The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
1. Interim Period Reporting
The accompanying unaudited
interim condensed consolidated financial statements include all adjustments consisting of normal recurring adjustments that are, in the
opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim
period presented. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of results for a
full fiscal year or any other period.
The accompanying condensed consolidated financial statements for the
three months ended March 31, 2022 and 2021 have been prepared by us, pursuant to the rules and regulations of the United States Securities
and Exchange Commission (“SEC”). Certain information and footnote disclosures normally contained in financial statements prepared
in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and
notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Operations
Neonode Inc., which is collectively
with its subsidiaries referred to as “Neonode” or the “Company” in this report, develops advanced optical sensing
solutions for contactless touch, touch, gesture sensing, and scene analysis solutions using advanced machine learning algorithms to detect
and track persons and objects in video streams for cameras and other types of imagers. We market and sell our contactless touch, touch,
and gesture sensing products and solutions based on our zForce technology platform, and our scene analysis solutions based on our MultiSensing
technology platform. We offer our solutions to customers in many different markets and segments including, but not limited to, office
equipment, automotive, industrial automation, medical, military and avionics.
In our operations, we have
historically focused on three different business areas, human machine interface (“HMI”) Solutions, HMI Products and Remote
Sensing Solutions. On May 4, 2021, we announced a new strategy and organizational update targeting an increased focus on the Company’s
contactless touch business and on current market opportunities in North America (“AMER”), Asia-Pacific (“APAC”),
and Europe, Middle East and Africa (“EMEA”). We thereby changed from a business area organization to a regional sales organization
going forward. Revenues are however primarily monitored for each of our revenue streams consisting of license fees, product sales and
non-recurring engineering fees.
Liquidity
We have incurred significant
operating losses and negative cash flows from operations since our inception. The Company incurred net losses of approximately $1.4 million
and $1.6 million for the three months ended March 31, 2022 and 2021, respectively, and had an accumulated deficit of approximately $204.0
million and $202.6 million as of March 31, 2022 and December 31, 2021, respectively. In addition, operating activities used cash of approximately
$2.3 million and $2.0 million for the three months ended March 31, 2022 and 2021, respectively.
The condensed consolidated
financial statements included in this report have been prepared on a going concern basis, which contemplates continuity of operations
and the 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 determined that the Company’s current operating plan and sources of potential capital
would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern.
In the future, we may require
sources of capital in addition to cash on hand 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. 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 to us on acceptable terms,
or at all, we may be unable to adequately fund our business plans, which could have a negative effect on our business, results of operations
and financial condition. If funds are available through the issuance of equity or debt securities, 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 on us that could impair our ability to engage in certain business transactions.
We expect revenues will enable
us to reduce our operating losses in coming years. In addition, we intend to continue to implement various measures to improve our operational
efficiencies. No assurances can be given that management will be successful in meeting its revenue targets and reducing its operating
loss.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated
financial statements have been prepared in accordance with U.S. GAAP and include the accounts of Neonode Inc. and its wholly-owned subsidiaries,
as well as Pronode Technologies AB, a 51% majority owned subsidiary of Neonode Technologies AB. The remaining 49% of Pronode Technologies
AB is owned by 2X Communication AB, located in Gothenburg, Sweden. Pronode Technologies AB was organized to manufacture and sell our touch
sensor modules (“TSMs”). All inter-company accounts and transactions have been eliminated in consolidation.
Neonode consolidates entities
in which it has a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50%
of the voting rights.
The condensed consolidated
balance sheets at March 31, 2022 and December 31, 2021 and the condensed consolidated statements of operations, comprehensive loss, stockholders’
equity and cash flows for the three months ended March 31, 2022 and 2021 include our accounts and those of our wholly-owned subsidiaries
as well as Pronode Technologies AB.
Estimates and Judgments
The preparation of financial
statements in conformity with U.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. Actual results could differ from these estimates and judgments.
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; measuring variable
consideration and other obligations such as product returns and refunds, and product warranties; provisions for uncollectible receivables;
determining the net realizable value of inventory; recoverability of capitalized project costs and long-lived assets; 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 as stock-based compensation.
Cash
and Cash Equivalents
We
have not had any liquid investments other than normal cash deposits with bank institutions to date. The Company considers all highly
liquid investments with original maturities of three months or less to be cash equivalents.
Concentration
of Cash Balance Risks
Cash balances are maintained at various banks in the United States,
Japan, Taiwan 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. The Central Deposit Insurance Corporation in Taiwan provides insurance coverage up to 3,000,000 Taiwan
Dollar per customer. At times, deposits held with financial institutions may exceed the amount of insurance provided.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable is stated at net realizable value. Our policy is to maintain allowances for estimated losses resulting from the inability
of our customers to make required payments. Credit limits are established through a process of reviewing the financial history and stability
of each customer. Should all efforts fail to recover the related receivable, we will write off the account. We also record an allowance
for all customers based on certain other factors including the length of time the receivables are past due and historical collection
experience with customers. Our allowance for doubtful accounts was approximately $79,000 as of March 31, 2022 and December 31, 2021.
Projects
in Process
Projects
in process consist of costs incurred toward the completion of various projects for certain customers. These costs are primarily comprised
of direct engineering labor costs and project-specific equipment costs. These costs are capitalized on our consolidated balance sheet
as an asset and deferred until revenue for each project is recognized in accordance with our revenue recognition policy. There were no
costs capitalized to projects in process as of March 31, 2022 and December 31, 2021.
