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Executive management is responsible for the Company’s enterprise risk management program and regularly considers cybersecurity risks alongside other operational, financial, and strategic risks. Cybersecurity risks are assessed for potential materiality and are incorporated into management decision-making where appropriate. We maintain a structured and risk-based process for identifying, assessing, and managing material risks arising from cybersecurity threats as part of our broader enterprise risk management framework. Our cybersecurity risk management activities are integrated into the Company’s overall risk management processes and are designed to address prevention, detection, response, and recovery. We monitor security industry developments and global threat trends on an ongoing basis. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission File No. 001-35526

NEONODE INC.

(Exact name of Registrant as specified in its charter)

Delaware

94-1517641

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer
identification number)

Karlavägen 100, 115 26 Stockholm, Sweden		N/A
(Address of principal executive offices and zip code)		(ZIP code)

+46 (0) 70 29 58 519

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		NEON		The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes ☐ No ☒

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price for the registrant’s common stock on June 2830, ~~2024~~2025 (the last business day of the registrant’s most recently completed second fiscal quarter) as reported on the Nasdaq Stock Market, was $24334,~~187~~359,~~310~~366.

The number of shares of the registrant’s common stock outstanding as of March 1716, ~~2025~~2026 was 16,782,922.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the registrant’s ~~2025~~ 2026 Annual Meeting of Stockholders are incorporated by reference as set forth in Part III of this Annual Report. The registrant intends to file such definitive proxy statement with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, ~~2024~~2025.

Table of Contents

NEONODE INC.

~~2024~~ 2025 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

	SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS	ii

PART I

Item 1.	BUSINESS	1
Item 1A.	RISK FACTORS	6
Item 1B.	UNRESOLVED STAFF COMMENTS	14
Item 1C.	CYBERSECURITY	14
Item 2.	PROPERTIES	15
Item 3.	LEGAL PROCEEDINGS	15
Item 4.	MINE SAFETY DISCLOSURES	15

PART II

Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	16
Item 6.	[RESERVED]	16
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	24
Item 9A.	CONTROLS AND PROCEDURES	24
Item 9B.	OTHER INFORMATION	25
Item 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	25

PART III

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	26
Item 11.	EXECUTIVE COMPENSATION	26
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	26
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	26
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	26

PART IV

Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	27
Item 16.	FORM 10-K SUMMARY	27
	SIGNATURES	28

Table of Contents

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. For example, statements in this Annual Report regarding our plans, strategy and focus areas are forward-looking statements. You can identify some forward-looking statements by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “goal,” “plan,” and similar expressions. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to our history of losses since inception, our dependence on a limited number of customers, our reliance on our customers’ ability to design, manufacture and sell products that incorporate our touch technology, the length of a product development and release cycle, our and our customers’ reliance on component suppliers, the difficulty in verifying royalty amounts owed to us, our ability to remain competitive in response to new technologies, our dependence on key members of our management and development team, the costs to defend, as well as risks of losing, patents and intellectual property rights, our ability to obtain adequate capital to fund future operations, and general economic conditions, including inflation, or other effects related to future pandemics or epidemics, or geopolitical conflicts such as the ongoing war in Ukraine or the Gaza Strip. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see “Item 1A. Risk Factors” and elsewhere in this Annual Report, and in our publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the date of this Annual Report. Because actual events or results may differ materially from those discussed in or implied by forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statement. We do not undertake responsibility to update or revise any of these factors or to announce publicly any revision to forward-looking statements, whether as a result of new information, future events or otherwise.

Table of Contents

PART I

Neonode Inc., collectively with its subsidiaries, is referred to in this Annual Report as “Neonode”, “we”, “us”, “our”, “registrant”, or “Company”.

We use Neonode, our logo, zForce, MultiSensing and other marks as trademarks. This Annual Report contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Annual Report, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names.

ITEM 1. BUSINESS

About Us

Neonode provides ~~advanced optical sensing solutions for touch, contactless touch, and gesture sensing. We also provide~~ software solutions for machine perception that feature advanced machine learning algorithms to detect and track persons and objects in video streams from cameras and other types of imagers. We base our ~~contactless touch, touch, and gesture sensing products and solutions using our zForce technology platform and our~~ machine perception solutions on our MultiSensing® technology platform. We market and sell our solutions to customers in ~~many~~mainly ~~different~~in ~~markets~~the ~~and~~automotive ~~segments~~market. ~~including~~However, ~~but~~our ~~not~~solution ~~limited~~can ~~to,~~also ~~office~~be ~~equipment,~~used ~~automotive,~~in ~~industrial~~many ~~automation,~~other ~~medical~~markets, ~~military~~ and ~~avionics~~we plan to expand our solutions into new markets in the future.

Neonode also provides advanced optical sensing solutions for touch, contactless touch, and gesture sensing using our zForce® technology platform. In 2010, we began licensing to Original Equipment Manufacturers (“OEMs”) and automotive Tier 1 suppliers who embed our technology into products they develop, manufacture, and sell. Since 2010, our licensing customers have sold over 95 million products that feature our technology. In October 2017, we augmented our licensing business and began manufacturing and shipping touch sensor modules (“TSMs”) that incorporate our patented technology. On December 12, 2023, we announced a new, sharpened strategy with full focus on the licensing business. Consequently, we phased out the TSM product business during 2024 through licensing of the TSM technology to strategic partners and in parallel we sold parts of the remaining TSMs. The phase out of our TSM product business meets the criteria to be reported as discontinued operations. Refer to Note 2 of Notes to the Consolidated Financial Statements for additional discussion of discontinued operations. All following information presents continuing operations. In September 2025, we made the strategic decision to transition the zForce platform into maintenance mode. We are no longer selling the zForce technology to new customers but will continue supporting existing customers in various markets and segments such as office equipment, automotive, industrial automation, medical, military, and avionics.

In October 2017, we augmented our licensing business and began manufacturing and shipping touch sensor modules (“TSMs”) that incorporate our patented technology. On December 12, 2023, we announced a new, sharpened strategy with full focus on the licensing business. Consequently, we phased out the TSM product business during 2024 through licensing of the TSM technology to strategic partners and in parallel we sold parts of the remaining TSMs. The phase out of our TSM product business meets the criteria to be reported as discontinued operations. Refer to Note 2 of Notes to the Consolidated Financial Statements for additional discussion of discontinued operations. All following information present continuing operations.Licensing

~~During 2024,~~We welicense ~~also~~our ~~continued~~MultiSensing and zForce technology to ~~focus~~OEMs and ~~our~~automotive ~~efforts~~Tier on1 ~~maintaining~~suppliers who embed our ~~current~~technology ~~licensing~~into ~~customers~~products that they develop, manufacture and ~~achieving~~sell. ~~design~~Since ~~wins~~2010, ~~for~~our ~~new~~licensing ~~programs both~~customers ~~with~~have ~~current~~sold ~~and~~over ~~future~~95 ~~customers~~million devices that use our patented technology.

~~Licensing~~As of December 31, 2025, we had 36 valid technology license agreements with global OEMs, Original Design Manufacturers ("ODMs") and automotive Tier 1 suppliers.

~~We license~~Our ~~our~~licensing ~~zForce~~customer base is primarily in the automotive and ~~MultiSensing~~printer segments. Nine of our licensing customers are currently shipping products that embed our technology. We anticipate current customers will continue to ~~OEMs~~ship products with our technology in 2026 and ~~automotive~~in ~~Tier~~future 1years. ~~suppliers~~We ~~who~~also ~~embed~~expect to expand our ~~technology~~customer ~~into~~base with a number of new customers who will be looking to ship new products ~~that~~incorporating our MultiSensing technologies as they ~~develop,~~ ~~manufacture~~complete final product development and ~~sell~~release cycles. ~~Since~~We ~~2010,~~typically earn our ~~licensing~~license fees on a per unit basis when our customers ~~have~~ship ~~sold~~products ~~over~~using 95our ~~million~~technology, ~~devices~~but ~~that~~in the future, we may use ~~our~~other ~~patented~~business ~~technology~~models as well.

As ~~of December 31, 2024, we had 37 valid technology license agreements with global OEMs, ODMs and automotive Tier~~ 1 ~~suppliers.~~

~~Our licensing customer base is primarily in the automotive and printer~~ ~~segments.~~ Table ~~Nine~~ of ~~our licensing customers are currently shipping products that embed our technology. We anticipate current customers,~~Contents except of one, will continue to ship products with our technology in 2025 and in future years. We also expect to expand our customer base with a number of new customers who will be looking to ship new products incorporating our zForce and MultiSensing technologies as they complete final product development and release cycles. Typically, our licensing customers require engineering support during the development and initial manufacturing phase for their products using our technology. For more details on non-recurring engineering (“NRE”) services please refer to the section below. We typically earn our license fees on a per unit basis when our customers ship products using our technology, but in the future we may use other business models as well.

1Non-recurring Engineering Services

~~Non~~We also offer non-recurring ~~Engineering~~ ~~Services~~engineering (“NRE”) services related to application development linked to our technology platform on a flat rate or hourly rate basis.

WeTypically, ~~also~~our ~~offer~~licensing ~~NRE~~customers ~~services~~require ~~related~~engineering tosupport ~~application~~during the development ~~linked to our zForce~~ and ~~MultiSensing~~initial ~~technology~~manufacturing ~~platforms~~phase onfor atheir ~~flat~~products ~~rate~~using orour ~~hourly rate basis~~technology.

~~Typically,~~Strategy ~~our licensing customers require engineering support during the development~~ and ~~initial~~Focus ~~manufacturing phase for their products using our technology. In this case we can offer NRE services and earn NRE revenues.~~Areas

~~Strategy~~ Our customers use machine perception technologies to grow their businesses, drive efficiencies, and ~~Focus~~seek ~~Areas~~competitive advantages. Our strategy is to deliver value-adding human-machine interaction (“HMI”) and machine perception solutions that enable our customers to achieve these targets. We offer specialized NRE services related to the integration of our solutions into customer systems and products to ensure that optimal functionality and performance is achieved.

~~Our customers~~With ~~use~~the ~~touch,~~strategic ~~contactless~~decision ~~touch,~~in ~~gesture~~September ~~sensing~~2025 to transition the zForce platform into maintenance mode, ~~and~~we ~~machine~~are ~~perception~~no ~~technologies~~longer selling the zForce technology to ~~grow~~new ~~their~~customers. We ~~businesses,~~instead ~~drive~~aim ~~efficiencies, and~~to ~~seek~~capture ~~competitive~~a ~~advantages.~~significant ~~Our~~share ~~strategy~~of isthe togrowing ~~deliver~~automotive ~~value-adding~~driver ~~human~~and in-cabin monitoring market by developing our machine ~~interaction~~perception (“business. We are innovators in the HMI”) and machine perception ~~solutions~~ ~~that~~areas ~~enable~~and our ~~customers~~goal is to ~~achieve~~introduce next-generation products in these ~~targets.~~areas Wethat offer ~~specialized~~better ~~NRE~~price, ~~services~~performance, ~~related~~and architectural advantages compared to ~~the~~our ~~integration~~current offers and those of our ~~solutions into~~competitors. ~~customer~~We ~~systems~~intend to execute on this strategy through portfolio transformation, internal innovation, and ~~products~~co-development toof ~~ensure~~products ~~that~~with ~~optimal~~our ~~functionality~~customers and ~~performance~~the isbuilding ~~achieved~~of strategic partnerships with other technology companies.

With the sharpened strategy, announced in December 2023, we focus solely on the licensing business. This allows customers to license our unique and advanced TSM technology to create bespoke products and solutions that bring value to end customers. We continue to be a leader in optical touch and gesture sensing by licensing our zForce technology to customers in the printer, automotive, and other sectors. We also aim to capture a significant share of the growing automotive driver and in-cabin monitoring market by developing our machine perception business. We are innovators in the HMI and machine perception areas and our goal is to introduce next-generation products in these areas that offer better price, performance, and architectural advantages compared to our current offers and those of our competitors. We intend to execute on this strategy through portfolio transformation, internal innovation, and co-development of products with our customers and the building of strategic partnerships with other technology companies.Markets

~~Markets~~Automotive

~~Automotive~~The automotive value chain consists of OEMs (vehicle manufacturers) and tiered suppliers (Tier 1 system suppliers, Tier 2 component suppliers and etc.). In this market, we mainly act as a Tier 2 technology provider to Tier 1 suppliers who license our technology and deliver different types of systems to OEMs (e.g. our driver and in-cabin monitoring solution or our touch technology). In some cases, we are also engaged directly by OEMs, following the trend that OEMs are insourcing more and more of their systems and software development.

~~The~~During ~~automotive value chain consists of OEMs (vehicle manufacturers)~~ 2025 and ~~tiered suppliers (Tier 1 system suppliers~~2024, ~~Tier~~our 2automotive ~~component~~customers ~~suppliers~~shipped ~~etc~~approximately 0.).3 Inmillion ~~this market, we mainly act as a Tier 2 technology provider to Tier 1 suppliers who license our technology~~ and ~~deliver different types of systems to OEMs (e~~ 0.g.5 ~~our~~million ~~driver~~products ~~and~~with ~~in-cabin monitoring solution or~~ our ~~touch~~ technology), respectively. ~~In some cases~~Accumulated, wesince ~~are also engaged directly by OEMs~~2014, ~~following~~ ~~the~~our ~~trend~~automotive ~~that~~customers ~~OEMs~~have ~~are~~shipped ~~insourcing~~approximately 8.8 ~~more~~million ~~and~~products ~~more~~featuring ofour ~~their systems and software development~~technology.

~~During 2024~~Printers and ~~2023,~~Office our automotive customers shipped approximately 0.5 million and 0.9 million products with our technology, respectively. Accumulated, since 2014, our automotive customers have shipped approximately 8.5 million products featuring our technology.Equipment

~~Printers~~ Multi-function printers typically feature touch displays for user interaction with feature-rich menus and ~~Office~~settings. ~~Equipment~~We have operational license agreements with three of the leading global printers and office equipment OEMs. During 2025 and 2024, our customers shipped approximately 1.7 million and 2.4 million printers using our touch technology, respectively, and since mid-2014 they have shipped approximately 58.9 million printers using our touch technology.

~~Multi-function~~ printers typically feature touch displays for user interaction with feature-rich menus and settings. We have operational license agreements with three of the leading global printers and office equipment OEMs. During 2024 our customers shipped approximately 2~~.4 million printers~~ ~~using our touch technology and since mid-2014 they have shipped approximately 57.3 million printers using our touch technology.~~

~~Rugged~~ ~~and~~ Table ~~Larger~~of ~~Touch Displays~~Contents

Following the decision in December 2023 to transform our zForce business to a licensing only business model, we see an increasing number of opportunities for our optical touch and gesture control solutions in the rugged industrial touchscreen market as well as for cost efficient touch solutions for larger touch displays i.e. 21 inch and above where we offer lower cost per inch on larger displays compared to PCAP. Easily integrated using a single-sided TSM sensor or a full-frame zForce implementation, Neonode’s licensable touch interaction technology platforms deliver exceptional performance and value to any touch-operated application. We also see potential demand for our machine perception solutions in industrial settings.Amusement

2Following the announcement that Nexty Electronics has selected Neonode’s TSM technology for sensor development and manufacturing of the next-generation slot machines for a leading manufacturer in Japan’s amusement market, we see further potential to deliver our technology to companies in the Japanese amusement market as well as in other markets that desire high quality, cost-effective touch functionality on large displays and surfaces.

~~Amusement~~Holographic Interaction

~~Following the~~Using ~~announcement~~our ~~that Nexty Electronics has selected Neonode’s~~ TSM technology ~~for~~to ~~sensor~~facilitate ~~development~~interaction ~~and~~with ~~manufacturing~~a ofhologram allows ~~the~~us ~~next-generation slot~~to ~~machines~~create ~~for~~immersive experiences with a ~~leading~~“wow ~~manufacturer~~factor” in ~~Japan’s~~the ~~amusement~~infotainment ~~market~~sector, wee.g. ~~see~~museums, ~~further~~receptions, ~~potential~~AI toavatars ~~deliver~~and ~~our~~etc. ~~technology~~We toalso ~~companies in~~see ~~the~~an ~~Japanese~~increasing ~~amusement~~potential ~~market~~for assurgical ~~well~~planning asand ~~in other markets that desire high quality~~education, ~~cost-effective~~enabling ~~touch~~virtual ~~functionality~~explorations ~~on large displays~~ and ~~surfaces~~interactive learning.

~~Holographic Interaction~~New Business Development

~~Using our~~Our ~~TSM~~strategy ~~technology~~process toensures ~~facilitate~~continuous ~~interaction~~evaluation ~~with~~of athe ~~hologram,~~market ~~allows~~opportunities uswe toare ~~create~~pursuing. ~~immersive~~During ~~experiences~~the ~~with~~past ayear ~~“wow~~we ~~factor” in~~identified ~~the~~a ~~infotainment~~new ~~sector~~potential ~~e.g.~~vertical ~~museums,~~segment ~~receptions~~to pursue, AIwhich ~~avatars~~is ~~etc~~the automated self-service check-out systems within retail. WeIf ~~also~~we see, anafter ~~increasing~~we ~~potential~~complete ~~for~~the ~~surgical~~evaluation ~~planning~~of the ~~and~~full ~~education~~potential, ~~enabling~~ evidence ~~virtual~~of ~~explorations~~market ~~and~~pull, ~~interactive~~this ~~learning~~segment may become an important new growth bet.

Customers

Our customers are primarily located in North America, Europe and Asia.

As of December 31, ~~2024~~2025, four of our customers represented approximately 80 95.94% of our consolidated accounts receivable and unbilled revenues.

As of December 31, ~~2023~~2024, four ~~three~~ of our customers represented approximately 77 80.89% of our consolidated accounts receivable and unbilled revenues.

Customers who accounted for 10% or more of our revenues during the year ended December 31, ~~2024~~2025 are as follows.

● Seiko Epson – 2734.3% ● Alps Alpine ~~Electronics~~ – 2019.74% ● Hewlett-Packard ~~Company~~ – 2019.40% ● Commercial Vehicle OEM – 1114.86%

Customers who accounted for 10% or more of our revenues during the year ended December 31, ~~2023~~2024 are as follows.

● ~~Hewlett-Packard~~Seiko ~~Company~~Epson – 3327.3% ● ~~Seiko~~Alps ~~Epson~~Alpine – 20.27% ● ~~Alpine~~Hewlett-Packard ~~Electronics~~ – 1820.24% ● LGCommercial ~~Electronics~~Vehicle OEM – 1311.18%

~~Customers~~ by Table ~~Market~~of Contents

~~The following~~Customers ~~table presents our revenues~~ by ~~market as a percentage of total revenues:~~Market

	Years ended December 31,
	2024			2023
Net license revenues from amusement		4.8	%		-	%
Net license revenues from automotive		30.5	%		40.7	%
Net license revenues from consumer electronics		51.2	%		58.6	%
Net non-recurring engineering services revenues		13.5	%		0.7	%
Total		100.0	%		100.0	%

The following table presents our revenues by market as a percentage of total revenues:

Geographical Data

	Years ended December 31,
	2025			2024
Net license revenues from amusement		6.7	%		4.8	%
Net license revenues from automotive		26.0	%		30.5	%
Net license revenues from consumer electronics		55.7	%		51.2	%
Net non-recurring engineering services revenues		11.6	%		13.5	%
		100.0	%		100.0	%

~~The following~~Geographical ~~table presents our revenues by geographic region as a percentage of total revenues:~~Data

	Years ended December 31,
	2024			2023
Japan		55.8	%		38.5	%
United States		24.5	%		38.0	%
Sweden		11.7	%		-	%
Germany		3.7	%		9.9	%
South Korea		3.1	%		13.1	%
China		1.0	%		0.5	%
Other		0.2	%		-	%
Total		100.0	%		100.0	%

The following table presents our revenues by geographic region as a percentage of total revenues:

The following table presents our total assets by geographic region:

	Years ended December 31,
	2025			2024
Japan		62.0	%		55.8	%
Sweden		14.5	%		11.7	%
Germany		2.0	%		3.7	%
China		0.8	%		3.1	%
South Korea		-	%		1.0	%
Other		0.1	%		0.2	%
		79.4	%		75.5	%
United States		20.6	%		24.5	%
Total		100.0	%		100.0	%

	December 31,
(in thousands)	2024		2023
United States	$	16,951	$	16,084
Sweden		1,406		1,682
Asia		24		42
Total	$	18,381	$	17,808

The following table presents our total assets by geographic region (in thousands):

Competition

	December 31,
	2025		2024
United States	$	25,324	$	16,951
Sweden		1,555		1,406
Asia		6		24
Total	$	26,885	$	18,381

There are various technologies for touch and gesture control solutions available that compete with our optical zForce technology. The competing technologies have differing profiles such as performance, power consumption, level of maturity and cost. For touch solutions, the main competition comes from resistive and capacitive touch solutions. For touch displays, projective capacitive technology is the prevalent standard in mobile phones and tablets and therefore an important competing technology to ours that many suppliers offer with price being a major differentiation point. This means we must continuously develop our technology and improve our offers to defend and grow our market share. For gesture control the main competition comes from other optical technologies and from both ultrasonic and radar technologies. Examples of competitors active in the area of gesture sensing include Ultraleap and suppliers of radar and ultrasonic sensor chips, for instance Texas Instruments and Acconeer. Detection range, resolution and cost are the main differentiators.Competition

~~For contactless~~There ~~touch~~are ~~opportunities,~~various ~~competing~~driver ~~technologies~~and ~~include camera~~in-~~based~~cabin ~~technologies~~monitoring ~~for~~solutions ~~detecting~~that ~~finger~~compete ~~placement~~with ~~and~~our ~~gestures in~~MultiSensing ~~the~~technology. ~~airspace~~Our incompetitors ~~front~~among ofTier a2 ~~kiosk~~software orproviders ~~button~~include ~~panel~~SmartEye, ~~capacitive~~Cipia, ~~sensors~~Xperi, ~~capable~~Seeing ~~of detecting a finger hovering above a display or button~~Machines, as ~~well~~PUX ~~as voice-activated interfaces~~ and ~~interfaces using one’s mobile phone to interact with a kiosk or button panel~~Jungo.

There are various ~~driver~~technologies for touch and ~~in-cabin~~gesture ~~monitoring~~control solutions available that compete with our ~~MultiSensing~~optical zForce technology. ~~Our~~The ~~competitors~~competing ~~among~~technologies ~~Tier~~have 2differing ~~software providers~~profiles ~~include~~such ~~SmartEye~~as performance, ~~Cipia~~power consumption, ~~Xperi~~level of maturity and cost. For touch solutions, ~~Seeing~~the ~~Machines~~main competition comes from resistive and capacitive touch solutions. For touch displays, ~~PUX~~projective capacitive technology is the prevalent standard in mobile phones and ~~Jungo~~tablets and therefore an important competing technology to ours that many suppliers offer with price being a major differentiation point. For gesture control the main competition comes from other optical technologies and from both ultrasonic and radar technologies. Examples of competitors active in the area of gesture sensing include Ultraleap and suppliers of radar and ultrasonic sensor chips, for instance Texas Instruments and Acconeer. Detection range, resolution and cost are the main differentiators.

~~Intellectual~~ ~~Property~~ Table of Contents

~~We rely~~Intellectual on a combination of intellectual property laws and contractual provisions to establish and protect the proprietary rights in our technology. The number of our issued and pending patents and patents filed in each jurisdiction as of December 31, 2024 is set forth in the following table: Property

Jurisdiction	No. of Reg. Designs		No. of Issued Patents		No. of Patents Pending
United States		5		46		6
Europe		-		13		4
Japan		-		8		1
China		-		6		2
South Korea		-		6		2
Patent Convention Treaty		Not Applicable		Not Applicable		1
Total:		5		79		16

We rely on a combination of intellectual property laws and contractual provisions to establish and protect the proprietary rights in our technology. The number of our issued and pending patents and patents filed in each jurisdiction as of December 31, 2025 is set forth in the following table:

Our patents cover optical blocking technologies for touchscreens and head-up displays, optical reflective technologies for contactless interaction with kiosks and elevators, as well as machine perception solutions for driver and in-cabin monitoring.

Jurisdiction	No. of Reg. Designs		No. of Issued Patents		No. of Patents Pending
United States		5		40		5
Europe		-		6		3
Japan		-		5		0
China		-		2		1
South Korea		-		3		0
Patent Convention Treaty	Not Applicable		Not Applicable			0
Total:		5		56		9

Our ~~software~~ ~~may~~patents ~~also~~cover beoptical ~~protected~~blocking bytechnologies ~~copyright~~for ~~laws~~touchscreens inand ~~most~~head-up ~~countries~~displays, ~~including~~optical ~~Sweden~~reflective ~~and~~technologies ~~the~~for ~~European~~contactless ~~Union,~~interaction ifwith ~~the~~kiosks ~~software~~and iselevators, ~~deemed new~~as ~~and~~well ~~original.~~as ~~Protection~~machine ~~can~~perception besolutions ~~claimed~~for ~~from~~driver ~~the~~and ~~date~~in-cabin ~~of creation~~monitoring.

InOur ~~2024~~software wemay ~~filed~~also ~~four~~be ~~new patent~~protected ~~applications~~by ~~and~~copyright ~~had~~laws ~~seven~~in ~~new~~most ~~patent~~countries, ~~grants~~including ~~issued;~~Sweden ~~eleven~~and ~~patents~~the ~~lapsed~~European Union, if the software is deemed new and ~~one~~original. ~~patent~~Protection ~~application~~can ~~was~~be ~~abandoned~~claimed from the date of creation.

~~The duration~~In 2025 ofwe ~~our~~filed ~~patent~~one ~~protection~~new ~~for~~patent ~~utility~~application ~~patents~~and ishad ~~generally~~three ~~20 years. The duration of our~~ patent ~~protection~~grants ~~for~~issued; ~~design~~two patents ~~varies~~ ~~throughout~~lapsed, ~~the~~twenty-four ~~world~~patents ~~between 10~~ and 25five ~~years,~~patent ~~depending~~applications onwere ~~the jurisdiction~~abandoned. ~~We believe the duration of our intellectual property rights is adequate relative to the expected lives of our products.~~

~~We also~~The ~~protect~~duration ~~and~~of ~~promote~~ our ~~brand~~patent byprotection ~~registering~~for ~~trademarks~~utility inpatents ~~key~~is ~~markets~~generally ~~around~~20 years. The duration of our patent protection for design patents varies throughout the world. ~~Our~~between ~~trademarks~~10 ~~include:~~and ~~Neonode~~25 ~~(26 registrations~~years, 1 ~~pending~~depending ~~applications),~~on the ~~Neonode~~jurisdiction. ~~logo~~We (8believe ~~registrations),~~the ~~zForce~~duration ~~(10~~of ~~registrations),~~our ~~and~~intellectual ~~MultiSensing~~property (3rights ~~registrations)~~is adequate relative to the expected lives of our products.

~~Research~~ We also protect and ~~Development~~ promote our brand by registering trademarks in key markets around the world. Our trademarks include: Neonode (27 registrations, 1 pending application), the Neonode logo (8 registrations), zForce (9 registrations), and MultiSensing (3 registrations).

~~In fiscal~~Research ~~years 2024~~ and 2023, we incurred $3.4 million and $3.8 million, respectively, on research and development activities. Our research and development is performed predominantly in-house, but may also be performed in collaboration with external partners and specialists.Development

~~Human Capital~~In fiscal years 2025 and 2024, we incurred $3.8 million and $3.4 million, respectively, on research and development activities. Our research and development is performed predominantly in-house, but may also be performed in collaboration with external partners and specialists.

~~We recognize~~Human ~~that the development, attraction and retention of employees is critical to our success. For this reason, we strive to provide a positive work culture for our employees.~~Capital

We ~~focus~~ onrecognize ~~skills~~that ~~enhancement,~~the ~~leadership~~ development, ~~innovation~~attraction ~~excellence~~ and ~~professional~~retention ~~growth~~of ~~throughout~~employees ~~our~~is ~~employees’~~critical ~~careers~~to our success. ~~Our~~ ~~leadership~~For ~~program~~this ~~provides~~reason, ~~leadership~~we ~~trainings~~strive to ~~our~~provide ~~high-potential~~a ~~emerging~~positive ~~leaders~~work culture for our employees.

5We focus on skills enhancement, leadership development, innovation excellence and professional growth throughout our employees’ careers. Our leadership program provides leadership training to our high-potential emerging leaders.

We ~~provide market competitive compensation aligned with company performance. We provide a comprehensive benefits package to our employees,~~ 5 including healthcare and retirement plans. We have a dedicated human resources (HR) person to ensure clear and beneficial HR-related processes and strategy. We work proactively against all discrimination, harassment and other abusive behavior to ensure the work environment at Neonode is good and healthy. We believe that a diverse workforce provides different viewpoints on business strategy, risk and innovation.

~~Since the COVID-19 pandemic~~ ~~has~~ Table ~~subsided~~of ~~we have adopted a hybrid workplace. While we encourage employees to work from the office as much as possible, employees~~Contents ~~are permitted to work part time from home.~~

~~As of~~We ~~December~~provide ~~31,~~competitive ~~2024,~~market wecompensation ~~had~~aligned 43with ~~employees~~company ~~(including~~performance. 40We ~~full-time~~provide ~~employees)~~a ~~and~~comprehensive 7benefits ~~consultants.~~package Weto ~~have~~our employees, ~~and/or~~including ~~consultants located~~healthcare inand ~~the~~retirement ~~United~~plans. We ~~States,~~work ~~Sweden,~~proactively ~~United~~against ~~Kingdom~~all discrimination, ~~Japan~~harassment and ~~Taiwan.~~other ~~None~~abusive ofbehavior ~~our~~to ~~employees~~ensure ~~are~~the ~~represented~~work byenvironment aat ~~labor~~Neonode ~~union~~is good and healthy. We ~~have experienced~~believe nothat ~~work~~a ~~stoppages.~~diverse Weworkforce ~~believe~~provides ~~our~~different ~~employee~~viewpoints ~~relations~~on ~~are~~business ~~positive~~strategy, risk and innovation.

~~Additional Information~~We have adopted a hybrid workplace and while we encourage employees to work from the office as much as possible, employees are permitted to work part time from home.

