Neonode Inc.

Previous wording

As of September 30, 2025, we had 37 valid technology license agreements with global OEMs, Original Design Manufacturers (“ODMs”) and automotive Tier 1 suppliers.

Current wording

As of March 31, 2026, we had 36 valid technology license agreements with global OEMs, Original Design Manufacturers (“ODMs”) and automotive Tier 1 suppliers.

Previous wording

All of our sales for the three and nine months ended September 30, 2025 and 2024 were to customers located in the United States, Europe and Asia.

Current wording

All of our sales for the three months ended March 31, 2026 and 2025 were to customers located in the United States, Europe and Asia.

Previous wording

Total revenues were $0.4 million and $1.5 million for the three and nine months ended September 30, 2025, respectively, compared to $0.8 million and $2.5 million for the same periods in 2024, respectively. The decrease in total revenues of 48.7% for the three months ended September 30, 2025, as compared to the same period in 2024, is explained by lower license fees and non-recurring revenues. The decrease in total revenues of 37.1% for the nine months ended September 30, 2025, as compared to the same period in 2024, is explained by lower license fees and non-recurring revenues.

Current wording

Total revenues were $0.6 million for the three months ended March 31, 2026, compared to $0.5 million for the same period in 2025. The increase in total revenues of 19.7% for the three months ended March 31, 2026, as compared to the same period in 2025, is mainly explained by higher license fees.

Previous wording

Revenues from non-recurring engineering were $24,000 and $235,000 for the three and nine months ended September 30, 2025, respectively, compared to $107,000 and $335,000 for the same periods in 2024, respectively. Most of our non-recurring engineering revenues are related to application development and proof-of-concept projects related to our technology platforms. The decrease of 77.6% for the three months ended September 30, 2025, as compared to the same period in 2024, was the result of decreased delivery in projects. The decrease of 29.9% for the nine months ended September 30, 2025, as compared to the same period in 2024, was the result of fewer projects.

Current wording

Revenues from non-recurring engineering were $22,000 for the three months ended March 31, 2026, compared to $16,000 for the same periods in 2025. Most of our non-recurring engineering revenues are related to application development and proof-of-concept projects related to our technology platforms. The increase of 37.5% for the three months ended March 31, 2026, as compared to the same period in 2025, was the result of increased delivery in projects.

Previous wording

Our gross margin was 97.9% and 98.4% for the three and nine months ended September 30, 2025, respectively, compared to 97.3% and 97.4% for the same periods in 2024, respectively.

Current wording

Our gross margin was 99.3% for the three months ended March 31, 2026, compared to 98.2% for the same periods in 2025.

Previous wording

Research and development (“R&D”) expenses were $0.8 million and $2.8 million for the three and nine months ended September 30, 2025, respectively, compared to $0.8 million and $2.7 million for the same periods in 2024, respectively. The decrease of 3.4% for the three months ended September 30, 2025 compared to the same period in 2024 was primarily related to lower cost for development of prototypes. The increase of 5.6% for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily related to higher payroll and related costs.

Current wording

Research and development (“R&D”) expenses were $0.9 million for the three months ended March 31, 2026, compared to $1.0 million for the same periods in 2025. The decrease of 7.2% for the three months ended March 31, 2026 compared to the same period in 2025 was primarily related to lower cost for payroll and related costs.

Previous wording

General and administrative expenses were $0.9 million and $2.8 million for the three and nine months ended September 30, 2025, respectively, compared to $0.7 million and $2.7 million for the same periods in 2024, respectively. The increase of 17.4% for the three months ended September 30, 2025, compared to the same period in 2024, was primarily related to higher professional fees offset by lower payroll and related costs. The increase of 1.9% for the nine months ended September 30, 2025, compared to the same period in 2024, was primarily related to higher professional fees.

Current wording

General and administrative expenses were $1.2 million for the three months ended March 31, 2026, compared to $0.9 million for the same period in 2025. The increase of 37.1% for the three months ended March 31, 2026, compared to the same period in 2025, was primarily related to higher professional fees due to tax analysis of the net income for 2025, higher payroll and related costs and the currency exchange effect.

Previous wording

Other income was $0.1 million and $0.4 million for the three and nine months ended September 30, 2025, respectively, compared to $0.2 million and $0.5 million for the same periods in 2024, respectively. The other income for the period was mainly related to interest income earned.

Current wording

Other income was $0.2 million for the three months ended March 31, 2026, compared to $0.2 million for the same periods in 2025, respectively. The other income for the period was mainly related to interest income earned.

Previous wording

Our effective tax rate was nil and (0.1)% for the three and nine months ended September 30, 2025, respectively, compared to 1.0% and (0.2)% for the same periods in 2024, respectively. The tax rate is due to global intangible low-taxed income and change in valuation allowance.

Current wording

Our effective tax rate was (0.1)% for the three months ended March 31, 2026, compared to 0.6% for the same periods in 2025, respectively. The tax rate is due to global intangible low-taxed income and change in valuation allowance.

Previous wording

As a result of the factors discussed above, we recorded an income from continuing operations of $14.2 million and $10.6 million for the three and nine months ended September 30, 2025, respectively, and a loss of $1.1 million and $4.9 million for the same periods in 2024, respectively.

Current wording

As a result of the factors discussed above, we recorded a loss from continuing operations of $1.9 million for the three months ended March 31, 2026, and a loss of $1.8 million for the same periods in 2025.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $11.6 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 report.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $23.2 million, as compared to $25.4 million as of December 31, 2025. 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 report.

Previous wording

Working capital (current assets less current liabilities) was $26.2 million as of September 30, 2025, compared to $16.1 million as of December 31, 2024.

Current wording

Working capital (current assets less current liabilities) was $22.3 million as of March 31, 2026, compared to $24.1 million as of December 31, 2025.

Previous wording

Net cash used in operating activities for combined continuing and discontinued operations for the nine months ended September 30, 2025, was $4.6 million and was primarily the result of a net loss of $10.6 million and approximately $(19.2) million in non-cash operating expenses, comprised of depreciation and amortization and amortization of operating lease right-of-use assets and changes in operating assets and liabilities of $4.0 million. Net cash used in operating activities for combined continuing and discontinued operations for the nine months ended September 30, 2024, was $4.4 million and was primarily the result of a net loss of $4.9 million and approximately $0.4 million in non-cash operating expenses, comprised of stock-based compensation expense, depreciation and amortization, amortization of operating lease right-of-use assets and inventory impairment loss and changes in operating assets and liabilities of $28,000.

Current wording

Net cash used in operating activities for combined continuing and discontinued operations for the three months ended March 31, 2026, was $2.1 million and was primarily the result of a net loss of $1.9 million and approximately $0.1 million in non-cash operating expenses, comprised of depreciation and amortization and amortization of operating lease right-of-use assets and changes in operating assets and liabilities of $(0.4) million. Net cash used in operating activities for combined continuing and discontinued operations for the three months ended March 31, 2025, was $1.4 million and was primarily the result of a net loss of $1.7 million and approximately $91,000 in non-cash operating expenses, comprised of depreciation and amortization and amortization of operating lease right-of-use assets and changes in operating assets and liabilities of $282,000.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025, was approximately $90,000 and was primarily the result of purchase of property and equipment. Net cash provided by investing activities for the nine months ended September 30, 2024, was approximately $153,000 and was primarily proceeds from sale of property and equipment offset by purchase of property and equipment.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026, was approximately $13,000 and was primarily the result of purchase of property and equipment. Net cash used in investing activities for the three months ended March 31, 2025, was approximately $40,000 and was primarily the result of purchase of property and equipment.

Previous wording

Net cash used in financing activities for the nine months ended September 30, 2025, was approximately $8,000 and was primarily the result of principal payments on finance leases. Net cash provided by financing activities for the nine months ended September 30, 2024, was approximately $5.8 million and was primarily the result of proceeds from the issuance of common stock, net of offering costs.

Current wording

Net cash used in financing activities for the three months ended March 31, 2026, was approximately $3,000 and was primarily the result of principal payments on finance leases. Net cash used in financing activities for the three months ended March 31, 2025, was approximately $2,000 and was primarily the result of principal payments on finance leases.

Previous wording

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 $14.2 million and $10.6 million for the three and nine months ended September 30, 2025, respectively, compared to a loss of $1.1 million and $4.9 million for the same periods in 2024, respectively, and had an accumulated deficit of approximately $213.5 million and $224.1 million as of September 30, 2025 and December 31, 2024, respectively. In addition, operating activities used cash of approximately $4.6 million and $4.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net loss for combined continuing and discontinued operations of approximately $1.9 million for the three months ended March 31, 2026, compared to a loss of $1.7 million for the same period in 2025, and had an accumulated deficit of approximately $217.5 million and $215.6 million as of March 31, 2026 and December 31, 2025, respectively.

Previous wording

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. 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, South Korean Won or Taiwan Dollar will impact our future operating results.

Current wording

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.

Previous wording

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 November 2026. It is extended on a yearly basis unless written notice is provided nine months prior to the expiration date.

Current wording

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 2030, with premises adjusted from 6,684 square feet to 6,254 square feet. It is extended on a yearly basis unless written notice is provided nine months prior to the expiration date.

Previous wording

For total rent expense for combined continuing and discontinued operations, we recorded $117,000 and $336,000 for the three and nine months ended September 30, 2025, respectively, compared to $127,000 and $376,000 for the same periods in 2024.

Current wording

For total rent expense for combined continuing and discontinued operations, we recorded $126,000 for the three months ended March 31, 2026, compared to $104,000 for the same period in 2025.

Previous wording

During the three and nine months ended September 30, 2025, no shares were sold under the Ladenburg ATM Facility. During the three and nine months ended September 30, 2024, we sold an aggregate of 1,423,441 shares of our common stock, respectively, 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.

Current wording

During the three months ended March 31, 2026 and 2025, no shares were sold under the Ladenburg ATM Facility.

Previous wording

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. 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.”

Current wording

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 was closed.

Previous wording

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. Among other dates, the parties proposed (i) a close of fact discovery on August 28, 2025, (ii) mediation by January 19, 2027, and (iii) trial by April 5, 2027. The Court has yet to order the scheduling order.

Current wording

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. On April 2, 2026, Apple moved for summary judgment of invalidity for lack of written description. The motion has been fully briefed and is scheduled for oral argument on May 7, 2026. Additionally, as of April 17, 2026, claim construction briefing was completed, and on April 15, 2026, Apple also moved to serve amended invalidity contentions based on new information and case developments.