What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2026-03-18 compared with 2025-03-21 · 250 added, 10 removed, 1 unchanged (100% of the section changed)

MARKET FOR THE REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

common stock is quoted on the Nasdaq Stock Market under the symbol “NEON.”

of January 28, 2025, there were 53 stockholders of record of our common stock.

This does not include the number of stockholders that

hold shares in “street name” through banks, brokers, and other financial institutions.

Authorized for Issuance Under Equity Compensation Plans

Part III, Item 12.

“Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters” for information

relating to our equity compensation plans.

Sale of Unregistered Securities and Use of Proceeds

of Equity Securities by the Issuer and Affiliated Purchasers

Market Information

Our common stock is quoted on the Nasdaq Stock Market under the symbol “NEON.”

As of January 26, 2026, there were 53 stockholders of record of our common stock.

This does not include the number of stockholders that hold shares in “street name” through banks, brokers, and other financial institutions.

Securities Authorized for Issuance Under Equity Compensation Plans

See Part III, Item 12.

“Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters” for information relating to our equity compensation plans.

Recent Sale of Unregistered Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report.

All information in the following discussion and analysis presents the results of continuing operations and excludes amounts related to discontinued operations for all periods presented unless otherwise stated.

Neonode provides software solutions for machine perception that feature advanced machine learning algorithms to detect and track persons and objects in video streams from cameras and other types of imagers.

We base our machine perception solutions on our MultiSensing® technology platform.

We market and sell our solutions to customers mainly in the automotive market.

However, our solution can also be used in many other markets, and we plan to expand our solutions into new markets in the future.

Neonode also provides advanced optical sensing solutions for touch, contactless touch, and gesture sensing using our zForce® technology platform.

In September 2025, we made the strategic decision to transition the zForce platform into maintenance mode.

We are no longer selling zForce technology to new customers but will continue supporting existing customers in various markets and segments such as office equipment, automotive, industrial automation, medical, military, and avionics.

Recent Accounting Pronouncements

The information set forth under Note 1 to the consolidated financial statements is incorporated herein by reference.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), which requires us to make certain estimates, judgments and assumptions that can affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure.

Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made.

To the extent that there are differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected.

We have not identified any critical accounting estimate.

Refer to Note 1 of our consolidated financial statements for more discussion of our significant accounting policies.

Results of Operations

The following table provides our consolidated results (in thousands, except percentages):

Years ended December 31,

Percentage of revenue

Non-recurring engineering

Percentage of revenue

Total revenues

Cost of revenues:

Non-recurring engineering

Percentage of revenue

Total cost of revenues

Operating expenses:

Research and development

Percentage of revenue

Sales and marketing

Percentage of revenue

General and administrative

Percentage of revenue

Total operating expenses

Percentage of revenue

Gain from patent assignment

Percentage of revenue

Broker fee from patent assignment

Percentage of revenue

Operating income (loss)

Percentage of revenue

Other income, net

Percentage of revenue

Provision (benefit) for income taxes

Percentage of revenue

Income (loss) from continuing operations

Percentage of revenue

Basic and diluted income (loss) per share from continuing operations

All of our sales for the years ended December 31, 2025 and 2024 were to customers located in the United States, Europe and Asia.

Total net revenues were $2.1 million and $3.1 million for the years ended December 31, 2025 and 2024, respectively.

The decrease in total net revenues by 33.7% for the year ended December 31, 2025 as compared to 2024 was caused by lower revenues from both license revenues and non-recurring engineering.

The following table presents the net revenues distribution by business area and revenue stream (in thousands, except percentages):

Years ended December 31,

Non-recurring engineering

IT & Industrial:

Non-recurring engineering

The following table presents disaggregated revenues by revenue stream (in thousands, except percentages):

Years ended December 31,

Net license revenues from amusement

Net license revenues from automotive

Net license revenues from consumer electronics

Net non-recurring engineering services revenues

Revenues from license fees were $1.8 million and $2.7 million for the years ended December 31, 2025 and 2024, respectively.

