Neonode Inc. (NASDAQ: NEON)

Neonode 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. 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.

Neonode generates revenue primarily through licensing of its MultiSensing and zForce technologies and through nonrecurring engineering services. Licensing fees are typically earned on a per unit basis when customers ship products that incorporate the company’s technology. As of December 31 2025 Neonode had 36 valid technology license agreements with global OEMs Original Design Manufacturers (“ODMs”) and automotive Tier 1 suppliers. Nine of these licensing customers were actively shipping products that embed Neonode’s technology. The company also expects to add new customers as they complete product development and release cycles. Nonrecurring engineering services are offered on a flat rate or hourly rate basis to assist customers with application development and integration during the early stages of product creation. These services help ensure optimal functionality and performance of Neonode’s technology in customer systems. Revenue from licensing and nonrecurring engineering together accounted for 100 percent of total revenues in the years ended December 31 2025 and 2024.

The company operates through the following segments:

• The licensing segment includes the MultiSensing and zForce technology platforms. Neonode licenses these technologies to OEMs and automotive Tier 1 suppliers who embed them into products they develop manufacture and sell. License fees are generally based on a per unit royalty when the licensed products are shipped. The licensing business has generated over 95 million units sold by customers since 2010. As of December 31 2025 there were 36 active license agreements covering automotive printer and other markets. Nine licensing customers were currently shipping products that incorporate Neonode’s technology. The segment also provides support for existing customers after the zForce platform was placed in maintenance mode in September 2025.

• The nonrecurring engineering segment provides application development and integration support linked to Neonode’s technology platforms. Services are delivered on a flat rate or hourly rate basis depending on the scope of work. Licensing customers frequently engage Neonode for engineering assistance during product development and initial manufacturing phases. The segment helps customers achieve optimal functionality and performance of the licensed technology in their end products. Nonrecurring engineering revenue represented 11.6 percent of total revenues in 2025 and 13.5 percent in 2024.

Neonode competes in the machine perception market against providers such as SmartEye Cipia Xperi Seeing Machines PUX and Jungo. In the touch and gesture sensing arena the company faces competition from resistive and capacitive touch solutions as well as projective capacitive technology which is the prevailing standard in mobile devices. For gesture control the main competitors include Ultraleap and suppliers of radar and ultrasonic sensor chips such as Texas Instruments and Acconeer. Neonode’s competitive advantages stem from its patented optical sensing technology its focus on automotive driver and in cabin monitoring and its ability to offer value adding human machine interaction solutions. The company’s intellectual property portfolio includes patents covering optical blocking for touchscreens and head up displays optical reflective technologies for contactless interaction and machine perception algorithms for driver monitoring. Neonode also emphasizes innovation through portfolio transformation internal development and co‑development with customers and strategic partners.

Neonode’s customer base consists primarily of OEMs and Tier 1 suppliers in the automotive printer office equipment amusement and other sectors. As of December 31 2025 four customers accounted for approximately 95.4 percent of consolidated accounts receivable and unbilled revenues. The largest revenue contributors for the year ended December 31 2025 were Seiko Epson 34.3 percent Alps Alpine 19.4 percent Hewlett Packard 19.0 percent and Commercial Vehicle OEM 14.6 percent. In the prior year the top four customers were Seiko Epson 27.3 percent Alps Alpine 20.7 percent Hewlett Packard 20.4 percent and Commercial Vehicle OEM 11.8 percent. The company also serves customers in the Japanese amusement market following the selection of its TSM technology by Nexty Electronics for slot machine sensors. Additional markets include holographic interaction applications in infotainment surgical planning and emerging opportunities in automated self service check out systems within retail. Neonode’s customers are located principally in North America Europe and Asia with a significant concentration in Japan.