Inventory
The
Company’s inventory consists primarily of components that will be used in the manufacturing of our TSMs. We classify inventory
for reporting purposes as raw materials, work-in-process, and finished goods.
Inventory
is stated at the lower of cost or net realizable value, using the first-in, first-out (“FIFO”) valuation method. Net realizable
value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and
transportation. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current
period.
Due to the low sell-through
of our AirBar products, management has decided to fully reserve work-in-process for AirBar components, as well as AirBar related raw materials.
Management has further decided to reserve for a portion of AirBar finished goods, depending on type of AirBar and in which location it
is stored. The AirBar inventory reserve was $0.4 million and $0.8 million as of March 31, 2022 and December 31, 2021, respectively.
Raw
materials, work-in-process, and finished goods are as follows (in thousands):
| |
March 31, | |
December 31, |
| |
2022 | |
2021 |
Raw materials | |
$ | 2,574 | | |
$ | 1,446 | |
Work-in-process | |
| - | | |
| 10 | |
Finished
goods | |
| 979 | | |
| 1,064 | |
| |
$ | 3,553 | | |
$ | 2,520 | |
Property
and Equipment
Property
and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using
the straight-line method based upon estimated useful lives of the assets as follows:
Estimated
useful lives
Computer equipment | |
3 years |
Furniture and fixtures | |
5 years |
Equipment | |
7 years |
Equipment
purchased under a finance lease is recognized over the term of the lease if that lease term is shorter than the estimated useful life.
Upon
retirement or sale of property and equipment, cost and accumulated depreciation and amortization are removed from the accounts and any
gains or losses are reflected in the condensed consolidated statement of operations. Maintenance and repairs are charged to expense as
incurred.
Right-of-Use Asstes
A
right-of-use asset represents a lessee’s right to use a leased asset for the term of the lease. Our right-of-use assets generally
consist of operating leases for buildings and finance leases for manufacturing equipment.
Right-of-use
assets are measured initially at the present value of the lease payments, plus any lease payments made before a lease began and any initial
direct costs, such as commissions paid to obtain a lease.
Right-of-use
assets are subsequently measured at the present value of the remaining lease payments, adjusted for incentives, prepaid or accrued rent,
and any initial direct costs not yet expensed.
Long-lived Assets
We
assess the recoverability of long-lived assets by estimating the future cash flows from the associated assets in accordance with relevant
accounting guidance. If the estimated undiscounted future cash flows related to these assets decreases or the useful life is shorter
than originally estimated, we may incur charges for impairment of these assets. As of March 31, 2022, we believe there was no impairment
of our long-lived assets. There can be no assurance, however, that market conditions will not change or sufficient demand for our products
and services will continue, which could result in impairment of long-lived assets in the future.
Foreign
Currency Translation and Transaction Gains and Losses
The functional currency of
our foreign subsidiaries is the applicable local currency, the Swedish Krona, the Japanese Yen, the South Korean Won and the Taiwan Dollar.
The translation from Swedish Krona, Japanese Yen, South Korean Won and Taiwan Dollar to U.S. Dollars is performed for balance sheet accounts
using current exchange rates in effect at the 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 $33,000 and $(166,000) during the three months ended March 31, 2022 and
2021, respectively. Gains (losses) resulting from foreign currency transactions are included in general and administrative expenses in
the accompanying condensed consolidated statements of operations and were $(1,000) during the three months ended March 31, 2022 compared
to $82,000 during the same period in 2021.
Concentration
of Credit and Business Risks
Our customers are located
in the United States, Europe and Asia.
As of March 31, 2022, five
of our customers represented approximately 85% of our consolidated accounts receivable and unbilled revenues.
As
of December 31, 2021, four of our customers represented approximately 76% of our consolidated accounts receivable and unbilled revenues.
Customers
who accounted for 10% or more of our net revenues during the three months ended March 31, 2022 are as follows:
| ● | Hewlett-Packard Company – 32% |
| | |
| ● | Seiko Epson – 17% |
| | |
| ● | LG – 15% |
Customers who accounted for
10% or more of our net revenues during the three months ended March 31, 2021 are as follows:
| ● | Hewlett-Packard Company – 19% |
| | |
| ● | LG – 17% |
| | |
| ● | Seiko Epson – 15% |
| | |
| ● | Lexmark – 14% |
| | |
| ● | Alps Alpine – 13% |
Revenue
Recognition
We
recognize revenue when control of products is transferred to our customers, and when services are completed and accepted by our customers;
the amount of revenue we recognize reflects the consideration we expect to receive for those products or services. Our contracts with
customers may include combinations of products and services (e.g., a contract that includes products and related engineering services).
We structure our contracts such that distinct performance obligations, such as product sales or license fees, and related engineering
services, are clearly defined in each contract.
License
fees and sales of our AirBar and TSMs are on a per-unit basis. Therefore, we generally satisfy performance obligations as units are shipped
to our customers. Non-recurring engineering service performance obligations are satisfied as work is performed and accepted by our customers.
We
recognize revenue net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental
authorities. We treat all product shipping and handling charges (regardless of when they occur) as activities to fulfill the promise
to transfer goods, therefore we treat all shipping and handling charges as expenses.