The decrease of 32.2% in 2025 as compared to 2024 was mainly due to lower demand for our legacy customers products within printer and passenger car touch applications offset by revenues from new licensing customers.

Revenues from non-recurring engineering revenues were $0.2 million and $0.4 million for the years ended December 31, 2025 and 2024.

Our non-recurring engineering revenues are related to application development and proof-of-concept projects related to our zForce and MultiSensing technology platforms.

The decrease of 43.0% in 2025 compared to 2024 was the result of decreased delivery in projects.

Our gross margin was 98.7% in 2025 compared to 96.3% in 2024.

The increase in 2025 compared to 2024 were due to decrease in NRE revenues.

Our cost of revenues includes the direct cost of production of certain customer prototypes, costs of engineering personnel, engineering consultants to complete the engineering design contracts.

Research and Development

R&D expenses for 2025 and 2024 were $3.8 million and $3.4 million, respectively.

R&D expenses primarily consist of personnel-related costs in addition to external consultancy costs, such as testing, certifying and measurements, along with costs related to developing and building new product prototypes.

The increase of 9.7% in 2025 compared to 2024 was primarily related to unfavorable exchange rate development and lower NRE revenues causing less costs to be allocated to cost of sales.

Sales and Marketing

Sales and marketing expenses for 2025 and 2024 were $2.3 million and $2.3 million, respectively.

Sales and marketing expenses in 2025 decreased 2.3% compared to 2024, despite unfavorable exchange rate development, primarily due to lower costs for marketing and lower legal fees.

Our sales and marketing activities focus on OEM, ODM and Tier 1 customers who will license our technology.

General and Administrative

General and administrative (“G&A”) expenses for 2025 and 2024 were $4.1 million and $3.8 million, respectively.

The increase of 9.5% compared to 2024 was primarily due to unfavorable exchange rate development and higher professional fees.

There is no non-cash stock-based compensation included in G&A expenses for the year ended December 31, 2025 compared to $3,000 for the year ended December 31, 2024.

Gain from Patent Assignment and Broker Fee from Patent Assignment

Gain from the patent assignment to Aequitas Technologies LLC ("Aequitas") was $19.4 million for the year ended December 31, 2025.

The Company recognized a brokerage fee from the patent assignment of $3.8 million for the year ended December 31, 2025.

The amount represents the final outcome from the legal proceedings between Neonode Smartphone LLC, an unrelated third party that is a subsidiary of Aequitas (“Aequitas Sub”), and Samsung Electronics Co., Ltd.

and Samsung Electronics America, Inc.

(collectively, “Samsung”), excluding any potential tax recoveries.

Other income for the year ended December 31, 2025 was $0.7 million compared to $0.7 million for the year ended December 31, 2024.

The other income for 2025 and 2024 was mainly related to interest income earned.

Our effective tax rate was (0.1)% for the year ended December 31, 2025 and (0.3)% for the year ended December 31, 2024.

We recorded valuation allowances in 2025 and 2024 for deferred tax assets related to net operating losses due to the uncertainty of realization.

As a result of the factors discussed above, we recorded a net income of $8.0 million for the year ended December 31, 2025, compared to a net loss of $5.9 million for the year ended December 31, 2024.

Liquidity and Capital Resources

Our liquidity is dependent on many factors, including sales volume, operating profit and the efficiency of asset use and turnover.

Our future liquidity will be affected by, among other things:

licensing of our technology;

operating expenses;

timing of our OEM customer product shipments;

timing of payment for our technology licensing agreements;

gross profit margin;

ability to raise additional capital, if necessary.

As of December 31, 2025, we had cash and cash equivalents of $25.4 million, as compared to $16.4 million as of December 31, 2024.

Based on our current cash position, and assuming currently planned expenditures and level of operations, we believe we have sufficient capital to fund operations for the twelve-month period subsequent to the date of this Annual Report.

