2. |
Summary of Significant Accounting policies |
Principles of Consolidation The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (“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, through September 30, 2022. On October 1, 2022, the remaining 49% of Pronode Technologies AB was acquired from
Propoint AB, located in Gothenburg, Sweden. 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 consolidated balance sheets at December 31,
2022 and 2021 and the consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the years
ended December 31, 2022 and 2021 include our accounts and those of our wholly owned subsidiaries. Estimates 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 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 shares and options issued for 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 of less to be cash equivalents. Concentration of Cash Balance Risks Cash balances are maintained at various banks
in the U.S., Japan, Korea, Taiwan and Sweden. For deposits held with financial institutions in the U.S., 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 100,000 Euro per customer and covers deposits in all types of accounts. The Japanese government provides insurance coverage up
to 10,000,000 Yen per customer. The Korea Deposit Insurance Corporation provides insurance coverage up to 50,000,000 Won per customer.
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 the 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 $30,000 and $79,000 as of December 31, 2022 and 2021, respectively. 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 in projects in process
as of December 31, 2022 and 2021. Inventory The Company’s inventory
consists primarily of components that will be used in the manufacturing of our touch sensor modules (“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 and finished goods.
The AirBar inventory reserve was $0.3 million and $0.8 million as of December 31, 2022 and 2021, respectively. Management decided to reserve for TSM inventory related to a quality
issue in production. The TSM inventory reserve was $0.2 million as of December 31, 2021. During 2022 the affected inventory was scrapped
and as of December 31, 2022 the inventory reserve was zero. Raw materials, work-in-process, and finished goods
are as follows (in thousands):
| |
December 31, | | |
December 31, | |
| |
2022 | | |
2021 | |
Raw materials | |
$ | 3,177 | | |
$ | 1,446 | |
Work-in-process | |
| 414 | | |
| 10 | |
Finished goods | |
| 236 | | |
| 1,064 | |
Ending inventory | |
$ | 3,827 | | |
$ | 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 | |
| 10 years | |
Equipment purchased under a finance lease is depreciated
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 consolidated
statement of operations. Maintenance and repairs are charged to expense as incurred. Right-of-Use Assets 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. 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 any impairment by estimating the future
cash flow from the associated asset in accordance with relevant accounting guidance. If the estimated undiscounted future cash flow 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 December 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 or the 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).
Gains or (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying
consolidated statements of operations and were $35,000 and $(66,000) during the years ended December 31, 2022 and 2021, respectively.
Foreign currency translation gains (losses) were $68,000 and $(4,000) during the years ended December 31, 2022 and 2021, respectively. Concentration of Credit and Business Risks Our customers are located in the United States,
Europe and Asia. As of December 31, 2022, five of our customers
represented approximately 83% 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
revenues during the year ended December 31, 2022 are as follows. | ● | Hewlett-Packard Company – 27% | | | | | ● | Seiko Epson – 19% | | | | | ● | LG – 12% | | | | | ● | Alpine Electronics – 10% | Customers who accounted for 10% or more of our
revenues during the year ended December 31, 2021 are as follows. | ● | Hewlett-Packard Company – 32% | | | | | ● | Seiko Epson – 18% | | | | | ● | LG – 13% | The Company conducts business in the United States,
Europe and Asia. As of December 31, 2022, the Company maintained approximately $15,535,000, $3,857,000 and $26,000 of its net assets in
the United States, Europe and Asia, respectively. As of December 31, 2021, the Company maintained approximately $17,198,000, $2,611,000
and $28,000 of its net assets in the United States, Europe and Asia, respectively. 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 December 31, 2022. Product Sales We earn revenue from sales of TSM hardware products
to our OEM, ODM 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
AirBar and TSMs 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 AirBar and TSMs 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 AirBar and TSM 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 $9,000 and $69,000 as
