Neonode Inc.

Previous wording

We license our MultiSensing and zForce technology to Original Equipment Manufacturers (“OEMs”) and automotive Tier 1 suppliers who embed our technology into products that they develop, manufacture and sell. Since 2010, our licensing customers have sold over 95 million devices that use our patented technology.

Current wording

We license our MultiSensing and zForce technology to Original Equipment Manufacturers (“OEMs”) and Tier 1 suppliers who embed our technology into products that they develop, manufacture and sell. Since 2010, our licensing customers have sold over 100 million devices that use our patented technology.

Previous 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.

Current wording

As of June 30, 2026, we had 36 valid technology license agreements with global OEMs, Original Design Manufacturers (“ODMs”) and Tier 1 suppliers.

Previous wording

The ongoing war in Ukraine has impacted the global economy as the United States, the UK, the EU, and other countries have imposed broad export controls and financial and economic sanctions against Russia (a large exporter of commodities), Belarus, and specific areas of Ukraine, and may continue to impose additional sanctions or other measures. Russia may impose its own counteractive measures. We do not procure materials directly from Ukraine or Russia, but the war in Ukraine may further exacerbate ongoing supply chain disruptions that are occurring across the globe. While the precise effects on global economies from the war in Ukraine and related sanctions remain uncertain, there has been significant volatility in the financial markets, fluctuations in currency exchange rates, and an increase in energy and commodity prices globally. Should the wars continue or escalate, there may be various economic and security consequences including, but not limited to, additional supply shortages of different kinds; further increases in prices of commodities; significant disruptions in logistics infrastructure and telecommunications services; and risks relating to the unavailability of information technology systems and infrastructure. The resulting impacts on the global economy, financial markets, inflation, interest rates, and unemployment, among others, could adversely impact economic and financial conditions.

Current wording

The ongoing war in Ukraine has impacted the global economy as the United States, the UK, the EU, and other countries have imposed broad export controls and financial and economic sanctions against Russia (a large exporter of commodities), Belarus, and specific areas of Ukraine, and may continue to impose additional sanctions or other measures. Russia may impose its own counteractive measures. In addition, the war with Iran has led to recent increases in the fuel prices. We do not procure materials directly from Ukraine, Russia or Iran, but the war in Ukraine and the war with Iran may further exacerbate ongoing supply chain disruptions that are occurring across the globe, and the increases in inflation could impact the overall demand for our technology and services, our costs for labor, equipment and products, shipping, fuel, warehousing and other operational overhead and the margins we will be able to realize on our technology and services, all of which could have an adverse impact on our business, financial position, results of operations and cash flows. While the precise effects on global economies from the war in Ukraine, the war with Iran and related sanctions remain uncertain, there has been significant volatility in the financial markets, fluctuations in currency exchange rates, and an increase in energy and commodity prices globally. Should the wars continue or escalate, there may be various economic and security consequences including, but not limited to, additional supply shortages of different kinds; further increases in prices of commodities; significant disruptions in logistics infrastructure and telecommunications services; and risks relating to the unavailability of information technology systems and infrastructure. The resulting impacts on the global economy, financial markets, inflation, interest rates, and unemployment, among others, could adversely impact economic and financial conditions.

Previous 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.

Current wording

All of our sales for the three and six months ended June 30, 2026 and 2025 were to customers located in the United States, Europe and Asia.

Previous 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.

Current wording

Total revenues were $0.5 million and $1.1 million for the three and six months ended June 30, 2026, respectively compared to $0.6 million and $1.1 million for the same periods in 2025, respectively. The decrease in total revenues of 20.4% for the three months ended June 30, 2026, as compared to the same period in 2025, is mainly explained by lower NRE offset by higher license fees. The decrease in total revenues of 1.9% for the six months ended June 30, 2026, as compared to the same period in 2025, is mainly explained by lower NRE offset by higher license fees.

Previous wording

Revenues from license fees were $0.6 million for the three months ended March 31, 2026, compared to $0.5 million for the same periods in 2025. The increase of 19.1% for the three months ended March 31, 2026, as compared to the same period in 2025, was mainly due to new license agreements.

Current wording

Revenues from license fees were $0.4 million and $1.0 million for the three and six months ended June 30, 2026, respectively, compared to $0.4 million and $0.9 million for the same periods in 2025, respectively. The increase of 9.2% for the three months ended June 30, 2026, as compared to the same period in 2025, was mainly due to new license agreements, including significant growth in MultiSensing license revenue, which increased more than fivefold. The increase of 14.7% for the six months ended June 30, 2026, as compared to the same period in 2025, was mainly due to new license agreements.

Previous 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.

Current wording

Revenues from non-recurring engineering were $36,000 and $58,000 for the three and six months ended June 30, 2026, respectively, compared to $195,000 and $211,000 for the same periods in 2025, 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 81.5% for the three months ended June 30, 2026, as compared to the same period in 2025, was the result of decreased delivery in projects. The decrease of 72.5% for the six months ended June 30, 2026, as compared to the same period in 2025, was the result of decreased delivery in projects.

Previous 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.

Current wording

Our gross margin was 98.1% and 98.8% for the three and six months ended June 30, 2026, respectively, compared to 99.0% and 98.7% for the same periods in 2025, respectively.

Previous 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.

Current wording

Research and development (“R&D”) expenses were $1.0 million and $1.9 million for the three and six months ended June 30, 2026, respectively, compared to $1.1 million and $2.0 million for the same periods in 2025, respectively. The decrease of 6.5% for the three months ended June 30, 2026 compared to the same period in 2025 was primarily related to lower payroll and related costs. The decrease of 6.8% for the six months ended June 30, 2026, as compared to the same period in 2025, was primarily related to lower payroll and related costs.

Previous wording

Sales and marketing expenses were $0.6 million for the three months ended March 31, 2026, compared to $0.6 million for the same periods in 2025. The decrease of 5.3% for the three months ended March 31, 2026 compared to the same period in 2025 was primarily related to lower advertising and travel expenses.

Current wording

Sales and marketing expenses were $0.7 million and $1.3 million for the three and six months ended June 30, 2026, respectively, compared to $0.6 million and $1.2 million for the same periods in 2025, respectively. The increase of 24.0% for the three months ended June 30, 2026 compared to the same period in 2025 was primarily related to higher payroll and related costs and higher advertising and travel expenses. The increase of 8.8% for the six months ended June 30, 2026, as compared to the same period in 2025, was primarily related to higher payroll and related costs.

Previous 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.

Current wording

General and administrative expenses were $1.0 million and $2.2 million for the three and six months ended June 30, 2026, respectively, compared to $1.0 million and $1.9 million for the same period in 2025, respectively. The increase of 17.5% for the six months ended June 30, 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 $0.2 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.

Current wording

Other income was $0.2 million and $0.4 million for the three and six months ended June 30, 2026, respectively, compared to $0.1 million and $0.3 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 (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.

Current wording

Our effective tax rate was zero and (0.1)% for the three and six months ended June 30, 2026, respectively, compared to zero and 0.3% 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 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.

Current wording

As a result of the factors discussed above, we recorded a loss from continuing operations of $2.1 million and $4.0 million for the three and six months ended June 30, 2026, respectively, and $2.0 million and $3.8 million for the same periods in 2025, respectively.

Previous 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.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $21.3 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 $22.3 million as of March 31, 2026, compared to $24.1 million as of December 31, 2025.

Current wording

Working capital (current assets less current liabilities) was $20.3 million as of June 30, 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 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.

Current wording

Net cash used in operating activities for combined continuing and discontinued operations for the six months ended June 30, 2026, was $4.0 million and was primarily the result of a net loss of $4.0 million and approximately $0.2 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 $(0.3) million. Net cash used in operating activities for combined continuing and discontinued operations for the six months ended June 30, 2025, was $3.1 million and was primarily the result of a net loss of $3.6 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.

Previous 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.

Current wording

Net cash used in investing activities for combined continuing and discontinued operations for the six months ended June 30, 2026, was approximately $14,000 and was primarily the result of purchase of property and equipment. Net cash used in investing activities for combined continuing and discontinued operations for the six months ended June 30, 2025, was approximately $15,000 and was primarily the result of purchase of property and equipment.

Previous 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.

Current wording

Net cash used in financing activities for combined continuing and discontinued operations for the six months ended June 30, 2026, was approximately $6,000 and was primarily the result of principal payments on finance leases. Net cash used in financing activities for combined continuing and discontinued operations for the six months ended June 30, 2025, was approximately $5,000 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 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.

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 $2.1 million and $4.0 million for the three and six months ended June 30, 2026, respectively, compared to a loss of $1.9 million and $3.6 million for the same periods in 2025, respectively, and had an accumulated deficit of approximately $219.6 million and $215.6 million as of June 30, 2026 and December 31, 2025, respectively.

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 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.

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. Fixed lease payments are expected to be in the range of $280,000 and $310,000 annually until expiration.

Previous 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.

Current wording

For total rent expense for combined continuing and discontinued operations, we recorded $123,000 and $249,000 for the three and six months ended June 30, 2026, respectively, compared to $115,000 and $219,000 for the same periods in 2025, respectively.

Previous wording

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

Current wording

During the six months ended June 30, 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. As of September 2, 2025, the case in the Western District of Texas was closed.

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 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. 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.

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. On June 8, 2026, the Court granted Apple’s motion for summary judgment, and on June 15, 2026 the clerk entered judgment dismissing the case. On July 1, 2026, Neonode Smartphone LLC appealed to the Federal Circuit (assigned docket number 26-2007). Neonode Smartphone LLC’s opening appellate brief is due in early September 2026, absent any extension.