License
Fees
We
earn revenue from licensing our internally developed intellectual property (“IP”). We enter into IP licensing agreements
that generally provide licensees the right to incorporate our IP components in their products, with terms and conditions that vary by
licensee. Fees under these agreements may include license fees relating to our IP, 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.
For
technology license arrangements that do not require significant modification or customization of the underlying technology, we recognize
technology license revenue when the license is made available to the customer and the customer has a right to use that license. At the
end of each reporting period, we record unbilled license fees, using prior royalty revenue data by customer to make estimates of those
royalties.
Explicit
return rights are not offered to customers. There have been no returns through March 31, 2022.
Product
Sales
We earn revenue from sales
of TSM hardware products to our original equipment manufacturers (“OEMs”), original design manufacturers (“ODMs”)
and Tier 1 supplier customers, who embed our hardware into their products, and from sales of branded consumer products that incorporate
our TSMs that are sold through distributors or directly to end users. These distributors are generally given business terms that allow
them to return unsold inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs.
Our sales agreements generally provide customers with limited rights of return and warranty provisions.
The
timing of revenue recognition related to AirBar modules depends upon how each sale is transacted - either point-of-sale or through distributors.
We recognize revenue for AirBar modules sold point-of-sale (online sales and other direct sales to customers) when we provide the promised
product to the customer.
Because we generally use distributors
to provide TSMs and AirBars to our customers, we must analyze the terms of our distributor agreements to determine when control passes
from us to our distributors. For sales of TSMs and AirBars sold through distributors, we recognize revenues when our distributors obtain
control over our products. Control passes to our distributors when we have a present right to payment for products sold to the distributors,
the distributors have legal title to and physical possession of products purchased from us, and the distributors have significant risks
and rewards of ownership of products purchased.
Distributors
participate in various cooperative marketing and other incentive programs, and we maintain estimated accruals and allowances for these
programs. If actual credits received by distributors under these programs were to deviate significantly from our estimates, which are
based on historical experience, our revenue could be adversely affected.
Under U.S. GAAP, companies
may make reasonable aggregations and approximations of returns data to accurately estimate returns. Our TSM and AirBar returns and warranty
experience to date has enabled us to make reasonable returns estimates, which are supported by the fact that our product sales involve
homogenous transactions. The reserve for future sales returns is recorded as a reduction of our accounts receivable and revenue and was
$64,000 as of March 31, 2022 and $69,000 as of December 31, 2021. If the actual future returns were to deviate from the historical data
on which the reserve had been established, our revenue could be adversely affected.
Non-Recurring
Engineering
For technology license or
TSM contracts that require modification or customization of the underlying technology to adapt the technology to customer use, we determine
whether the technology license or TSM, and required engineering consulting services represent separate performance obligations. We perform
our analysis on a contract-by-contract basis. If there are separate performance obligations, we determine the standalone selling price
(“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 generally charge an hourly rate for engineering services, and we recognize revenue as engineering
services specified in contracts are completed and accepted by our customers. Any upfront payments we receive for future non-recurring
engineering services are recorded as contract liabilities until that revenue is earned.
We
believe that recognizing non-recurring 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.
Revenues
from non-recurring engineering contracts that are short-term in nature are recorded when those services are complete and accepted by
customers.
Revenues
from non-recurring engineering contracts with substantive defined deliverables for which payment terms in the SOW are commensurate with
the efforts required to produce such deliverables are recognized as they are completed and accepted by customers.
Estimated losses on all SOW
projects are recognized in full as soon as they become evident. During the three months ended March 31, 2022 and 2021, no losses related
to SOW projects were recorded.
The
following tables present the net revenues distribution by geographical area and market for the three months ended March 31, 2022 and
2021 (dollars in thousands):
| |
Three
months ended March 31, 2022 | |
Three
months ended March 31, 2021 |
| |
Amount | |
Percentage | |
Amount | |
Percentage |
AMER | |
| |
| |
| |
|
Net revenues from
consumer electronics | |
$ | 479 | | |
| 97 | % | |
$ | 592 | | |
| 86 | % |
Net
revenues from distributors and other | |
| 14 | | |
| 3 | % | |
| 100 | | |
| 14 | % |
| |
$ | 493 | | |
| 100 | % | |
$ | 692 | | |
| 100 | % |
| |
| | | |
| | | |
| | | |
| | |
APAC | |
| | | |
| | | |
| | | |
| | |
Net revenues from automotive | |
$ | 356 | | |
| 55 | % | |
$ | 395 | | |
| 48 | % |
Net revenues from consumer
electronics | |
| 235 | | |
| 37 | % | |
| 200 | | |
| 24 | % |
Net
revenues from distributors and other | |
| 50 | | |
| 8 | % | |
| 235 | | |
| 28 | % |
| |
$ | 641 | | |
| 100 | % | |
$ | 830 | | |
| 100 | % |
| |
| | | |
| | | |
| | | |
| | |
EMEA | |
| | | |
| | | |
| | | |
| | |
Net revenues from automotive | |
$ | 88 | | |
| 48 | % | |
$ | 114 | | |
| 80 | % |
Net revenues from medical | |
| 64 | | |
| 35 | % | |
| 21 | | |
| 14 | % |
Net
revenues from distributors and other | |
| 32 | | |
| 17 | % | |
| 8 | | |
| 6 | % |
| |
$ | 184 | | |
| 100 | % | |
$ | 143 | | |
| 100 | % |
Significant
Judgments
Our
contracts with customers may include promises to transfer multiple products and services to a customer, particularly when one of our
customers contracts with us for a product and related engineering services fees for customizing that product for our customer. Determining
whether products and services are considered distinct performance obligations that should be accounted for separately may require significant
judgment. Judgment may also be required to determine the SSP for each distinct performance obligation identified, although we generally
structure our contracts such that performance obligations and pricing for each performance obligation are specifically addressed. We
currently have no outstanding contracts with multiple performance obligations; however, we recently negotiated a contract that may include
multiple performance obligations in the future.
