Neonode, Inc. Q2 FY2022 earnings call

• Business model has two pillars: technology licensing (zForce and MultiSensing platforms) and product sales (touch sensor modules/T SMs). - Focus segments for licensing: printers and automotive; for products: elevator interactive kiosks. - Worked on marketing and lead generation, including digital campaigns, events like Passenger Terminal Expo, and partnerships. - Addressing challenges like COVID lockdowns, semiconductor shortages, but seeing potential in products business and automotive licensing.

Total revenues for Q2 2022 were $1.3 million, a 26% year-over-year decrease. License revenues declined due to customer component shortages. Product revenues were $0.2 million, a 39% year-over-year decrease, affected by COVID-19 lockdowns and long product development cycles. Gross margin was 56%, up 17 percentage points year-over-year (based on low volumes). Operating expenses were $2.8 million, a 14% year-over-year decrease. Net loss was $1.5 million. Cash burn was $2.9 million, with cash and accounts receivable balance at $13.5 million as of June 30, 2022.

• Remain optimistic about growing and improving cash flow during the rest of 2022 and coming year. - Ambitious growth targets and working hard to realize potential. - Expecting semiconductor issues to be remedied in third and fourth quarters, leading to a rebound.

• COVID-related lockdowns affecting customers and partners in China, Korea, Taiwan. - Semiconductor shortages impacting customers in printer and automotive sectors. - Long sales and development cycles due to macro uncertainties, high interest rates. - Currency effects, with SEK weakness impacting consolidated results.

Q: Regarding product segments and main projects, update on largest projects?

A: Working on elevator OEMs with new equipment solutions and kiosk market with fragmented segments, some Fortune 500 customers.

Q: Driver monitoring procurements and design wins?

A: Late entrant, but flexible software platform getting positive responses, with potential design wins this year and next, though launches are a few years out.

Q: Impact of macro uncertainties like inflation and FX?

A: Short-term inflation not major, but currency effect with SEK weakness helping as cost base is in SEK.