Working capital (current assets less current liabilities) was $24.1 million as of December 31, 2025, compared to working capital of $16.1 million as of December 31, 2024.

Net cash used in operating activities for combined continuing and discontinued operations for the year ended December 31, 2025 was $10.3 million and was primarily the result of a net income of $8.5 million and approximately $19.2 million in adjustments to reconcile net loss to net cash used in operating activities, comprised of recoveries of bad debt, gain from patent assignment, loss on disposal of assets, depreciation and amortization and amortization of operating lease right-of-use assets, and changes in operating assets and liabilities of $444,000.

Net cash used in operating activities for the year ended December 31, 2024 was $5.6 million and was primarily the result of a net loss of $6.5 million and approximately $687,000 in non-cash operating expenses, comprised of stock-based compensation expense, bad debt expense, loss on disposal of assets, depreciation and amortization, amortization of operating lease right-of-use assets, and inventory impairment loss and changes in operating assets and liabilities of $187,000.

Accounts receivable and unbilled revenues for combined continuing and discontinued operations decreased by approximately $300,000 as of December 31, 2025 compared to December 31, 2024, due to lower revenues.

Prepaid expenses and other current assets for combined continuing and discontinued operations increased by approximately $20,000, mainly due to increased tax receivables.

Accounts payable, accrued payroll and employee benefits, and accrued expenses for combined continuing and discontinued operations increased approximately $395,000 as of December 31, 2025 compared to December 31, 2024.

Net cash provided by investing activities for the year ended December 31, 2025 was $19.3 million and consisted primarily of the proceeds from the patent assignment.

We have incurred significant operating losses and negative cash flows from operations since our inception.

The Company incurred net income for combined continuing and discontinued operations of approximately $8.5 million for the year ended December 31, 2025 and net loss of $6.5 million for the year ended December 31, 2024, and had an accumulated deficit of approximately $215.6 million and $224.1 million as of December 31, 2025 and 2024, respectively.

In addition, operating activities used cash of approximately $10.3 million and $5.6 million for the years ended December 31, 2025 and 2024, respectively.

The consolidated financial statements included herein have been prepared on a going concern basis, which contemplates continuity of operations and the realization of assets and the repayment of liabilities in the ordinary course of business.

Management evaluated the significance of the Company’s operating loss and 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 year ended December 31, 2024, we sold an aggregate of 1,423,441 of our common stock under the Ladenburg ATM Facility (as defined below) with aggregate net proceeds to us of $5.8 million, after payment of commissions to Ladenburg Thalmann & Co.

(“Ladenburg”) and other expenses of $0.2 million.

During the year ended December 31, 2025, no shares were sold under the Ladenburg ATM Facility.

In the future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility 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.

Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity.

Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.

No assurances can be given, however, 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, no assurance can be given that stockholders will approve an increase in the number of our authorized shares of common stock if needed.

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.

The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won.

They are subject to foreign currency exchange rate risk.

Any increase or decrease in the exchange rate of the U.S.

Dollar compared to the Swedish Krona, Japanese Yen or South Korean Won will impact our future operating results.

Contractual Obligation and Off-Balance Sheet Arrangements

We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to affect our liquidity or capital resources other than the operating leases incurred in the normal course of business.

We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support.

We do not engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected on the face of the consolidated financial statements.

Operating Leases

operates solely through a virtual office in California.

On December 1, 2020, Neonode Technologies AB entered into a lease for 6,684 square feet of office space located at Karlavägen 100, Stockholm, Sweden.

The lease agreement has been extended and is valid through January 2027.

It is extended on a yearly basis unless written notice is provided nine months prior to the expiration date.

For the years ended December 31, 2025 and 2024, we recorded approximately $455,000 and $449,000, respectively, for rent expense in continuing operations.

Equipment Subject to Finance Leases

In 2025, we entered into a lease for a Volkswagen ID Buzz to be used as a demo car for our technology.