~~We are~~As ~~subject to the informational requirements~~ of ~~the~~December ~~Securities~~31, ~~Exchange~~2025, ~~Act~~we ofhad ~~1934,~~39 asemployees ~~amended~~ (~~the~~including ~~“Exchange~~35 ~~Act”~~full-time employees) and we ~~file~~6 orconsultants. ~~furnish~~We ~~reports,~~have ~~proxy~~employees ~~statements,~~ and/or ~~other~~consultants ~~information~~located ~~with~~in the ~~Securities~~United ~~and~~States, ~~Exchange~~Sweden, ~~Commission~~Japan ~~(“SEC”)~~and Taiwan. ~~The~~ ~~reports~~None ~~and~~of ~~other~~our ~~information~~employees ~~filed~~are represented by usa ~~with~~labor ~~the~~union. ~~SEC~~We ~~are~~have ~~available~~experienced ~~free~~no ofwork ~~charge~~stoppages. onWe ~~the~~believe ~~SEC’s~~our ~~website~~employee atrelations ~~www~~are positive.~~sec.gov.~~

~~Our website~~Additional is www.neonode.com. We make available free of charge through our website all of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K as well as Form 3, Form 4, and Form 5 reports for our directors, officers, and principal stockholders, together with amendments to those reports filed or furnished pursuant to Sections 13(a), 15(d), or 16 under the Exchange Act. These reports are available as soon as reasonably practicable after their electronic filing or furnishing with the SEC. Our website also includes corporate governance information, such as our Code of Business Conduct (including a Code of Ethics for the Chief Executive Officer and Senior Financial Officers) and our Board of Directors’ Committee Charters. The information contained on our website is not a part of, nor is it incorporated by reference into, this Annual Report.Information

~~ITEM 1A~~We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and we file or furnish reports, proxy statements, and other information with the Securities and Exchange Commission (“SEC”). ~~RISK~~The ~~FACTORS~~reports and other information filed by us with the SEC are available free of charge on the SEC’s website at www.sec.gov.

~~An investment~~Our inwebsite ~~our~~is ~~common~~www.neonode.com. ~~stock~~We ~~involves~~make aavailable ~~high~~free ~~degree~~ of ~~risk.~~charge ~~Before~~through ~~deciding~~our towebsite ~~purchase,~~all ~~hold,~~of orour ~~sell~~filings ~~our~~with ~~common~~the ~~stock~~SEC, ~~you~~including ~~should consider~~our ~~carefully~~annual ~~the~~reports ~~risks~~on ~~described~~Form ~~below~~10-K, inquarterly ~~addition~~reports toon ~~the~~Form ~~cautionary~~10-Q, ~~statements~~ and ~~risks~~current ~~described~~reports ~~elsewhere~~on inForm ~~this~~8-K ~~Annual~~as ~~Report~~ well as Form 3, Form 4, and inForm 5 reports for our ~~other~~directors, ~~filings~~officers, ~~with~~and ~~the~~principal ~~SEC~~stockholders, ~~including~~together ~~subsequent~~with ~~reports~~amendments onto ~~Forms~~those ~~10-Q~~reports ~~and~~filed ~~8-K.~~or ~~The~~furnished ~~risks~~pursuant ~~and~~to ~~uncertainties~~Sections ~~described~~13(a), ~~below are~~15(d), ~~not~~or ~~the~~16 ~~only~~under ~~ones~~the weExchange ~~face~~Act. ~~Additional~~These ~~risks~~reports ~~and~~are ~~uncertainties~~available ~~not~~as ~~presently~~soon ~~known~~as toreasonably uspracticable after their electronic filing or ~~that~~furnishing wewith ~~currently~~the ~~deem~~SEC. ~~immaterial~~Our ~~may~~ website also ~~impair~~includes ~~our~~corporate ~~business~~governance ~~operations.~~information, Ifsuch ~~any~~as ofour ~~these~~Code ~~known~~of orBusiness ~~unknown~~Conduct ~~risks~~(including ora ~~uncertainties~~Code ~~actually~~of ~~occur,~~Ethics ~~our~~for ~~business,~~the ~~financial condition,~~Chief ~~results~~Executive ofOfficer ~~operations~~and orSenior ~~cash~~Financial ~~flows~~Officers) ~~could~~and beour ~~seriously~~Board ~~harmed.~~of ~~This~~Directors’ ~~could~~Committee ~~cause~~Charters. ~~the~~The ~~trading~~information ~~price~~contained ofon our ~~common~~website ~~stock~~is tonot ~~decline~~a part of, ~~resulting~~ innor ais ~~loss~~it ofincorporated ~~all~~by orreference ~~part~~into, ofthis ~~your~~Annual ~~investment~~Report.

~~Risks Related~~ITEM to1A. ~~Our~~RISK ~~Business~~FACTORS

~~We have~~An ~~had~~investment in our common stock involves a ~~history~~high degree of ~~losses~~risk. ~~and~~Before ~~may~~deciding ~~require~~to ~~additional~~purchase, ~~capital~~hold, or sell our common stock, you should consider carefully the risks described below in addition to ~~fund~~the cautionary statements and risks described elsewhere in this Annual Report and in our ~~operations~~other filings with the SEC, ~~which~~including ~~may~~subsequent reports on Forms 10-Q and 8-K. The risks and uncertainties described below are not bethe ~~available~~only ones we face. Additional risks and uncertainties not presently known to us onor ~~commercially attractive~~that ~~terms~~we currently deem immaterial may also impair our business operations. If any of these known or atunknown risks or uncertainties actually occur, our business, financial condition, results of operations or cash flows could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.

~~We have~~Risks ~~experienced~~Related ~~substantial~~to net losses in each fiscal period since our inception. These net losses have resulted from a lack of substantial revenues and the significant costs incurred in the development and commercial acceptance of our technologies. Our ability to continue as a going concern is dependent on our ability to implement our business plan. If our operations do not become cash flow positive, we may be forced to seek sources of capital to continue operations. No assurances can be given that we will be successful in obtaining such additional financing on reasonable terms, or at all. If adequate funds are not available when needed on acceptable terms, or at all, we may be unable to adequately fund our business plan, which could have a negative effect on our business, results of operations, and financial condition.Business

6We have had a history of losses and may require additional capital to fund our operations, which may not be available to us on commercially attractive terms or at all.

We ~~may,~~ have experienced substantial net losses in ~~the~~each ~~short~~fiscal ~~and~~period ~~long-term~~since our inception, ~~seek~~except for fiscal year 2025, in which we recorded a gain related to ~~raise~~a ~~capital~~patent ~~through~~assignment. These ~~the~~net ~~issuance~~losses have resulted from a lack of ~~equity~~substantial ~~securities~~revenues orand ~~through~~the ~~other~~significant ~~financing~~costs ~~sources. To~~incurred in the ~~extent~~development ~~that~~and wecommercial ~~raise~~acceptance ~~additional~~of ~~funds~~our bytechnologies. ~~issuing~~Our ~~equity~~ability ~~securities,~~to continue as a going concern is dependent on our ~~stockholders~~ability ~~may~~to ~~experience~~implement ~~significant~~our ~~dilution~~business plan. ~~Any debt~~If ~~financing,~~our ifoperations ~~available~~do not become cash flow positive, we may ~~include~~be ~~financial~~forced ~~and~~to ~~other~~seek ~~covenants~~sources ~~that~~of ~~could~~capital ~~restrict~~to ~~our~~continue ~~use~~operations. ofNo ~~the~~assurances ~~proceeds~~can ~~from~~be given that we will be successful in obtaining such additional financing on reasonable terms, or ~~impose~~at ~~other~~all. ~~business~~If ~~and~~adequate ~~financial~~funds ~~restrictions~~are not available when needed on ~~us.~~acceptable Interms, ~~addition~~or at all, we may ~~consider~~be ~~alternative~~unable ~~approaches~~to ~~such~~adequately asfund ~~licensing,~~our ~~joint venture~~business plan, orwhich ~~partnership~~could ~~arrangements~~have toa ~~provide~~negative ~~long-term~~effect ~~capital~~on our business, results of operations, and financial condition.

We ~~are dependent on a limited number of customers.~~ 6

~~Our~~ ~~license~~ Table revenues for the year ended December 31, 2024 were earned from eight OEM, ODM and Tier 1 customers. We generated NRE revenues from four customers for the year ended December 31, 2024. During the year ended December 31, 2024, four customers represented approximately 80.2% of ~~our consolidated net revenues. Our customer concentration may change significantly from period-to-period depending on a~~Contents customer’s product cycle and changes in our industry. The loss of a major customer, a reduction in net revenues of a major customer for any reason, or a failure of a major customer to fulfill its financial or other obligations due to us could have a material adverse effect on our business, financial condition, and future revenue stream. The new business strategy with 100% focus on technology and software licensing, that we launched in December 2023, is likely to trigger changes in our customer composition and an overall reduction of the number of customers we have active engagements with.

We ~~rely~~ onmay, in the ~~ability~~short and long-term, seek to raise capital through the issuance of equity securities or through other financing sources. To the extent that we raise additional funds by issuing equity securities, our ~~customers~~stockholders tomay ~~design~~experience significant dilution. Any debt financing, ~~manufacture~~if ~~and~~available, ~~sell~~may ~~their~~include ~~products~~financial and other covenants that ~~incorporate~~could restrict our ~~touch~~use ~~technology~~of the proceeds from such financing or impose other business and financial restrictions on us. In addition, we may consider alternative approaches such as licensing, joint ventures, or partnership arrangements to provide long-term capital.

We ~~have~~ ~~historically~~are ~~generated~~dependent ~~revenue~~on ~~through~~a ~~technology~~limited ~~licensing~~number ~~agreements with companies that design, manufacture, and sell their own products incorporating our touch technology. The majority~~ of ~~our license fees earned in 2024 and 2023 were from customer shipments of printer products and automotive infotainment systems. We continue to rely on licensing revenue from current and new~~ customers ~~whose products are still in the development cycle~~. If our customers are not able to design, manufacture and sell their products, or are delayed in producing and selling their products, our revenues, profitability, and liquidity, as well as our brand image, may be adversely affected.

~~The length~~Our licensing revenues for the year ended December 31, 2025 were earned from eight OEM, ODM and Tier 1 customers. We generated NRE revenues from two customers for the year ended December 31, 2025. During the year ended December 31, 2025, four customers represented approximately 95.4% of our consolidated net revenues. Our customer concentration may change significantly from period-to-period depending on a customer’s product ~~development~~cycle and ~~release~~changes ~~cycle~~in ~~depends~~our onindustry. ~~many~~The ~~factors~~loss ~~outside~~of a major customer, a reduction in net revenues of ~~our~~a ~~control~~major ~~and~~customer for any ~~delays~~reason, ~~could cause~~or usa failure of a major customer to ~~incur~~fulfill ~~significant~~its ~~expenses~~financial ~~without~~or ~~offsetting~~other ~~revenues~~obligations due to us could have a material adverse effect on our business, orfinancial ~~revenues~~condition, and future revenue stream. The new business strategy with 100% focus on technology and software licensing that ~~vary~~we ~~significantly~~launched ~~from~~in ~~quarter~~December 2023 is likely to ~~quarter~~trigger changes in our customer composition and an overall reduction of the number of customers we have active engagements with.

~~The development~~We ~~and~~rely ~~release~~on ~~cycle for customer products is lengthy and unpredictable. Our customers often undertake significant evaluation and design in~~ the ~~qualification~~ability of our ~~solutions,~~customers ~~which contributes~~ to a lengthy product release cycle. The typical product development and release cycle is 18 to 36 months. The development and release cycle may be longer in some cases, particularly for automotive vehicle products. There is no assurance that a customer will adopt our technology after the evaluation or design ~~phase~~, inmanufacture ~~which case we would not be entitled to any revenues from the customer moving forward. The lengthy~~ and ~~variable~~sell ~~development~~their ~~and release cycle for~~ products ~~may~~ ~~also~~that ~~have~~incorporate ~~a negative impact on the timing of~~ our ~~revenues,~~touch ~~causing our revenues and results of operations to vary significantly from quarter to quarter~~technology.

~~Our license~~We ~~customers~~have ~~rely~~historically ~~upon~~generated ~~component~~revenue ~~suppliers~~through totechnology licensing agreements with companies that design, manufacture, and sell their own products ~~containing~~incorporating our touch technology. The majority of our license fees earned in 2025 and ~~limited~~2024 ~~availability~~were from customer shipments of ~~components~~ ~~may~~printer ~~adversely~~products ~~affect~~and ~~our~~automotive infotainment systems. We continue to rely on licensing revenues from current and new customers whose products are still in the development cycle. If our customers’ ~~businesses~~are not able to design, manufacture and sell their products, or are delayed in producing and selling their products, our revenues, profitability, and liquidity, as well as our brand image, may be adversely affected.

~~Under our~~The ~~licensing~~length ~~model,~~of ~~OEMs,~~a ~~ODMs and Tier 1 suppliers manufacture or contract to manufacture products that include Neonode~~customer’s ~~special Application~~product ~~Specific~~development ~~Integrated~~and ~~Circuits~~release ~~(“ASICs”)~~cycle ~~that~~depends ~~incorporate~~on ~~our~~many ~~patented~~factors ~~technology.~~outside ~~The~~of ~~Neonode~~our ~~ASICs~~control ~~are manufactured by Texas Instruments~~ and STany ~~Microelectronics.~~delays ~~Texas~~could ~~Instruments~~cause ~~manufactures~~us ~~two~~to ~~ASIC~~incur ~~components~~significant ~~that~~expenses ~~both~~without weoffsetting ~~and our license customers buy. As part of their product development process~~revenues, ~~our~~or ~~customers~~revenues ~~must~~that ~~qualify~~vary ~~these~~significantly ~~components~~from ~~for~~quarter ~~use in their products, thus making the components difficult~~ to ~~replace~~quarter.

~~Our dependence~~The ondevelopment ~~third~~and ~~parties~~release tocycle ~~supply~~for ~~core~~customer ~~components~~products ~~that~~is ~~incorporate~~lengthy ~~our~~and ~~patented~~unpredictable. ~~technology~~Our ~~exposes~~customers usoften toundertake asignificant ~~number~~evaluation ofand ~~risks~~design ~~including~~ in the ~~risk~~qualification ~~that~~of ~~these~~our ~~suppliers~~solutions, ~~will~~which ~~not~~contributes beto ~~able~~a tolengthy ~~obtain~~product anrelease ~~adequate~~cycle. ~~supply~~The oftypical ~~raw~~product ~~materials~~development orand ~~components,~~release ~~the~~cycle ~~risk~~is ~~that~~18 ~~these~~to ~~suppliers will~~36 ~~not~~months. beThe ~~able~~development toand ~~meet~~release ~~our~~cycle ~~customer~~may ~~requirements~~be longer in some cases, ~~and~~particularly ~~the~~for ~~risk~~automotive vehicle products. There is no assurance that ~~these~~a ~~suppliers~~customer will ~~not~~adopt beour ~~able~~technology toafter ~~remain~~the inevaluation ~~business~~ or ~~adjust to~~design ~~market~~phase, ~~conditions.~~in Ifwhich ~~our~~case ~~customers~~we ~~are~~would ~~unable~~not be entitled to ~~obtain~~any ~~ASICs~~revenues ~~that~~from ~~incorporate~~the ~~our~~customer ~~patented~~moving ~~technology,~~forward. weThe ~~may~~lengthy ~~not~~and bevariable ~~able~~development toand ~~meet demand,~~release ~~which~~cycle ~~could~~for products may also have a ~~material~~negative ~~adverse~~impact ~~effect~~ on the timing of our ~~business~~revenues, ~~financial~~causing ~~condition,~~our revenues and results of operations ~~and~~to ~~cash~~vary ~~flows~~significantly from quarter to quarter.

7Our license customers rely upon component suppliers to manufacture and sell products containing our technology and limited availability of components may adversely affect our and our customers’ businesses.

~~It can~~Under beour ~~difficult~~licensing ~~for~~model, usOEMs, toODMs ~~verify~~and ~~royalty~~Tier ~~amounts~~1 ~~owed~~suppliers manufacture or contract to usmanufacture ~~under~~products ~~licensing~~that ~~agreements,~~include Neonode’s special Application Specific Integrated Circuits (“ASICs”) that incorporate our patented technology. The Neonode ASICs are manufactured by Texas Instruments and ~~this~~ST ~~may~~Microelectronics. ~~cause~~Texas usInstruments tomanufactures ~~lose~~two ~~potential~~ASIC ~~revenue~~components that are purchased by our license customers. As part of their product development process, our customers must qualify these components for use in their products, thus making the components difficult to replace.

Our ~~license~~ ~~agreements~~dependence ~~typically~~on ~~require~~third ~~our~~parties ~~licensees~~ to ~~document~~supply ~~the~~core ~~sale~~components ofthat ~~licensed~~incorporate ~~products~~our ~~and~~patented ~~report~~technology ~~this~~exposes ~~data~~us to usa onnumber aof ~~quarterly basis.~~risks ~~Although~~including ~~our~~the ~~standard~~risk ~~license~~that ~~terms~~these ~~give~~suppliers uswill ~~the~~not ~~right~~be able to ~~audit~~obtain ~~books~~an ~~and~~adequate ~~records~~supply of ~~our~~raw ~~licensees~~materials toor ~~verify~~components, ~~this~~the ~~information, audits~~risk ~~can~~that these suppliers will not be ~~expensive,~~able ~~time~~to ~~consuming,~~meet ~~incomplete~~our customer requirements, and ~~subject~~the torisk ~~dispute.~~that ~~From~~these ~~time~~suppliers towill ~~time,~~not webe ~~audit~~able ~~certain~~to ofremain ~~our~~in ~~licensees~~business ~~to verify~~or ~~independently~~adjust ~~the~~to ~~accuracy~~market ofconditions. ~~the~~If ~~information~~our ~~contained~~customers inare ~~their~~unable ~~royalty~~to ~~reports~~obtain inASICs anthat ~~effort~~incorporate toour ~~decrease~~patented ~~the~~technology, ~~likelihood that~~ we ~~will~~may not ~~receive~~be ~~the~~able ~~royalty~~to ~~revenues~~meet tothe demand, which wecould ~~are~~have ~~entitled~~a ~~under~~material ~~the~~adverse ~~terms~~effect ofon our ~~license agreements~~business, ~~but~~financial wecondition, ~~can~~results ~~give~~of nooperations ~~assurances that~~and ~~these~~cash ~~audits will be effective~~flows.

If ~~we fail to develop and introduce new technology successfully, and in a cost-effective and timely manner, we will not be able to compete~~ 7 ~~effectively and our ability to generate revenues will suffer.~~

We ~~operate~~ Table in a highly competitive, rapidly evolving environment, and our success depends on our ability to develop and introduce new technology that our customers and end users choose to buy. If we are unsuccessful at developing new technologies that are appealing to our customers and end users, with acceptable functionality, quality, prices, and terms, we will not be able to compete effectively and our ability to generate revenues will suffer. The development of ~~new technology is very difficult and requires high levels of innovation and competence.~~Contents The development process is typically also very lengthy and costly. If we fail to anticipate our end users’ needs or technological trends accurately or if we are unable to complete development in a cost effective and timely fashion, we will be unable to introduce new technology into the market or successfully compete with other providers. As we introduce new or enhanced technology or integrate new technology into new or existing customer products, we face risks including, among other things, disruption in customers’ ordering patterns, inability to deliver new technology to meet customers’ demand, possible product and technology defects, and potentially unfamiliar sales and support environments. Premature announcements or leaks of new products, features, or technologies may exacerbate some of these risks. Our failure to manage the transition to newer technology or the integration of newer technology into new or existing customer products could adversely affect our business, results of operations, and financial condition.

~~Our operating~~It ~~results~~can ~~may~~be ~~fluctuate~~difficult ~~significantly~~for asus ato ~~result~~verify ofroyalty aamounts ~~variety~~owed ofto ~~factors~~us under licensing agreements, ~~many~~and ofthis ~~which~~may ~~are~~cause ~~outside~~us ofto ~~our~~lose ~~control~~potential revenue.

~~As a~~Our ~~result~~license ofagreements typically require our licensees to document the ~~unpredictability~~sale of ~~our~~licensed ~~customer~~products ~~product~~and ~~development~~report ~~and~~this ~~the~~data ~~nature~~to ofus ~~the~~on ~~markets~~a inquarterly ~~which~~basis. weAlthough ~~compete,~~our itstandard islicense ~~very~~terms ~~difficult for~~give us the right to ~~forecast~~audit ~~accurately.~~books Weand ~~base~~records of our ~~current~~licensees ~~and~~to ~~future~~verify ~~expense~~this ~~estimates~~information, ~~largely~~audits oncan ~~our~~be ~~investment~~expensive, ~~plans~~time-consuming, incomplete, and ~~estimates~~subject ofto ~~future needs~~dispute. From time to time, ~~although~~we ~~some~~audit certain of our ~~expenses~~licensees ~~are,~~ to averify ~~large~~independently ~~extent,~~the ~~fixed.~~accuracy Weof ~~may~~the beinformation ~~unable~~contained toin ~~adjust~~their ~~spending~~royalty reports in aan ~~timely~~effort ~~manner~~ to ~~compensate for~~decrease ~~any~~the ~~unexpected~~likelihood ~~revenue~~that ~~shortfall.~~we ~~Accordingly,~~will ~~any~~not ~~significant~~receive ~~shortfall~~the inroyalty revenues ~~relative~~ to ~~our~~which ~~planned~~we ~~expenditures~~are ~~would~~entitled ~~have an~~under ~~immediate~~the ~~adverse~~terms ~~effect~~of on our ~~business~~license agreements, ~~results~~but ofwe ~~operations~~can ~~and~~give ~~financial~~no ~~condition~~assurances that these audits will be effective.

~~In addition,~~If ~~the~~we ~~following~~fail ~~factors,~~to ~~among~~develop ~~others~~and introduce new technology successfully, ~~may~~and ~~negatively~~in ~~affect~~a cost-effective and ~~cause~~timely ~~fluctuations~~manner, inwe will not be able to compete effectively and our ~~operating~~ability ~~results:~~to generate revenues will suffer.

●We ~~the~~operate ~~announcement~~in ora ~~introduction~~highly ofcompetitive, ~~new~~rapidly ~~products~~evolving orenvironment, ~~technologies~~and by our ~~competitors;~~success ●depends on our ability to ~~upgrade~~develop and ~~develop~~introduce new technology that our ~~infrastructure~~customers and end users choose to ~~accommodate~~buy. ~~growth;~~If ●we ~~our~~are ~~ability~~unsuccessful at developing new technologies that are appealing to ~~attract~~our customers and ~~retain~~end ~~key~~users, ~~personnel~~with inacceptable afunctionality, ~~timely~~quality, prices, and ~~cost-effective~~terms, ~~manner;~~we ●will ~~technical~~not ~~difficulties;~~be ●able ~~the~~to ~~amount~~compete effectively and ~~timing~~our ability to generate revenues will suffer. The development of ~~operating~~new ~~costs~~technology ~~and~~is ~~capital~~very ~~expenditures~~difficult ~~relating~~and torequires ~~the~~high ~~expansion~~levels of innovation and competence. The development process is typically also very lengthy and costly. If we fail to anticipate our ~~business,~~end ~~operations,~~users’ needs or technological trends accurately or if we are unable to complete development in a cost effective and ~~infrastructure;~~timely ●fashion, ~~economic~~we ~~conditions~~will ~~specific~~be unable to introduce new technology into the ~~industries~~market ~~and~~or ~~segments~~successfully ~~where~~compete with other providers. As we ~~are~~introduce ~~active~~new or enhanced technology or integrate new technology into new or existing customer products, ~~for~~we ~~instance~~face ~~printers~~risks including, ~~automotive~~among other things, ~~elevators~~disruption in customers’ ordering patterns, inability to deliver new technology to meet customers’ demand, possible product and ~~interactive~~technology ~~kiosks;~~defects, and potentially unfamiliar sales and support environments. Premature announcements or leaks of new products, features, or technologies may exacerbate some of these risks. Our failure to manage the transition to newer technology or the integration of newer technology into new or existing customer products could adversely affect our business, results of operations, and financial condition.

8Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control.

●As ~~general~~a ~~economic~~result ~~conditions~~of ~~including~~the asunpredictability aof ~~result~~our customer product development and the nature of ~~pandemics~~the ormarkets ~~epidemics~~in which we compete, orit ~~geopolitical~~is ~~conflicts~~very ~~such~~difficult asfor ~~the~~us ~~ongoing~~to ~~war~~forecast accurately. We base our current and future expense estimates largely on our investment plans and estimates of future needs, although some of our expenses are, to a large extent, fixed. We may be unable to adjust spending in ~~Ukraine~~a ortimely ~~the~~manner ~~Israel-Palestine~~to ~~conflict~~compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues relative to our planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition.

~~Further~~In addition, as ~~a strategic response to changes in~~ the ~~competitive~~following ~~environment~~factors, weamong ~~may from time to time make certain pricing~~others, ~~service,~~may ornegatively ~~marketing decisions~~affect ~~that could have a material~~ and ~~adverse~~cause ~~effect~~fluctuations onin our ~~business, results of operations, and financial condition. Due to the foregoing factors, our revenues and~~ operating results ~~are and will remain difficult to forecast.~~ :

~~We must~~● ~~enhance~~the announcement or introduction of new products or technologies by our ~~sales~~competitors; ~~and~~● ~~technology~~our ~~development~~ability ~~organizations.~~to Ifupgrade weand ~~are~~develop ~~unable~~our infrastructure to ~~identify,~~accommodate ~~hire,~~growth; or● our ability to attract and retain ~~qualified~~key ~~sales,~~personnel ~~marketing,~~ in a timely and cost-effective manner; ● technical ~~personnel,~~difficulties; ● the amount and timing of operating costs and capital expenditures relating to the expansion of our ~~ability~~business, operations, and infrastructure; ● economic conditions specific to ~~achieve~~the ~~future~~industries ~~revenue~~and ~~may~~segments bewhere ~~adversely~~we ~~affected.~~are active, for instance printers, automotive, elevators, and interactive kiosks; and

We ~~continually monitor and enhance the effectiveness and breadth of our sales efforts in order to increase market awareness and sales of~~ 8 our technology, especially as we expand into new market areas. Competition for qualified sales personnel is intense, and we may not be able to hire the kind and number of sales personnel we are targeting. Likewise, our efforts to improve and refine our technology require skilled engineers and programmers. Competition for professionals capable of expanding our research and development efforts is intense due to the limited number of people available with the necessary technical skills. If we are unable to identify, hire, or retain qualified sales, marketing, and technical personnel, our ability to achieve future revenue may be adversely affected.

We ~~may~~ Table ~~make acquisitions and strategic investments that are dilutive to existing stockholders, result in unanticipated accounting charges or otherwise adversely affect our results~~ of ~~operations.~~Contents

~~We may~~● ~~decide~~general toeconomic ~~grow~~conditions ~~our~~including ~~business~~as ~~through~~a ~~business~~result ~~combinations or other acquisitions~~ of ~~businesses,~~pandemics ~~products~~ or ~~technologies that allow us to complement our existing touch technology offerings~~epidemics, ~~expand our market coverage, increase our workforce,~~ or ~~enhance~~geopolitical ~~our~~conflicts ~~technological capabilities.~~such Ifas wethe ~~make~~ongoing ~~any~~war ~~future~~in ~~acquisitions,~~Ukraine ~~we could issue stock that would dilute our stockholders’ percentage ownership,~~ or wethe may incur substantial debt, reduce our cash reserves and/or assume contingent liabilities. Further, acquisitions and strategic investments may result in material charges, adverse tax consequences, substantial depreciation, deferred compensation charges, inIsrael-~~process research~~Palestine ~~and development charges, and the amortization of amounts related to deferred compensation and identifiable purchased intangible assets or impairment of goodwill~~conflict. ~~Any of these could negatively impact our results of operations.~~

~~We are~~Further, ~~dependent~~as ona strategic response to changes in the ~~services~~competitive environment, we may from time to time make certain pricing, service, or marketing decisions that could have a material and adverse effect on our business, results of operations, and financial condition. Due to the foregoing factors, our ~~key~~revenues ~~personnel~~and operating results are and will remain difficult to forecast.

We ~~are~~ ~~highly~~must ~~dependent~~enhance on our ~~senior~~sales ~~management team, including Fredrik Nihlén, our interim Chief Executive Officer~~ and ~~Chief~~technology ~~Financial Officer~~development organizations. ~~Changes~~If inwe ~~our~~are ~~senior~~unable ~~management~~to ~~team~~identify, hire, or ~~the~~retain ~~unplanned~~qualified ~~loss~~sales, ofmarketing, ~~the~~and ~~services~~technical ofpersonnel, ~~either member of~~ our ~~senior~~ability ~~management~~to ~~team~~achieve ~~could have~~future arevenue ~~material~~may ~~adverse~~be ~~effect~~adversely ~~on our operations and future prospects~~affected.

~~If we~~We ~~are~~continually ~~unable~~monitor toand ~~obtain~~enhance the effectiveness and ~~maintain~~breadth ~~patent~~of orour ~~other~~sales ~~intellectual~~efforts ~~property~~in ~~protection~~order ~~for~~to ~~any~~increase ~~products~~market weawareness ~~develop~~and orsales ~~for~~of our ~~technologies~~technology, or ifespecially ~~the~~as ~~scope~~we ofexpand ~~the~~into ~~patents~~new ~~and~~market ~~other~~areas. ~~intellectual~~Competition ~~property~~for ~~protection~~qualified ~~obtained~~sales personnel is intense, and we may not ~~sufficiently~~be ~~broad~~able to hire the kind and number of sales personnel we are targeting. Likewise, our ~~competitors~~efforts ~~could~~to ~~develop~~ improve and ~~commercialize~~refine ~~products~~our technology require skilled engineers and ~~technologies~~programmers. ~~similar~~Competition orfor ~~identical~~professionals tocapable ~~ours,~~of ~~and~~expanding our ~~ability~~research and development efforts is intense due to ~~successfully~~the ~~commercialize~~limited ~~any~~number ~~products~~ of people available with the necessary technical skills. If we ~~may~~are ~~develop~~unable to identify, hire, or retain qualified sales, marketing, and ~~our~~technical ~~technologies~~personnel, our ability to achieve future revenue may be ~~harmed~~adversely affected.