Judgment
is also required to determine when control of products passes from us to our distributors, as well as the amounts of product that may
be returned to us. Our products are sold with a right of return, and we may provide other credits or incentives to our customers, which
could result in variability when determining the amount of revenue to recognize. At the end of each reporting period, we use product
returns history and additional information that becomes available to estimate returns and credits. We do not recognize revenue if it
is probable that a significant reversal of any incremental revenue would occur.
Finally,
judgment is required to determine the amount of unbilled license fees at the end of each reporting period.
Contract
Balances
Timing
of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when we have an unconditional right
to receive future payments from customers, and we record unearned deferred revenue when we receive prepayments or upfront payments for
goods or services from our customers.
The following table presents
accounts receivable and deferred revenues as of March 31, 2022 and December 31, 2021 (in thousands):
| |
March 31, 2022 | | |
December 31, 2021 | |
Accounts receivable and unbilled revenue, net | |
$ | 1,142 | | |
$ | 1,293 | |
Contract liabilities (deferred revenues) | |
| 103 | | |
| 106 | |
The
timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled revenues (contract assets),
and customer advances and deposits or deferred revenue (contract liabilities) on the consolidated balance sheets. Generally, billing
occurs subsequent to revenue recognition, resulting in contract assets; contract assets are generally classified as current. The Company
sometimes receives advances or deposits from its customers before revenue is recognized, which are reported as contract liabilities and
are generally classified as current. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract
basis at the end of each reporting period.
We do not anticipate impairment
of our contract assets related to license fee revenues, given the creditworthiness of our customers whose invoices comprise the balance
in that asset account. We will continue to monitor the timeliness of receipts from those customers to assess whether the contract assets
have been impaired.
Payment
terms and conditions vary by the type of contract; however, payments generally occur 30-60 days after invoicing for license fees and
sensor modules to our resellers and distributors. Where revenue recognition timing differs from invoice timing, we have determined that
our contracts do not include a significant financing component. Our intent is to provide our customers with consistent invoicing terms
for the convenience of our customers, not to receive financing from our customers.
Costs
to Obtain Contracts
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.
We
expense as incurred costs of obtaining a contract when the amortization period of those costs would have been less than or equal to one
year.
Product
Warranty
The
following table summarizes the activity related to the product warranty liability (in thousands):
|
|
March 31,
2022 |
|
December 31,
2021 |
Balance at beginning of period |
|
$ |
36 |
|
|
$ |
25 |
|
Provisions for warranty issued |
|
|
(3 |
) |
|
|
11 |
|
Balance at end of period |
|
$ |
33 |
|
|
$ |
36 |
|
The
Company accrues for warranty costs as part of its cost of sales of TSMs based on estimated costs. The Company’s products are generally
covered by a warranty for a period of 12 months from the customer receipt of the product.
Contract liabilities
Contract liabilities (deferred revenues) consist primarily of prepayments
for license fees, and other products or services that we have been paid in advance. We earn the revenue when we transfer control of the
product or service. Deferred revenues may also include upfront payments for consulting services to be performed in the future, such as
non-recurring engineering services.
We
defer license fees until we have met all accounting requirements for revenue recognition, which is when a license is made available to
a customer and that customer has a right to use the license. Non-recurring engineering fee revenues are deferred until engineering services
have been completed and accepted by our customers.
The
following table presents our deferred revenues by source (in thousands):
| |
March 31,
2022 | |
December 31,
2021 |
Deferred revenues
license fees | |
$ | 28 | | |
$ | 28 | |
Deferred revenues products | |
| 64 | | |
| 70 | |
Deferred
revenues non-recurring engineering | |
| 11 | | |
| 8 | |
| |
$ | 103 | | |
$ | 106 | |
During the three months ended
March 31, 2022, the Company recognized revenues of approximately $9,000 related to contract liabilities outstanding at the beginning of
the year.
Advertising
Advertising costs are expensed
as incurred. Advertising costs for the three months ended March 31, 2022 and 2021 amounted to approximately $46,000 and $19,000, respectively.
Research
and Development
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.
Stock-Based
Compensation Expense
We
measure the cost of employee services received in exchange for an award of equity instruments, including share options, based on the
estimated fair value of the award on the grant date, and recognize the value as compensation expense over the period the employee is
required to provide services in exchange for the award, usually the vesting period.
We
account for equity instruments issued to non-employees at their estimated fair value.
When
determining stock-based compensation expense involving options and warrants, we determine the estimated fair value of options and warrants
using the Black-Scholes option pricing model.
Noncontrolling
Interests
We recognize any noncontrolling interest, also known as a minority
interest, as a separate line item in stockholders’ equity in the consolidated financial statements. A noncontrolling interest represents
the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to us. Generally, any interest that holds less
than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making
rights, that are considered as well. We include the amount of net income (loss) attributable to noncontrolling interests in consolidated
net income (loss) on the face of the consolidated statements of operations.
