NASDAQ: NEON

Licensing

We license our MultiSensing and zForce technology to OEMs and automotive Tier 1 suppliers who embed our technology into products that they develop, manufacture and sell. Since 2010, our licensing customers have sold over 95 million devices that use our patented technology.

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

Our licensing customer base is primarily in the automotive and printer segments. Nine of our licensing customers are currently shipping products that embed our technology. We anticipate current customers will continue to ship products with our technology in 2026 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 MultiSensing technologies as they complete final product development and release cycles. 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.

Non-recurring Engineering Services

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

Typically, our licensing customers require engineering support during the development and initial manufacturing phase for their products using our technology.

Strategy and Focus Areas

Our customers use machine perception technologies to grow their businesses, drive efficiencies, and seek 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.

With the strategic decision in September 2025 to transition the zForce platform into maintenance mode, we are no longer selling the zForce technology to new customers. We instead 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

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.

During 2025 and 2024, our automotive customers shipped approximately 0.3 million and 0.5 million products with our technology, respectively. Accumulated, since 2014, our automotive customers have shipped approximately 8.8 million products featuring our technology.

Printers and Office Equipment

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 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.

Amusement

Following 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.

Holographic Interaction

Using our TSM technology to facilitate interaction with a hologram allows us to create immersive experiences with a “wow factor” in the infotainment sector, e.g. museums, receptions, AI avatars and etc. We also see an increasing potential for surgical planning and education, enabling virtual explorations and interactive learning.

New Business Development

Our strategy process ensures continuous evaluation of the market opportunities we are pursuing. During the past year we identified a new potential vertical segment to pursue, which is the automated self-service check-out systems within retail. If we see, after we complete the evaluation of the full potential, evidence of market pull, this segment may become an important new growth bet.

Customers

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

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

As of December 31, 2024, four of our customers represented approximately 80.9% of our consolidated accounts receivable and unbilled revenues.

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

●

Seiko Epson – 34.3%

●

Alps Alpine – 19.4%

●

Hewlett-Packard – 19.0%

●

Commercial Vehicle OEM – 14.6%

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

●

Seiko Epson – 27.3%

●

Alps Alpine – 20.7%

●

Hewlett-Packard – 20.4%

●

Commercial Vehicle OEM – 11.8%

Customers by Market

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

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
%

Geographical Data

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

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
%

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

December 31,

2025

2024

United States

$
25,324

$
16,951

Sweden

1,555

1,406

Asia

6

24

Total

$
26,885

$
18,381

Competition

There are various driver and in-cabin monitoring solutions that compete with our MultiSensing technology. Our competitors among Tier 2 software providers include SmartEye, Cipia, Xperi, Seeing Machines, PUX and Jungo.

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. 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

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:

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 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.

Our software may also be protected by copyright laws in most countries, including Sweden and the European Union, if the software is deemed new and original. Protection can be claimed from the date of creation.

In 2025 we filed one new patent application and had three patent grants issued; two patents lapsed, twenty-four patents and five patent applications were abandoned.

The duration of our patent protection for utility patents is generally 20 years. The duration of our patent protection for design patents varies throughout the world between 10 and 25 years, depending on the jurisdiction. We believe the duration of our intellectual property rights is adequate relative to the expected lives of our products.

We also protect and 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).

Research and Development

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.

Human Capital

We recognize 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.

We 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 competitive market compensation aligned with company performance. We provide a comprehensive benefits package to our employees, including healthcare and retirement plans. 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.

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.

As of December 31, 2025, we had 39 employees (including 35 full-time employees) and 6 consultants. We have employees and/or consultants located in the United States, Sweden, Japan and Taiwan. None of our employees are represented by a labor union. We have experienced no work stoppages. We believe our employee relations are positive.

Additional Information

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”). The reports and other information filed by us with the SEC are available free of charge on the SEC’s website at www.sec.gov.

Our website 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.