~~Our success depends in large part on our proprietary technology and other intellectual property rights.~~ We ~~rely~~may onmake aacquisitions ~~combination of patents, copyrights, trademarks~~ and ~~trade~~strategic ~~secrets,~~investments ~~confidentiality~~that ~~provisions,~~are ~~and~~dilutive ~~licensing arrangements~~ to ~~establish~~existing ~~and protect our proprietary rights. Our intellectual property~~stockholders, ~~particularly~~result ~~our~~in ~~patents,~~unanticipated ~~may~~accounting ~~not~~charges ~~provide us with a significant competitive advantage. If we fail to protect~~ or tootherwise ~~enforce~~adversely ~~our~~affect ~~intellectual property rights successfully,~~ our ~~competitive position could suffer, which could harm our~~ results of operations. Our pending patent applications for registration may not be allowed, or others may challenge the validity or scope of our patents. Even if our patent registrations are issued and maintained, these patents may not be of adequate scope or benefit to us or may be held invalid and unenforceable against third parties. We may need to expend significant resources to secure and protect our intellectual property. The loss of intellectual property rights may adversely impact our ability to generate revenues and expand our business.

9We may decide to grow our business through business combinations or other acquisitions of businesses, products or technologies that allow us to complement our existing technology offerings, expand our market coverage, increase our workforce, or enhance our technological capabilities. If we make any future acquisitions, we could issue stock that would dilute our stockholders’ percentage ownership, or we may incur substantial debt, reduce our cash reserves and/or assume contingent liabilities. Further, acquisitions and strategic investments may result in material charges, adverse tax consequences, substantial depreciation, deferred compensation charges, in-process research and development charges, and the amortization of amounts related to deferred compensation and identifiable purchased intangible assets or impairment of goodwill. Any of these could negatively impact our results of operations.

We ~~may~~ ~~not~~are bedependent ~~successful~~on inthe ~~our~~services ~~strategic~~of ~~efforts~~our ~~around~~key ~~patent monetization~~personnel.

~~Our success~~We ~~depends~~are inhighly ~~part~~dependent on our ~~ability~~senior tomanagement ~~effectively~~team, ~~utilize~~including ~~our~~Pierre ~~intellectual~~Daniel ~~property.~~Alexus, ~~Our policy is to always try to protect~~ our ~~innovations using~~Chief ~~patents.~~Executive ~~Our~~Officer, ~~patent portfolio is an important prerequisite for our licensing business~~ and ~~also~~Fredrik ~~protects~~Nihlén, our ~~investments~~Chief inFinancial ~~product development~~Officer. ~~From~~Changes ~~time~~in ~~to time, we also explore opportunities to monetize~~ our ~~patents~~senior ~~per~~management ~~se.~~team ~~As an example of this, on May 6, 2019, we assigned a portfolio of patents to Aequitas Technologies LLC to license~~ or ~~otherwise monetize those patents. In~~ the ~~future~~unplanned weloss ~~may enter~~of ~~into additional alternative patent monetization strategies, including~~ the ~~sale~~services of ~~patents.~~either ~~Our~~member ~~patent~~of ~~monetization strategies may negatively impact~~ our ~~financial~~senior ~~condition,~~management ~~revenues,~~team ~~and~~could ~~results~~have ofa ~~operations.~~material Noadverse ~~assurance~~effect ~~can~~on ~~be given that we will enter into agreements related to~~ our ~~patent~~operations ~~portfolio~~and orfuture ~~that we will be successful in any strategic efforts around patent monetization~~prospects.

If ~~third~~ ~~parties~~we ~~infringe~~are ~~upon~~unable ~~our~~to obtain and maintain patent or other intellectual property, protection for any products we ~~may~~develop ~~expend~~or ~~significant~~for ~~resources~~our ~~enforcing~~technologies, or if the scope of the patents and other intellectual property protection obtained is not sufficiently broad, our ~~rights~~competitors could develop and commercialize products and technologies similar or ~~suffer~~identical ~~competitive injury~~to ours, and our ability to successfully commercialize any products we may develop, and our technologies, may be harmed.

~~Existing laws,~~Our ~~contractual~~success ~~provisions~~depends ~~and~~in ~~remedies~~large ~~afford~~part ~~only~~on ~~limited protection for~~ our ~~intellectual~~proprietary ~~property.~~technology ~~We may be required to spend significant resources to monitor~~ and ~~police~~other ~~our~~ intellectual property rights. ~~Effective~~We ~~policing~~rely ofon ~~the~~a ~~unauthorized~~combination ~~use~~ of ~~our~~patents, ~~technology~~copyrights, ortrademarks ~~intellectual property is difficult~~ and ~~litigation~~trade ~~may~~secrets, beconfidentiality ~~necessary~~provisions, inand ~~the~~licensing ~~future~~arrangements to ~~enforce~~establish ~~our~~and ~~intellectual~~protect ~~property~~our proprietary rights. ~~Intellectual~~Our intellectual property ~~litigation~~, isparticularly ~~not~~our ~~only expensive~~patents, ~~but~~may ~~time-consuming,~~not ~~regardless~~provide ofus ~~the~~with ~~merits~~a ofsignificant ~~any~~competitive ~~claim,~~advantage. ~~and~~If ~~could~~we ~~divert~~fail ~~attention~~to ofprotect ~~our~~or ~~management from~~to ~~operating~~enforce ~~the~~our ~~business.~~intellectual ~~Intellectual~~ property ~~lawsuits~~rights ~~are~~successfully, ~~subject~~our tocompetitive ~~inherent~~position ~~uncertainties~~could ~~due to~~suffer, ~~among~~which ~~other~~could ~~things,~~harm ~~the~~our ~~complexity~~ results of ~~the~~operations. ~~technical~~Our ~~issues~~pending ~~involved,~~patent ~~and~~applications wefor ~~cannot~~registration ~~assure~~may ~~you~~not ~~that we will~~ be ~~successful~~allowed, inor ~~asserting~~others ~~our intellectual property rights. Attempts~~ may bechallenge ~~made~~the tovalidity ~~copy~~ or ~~reverse~~scope ~~engineer aspects~~ of our ~~technology~~patents. orEven toif ~~obtain~~our ~~and~~patent ~~use~~registrations ~~information~~are ~~that~~issued weand ~~regard~~maintained, asthese ~~proprietary. We~~patents may not be ~~able~~of toadequate ~~detect~~scope ~~infringement~~or ~~and~~benefit ~~may~~to ~~lose~~us ~~competitive~~or ~~position in the market as a result. In addition, competitors~~ may ~~design around~~be ~~our~~held ~~technology~~invalid orand ~~develop~~unenforceable ~~competing~~against ~~technologies~~third parties. We ~~cannot~~may ~~assure~~need ~~you~~to ~~that~~expend wesignificant ~~will~~resources beto ~~able~~secure toand protect our ~~proprietary~~intellectual ~~rights against unauthorized third party copying or use~~property. The ~~unauthorized~~loss ~~use~~ of ~~our~~intellectual ~~technology~~property orrights ofmay ~~our~~adversely ~~proprietary~~impact ~~information~~our byability ~~competitors could~~to ~~have~~generate anrevenues ~~adverse~~and ~~effect~~expand on our ~~ability to sell our technology~~business.

~~The~~ ~~laws of certain foreign countries may not provide sufficient protection of our intellectual property rights to the same extent as the~~ 9 ~~laws of the United States, which may make it more difficult for us to protect our intellectual property.~~

As ~~part~~ Table of ~~our business strategy, we target customers and relationships with suppliers and OEMs in countries with large populations and~~Contents propensities for adopting new technologies. However, many of these countries do not address misappropriation of intellectual property nor deter others from developing similar, competing technologies or intellectual property. Effective protection of patents, copyrights, trademarks, trade secrets and other intellectual property may be unavailable or limited in some foreign countries. In particular, the laws of some foreign countries in which we do business may not protect our intellectual property rights to the same extent as the laws of the United States. As a result, we may not be able to effectively prevent competitors in these regions from infringing our intellectual property rights, which could reduce our competitive advantage and ability to compete in those regions and negatively impact our business.

We ~~have~~ anmay ~~international~~not ~~presence~~be successful in ~~countries~~our ~~and~~strategic ~~must~~efforts ~~manage~~around ~~currency~~patent ~~risks~~monetization.

~~A significant~~Our ~~portion~~success ofdepends ~~our~~in ~~business~~part ison ~~conducted~~our inability ~~currencies~~to ~~other~~effectively ~~than~~utilize ~~the~~our Uintellectual property.S. ~~dollar~~Our ~~(the~~policy ~~currency~~is into ~~which~~always ~~our~~try ~~consolidated~~to ~~financial statements~~protect ~~are~~our ~~reported),~~innovations ~~primarily~~using ~~the~~patents. ~~Swedish~~Our ~~Krona~~patent ~~and,~~portfolio tois aan ~~lesser~~important ~~extent,~~prerequisite ~~the~~for ~~Euro,~~our ~~Japanese~~licensing ~~Yen~~business and ~~Korean~~also ~~Won.~~protects ~~For~~our ~~the~~investments ~~year~~in ~~ended December~~product ~~31,~~development. ~~2024,~~From ~~our~~time ~~revenues~~to ~~from Asia~~time, ~~North~~we ~~America~~also ~~and~~explore ~~Europe~~opportunities ~~were~~to ~~59.8%,~~monetize ~~24.5%,~~our ~~and~~patents ~~15.7%,~~per ~~respectively~~se. WeAs ~~incur~~an aexample ~~significant portion~~ of ~~our~~this, ~~expenses~~on inMay ~~Swedish~~6, ~~Krona~~2019, ~~including~~we assigned a ~~significant~~portfolio ~~portion~~ of ~~our~~patents ~~research~~to ~~and~~Aequitas ~~development~~Technologies ~~expenses~~LLC ~~and~~to alicense ~~substantial portion~~or ofotherwise ~~our~~monetize ~~general~~those ~~and~~patents. ~~administrative~~In ~~expenses.~~the Asfuture awe ~~result,~~may ~~appreciation~~enter ofinto additional alternative patent monetization strategies, including the ~~value~~sale of ~~the~~patents. ~~Swedish~~Our ~~Krona~~patent ~~relative~~monetization tostrategies ~~the~~may ~~other currencies,~~negatively ~~particularly~~impact ~~the~~our ~~U.S.~~financial ~~dollar~~condition, ~~could~~revenues, ~~adversely~~and ~~affect~~results ~~operating~~of ~~results~~operations. WeNo doassurance ~~not~~can ~~currently~~be ~~undertake~~given ~~hedging~~that ~~transactions to~~we ~~cover~~will ~~our~~enter ~~currency~~into ~~exposure,~~agreements ~~but~~related weto ~~may~~our ~~choose~~patent toportfolio ~~hedge~~or athat ~~portion~~we ofwill ~~our~~be ~~currency~~successful ~~exposure~~ in ~~the~~any ~~future~~strategic asefforts wearound ~~deem~~patent ~~appropriate~~monetization.

10If third parties infringe upon our intellectual property, we may expend significant resources enforcing our rights or suffer competitive injury.

Existing laws, contractual provisions and remedies afford only limited protection for our intellectual property. We ~~have~~ ~~concentration~~may be required to spend significant resources to monitor and police our intellectual property rights. Effective policing of ~~cash~~the ~~balance~~unauthorized atuse ~~various~~of ~~banks~~our technology or intellectual property is difficult, and litigation may be necessary in the ~~United~~future ~~States~~to enforce our intellectual property rights. Intellectual property litigation is not only expensive, ~~Japan~~but time-consuming, regardless of the merits of any claim, and ~~Sweden~~could divert attention of our management from operating the business. Intellectual property lawsuits are subject to inherent uncertainties due to, among other things, the complexity of the technical issues involved, and we cannot assure you that we will be successful in asserting our intellectual property rights. Attempts may be made to copy or reverse engineer aspects of our technology or to obtain and use information that we regard as proprietary. We may not be able to detect infringement and may lose competitive position in the market as a result. In addition, competitors may design around our technology or develop competing technologies. We cannot assure you that we will be able to protect our proprietary rights against unauthorized third party copying or use. The unauthorized use of our technology or of our proprietary information by competitors could have an adverse effect on our ability to sell our technology.

~~Cash and~~The ~~cash~~laws ~~equivalents~~of ~~balances~~certain ~~are~~foreign ~~maintained~~countries atmay ~~various~~not ~~banks~~provide insufficient ~~the~~protection ~~United~~of ~~States,~~our ~~Japan~~intellectual ~~and~~property ~~Sweden.~~rights ~~For~~to ~~deposits~~the ~~held~~same ~~with~~extent ~~financial institutions~~as in the ~~United~~laws ~~States,~~of the ~~U.S.~~United ~~Federal Deposit Insurance Corporation provides basic deposit coverage with limits up to $250~~States,~~000 per~~ ~~owner.~~which ~~The~~may ~~Swedish~~make ~~government~~it ~~provides~~more ~~insurance~~difficult ~~coverage~~for upus to ~~1,050,000~~protect ~~Krona~~our ~~per~~intellectual ~~customer and covers deposits in all types of accounts~~property. For bank accounts of the category held by Neonode, the Japanese government provides full insurance coverage. At times, deposits held with financial institutions may exceed the amount of insurance provided.

~~Security breaches~~As ~~and~~part ~~other~~of ~~disruptions~~our tobusiness ~~our~~strategy, ~~information~~we ~~technology~~target ~~infrastructure~~customers ~~could~~and ~~interfere~~relationships with ~~our~~suppliers ~~operations~~and OEMs in countries with large populations and propensities for adopting new technologies. However, ~~compromise~~many ~~confidential information~~of these countries do not address misappropriation of intellectual property nor deter others from developing similar, competing technologies or intellectual property. Effective protection of patents, copyrights, trademarks, trade secrets and ~~expose~~other usintellectual property may be unavailable or limited in some foreign countries. In particular, the laws of some foreign countries in which we do business may not protect our intellectual property rights to ~~liability~~the same extent as the laws of the United States. As a result, we may not be able to effectively prevent competitors in these regions from infringing our intellectual property rights, which could ~~materially~~reduce ~~adversely~~our ~~impact~~competitive ~~our~~advantage ~~business~~and ability to compete in those regions and ~~reputation~~negatively impact our business.

~~In the~~We normal course of business, we rely on information technology networks and systems to process, transmit, and store electronic information, and to manage or support a variety of business processes and activities. Additionally, we collect and store certain data, including proprietary business information and customer and employee data, and may have ~~access~~an tointernational ~~confidential~~presence ~~or personal information~~ in ~~certain~~countries ~~of our businesses that is subject to privacy~~ and ~~security~~must ~~laws,~~manage ~~regulations,~~currency ~~and customer-imposed controls~~risks. Despite our cybersecurity measures, our information technology networks, and infrastructure may be vulnerable to damage, disruptions, or shutdowns due to attack by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters, or other catastrophic events. Any such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to our reputation, which could materially adversely affect our business.

~~Third parties~~A ~~that~~significant ~~maintain~~portion of our ~~confidential~~business is conducted in currencies other than the U.S. dollar (the currency in which our consolidated financial statements are reported), primarily the Swedish Krona and, ~~proprietary~~to ~~information~~a lesser extent, the Euro, Japanese Yen and Korean Won. For the year ended December 31, 2025, our revenues from Asia, North America and Europe were 20.6%, 62.8%, and 16.6%, respectively. We incur a significant portion of our expenses in Swedish Krona, including a significant portion of our research and development expenses and a substantial portion of our general and administrative expenses. As a result, appreciation of the value of the Swedish Krona relative to the other currencies, particularly the U.S. dollar, could ~~experience~~adversely affect operating results. We do not currently undertake hedging transactions to cover our currency exposure, but we may choose to hedge a ~~cybersecurity~~portion ~~incident~~of our currency exposure in the future as we deem appropriate.

We ~~rely on third parties to provide or maintain some of our information technology and related services. We do not exercise direct control~~ 10 over these systems. Despite the implementation of security measures at third party locations, these services are also vulnerable to security breaches or other disruptions. Despite assurances from third parties to protect this information and, where we believe appropriate, our monitoring of the protections employed by these third parties, there is a risk that the confidentiality of the data held by these third parties on our behalf may be compromised and expose us to liability for any security breach or disruption.

~~While we have identified material weaknesses~~ in Table ~~our~~of ~~internal control, if we are unable to detect additional material weaknesses in our internal control, our financial reporting and~~Contents ~~our business may be adversely affected.~~

~~Section~~We 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal controls over financial reporting as of the end of each fiscal year, and to include a management report assessing the effectiveness of our internal controls over financial reporting in our annual report on Form 10-K for that fiscal year. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud involving a company have ~~been,~~concentration ~~or will be, detected. The design~~ of ~~any~~cash ~~system~~balance ofat ~~controls~~various isbanks ~~based~~ in ~~part on certain assumptions about~~ the ~~likelihood~~United ~~of future events~~States, ~~and~~Japan we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become ineffective because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and ~~not be detected~~Sweden. As described below, we have identified material weaknesses in our internal control over financial reporting. As a result of the material weaknesses, our management concluded that our internal control over financial reporting was not effective based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission. Consequently, we may experience a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock. We cannot assure you that we or our independent registered public accounting firm will not identify an additional material weakness in our internal controls in the future.

11Cash and cash equivalents balances are maintained at various banks in the United States, Japan and Sweden. For deposits held with financial institutions in the United States, the U.S. Federal Deposit Insurance Corporation provides basic deposit coverage with limits up to $250,000 per owner. The Swedish government provides insurance coverage up to 1,050,000 Krona per customer and covers deposits in all types of accounts. For bank accounts of the category held by Neonode, the Japanese government provides full insurance coverage. At times, deposits held with financial institutions may exceed the amount of insurance provided.

~~We have~~Security ~~identified~~breaches ~~material~~and ~~weaknesses~~other indisruptions to our ~~internal~~information ~~control~~technology ~~over~~infrastructure ~~financial~~could ~~reporting.~~interfere Ifwith weour ~~are~~operations, ~~unable~~compromise toconfidential ~~remediate these material weaknesses~~information, or ifand weexpose ~~identify~~us ~~additional material weaknesses in the future or otherwise fail~~ to ~~maintain~~liability anwhich ~~effective~~could ~~system~~materially ofadversely ~~internal~~impact ~~controls, we may not be able to accurately or timely report~~ our ~~financial~~business ~~condition~~and ~~or results of operations~~reputation.

~~Our management~~In the normal course of business, we rely on information technology networks and systems to process, transmit, and store electronic information, and to manage or support a variety of business processes and activities. Additionally, we collect and store certain data, including proprietary business information and customer and employee data, and may have access to confidential or personal information in certain of our businesses that is ~~responsible~~subject ~~for~~to ~~establishing~~privacy and ~~maintaining~~security ~~adequate~~laws, ~~internal~~regulations, ~~control~~and ~~over~~customer-imposed controls. Despite our ~~financial~~cybersecurity ~~reporting~~measures, asour ~~defined~~information technology networks, and infrastructure may be vulnerable to damage, disruptions, or shutdowns due to attacks by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters, or other catastrophic events. Any such events could result in ~~Rule 13a-15(f)~~legal claims or proceedings, liability or penalties under ~~the~~privacy ~~Securities~~laws, ~~Exchange~~disruption ~~Act~~in ofoperations, ~~1934~~and damage to our reputation, aswhich ~~amended~~could materially adversely affect our business.

InThird ~~the~~parties ~~course~~that ofmaintain our ~~assessment~~confidential ofand ~~the~~proprietary ~~effectiveness~~information ofcould ~~our~~experience ~~internal control~~a ~~over~~cybersecurity ~~financial reporting as of December 31, 2024, our management identified material weaknesses in our internal control over financial reporting~~incident. ~~The material weaknesses are discussed in more detail in this Annual Report under “Item 9A. Controls and Procedures.”~~

~~A material~~We ~~weakness~~rely ison ~~defined~~third asparties ato ~~deficiency,~~provide or ~~combination~~maintain some of ~~deficiencies,~~our ininformation ~~internal~~technology and related services. We do not exercise direct control over ~~financial~~these ~~reporting~~systems. Despite the implementation of security measures at third party locations, ~~such~~these ~~that~~ services are also vulnerable to security breaches or other disruptions. Despite assurances from third parties to protect this information and, where we believe appropriate, our monitoring of the protections employed by these third parties, there is a ~~reasonable~~risk ~~possibility~~ that athe ~~material~~confidentiality ~~misstatement~~ of ~~our~~the ~~annual~~data orheld ~~interim~~by ~~financial~~these ~~statements~~third ~~will~~parties ~~not~~on our behalf may be ~~prevented~~compromised ~~or detected~~and onexpose aus ~~timely~~to ~~basis~~liability for any security breach or disruption.

~~Our management~~While iswe ~~actively~~have ~~engaged~~identified ~~in developing a remediation plan designed to address these~~ material weaknesses. Wein ~~cannot~~our ~~assure~~internal ~~you~~control, ~~that any~~if ~~measures~~ we ~~may~~are ~~take~~unable ~~in the near future will be sufficient~~ to ~~remediate~~detect ~~these~~additional material weaknesses orin ~~avoid~~our ~~potential~~internal ~~future material weaknesses. In addition~~control, weour ~~may~~financial ~~suffer~~reporting ~~adverse regulatory or other consequences, as well as negative market reaction, as a result of any material weaknesses,~~ and weour ~~will~~business ~~incur~~may ~~additional~~be ~~costs~~adversely ~~as we seek to remediate these material weaknesses~~affected.

~~If we~~Section ~~are~~404 ~~unable~~of the Sarbanes-Oxley Act of 2002 requires us to ~~successfully~~evaluate ~~remediate~~the effectiveness of our ~~existing~~internal orcontrols ~~any~~over ~~future~~financial ~~material~~reporting ~~weaknesses~~as inof the end of each fiscal year, and to include a management report assessing the effectiveness of our internal ~~control~~controls over financial reporting in our annual report on Form 10-K for that fiscal year. A control system, or ~~identify~~no ~~any~~matter ~~additional~~how ~~material~~well ~~weaknesses~~designed inand ~~the~~operated, ~~future~~can orprovide ~~otherwise~~only ~~fail~~reasonable, tonot ~~maintain~~absolute, anassurance ~~effective~~that the control system’s objectives will be met. Further, the design of ~~internal~~a ~~controls~~control system must reflect the fact that there are resource constraints, and the ~~accuracy~~benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and ~~timing~~instances of ~~our~~fraud ~~financial~~involving ~~reporting~~a ~~may~~company have been, or will be, ~~negatively~~detected. ~~impacted~~The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may bebecome ~~unable~~ineffective tobecause ~~maintain~~of changes in conditions or deterioration in the degree of compliance with ~~securities law~~policies ~~requirements~~or ~~regarding~~procedures. ~~timely~~Because ~~filing~~ of ~~periodic~~the ~~reports~~inherent limitations in ~~addition~~a cost-effective control system, misstatements due to ~~applicable~~error ~~stock~~or ~~exchange~~fraud ~~listing~~may ~~requirements~~occur and not be detected. As described below, ~~investors may~~we ~~lose~~have ~~confidence~~identified material weaknesses in our internal control over financial reporting. As a result of the material weaknesses, our management concluded that our internal control over financial reporting was not effective based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission. Consequently, we may experience a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock. ~~price~~We ~~may~~cannot ~~decline~~assure asyou athat ~~result~~we or our independent registered public accounting firm will not identify an additional material weakness in our internal controls in the future.

~~Risks~~ ~~Related to Owning Our Stock~~ 11

~~Future~~ ~~sales~~ Table of ~~our common stock by us or our insiders could adversely affect the trading price of our common stock and dilute your investment.~~Contents

~~Our long-term~~We ~~success~~have isidentified ~~dependent~~material onweaknesses usin ~~obtaining sufficient capital to fund~~ our ~~operations,~~internal ~~develop~~control ~~our~~over ~~technology~~financial ~~and~~reporting. ~~bring~~If ~~our~~we ~~technology to~~are ~~the~~unable ~~worldwide market in order~~ to ~~generate~~remediate ~~sufficient~~these ~~sales~~material ~~volume~~weaknesses, toor beif ~~profitable.~~we Weidentify ~~may~~additional ~~sell~~material ~~securities~~weaknesses in the ~~public~~future or ~~private equity~~otherwise ~~markets~~fail ifto ~~and~~maintain ~~when~~an ~~conditions~~effective ~~are~~system ~~favorable,~~of ~~even~~internal ifcontrols, we domay not ~~have~~be anable ~~immediate~~to ~~need~~accurately ~~for additional capital at that time. We may also issue additional common stock in future financing transactions~~ or astimely ~~incentive~~report ~~compensation for~~ our ~~executive~~financial ~~management~~condition ~~and other~~or ~~key~~results ~~personnel,~~of ~~consultants, and advisors~~operations.

~~Sales of~~Our ~~substantial~~management ~~amounts~~is ofresponsible ~~common~~for ~~stock~~establishing ~~by us or by our insiders or large stockholders, or the perception that such sales could occur, could adversely affect the prevailing market price of our common stock~~ and ~~our~~maintaining ~~ability~~adequate tointernal ~~raise~~control ~~capital.~~over ~~Issuing equity securities would also be dilutive to the equity interests represented by~~ our ~~then-outstanding~~financial ~~shares~~reporting, ~~of common stock. The market price for our common stock could decrease~~ as ~~the~~defined ~~market~~in ~~takes~~Rule ~~into~~13a-15(f) ~~account~~under the ~~dilutive~~Securities ~~effect~~Exchange ofAct ~~any~~ of ~~these issuances. Furthermore~~1934, weas ~~may enter into financing transactions at prices that represent a substantial discount to the market price of our common stock~~amended. ~~A negative reaction by investors and securities analysts to any discounted sale of our equity securities could result in a decline in the trading price of our common stock.~~

~~We currently~~In ~~have~~the ~~fewer~~course ~~than 300 stockholders~~of our assessment of ~~record~~the ~~and,~~effectiveness ~~therefore,~~of ~~are~~our ~~eligible~~internal tocontrol ~~terminate~~over ~~the~~financial ~~registration~~reporting as of December 31, 2025, our ~~common stock~~management ~~under~~identified ~~the~~material ~~Exchange~~weaknesses ~~Act~~in ~~and~~our ~~cease~~internal ~~being~~control aover Ufinancial reporting.S. ~~public~~The ~~company~~material ~~with~~weaknesses ~~reporting~~are ~~obligations~~discussed in more detail in this Annual Report under “Item 9A. Controls and Procedures.”

~~Section 12(g)(4)~~A ofmaterial ~~the~~weakness ~~Exchange~~is ~~Act~~defined ~~allows~~as ~~for the registration of any class of securities to be terminated after~~ a ~~company~~deficiency, ~~files~~or acombination ~~certification with the SEC that the number~~ of ~~holders of record of such class of security is fewer than 300 persons. As of January 28~~deficiencies, ~~2025, there were 53 stockholders of record of our common stock. This does not include the number of shareholders that hold shares~~ in ~~“street name”~~internal ~~through~~control ~~banks,~~over ~~brokers and other~~ financial ~~institutions. Accordingly~~reporting, wesuch ~~are~~that ~~eligible~~there ~~to deregister our~~is ~~common stock~~a ~~and~~reasonable ~~suspend~~possibility ~~our~~that ~~reporting~~a ~~obligations~~material ~~under~~misstatement ~~the~~of ~~Exchange Act. If we were to terminate~~ our ~~registration~~annual ~~and~~or ~~suspend~~interim ~~our~~financial ~~reporting obligations~~statements ~~under~~will ~~the~~not ~~Exchange Act, we would no longer~~ be ~~required~~prevented toor ~~comply~~detected ~~with~~on ~~U.S.~~a ~~public~~timely company disclosure requirements under the Exchange Act, including, but not limited to, annual and quarterly report filings, proxy statement filings and filings by insiders to disclose the acquisition and disposition of our securitiesbasis.

12Our management is actively engaged in developing a remediation plan designed to address these material weaknesses. We cannot assure you that any measures we may take in the near future will be sufficient to remediate these material weaknesses or avoid potential future material weaknesses. In addition, we may suffer adverse regulatory or other consequences, as well as negative market reaction, as a result of any material weaknesses, and we will incur additional costs as we seek to remediate these material weaknesses.

~~Our stock~~If ~~price~~we ~~has~~are ~~been~~unable ~~volatile~~to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, ~~and~~or ~~your~~identify ~~investment~~any additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, the accuracy and timing of our ~~common~~financial reporting may be negatively impacted, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock ~~could~~exchange ~~suffer~~listing arequirements, ~~decline~~investors may lose confidence in ~~value~~our financial reporting, and our stock price may decline as a result.

~~There has~~Risks ~~been~~Related ~~significant volatility in the market price and trading volume of equity securities, which is unrelated~~ to ~~the~~Owning ~~financial~~Our performance of the companies issuing the securities. These broad market fluctuations may negatively affect the market price of our common stock. You may not be able to resell your shares at or above the price you pay for those shares due to fluctuations in the market price of our common stock caused by changes in our operating performance or prospects, and other factors.Stock

~~Some factors~~Future ~~that~~sales ~~may~~of ~~have~~our acommon ~~significant~~stock ~~effect~~by onus or our insiders could adversely affect the trading price of our common stock ~~market~~and ~~price~~dilute ~~include:~~your investment.

●Our ~~actual~~long-term orsuccess ~~anticipated~~is ~~fluctuations~~dependent inon ~~our~~us ~~operating~~obtaining ~~results~~sufficient orcapital ~~future~~to ~~prospects;~~fund ● our ~~announcements~~operations, ordevelop our ~~competitors’~~technology ~~announcements~~and ofbring ~~new~~our technology; ●to the ~~public’s~~worldwide ~~reaction~~market in order to ~~our~~generate ~~press~~sufficient ~~releases,~~sales ~~our~~volume ~~other~~to ~~public~~be ~~announcements,~~profitable. ~~and~~We ~~our~~may ~~filings~~sell ~~with~~securities in the ~~SEC;~~public ●or ~~strategic~~private ~~actions~~equity bymarkets usif orand ~~our~~when ~~competitors~~conditions are favorable, ~~such~~even asif ~~acquisitions~~we ordo ~~restructurings;~~not ●have ~~new~~an ~~laws~~immediate orneed ~~regulations~~for oradditional ~~new~~capital ~~interpretations~~at ofthat ~~existing~~time. ~~laws~~We may also issue additional common stock in future financing transactions or ~~regulations~~as ~~applicable~~incentive tocompensation for our ~~business;~~executive management and other key personnel, consultants, and advisors.