Under the terms of the agreement, the lease will be renewed within two years of the original three-year lease term.

In accordance with relevant accounting guidance the lease is classified as a finance lease.

The lease payments and depreciation periods began in March 2025 when the equipment went into service.

The implicit interest rate of the lease is currently approximately 3.47% per annum.

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 2,000,000 ASICs sold.

As of December 31, 2025, we had made no payments to TI under the NN1002 Agreement.

At-the-Market Offering Program

On May 10, 2021, we entered into an At Market Issuance Sales Agreement (the “B.

Riley Sales Agreement”) with B.

Riley Securities, Inc.

Riley Securities”) with respect to an “at the market” offering program (the “B.

Riley ATM Facility”), under which we may, from time to time, in our sole discretion, issue and sell through B.

Riley Securities, acting as sales agent, up to $25 million of shares of our common stock, in any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended.

On May 29, 2024, we terminated the B.

Riley Sales Agreement with B.

Riley Securities.

On June 4, 2024, we entered into an At The Market Offering Agreement (the “Ladenburg Sales Agreement”) with Ladenburg Thalmann & Co.

(“Ladenburg”) with respect to an “at the market” offering program (the “Ladenburg ATM Facility”), under which we may, from time to time, in our sole discretion, issue and sell through Ladenburg, acting as agent or principal, up to approximately $10 million of shares of our common stock.

Pursuant to the Ladenburg Sales Agreement, we may sell the shares through Ladenburg by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended.

Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us (including any price or size limits or other customary parameters or conditions we may impose).

We will pay Ladenburg a commission of 3.0% of the gross sales price per share sold under the Ladenburg Sales Agreement.

We are not obligated to sell any shares under the Ladenburg Sales Agreement.

The offering of shares pursuant to the Ladenburg Sales Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through Ladenburg, of all of the shares of our common stock subject to the Ladenburg Sales Agreement and (ii) termination of the Ladenburg Sales Agreement in accordance with its terms.

During the year ended December 31, 2025, we sold no shares under the Ladenburg ATM Facility.

During the year ended December 31, 2024, we sold an aggregate of 1,423,441 shares of our common stock under the Ladenburg 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.

Future Sources of Liquidity

In the future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility 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.

Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity.

Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.

No assurances can be given, however, that we will be successful in obtaining such additional financing on reasonable terms, or at all.

In addition, no assurance can be given that stockholders will approve an increase in the number of our authorized shares of common stock if needed.

The functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won.

They are subject to foreign currency exchange rate risk.

Any increase or decrease in the exchange rate of the U.S.

Dollar compared to the Swedish Krona, Japanese Yen or South Korean Won will impact our future operating results.

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 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.

As reflected in publicly available court filings, on June 8, 2020, Aequitas Sub, filed complaints against Apple Inc.

(“Apple”) (assigned docket number 6:20-cv-00505-ADA), and Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc.

(collectively, “Samsung”) (assigned docket number 6:20-cv -00507-ADA;

see also 6:23-cv-00204-ADA), in the Western District of Texas alleging infringement of two patents, U.S.

8,095,879 and 8,812,993.

In November 2020, Samsung and Apple filed a petition for inter partes review of certain challenged claims in U.S.

8,095,879, assigned proceeding number IPR2021-00144.

As reflected in publicly available records, the U.S.

Patent and Trademark Office Patent Trial and Appeal Board (“PTAB”) denied the petition in June 2021.

Apple and Samsung filed a request for rehearing, which was ultimately granted on December 3, 2021, and inter partes review was instituted.

The court case against Apple was subsequently transferred to the Northern District of California in November 2021 and assigned docket number 3:21-cv-08872, which was subsequently stayed pending the PTAB’s decision.

The case against Samsung in the Western District of Texas was likewise stayed pending PTAB ruling.

