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Discontinued Operations

9 Months Ended

Sep. 30, 2024

Discontinued Operations [Abstract]

Discontinued Operations

2. Discontinued Operations

During the fourth quarter of 2023 the Company decided to phase out the product business and as a consequence terminate production at the Pronode Technologies AB facilities in Kungsbacka, Sweden. Subsequently, we commenced the phase out of our TSM product business during the first quarter of 2024 through licensing of the TSM technology to strategic partners or outsourcing. In May 2024, we stopped producing TSMs and started to shut down the factory. The facility lease terminated as of September 30, 2024 and was not renewed.

The Company concluded that, in aggregate, the termination of TSM manufacturing met the criteria for discontinued operations. As a result, this business has been reclassified to discontinued operations in these condensed consolidated financial statements for all periods presented.

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations are presented separately in the condensed consolidated balance sheets for all periods presented. On September 30, 2024 and December 31, 2023, these balances consisted of assets and liabilities of the Company’s Products business. Pronode Technologies AB is expected to be merged into Neonode Technologies AB before the end of the year, upon receipt of regulatory approval.

The following table presents a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the current assets and liabilities of discontinued operations as presented on the Company’s condensed consolidated balance sheets:

		September 30,				December 31,
		2024				2023

ASSETS OF DISCONTINUED OPERATIONS
Current assets:
Accounts receivable and unbilled revenues, net		$	178			$	265
Inventory			172				610
Prepaid expenses and other current assets			14				47
Total current assets of discontinued operations			364				922

Property and equipment, net			-				230
Operating lease right-of-use assets, net			-				54
Total assets of discontinued operations		$	364			$	1,206

LIABILITIES OF DISCONTINUED OPERATIONS
Current liabilities:
Accounts payable		$	50			$	40
Accrued payroll and employee benefits			50				86
Accrued expenses			42				45
Contract liabilities			-				8
Current portion of finance lease obligations			-				25
Current portion of operating lease obligations			-				54
Total current liabilities of discontinued operations			142				258

Finance lease obligations, net of current portion			-				17
Total liabilities of discontinued operations		$	142			$	275

Loss from Discontinued Operations

Discontinued operations for the three and nine months ended September 30, 2024 and 2023, respectively, consists of results from the Company’s products business.

The following table provides details about the major classes of line items constituting “Net loss from discontinued operations” as presented on the Company’s condensed consolidated statements of operations:

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Revenues:
Products		$	85			$	163			$	908			$	349
Total revenues			85				163				908				349

Cost of revenues:
Products			(19	)			227				822				302
Total cost of revenues			(19	)			227				822				302

Total gross margin			104				(64	)			86				47

Operating expenses:
General and administrative			148				136				573				770

Total operating expenses			148				136				573				770
Operating loss			(44	)			(200	)			(487	)			(723	)

Other income (expense):
Interest income, net			-				2				1				6
Other income (expense)			-				(6	)			18				(6	)
Total other income (expense), net			-				(4	)			19				-

Net loss from discontinued operations		$	(44	)		$	(204	)		$	(468	)		$	(723	)

Cash Flows Information

The following table presents cash flow information for discontinued operations (in thousands):

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Depreciation and amortization		$	1			$	8			$	19			$	20
Amortization of operating lease ROU assets			18				16				52				49
Inventory impairment loss			287				-				287				-
Purchase of property and equipment							(22	)			(37	)			(58	)
Proceeds from sale of property and equipment			-								190				-
		$	306			$	2			$	511			$	11