●Sales ~~changes~~of insubstantial ~~accounting~~amounts ~~standards,~~of ~~policies,~~common ~~guidance,~~stock ~~interpretations,~~by us or ~~principles;~~by ●our ~~changes~~insiders inor ~~our~~large ~~growth~~stockholders, ~~rates~~ or ~~our~~the ~~competitors’~~perception ~~growth~~that ~~rates;~~such ●sales ~~developments~~could ~~regarding~~occur, ~~our~~could ~~patents~~adversely oraffect ~~proprietary~~the ~~rights~~prevailing ormarket ~~those~~price of our ~~competitors;~~common ●stock ~~the~~and ~~public’s~~our ~~reaction~~ability to ~~news~~raise ~~concerning~~capital. ~~Aequitas~~Issuing ~~Technologies~~equity ~~LLC’s~~securities ~~patent~~would ~~litigations~~also ~~against~~be ~~Apple~~dilutive ~~and~~to ~~Samsung;~~the ●equity interests represented by our ~~inability~~then-outstanding toshares ~~raise~~of ~~additional~~common ~~capital~~stock. asThe ~~needed;~~market ●price ~~concern~~for asour tocommon stock could decrease as the ~~efficacy~~market oftakes ~~our~~into ~~technology;~~account ●the ~~changes~~dilutive ineffect ~~financial~~of ~~markets~~any orof ~~general~~these ~~economic~~issuances. ~~conditions~~Furthermore, ~~including~~we asmay aenter ~~result~~into offinancing ~~war,~~transactions ~~terrorism,~~at ~~pandemics~~prices orthat ~~other~~represent ~~catastrophes;~~a ●substantial ~~sales~~discount to the market price of our common stock. byA usnegative orreaction ~~members~~by ofinvestors ~~our~~and ~~management~~securities ~~team;~~analysts ~~and~~to ●any ~~changes~~discounted insale ~~stock~~of ~~market~~our ~~analyst~~equity ~~recommendations~~securities orcould ~~earnings~~result ~~estimates~~in ~~regarding~~a ~~our~~decline ~~common~~in ~~stock,~~the ~~other~~trading ~~comparable~~price ~~companies,~~of or our ~~industry~~common ~~generally~~stock.

~~A limited~~We ~~number~~currently ofhave fewer than 300 stockholders, ~~including~~of ~~directors~~record and, ~~hold~~therefore, aare ~~significant~~eligible ~~number~~to ofterminate ~~shares~~the registration of our ~~outstanding~~ common stock under the Exchange Act and cease being a U.S. public company with reporting obligations.

~~Our two~~Section ~~largest~~12(g)(4) ~~stockholders,~~of ~~who~~the ~~both~~Exchange ~~are~~Act ~~members~~allows for the registration of ~~our~~any ~~Board~~class of ~~Directors,~~securities ~~hold~~to ~~approximately~~be ~~one-fifth~~terminated ofafter a company files a certification with the ~~shares~~SEC that the number of ~~our~~holders ~~outstanding voting~~of ~~stock.~~record ~~This~~of ~~concentration~~such class of ~~ownership~~security ~~could~~is ~~impact~~fewer ~~the~~than 300 persons. ~~outcome~~As of ~~stockholder~~January ~~votes~~26, ~~including~~2026, ~~votes~~there ~~concerning~~were ~~the~~53 ~~election~~ stockholders of ~~directors,~~record ~~the~~of ~~adoption~~our orcommon ~~amendment~~stock. This does not include the number of ~~provisions~~shareholders that hold shares in ~~our~~“street ~~certificate~~name” ofthrough ~~incorporation~~banks, brokers and ~~our~~other ~~bylaws~~financial institutions. Accordingly, we are eligible to deregister our common stock and suspend our reporting obligations under the ~~approval~~Exchange ofAct. ~~mergers~~ If we were to terminate our registration and ~~other~~suspend ~~significant~~our ~~corporate~~reporting ~~transactions~~obligations under the Exchange Act, we would no longer be required to comply with U.S. ~~These~~public ~~factors~~company ~~may~~disclosure ~~also~~requirements ~~have~~under the ~~effect~~Exchange ofAct, ~~delaying~~including, orbut ~~preventing~~not alimited ~~change~~to, inannual ~~our~~and ~~management or~~quarterly ~~our~~report ~~voting~~filings, ~~control~~proxy statement filings and filings by insiders to disclose the acquisition and disposition of our securities.

13 12

~~Our~~ ~~certificate~~ Table of ~~incorporation and bylaws and the Delaware General Corporation Law contain provisions that could delay or prevent a change~~Contents ~~in control.~~

Our ~~Board~~ ~~of Directors has the authority to issue up to 1,000,000 shares of preferred~~ stock ~~and to determine the~~ price, ~~rights,~~has ~~preferences, and~~been ~~privileges of those shares without any further vote or action by the stockholders. The rights of the holders of common stock will be subject to~~volatile, and ~~may~~your beinvestment ~~materially adversely affected by, the rights of the holders of any preferred stock that may be issued~~ in ~~the future.~~our ~~The~~common ~~issuance of preferred~~ stock could ~~have~~suffer ~~the effect of making it more difficult for~~ a ~~third~~decline ~~party to acquire a majority of our outstanding voting stock. Furthermore, certain other provisions of our certificate of incorporation and bylaws may have the effect of delaying or preventing changes~~ in ~~control or management, which could adversely affect the market price of our common stock~~value. ~~In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law.~~

If There has been significant volatility in the market price and trading volume of equity securities, ~~analysts~~which dois ~~not~~unrelated ~~publish~~to ~~research~~the orfinancial ifperformance of the companies issuing the securities. ~~analysts~~These orbroad ~~other~~market ~~third~~fluctuations ~~parties~~may ~~publish~~negatively ~~inaccurate~~affect the market price of our common stock. You may not be able to resell your shares at or ~~unfavorable~~above ~~research about~~the ~~us,~~price you pay for those shares due to fluctuations in the market price of our common stock ~~could~~caused ~~decline.~~by changes in our operating performance or prospects, and other factors.

~~The trading~~Some ~~market~~factors ~~for~~that ~~our common stock~~ may ~~rely~~have ina ~~part~~significant effect on ~~the research and reports that securities analysts and other third parties choose to publish about us. We do not control these analysts or other third parties. The price of~~ our common stock ~~could~~market beprice ~~negatively impacted by insufficient analyst coverage or if one or more analysts or other third parties publish inaccurate or unfavorable research about us.~~ include:

~~ITEM 1B.~~● ~~UNRESOLVED~~actual ~~STAFF~~or ~~COMMENTS~~anticipated fluctuations in our operating results or future prospects; ● our announcements or our competitors’ announcements of new technology; ● the public’s reaction to our press releases, our other public announcements, and our filings with the SEC; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

~~None~~● changes in accounting standards, policies, guidance, interpretations, or principles; ● changes in our growth rates or our competitors’ growth rates; ● developments regarding our patents or proprietary rights or those of our competitors; ● the public’s reaction to news concerning Aequitas Technologies LLC’s patent litigations against Apple and Samsung; ● our inability to raise additional capital as needed; ● concern as to the efficacy of our technology; ● changes in financial markets or general economic conditions, including as a result of war, terrorism, pandemics or other catastrophes; ● sales of common stock by us or members of our management team; and ● changes in stock market analyst recommendations or earnings estimates regarding our common stock, other comparable companies, or our industry generally.

~~ITEM 1C.~~A ~~CYBERSECURITY~~limited number of stockholders, including directors, hold a significant number of shares of our outstanding common stock.

~~We maintain~~Our atwo ~~comprehensive~~largest ~~process for identifying~~stockholders, ~~assessing,~~who ~~and~~both ~~managing~~are ~~material~~members ~~risks from cybersecurity threats as part~~ of our ~~broader risk~~Board ~~management~~of ~~system~~Directors, ~~and~~hold ~~processes.~~approximately Weone-fifth ~~closely~~of ~~follow~~ the ~~security~~shares ~~industry~~of ~~and~~our ~~global~~outstanding ~~threat~~voting ~~trends,~~stock. ~~and~~This ~~our~~concentration ~~dedicated~~of ~~privacy,~~ownership ~~safety, and~~could ~~security~~impact ~~professionals~~the ~~oversee~~outcome ~~cybersecurity~~of ~~risk~~stockholder ~~management and mitigation~~votes, ~~incident~~including ~~prevention,~~votes ~~detection,~~concerning ~~and~~the ~~remediation.~~election ~~Our team~~of ~~and~~directors, ~~external~~the ~~partners~~adoption ~~include~~or ~~professionals~~amendment ~~with~~of ~~deep~~provisions ~~cybersecurity~~in ~~expertise~~our ~~across~~certificate ~~multiple~~of ~~industries,~~incorporation ~~including~~and our ITbylaws, ~~Information security~~and &the ~~Quality~~approval ~~Manager~~of ~~who~~mergers ~~oversees~~and ~~our~~other ~~cybersecurity~~significant ~~operations~~corporate transactions. ~~Our~~These ~~executive~~factors ~~leadership~~may ~~team,~~also ~~along~~have ~~with input from~~ the ~~above professionals,~~effect ~~are~~of ~~responsible~~delaying ~~for~~or ~~our~~preventing ~~overall~~a ~~enterprise~~change ~~risk management process and regularly consider cybersecurity risks~~ in ~~the~~our ~~context of~~management ~~other~~or ~~material~~our ~~risks~~voting ~~to the Company~~control.

As ~~part of our cybersecurity risk management system, we track and log privacy and security incidents across Neonode, our vendors, and other~~ 13 third-party service providers to remediate and resolve any such incidents. Significant incidents are reviewed regularly by a cross-functional team to determine whether further escalation is appropriate. Any incident assessed as potentially being or potentially becoming material is immediately escalated for further assessment, and then reported to designated members of our senior management. We consult with outside counsel as appropriate, including on materiality analysis and disclosure matters, and our senior management makes the final materiality determinations and disclosure and other compliance decisions.

14 Table of Contents

~~The Board~~Our certificate of ~~Directors~~incorporation ~~has oversight responsibility for risks~~ and ~~incidents~~bylaws ~~relating to cybersecurity threats, including compliance with disclosure requirements, cooperation with law enforcement,~~ and ~~related~~the ~~effects~~Delaware onGeneral ~~financial~~Corporation ~~and~~Law ~~other~~contain ~~risks.~~provisions ~~Senior~~that ~~management~~could ~~regularly discusses~~delay ~~cyber~~or ~~risks~~prevent ~~and~~a ~~trends~~change ~~and,~~in ~~should they arise, any material incidents with the Board of Directors~~control.

Our ~~business~~ ~~strategy~~Board of Directors has the authority to issue up to 1,000,000 ~~results~~shares of ~~operations~~preferred stock and ~~financial~~to ~~condition~~determine ~~have~~the ~~not~~price, ~~been~~rights, ~~materially~~preferences, ~~affected~~and byprivileges ~~risks~~of ~~from~~those ~~cybersecurity~~shares ~~threats, including~~without asany afurther ~~result~~vote ofor ~~previously~~action ~~identified~~by ~~cybersecurity~~the ~~incidents,~~stockholders. ~~but~~The werights ~~cannot~~of ~~provide~~the ~~assurance~~holders ~~that~~of ~~they~~common stock will ~~not~~be subject to, and may be materially adversely affected inby, the ~~future~~rights byof ~~such~~the ~~risks~~holders orof any ~~future~~preferred ~~material~~stock ~~incidents~~that may be issued in the future. ~~For~~The issuance of preferred stock could have the effect of making it more ~~information~~difficult onfor a third party to acquire a majority of our ~~cybersecurity~~outstanding ~~related~~voting ~~risks~~stock. Furthermore, ~~see~~certain ~~Item 1A~~other ~~Risk~~provisions ~~Factors~~of our certificate of ~~this~~incorporation ~~Annual~~and ~~Report~~bylaws onmay ~~Form~~have 10the effect of delaying or preventing changes in control or management, which could adversely affect the market price of our common stock. In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-Ktakeover law.

~~ITEM 2~~If securities analysts do not publish research or if securities analysts or other third parties publish inaccurate or unfavorable research about us, the price of our common stock could decline. ~~PROPERTIES~~

~~As of~~The ~~December~~trading ~~31,~~market ~~2024,~~for weour ~~leased~~common ~~office~~stock ~~facilities~~may ofrely ~~approximately~~in ~~6,700~~part ~~square~~on ~~feet~~the ~~for~~research and reports that securities analysts and other third parties choose to publish about us. We do not control these analysts or other third parties. The price of our ~~corporate~~common ~~headquarter~~stock incould ~~Stockholm~~be negatively impacted by insufficient analyst coverage or if one or more analysts or other third parties publish inaccurate or unfavorable research about us.

~~We believe~~ITEM ~~our~~1B. ~~facilities~~UNRESOLVED ~~are~~STAFF ~~adequate and suitable for our current needs and that suitable additional or alternative space will be available to accommodate our operations if needed.~~COMMENTS

~~ITEM 3~~None. ~~LEGAL PROCEEDINGS~~

~~We are~~ITEM ~~not a party to any pending legal proceedings~~1C. ~~From time to time, we may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business, including, but not limited to, employee, customer and vendor disputes.~~CYBERSECURITY

~~ITEM 4~~We maintain a structured and risk-based process for identifying, assessing, and managing material risks arising from cybersecurity threats as part of our broader enterprise risk management framework. ~~MINE~~Our ~~SAFETY~~cybersecurity ~~DISCLOSURES~~risk management activities are integrated into the Company’s overall risk management processes and are designed to address prevention, detection, response, and recovery. We monitor security industry developments and global threat trends on an ongoing basis. Cybersecurity risk management and mitigation are overseen by dedicated privacy, safety, and security professionals, including our Information Security & Quality Manager, who has primary responsibility for overseeing cybersecurity operations. Our cybersecurity program is supported by both internal resources and external service providers with relevant expertise across multiple industries. Executive management is responsible for the Company’s enterprise risk management program and regularly considers cybersecurity risks alongside other operational, financial, and strategic risks. Cybersecurity risks are assessed for potential materiality and are incorporated into management decision-making where appropriate.

~~Not applicable~~As part of our cybersecurity risk management program, we track, log, and manage privacy and security incidents across Neonode, as well as incidents involving vendors and other third-party service providers. Reported incidents are evaluated in accordance with established procedures to determine severity, potential impact, and required remediation. Significant incidents are reviewed by a cross-functional team, and any incident assessed as potentially material, or potentially becoming material, is escalated promptly to senior management for further evaluation. Where appropriate, we consult external advisors, including legal counsel, to support materiality assessments, regulatory considerations, and disclosure obligations. Senior management is responsible for making final determinations regarding materiality and related disclosure or compliance actions.

15 14

~~PART~~ II Table of Contents

~~ITEM 5.~~The ~~MARKET~~Board ~~FOR~~of ~~THE~~Directors ~~REGISTRANT~~has oversight responsibility for cybersecurity risks, including oversight of material cybersecurity incidents, compliance with applicable disclosure requirements, and the potential impact of cybersecurity risks on the Company’Ss ~~COMMON~~financial ~~EQUITY~~condition, ~~RELATED~~results ~~STOCKHOLDER~~of ~~MATTERS~~operations, ~~AND~~and ~~ISSUER~~business ~~PURCHASES~~strategy. OFSenior ~~EQUITY~~management ~~SECURITIES~~provides updates to the Board of Directors regarding cybersecurity risks, trends, and, if applicable, material incidents.

~~Market Information~~To date, our business strategy, results of operations, and financial condition have not been materially affected by risks arising from cybersecurity threats, including as a result of previously identified cybersecurity incidents. However, cybersecurity risks continue to evolve, and we cannot provide assurance that future incidents or emerging threats will not have a material adverse effect. For additional information regarding cybersecurity-related risks, see Item 1A – Risk Factors of this Annual Report on Form 10-K.

~~Our common~~ITEM ~~stock is quoted on the Nasdaq Stock Market under the symbol “NEON~~2.” PROPERTIES

~~Holders~~As of December 31, 2025, we leased office facilities of approximately 6,700 square feet for our corporate headquarters in Stockholm.

~~As of~~We ~~January~~believe ~~28,~~our ~~2025,~~facilities ~~there~~are ~~were~~adequate 53and ~~stockholders~~suitable offor ~~record of~~ our ~~common~~current ~~stock.~~needs ~~This~~and ~~does~~that ~~not~~suitable ~~include~~additional ~~the~~or ~~number~~alternative ofspace ~~stockholders~~will ~~that hold~~be ~~shares~~available into ~~“street~~accommodate ~~name”~~our ~~through~~operations ~~banks,~~if ~~brokers, and other financial institutions~~needed.

~~Securities Authorized~~ITEM ~~for~~3. ~~Issuance~~LEGAL ~~Under Equity Compensation Plans~~PROCEEDINGS

~~See Part~~We ~~III,~~are ~~Item~~not 12a party to any pending legal proceedings. ~~“Security~~From ~~Ownership~~time ofto ~~Certain~~time, ~~Beneficial~~we ~~Owners~~may ~~and~~become ~~Management~~subject to legal proceedings, claims, and ~~Related~~litigation ~~Shareholder~~arising ~~Matters”~~in ~~for~~the ~~information relating~~ordinary course of business, including, but not limited to, ~~our~~employee, ~~equity~~customer ~~compensation~~and ~~plans~~vendor disputes.

~~Recent Sale~~ITEM of4. ~~Unregistered~~MINE ~~Securities~~SAFETY ~~and Use of Proceeds~~DISCLOSURES

~~None~~Not applicable.

~~Purchases~~ ~~of Equity Securities by the Issuer and Affiliated Purchasers~~ 15

~~None.~~ Table of Contents

~~ITEM 6.~~PART ~~[RESERVED]~~II

ITEM 7 5. ~~MANAGEMENT~~MARKET FOR THE REGISTRANT’S ~~DISCUSSION~~COMMON ~~AND~~EQUITY, ~~ANALYSIS~~RELATED OFSTOCKHOLDER ~~FINANCIAL~~MATTERS ~~CONDITION~~ AND ~~RESULTS~~ ISSUER PURCHASES OF ~~OPERATIONS~~EQUITY SECURITIES

~~The following~~Market discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report. All information in the following discussion and analysis present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented unless otherwise stated.Information

~~Overview~~Our common stock is quoted on the Nasdaq Stock Market under the symbol “NEON.”

Neonode provides advanced optical sensing solutions for touch, contactless touch, and gesture sensing. We also provide software solutions for machine perception that feature advanced machine learning algorithms to detect and track persons and objects in video streams from cameras and other types of imagers. We base our contactless touch, touch, and gesture sensing products and solutions using our zForce technology platform and our machine perception solutions on our MultiSensing technology platform. We market and sell our solutions to customers in many different markets and segments including, but not limited to, office equipment, automotive, industrial automation, medical, military and avionics.Holders

~~Recent Accounting~~As ~~Pronouncements~~of January 26, 2026, there were 53 stockholders of record of our common stock. This does not include the number of stockholders that hold shares in “street name” through banks, brokers, and other financial institutions.

~~The information~~Securities ~~set~~Authorized ~~forth~~for ~~under~~Issuance ~~Note~~Under 1Equity toCompensation ~~the consolidated financial statements is incorporated herein by reference.~~Plans

16See Part III, Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters” for information relating to our equity compensation plans.

~~Critical Accounting~~Recent ~~Estimates~~Sale of Unregistered Securities and Use of Proceeds

~~Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U~~None.S. GAAP”), which requires us to make certain estimates, judgments and assumptions that can affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure. Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. We have not identified any critical accounting estimate. Refer to Note 1 of our consolidated financial statements for more discussion of our significant accounting policies.

~~Results~~ Purchases of ~~Operations~~Equity Securities by the Issuer and Affiliated Purchasers

~~The following table provides our consolidated results for the continuing operations:~~None.

	Years ended December 31,						Variance in			Variance in
(in thousands)	2024			2023			Dollars			Percent
Revenues:
License fees	$	2,687		$	3,803		$	(1,116	)		(29.3	)%
Percentage of revenue		86.5	%		99.3	%
Non-recurring engineering		421			26			395			1,519.2	%
Percentage of revenue		13.5	%		0.7	%
Total revenues	$	3,108		$	3,829		$	(721	)		(18.8	)%
Cost of revenues:
Non-recurring engineering		116			12			104			866.7	%
Percentage of revenue		3.7	%		0.3	%
Total cost of revenues	$	116		$	12		$	104			866.7	%
Gross margin	$	2,992		$	3,817		$	(825	)		(21.6	)%
Operating expenses:
Research and development	$	3,444		$	3,833		$	(389	)		(10.1	)%
Percentage of revenue		110.8	%		100.1	%
Sales and marketing		2,328			2,455			(127	)		(5.2	)%
Percentage of revenue		74.9	%		64.1	%
General and administrative		3,767			3,266			501			15.3	%
Percentage of revenue		121.2	%		85.3	%
Total operating expenses	$	9,539		$	9,554		$	(15	)		(0.2	)%
Percentage of revenue		306.9	%		249.5	%
Operating loss	$	(6,547	)	$	(5,737	)	$	(810	)		14.1	%
Percentage of revenue		(210.6	)%		(149.8	)%
Other income, net		687			736			(49	)		(6.7	)%
Percentage of revenue		22.1	%		19.2	%
Provision for income taxes		15			115			(100	)		(87.0	)%
Percentage of revenue		0.5	%		3.0	%
Loss from continuing operations	$	(5,875	)	$	(5,116	)	$	(759	)		14.8	%
Percentage of revenue		(189.0	)%		(133.6	)%
Loss per share from continuing operations	$	(0.37	)	$	(0.33	)	$	(0.04	)		12.1	%

ITEM 6. [RESERVED]

~~Revenues~~ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~All of~~The following discussion and analysis should be read in conjunction with our ~~sales~~consolidated ~~for~~financial statements and the ~~years~~related ~~ended~~notes ~~December~~thereto ~~31,~~included ~~2024~~elsewhere ~~and~~in ~~2023~~this ~~were~~Annual toReport. ~~customers~~All ~~located~~information in the ~~United~~following ~~States,~~discussion ~~Europe~~and analysis presents the results of continuing operations and ~~Asia~~excludes amounts related to discontinued operations for all periods presented unless otherwise stated.

Total net revenues were $3.1 million and $3.8 million for the years ended December 31, 2024 and 2023, respectively. The decrease in total net revenues by 18.8% for the year ended December 31, 2024 as compared to 2023 was caused by lower revenues from license revenues offset by higher revenues from non-recurring engineering.Overview

17Neonode provides software solutions for machine perception that feature advanced machine learning algorithms to detect and track persons and objects in video streams from cameras and other types of imagers. We base our machine perception solutions on our MultiSensing® technology platform. We market and sell our solutions to customers mainly in the automotive market. However, our solution can also be used in many other markets, and we plan to expand our solutions into new markets in the future.

~~The following~~Neonode ~~table~~also ~~present~~provides advanced optical sensing solutions for touch, contactless touch, and gesture sensing using our zForce® technology platform. In September 2025, we made the ~~net~~strategic ~~revenues~~decision ~~distribution~~to bytransition ~~business~~the ~~area~~zForce platform into maintenance mode. We are no longer selling zForce technology to new customers but will continue supporting existing customers in various markets and ~~revenue~~segments ~~stream:~~such as office equipment, automotive, industrial automation, medical, military, and avionics.

	Years ended December 31,
	2024					2023
(in thousands)	Amount		Percentage			Amount		Percentage
Automotive
License fees	$	949		77.9	%	$	1,560		98.8	%
Non-recurring engineering		270		22.1	%		19		1.2	%
	$	1,219		100.0	%	$	1,579		100.0	%
IT & Industrial
License fees	$	1,738		92.0	%	$	2,243		99.7	%
Non-recurring engineering		151		8.0	%		7		0.3	%
	$	1,889		100.0	%	$	2,250		100.0	%

Recent Accounting Pronouncements

The ~~following~~ ~~table~~information ~~presents~~set ~~disaggregated~~forth ~~revenues~~under byNote ~~revenue~~1 ~~stream:~~to the consolidated financial statements is incorporated herein by reference.

	Years ended December 31,
	2024					2023
(in thousands)	Amount		Percentage			Amount		Percentage
Net license revenues from amusement	$	150		4.8	%	$	-		-	%
Net license revenues from automotive		948		30.5	%		1,559		40.7	%
Net license revenues from consumer electronics		1,589		51.2	%		2,244		58.6	%
Net non-recurring engineering services revenues		421		13.5	%		26		0.7	%
	$	3,108		100.0	%	$	3,829		100.0	%

~~Revenues~~ ~~from~~ Table ~~license fees were $2.7 million and $3.8 million for the years ended December 31, 2024 and 2023, respectively. The decreased~~ of ~~29.3%~~Contents ~~in 2024 as compared to 2023 were mainly due to lower demand for our legacy customers products within printer and passenger car touch applications offset by revenues from new licensing customers.~~

~~Revenues~~Critical ~~from~~Accounting ~~non-recurring~~Estimates engineering revenues were $0.4 million and $26,000 for the years ended December 31, 2024 and 2023. Our non-recurring engineering revenues are related to application development and proof-of-concept projects related to our zForce and MultiSensing technology platforms. The increase of 1,519.2% in 2024 compared to 2023 was mainly attributable to the DMS project with the commercial vehicle OEM customer that was announced at the end of 2023 and the new agreement with NEXTY Electronics for an evolution of our licensable Touch Sensor Module (“TSM”) technology.

~~Gross Margin~~Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which requires us to make certain estimates, judgments and assumptions that can affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure. Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. We have not identified any critical accounting estimate. Refer to Note 1 of our consolidated financial statements for more discussion of our significant accounting policies.

~~Our gross~~Results ~~margin~~of ~~was 96.3% in 2024 compared to 99.7% in 2023. The decrease in 2024 compared to 2023 were due to more NRE projects.~~Operations

~~Our cost~~The offollowing ~~revenues~~table ~~includes~~provides ~~the~~our ~~direct~~consolidated ~~cost~~results of(in ~~production of certain customer prototypes~~thousands, ~~costs~~except ~~of engineering personnel, engineering consultants to complete the engineering design contracts.~~percentages):

Research and Development

	Years ended December 31,						Variance in
	2025			2024			Dollars			Percent
Revenues:
License fees	$	1,822		$	2,687		$	(865	)		(32.2	)%
Percentage of revenue		88.4	%		86.5	%
Non-recurring engineering		240			421			(181	)		(43.0	)%
Percentage of revenue		11.6	%		13.5	%
Total revenues	$	2,062		$	3,108		$	(1,046	)		(33.7	)%

Cost of revenues:
Non-recurring engineering		26			116			(90	)		(77.6	)%
Percentage of revenue		1.3	%		3.7	%
Total cost of revenues	$	26		$	116		$	(90	)		(77.6	)%
Gross margin	$	2,036		$	2,992		$	(956	)		(32.0	)%

Operating expenses:
Research and development	$	3,779		$	3,444		$	335			9.7	%
Percentage of revenue		183.3	%		110.8	%
Sales and marketing		2,274			2,328			(54	)		(2.3	)%
Percentage of revenue		110.3	%		74.9	%
General and administrative		4,123			3,767			356			9.5	%
Percentage of revenue		200.0	%		121.2	%
Total operating expenses	$	10,176		$	9,539		$	637			6.7	%
Percentage of revenue		493.5	%		306.9	%

Gain from patent assignment	$	19,389		$	-		$	19,389			-	%
Percentage of revenue		940.3	%		-	%
Broker fee from patent assignment		(3,878	)		-			(3,878	)		-	%
Percentage of revenue		(188.1	)%		-	%

Operating income (loss)	$	7,371		$	(6,547	)	$	13,918			(212.6	)%
Percentage of revenue		357.5	%		(210.6	)%
Other income, net		657			687			(30	)		(4.4	)%
Percentage of revenue		31.9	%		22.1	%
Provision (benefit) for income taxes		(9	)		15			(24	)		(160.0	)%
Percentage of revenue		(0.4	)%		0.5	%
Income (loss) from continuing operations	$	8,037		$	(5,875	)	$	13,912			(236.8	)%
Percentage of revenue		389.8	%		(189.0	)%
Basic and diluted income (loss) per share from continuing operations	$	0.48		$	(0.37	)	$	0.85			(229.7	)%

R&D expenses for 2024 and 2023 were $3.4 million and $3.8 million, respectively. R&D expenses primarily consist of personnel-related costs in addition to external consultancy costs, such as testing, certifying and measurements, along with costs related to developing and building new product prototypes. The decrease of 10.1% in 2024 compared to 2023 was primarily related to lower payroll and related costs.Revenues

18All of our sales for the years ended December 31, 2025 and 2024 were to customers located in the United States, Europe and Asia.

~~Sales~~ Total net revenues were $2.1 million and ~~Marketing~~$3.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease in total net revenues by 33.7% for the year ended December 31, 2025 as compared to 2024 was caused by lower revenues from both license revenues and non-recurring engineering.

~~Sales~~ ~~and marketing expenses for were $2.3 million and $2.5 million, respectively. Sales and marketing expenses in 2024 decreased 5.2% compared~~ 17 to 2023 primarily due to lower cost for personnel and related costs offset by higher cost for marketing. There is no non-cash stock-based compensation included in sales and marketing expenses for the year ended December 31, 2024 compared to $8,000 for the year ended December 31, 2023.

