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Accounting Policies, by Policy (Policies)
 6 Months Ended
Jun. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
Principles of Consolidation

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.

The condensed consolidated balance sheets at June 30, 2024 and December 31, 2023 and the condensed consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the three and six months ended June 30, 2024 and 2023 include our accounts and those of our intercompany subsidiaries.

 
Foreign Currency Translation and Transaction Gains and Losses

Foreign Currency Translation and Transaction Gains and Losses

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. The translation from Swedish Krona, Japanese Yen, South Korean Won and Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the condensed consolidated balance sheet date and for income statement accounts using a weighted-average exchange rate during the period. Gains or (losses) resulting from translation are included as a separate component of accumulated other comprehensive income (loss). Foreign currency translation gains (losses) were ($32,000) and ($66,000) and $(141,000) and $(106,000) during the three and six months ended June 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 $2,000 during the three and six months ended June 30, 2024, respectively, compared to $0 and $(5,000) during the same periods in 2023, respectively.
Concentration of Credit and Business Risks

Concentration of Credit and Business Risks

Our customers are located in the United States, Europe, Oceania and Asia.

As of June 30, 2024, six of our customers represented approximately 82.0% of our consolidated accounts receivable and unbilled revenues.

As of December 31, 2023, four of our customers represented approximately 76.4% 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 June 30, 2024 are as follows:

  ● Seiko Epson – 14.3%
     
  ● Commercial Vehicle OEM – 13.9%
     
  ● Alps Alpine – 13.0%
     
  ● Propoint – 11.5%

 

Customers who accounted for 10.0% or more of our net revenues during the six months ended June 30, 2024 are as follows:

  ● Hewlett-Packard Company – 15.9%
     
  ● Alps Alpine – 15.3%
     
  ● Seiko Epson – 14.9%

Customers who accounted for 10.0% or more of our net revenues during the three months ended June 30, 2023 are as follows:

  ● Hewlett-Packard Company – 37.4%
     
  ● Alps Alpine – 15.3%
     
  ● Seiko Epson – 13.7%
     
  ● LG – 12.5%

Customers who accounted for 10.0% or more of our net revenues during the six months ended June 30, 2023 are as follows:

  ● Hewlett-Packard Company – 34.0%
     
  ● Seiko Epson – 17.0%
     
  ● Alps Alpine – 15.0%
     
  ● LG – 13.1%

 
Revenue Recognition

Revenues

The following tables present the net revenues distribution by geographical area and market for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

   Three months ended
June 30, 2024		   Three months ended
June 30, 2023		 
   Amount   Percentage   Amount   Percentage 
North America                
Net revenues from Automotive  $
-
    
-
%  $
-
    
-
%
Net revenues from IT & Industrial   248    100.0%   566    100.0%
   $248    100.0%  $566    100.0%
                     
Asia Pacific                    
Net revenues from Automotive  $206    26.1%  $332    63.6%
Net revenues from IT & Industrial   584    73.9%   190    36.4%
   $790    100.0%  $522    100.0%
                     
Europe, Middle East and Africa                    
Net revenues from Automotive  $221    57.3%  $112    100.0%
Net revenues from IT & Industrial   165    42.7%   
-
    
-
%
   $386    100.0%  $112    100.0%
   Six months ended
June 30, 2024		   Six months ended
June 30, 2023		 
   Amount   Percentage   Amount   Percentage 
North America                
Net revenues from Automotive  $
-
    
-
%  $
-
    
-
%
Net revenues from IT & Industrial   586    100.0%   1,037    100.0%
   $586    100.0%  $1,037    100.0%
                     
Asia Pacific                    
Net revenues from Automotive  $454    35.7%  $689    59.6%
Net revenues from IT & Industrial   816    64.3%   467    40.4%
   $1,270    100.0%  $1,156    100.0%
                     
Europe, Middle East and Africa                    
Net revenues from Automotive  $310    53.3%  $201    77.3%
Net revenues from IT & Industrial   272    46.7%   59    22.7%
   $582    100.0%  $260    100.0%

 
Product Warranty

Product Warranty

The following table summarizes the activity related to the product warranty liability (in thousands):

   June 30,
2024		   December 31,
2023		 
Balance at beginning of period  $30   $49 
Provisions for (adjustments to) warranty issued   31    (19)
Balance at end of period  $61   $30 

The Company accrues for warranty costs as part of its cost of sales of TSMs based on estimated costs. The Company’s products are generally covered by a warranty for a period of 12 months from the customer receipt of the product included as a component of accrued expenses on the condensed consolidated balance sheet.
Contract Liabilities

Contract Liabilities

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

   June 30,
2024		   December 31,
2023		 
Deferred revenues license fees  $50   $         2 
Deferred revenues products              1    8 
Deferred revenues non-recurring engineering   
-
    
-
 
   $51   $10 

During the three and six months ended June 30, 2024, the Company recognized revenues of approximately $7,000 and $10,000, respectively, related to contract liabilities outstanding at the beginning of the year. During the three and six months ended June 30, 2023, the Company recognized revenues of approximately $9,000 and 14,000, respectively, related to contract liabilities outstanding at the beginning of the year.
Income Taxes

Income Taxes

We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the condensed consolidated financial statements or tax returns. We estimate income taxes based on rates in effect in each of the jurisdictions in which we operate. Deferred income tax assets and liabilities are determined based upon differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The realization of deferred tax assets is based on historical tax positions and expectations about future taxable income. Valuation allowances are recorded against net deferred tax assets when, in our opinion, realization is uncertain based on the “more likely than not” criteria of the accounting guidance.

Based on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of June 30, 2024 and December 31, 2023. In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred tax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in deferred tax amounts, plus income taxes paid or payable for the current period.

We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of June 30, 2024 and December 31, 2023, we had no unrecognized tax benefits. 
Net Loss per Share

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

 
Recent Accounting Pronouncements

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.