, which could have a negative effect on our business, results of operations and financial

If funds are available through the issuance of equity or debt securities, 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 on us that could impair our ability to engage in certain business transactions.

Discontinued Operations

As described in the

Company’s 2023 Annual Report on Form 10-K, the Company’s plan to phase out TSM manufacturing meets the criteria to be

reported as discontinued operations.

In accordance with U.S.

GAAP, assets and liabilities of discontinued operations are presented

separately in the condensed consolidated balance sheets, and results of discontinued operations are reported as a separate component

of net loss in the condensed consolidated statements of operations, for all periods presented, resulting in changes to the

presentation of certain prior period amounts.

Cash flows from discontinued operations are not reported separately in the condensed

consolidated statements of cash flows.

to Note 2 for additional discussion of discontinued operations.

All other notes to these consolidated financial statements present the

results of continuing operations and exclude amounts related to discontinued operations for all periods presented unless otherwise stated.

Discontinued Operations

During the fourth quarter

of 2023 the Company decided to phase out the product business and as a consequence terminate production at the Pronode Technologies AB

facilities in Kungsbacka, Sweden.

Subsequently, we commenced the phase out of our TSM product business during the first quarter of 2024

through licensing of the TSM technology to strategic partners or outsourcing.

In May 2024, we stopped producing TSMs

and started to shut down the factory.

The facility lease terminated as of September 30, 2024 and was not renewed.

The Company concluded that, in aggregate, the termination of TSM manufacturing

met the criteria for discontinued operations.

As a result, this business has been reclassified to discontinued operations in these condensed

consolidated financial statements for all periods presented.

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations are presented separately

in the condensed consolidated balance sheets for all periods presented.

On September 30, 2024 and December 31, 2023, these balances consisted

of assets and liabilities of the Company’s Products business.

Pronode Technologies AB is expected to be merged into Neonode Technologies

AB before the end of the year, upon receipt of regulatory approval.

The following table presents

a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the current assets and liabilities of

discontinued operations as presented on the Company’s condensed consolidated balance sheets:

September 30,

ASSETS OF DISCONTINUED OPERATIONS

Current assets:

Accounts receivable and unbilled revenues, net

Prepaid expenses and other current assets

Total current assets of discontinued operations

Property and equipment, net

Operating lease right-of-use assets, net

Total assets of discontinued operations

LIABILITIES OF DISCONTINUED OPERATIONS

Current liabilities:

Accounts payable

Accrued payroll and employee benefits

Accrued expenses

Contract liabilities

Current portion of finance lease obligations

Current portion of operating lease obligations

Total current liabilities of discontinued operations

Finance lease obligations, net of current portion

Total liabilities of discontinued operations

Loss from Discontinued Operations

Discontinued operations for

the three and nine months ended September 30, 2024 and 2023, respectively, consists of results from the Company’s products business.

The following table provides

details about the major classes of line items constituting “Net loss from discontinued operations” as presented on the Company’s

condensed consolidated statements of operations:

Three months ended

September 30,

Nine months ended

September 30,

Total revenues

Cost of revenues:

Total cost of revenues

Total gross margin

Operating expenses:

General and administrative

Total operating expenses

Operating loss

Other income (expense):

Interest income, net

Other income (expense)

Total other income (expense), net

Net loss from discontinued operations

Cash Flows Information

The following table presents

cash flow information for discontinued operations (in thousands):

Three months ended

September 30,

Nine months ended

September 30,

Depreciation and amortization

Amortization of operating lease ROU assets

Inventory impairment loss

Purchase of property and equipment

Proceeds from sale of property and equipment

Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated

financial statements include the accounts of Neonode Inc.

and its intercompany subsidiaries.

All inter-company accounts and transactions

have been eliminated in consolidation.

Statements (Unaudited)

Organization and Summary of Significant

Accounting Policies

Basis of Presentation and Preparation

The condensed consolidated

balance sheets at September 30, 2024 and December 31, 2023 and the condensed consolidated statements of operations, comprehensive loss,

stockholders’ equity and cash flows for the three and nine months ended September 30, 2024 and 2023 include our accounts and those

of our intercompany subsidiaries.