of December 31, 2022 and 2021, respectively. The warranty reserve is recorded as an accrued expense and cost of sales and was $49,000
and $36,000 as of December 31, 2022 and 2021, respectively. 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 unearned revenue 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 years ended December 31, 2022 and 2021, we recorded no losses. The following tables present the net revenues
distribution by geographical area and market for the years ended December 31, 2022 and 2021 (dollars in thousands):
| |
2022 | | |
2021 | |
| |
Amount | | |
Percentage | | |
Amount | | |
Percentage | |
AMER | |
| | |
| | |
| | |
| |
Net revenues from consumer electronics | |
$ | 1,812 | | |
| 98.5 | % | |
$ | 2,097 | | |
| 93.4 | % |
Net revenues from distributors and other | |
| 27 | | |
| 1.5 | % | |
| 149 | | |
| 6.6 | % |
| |
$ | 1,839 | | |
| 100.0 | % | |
$ | 2,246 | | |
| 100.0 | % |
| |
| | | |
| | | |
| | | |
| | |
APAC | |
| | | |
| | | |
| | | |
| | |
Net revenues from automotive | |
$ | 1,295 | | |
| 46.9 | % | |
$ | 1,330 | | |
| 42.9 | % |
Net revenues from consumer electronics | |
| 1,127 | | |
| 40.8 | % | |
| 1,088 | | |
| 35.0 | % |
Net revenues from distributors and other | |
| 341 | | |
| 12.3 | % | |
| 685 | | |
| 22.1 | % |
| |
$ | 2,763 | | |
| 100.0 | % | |
$ | 3,103 | | |
| 100.0 | % |
| |
| | | |
| | | |
| | | |
| | |
EMEA | |
| | | |
| | | |
| | | |
| | |
Net revenues from automotive | |
$ | 493 | | |
| 46.1 | % | |
$ | 313 | | |
| 64.3 | % |
Net revenues from medical | |
| 398 | | |
| 37.3 | % | |
| 73 | | |
| 15.0 | % |
Net revenues from distributors and other | |
| 177 | | |
| 16.6 | % | |
| 101 | | |
| 20.7 | % |
| |
$ | 1,068 | | |
| 100.0 | % | |
$ | 487 | | |
| 100.0 | % |
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,
unbilled revenues and deferred revenues as of December 31, 2022 and 2021 (in thousands):
| |
December 31, 2022 | | |
December 31, 2021 | |
Accounts receivable and unbilled revenues | |
$ | 1,448 | | |
$ | 1,293 | |
Contract liabilities (deferred revenues) | |
$ | 36 | | |
$ | 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 sheets 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. The allowance for doubtful accounts reflects our
best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts,
historical experience, and other currently available evidence. 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):
| |
Years ended | |
| |
December 31, 2022 | | |
December 31, 2021 | |
Balance at beginning of period | |
$ | 36 | | |
$ | 25 | |
Provisions for warranty issued | |
| 13 | | |
| 11 | |
Balance at end of period | |
$ | 49 | | |
$ | 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 included as a component of accrued expenses on the consolidated balance sheet. 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):
|
|
As of
December 31, |
|
|
|
2022 |
|
|
2021 |
|
Deferred revenues license fees |
|
$ |
20 |
|
|
$ |
28 |
|
Deferred revenues products |
|
|
9 |
|
|
|
70 |
|
Deferred non-recurring engineering |
|
|
7 |
|
|
|
8 |
|
|
|
$ |
36 |
|
|
$ |
106 |
|
Deferred revenue not yet recognized was $36,000
as of December 31, 2022. We expect to recognize 100% of that revenue over the next twelve months. The Company recognized revenues of approximately
$24,000 and $41,000, for 2022 and 2021, respectively, related to contract liabilities outstanding at the beginning of the year. Advertising Advertising costs are expensed as incurred. Advertising
costs amounted to approximately $158,000 and $208,000 for the years ended December 31, 2022 and 2021, 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 consolidated
statement of stockholders’ equity, if presented, or in the notes to 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 December 31, 2022 and 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 December 31, 2022 and 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 years ended December 31, 2022 and 2021. 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 years ended December 31, 2022 and 2021 exclude the potential
common stock equivalents, as the effect would be anti-dilutive (see Note 14). 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 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 consolidated statements of operations was as follows:
| |
Years ended December 31, | |
| |
2022 | | |
2021 | |
Swedish Krona | |
| 10.12 | | |
| 8.58 | |
Japanese Yen | |
| 131.72 | | |
| 109.82 | |
South Korean Won | |
| 1,292.25 | | |
| 1,144.95 | |
Taiwan Dollar | |
| 29.81 | | |
| 27.93 | |
Exchange rates for the consolidated balance sheets
were as follows:
| |
As of December 31, | |
| |
2022 | | |
2021 | |
Swedish Krona | |
| 10.43 | | |
| 9.03 | |
Japanese Yen | |
| 131.12 | | |
| 115.12 | |
South Korean Won | |
| 1,261.91 | | |
| 1,190.75 | |
Taiwan Dollar | |
| 30.66 | | |
| 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. Reclass of Presentation in our Consolidated Statements
of Operations 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.
|