~~Our~~ ~~sales~~ Table ~~and~~of ~~marketing activities focus on OEM, ODM and Tier 1 customers who will license our technology.~~Contents

~~General~~ The following table presents the net revenues distribution by business area and ~~Administrative~~revenue stream (in thousands, except percentages):

General and administrative (“G&A”) expenses for 2024 and 2023 were $3.8 million and $3.3 million, respectively. The increase of 15.3% from 2023 was primarily due to higher for cost payroll and related costs and professional fees. There is approximately $3,000 of non-cash stock-based compensation included in G&A expenses for the year ended December 31, 2024 compared to $50,000 for the year ended December 31, 2023.

	Years ended December 31,
	2025					2024
	Amount		Percentage			Amount		Percentage
Automotive:
License fees	$	537		72.9	%	$	949		77.9	%
Non-recurring engineering		200		27.1	%		270		22.1	%
	$	737		100.0	%	$	1,219		100.0	%

IT & Industrial:
License fees	$	1,285		97.0	%	$	1,738		92.0	%
Non-recurring engineering		40		3.0	%		151		8.0	%
	$	1,325		100.0	%	$	1,889		100.0	%

~~Other Income~~The following table presents disaggregated revenues by revenue stream (in thousands, except percentages):

Other income for the year ended December 31, 2024 was $0.7 compared to $0.7 million for the year ended December 31, 2023. The other income for 2024 and 2023 was mainly related to interest income earned.

	Years ended December 31,
	2025					2024
	Amount		Percentage			Amount		Percentage
Net license revenues from amusement	$	138		6.7	%	$	150		4.8	%
Net license revenues from automotive	$	537		26.0	%		948		30.5	%
Net license revenues from consumer electronics	$	1,147		55.7	%		1,589		51.2	%
Net non-recurring engineering services revenues		240		11.6	%		421		13.5	%
	$	2,062		100.0	%	$	3,108		100.0	%

~~Income Taxes~~Revenues from license fees were $1.8 million and $2.7 million for the years ended December 31, 2025 and 2024, respectively. The decrease of 32.2% in 2025 as compared to 2024 was mainly due to lower demand for our legacy customers products within printer and passenger car touch applications offset by revenues from new licensing customers.

~~Our effective~~Revenues ~~tax~~from ~~rate~~non-recurring ~~was~~engineering (revenues were $0.~~3)%~~2 million and $0.4 million for the ~~year~~years ended December 31, ~~2024~~2025 and (22024.~~3)%~~ ~~for~~Our ~~the~~non-recurring ~~year~~engineering ~~ended~~revenues ~~December~~are ~~31,~~related ~~2023.~~to Weapplication ~~recorded~~development ~~valuation allowances~~and inproof-of-concept ~~2024~~projects ~~and~~related ~~2023~~to ~~for~~our ~~deferred~~zForce ~~tax~~and ~~assets~~MultiSensing ~~related~~technology toplatforms. ~~net~~The ~~operating~~decrease of ~~losses~~43.0% in ~~due~~2025 compared to 2024 was the ~~uncertainty~~result of ~~realization~~decreased delivery in projects.

~~Net Loss~~Gross Margin

~~As a~~Our ~~result~~gross ofmargin ~~the~~was ~~factors~~98.7% in ~~discussed~~2025 ~~above,~~compared weto ~~recorded~~96.3% in ~~a net loss of $5~~2024.9 ~~million~~The ~~for~~increase in ~~the~~2025 ~~year ended December 31, 2024,~~ compared to 2024 awere ~~net loss~~due ofto ~~$5.1~~decrease ~~million~~in ~~for~~NRE ~~the year ended December 31, 2023~~revenues.

~~Liquidity and~~Our ~~Capital~~cost ~~Resources~~of revenues includes the direct cost of production of certain customer prototypes, costs of engineering personnel, engineering consultants to complete the engineering design contracts.

~~Our liquidity~~Research ~~is dependent on many factors, including sales volume, operating profit~~ and ~~the efficiency of asset use and turnover. Our future liquidity will be affected by, among other things:~~Development

●R&D ~~licensing~~expenses offor ~~our~~2025 ~~technology;~~and ●2024 ~~operating~~were $3.8 million and $3.4 million, respectively. R&D expenses; ●primarily ~~timing~~consist of ~~our~~personnel-related ~~OEM~~costs ~~customer~~in ~~product~~addition ~~shipments;~~to ●external ~~timing~~consultancy costs, such as testing, certifying and measurements, along with costs related to developing and building new product prototypes. The increase of ~~payment~~9.7% in 2025 ~~for~~compared ~~our~~to 2024 ~~technology~~was ~~licensing~~primarily ~~agreements;~~related ●to ~~gross~~unfavorable ~~profit~~exchange ~~margin;~~rate development and ●lower ~~ability~~NRE revenues causing less costs to ~~raise~~be ~~additional~~allocated ~~capital,~~to ifcost ~~necessary~~of sales.

As ~~of December 31, 2024, we had cash and cash equivalents of $16.4 million, as compared to $16.2 million as of December 31, 2023. Based~~ 18 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 Annual Report.

~~Working~~ ~~capital~~ Table ~~(current assets less current liabilities) was $16.1 million as~~ of ~~December 31, 2024, compared to working capital of $16.1 million~~Contents ~~as of December 31, 2023.~~

~~Net cash~~Sales ~~used in operating activities for combined continuing~~ and discontinued operations for the year ended December 31, 2024 was $5.6 million and was primarily the result of a net loss of $6.4 million and approximately $0.5 million in non-cash operating expenses, comprised of stock-based compensation expense, inventory impairment loss, 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 the year ended December 31, 2023 was $6.3 million and was primarily the result of a net loss of $10.1 million and approximately $3.8 million in non-cash operating expenses, comprised of stock-based compensation expense, inventory impairment loss, depreciation and amortization and amortization of operating lease right-of-use assets, and changes in operating assets and liabilities of $25,000.Marketing

19Sales and marketing expenses for 2025 and 2024 were $2.3 million and $2.3 million, respectively. Sales and marketing expenses in 2025 decreased 2.3% compared to 2024, despite unfavorable exchange rate development, primarily due to lower costs for marketing and lower legal fees.

~~Accounts~~Our ~~receivable~~sales and ~~unbilled~~marketing ~~revenues~~activities ~~for~~focus ~~combined~~on ~~continuing and discontinued operations decreased by approximately $134~~OEM,~~000~~ asODM ofand ~~December 31,~~Tier ~~2024~~1 ~~compared~~customers towho ~~December~~will ~~31,~~license ~~2023,~~our ~~due to lower revenues~~technology.

~~Inventory for~~General ~~discontinued~~and ~~operations increased by approximately $223,000 as of December 31, 2024, not considering the $357,000 non-cash impairment charge recorded during 2024, compared to December 31, 2023.~~Administrative

~~Accounts~~General ~~payable~~ and ~~accrued~~administrative (“G&A”) expenses for ~~combined~~2025 ~~continuing~~ and ~~discontinued operations~~2024 ~~decreased~~were ~~approximately~~$4.1 million and $~~342~~3.8 million,~~000~~ asrespectively. The increase of 9.5% compared to 2024 was primarily due to unfavorable exchange rate development and higher professional fees. There is no non-cash stock-based compensation included in G&A expenses for the year ended December 31, ~~2024~~2025 compared to $3,000 for the year ended December 31, ~~2023~~2024.

~~For the~~Gain ~~year~~from ~~ended~~Patent ~~December~~Assignment ~~31,~~and ~~2024,~~Broker weFee ~~purchased~~from ~~$37,000~~Patent ~~of fixed assets, consisting primarily of ERP software. For the year ended December 31, 2023, we purchased $123,000 of fixed assets, consisting primarily of manufacturing equipment.~~ Assignment

~~Net cash~~Gain ~~provided~~from bythe ~~financing~~patent ~~activities~~assignment to Aequitas Technologies LLC ("Aequitas") was $19.4 million for the year ended December 31, ~~2024~~2025. ~~was~~The ~~$5.8~~Company ~~million~~recognized ~~and~~a ~~was~~brokerage ~~primarily~~fee from the ~~result~~patent ofassignment ~~issuance~~ of ~~common~~$3.8 ~~stock~~million ~~under~~for the ~~ATM~~year ~~Facility~~ended December ~~(as~~31, ~~defined~~2025. ~~and~~The amount ~~described~~represents ~~below).~~the ~~Net~~final ~~cash~~outcome ~~provided~~from bythe ~~financing~~legal ~~activities~~proceedings ~~for~~between Neonode ~~the~~Smartphone ~~year~~LLC, ~~ended December~~an ~~31,~~unrelated ~~2023~~third ~~was~~party ~~$7.8~~that ~~million~~is ~~and~~a ~~was~~subsidiary ~~primarily~~of ~~the~~Aequitas ~~result~~(“Aequitas ofSub”), ~~issuance~~and ofSamsung ~~common~~Electronics ~~stock~~Co., ~~under~~Ltd. ~~the~~and ~~ATM~~Samsung ~~Facility~~Electronics ~~(as~~America, ~~defined~~Inc. ~~and~~(collectively, ~~described below~~“Samsung”), excluding any potential tax recoveries.

~~We have~~Other incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net losses for combined continuing and discontinued operations of approximately $6.5 million and $10.1 million for the years ended December 31, 2024 and 2023, respectively, and had an accumulated deficit of approximately $224.1 million and $217.6 million as of December 31, 2024 and 2023, respectively. In addition, operating activities used cash of approximately $5.6 million and $6.3 million for the years ended December 31, 2024 and 2023, respectively.Income

~~The consolidated~~Other ~~financial~~income ~~statements~~for ~~included~~the ~~herein~~year ~~have~~ended December ~~been prepared on a going concern basis~~31, ~~which~~2025 ~~contemplates~~was ~~continuity of operations and the realization of assets and the repayment of liabilities in the ordinary course of business~~$0.7 ~~Management~~million compared evaluated the significance of the Company’s operating loss and negative cash flows from operations and determined that the Company’s current operating plan and sources of liquidity would be sufficient to ~~alleviate concerns about the Company’s ability to continue as a going concern~~$0. ~~Management~~7 ~~has prepared an operating plan and believes that the Company has sufficient cash to meet its obligations as they come due~~ million for ~~a year from~~ the ~~date the financial statements were issued. During the~~ year ended December 31, 2024,. weThe ~~sold~~other anincome ~~aggregate~~for of2025 ~~1,423,441 of~~and ~~our~~2024 ~~common~~was ~~stock~~mainly ~~under~~related ~~the ATM Facility with aggregate net proceeds~~ to usinterest ofincome $5earned.~~8 million, after payment of commissions to Ladenburg and other expenses of $0.2 million.~~

~~In the~~Income future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility to continue operations and to implement our strategy. If our operations do not become cash flow positive, we may be forced to seek equity investments or debt arrangements. Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity. Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.Taxes

~~No assurances~~Our ~~can~~effective betax ~~given,~~rate ~~however,~~was ~~that we will be successful in obtaining such additional financing on reasonable terms, or at all~~(0.1)% for ~~If adequate~~the ~~funds~~year ~~are~~ended December ~~not available on acceptable terms~~31, or2025 ~~at all, we may be unable to adequately fund our business plans~~ and it(0.3)% for ~~could have~~the ayear ~~negative~~ended ~~effect~~December ~~on our business~~31, ~~results of operations and financial condition~~2024. InWe ~~addition,~~recorded novaluation ~~assurance~~allowances ~~can be given that stockholders will approve an increase~~ in ~~the~~2025 ~~number~~and of2024 ~~our~~for ~~authorized~~deferred ~~shares~~tax ofassets ~~common~~related ~~stock~~to ifnet ~~needed.~~operating ~~The~~losses ~~issuance~~due ~~of equity securities or securities convertible into equity could dilute the value of shares of our common stock and cause the market price~~ to ~~fall, and~~ the ~~issuance~~uncertainty of ~~debt~~ ~~securities could impose restrictive covenants that could impair our ability to engage in certain business transactions~~realization.

~~The functional~~Net 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. Loss

20As a result of the factors discussed above, we recorded a net income of $8.0 million for the year ended December 31, 2025, compared to a net loss of $5.9 million for the year ended December 31, 2024.

~~Contractual Obligation~~Liquidity and ~~Off-Balance~~Capital ~~Sheet Arrangements~~Resources

~~We do~~Our ~~not~~liquidity ~~have~~is ~~any~~dependent ~~transactions,~~on ~~arrangements~~many factors, orincluding ~~other~~sales ~~relationships~~volume, ~~with~~operating ~~unconsolidated~~profit ~~entities~~and ~~that~~the ~~are~~efficiency ~~reasonably~~of ~~likely~~asset touse ~~affect our~~and ~~liquidity~~turnover. orOur ~~capital~~future ~~resources~~liquidity ~~other~~will ~~than~~be ~~the~~affected ~~operating~~by, ~~leases~~among ~~incurred~~other ~~in the normal course of business.~~things:

~~We have~~● nolicensing ~~special~~of ~~purpose~~our ortechnology; ~~limited~~● ~~purpose~~operating ~~entities~~expenses; ~~that~~● ~~provide~~timing ~~off-balance~~of ~~sheet~~our ~~financing,~~OEM ~~liquidity,~~customer orproduct ~~market~~shipments; or● ~~credit~~timing ~~risk~~of ~~support. We~~payment dofor ~~not~~our ~~engage~~technology inlicensing ~~leasing,~~agreements; ~~hedging,~~● ~~research~~gross ~~and~~profit ~~development~~margin; ~~services,~~and or● ~~other~~ability ~~relationships that expose us~~ to ~~liability~~raise ~~that~~additional iscapital, ~~not reflected~~if ~~on the face of the consolidated financial statements~~necessary.

~~Operating Leases~~As of December 31, 2025, we had cash and cash equivalents of $25.4 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 Annual Report.

~~Neonode Inc~~Working capital (current assets less current liabilities) was $24.1 ~~operates~~million as ~~solely~~of ~~through~~December a31, ~~virtual~~2025, ~~office~~compared into ~~California~~working capital of $16.1 million as of December 31, 2024.

On Net cash used in operating activities for combined continuing and discontinued operations for the year ended December 131, ~~2020,~~2025 ~~Neonode~~was ~~Technologies~~$10.3 ABmillion and ~~entered~~was ~~into~~primarily the result of a ~~lease~~net ~~for~~income 6of $8.5 million and approximately $19.2 million in adjustments to reconcile net loss to net cash used in operating activities,~~684~~ ~~square~~comprised ~~feet~~of recoveries of ~~office~~bad ~~space~~debt, ~~located~~gain atfrom ~~Karlavägen~~patent ~~100~~assignment, ~~Stockholm~~ loss on disposal of assets, ~~Sweden.~~depreciation ~~The~~and amortization and amortization of operating lease ~~agreement~~right-of-use ~~has~~assets, ~~been~~and ~~extended~~changes in operating assets and isliabilities ~~valid~~of ~~through~~$444,000. ~~November~~Net ~~2026~~cash used in operating activities for the year ended December 31, 2024 was $5.6 Itmillion and iswas ~~extended~~primarily onthe result of a ~~yearly~~net ~~basis~~loss ~~unless written~~of ~~notice~~$6.5 ismillion and ~~provided~~approximately ~~nine~~$687,000 in ~~months~~non-cash ~~prior~~operating toexpenses, ~~the~~comprised ~~expiration~~of ~~date~~stock-based compensation expense, bad debt expense, loss on disposal of assets, depreciation and amortization, amortization of operating lease right-of-use assets, and inventory impairment loss and changes in operating assets and liabilities of $187,000.

~~For the years ended December~~ ~~31, 2024 and 2023, we recorded approximately $449,000 and $428,000, respectively, for rent expense in continuing operations.~~ 19

~~Equipment~~ ~~Subject~~ Table toof ~~Finance Leases~~Contents

~~In 2022,~~Accounts wereceivable ~~entered~~and ~~into~~unbilled arevenues ~~lease~~ for ~~soundproof~~combined ~~office~~continuing ~~pods.~~and ~~Under~~discontinued ~~the~~operations ~~terms~~decreased ofby ~~the~~approximately ~~agreement~~$300,000 as ~~the~~of ~~lease~~December ~~will~~31, be2025 ~~renewed~~compared ~~within~~to ~~one~~December ~~year of~~31, ~~the~~2024, ~~original~~due ~~three-year~~to ~~lease~~lower ~~term~~revenues. InPrepaid ~~accordance~~expenses ~~with~~and ~~relevant~~other ~~accounting~~current ~~guidance~~assets ~~the~~for ~~lease~~combined iscontinuing ~~classified~~and asdiscontinued aoperations increased ~~finance~~by ~~lease.~~approximately $20,000, ~~The lease~~mainly ~~payments~~due ~~and~~to ~~depreciation~~increased ~~periods~~tax ~~began~~receivables. inAccounts ~~May~~payable, ~~2022~~accrued ~~when~~payroll ~~the~~and ~~equipment~~employee ~~went~~benefits, and ~~into~~accrued ~~service.~~expenses ~~The~~for ~~implicit~~combined ~~interest~~continuing ~~rate~~and discontinued operations increased approximately $395,000 as of ~~the~~December ~~lease is~~31, ~~currently~~2025 ~~approximately~~compared ~~3.0%~~to ~~per~~December ~~annum~~31, 2024.

~~Non-Recurring Engineering~~Net ~~Development~~cash ~~Costs~~provided by investing activities for the year ended December 31, 2025 was $19.3 million and consisted primarily of the proceeds from the patent assignment.

~~On April~~We ~~25,~~have ~~2013,~~incurred wesignificant ~~entered~~operating ~~into~~losses anand ~~Analog~~negative ~~Device~~cash ~~Development~~flows ~~Agreement~~from ~~with~~operations ansince ~~effective~~our ~~date~~inception. ofThe ~~December~~Company 6,incurred ~~2012~~net ~~(the~~income ~~“NN1002 Agreement”)~~for ~~with~~combined ~~Texas~~continuing ~~Instruments~~and ~~(“TI”)~~discontinued ~~pursuant~~operations toof ~~which~~approximately TI$8.5 ~~agreed~~million for tothe ~~integrate~~year ended ~~our~~December ~~intellectual~~31, ~~property~~2025 ~~into~~and ~~an Application~~net ~~Specific~~loss ~~Integrated~~of ~~Circuit (“ASIC”)~~$6.5 ~~Under~~million for the ~~terms~~year ended ofDecember ~~the~~31, ~~NN1002 Agreement~~2024, weand ~~agreed~~had toan ~~pay~~accumulated TIdeficit ~~$500,000~~ of ~~non-recurring~~ ~~engineering~~approximately $215.6 ~~costs~~million ~~at the rate of~~ and $0224.251 ~~per~~million as of ~~ASIC~~December ~~for~~31, ~~each~~2025 ofand ~~the~~2024, ~~first~~respectively. 2In addition,~~000,000~~ ~~ASICs~~operating ~~sold.~~activities Asused cash of ~~December~~approximately ~~31,~~$10.3 ~~2024,~~million and $5.6 ~~we had~~million for ~~made~~the noyears ~~payments~~ended toDecember TI31, ~~under~~2025 ~~the~~and ~~NN1002~~2024, ~~Agreement~~respectively.

~~At-~~The consolidated financial statements included herein have been prepared on a going concern basis, which contemplates continuity of operations and the~~-Market Offering~~ ~~Program~~realization of assets and the repayment of liabilities in the ordinary course of business. Management evaluated the significance of the Company’s operating loss and negative cash flows from operations and determined that the Company’s current operating plan and sources of liquidity would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern. Management has prepared an operating plan and believes that the Company has sufficient cash to meet its obligations as they come due for a year from the date the financial statements were issued. During the year ended December 31, 2024, we sold an aggregate of 1,423,441 of our common stock under the Ladenburg ATM Facility (as defined below) with aggregate net proceeds to us of $5.8 million, after payment of commissions to Ladenburg Thalmann & Co. Inc. (“Ladenburg”) and other expenses of $0.2 million. During the year ended December 31, 2025, no shares were sold under the Ladenburg ATM Facility.

~~On May~~In ~~10,~~the ~~2021~~future, we ~~entered~~may ~~into~~require ansources Atof ~~Market~~capital ~~Issuance~~in ~~Sales~~addition ~~Agreement~~to ~~(the~~cash ~~“B.~~on ~~Riley~~hand ~~Sales~~and ~~Agreement”)~~our ~~with~~Ladenburg B.ATM ~~Riley~~Facility ~~Securities, Inc.~~to ~~(“B.~~continue ~~Riley~~operations ~~Securities”)~~and ~~with respect~~ to animplement ~~“at~~our ~~the~~strategy. ~~market”~~If ~~offering~~our ~~program~~operations ~~(the~~do ~~“B.~~not ~~Riley~~become ~~ATM~~cash ~~Facility”)~~flow positive, ~~under~~ ~~which~~ we may, ~~from~~be ~~time~~forced to ~~time,~~seek inequity ~~our~~investments ~~sole~~or ~~discretion,~~debt ~~issue and sell through B~~arrangements. ~~Riley Securities~~Historically, ~~acting~~we ashave ~~sales~~been ~~agent,~~able up to ~~$25~~access ~~million~~the ofcapital ~~shares~~markets ofthrough ~~our~~sales of common stock, inand ~~any~~warrants ~~method~~to ~~permitted~~generate ~~that~~liquidity. isOur ~~deemed~~management anbelieves ~~“at~~it ~~the~~could ~~market”~~raise ~~offering~~capital asthrough ~~defined in~~public ~~Rule~~or ~~415~~private ~~under~~offerings ~~the~~if ~~Securities~~needed ~~Act~~to ofprovide ~~1933,~~us ~~as amended. On May 29, 2024, we terminated the B. Riley Sales Agreement~~ with B.sufficient ~~Riley Securities~~liquidity.

~~On June~~No 4assurances can be given, ~~2024~~however, that we ~~entered~~will ~~into~~be ansuccessful Atin ~~The~~obtaining ~~Market~~such ~~Offering~~additional ~~Agreement~~financing ~~(the~~on ~~“Ladenburg~~reasonable ~~Sales~~terms, ~~Agreement”)~~or ~~with~~at ~~Ladenburg~~all. ~~Thalmann &~~If ~~Co.~~adequate ~~Inc.~~funds ~~(“Ladenburg”)~~are ~~with~~not ~~respect~~available toon anacceptable “terms, or at ~~the~~all, ~~market”~~we ~~offering~~may ~~program~~be ~~(the~~unable ~~“Ladenburg~~to ~~ATM~~adequately ~~Facility”), under~~fund ~~which~~our webusiness ~~may~~plans and it could have a negative effect on our business, ~~from~~results ~~time~~of tooperations ~~time~~and financial condition. In addition, no assurance can be given that stockholders will approve an increase in the number of our ~~sole~~authorized ~~discretion,~~shares ~~issue~~of ~~and~~common ~~sell~~stock ~~through~~if ~~Ladenburg,~~needed. ~~acting~~The asissuance ~~agent~~of equity securities or ~~principal,~~securities upconvertible ~~to approximately~~into ~~$10~~equity ~~million~~could dilute the value of shares of our common stock and cause the market price to fall, and the issuance of debt securities could impose restrictive covenants that could impair our ability to engage in certain business transactions.

21The 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.

~~Pursuant~~ ~~to the Ladenburg Sales Agreement, we may sell the shares through Ladenburg by any method permitted that is deemed an “at the market”~~ 20 offering as defined in Rule 415 under the Securities Act of 1933, as amended. Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us (including any price or size limits or other customary parameters or conditions we may impose). We will pay Ladenburg a commission of 3.0% of the gross sales price per share sold under the Ladenburg Sales Agreement.

We ~~are~~ Table ~~not obligated to sell any shares under the Ladenburg Sales Agreement. The offering~~ of ~~shares pursuant to the Ladenburg Sales Agreement~~Contents will terminate upon the earlier to occur of (i) the issuance and sale, through Ladenburg, of all of the shares of our common stock subject to the Ladenburg Sales Agreement and (ii) termination of the Ladenburg Sales Agreement in accordance with its terms.

~~During the~~Contractual ~~year~~Obligation ended December 31, 2024, we sold an aggregate of 1,423,441 shares of our common stock under the Ladenburg ATM Facility with aggregate net proceeds to us of $5.8 million, after payment of commissions to Ladenburg and ~~other~~Off-Balance ~~expenses~~Sheet ~~of $0.2 million.~~ Arrangements

~~During~~We ~~the~~do ~~year~~not ~~ended~~have ~~December 31,~~any ~~2023~~transactions, ~~we sold an aggregate of 903~~arrangements,~~716~~ ~~shares~~or ofother ~~our~~relationships ~~common~~with ~~stock~~unconsolidated ~~under~~entities ~~the~~that ~~ATM~~are ~~Facility~~reasonably ~~with~~likely ~~aggregate~~to ~~net~~affect ~~proceeds~~our toliquidity usor ofcapital ~~$7.9 million,~~resources ~~after~~other ~~payment~~than ofthe ~~commissions~~operating toleases B.incurred ~~Riley~~in ~~Securities~~the ~~and~~normal ~~other~~course ~~expenses~~ of $0business.~~2 million.~~

~~Future Sources~~We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support. We do not engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected on the face of ~~Liquidity~~the consolidated financial statements.

~~In the~~Operating future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility to continue operations and to implement our strategy. If our operations do not become cash flow positive, we may be forced to seek equity investments or debt arrangements. Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity. Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.Leases

~~No assurances~~Neonode ~~can be given, however, that we will be successful in obtaining such additional financing on reasonable terms, or at all~~Inc. ~~If adequate~~operates ~~funds~~solely ~~are~~through ~~not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have~~ a ~~negative~~virtual ~~effect~~office ~~on our business, results of operations and financial condition. In addition, no assurance can be given that stockholders will approve an increase~~ in ~~the number of our authorized shares of common stock if needed~~California. The issuance of equity securities or securities convertible into equity could dilute the value of shares of our common stock and cause the market price to fall, and the issuance of debt securities could impose restrictive covenants that could impair our ability to engage in certain business transactions.

~~The functional~~On ~~currency~~December of1, ~~our~~2020, ~~foreign~~Neonode ~~subsidiaries~~Technologies isAB ~~the~~entered ~~applicable~~into ~~local~~a ~~currency,~~lease ~~the~~for ~~Swedish Krona~~6,684 ~~the~~square ~~Japanese~~feet ~~Yen~~of ~~and~~office ~~the~~space ~~South~~located ~~Korean Won.~~at ~~They~~Karlavägen ~~are~~100, ~~subject~~Stockholm, toSweden. ~~foreign~~The ~~currency~~lease ~~exchange~~agreement ~~rate~~has ~~risk.~~been ~~Any~~extended ~~increase~~and oris ~~decrease~~valid inthrough ~~the~~January ~~exchange~~2027. ~~rate~~It ofis ~~the~~extended ~~U.S.~~on ~~Dollar~~a ~~compared to~~yearly ~~the~~basis ~~Swedish~~unless ~~Krona,~~written ~~Japanese~~notice ~~Yen~~is orprovided ~~South~~nine ~~Korean~~months ~~Won~~prior ~~will~~to ~~impact~~the ~~our~~expiration ~~future operating results~~date.

~~Patent Assignment~~For the years ended December 31, 2025 and 2024, we recorded approximately $455,000 and $449,000, respectively, for rent expense in continuing operations.

~~On May~~Equipment 6,Subject ~~2019, the Company assigned a portfolio of patents~~ to ~~Aequitas~~Finance Technologies LLC (“Aequitas”), an unrelated third party. The assignment provides the Company the right to share the potential net proceeds generated from possible licensing and monetization program that Aequitas may enter into. Under the terms of the assignment, net proceeds mean gross proceeds less out of pocket expenses and legal fees paid by Aequitas. The Company’s share would also be net of the Company’s own fees and expenses, including a brokerage fee payable by the Company in connection with the original assignment to Aequitas.Leases

~~As reflected~~In in2025, ~~publicly~~we ~~available~~entered ~~court~~into ~~filings,~~a onlease ~~June~~for 8,a ~~2020,~~Volkswagen ~~Neonode~~ID ~~Smartphone~~Buzz ~~LLC,~~to anbe ~~unrelated~~used ~~third~~as ~~party~~a ~~that~~demo iscar afor ~~subsidiary of~~our ~~Aequitas~~technology. ~~(“Aequitas~~Under ~~Sub”)~~the terms of the agreement, ~~filed~~the ~~complaints~~lease ~~against~~will ~~Apple~~be ~~Inc.~~renewed ~~(“Apple”)~~within ~~(assigned~~two ~~docket~~years ~~number~~of ~~6:20-cv-00505-ADA), and~~the ~~Samsung~~original ~~Electronics~~three-year ~~Co.,~~lease ~~Ltd~~term., ~~and~~In ~~Samsung~~accordance ~~Electronics~~with ~~America,~~relevant ~~Inc.~~accounting ~~(collectively,~~guidance ~~“Samsung”)~~the ~~(assigned~~lease ~~docket~~is ~~number 6:20-cv~~classified ~~-00507-ADA;~~as ~~see~~a ~~also~~finance ~~6:23-cv-00204-ADA),~~lease. The lease payments and depreciation periods began in March 2025 when the ~~Western~~equipment ~~District~~went ofinto ~~Texas~~service. ~~alleging~~The ~~infringement~~implicit interest rate of ~~two~~the ~~patents,~~lease ~~U.S.~~is ~~Patent~~currently ~~Nos~~approximately 3. ~~8,095,879~~47% ~~and~~per ~~8,812,993~~annum.

22Non-Recurring Engineering Development Costs

UOn April 25, 2013, we entered into an Analog Device Development Agreement with an effective date of December 6, 2012 (the “NN1002 Agreement”) with Texas Instruments (“TI”) pursuant to which TI agreed to integrate our intellectual property into an Application Specific Integrated Circuit (“ASIC”).S Under the terms of the NN1002 Agreement, we agreed to pay TI $500,000 of non-recurring engineering costs at the rate of $0. ~~Patent~~25 Noper ASIC for each of the first 2,000,000 ASICs sold. 8As of December 31,~~095~~ 2025,~~879~~ we had made no payments to TI under the NN1002 Agreement.

~~In November 2020, Samsung and Apple filed a petition for inter partes review of certain challenged claims in U.S. Patent No. 8,095,879, assigned proceeding number IPR2021~~At-~~00144. As reflected in publicly available records,~~ the U.S. Patent and Trademark Office Patent Trial and Appeal Board (“PTAB”) denied the petition in June 2021. Apple and Samsung filed a request for rehearing, which was ultimately granted on December 3, 2021, and inter partes review was instituted. The court case against Apple was subsequently transferred to the Northern District of California in November 2021 and assigned docket number 3:21-~~cv-08872,~~Market ~~which~~Offering ~~was subsequently stayed pending the PTAB’s decision. The case against Samsung in the Western District of Texas was likewise stayed pending PTAB ruling.~~Program

~~Meanwhile, in~~On ~~June~~May 10, 2021, ~~Google~~we ~~LLC~~entered into an At Market Issuance Sales Agreement (the “~~Google~~B. Riley Sales Agreement”) ~~filed~~with aB. ~~separate~~Riley ~~petition~~Securities, Inc. (“B. Riley Securities”) with respect to an “at the ~~PTAB~~market” ~~seeking~~offering ~~inter~~program ~~partes~~(the ~~review~~“B. ofRiley ~~certain~~ATM ~~challenged claims~~Facility”), under which we may, from time to time, in ~~U.S.~~our ~~Patent~~sole Nodiscretion, issue and sell through B. 8Riley Securities,~~095~~ acting as sales agent,~~879~~ up to $25 million of shares of our common stock, ~~assigned~~in ~~proceeding~~any ~~number~~method ~~IPR2021-01041.~~permitted Asthat ~~reflected~~is deemed an “at the market” offering as defined in ~~publicly~~Rule ~~available~~415 ~~records,~~under the ~~PTAB~~Securities ~~granted~~ Act of 1933, as amended. On May 29, 2024, we terminated the ~~petition~~B. inRiley ~~January~~Sales ~~2022~~Agreement with B. Riley Securities.

~~The PTAB~~On ~~found~~June in4, ~~favor~~2024, ofwe ~~Aequitas~~entered ~~Sub~~into ~~and~~an ~~against~~At ~~Apple~~The ~~and~~Market ~~Samsung~~Offering inAgreement ~~December~~(the ~~2022~~“Ladenburg inSales ~~connection~~Agreement”) with ~~the~~Ladenburg ~~inter~~Thalmann ~~partes~~& ~~review proceedings, ruling that none of the challenged claims were unpatentable~~Co. ~~The PTAB similarly held in favor of Aequitas Sub and against Google in January 2023~~Inc. ~~Apple~~(“Ladenburg”) ~~and~~with ~~Samsung~~respect ~~appealed~~ to ~~the~~an ~~United~~“at ~~States Court of Appeals for~~ the ~~Federal~~market” ~~Circuit~~offering program (the “~~Federal~~Ladenburg ~~Circuit~~ATM Facility”), ~~in February~~under ~~2023~~which ~~(assigned~~we ~~docket number 23-1464~~may, ~~and~~from ~~Google~~time ~~filed~~to ~~its~~time, ~~appeal~~ in ~~the~~our ~~Federal~~sole ~~Circuit~~discretion, inissue ~~March~~and ~~2023~~sell ~~(assigned~~through ~~docket~~Ladenburg, ~~number 23-1638.~~acting Onas ~~July~~agent ~~18,~~or ~~2024~~principal, ~~the~~up ~~Federal~~to ~~Circuit~~approximately ~~affirmed~~$10 ~~the~~million ~~PTAB’s rulings, found in favor~~ of ~~Aequitas~~shares ~~Sub and against Google and Apple/Samsung, and held that none~~ of ~~the~~our ~~challenged~~common ~~claims in U~~stock.~~S. Patent No. 8,095,879 are unpatentable.~~

As ~~reflected in publicly available court records, on July 14, 2023, the United States District Court for the Western District of Texas entered~~ 21 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.

~~The~~ ~~case~~ Table ~~against Apple remains pending in the United States District Court for the Northern District~~ of ~~California. On November 13, 2024,~~Contents 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.

UPursuant to the Ladenburg Sales Agreement, we may sell the shares through Ladenburg by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended.S Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us (including any price or size limits or other customary parameters or conditions we may impose). ~~Patent~~ NoWe will pay Ladenburg a commission of 3.0% ~~8,812,993~~of the gross sales price per share sold under the Ladenburg Sales Agreement.

~~Based on~~We ~~information~~are innot ~~public~~obligated ~~records,~~to insell ~~November~~any ~~2020,~~shares ~~Samsung~~under ~~and~~the ~~Apple~~Ladenburg ~~collectively~~Sales ~~sought~~Agreement. ~~inter~~The ~~partes~~offering ~~review~~ of ~~certain~~shares ~~claims~~pursuant into ~~U.S. Patent~~the ~~No.~~Ladenburg ~~8,812,993~~Sales ~~(assigned~~Agreement ~~proceeding~~will ~~number~~terminate ~~IPR2021-00145).~~upon Inthe ~~June~~earlier ~~2022,~~to ~~the~~occur ~~PTAB~~of ~~invalidated~~(i) ~~U.S.~~the ~~Patent~~issuance ~~No.~~and 8sale,~~812,993,~~ ~~which Aequitas~~through ~~Sub~~Ladenburg, ~~appealed~~of toall of the ~~Federal~~shares ~~Circuit~~of inour ~~August~~common ~~2022~~stock ~~(assigned~~subject ~~docket~~to ~~number~~the ~~22-2134).~~Ladenburg ~~The~~Sales ~~Federal~~Agreement ~~Circuit~~and ~~affirmed~~(ii) termination of the ~~PTAB’s decision~~Ladenburg onSales ~~June~~Agreement ~~11,~~in ~~2024~~accordance with its terms.

~~ITEM 7A.~~During ~~QUANTITATIVE~~the ~~AND~~year ~~QUALITATIVE~~ended ~~DISCLOSURES~~December ~~ABOUT~~31, ~~MARKET~~2025, ~~RISK~~we sold no shares under the Ladenburg ATM Facility.

~~Not applicable~~During the year ended December 31, 2024, we sold an aggregate of 1,423,441 shares of our common stock 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.

23Future Sources of Liquidity

~~ITEM 8~~In the future, we may require sources of capital in addition to cash on hand and our Ladenburg ATM Facility to continue operations and to implement our strategy. ~~FINANCIAL~~If ~~STATEMENTS~~our ~~AND~~operations ~~SUPPLEMENTARY~~do ~~DATA~~not become cash flow positive, we may be forced to seek equity investments or debt arrangements. Historically, we have been able to access the capital markets through sales of common stock and warrants to generate liquidity. Our management believes it could raise capital through public or private offerings if needed to provide us with sufficient liquidity.

Index to the Consolidated Financial Statements		Page
Report of Crowe LLP, Independent Registered Public Accounting Firm (PCAOB ID: 173)		F-2
Report of KMJ Corbin & Company LLP, Independent Registered Public Accounting Firm (PCAOB ID: 170)		F-3
Consolidated Balance Sheets as of December 31, 2024 and 2023		F-4
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023		F-5
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024 and 2023		F-6
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023		F-8
Notes to the Consolidated Financial Statements		F-9

No assurances can be given, however, that we will be successful in obtaining such additional financing on reasonable terms, or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, results of operations and financial condition. In addition, no assurance can be given that stockholders will approve an increase in the number of our authorized shares of common stock if needed. The issuance of equity securities or securities convertible into equity could dilute the value of shares of our common stock and cause the market price to fall, and the issuance of debt securities could impose restrictive covenants that could impair our ability to engage in certain business transactions.

~~F-1~~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.

~~REPORT~~Patent ~~OF CROWE LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~ Assignment

~~Shareholders~~On May 6, 2019, the Company assigned a portfolio of patents to Aequitas Technologies LLC (“Aequitas”), an unrelated third party. The assignment provides the Company the right to share the potential net proceeds generated from possible licensing and monetization program that Aequitas may enter into. Under the ~~Board~~terms of ~~Directors~~the assignment, net proceeds mean gross proceeds less out of ~~Neonode Inc~~pocket expenses and legal fees paid by Aequitas. The Company’s share would also be net of the Company’s own fees and expenses, including a brokerage fee payable by the Company in connection with the original assignment to Aequitas.

~~Opinion~~As reflected in publicly available court filings, on June 8, 2020, Aequitas Sub, filed complaints against Apple Inc. (“Apple”) (assigned docket number 6:20-cv-00505-ADA), and Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc. (collectively, “Samsung”) (assigned docket number 6:20-cv -00507-ADA; see also 6:23-cv-00204-ADA), in the ~~Financial~~Western ~~Statements~~District of Texas alleging infringement of two patents, U.S. Patent Nos. 8,095,879 and 8,812,993.

~~We have audited the accompanying~~ ~~consolidated balance sheet of Neonode Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations,~~ 22 comprehensive loss, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

~~Basis~~ Table ~~for~~of ~~Opinion~~Contents

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. ~~federal~~Patent ~~securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB~~No. 8,095,879

WeIn ~~conducted~~November ~~our~~2020, ~~audit~~Samsung ~~in accordance~~and ~~with~~Apple ~~the~~filed ~~standards~~a petition for inter partes review of ~~the~~certain ~~PCAOB.~~challenged ~~Those~~claims ~~standards~~in ~~require~~U.S. ~~that~~Patent weNo. ~~plan~~8,095,879, ~~and~~assigned ~~perform~~proceeding ~~the~~number ~~audit~~IPR2021-00144. toAs ~~obtain~~reflected ~~reasonable~~in ~~assurance about~~publicly ~~whether~~available records, the ~~financial~~U.S. ~~statements~~Patent ~~are~~and ~~free~~Trademark ofOffice ~~material~~Patent ~~misstatement,~~Trial ~~whether~~and ~~due~~Appeal toBoard ~~error~~(“PTAB”) ordenied ~~fraud.~~the ~~The~~petition ~~Company~~in isJune ~~not~~2021. ~~required~~Apple ~~to have,~~and ~~nor~~Samsung ~~were~~filed wea ~~engaged~~request tofor ~~perform~~rehearing, anwhich ~~audit~~was ofultimately ~~its~~granted ~~internal~~on ~~control~~December ~~over~~3, ~~financial~~2021, ~~reporting~~and inter partes review was instituted. AsThe ~~part~~court ofcase ~~our~~against ~~audit~~Apple wewas ~~are~~subsequently ~~required~~ transferred to ~~obtain~~the anNorthern ~~understanding~~District of ~~internal~~California ~~control~~in ~~over~~November ~~financial~~2021 ~~reporting~~and ~~but~~assigned ~~not~~docket ~~for~~number ~~the~~3:21-cv-08872, ~~purpose~~which ofwas ~~expressing~~subsequently anstayed ~~opinion~~pending on the ~~effectiveness of~~PTAB’s ~~the~~decision. ~~Company's~~The ~~internal~~case ~~control~~against ~~over~~Samsung ~~financial~~in ~~reporting.~~the ~~Accordingly,~~Western weDistrict ~~express~~of noTexas ~~such~~was ~~opinion~~likewise stayed pending PTAB ruling.

~~Our~~Meanwhile, ~~audit~~in ~~included~~June ~~performing procedures~~2021, toGoogle ~~assess~~LLC ~~the~~(“Google”) ~~risks~~filed ofa ~~material~~separate ~~misstatement~~petition ofwith the ~~financial~~PTAB ~~statements,~~seeking ~~whether~~inter ~~due~~partes toreview ~~error~~of orcertain ~~fraud,~~challenged ~~and~~claims ~~performing~~in ~~procedures that~~U.S. ~~respond~~Patent ~~to those risks~~No. ~~Such procedures included examining~~8, ~~on a test basis~~095,879, ~~evidence~~assigned ~~regarding~~proceeding ~~the~~number ~~amounts~~IPR2021-01041. ~~and~~As ~~disclosures~~reflected in ~~the financial~~publicly ~~statements.~~available ~~Our audit also included evaluating the accounting principles used and significant estimates made by management~~records, as ~~well as evaluating~~ the ~~overall~~PTAB ~~presentation~~granted of the ~~financial~~petition ~~statements.~~in WeJanuary ~~believe that our audit provides a reasonable basis for our opinion~~2022.

~~Critical~~The ~~Audit~~PTAB ~~Matters~~found in favor of Aequitas Sub and against Apple and Samsung in December 2022 in connection with the inter partes review proceedings, ruling that none of the challenged claims were unpatentable. The PTAB similarly held in favor of Aequitas Sub and against Google in January 2023. Apple and Samsung appealed to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) in February 2023 (assigned docket number 23-1464, and Google filed its appeal in the Federal Circuit in March 2023 (assigned docket number 23-1638. On July 18, 2024, the Federal Circuit affirmed the PTAB’s rulings, found in favor of Aequitas Sub and against Google and Apple/Samsung, and held that none of the challenged claims in U.S. Patent No. 8,095,879 are unpatentable.

~~Critical~~As ~~audit~~reflected ~~matters~~in ~~are matters~~publicly ~~arising~~available ~~from~~court records, on July 14, 2023, the ~~current~~United ~~period~~States ~~audit~~District Court for the Western District of Texas entered its final claim constructions in the ~~financial~~Samsung ~~statements~~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 ~~were~~claim ~~communicated~~1 orof ~~required~~the ‘879 patent was not indefinite. Mandate issued returning the case to bethe ~~communicated~~Western District of Texas on September 26, 2024. On November 5, 2024, Samsung filed its Answer to the ~~audit~~ ~~committee~~Complaint. ~~and~~On ~~that:~~June 13, 2025, the parties submitted a joint motion to stay all deadlines for thirty (130) ~~relate~~days as the parties had reached a “settlement in principle.” On June 20, 2025, the Court granted the motion to ~~accounts~~stay orand ~~disclosures~~ordered that ~~are~~all ~~material~~deadlines be stayed until July 21, 2025. On July 17, 2025, the parties submitted a joint motion to extend the ~~financial~~stay ~~statements~~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), ~~involved~~2025, ~~our~~the ~~especially challenging~~Court granted the motion. As of September 2, ~~subjective~~2025, orthe ~~complex~~case ~~judgments~~in the Western District of Texas is now closed. WeFor ~~determined~~additional ~~that~~information ~~there~~regarding ~~are~~the nosettlement, ~~critical~~see ~~audit~~“Item ~~matters~~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.”

~~/s/~~The ~~Crowe~~case ~~LLP~~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.

~~We have served as the Company’s auditor since 2024~~.

~~New~~U.S. ~~York,~~Patent ~~New~~No. ~~York~~8,812,993

~~March~~Based 21on information in public records, ~~2025~~in November 2020, Samsung and Apple collectively sought inter partes review of certain claims in U.S. Patent No. 8,812,993 (assigned proceeding number IPR2021-00145). In June 2022, the PTAB invalidated U.S. Patent No. 8,812,993, which Aequitas Sub appealed to the Federal Circuit in August 2022 (assigned docket number 22-2134). The Federal Circuit affirmed the PTAB’s decision on June 11, 2024.

~~F-2~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~REPORT~~Not ~~OF KMJ CORBIN & COMPANY LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~applicable.

~~Board of Directors and Stockholders~~ 23

~~Neonode~~ Table ~~Inc.~~of Contents

~~Opinion~~ITEM on8. ~~the~~FINANCIAL ~~Consolidated~~STATEMENTS ~~Financial~~AND ~~Statements~~SUPPLEMENTARY DATA

We have audited the accompanying consolidated balance sheet of Neonode Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Index to the Consolidated Financial Statements		Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 173)		F-2

Consolidated Balance Sheets as of December 31, 2025 and 2024		F-3

Consolidated Statements of Operations for the years ended December 31, 2025 and 2024		F-4

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025 and 2024		F-5

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024		F-6

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024		F-7

Notes to the Consolidated Financial Statements		F-8

~~Emphasis of a Matter~~ F- ~~Discontinued Operations~~1

~~As discussed in Note 2 to~~ ~~the~~ Table ~~consolidated financial statements, the Company concluded that the termination~~ of ~~manufacturing touch sensor modules in 2024 met the~~Contents criteria for discontinued operations of its products business in accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements—Discontinued Operations. The financial statements for 2023 have been retrospectively adjusted to reflect the impact of this classification. Our opinion is not modified with respect to this matter.

~~Basis~~REPORT ~~for~~OF ~~Opinion~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~These~~Shareholders ~~consolidated~~and ~~financial statements are~~ the ~~responsibility~~Board of ~~the~~Directors Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of ~~the~~Neonode ~~Securities and Exchange Commission and the PCAOB~~Inc.

WeOpinion conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the ~~effectiveness~~ ofFinancial ~~the Company’s internal control over financial reporting. Accordingly, we express no such opinion.~~Statements

~~Our~~We ~~audit~~have ~~included~~audited ~~performing procedures~~the toaccompanying ~~assess~~consolidated ~~the~~balance ~~risks~~sheets of ~~material~~Neonode ~~misstatement~~Inc. (the "Company") as of ~~the~~December ~~consolidated~~31, ~~financial~~2025 ~~statements~~and 2024, ~~whether~~the ~~due~~related toconsolidated ~~error~~statements orof ~~fraud~~operations, ~~and~~comprehensive ~~performing procedures~~income ~~that~~(loss), ~~respond~~stockholders’ toequity, ~~those~~and ~~risks.~~cash ~~Such~~flows ~~procedures~~for ~~included~~the ~~examining~~years then ended, onand athe ~~test~~related ~~basis,~~notes ~~evidence~~(collectively ~~regarding~~referred to as the ~~amounts~~"financial ~~and~~statements"). ~~disclosures in~~In ~~the~~our ~~consolidated~~opinion, the financial statements. ~~Our~~present ~~audit~~fairly, ~~also~~in ~~included~~all ~~evaluating~~material respects, the ~~accounting~~financial ~~principles~~position ~~used~~of ~~and~~the ~~significant~~Company ~~estimates made~~as byof ~~management~~December 31, as2025 ~~well~~and as2024, ~~evaluating~~and the ~~overall~~results ~~presentation~~ of its operations and its cash flows for the ~~consolidated~~years ~~financial~~then ~~statements.~~ended, Wein ~~believe~~conformity ~~that~~with ~~our~~accounting ~~audit provides~~principles agenerally ~~reasonable~~accepted ~~basis~~in ~~for~~the ~~our~~United ~~opinion~~States of America.

~~/s/~~Basis ~~KMJ~~for ~~Corbin & Company LLP~~Opinion

WeThese ~~served~~financial asstatements are the responsibility of the Company’'s ~~auditor~~management. ~~from 2009~~Our responsibility is to ~~2024~~express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~Glendora~~We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, ~~California~~whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

~~February~~Our 28audits included performing procedures to assess the risks of material misstatement of the financial statements, ~~2024~~whether ~~(except~~due ~~for~~to ~~Notes~~error 2or fraud, 10and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and 11disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as towell ~~which~~as evaluating the ~~date is~~overall ~~March~~presentation ~~21,~~of ~~2025)~~the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~F-3~~Critical Audit Matters

~~NEONODE INC~~Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

~~CONSOLIDATED BALANCE~~/s/ ~~SHEETS~~Crowe LLP

~~(In thousands,~~We ~~except~~have ~~share~~served ~~and~~as ~~per~~the ~~share~~Company’s ~~amounts)~~auditor since 2024.

	December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	16,427		$	16,155
Accounts receivable and unbilled revenues, net		732			652
Contract assets		51			-
Prepaid expenses and other current assets		475			891
Current assets of discontinued operations		-			922
Total current assets		17,685			18,620
Non-current assets:
Property and equipment, net		62			110
Operating lease right-of-use assets, net		634			-
Non-current assets of discontinued operations		-			284
Total non-current assets		696			394
Total assets	$	18,381		$	19,014
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	229		$	400
Accrued payroll and employee benefits		760			854
Accrued expenses		404			309
Contract liabilities		-			2
Current portion of finance lease obligations		2			8
Current portion of operating lease obligations		225			-
Current liabilities of discontinued operations		-			259
Total current liabilities		1,620			1,832
Non-current liabilities
Finance lease obligations, net of current portion		-			2
Operating lease obligations, net of current portion		319			-
Non-current liabilities of discontinued operations		-			17
Total non-current liabilities		319			19
Total liabilities		1,939			1,851
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, 1,000,000 shares authorized, with par value of $0.001; no shares issued and outstanding at December 31, 2024 and 2023, respectively		-			-
Common stock, 25,000,000 shares authorized, with par value of $0.001; 16,782,922 and 15,359,481 shares issued and outstanding at December 31, 2024 and 2023, respectively		17			15
Additional paid-in capital		240,955			235,158
Accumulated other comprehensive loss		(450	)		(396	)
Accumulated deficit		(224,080	)		(217,614	)
Total stockholders’ equity		16,442			17,163
Total liabilities and stockholders’ equity	$	18,381		$	19,014

New York, New York

~~The accompanying~~March ~~notes~~18, ~~are an integral part of these consolidated financial statements.~~2026

F-42

~~NEONODE~~ ~~INC.~~ Table of Contents

~~CONSOLIDATED STATEMENTS~~NEONODE ~~OF OPERATIONS~~INC.

~~(In thousands,~~CONSOLIDATED ~~except~~BALANCE ~~per share amounts)~~SHEETS

	Years ended December 31,
	2024			2023
Revenues:
License fees	$	2,687		$	3,803
Non-recurring engineering		421			26
Total revenues		3,108			3,829
Cost of revenues:
Non-recurring engineering		116			12
Total cost of revenues		116			12
Gross margin		2,992			3,817
Operating expenses:
Research and development		3,444			3,833
Sales and marketing		2,328			2,455
General and administrative		3,767			3,266
Total operating expenses		9,539			9,554
Operating loss		(6,547	)		(5,737	)
Other income, net		687			736
Loss before provision for income taxes		(5,860	)		(5,001	)
Provision for income taxes		15			115
Loss from continuing operations		(5,875	)		(5,116	)
Loss from discontinued operations		(591	)		(5,007	)
Net loss	$	(6,466	)	$	(10,123	)
Loss per common share:
Basic and diluted loss per share from continuing operations	$	(0.37	)	$	(0.33	)
Basic and diluted loss per share from discontinued operations		(0.04	)		(0.33	)
Basic and diluted net loss per share	$	(0.41	)	$	(0.66	)
Basic and diluted – weighted average number of common shares outstanding		15,873			15,322

(In thousands, except share and per share amounts)

The accompanying notes are an integral part of these consolidated financial statements.

	December 31, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	25,358		$	16,427
Accounts receivable and unbilled revenues, net		391			732
Contract asset		-			51
Prepaid expenses and other current assets		495			475
Current assets of discontinued operations		41			-
Total current assets		26,285			17,685

Non-current assets:
Property and equipment, net		145			62
Operating lease right-of-use assets, net		455			634
Total non-current assets		600			696
Total assets	$	26,885		$	18,381

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	464		$	229
Accrued payroll and employee benefits		865			760
Accrued expenses		459			404
Contract liabilities		37			-
Current portion of finance lease obligations		12			2
Current portion of operating lease obligations		344			225
Total current liabilities		2,181			1,620

Non-current liabilities:
Finance lease obligations, net of current portion		15			-
Operating lease obligations, net of current portion		-			319
Total non-current liabilities		15			319
Total liabilities		2,196			1,939

Commitments and contingencies (Note 8)

Stockholders’ equity:
Preferred stock, 1,000,000 shares authorized, with par value of $0.001; no shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively.		-			-
Common stock, 25,000,000 shares authorized, with par value of $0.001; 16,782,922 and 16,782,922 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively.		17			17
Additional paid-in capital		240,955			240,955
Accumulated other comprehensive loss		(696	)		(450	)
Accumulated deficit		(215,587	)		(224,080	)
Total stockholders’ equity		24,689			16,442
Total liabilities and stockholders’ equity	$	26,885		$	18,381

~~F-5~~The accompanying notes are an integral part of these consolidated financial statements.

~~NEONODE INC~~.

~~CONSOLIDATED~~ ~~STATEMENTS OF COMPREHENSIVE LOSS~~ F-3

~~(In~~ ~~thousands)~~ Table of Contents

	Years ended December 31,
	2024			2023
Net loss	$	(6,466	)	$	(10,123	)
Other comprehensive loss:
Foreign currency translation adjustments		(54	)		(56	)
Other comprehensive loss		(54	)		(56	)
Comprehensive loss	$	(6,520	)	$	(10,179	)

NEONODE INC.

~~The accompanying~~CONSOLIDATED ~~notes~~STATEMENTS ~~are~~OF ~~an integral part of these consolidated financial statements.~~OPERATIONS

~~F-6~~(In thousands, except per share amounts)

NEONODE INC.

	Years ended December 31,
	2025			2024
Revenues:
License fees	$	1,822		$	2,687
Non-recurring engineering		240			421
Total revenues		2,062			3,108

Cost of revenues:
Non-recurring engineering		26			116
Total cost of revenues		26			116
Gross margin		2,036			2,992

Operating expenses:
Research and development		3,779			3,444
Sales and marketing		2,274			2,328
General and administrative		4,123			3,767
Total operating expenses		10,176			9,539

Gain from patent assignment		19,389			-
Broker fee from patent assignment		(3,878	)		-

Operating income (loss)		7,371			(6,547	)
Other income, net		657			687
Income (loss) before provision (benefit) for income taxes		8,028			(5,860	)
Provision (benefit) for income taxes		(9	)		15
Income (loss) from continuing operations		8,037			(5,875	)
Income (loss) from discontinued operations		456			(591	)
Net income (loss)	$	8,493		$	(6,466	)

Income (loss) per common share:
Basic and diluted income (loss) per share from continuing operations	$	0.48		$	(0.37	)
Basic and diluted income (loss) per share from discontinued operations		0.03			(0.04	)
Basic and diluted net income (loss) per share	$	0.51		$	(0.41	)
Basic and diluted – weighted average number of common shares outstanding		16,783			15,873

~~CONSOLIDATED STATEMENTS~~The OFaccompanying ~~STOCKHOLDERS’~~notes ~~EQUITY~~are an integral part of these consolidated financial statements.

~~(In~~ ~~thousands)~~ F-4

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balances, January 1, 2023		14,456	$	14	$	227,235	$	(340	)	$	(207,491	)	$	19,418
Issuance of shares for cash, net of offering costs		903		1		7,865		-			-			7,866
Stock-based compensation		-		-		58		-			-			58
Foreign currency translation adjustment		-		-		-		(56	)		-			(56	)
Net loss		-		-		-		-			(10,123	)		(10,123	)
Balances, December 31, 2023		15,359	$	15	$	235,158	$	(396	)	$	(217,614	)	$	17,163
Issuance of shares for cash, net of offering costs		1,424		2		5,794		-			-			5,796
Stock-based compensation		-		-		3		-			-			3
Foreign currency translation adjustment		-		-		-		(54	)		-			(54	)
Net loss		-		-		-		-			(6,466	)		(6,466	)
Balances, December 31, 2024		16,783	$	17	$	240,955	$	(450	)	$	(224,080	)	$	16,442

Table of Contents

~~The accompanying~~NEONODE ~~notes are an integral part of these consolidated financial statements~~INC.

~~F-7~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

~~NEONODE INC.~~(In thousands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
	2025			2024
Net income (loss)	$	8,493		$	(6,466	)

Other comprehensive loss:
Foreign currency translation adjustments		(246	)		(54	)
Total other comprehensive loss		(246	)		(54	)
Comprehensive income (loss)	$	8,247		$	(6,520	)

~~(In thousands)~~The accompanying notes are an integral part of these consolidated financial statements.

	Years ended December 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(6,466	)	$	(10,123	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		3			58
Bad debt expense		172			-
Loss on disposal of assets		18			-
Depreciation and amortization		58			95
Amortization of operating lease right-of-use assets		79			65
Inventory impairment loss		357			3,572
Changes in operating assets and liabilities:
Accounts receivable, unbilled revenue and contract assets		(51	)		539
Inventory		223			(395	)
Prepaid expenses and other current assets		382			(201	)
Accounts payable, accrued payroll and employee benefits, and accrued expenses		(213	)		173
Contract liabilities		(10	)		(26	)
Operating lease obligations		(144	)		(65	)
Net cash used in operating activities		(5,592	)		(6,308	)
Cash flows from investing activities:
Purchase of property and equipment		(37	)		(123	)
Proceeds from sale of property and equipment		189			-
Net cash provided by (used in) investing activities		152			(123	)
Cash flow from financing activities:
Proceeds from issuance of common stock, net of offering costs		5,796			7,866
Principal payments on finance lease obligations		(17	)		(89	)
Net cash provided by financing activities		5,779			7,777
Effect of exchange rate changes on cash and cash equivalents		(67	)		(7	)
Net increase in cash and cash equivalents		272			1,339
Cash and cash equivalents at beginning of year		16,155			14,816
Cash and cash equivalents at end of year	$	16,427		$	16,155
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1		$	9
Cash paid for income taxes	$	15		$	115
Supplemental disclosure of non-cash investing and financial activities:
Right-of-use asset obtained in exchange for operating lease obligations	$	668		$	-

F-5

~~The~~ ~~accompanying~~ Table ~~notes are an integral part~~ of ~~these consolidated financial statements.~~Contents

~~F-8~~NEONODE INC.

~~NEONODE INC.~~ CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

~~Notes to~~(In ~~the Consolidated Financial Statements~~thousands)

1. Organization and Summary of Significant Accounting Policies

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders' Equity
Balances, January 1, 2024		15,359	$	15	$	235,158	$	(396	)	$	(217,614	)	$	17,163
Issuance of shares for cash, net of offering costs		1,424		2		5,794		-			-			5,796
Stock-based compensation		-		-		3		-			-			3
Foreign currency translation adjustment		-		-		-		(54	)		-			(54	)
Net loss		-		-		-		-			(6,466	)		(6,466	)
Balances, December 31, 2024		16,783	$	17	$	240,955	$	(450	)	$	(224,080	)	$	16,442
Foreign currency translation adjustment		-		-		-		(246	)		-			(246	)
Net income		-		-		-		-			8,493			8,493
Balances, December 31, 2025		16,783	$	17	$	240,955	$	(696	)	$	(215,587	)	$	24,689

~~Basis~~ The accompanying notes are an integral part of ~~Presentation~~these ~~and~~consolidated ~~Preparation~~financial statements.

~~The~~ consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Neonode Inc. and its wholly owned subsidiaries. All inter F-~~company accounts~~6 ~~and transactions have been eliminated in consolidation.~~

~~Use~~ Table of ~~Estimates~~Contents

~~The preparation~~NEONODE ~~of financial statements in conformity with U~~INC.S. GAAP requires making estimates and judgments that affect, at the date of the financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Significant estimates and judgments include, but are not limited to: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, the standalone selling price of performance obligations, and transaction prices and assessing transfer of control; provisions for uncollectible receivables; for leases, determining whether a contract contains a lease, allocating consideration between lease and non-lease components, determining incremental borrowing rates, and identifying reassessment events, such as modifications; the valuation allowance related to our deferred tax assets; and the fair value of options issued for stock-based compensation. Actual results could differ from these estimates and judgments.

~~Recently Issued~~CONSOLIDATED ~~Accounting~~STATEMENTS ~~Pronouncement~~OF ~~Adopted~~CASH FLOWS

(In ~~November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280~~thousands): 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. We adopted ASU 2023-07 for the annual period ended December 31, 2024 using a retrospective method to all periods presented. See Note 12 Segment Information in the accompanying notes to the consolidated financial statements for further detail.

Recently Issued Accounting Pronouncements Pending Adoption

	Years ended December 31,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	8,493		$	(6,466	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		-			3
Bad debt expense		-			172
Recoveries of bad debt		(140	)		-
Gain from patent assignment		(19,389	)		-
Loss on disposal of assets		2			18
Depreciation and amortization		50			58
Amortization of operating lease right-of-use assets		286			79
Inventory impairment loss		-			357
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenues		494			(51	)
Inventory		-			223
Prepaid expenses and other current assets		44			382
Accounts payable, accrued payroll and employee benefits, and accrued expenses		157			(213	)
Contract liabilities		37			(10	)
Operating lease obligations		(288	)		(144	)
Net cash used in operating activities		(10,254	)		(5,592	)

Cash flows from investing activities:
Purchase of property and equipment		(91	)		(37	)
Proceeds from patent assignment		19,389			-
Proceeds from sale of property and equipment		-			189
Net cash provided by investing activities		19,298			152

Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		-			5,796
Principal payments on finance lease obligations		(11	)		(17	)
Net cash provided by (used in) financing activities		(11	)		5,779

Effect of exchange rate changes on cash and cash equivalents		(102	)		(67	)

Net change in cash and cash equivalents		8,931			272
Cash and cash equivalents at beginning of period		16,427			16,155
Cash and cash equivalents at end of period	$	25,358		$	16,427


Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	1
Cash paid (received) for income taxes	$	(9	)	$	15

Supplemental disclosure of non-cash activities:
Property and equipment obtained in exchange for finance lease obligations	$	35		$	-
Right-of-use asset obtained in exchange for lease obligations	$	-		$	668

InThe ~~December~~accompanying ~~2023,~~notes 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~~an ~~evaluating~~integral ~~the~~part ~~impact~~of ~~ASU~~these ~~2023-09 will have on our~~ consolidated financial statements.

~~In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting~~ ~~Comprehensive Income~~ F-~~Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring~~7 public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2024-03.

~~Foreign Currency Translation and Transaction~~ ~~Gains~~ Table ~~and~~of ~~Losses~~Contents

~~The~~NEONODE ~~functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won~~INC. The translation from Swedish Krona, Japanese Yen or South Korean Won to U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the 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 $(54,000) and $(56,000) during the years ended December 31, 2024 and 2023, respectively. Gains or (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying consolidated statements of operations and were $(1,000) and $(5,000) during the years ended December 31, 2024 and 2023, respectively.

~~Liquidity~~Notes to the Consolidated Financial Statements

We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net losses for combined continuing and discontinued operations of approximately $6.5 million and $10.1 ~~million for the years ended December 31, 2024 and 2023, respectively, and had an accumulated deficit of approximately $224~~.1 ~~million~~Organization and ~~$217.6~~Summary ~~million as~~ of ~~December~~Significant ~~31,~~Accounting ~~2024 and 2023, respectively. In addition, operating activities used cash of approximately $5.6 million and $6.3 million for the years ended December 31, 2024 and 2023, respectively.~~Policies

~~The~~Basis ~~consolidated financial statements have been prepared on a going concern basis, which contemplates continuity~~ of ~~operations~~Presentation and ~~the realization of assets and the repayment of liabilities in the ordinary course of business.~~Preparation

FThe consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Neonode Inc. and its wholly owned subsidiaries. All inter-9company accounts and transactions have been eliminated in consolidation.

~~Management has~~Use prepared an operating plan and believes that the Company has sufficient cash to meet its obligations as they come due for a year from the date the consolidated financial statements were issued. During the year ended December 31, 2024, we sold an aggregate of ~~1,423,441 shares of our common stock under the 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.~~Estimates

~~Accounts Receivable~~The preparation of financial statements in conformity with U.S. GAAP requires making estimates and ~~Credit~~judgments ~~Losses~~ that affect, at the date of the financial statements, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Significant estimates and judgments include, but are not limited to: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, the standalone selling price of performance obligations, and transaction prices and assessing transfer of control; provisions for uncollectible receivables; for leases, determining whether a contract contains a lease, allocating consideration between lease and non-lease components, determining incremental borrowing rates, and identifying reassessment events, such as modifications; the valuation allowance related to our deferred tax assets; and the fair value of options issued for stock-based compensation. Actual results could differ from these estimates and judgments.

~~Accounts receivable~~Recently isIssued ~~stated~~Accounting atPronouncement net realizable value. We estimate and record a provision for expected credit losses related to our financial instruments, including our trade receivables. We consider historical collection rates, the current financial status of our customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses.Adopted

~~Further~~In December 2023, we ~~consider~~the ~~macroeconomic~~Financial ~~factors~~Accounting ~~and~~Standards ~~the~~Board ("FASB") ~~status~~issued ofASU ~~the~~2023-09, ~~technology~~Income ~~industry~~Taxes (Topic 740): Improvements to ~~estimate~~Income ifTax ~~there~~Disclosures (“ASU ~~are~~2023-09”), ~~current~~which ~~expected~~updates ~~credit~~several ~~losses~~disclosures ~~within our~~regarding ~~trade~~the ~~receivables~~accounting ~~based~~for onincome ~~the~~taxes. ~~trends~~ASU ~~and~~2023-09 ~~our~~is ~~expectation~~effective offor ~~the~~public ~~future~~business ~~status~~entities offor ~~such~~fiscal ~~economic~~years ~~and~~beginning ~~industry-specific~~after December ~~factors~~15, 2024, with early adoption permitted. ~~Also~~We have adopted ASU 2023-09 for the fiscal year ended December 31, ~~specific~~ ~~allowance~~2025, ~~amounts~~using ~~are~~a ~~established~~prospective ~~based~~approach. onPrior ~~review~~period ofdisclosures ~~outstanding~~have ~~invoices~~not been adjusted to ~~record~~reflect the ~~appropriate~~new ~~provision~~disclosure ~~for~~requirements. ~~customers that~~The adoption did not have a ~~higher~~material ~~probability~~impact ofon ~~default~~our consolidated financial statements. See Note 11 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

~~The accounts~~Recently ~~receivable~~Issued ~~balance~~Accounting onPronouncements ~~our~~Pending consolidated balance sheet as of December 31, 2024 was $0.8 million, and did not include any allowances. The accounts receivable balance on our consolidated balance sheet as of December 31, 2023 was $0.7 million, and did not include any allowances.Adoption

~~Concentration of~~In December ~~Credit~~2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12"). ASU 2025-12 makes incremental improvements to the Accounting Standards Codification and ~~Business~~U.S. ~~Risks~~GAAP. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

~~Our customers~~In December ~~are~~2025, ~~primarily~~the ~~located~~FASB inissued ~~North~~ASU ~~America~~2025-11, ~~Europe~~Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). The amendments clarify and ~~Asia~~reorganize existing interim reporting guidance, including the scope of Topic 270 and interim disclosure requirements, and introduce a disclosure principle requiring entities to disclose material events or changes occurring since the most recent annual reporting period. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

~~As of~~In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which aims to modernize financial reporting by updating how entities recognize and disclose costs incurred for software developed for internal use. ASU 2025-06 is effective for fiscal years beginning after December 3115, ~~2024~~2027, ~~four~~including ofinterim ~~our~~periods ~~customers~~within ~~represented~~those ~~approximately~~fiscal 80years.9% Early adoption is permitted. We are currently evaluating the impact of ~~our~~the ~~consolidated~~adoption ~~accounts~~of ~~receivable~~this ~~and~~ASU ~~unbilled~~on ~~revenues~~our consolidated financial statements.

As In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which amends ASC 326-20 to provide a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 3115, ~~2023~~2025 and interim periods within those fiscal years, ~~three~~with ofearly ~~our~~adoption ~~customers~~permitted, ~~represented~~and ~~approximately~~should 77be applied on a prospective basis.8% We are currently evaluating the impact of ~~our~~the ~~consolidated~~adoption ~~accounts~~of ~~receivable~~this ~~and~~ASU ~~unbilled~~on ~~revenues~~our consolidated financial statements.

~~Customers who~~In November ~~accounted~~2024, ~~for~~the ~~10%~~FASB orissued ~~more~~ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of ~~our~~Income ~~revenues~~Statement ~~during~~Expenses, requiring public entities to disclose additional information about specific expense categories in the ~~year~~notes ~~ended~~to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 3115, ~~2024~~2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are ascurrently ~~follows~~evaluating the impact of adopting ASU 2024-03.

●Foreign ~~Seiko~~Currency ~~Epson~~Translation –and ~~27.3%~~Transaction ●Gains ~~Alpine~~and ~~Electronics – 20.7% ● Hewlett-Packard Company – 20.4% ● Commercial Vehicle OEM – 11.8%~~Losses

~~Customers who~~The ~~accounted~~functional currency of our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen and the South Korean Won. The translation from Swedish Krona, Japanese Yen or South Korean Won to U.S. Dollars is performed for ~~10%~~balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using a weighted-average exchange rate during the period. Gains or ~~more~~(losses) resulting from translation are included as a separate component of ~~our~~accumulated ~~revenues~~other comprehensive income (loss). Foreign currency translation gains (losses) were $(246,000) and $(54,000) during the ~~year~~years ended December 31, ~~2023~~2025 and 2024, respectively. Gains or (losses) resulting from foreign currency transactions are asincluded ~~follows~~in general and administrative expenses in the accompanying consolidated statements of operations and were $67,000 and $(1,000) during the years ended December 31, 2025 and 2024, respectively.

~~● Hewlett-Packard Company – 33.3% ● Seiko Epson – 20.2% ● Alpine Electronics – 18.2% ● LG Electronics – 13.1%~~Liquidity

F-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 $8.5 million for the year ended December 31, 2025 and net loss of approximately $6.5 million for the year ended December 31, 2024, and had an accumulated deficit of approximately $215.6 million and $224.1 million as of December 31, 2025 and 2024, respectively. In addition, operating activities used cash of approximately $10.3 million and $5.6 million for the years ended December 31, 2025 and 2024, respectively.

~~Cash~~ The consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations and ~~Cash~~the ~~Equivalents~~realization of assets and the repayment of liabilities in the ordinary course of business.

~~The~~ ~~Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.~~ F- 8

~~Property~~ ~~and~~ Table ~~Equipment~~of Contents

~~Property and~~Management ~~equipment~~has ~~are~~prepared ~~stated~~an atoperating ~~cost~~plan ~~less~~and ~~accumulated~~believes ~~depreciation~~that ~~and~~the ~~include~~Company ~~estimated~~has ~~useful~~sufficient ~~lives.~~cash ~~Depreciation~~to onmeet ~~property,~~its ~~plant~~obligations ~~and equipment~~as isthey ~~recognized~~come ondue for a ~~straight-line~~year ~~basis~~from the date the consolidated financial statements were issued.

~~Research~~ Accounts Receivable and ~~Development~~Credit Losses

~~Research and~~Accounts ~~development~~receivable ~~(“R&D”)~~is ~~costs~~stated ~~are~~at ~~expensed~~net asrealizable ~~incurred~~value. ~~R&D~~We ~~costs~~estimate ~~consist~~and ~~primarily~~record ofa ~~personnel~~provision ~~related~~for ~~costs~~expected ~~in addition~~credit losses related to ~~external~~our ~~consultancy~~financial ~~costs~~instruments, ~~such~~including asour ~~testing~~trade receivables. We consider historical collection rates, ~~certifying~~the current financial status of our customers, macroeconomic factors, and ~~measurements~~other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses.

~~Stock~~Further, we consider macroeconomic factors and the status of the technology industry to estimate if there are current expected credit losses within our trade receivables based on the trends and our expectation of the future status of such economic and industry-~~Based Compensation~~specific ~~Expense~~factors. Also, specific allowance amounts are established based on review of outstanding invoices to record the appropriate provision for customers that have a higher probability of default.

~~We measure~~The ~~the~~accounts ~~cost~~receivable ofbalance ~~employee~~on ~~services~~our ~~received~~consolidated inbalance ~~exchange~~sheet ~~for~~as ~~an award~~ of December ~~equity instruments~~31, ~~including~~2025 ~~share~~was ~~options~~$0.4 million, ~~based~~and ondid ~~the estimated~~not ~~fair~~include ~~value~~any ofallowances. ~~the~~The ~~award~~accounts onreceivable ~~the~~balance ~~grant~~on ~~date,~~our ~~and~~consolidated ~~recognize~~balance ~~the~~sheet ~~value~~ as ~~compensation~~of December ~~expense~~31, ~~over~~2024 ~~the~~was ~~period~~$0.7 ~~the~~million, ~~employee~~and ~~is required~~did tonot ~~provide~~include ~~services~~any ~~in exchange for the award, usually the vesting period~~allowances.

~~We account~~Concentration ~~for~~of ~~equity~~Credit ~~instruments~~and ~~issued~~Business ~~to non-employees at their estimated fair value.~~Risks

~~When determining~~Our ~~stock-based~~customers ~~compensation~~are ~~expense~~primarily ~~involving~~located ~~options~~in ~~and~~North ~~warrants~~America, weEurope ~~determine the estimated fair value of options~~ and ~~warrants using the Black-Scholes option pricing model~~Asia.

~~Income Taxes~~As of December 31, 2025, four of our customers represented approximately 95.4% of our consolidated accounts receivable and unbilled revenues.

~~We recognize~~As ~~deferred tax liabilities and assets for the expected future tax consequences~~ of December ~~items~~31, ~~that~~2024, ~~have been included in the consolidated financial statements or tax returns. We estimate income taxes based on rates in effect in each~~ four of ~~the~~our ~~jurisdictions~~customers inrepresented ~~which~~approximately ~~we operate~~80. ~~Deferred income tax assets and liabilities are determined based upon differences between the financial statement and income tax bases~~ 9% of ~~assets~~our ~~and~~consolidated ~~liabilities~~accounts ~~using~~receivable ~~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~~unbilled ~~about future taxable income~~revenues. ~~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~~Customers ~~the~~who ~~uncertainty~~accounted offor ~~future~~10% ~~pre-tax~~or ~~income,~~more weof ~~fully reserved~~ our ~~net~~revenues ~~deferred~~during ~~tax~~the ~~assets~~year ~~as of~~ ended December 31, ~~2024~~2025 ~~and~~are ~~2023.~~as 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 madefollows. ~~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.~~Seiko ~~GAAP~~Epson ~~related~~– to34.3% ~~accounting~~● ~~for~~Alps ~~uncertainty~~Alpine in– ~~income taxes, which prescribes a model for the recognition, measurement and presentation of uncertainty in income taxes~~19.4% As● aHewlett-Packard ~~result,~~– ~~we did not recognize a liability for unrecognized tax benefits~~19.0% As● ~~of December 31,~~Commercial ~~2024~~Vehicle ~~and~~OEM ~~2023,~~– ~~we had no unrecognized tax benefits~~14.6%

~~F-11~~Customers who accounted for 10% or more of our revenues during the year ended December 31, 2024 are as follows.

~~Fair Value~~● ofSeiko ~~Financial~~Epson ~~Instruments~~– 27.3% ● Alps Alpine – 20.7% ● Hewlett-Packard – 20.4% ● Commercial Vehicle OEM – 11.8%

~~We disclose the estimated~~F- ~~fair values for all financial instruments for which it is practicable to estimate fair value. The carrying value of financial instruments~~ 9 ~~including cash and cash equivalents, accounts receivable and accounts payable are deemed to approximate fair value due to their short maturities.~~

~~Accounting guidance defines~~ ~~fair~~ Table ~~value,~~of ~~establishes a framework for measuring fair value, and requires disclosures about fair value measurements.~~Contents

~~The three~~Cash ~~levels~~and ofCash ~~the fair value hierarchy are described as follows:~~Equivalents

~~Level 1:~~The ~~Applies~~Company toconsiders ~~assets~~all orhighly ~~liabilities~~liquid ~~for~~investments ~~which~~with ~~there~~original ~~are~~maturities ~~observable~~of ~~quoted~~three ~~prices~~months inor ~~active~~less ~~markets~~to ~~for~~be ~~identical~~cash ~~assets and liabilities~~equivalents.

~~Level~~Property 2:and ~~Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are directly or indirectly observable.~~Equipment

~~Level 3:~~Property ~~Applies~~and toequipment ~~assets or liabilities for which inputs~~ are ~~unobservable,~~stated ~~and~~at ~~those~~cost ~~inputs~~less ~~that~~accumulated ~~are~~depreciation. ~~significant~~Depreciation toon ~~the~~property ~~measurement~~and ofequipment ~~the fair~~is ~~value~~recognized ofon ~~the~~a ~~assets~~straight-line ~~or liabilities~~basis.

~~There were~~Research ~~no assets or liabilities recorded at fair value on a recurring basis in 2024~~ and ~~2023.~~Development

~~Revenue~~Research and development (“R&D”) costs are expensed as incurred. R&D costs consist primarily of personnel related costs in addition to external consultancy costs such as testing, certifying and measurements.

~~We earn~~Income revenues from licensing of our intellectual property, licensing of our software and by performing engineering services. The timing of revenue recognition and the amount of revenue actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of our performance obligations.Taxes

~~License Fees~~We recognize deferred tax liabilities and assets for the expected future tax consequences of items that have been included in the 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.

~~We earn~~Based ~~revenue~~on ~~from~~the ~~licensing~~uncertainty ~~our~~of ~~internally~~future ~~developed~~pre-tax ~~intellectual~~income, ~~property~~we ~~(“IP”)~~fully ~~and~~reserved ~~licensing of~~ our ~~internally~~net ~~developed software.~~deferred Wetax ~~enter~~assets ~~into~~as IPof December ~~licensing~~31, ~~agreements~~2025 ~~that~~and ~~generally~~2024. ~~provide~~In ~~licensees~~ the ~~right~~event towe ~~incorporate~~were ~~our~~to IPdetermine ~~components~~that inwe ~~their products,~~would ~~with~~be ~~terms~~able ~~and~~to ~~conditions~~realize ~~that~~our ~~vary~~deferred bytax ~~licensee.~~assets ~~Fees~~in ~~under~~the ~~these~~future, ~~agreements~~an ~~may~~adjustment ~~include~~to ~~technology~~the ~~access~~deferred ~~fees~~tax ~~payable~~asset ~~upfront and~~would ~~royalties~~increase ~~payable~~income toin ~~us following~~ the ~~distribution~~period bysuch ~~our~~determination ~~licensees~~was ofmade. ~~products~~The ~~incorporating~~provision ~~the~~(benefit) ~~licensed~~for ~~technology.~~income ~~The~~taxes ~~license for~~represents ~~our~~the IPnet ~~has~~change ~~standalone~~in ~~value~~deferred ~~and~~tax ~~can~~amounts, beplus ~~used~~income bytaxes ~~the~~paid ~~licensee~~or ~~without~~payable ~~maintenance~~for ~~and~~the ~~support~~current period.

~~For~~We ~~technology~~follow ~~license~~U.S. ~~arrangements~~GAAP ~~that~~related doto ~~not~~accounting ~~require~~for ~~significant modification~~uncertainty orin ~~customization~~income ~~of the underlying technology~~taxes, wewhich ~~recognize~~prescribes ~~technology~~a ~~license~~model ~~revenue~~for ~~when~~ the ~~license~~recognition, ismeasurement ~~made~~and ~~available to~~presentation ~~the~~of ~~customer~~uncertainty ~~and~~in ~~the~~income ~~customer~~taxes. ~~has~~As a ~~right~~result, towe ~~use~~did ~~that~~not ~~license. We~~ recognize ~~royalties~~a ~~following~~liability ~~the~~for ~~distribution~~unrecognized bytax ~~our licensees of products incorporating the licensed technology~~benefits. AtAs ~~the end~~ of December ~~each reporting period~~31, we2025 ~~record~~and ~~unbilled license fees~~2024, ~~using~~we ~~prior~~had ~~royalty revenue~~no ~~data~~unrecognized bytax ~~customer to make estimates of those royalties~~benefits.

We also earn license fee revenue by providing our customers with development licenses for our software tools related to the MultiSensing platform. We recognize revenue ratably over the contract term beginning on the commencement date of each contract, which is the date we make the software available to our customers. Our development license contracts with customers typically include a fixed amount of consideration and are generally non F-~~cancellable and without any refund-type provisions. We typically~~ ~~invoice our customers annually in advance for our development licenses upon execution of the initial contract or subsequent~~ 10 ~~renewal.~~

~~F-12~~ Table of Contents

~~Non-Recurring Engineering~~Fair Value of Financial Instruments

For technology license that require modification or customization of the underlying technology to adapt the technology to customer use, we determine whether the technology license, and required engineering consulting services represent separate performance obligations. We ~~perform~~disclose ~~our analysis on a contract-by-contract basis. If there are separate performance obligations, we determine~~ the ~~standalone~~estimated ~~selling~~fair ~~price~~values (“SSP”) of each separate performance obligation to properly recognize revenue as each performance obligation is satisfied. We provide engineering consulting services to our customers under a signed Statement of Work (“SOW”). Deliverables and payment terms are specified in each SOW. We charge an hourly rate or a fixed fee for ~~engineering~~all ~~services.~~financial Weinstruments ~~recognize revenues~~ for ~~hourly~~which ~~rate~~it ~~services~~is aspracticable ~~engineering services specified in contracts are completed and accepted by our customers. Revenues for fixed price services are generally recognized over time applying input methods~~ to estimate ~~progress~~fair ~~to completion~~value. WeThe ~~believe~~carrying ~~that~~value ~~recognizing~~of ~~non-recurring~~financial ~~engineering~~instruments ~~services~~including ~~revenues as~~cash ~~progress towards completion of engineering services~~ and ~~customer~~cash ~~acceptance of those services occurs best reflects the economics of those transactions~~equivalents, ~~because~~accounts ~~engineering~~receivable ~~services~~and asaccounts ~~tracked~~payable inare ~~our~~deemed ~~systems~~to ~~correspond~~approximate ~~directly~~fair ~~with the~~ value todue ~~our customers of our performance completed~~ to ~~date.~~their ~~Hours~~short ~~performed for each engineering project are tracked and reflect progress made on each project and are charged at a consistent hourly rate~~maturities. ~~Any upfront payments we receive for future non-recurring engineering services are recorded as unearned revenue until that revenue is earned.~~

~~Revenues from~~Accounting ~~non-recurring~~guidance ~~engineering~~defines ~~contracts~~fair ~~that~~value, ~~are~~establishes ~~short-term~~a inframework ~~nature~~for ~~are~~measuring ~~recorded~~fair ~~when~~value, ~~those~~and ~~services~~requires ~~are~~disclosures ~~complete~~about ~~and~~fair ~~accepted~~value ~~by customers~~measurements.

The ~~following~~ ~~tables~~three ~~present~~levels of the ~~net~~fair ~~revenues~~value ~~distribution~~hierarchy byare ~~geographical~~described ~~area~~as ~~and market~~follows:

	Years ended December 31,
	2024					2023
(in thousands)	Amount		Percentage			Amount		Percentage
North America
Net revenues from Automotive	$	-		-	%	$	-		-	%
Net revenues from IT & Industrial		763		100.0	%		1,455		100.0	%
	$	763		100.0	%	$	1,455		100.0	%
Asia Pacific
Net revenues from Automotive	$	732		39.4	%	$	1,199		60.1	%
Net revenues from IT & Industrial		1,127		60.6	%		796		39.9	%
	$	1,859		100.0	%	$	1,995		100.0	%
Europe, Middle East and Africa
Net revenues from Automotive	$	486		100.0	%	$	379		100.0	%
Net revenues from IT & Industrial		-		-	%		-		-	%
	$	486		100.0	%	$	379		100.0	%

Level 1: Applies to assets or liabilities for which there are observable quoted prices in active markets for identical assets and liabilities.

~~Contract Balances~~Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are directly or indirectly observable.

~~Timing~~Level of3: ~~revenue~~Applies ~~recognition may differ from the timing of invoicing and receipt of consideration. We record a receivable or unbilled revenue when we have an unconditional right~~ to ~~receive consideration from customers. Contract~~ assets ~~represent~~or ~~revenue~~liabilities ~~recognized~~ for ~~performance~~which toinputs ~~date~~are ~~when~~unobservable, ~~the~~and ~~right~~those toinputs ~~consideration~~that isare ~~conditional~~significant ~~on something~~to ~~other than~~ the ~~passage~~measurement of ~~time.~~the Wefair ~~record~~value ~~contract~~of ~~liabilities~~the ~~when~~assets ~~we receive prepayments~~ or ~~upfront payments ahead of performance~~liabilities.

~~F-13~~There were no assets or liabilities recorded at fair value on a recurring basis for the years ended December 31, 2025 and 2024.

~~The following table presents our accounts receivable, net, contract assets, and contract liabilities:~~Revenue

	December 31,
(in thousands)	2024		2023		2022
Accounts receivable and unbilled revenues	$	732	$	652	$	1,119
Contract assets		51		-		-
Contract liabilities (deferred revenues)		-		2		28

We earn revenues from licensing of our intellectual property, licensing of our software and by performing engineering services. The timing of revenue recognition and the amount of revenue actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of our performance obligations.

~~Payment~~License terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees. Where revenue recognition timing differs from invoice timing, we have determined that our contracts do not include a significant financing component. Applying the practical expedient in Topic 606, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. Our intent is to provide our customers with consistent invoicing terms for the convenience of our customers, not to provide financing to our customers.Fees

~~Contract Liabilities~~We earn revenue from licensing our internally developed intellectual property (“IP”) and licensing of our internally developed software. We enter into IP licensing agreements that generally provide licensees with the right to incorporate our IP components in their products, with terms and conditions that vary by licensee. Fees under these agreements may include technology access fees payable upfront and royalties payable to us following the distribution by our licensees of products incorporating the licensed technology. The license for our IP has standalone value and can be used by the licensee without maintenance and support.

~~Contract liabilities~~For ~~(deferred~~technology ~~revenues)~~license ~~consist~~arrangements ~~primarily~~that do not require significant modification or customization of ~~prepayments~~the ~~for~~underlying technology, we recognize technology license ~~fees~~revenue when the license is made available to the customer, and ~~other~~the ~~services~~customer ~~that~~has wea ~~have~~right ~~been~~to ~~paid~~use inthat ~~advance~~license. We ~~earn~~recognize ~~the~~royalties ~~revenue~~following ~~when~~the wedistribution ~~transfer~~by ~~control~~our licensees of products incorporating the ~~service~~licensed technology. ~~Deferred~~At ~~revenues~~the ~~may~~end ~~also~~of ~~include~~each ~~upfront~~reporting ~~payments~~period, ~~for~~we ~~consulting~~record ~~services to~~unbilled belicense ~~performed~~fees, inusing ~~the~~prior ~~future,~~royalty ~~such~~revenue asdata ~~non-recurring~~by ~~engineering~~customer ~~services~~to make estimates of those royalties.

~~The following~~We ~~table~~also ~~presents~~earn ~~our~~license ~~deferred~~fee ~~revenues~~revenue by ~~source:~~providing our customers with development licenses for our software tools related to the MultiSensing platform. We recognize revenue ratably over the contract term beginning on the commencement date of each contract, which is the date we make the software available to our customers. Our development license contracts with customers typically include a fixed amount of consideration and are generally non-cancellable and without any refund-type provisions. We typically invoice our customers annually in advance for our development licenses upon execution of the initial contract or subsequent renewal.

	December 31,
(in thousands)	2024		2023		2022
Deferred revenues license fees	$	-	$	2	$	20
Deferred revenues non-recurring engineering		-		-		8
	$	-	$	2	$	28

F- 11

~~Deferred~~ ~~revenue~~ Table ~~were zero as~~ of ~~December 31, 2024. The Company recognized revenues of approximately $2,000 and $25,000, for 2024 and 2023, respectively,~~Contents ~~related to contract liabilities outstanding at the beginning of the year.~~

~~Costs~~Non-Recurring ~~to Obtain Contracts~~Engineering

WeFor ~~record~~technology ~~the~~license ~~incremental costs~~that require modification or customization of ~~obtaining~~the aunderlying ~~contract~~technology ~~with~~to aadapt the technology to customer asuse, we determine whether the technology license and required engineering consulting services represent separate performance obligations. We perform our analysis on a contract-by-contract ~~asset~~basis. ifIf there are separate performance obligations, we ~~expect~~determine the ~~benefit~~standalone selling price (“SSP”) of ~~those~~each ~~costs~~separate performance obligation to ~~cover~~properly recognize revenue as each performance obligation is satisfied. We provide engineering consulting services to our customers under a ~~period~~signed ~~greater~~Statement ~~than one~~of ~~year~~Work (“SOW”). Deliverables and payment terms are specified in each SOW. We ~~currently~~charge ~~have~~an nohourly ~~incremental~~rate ~~costs~~or a fixed fee for engineering services. We recognize revenues for hourly rate services as engineering services specified in contracts are completed and accepted by our customers. Revenues for fixed price services are generally recognized over time applying input methods to estimate progress to completion. We believe that ~~must~~recognizing benon-recurring ~~capitalized~~engineering services revenues as progress towards completion of engineering services and customer acceptance of those services occurs best reflects the economics of those transactions, because engineering services as tracked in our systems correspond directly with the value to our customers of our performance completed to date. Hours performed for each engineering project are tracked and reflect progress made on each project and are charged at a consistent hourly rate. Any upfront payments we receive for future non-recurring engineering services are recorded as unearned revenue until that revenue is earned.