The
Company provides either in the condensed consolidated statement of stockholders’ equity, if presented, or in the notes to condensed
consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity
(net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that
separately discloses:
|
(1) |
Net income or loss; |
|
|
|
|
(2) |
Transactions with owners
acting in their capacity as owners, showing separately contributions from and distributions to owners; and |
|
|
|
|
(3) |
Each component of other
comprehensive income or loss. |
Income
taxes
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.
Based
on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of March 31, 2022 and December 31, 2021.
In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred
tax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in
deferred tax amounts, plus income taxes paid or payable for the current period.
We
follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing
and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of March 31,
2022 and December 31, 2021, we had no unrecognized tax benefits.
Net
Loss per Share
Net loss per share amounts
have been computed based on the weighted average number of shares of common stock outstanding during the three months ended March 31,
2022. Net loss per share, assuming dilution amounts from common stock equivalents, is computed based on the weighted-average number of
shares of common stock and potential common stock equivalents outstanding during the period. The weighted-average number of shares of
common stock and potential common stock equivalents used in computing the net loss per share for the three months ended March 31, 2022
and 2021 exclude the potential common stock equivalents, as the effect would be anti-dilutive (see Note 8).
Other
Comprehensive Income (Loss)
Our
other comprehensive income (loss) includes foreign currency translation gains and losses. The cumulative amount of translation gains
and losses are reflected as a separate component of stockholders’ equity in the condensed consolidated balance sheets.
Cash
Flow Information
Cash
flows in foreign currencies have been converted to U.S. Dollars at an approximate weighted-average exchange rate for the respective reporting
periods. The weighted-average exchange rate for the condensed consolidated statements of operations was as follows:
| |
Three
months ended March 31, |
| |
2022 | |
2021 |
Swedish Krona | |
| 9.34 | | |
| 8.40 | |
Japanese Yen | |
| 116.23 | | |
| 106.03 | |
South Korean Won | |
| 1205.29 | | |
| 1,114.49 | |
Taiwan Dollar | |
| 28.00 | | |
| 28.08 | |
The exchange rate for the condensed consolidated balance sheets was
as follows:
|
|
As of |
|
|
March 31, |
|
December 31, |
|
|
2022 |
|
2021 |
Swedish Krona |
|
|
9.36 |
|
|
|
9.03 |
|
Japanese Yen |
|
|
121.59 |
|
|
|
115.12 |
|
South Korean Won |
|
|
1,214.51 |
|
|
|
1,190.75 |
|
Taiwan Dollar |
|
|
28.63 |
|
|
|
27.71 |
|
Fair
Value of Financial Instruments
We
disclose the estimated fair values for all financial instruments for which it is practicable to estimate fair value. Financial instruments
including cash, accounts receivable, accounts payable and accrued expenses are deemed to approximate fair value due to their short maturities.
New
Accounting Pronouncements
In
September 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial
Instruments, (“ASU 2016-13”), supplemented by subsequent accounting standards updates. The new standard requires entities
to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions
and reasonable and supportable forecasts. ASU 2016-13, as amended, is scheduled to become effective for fiscal years beginning after
December 15, 2023, with early adoption permitted. In the future, we will evaluate the impact that ASU 2016-13, as amended, will have
on our consolidated financial statements, specifically regarding our trade receivables; however, we do not expect any significant impact
from implementation of the new standard.
3.
Stockholders’ Equity
At-the-Market
Facility
On
May 10, 2021, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc.
(“B. Riley Securities”) with respect to an “at the market” offering program (the “ATM Facility”),
under which we may, from time to time, in our sole discretion, issue and sell through B. Riley Securities, acting as sales agent, up
to $25 million of shares of our common stock.
Pursuant
to the Sale Agreement, we may sell the shares through B. Riley Securities 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. B. Riley Securities 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 B. Riley Securities a commission of
3.0% of the gross sales price per share sold under the Sales Agreement.
We
are not obligated to sell any shares under the Sale Agreement. The offering of shares pursuant to the Sale Agreement will terminate upon
the earlier to occur of (i) the issuance and sale, through B. Riley Securities, of all of the shares subject to the Sales Agreement and
(ii) termination of the Sale Agreement in accordance with its terms.
Common
Stock
At
our annual meeting of stockholders held on September 29, 2020, stockholders approved a proposal to increase the number of authorized
shares of our common stock to 25,000,000 shares. Accordingly, on November 5, 2020, we filed an amendment to the Neonode Inc. Restated
Certificate of Incorporation, as amended (our “Certificate of Incorporation”), with the Secretary of State of the State of
Delaware to increase the number of authorized shares of our common stock to 25,000,000 shares.
On
December 29, 2020, we issued 37,288 shares of our common stock to key employees pursuant to our 2020 long-term incentive program (“2020
LTIP”) (see Note 4).
On
August 12, 2021, we issued 12,830 shares of our common stock to key employees pursuant to our 2020 LTIP (see Note 4).
On
December 29, 2021, we issued 14,735 shares of our common stock to key employees pursuant to our 2020 LTIP (see Note 4).
