Neonode (NEON) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We 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
2. 02We are dependent on a limited number of customers
3. 03We rely on the ability of our customers to design, manufacture and sell their products that incorporate our touch technology
4. 04The length of a customer’s product development and release cycle depends on many factors outside of our control and any delays could cause us to incur significant expenses without offsetting revenues, or revenues that vary significantly from quarter to quarter
5. 05Our 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
6. 06It can be difficult for us to verify royalty amounts owed to us under licensing agreements, and this may cause us to lose potential revenue
7. 07If we fail to develop and introduce new technology successfully, and in a cost-effective and timely manner, we will not be able to compete effectively and our ability to generate revenues will suffer
8. 08Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control
9. 09We must enhance our sales and technology development organizations. 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
10. 10We may make acquisitions and strategic investments that are dilutive to existing stockholders, result in unanticipated accounting charges or otherwise adversely affect our results of operations
11. 11We are dependent on the services of our key personnel
12. 12We may not be successful in our strategic efforts around patent monetization
13. 13If third parties infringe upon our intellectual property, we may expend significant resources enforcing our rights or suffer competitive injury
14. 14The laws of certain foreign countries may not provide sufficient protection of our intellectual property rights to the same extent as the laws of the United States, which may make it more difficult for us to protect our intellectual property
15. 15We have an international presence in countries and must manage currency risks
16. 16We have concentration of cash balance at various banks in the United States, Japan and Sweden
17. 17Security breaches and other disruptions to our information technology infrastructure could interfere with our operations, compromise confidential information, and expose us to liability which could materially adversely impact our business and reputation
18. 18Third parties that maintain our confidential and proprietary information could experience a cybersecurity incident
19. 19While we have identified material weaknesses in our internal control, if we are unable to detect additional material weaknesses in our internal control, our financial reporting and our business may be adversely affected
20. 20Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended
21. 21A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis

Risks Related to Owning Our Stock

1. 22Future sales of our common stock by us or our insiders could adversely affect the trading price of our common stock and dilute your investment
2. 23We currently have fewer than 300 stockholders of record and, therefore, are eligible to terminate the registration of our common stock under the Exchange Act and cease being a U.S. public company with reporting obligations
3. 24Our stock price has been volatile, and your investment in our common stock could suffer a decline in value
4. 25A limited number of stockholders, including directors, hold a significant number of shares of our outstanding common stock
5. 26Our certificate of incorporation and bylaws and the Delaware General Corporation Law contain provisions that could delay or prevent a change in control
6. 27If 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