WeRevenues ~~expense~~from asnon-recurring ~~incurred~~engineering ~~costs of~~contracts ~~obtaining~~that aare ~~contract~~short-term ~~when~~in ~~the~~nature ~~amortization~~are ~~period~~recorded ofwhen those ~~costs~~services ~~would~~are ~~have~~complete ~~been~~and ~~less~~accepted ~~than~~by ~~or equal to one year~~customers.

2.The ~~Discontinued~~following ~~Operations~~tables present the net revenues distribution by geographical area and market (in thousands, except percentages):

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.

	Years ended December 31,
	2025					2024
	Amount		Percentage			Amount		Percentage
North America:
Net revenues from IT & Industrial	$	425		100.0	%	$	763		100.0	%
	$	425		100.0	%	$	763		100.0	%

Asia Pacific:
Net revenues from Automotive	$	394		30.4	%	$	732		39.4	%
Net revenues from IT & Industrial		900		69.6	%		1,127		60.6	%
	$	1,294		100.0	%	$	1,859		100.0	%

Europe, Middle East and Africa:
Net revenues from Automotive	$	343		100.0	%	$	486		100.0	%
	$	343		100.0	%	$	486		100.0	%

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

~~F-14~~Timing of revenue recognition may differ from the timing of invoice and receipt of consideration. We record a receivable or unbilled revenue when we have an unconditional right to receive consideration from customers. Contract assets represent revenue recognized for performance to date when the right to consideration is conditional on something other than the passage of time. We record contract liabilities when we receive prepayments or upfront payments ahead of performance.

~~Assets~~ ~~and Liabilities of Discontinued Operations~~ F- 12

~~Assets~~ ~~and~~ Table ~~liabilities~~ of ~~discontinued operations are presented separately in the condensed consolidated balance sheets for all periods presented.~~Contents ~~On December 31, 2024 and December 31, 2023, these balances consisted of assets and liabilities of the Company’s Products business.~~

The following table presents aour ~~reconciliation~~accounts ofreceivable, ~~the~~net, ~~carrying~~contract ~~amounts of the major classes of these~~ assets, and ~~liabilities~~contract ~~to the assets and~~ liabilities of(in ~~discontinued operations as presented on the Company’s consolidated balance sheets~~thousands):

	December 31,
(in thousands)	2024		2023
	2025		2024		2023
ASSETS OF DISCONTINUED OPERATIONS
Accounts receivable and unbilled revenues, net	$	391	$	732	$	652
Current assets of discontinued operations:
Contract assets		-		51		-
Accounts receivable and unbilled revenues, net	$	-	$	265
Contract liabilities (deferred revenues)		37		-		2
Inventory		-		610
Prepaid expenses and other current assets		-		47
Total current assets of discontinued operations		-		922
Non-current assets of discontinued operations:
Property and equipment, net		-		230
Operating lease right-of-use assets, net		-		54
Total non-current assets of discontinued operations		-		284
Total assets of discontinued operations	$	-	$	1,206
LIABILITIES OF DISCONTINUED OPERATIONS
Current liabilities of discontinued operations:
Accounts payable	$	-	$	40
Accrued payroll and employee benefits		-		87
Accrued expenses		-		45
Contract liabilities		-		8
Current portion of finance lease obligations		-		25
Current portion of operating lease obligations		-		54
Total current liabilities of discontinued operations		-		259
Non-current liabilities of discontinued operations:
Finance lease obligations, net of current portion		-		17
Total non-current liabilities of discontinued operations		-		17
Total liabilities of discontinued operations	$	-	$	276

~~Loss~~ Payment terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees. Where revenue recognition timing differs from ~~Discontinued~~invoice ~~Operations~~timing, we have determined that our contracts do not include a significant financing component. Applying the practical expedient in Topic 606, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. Our intent is to provide our customers with consistent invoicing terms for the convenience of our customers, not to provide financing to our customers.

~~Discontinued operations~~Contract ~~for the years ended December 31, 2024 and 2023, respectively, consists of results from the Company’s products business.~~Liabilities

FContract liabilities (deferred revenues) consist primarily of prepayments for license fees, and other services that we have been paid in advance. We earn the revenue when we transfer control of the service. Deferred revenues may also include upfront payments for consulting services to be performed in the future, such as non-15recurring engineering services.

The following table ~~provides details~~presents ~~about~~our ~~the~~deferred ~~major~~revenues ~~classes~~by ~~of line items constituting “Loss from discontinued operations” as presented on the Company’s condensed consolidated statements of operations~~source:

	Years ended December 31,
	December 31,
(in thousands)	2024			2023
	2025			2024			2023
Revenues:
Deferred revenues license fees	$	-		$	-		$	2
Products	$	1,171		$	620
Deferred revenues non-recurring engineering		37			-			-
Total revenues		1,171			620
	$	37		$	-		$	2
Cost of revenues:
Products		989			4,168
Loss on purchase commitment		-			362
Total cost of revenues		989			4,530
Gross (loss) margin		182			(3,910	)
Operating expenses:
Sales and marketing		165			-
General and administrative		590			1,097
Total operating expenses		755			1,097
Operating loss		(573	)		(5,007	)
Other income (expense), net		(18	)		-
Loss from discontinued operations	$	(591	)	$	(5,007	)

~~Cash Flows~~Deferred ~~Information~~revenues were $37,000 as of December 31, 2025. The Company recognized revenues of approximately zero and $2,000, for the years ended December 31, 2025 and 2024, respectively, related to contract liabilities outstanding at the beginning of the year.

~~The following~~Costs ~~table~~to ~~presents~~Obtain ~~cash flow information for discontinued operations:~~Contracts

	Year ended December 31,
(in thousands)	2024		2023
Depreciation and amortization	$	19	$	47
Amortization of operating lease ROU assets		52		65
Inventory impairment loss		357		3,572
Bad debt expense		172		-
Purchase of property and equipment		-		(123	)
Proceeds from sale of property and equipment		190		-

We record the incremental costs of obtaining a contract with a customer as a contract asset if we expect the benefit of those costs to cover a period greater than one year. We currently have no incremental costs that must be capitalized.

3.We ~~Prepaid~~expense ~~Expenses~~as ~~and~~incurred ~~Other~~costs ~~Current~~of ~~Assets~~obtaining a contract when the amortization period of those costs would have been less than or equal to one year.

~~Prepaid expenses~~2. ~~and~~Discontinued ~~other current assets consist of the following:~~Operations

	December 31,
(in thousands)	2024		2023
Prepaid insurance	$	93	$	106
Prepaid rent		-		88
VAT receivable		172		410
Other		210		287
Total prepaid expenses and other current assets	$	475	$	891

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.

~~F-16~~The Company concluded that the termination of TSM manufacturing met the criteria for discontinued operations. As a result, this business has been reclassified to discontinued operations in these consolidated financial statements for all periods presented.

~~4. Property and Equipment~~ F- 13

~~Property~~ ~~and~~ Table ~~equipment, net consist~~ of ~~the following:~~Contents

	December 31,
(in thousands)	2024			2023
Computers, software, furniture and fixtures	$	277		$	396
Equipment		21			23
Less accumulated depreciation and amortization		(236	)		(309	)
Property and equipment, net	$	62		$	110

Assets and Liabilities of Discontinued Operations

~~Depreciation~~ Assets and ~~amortization~~liabilities ~~expense~~of ~~was~~discontinued ~~$39,000~~operations ~~and~~are ~~$47,000~~presented ~~for~~separately in the ~~years~~consolidated ~~ended~~balance sheets for all periods presented. On December 31, ~~2024~~2025 and December ~~2023~~31, ~~respectively~~2024, these balances consisted of assets and liabilities of the Company’s Products business.

5.The ~~Accrued~~following ~~Expenses~~table presents a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the assets and liabilities of discontinued operations as presented on the Company’s consolidated balance sheets (in thousands):

Accrued expenses consist of the following:

	December 31, 2025		December 31, 2024
ASSETS OF DISCONTINUED OPERATIONS
Current assets of discontinued operations:
Accounts receivable and unbilled revenues, net	$	41	$	-
Total current assets of discontinued operations		41		-
Total assets of discontinued operations	$	41	$	-

	December 31,
(in thousands)	2024		2023
Accrued audit fees	$	74	$	-
Accrued other compensation		107		-
Accrued bonus costs		172		91
Accrued costs related to customer claim		-		139
Accrued consulting fees and other		51		79
Total accrued expenses	$	404	$	309

Loss from Discontinued Operations

6.Discontinued ~~Stockholders~~operations for the years ended December 31, 2025 and 2024, respectively, consist of results from the Company’s ~~Equity~~products business.

~~Preferred Stock~~ F- 14

~~As of December 31, 2024 and~~ ~~2023,~~ Table ~~our Restated Certificate~~ of ~~Incorporation, as amended, authorized us to issue up to 1,000,000 shares of preferred stock, par value~~Contents ~~$0.001 per share.~~

~~There~~The ~~were~~following notable ~~transactions in~~provides ~~our~~details ~~preferred~~about ~~stock during~~ the ~~years~~major ~~ended~~classes ~~December~~of ~~31,~~line ~~2024~~items ~~and~~constituting ~~2023.~~“Income No(loss) ~~shares~~from ofdiscontinued ~~preferred~~operations” ~~stock~~as ~~were~~presented ~~issued~~on ~~and~~the ~~outstanding~~Company’s consolidated as statements of ~~December~~operations ~~31,~~(in ~~2024 and 2023.~~thousands):

Common Stock

	Years ended December 31,
	2025			2024
Revenues:
Products	$	361		$	1,171
Total revenues		361			1,171

Cost of revenues:
Products		48			989
Total cost of revenues		48			989
Gross margin		313			182

Operating expenses:
Sales and marketing		(143	)		165
General and administrative		-			590
Total operating expenses		(143	)		755

Operating income (loss)		456			(573	)
Other income (expense), net		-			(18	)
Loss before provision for income taxes		456			(591	)
Income (loss) from discontinued operations	$	456		$	(591	)

~~As of~~Cash ~~December~~Flows ~~31, 2024 and 2023, our Restated Certificate of Incorporation, as amended, authorized us to issue up to 25,000,000 shares of common stock, par value $0.001 per share.~~Information

~~During the~~The ~~year~~following ~~ended~~table ~~December~~presents ~~31,~~cash ~~2023,~~flow weinformation ~~sold~~for andiscontinued ~~aggregate of 903,716 shares of our common stock under the ATM Facility with aggregate net proceeds of $7,866,000, after payment of commissions to B. Riley Securities and other expenses of $244,000.~~operations:

During the year ended December 31, 2024, we sold an aggregate of 1,423,441 shares of our common stock 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.

	Years ended December 31,
	2025		2024
Depreciation and amortization	$	-	$	19
Amortization of operating lease ROU assets		-		52
Inventory impairment loss		-		357
Bad debt expense		-		172
Proceeds from sale of property and equipment		-		190

73. ~~Stock-Based~~Prepaid ~~Compensation~~Expenses and Other Current Assets

~~We have~~Prepaid ~~adopted~~expenses ~~equity incentive plans for which stock options~~ and ~~restricted~~other ~~stock~~current ~~awards~~assets ~~are~~consist available for grants to employees, consultants and directors. Except for certain options granted to certain Swedish employees, all employee, consultant and director stock options granted under our stock option plans have an exercise price equal to the market value of the ~~underlying~~following ~~common~~(in stock on the grant date. There are no vesting provisions tied to performance conditions for any options. Vesting for all outstanding option grants is based solely on continued service as an employee, consultant or director. All of our outstanding stock options and restricted stock awards are classified as equity instruments.thousands):

F-17

	Years ended December 31,
	2025		2024
Prepaid insurance	$	89	$	93
Prepaid rent		7		-
VAT receivable		218		172
Other		181		210
Prepaid expenses and other current assets	$	495	$	475

~~Stock~~ ~~Options and Long~~ F-~~Term Incentive Plan~~ 15

~~During the year ended December~~ ~~31,~~ Table 2020, our stockholders approved the 2020 Plan which replaced our 2015 Stock Incentive Plan (the “2015 Plan”), which in turn replaced our Neonode Inc. 2006 Equity Incentive Plan (the “2006 Plan”). There are no awards outstanding under the 2006 Plan and 2015 Plan. Under the 2020 Plan, 750,000 shares of ~~common stock have been reserved for awards, including nonqualified stock option~~Contents grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2020 Plan are set by our compensation committee at its discretion.

In 2020, we established the 2020 LTIP to provide eligible persons with the opportunity to acquire an equity interest, or otherwise increase their equity interest, in the Company as an incentive for them to remain in the service of the Company4. ~~Through~~Property ~~the~~and 2020 LTIP, eligible employees of Neonode may waive between 50% to 67% of future unearned bonuses that may be awarded to them under the Company’s annual bonus arrangement in exchange for the grant of shares of the Company’s common stock.Equipment

~~The~~Property ~~following~~and ~~table~~equipment, ~~summarizes the~~net ~~combined~~consist ~~activity under all~~ of the ~~stock~~following ~~option~~(in ~~plans~~thousands):

	Options Outstanding
	Years ended December 31,
							Weighted-
	2025			2024
							Average
Computers, software, furniture and fixtures	$	286		$	277
				Weighted-			Remaining
Equipment and vehicles		129			21
				Average			Contractual		Aggregate
Less accumulated depreciation and amortization		(270	)		(236	)
	Number of			Exercise			Life		Intrinsic
Property and equipment, net	$	145		$	62
	Shares			Price			(in years)		Value
Options outstanding – January 1, 2023		2,500		$	14.40			0.59	$	-
Options granted		-			-			-		-
Options exercised		-			-			-		-
Options cancelled or expired		(2,500	)		14.40			-		-
Options outstanding – December 31, 2023		-		$	-			-		-
Options granted		-			-			-		-
Options exercised		-			-			-		-
Options cancelled or expired		-			-			-		-
Options outstanding and vested – December 31, 2024		-		$	-			-	$	-

~~No stock~~Depreciation ~~options~~and ~~were~~amortization ~~granted~~expense ~~during~~was $50,000 and $39,000 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

~~During the years ended December 31, 2024 and 2023, we recorded no stock-based compensation expense related to the vesting of stock options~~5. ~~The~~ ~~estimated~~Accrued ~~fair value of the stock options will be calculated using the Black-Scholes option pricing model as of the grant date of the stock option.~~Expenses

~~Stock options~~Accrued ~~granted~~expenses ~~under~~consist ~~the 2006, 2015 and 2020 Plans are exercisable over a maximum term~~ of ~~10 years from~~ the ~~date~~following ~~of grant, vest~~ (in ~~various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant.~~thousands):

8. Commitments and Contingencies

	Years ended December 31,
	2025		2024
Accrued audit fees	$	6	$	74
Accrued other compensations		205		107
Accrued bonus costs		136		172
Accrued consulting fees and other		112		51
Total accrued expenses	$	459	$	404

~~Legal~~ 6. Stockholders’ Equity

~~The Company~~Preferred is subject to legal proceedings and claims that may arise in the ordinary course of business. The Company is not aware of any pending or threatened litigation matters at this time that would have a material impact on the operations of the Company.Stock

9As of December 31, 2025 and 2024, our Restated Certificate of Incorporation, as amended, authorized us to issue up to 1,000,000 shares of preferred stock, par value $0.001 ~~Leases~~per share.

~~The Company~~There ~~has~~were ~~leases~~no ~~mainly~~transactions ~~consisting~~in ofour ~~the~~preferred ~~corporate~~stock ~~office.~~during ~~This~~the ~~kind~~years ofended December ~~lease~~31, ~~typically~~2025 ~~has~~and ~~an original lease term of one to three years~~2024. ~~Future~~No ~~renewal~~shares ~~options that are not likely to be executed as~~ of ~~the~~preferred ~~consolidated~~stock ~~balance~~were ~~sheet~~issued ~~date are excluded from right-of-use assets~~ and ~~related~~outstanding ~~lease~~as ~~liabilities. The lease is automatically renewed at a cost increase~~ of December ~~2% on an annual basis~~31, ~~unless~~2025 weand ~~provide written notice nine months prior to the respective expiration dates~~2024.

~~Operating lease~~Common ~~right~~Stock of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. For finance leases, the implicit rate is used, since it is readily available.

~~F-18~~As of December 31, 2025 and 2024, our Restated Certificate of Incorporation, as amended, authorized us to issue up to 25,000,000 shares of common stock, par value $0.001 per share.

~~The components~~During the year ended December 31, 2025, we sold no shares under the Ladenburg ATM Facility. During the year ended December 31, 2024, we sold an aggregate of ~~lease~~1,423,441 ~~expense~~shares ~~were~~of asour ~~follows~~common ~~(in~~stock ~~thousands):~~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.

	Years ended December 31,
	2024		2023
Finance lease cost:
Amortization of leased assets	$	6	$	6
Interest on lease liabilities		1		1
Operating lease cost		31		330
Short-term lease cost		418	$	98
Total lease cost	$	456		435

7.	Stock-Based Compensation

~~The Company~~We ~~made~~have ~~cash~~adopted ~~payments~~equity ~~regarding~~incentive ~~operating~~plans ~~leases~~for ofwhich ~~$27~~stock options and restricted stock awards are available for grants to employees,~~000~~ consultants and $0directors. Except for ~~the~~certain ~~years~~options ~~ended~~granted ~~December~~to 31certain Swedish employees, ~~2024~~all employee, consultant and ~~2023,~~director ~~respectively. The~~stock ~~Company~~options ~~made~~granted ~~cash~~under ~~payments~~our ~~regarding~~stock ~~finance~~option ~~leases~~plans have an exercise price equal to the market value of ~~$18,000~~the ~~and~~underlying ~~$96,000~~common ~~for~~stock on the ~~years~~grant ~~ended~~date. ~~December~~There 31is no vesting provisions tied to performance conditions for any options. Vesting for all outstanding option grants is based solely on continued service as an employee, ~~2024~~consultant or director. All of our outstanding stock options and ~~2023,~~restricted ~~respectively~~stock awards are classified as equity instruments.

~~The~~ ~~following table shows right~~ F-~~of-use assets and lease liabilities:~~ 16

	December 31,
(in thousands)	2024		2023
Right-of-use assets:
Operating leases	$	634	$	-
Finance leases		21		23
Total right-of-use assets	$	655	$	23
Lease liabilities:
Current portion of operating lease obligations	$	225	$	-
Operating lease obligations, net of current portion		319		-
Current portion of finance lease obligations		2		8
Finance lease obligations, net of current portion		-		2
Total lease liabilities	$	546	$	10

Table of Contents

~~Lease liability~~Stock ~~maturities~~Options ~~are~~and asLong-Term ~~follows:~~Incentive Plan

(in thousands)	Operating Leases			Finance Leases		Total
2025	$	249			2	$	251
2026		328			-		328
Total		577			2		579
Less: Imputed interest		(33	)		-		(33	)
Total lease liabilities	$	544			2	$	546
Lease liabilities, current	$	225		$	2	$	227
Lease liabilities, non-current		319			-		319
Total lease liabilities	$	544		$	2	$	546

During the year ended December 31, 2020, our stockholders approved the 2020 Plan which replaced our 2015 Stock Incentive Plan (the “2015 Plan”), which in turn replaced our Neonode Inc. 2006 Equity Incentive Plan (the “2006 Plan”). There are no awards outstanding under the 2006 Plan and 2015 Plan. Under the 2020 Plan, 750,000 shares of common stock have been reserved for awards, including non-qualified stock option grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2020 Plan are set by our compensation committee at its discretion.

~~The~~In ~~weighted-average~~2020, ~~remaining lease~~we ~~term~~established ~~related~~the to2020 ~~the~~LTIP ~~Company’s~~to ~~operating~~provide ~~lease~~eligible ~~liabilities~~persons aswith ofthe ~~December~~opportunity ~~31,~~to ~~2024~~acquire ~~and~~an ~~December~~equity 31interest, ~~2023~~or ~~was~~otherwise ~~1.9~~increase ~~years~~their ~~and 0.8~~equity ~~years~~interest, ~~respectively.~~in ~~The~~the ~~discount~~Company ~~rate~~as ~~related~~an incentive for them to remain in the ~~Company’s~~service ~~operating~~of ~~lease~~the ~~liabilities~~Company. asThrough ofthe ~~December~~2020 31LTIP, ~~2024~~eligible ~~and~~employees ~~December 31,~~of ~~2023~~Neonode may ~~was~~waive ~~5.0~~between 50% to 67% of future unearned bonuses that may be awarded to them under the Company’s annual bonus arrangement in exchange for ~~each~~the grant of shares of the ~~years~~Company’s common stock.

~~The~~As ~~weighted-average remaining lease term related to the Company’s finance lease liabilities as~~ of December 31, ~~2024~~2025 and ~~December~~2024 no ~~31,~~awards ~~2023~~were ~~was~~outstanding ~~0.2~~under ~~years~~either ~~and~~of ~~1.3 years, respectively. The discount rate related to~~ the ~~Company’s operating lease liabilities as of December 31, 2024 and December 31, 2023 was 3~~plans.~~0% and 2.6%, respectively.~~

~~F-19~~There has been no activity under the stock option plans during the years ended December 31, 2025 and 2024.

Stock options granted under the 2006, 2015 and 2020 Plans are exercisable over a maximum term of 10. ~~Segment~~years ~~Information~~from the date of grant, vest in various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant.

~~The Company operates as one operating segment~~8. ~~Our~~Commitments ~~chief operating decision maker ("CODM") is our Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating loss~~ and net loss to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the allocation of budget between cost of revenues, research and development, sales and marketing, and general and administrative expenses.Contingencies

~~The following~~Legal ~~table presents key financial information with respect to the Company’s single operating segment:~~

	Years ended December 31,
(in thousands)	2024			2023
Revenues	$	3,108		$	3,829
Costs and expenses(a)
Cost of revenues		116			12
Product R&D		151			116
General and administrative, including rent		1,297			1,480
Payroll and related		6,332			6,330
Professional fees and IP		1,351			1,117
Marketing and travel		483			412
Total costs and expenses		9,730			9,467
Other segment items(b)		75			(99	)
Other income, net		687			736
Loss before provision for income taxes		(5,860	)		(5,001	)
Provision for income taxes		15			115
Loss from continuing operations	$	(5,875	)	$	(5,116	)

The Company is subject to legal proceedings and claims that may arise in the ordinary course of business. The Company is not aware of any pending or threatened litigation matters at this time that would have a material impact on the operations of the Company.

~~(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision-maker~~9. Leases

~~(b)~~The ~~Other~~Company ~~segment~~has ~~items~~leases ~~primarily~~mainly ~~include~~consisting ~~depreciation~~of the corporate office. The lease had an original lease term of two years and ~~amortization,~~is ~~payroll~~extended on a yearly basis unless written notice is provided nine months prior to the expiration date. Future renewal options that are not likely to be executed as of the consolidated balance sheet date are excluded from right-of-use assets and related -lease ~~re-allocated~~liabilities. toThe lease is automatically renewed at a cost increase of ~~revenues~~2% on an annual basis, ~~and~~unless ~~stock~~we ~~options~~provide ~~expense~~written notice nine months prior to the respective expiration dates.

~~The~~Operating ~~following~~lease ~~table~~right ~~presents the long~~of-~~lived~~use assets ~~property~~ and ~~equipment~~liabilities ~~and~~are ~~right~~recognized at the commencement date based on the present value of lease payments over the lease term. The Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-~~use~~line ~~assets~~basis byover ~~geographic~~the ~~area:~~lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. For finance leases, the implicit rate is used, since it is readily available.

	December 31,
	2024		2023
Sweden	$	696	$	109
Asia		-		1
Total	$	696	$	110

F- 17

We ~~report~~ Table ~~revenues~~of ~~from external customers based on the country where the customer is located. The following table presents net revenues~~Contents ~~by country:~~

	Years ended December 31,
	2024					2023
(in thousands)	Amount		Percentage			Amount		Percentage
Japan	$	1,731		55.8	%	$	1,476		38.5	%
Sweden		365		11.7	%		-		-	%
Germany		116		3.7	%		379		9.9	%
South Korea		97		3.1	%		501		13.1	%
China		31		1.0	%		18		0.5	%
Other		5		0.2	%		1		-	%
	$	2,345		75.5	%	$	2,375		62.0	%
United States		763		24.5	%		1,454		38.0	%
	$	3,108		100.0	%	$	3,829		100.0	%

The components of lease expense were as follows (in thousands):

F-20

	Years ended December 31,
	2025		2024
Finance lease cost:
Amortization of leased assets	$	19	$	6
Interest on leased liabilities		1		1
Operating lease cost		400		31
Short-term lease cost		83		418
Total lease cost	$	503	$	456

11The Company made cash payments regarding operating leases of $385,000 and $27,000 for the years ended December 31, 2025 and 2024, respectively. ~~Income~~The ~~Taxes~~Company made cash payments regarding finance leases of $25,000 and $18,000 for the years ended December 31, 2025 and 2024, respectively.

~~During~~The ~~2024,~~following ~~the~~table ~~Company~~shows ~~identified errors in the calculation~~ right-of-use ~~net operating loss carryforwards, resulting in balances for deferred tax~~ assets and ~~the~~lease ~~corresponding~~liabilities ~~valuation allowance being overstated at December 31, 2023. Following an analysis of quantitative and qualitative factors~~ (in accordance with SEC Staff Accounting Bulletin 99, Materiality, the Company concluded that the errors were not material to the previously issued consolidated financial statements, and thus, no restatement of any of the Company’s previously issued consolidated financial statements is necessary. These amounts have been corrected from the amounts that were previously reported in the footnotes to the December 31, 2023 consolidated financial statements in the 2023 tables below as followsthousands):

1. An increase to the foreign deferred tax provision and a corresponding decrease in the change in valuation allowance of $7,424,000.

	December 31,
	2025		2024
Right-of-use assets:
Operating leases	$	455	$	634
Finance leases		54		21
Total right-of-use assets	$	509	$	655

Lease liabilities:
Current portion of operating lease obligations	$	344	$	225
Operating lease obligations, net of current portion		-		319
Current portion of finance lease obligations		12		2
Finance lease obligations, net of current portion		15		-
Total lease liabilities	$	371	$	546

2.Lease Aliability ~~decrease~~maturities inare ~~gross~~as ~~deferred~~follows ~~tax~~(in ~~assets and the corresponding valuation allowance of $7,424,000.~~thousands):

These corrections did not impact the financial position, operating results or cash flows of the Company as of and for the year ended December 31, 2023.

	Operating Leases			Finance Leases			Total
2026	$	354		$	13		$	367
2027		-			13			13
2028		-			2			2
Total	$	354		$	28		$	382
Less: Imputed interest		(10	)		(1	)		(11	)
Total lease liabilities	$	344		$	27		$	371

Lease liabilities, current	$	344		$	12		$	356
Lease liabilities, non-current		-			15			15
Total lease liabilities	$	344		$	27		$	371

~~Loss before~~The ~~provision~~weighted-average ~~for~~remaining ~~income~~lease ~~taxes~~term related to the Company’s operating lease liabilities as of December 31, 2025 and December 31, 2024 was ~~distributed~~1.0 years ~~geographically~~and 1.9 years, respectively. The discount rate related to the Company’s operating lease liabilities as ~~follows:~~of December 31, 2025 and December 31, 2024 was 5.0% for each of the years.

	Years ended December 31,
(in thousands)	2024			2023
Domestic	$	(5,888	)	$	(5,221	)
Foreign		28			220
Total	$	(5,860	)	$	(5,001	)

The weighted-average remaining lease term related to the Company’s finance lease liabilities as of December 31, 2025 and December 31, 2024 was 2.2 years and 0.2 years, respectively. The discount rate related to the Company’s operating lease liabilities as of December 31, 2025 and December 31, 2024 was 3.5% and 3.0%, respectively.

~~The~~ ~~provision (benefit) for income taxes is as follows:~~ F- 18

	Years ended December 31,
(in thousands)	2024			2023
Current
Federal	$	-		$	-
State		-			-
Foreign		15			115
Total current expense		15			115
Deferred
Federal		(784	)		(1,054	)
State		99			-
Foreign		23			6,361
Change in valuation allowance		662			(5,307	)
Total deferred expense		-			-
Total provision for income taxes	$	15		$	115

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~~The differences between our effective income tax rate and the U~~10.S. ~~federal~~Segment ~~statutory federal income tax rate are as follows:~~Information

	Years ended December 31,
	2024			2023
Amounts at statutory tax rates		21	%		21	%
Foreign losses taxed at different rates		(2	)%		(20	)%
Stock-based compensation		-	%		-	%
GILTI inclusion		(8	)%		-	%
Other		-	%		(3	)%
Total		11	%		(2	)%
Valuation allowance		(11	)%		-	%
Effective tax rate		-	%		(2	)%

The Company operates as one operating segment. Our chief operating decision maker ("CODM") is our Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating loss and net loss to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the allocation of budget between cost of revenues, research and development, sales and marketing, and general and administrative expenses.

~~Significant components~~The offollowing ~~the~~table ~~deferred~~presents ~~tax~~key ~~asset~~financial ~~balances~~information ~~are~~with asrespect ~~follows~~to the Company’s single operating segment (in thousands):

	December 31,
	Years ended December 31,
(in thousands)	2024			2023
	2025			2024
Deferred tax assets:
Revenues	$	2,062		$	3,108
Accruals	$	-		$	3
Costs and expenses(a):
Net operating losses		22,124			21,320
Cost of revenues		26			116
Gross deferred tax assets		22,124			21,323
Product R&D		195			151
Valuation allowance		(22,108	)		(21,323	)
General and administrative, including rent		1,138			1,297
Total deferred tax assets		16			-
Payroll and related		6,736			6,332
Deferred tax liabilities:
Professional fees and IP		1,651			1,351
Accruals		(16	)		-
Marketing and travel		429			483
Net deferred tax assets	$	-		$	-
Total costs and expenses		10,175			9,730
Other segment items(b)

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