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.

All inter-company accounts and transactions have

been eliminated in consolidation.

The condensed consolidated financial statements have been prepared by us, pursuant to the rules and

regulations of the United States 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 United States (“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

Recently Issued Accounting Pronouncement

In November 2023, the FASB issued ASU 2023-07, Segment Reporting

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires, among other updates,

enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker.

clarifies that entities with a single reportable segment are subject to both new and existing reporting requirements under Topic 280.

We adopted ASU 2023-07 for this interim period ended March 31, 2025 using a retrospective method to all periods presented.

Segment Information for further details.

Recently Issued Accounting Pronouncements

Pending Adoption

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic

Improvements to Income Tax Disclosures (“ASU 2023-09”), which updates several disclosures regarding the accounting

for income taxes.

ASU 2023-09 will become effective for public business entities for fiscal years beginning after December 15, 2024, with

early adoption permitted.

We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements.

In November 2024, the FASB

issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation

of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the

notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15,

2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact

of adopting ASU 2024-03.

Foreign Currency Translation and Transaction

8 unchanged sentences

comprehensive income (loss).

Foreign currency translation losses were $( 30,000 ) and $( 96,000 ) and $( 48,000 ) and $( 154,000 ) during the

three and nine months ended September 30, 2024 and 2023, 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 $( 3,000 )

and $( 1,000 ) during the three and nine months ended September 30, 2024, respectively, compared to $ 7,000 and $ 2,000 during the same periods

in 2023, respectively.

Foreign currency translation losses were $( 134,000 ) and $( 34,000 ) during the three months ended March 31,

2025 and 2024, respectively.

Gains resulting from foreign currency transactions are included in general and administrative expenses in

the accompanying condensed consolidated statements of operations and were $ 80,000 and $ 5,000 during the three months ended March 31, 2025

and 2024, respectively.

We have incurred significant

operating losses and negative cash flows from operations since our inception.

The Company incurred net losses for combined continuing

and discontinued operations of approximately $ 1.7 million and $ 2.1 million for the three months ended March 31, 2025 and 2024, respectively

and had an accumulated deficit of approximately $ 225.8 million and $ 224.1 million as of March 31, 2025 and December 31, 2024, respectively.

In addition, operating activities used cash of approximately $ 1.4 million and $ 1.9 million for the three months ended March 31, 2025 and

2024, respectively.

The condensed consolidated

financial statements included in this report 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 has prepared an

operating plan and believes that the Company has sufficient cash to meet its obligations as they come due for a year from the date the

condensed consolidated financial statements were issued.

Concentration of Credit and Business Risks

Our customers are located

in the United States, Europe, Oceania and Asia.

As of September 30, 2024,

five of our customers represented approximately 94.8 % of our consolidated accounts receivable and unbilled revenues.

As of December 31, 2023, three of our customers represented approximately

77.8 % of our consolidated accounts receivable and unbilled revenues.

in the United States, Europe and Asia.

As of March 31, 2025, four

of our customers represented approximately 94.0 % of our consolidated accounts receivable and unbilled revenues.

As of December 31, 2024, four

of our customers represented approximately 80.9 % of our consolidated accounts receivable and unbilled revenues.

Customers who accounted for

10.0% or more of our net revenues during the three months ended September 30, 2024 are as follows:

10.0% or more of our net revenues during the three months ended March 31, 2025 are as follows:

● Seiko Epson – 39.02 %

● Nexty Electronics – 17.9 %

● Alps Alpine – 27.8 %

● Hewlett-Packard Company – 19.6 %

● Commercial Vehicle OEM – 12.35 %

Customers who accounted for

10.0% or more of our net revenues during the nine months ended September 30, 2024 are as follows:

● Seiko Epson – 25.2 %

● Hewlett-Packard Company – 20.7 %

● Alps Alpine – 20.4 %

● Commercial Vehicle OEM – 13.4 %

Customers who accounted for

10.0% or more of our net revenues during the three months ended September 30, 2023 are as follows:

● Seiko Epson – 25.5 %

10.0% or more of our net revenues during the three months ended March 31, 2024 are as follows:

● Hewlett-Packard Company – 30.9 %

● Alps Alpine – 22.9 %

● LG – 13.6 %

● Automotive Tier-1 – 11.1 %

Customers who accounted for

10.0% or more of our net revenues during the nine months ended September 30, 2023 are as follows:

● Hewlett-Packard Company – 33.5 %

● Seiko Epson – 19.6 %

● Alps Alpine – 17.1 %

● LG – 14.0 %

The following tables present the net revenues distribution by geographical

area and market for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

Three months ended

September 30, 2024

Three months ended

September 30, 2023

North America

Net revenues from Automotive

Net revenues from IT & Industrial

Net revenues from Automotive

Net revenues from IT & Industrial

Europe, Middle East and Africa

Net revenues from Automotive

Net revenues from IT & Industrial

Nine months ended

September 30, 2024

Nine months ended

September 30, 2023

The following tables present

the net revenues distribution by geographical area and market:

Three months ended March 31,

(in thousands)

North America

7 unchanged sentences

Contract Liabilities

The following table presents our deferred revenues by source (in thousands):

September 30,

The following table presents

our deferred revenues by source:

(in thousands)

Deferred revenues license fees

Deferred revenues non-recurring engineering

During the three and nine

months ended September 30, 2024, the Company recognized revenues of approximately $ 25,000 and $ 2,000 , respectively, related to contract

liabilities outstanding at the beginning of the period.

During the three and nine months ended September 30, 2023, the Company recognized

revenues of approximately $ 7,000 and 17,000 , respectively, related to contract liabilities outstanding at the beginning of the period.

During the three months ended

March 31, 2025 and 2024, the Company recognized revenues of approximately zero and $ 27,000 respectively, related to contract liabilities

outstanding at the beginning of the period.

We recognize deferred tax

10 unchanged sentences

Based on the uncertainty of

future pre-tax income, we fully reserved our net deferred tax assets as of September 30, 2024 and December 31, 2023.

future pre-tax income, we fully reserved our net deferred tax assets as of March 31, 2025 and December 31, 2024.

In the event we were

7 unchanged sentences

As a result, we did not recognize a liability for unrecognized tax benefits.

As of September 30, 2024 and

December 31, 2023, we had no unrecognized tax benefits.

Net Loss per Share

Net loss per share amounts

have been computed based on the weighted average number of shares of common stock outstanding during the three and nine months ended September

30, 2024 and 2023.

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 nine months ended

September 30, 2024 and 2023 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 6).

Recent Accounting Pronouncements

In November 2023, the FASB

issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the

chief operating decision maker.

The ASU also clarifies that entities with a single reportable segment are subject to both new and existing

reporting requirements under Topic 280.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024, and requires retrospective adoption.

Early adoption is permitted.

We are currently

evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB

issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which updates several disclosures regarding

the accounting for income taxes.

ASU 2023-09 will become effective for public business entities for fiscal years beginning after December

15, 2024, with early adoption permitted.

We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements.

As of March 31, 2025 and December

31, 2024, we had no unrecognized tax benefits.

Discontinued Operations

During the fourth quarter

of 2023 the Company decided to phase out the product business and as a consequence terminate production at the Pronode Technologies AB

facilities in Kungsbacka, Sweden.

Subsequently, we commenced the phase out of our TSM product business during the first quarter of 2024

through licensing of the TSM technology to strategic partners or outsourcing.

In May 2024, we stopped producing TSMs and started to shut

down the factory.

The facility lease terminated as of September 30, 2024 and was not renewed.

The Company concluded that

the termination of TSM manufacturing met the criteria for discontinued operations.

As a result, this business has been reclassified to

discontinued operations in these consolidated financial statements for all periods presented.

Assets and Liabilities of Discontinued Operations

Assets and liabilities of

discontinued operations are presented separately in the condensed consolidated balance sheets for all periods presented.

2025 and December 31, 2024, these balances consisted of assets and liabilities of the Company’s Products business.