Meanwhile, in June 2021, Google LLC (“Google”) filed a separate petition with the PTAB seeking inter partes review of certain challenged claims in U.S.

8,095,879, assigned proceeding number IPR2021-01041.

As reflected in publicly available records, the PTAB granted the petition in January 2022.

The PTAB found in favor of Aequitas Sub and against Apple and Samsung in December 2022 in connection with the inter partes review proceedings, ruling that none of the challenged claims were unpatentable.

The PTAB similarly held in favor of Aequitas Sub and against Google in January 2023.

Apple and Samsung appealed to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) in February 2023 (assigned docket number 23-1464, and Google filed its appeal in the Federal Circuit in March 2023 (assigned docket number 23-1638.

On July 18, 2024, the Federal Circuit affirmed the PTAB’s rulings, found in favor of Aequitas Sub and against Google and Apple/Samsung, and held that none of the challenged claims in U.S.

8,095,879 are unpatentable.

As reflected in publicly available court records, on July 14, 2023, the United States District Court for the Western District of Texas entered its final claim constructions in the Samsung case (docket number 6:20-cv-507), and based on those claim constructions, entered judgment in favor of Samsung and against Aequitas Sub.

Aequitas Sub filed an appeal with the Federal Circuit in August 2023 (assigned docket number 23-2304), and oral argument was held on June 6, 2024 As reflected on the public court docket, on August 20, 2024, the Federal Circuit issued its written opinion, reversing and remanding the case to the Western District of Texas for further proceedings.

Specifically, the Federal Circuit held that claim 1 of the ‘879 patent was not indefinite.

Mandate issued returning the case to the Western District of Texas on September 26, 2024.

On November 5, 2024, Samsung filed its Answer to the Complaint.

On June 13, 2025, the parties submitted a joint motion to stay all deadlines for thirty (30) days as the parties had reached a “settlement in principle.” On June 20, 2025, the Court granted the motion to stay and ordered that all deadlines be stayed until July 21, 2025.

On July 17, 2025, the parties submitted a joint motion to extend the stay for an additional thirty days “so that the settlement agreement can be finalized and appropriate dismissal papers submitted.” On August 5, 2025, the Court granted the parties request to extend the stay until August 20, 2025.

On August 29, 2025, following a settlement between Aequitas Sub and Samsung, the parties submitted a joint motion to vacate the claim construction order and to dismiss the matter with prejudice.

On September 2, 2025, the Court granted the motion.

As of September 2, 2025, the case in the Western District of Texas is now closed.

For additional information regarding the settlement, see “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Gain from Patent Assignment and Broker Fee from Patent Assignment.”

The case against Apple remains pending in the United States District Court for the Northern District of California (docket number 21-cv-8872).

On November 13, 2024, the Court granted the parties’ motion to continue the stay pending resolution of the Samsung case pending in the Western District of Texas (case number 20-cv-00507-ADA) by settlement or final judgment.

On September 15, 2025 the Court lifted the stay upon stipulation of the parties.

On October 27, 2025, the parties submitted a stipulated scheduling order for the remainder of the case.

On December 15, 2025, the Court entered a modified order for scheduling.

Among other dates, the Court ordered (i) a close of fact discovery on July 31, 2026, (ii) mediation by December 8, 2026, and (iii) trial by February 22, 2027.

The Court also ordered claim construction briefing beginning March 27, 2026 and concluding April 17, 2026.

Further, on February 10, 2026, the case was referred to private alternative dispute resolution to be completed by December 8, 2026.

Based on information in public records, in November 2020, Samsung and Apple collectively sought inter partes review of certain claims in U.S.

8,812,993 (assigned proceeding number IPR2021-00145).

In June 2022, the PTAB invalidated U.S.

8,812,993, which Aequitas Sub appealed to the Federal Circuit in August 2022 (assigned docket number 22-2134).

The Federal Circuit affirmed the PTAB’s decision on June 11, 2024.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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-K

Item 5. Market for Registrant’s Common Equity