During the twelve months ended
December 31, 2021, we sold an aggregate of 235,722 shares of common stock under the ATM Facility, resulting in net proceeds to us of approximately
$1,984,000 after payment of commissions to B. Riley Securities and other expenses of $66,000.
On
October 21, 2021, we entered into a placement agency agreement with Pareto Securities Inc. and Pareto Securities AB pursuant to which
we sold to certain Swedish and other European investors an aggregate of 1,808,000 shares of our common stock at a price of $7.75 per
share in a registered direct offering that closed on October 26, 2021 (the “Offering”). We received net proceeds of approximately
$13.1 million from the Offering after deducting placement agent fees and offering expenses.
Preferred
Stock
There were no transactions
in our preferred stock during the three months ended March 31, 2022 and 2021. No shares of preferred stock were issued and outstanding
as of March 31, 2022.
Warrants
As of March 31, 2022 and December
31, 2021, the Company had outstanding warrants to purchase zero and 431,368 shares of common stock, respectively. During the three months
ended March 31, 2022, 431,368 warrants expired and no warrants were exercised.
4.
Stock-Based Compensation
We have adopted equity incentive
plans for which stock options and restricted stock awards are available to grant 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 common 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.
Stock
Options
During the year ended December
31, 2020, our stockholders approved the Neonode Inc. 2020 Stock Incentive Plan (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”).
Although no new awards may be made under the 2006 Plan or 2015 Plan, the 2015 Plan is still operative for awards previously granted under
such plan. There are no awards outstanding under the 2006 Plan. Under the 2020 Plan, 750,000 shares of common stock have been reserved
for awards, including nonqualified 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.
In
2020 we established the Neonode Inc. 2020 Long Term Incentive Plan (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 Company. Through the 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.
On
December 29, 2020, we issued 37,288 shares of common stock to key employees pursuant to the 2020 LTIP. The shares were immediately vested
but subject to a two-year lock-up period after issuance. In the event the participant’s employment with Neonode is terminated by
the participant during the two-year lock-up period, the Company will repurchase the shares at a price equal to 30% of the lower of market
value at issuance and termination date. Neonode has reported and paid Swedish social charges of $75,000 for the issued shares but only
30% of the stock-based compensation (totaling $77,000) was recognized immediately in the consolidated statement of operations for the
year ended December 31, 2020, with the remainder to be recognized ratably over the two-year lock-up period.
On
August 12, 2021, we issued 12,830 shares of common stock to a key employee pursuant to the 2020 LTIP. The shares were immediately vested
but subject to a two-year lock-up period after issuance. In the event the participant’s employment with the Company is terminated
by the participant during the two-year lock-up period, the Company will repurchase the shares at a price equal to 30% of the lower of
market value at issuance and the termination date. The Company has reported and paid Swedish social charges of $21,000 for the issued
shares but only 30% of the stock-based compensation (totaling $25,000) was recognized immediately in the consolidated statements of operations
for the year ended December 31, 2021, with the remainder to be recognized ratably over the two-year lock-up period.
On
December 29, 2021, we issued 14,735 shares of common stock to key employees pursuant to the 2020 LTIP. The shares were immediately vested
but subject to a two-year lock-up period after issuance. In the event the participant’s employment with Neonode is terminated by
the participant during the two-year lock-up period, the Company will repurchase the shares at a price equal to 30% of the lower of market
value at issuance and termination date. Neonode has reported and paid Swedish social charges of $46,000 for the issued shares but only
30% of the stock-based compensation (totaling $38,000) was recognized immediately in the consolidated statements of operations for the
year ended December 31, 2021, with the remainder to be recognized ratably over the two-year lock-up period.
For the three months ended
March 31, 2022 and 2021, we recognized $39,000 and $23,000, respectively, of stock-based compensation for the amortization of the 2020
LTIP over the respective lock-up periods.
A
summary of the combined activity under all of our stock option plans is set forth below:
| |
Number of Options Outstanding | | |
Weighted Average Exercise Price | |
Outstanding at January 1, 2022 | |
| 9,500 | | |
$ | 26.19 | |
Expired | |
| (7,000 | ) | |
| 30.40 | |
Outstanding at March 31, 2022 | |
| 2,500 | | |
$ | 14.40 | |
The
aggregate intrinsic value of the 2,500 stock options that are outstanding, vested and expected to vest as of March 31, 2022 was $0.
For
the three months ended March 31, 2022 and 2021, we recorded no compensation expense related to the vesting of stock options.
During
the three months ended March 31, 2022, we did not grant any options to purchase shares of our common stock to employees or members of
our board of directors.
Stock options granted under
the 2006, 2015 and 2020 Plans are exercisable over a maximum term of 10 years 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.
5.