The following table presents

a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the assets and liabilities of discontinued

operations as presented on the Company’s condensed consolidated balance sheets:

(in thousands)

ASSETS OF DISCONTINUED OPERATIONS

Current assets:

Accounts receivable and unbilled revenues, net

Total current assets of discontinued operations

Total assets of discontinued operations

Income (Loss) from Discontinued Operations

Discontinued operations for

the three months ended March 31, 2025 and 2024, respectively, consists of results from the Company’s products business.

The following table provides details about the major classes of line

items constituting “Income (loss) from discontinued operations” as presented on the Company’s condensed consolidated

statements of operations:

Three months ended

(in thousands)

Total revenues

Cost of revenues:

Total cost of revenues

Gross (loss) margin

Operating expenses:

General and administrative

Total operating expenses

Operating income (loss)

Income (loss) from discontinued operations

Cash Flows Information

The following table presents

cash flow information for discontinued operations:

Three months ended

(in thousands)

Depreciation and amortization

Amortization of operating lease ROU assets

Inventory impairment loss

Stockholders’ Equity

32 unchanged sentences

litigation matters at this time that would have a material impact on the operations of the Company.

Patent Assignment

On May 6, 2019, the Company

assigned a portfolio of patents to Aequitas Technologies LLC (“Aequitas”), an unrelated third party.

The assignment provides

the Company the right to share the potential net proceeds to Aequitas generated from possible licensing and monetization program that

Aequitas may enter into.

Under the terms of the assignment, net proceeds mean gross proceeds less out of pocket expenses and legal fees

paid by Aequitas.

The Company’s share would also be net of the Company’s own fees and expenses, including a brokerage fee

payable by the Company in connection with the original assignment to Aequitas.

Net Loss per Share

Basic net loss per common

share for the three and nine months ended September 30, 2024 and 2023 was computed by dividing the net loss attributable to common shareholders

of 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 common shareholders of Neonode Inc.

for the relevant period by the weighted average

number of shares of common stock and common stock equivalents outstanding.

The Company had no potential

common stock equivalents for the three and nine months ended September 30, 2024 and 2023, respectively.

Basic net loss per common share for the three months ended March 31,

2025 and 2024 was computed by dividing the net loss attributable to common shareholders of 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 common shareholders of Neonode Inc.

for the relevant period by the weighted average number of shares of common stock and common stock

equivalents outstanding excluding potential common stock equivalents that are anti-dilutive.

The Company had no potential common stock equivalents for the three

months ended March 31, 2025 and 2024, respectively.

Three months ended

September 30,

Nine months ended

September 30,

(in thousands, except per share amounts)

1 unchanged sentence

Weighted average number of common shares outstanding

Net loss from continuing operations

Net loss from discontinued operations

Net loss per share from continuing operations - basic and diluted

Net loss per share from discontinued operations - basic and diluted

Net loss per share - basic and diluted

Loss from continuing operations

Income (loss) from discontinued operations

Loss per share from continuing operations - basic and diluted

Loss per share from discontinued operations - basic and diluted

Net loss per share - basic and diluted (a)

sum due to rounding.

Segment Information

The Company operates as one

operating segment.

Our chief operating decision maker (“CODM”) is our Chief Executive Officer, who reviews financial information

presented on a consolidated basis.

The CODM uses consolidated operating loss and net loss to assess financial performance and allocate

These financial metrics are used by the CODM to make key operating decisions, such as the allocation of budget between cost

of revenues, research and development, sales and marketing, and general and administrative expenses.

The following table presents

key financial information with respect to the Company’s single operating segment:

Three months ended

(in thousands)

Costs and expenses (a)

Cost of revenues

General and administrative, including rent

Payroll and related

Professional fees and IP

Marketing and travel

Total costs and expenses

Other segment items (b)

Other income, net

Loss before provision for income taxes

Provision for income taxes

Loss from continuing operations

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision-maker.

(b) Other segment items primarily include depreciation and amortization, payroll and related - re-allocated to cost of revenues, and stock options expense.

The following table presents

the long-lived assets property and equipment and right-of-use assets by geographic area:

We report revenues from external

customers based on the country where the customer is located.

The following table presents net revenues by country :

Three months ended March 31,

(in thousands)

United States

Subsequent Events

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements