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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
13.   Income Taxes
 
Income (loss) before income taxes was distributed geographically as follows (in thousands):
 
   
Year Ended
December 31,
    
Year Ended
December 31,
  
   
2011
    
2010
  
Domestic
  
$
(16,867
)
  
$
(29,590
)
Foreign
    
(200)
      
(1,991
 )
                 
Total
  
$
(17,067
)
  
$
(31,581
)
 
The provision for income taxes is as follows for the year ended December 31:
 
   
2011
    
2010
  
Current
            
Federal
  
$
--
    
$
--
  
State
    
2
      
1
  
Foreign
    
76
      
44
  
                 
Total current
  
$
78
    
$
45
  
  
The effective income tax rate differs from the statutory federal income tax rate for the following reasons:
 
   
Year Ended
December 31,
    
Year Ended
December 31,
  
   
2011
    
2010
  
Amount at standard tax rates
     34 %     34 %
      Non-deductible loss on revaluation of embedded conversion features and extinguishment of convertible debt
     (29 )%     (24 )%
Foreign losses at different rates
     2 %     --  
Stock compensation
     --       (5 )%
      7 %      5 %
Valuation allowance
     (7 )%     (5 )%
Effective tax rate
     --       --  
 
Significant components of the deferred tax balances are as follows (in thousands):
 
   
December 31,
  
   
2011
    
2010
  
Deferred tax assets:
            
Accruals
  
$
26
    
$
85
  
Stock compensation
    
1,080
      
897
  
                 
Net operating losses
    
4.116
      
2,455
  
Total deferred tax assets
  
$
5,222
    
$
3,437
  
                 
Valuation allowance
    
(5,222
)
    
(3,437
)
                 
Total net deferred tax assets
  
$
--
    
$
--
  
 
Valuation allowances are recorded to offset certain deferred tax assets due to management’s uncertainty of realizing the benefits of these items. Management applies a full valuation allowance for the accumulated losses of Neonode Inc, and its subsidiary Neonode Technologies AB, since it is not determinable using the “more likely than not” criteria that there will be any future benefit of our deferred tax assets. This is mainly due to our history of operating losses. Due to the reorganization, the Company believes that the US net operating losses and credits would be subject to the provisions of Section 382 and therefore subject to strict limitations. The Company has not completed a study of the limitations and therefore has not included these loss carryforwards or credits in the analysis of the deferred tax assets. The Company has federal, state and foreign net operating losses of $2,824,000, $6,699,000 and $323,000, respectively. The federal loss carryforward begins to expire in 2029, the California loss carryforward begins to expire in 2029 and the foreign loss carryforward indefinitely. On December 9, 2008, Neonode AB filed for liquidation under the Swedish bankruptcy laws and effective with the filing we are no longer responsible for the liabilities and no longer have any ownership interest in the assets of Neonode AB, including any tax net operating loss carryforwards.
 
Effective January 1, 2007, we adopted the provisions of accounting guidance which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions accounted for in accordance with accounting guidance. A reconciliation of the unrecognized tax benefits for the year ended December 31, 2011 is as follows:
  
Balance at January 1, 2011
  
$
---
  
Additions for tax positions of prior years
    
---
  
Reductions for tax position of prior years
    
---
  
Additions based on tax positions related to the current year
    
---
  
Decreases - Settlements
    
---
  
Reductions - Settlements
    
---
  
Balance at December 31, 2011
  
$
---
  
 
It is the Company’s policy to classify accrued interest and penalties as part of the accrued tax liability in the provision for income taxes. For the year ended December 31, 2011, we did not recognize any interest or penalties related to unrecognized tax benefits.
 
Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2011, we had no accrued interest and penalties related to uncertain tax matters.
 
As of December 31, 2011, we had no uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. We do not anticipate the adjustments would result in a material change to our financial position.
 
We file income tax returns in the U.S. federal jurisdiction, California and Sweden. The 1997 through 2010 tax years are open and may be subject to potential examination in one or more jurisdictions. We are not currently under any federal, state or foreign income tax examinations.