Commitments and Contingencies
Litigation
On
September 2, 2020, a putative stockholder of Neonode filed a purported class action lawsuit (Case No. 1:20-cv-01174-UNA) in the United
States District Court for the District of Delaware against Neonode, the Board of Directors of Neonode, and the Chief Executive Officer
of Neonode for alleged violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended, in connection with disclosure
of information concerning Proposal 5 and Proposal 6 in the proxy statement filed with the SEC by Neonode on August 20, 2020 for the 2020
Annual Meeting of Stockholders of Neonode (the “Proxy Statement”). These proposals for shareholder approval related to the
Private Placement by Neonode on August 5, 2020 in which two directors and the chief executive officer of Neonode participated. The relief
sought by the plaintiff included a preliminary injunction to enjoin the stockholder votes on Proposal 5 and Proposal 6. On October 20,
2020, the plaintiff voluntarily dismissed the lawsuit in the United States District Court. However, on February 11, 2021, the plaintiff’s
counsel informed Neonode that they would file a fee petition as a result of Neonode filing the definitive additional materials to the
Proxy Statement on September 18, 2020. On September 9, 2021, the plaintiff’s counsel filed a complaint in the Supreme Court of
the State of New York, County of Nassau, to recover plaintiff’s attorneys’ fees and expenses in the amount of $400,000 incurred
in connection with the Proceeding. On November 3, 2021, the Company entered into a settlement agreement with plaintiff’s counsel,
which was accrued for as of September 30, 2021. On November 4, 2021, the case was dismissed with prejudice.
Indemnities
and Guarantees
Our bylaws require that we
indemnify each of our executive officers and directors for certain events or occurrences arising because of the officer or director serving
in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential
amount of future payments we could be required to make under these indemnification agreements is unlimited. However, we have a directors’
and officers’ liability insurance policy that should enable us to recover a portion of any future amounts paid. As a result of our
insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal and we have no liabilities
recorded for these agreements as of March 31, 2022 and December 31, 2021.
We enter into indemnification
provisions under our agreements with other companies in the ordinary course of business, typically with business partners, contractors,
customers and landlords. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or
incurred by the indemnified party as a result of our activities or, in some cases, as a result of the indemnified party’s activities
under the agreement. These indemnification provisions often include indemnifications relating to representations made by us regarding
intellectual property rights. These indemnification provisions generally survive termination of the underlying agreement. The maximum
potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have not incurred
material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated
fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these indemnification provisions as of March
31, 2022 and December 31, 2021.
One
of our manufacturing partners has previously purchased material for the final assembly of AirBars. To protect the manufacturer from losses
in relation to AirBar production, we agreed to secure the value of the inventory in a bank guarantee. In December, 2021 the bank guarantee
was cancelled.
Patent
Assignment
On
May 6, 2019, the Company assigned a portfolio of patents to Aequitas Technologies LLC. The assignment provides the Company the right
to share potential proceeds generated from a licensing and monetization program.
On June 8, 2020, Neonode Smartphone
LLC, a subsidiary of Aequitas Technologies LLC filed complaints against Apple and Samsung in the Western District of Texas for infringing
two patents. The case against Apple was subsequently transferred to the Northern District of California. Both matters are still ongoing.
Non-Recurring
Engineering Development Costs
On
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
ASIC. Under the terms of the NN1002 Agreement, we agreed to pay TI $500,000 of non-recurring engineering costs at the rate of $0.25 per
ASIC for each of the first 2,000,000 ASICs sold. As of March 31, 2022, we had made no payments to TI under the NN1002 Agreement.
6.
Segment Information
We
have one reportable segment, which is comprised of the touch technology licensing and products business. We report revenues from external
customers based on the country where the customer is located.
The following table presents
net revenues by geographic area for the three months ended March 31, 2022 and 2021, respectively (dollars in thousands):
| |
Three months ended March 31, 2022 | | |
Three months ended March 31, 2021 | |
| |
Amount | | |
Percentage | | |
Amount | | |
Percentage | |
United States | |
$ | 493 | | |
| 38 | % | |
$ | 693 | | |
| 42 | % |
Japan | |
| 387 | | |
| 29 | % | |
| 405 | | |
| 24 | % |
South Korea | |
| 203 | | |
| 15 | % | |
| 284 | | |
| 17 | % |
Switzerland | |
| 64 | | |
| 5 | % | |
| 21 | | |
| 1 | % |
Germany | |
| 57 | | |
| 4 | % | |
| 109 | | |
| 7 | % |
France | |
| 36 | | |
| 3 | % | |
| 5 | | |
| 0 | % |
China | |
| 20 | | |
| 2 | % | |
| 134 | | |
| 8 | % |
Other | |
| 58 | | |
| 4 | % | |
| 14 | | |
| 1 | % |
| |
$ | 1,318 | | |
| 100 | % | |
$ | 1,665 | | |
| 100 | % |
The
following table presents our total assets by geographic region as of March 31, 2022 and December 31, 2021 (in thousands):
| |
March 31, 2022 | | |
December 31, 2021 | |
United States | |
$ | 15,369 | | |
$ | 17,589 | |
Sweden | |
| 5,887 | | |
| 5,353 | |
Asia | |
| 51 | | |
| 50 | |
Total | |
$ | 21,307 | | |
$ | 22,922 | |
7.
Leases
We have operating leases for our corporate offices and our manufacturing
facility, and finance leases for equipment. Our leases have remaining lease terms of two months to two years. One of our primary operating
leases includes options to extend the lease for one to three years and the other primary lease includes an option to annually prolong;
those operating leases also include options to terminate the leases within one year. Future renewal options that are not likely to be
executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities.
Our
operating leases represent building leases for our Stockholm corporate offices and our Kungsbacka manufacturing facility. Our Stockholm
corporate office lease has a remaining lease term of under one year and both of our leases are automatically renewed at a cost increase
of 2% on an annual basis, unless we provide written notice nine months prior to the respective expiration dates.
We
report operating lease right-of-use assets, as well as current and noncurrent operating lease obligations on our consolidated balance
sheets for the right to use those buildings in our business. Our finance leases represent manufacturing equipment; we report the manufacturing
equipment, as well as current and noncurrent finance lease obligations on our consolidated balance sheets for our manufacturing equipment.
Generally,
interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates
implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using
the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate.
The
components of lease expense were as follows (in thousands):
| |
Three Months Ended March 31, 2022 | | |
Three Months Ended March 31, 2021 | |
Operating lease cost (1) | |
$ | 166 | | |
$ | 176 | |
| |
| | | |
| | |
Finance lease cost: | |
| | | |
| | |
Amortization of leased assets | |
$ | 30 | | |
$ | 169 | |
Interest on lease liabilities | |
| 2 | | |
| 4 | |
Total finance lease cost | |
$ | 32 | | |
$ | 173 | |
(1) | Includes short-term lease costs of $44,000 and $38,000 for the three months ended March 31, 2022 and 2021, respectively. |
Supplemental
cash flow information related to leases was as follows (in thousands):
| |
Three Months Ended March 31, 2022 | | |
Three Months Ended March 31, 2021 | |
Cash paid for amounts included in leases: | |
| | |
| |
Operating cash flows from operating leases | |
$ | (184 | ) | |
| (210 | ) |
Operating cash flows from finance leases | |
| (2 | ) | |
| (4 | ) |
Financing cash flows from finance leases | |
| (61 | ) | |
| (148 | ) |
| |
| | | |
| | |
Right-of-use assets obtained in exchange for lease obligations: | |
| | | |
| | |
Operating leases | |
| - | | |
| - | |
Supplemental
balance sheet information related to leases was as follows (in thousands):
| |
March 31, 2022 | | |
December 31, 2021 | |
Operating leases | |
| | |
| |
Operating lease right-of-use assets | |
$ | 450 | | |
$ | 584 | |
| |
| | | |
| | |
Current portion of operating lease obligations | |
$ | 245 | | |
$ | 425 | |
Operating lease liabilities, net of current portion | |
| 95 | | |
| 117 | |
Total operating lease liabilities | |
$ | 340 | | |
$ | 542 | |
| |
| | | |
| | |
Finance leases | |
| | | |
| | |
Property and equipment, at cost | |
$ | 2,707 | | |
$ | 3,463 | |
Accumulated depreciation | |
| (2,472 | ) | |
| (3,199 | ) |
Property and equipment, net | |
$ | 235 | | |
$ | 264 | |
| |
| | | |
| | |
Current portion of finance lease obligations | |
$ | 150 | | |
$ | 258 | |
Finance lease liabilities, net of current portion | |
| 101 | | |
| 65 | |
Total finance lease liabilities | |
$ | 251 | | |
$ | 323 | |
| |
March 31, 2022 | | |
March 31, 2021 | |
Weighted Average Remaining Lease Term | |
| | |
| |
Operating leases | |
| 1.5 years | | |
| 1.5 years | |
Finance leases | |
| 2.0 years | | |
| 0.9 years | |
| |
| | | |
| | |
Weighted Average Discount Rate: | |
| | | |
| | |
Operating leases (2) | |
| 5 | % | |
| 5 | % |
Finance leases | |
| 2 | % | |
| 2 | % |
(2) | Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019 |
A
summary of future minimum payments under non-cancellable operating lease commitments as of March 31, 2022 is as follows (in thousands):
Year ending December 31, | |
Total | |
2022 (remaining months) | |
| 219 | |
2023 | |
| 79 | |
2024 | |
| 59 | |
| |
| 357 | |
Less imputed interest | |
| (17 | ) |
Total lease liabilities | |
$ | 340 | |
Less current portion | |
| (245 | ) |
| |
$ | 95 | |
The
following is a schedule of minimum future rentals on the non-cancellable finance leases as of March 31, 2022 (in thousands):
Year ending December 31, | |
Total | |
2022 (remaining months) | |
$ | 126 | |
2023 | |
| 90 | |
2024 | |
| 30 | |
2025 | |
| 11 | |
Total minimum payments required: | |
| 257 | |
Less amount representing interest: | |
| (6 | ) |
Present value of net minimum lease payments: | |
| 251 | |
Less current portion | |
| (150 | ) |
| |
$ | 101 | |
8.
Net Loss per Share
Basic
net loss per common share for the three months ended March 31, 2022 and 2021 was computed by dividing the net loss attributable to common
shareholders of Neonode Inc. for the relevant period by the weighted average number of shares of common stock outstanding. Diluted loss
per common share is computed by dividing net loss attributable to common shareholders of Neonode Inc. for the relevant period by the
weighted average number of shares of common stock and common stock equivalents outstanding.
There
were no potentially dilutive common stock equivalents for the three months ended March 31, 2022 and 2021, respectively.
(in thousands, except per share amounts) | |
Three months ended March 31, | |
| |
2022 | | |
2021 | |
BASIC AND DILUTED | |
| | |
| |
Weighted average number of common shares outstanding | |
| 13,576 | | |
| 11,504 | |
Net loss attributable to Neonode Inc. | |
$ | (1,380 | ) | |
$ | (1,568 | ) |
| |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (0.10 | ) | |
$ | (0.14 | ) |
9.
Subsequent Events
No
other subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure
in the notes thereto other than as discussed elsewhere in the accompanying notes.