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, until
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
condensed consolidated balance sheets at March 31, 2023 and December 31, 2022 and the condensed consolidated statements of operations,
comprehensive loss, stockholders’ equity and cash flows for the three months ended March 31, 2023 and 2022 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 Credit Losses Accounts receivable is stated
at net realizable value. We estimate and record a provision for expected credit losses related to our financial instruments, including
our trade receivables. We consider historical collection rates, the current financial status of our customers, macroeconomic factors,
and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered
in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable,
we believe that the carrying value, net of excepted losses, approximates fair value and therefore, relies more on historical and current
analysis of such financial instruments, including our trade receivables. Further, we consider macroeconomic
factors and the status of the technology industry to estimate if there are current expected credit losses within our trade receivables
based on the trends and our expectation of the future status of such economic and industry-specific factors. Also, specific allowance
amounts are established based on review of outstanding invoices to record the appropriate provision for customers that have a higher probability
of default. The accounts receivable balance
on our consolidated balance sheet as of March 31, 2023 was $1.9 million, net of approximately $30,000 of allowances. The following table
provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present
the net amount expected to be collected at March 31, 2023:
| Balance at January 1, 2023 | |
$ | 30,000 | |
| Change in expected credit losses | |
| - | |
| Write-offs, net of recoveries | |
| - | |
| Balance at March 31, 2023 | |
$ | 30,000 | |
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. 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 $0.3 million as of March 31, 2023 and December 31, 2022,
respectively. Raw
materials, work-in-process, and finished goods are as follows (in thousands):
| | |
March 31, | | |
December 31, | |
| | |
2023 | | |
2022 | |
| Raw
materials | |
$ | 3,241 | | |
$ | 3,177 | |
| Work-in-process | |
| 384 | | |
| 414 | |
| Finished
goods | |
| 226 | | |
| 236 | |
| Ending
inventory | |
$ | 3,851 | | |
$ | 3,827 | |
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 | |
Depreciation
of 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 March 31, 2023, 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 were $35,000 and $33,000 during the three months ended
March 31, 2023 and 2022, respectively. Losses resulting from foreign currency transactions are included in general and administrative
expenses in the accompanying condensed consolidated statements of operations and were $(5,000) during the three months ended March 31,
2023 compared to $(1,000) during the same period in 2022. Concentration
of Credit and Business Risks Our
customers are located in the United States, Europe and Asia. As of March 31, 2023, three
of our customers represented approximately 64% of our consolidated accounts receivable and unbilled revenues. As
of December 31, 2022, five of our customers represented approximately 83% 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, 2023 are as follows: | | ● | Hewlett-Packard Company – 31% | | | | | | | ● | Seiko Epson – 20% | | | | | | | ● | Alps Alpine – 15% | | | | | | | ● | LG – 14% | 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% | | | | | | | ● | Alps Alpine – 11% | 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, 2023. Product
Sales We
earn revenue from sales of TSM hardware products to our Original Equipment Manufacturer (“OEM”), Original Design Manufacturer
(“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 as of each of March 31, 2023 and December 31, 2022. The warranty reserve is recorded as an accrued expense and cost of sales and
was $47,000 as of March 31, 2023 and $49,000 as of December 31, 2022. 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 three months ended March 31, 2023 and 2022,
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, 2023 and
2022 (dollars in thousands):
| | |
Three months ended
March 31, 2023 | | |
Three months ended
March 31, 2022 | |
| | |
Amount | | |
Percentage | | |
Amount | | |
Percentage | |
| AMER | |
| | |
| | |
| | |
| |
| Net revenues from consumer electronics | |
$ | 447 | | |
| 95 | % | |
$ | 479 | | |
| 97 | % |
| Net revenues from distributors and other | |
| 24 | | |
| 5 | % | |
| 14 | | |
| 3 | % |
| | |
$ | 471 | | |
| 100 | % | |
$ | 493 | | |
| 100 | % |
| | |
| | | |
| | | |
| | | |
| | |
| APAC | |
| | | |
| | | |
| | | |
| | |
| Net revenues from automotive | |
$ | 357 | | |
| 56 | % | |
$ | 356 | | |
| 55 | % |
| Net revenues from consumer electronics | |
| 258 | | |
| 41 | % | |
| 235 | | |
| 37 | % |
| Net revenues from distributors and other | |
| 19 | | |
| 3 | % | |
| 50 | | |
| 8 | % |
| | |
$ | 634 | | |
| 100 | % | |
$ | 641 | | |
| 100 | % |
| | |
| | | |
| | | |
| | | |
| | |
| EMEA | |
| | | |
| | | |
| | | |
| | |
| Net revenues from automotive | |
$ | 89 | | |
| 60 | % | |
$ | 88 | | |
| 48 | % |
| Net revenues from medical | |
| 34 | | |
| 23 | % | |
| 64 | | |
| 35 | % |
| Net revenues from distributors and other | |
| 25 | | |
| 17 | % | |
| 32 | | |
| 17 | % |
| | |
$ | 148 | | |
| 100 | % | |
$ | 184 | | |
| 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, 2023 and December 31, 2022 (in thousands):
| | |
March 31,
2023 | | |
December 31,
2022 | |
| Accounts receivable and unbilled revenue, net | |
$ | 1,941 | | |
$ | 1,448 | |
| Contract liabilities (deferred revenues) | |
$ | 31 | | |
$ | 36 | |
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):
| | |
March 31,
2023 | | |
December 31,
2022 | |
| Balance
at beginning of period | |
$ | 49 | | |
$ | 36 | |
| Provisions
for warranty issued | |
| (2 | ) | |
| 13 | |
| Balance
at end of period | |
$ | 47 | | |
$ | 49 | |
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 condensed 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):
| | |
March 31,
2023 | | |
December 31,
2022 | |
| Deferred
revenues license fees | |
$ | 18 | | |
$ | 20 | |
| Deferred
revenues products | |
| 9 | | |
| 9 | |
| Deferred
revenues non-recurring engineering | |
| 4 | | |
| 7 | |
| | |
$ | 31 | | |
$ | 36 | |
During the three months ended
March 31, 2023, the Company recognized revenues of approximately $5,000 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, 2023 and 2022 amounted to approximately $54,000
and $46,000, 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 condensed 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 Company, 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, 2023 and December 31, 2022.
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,
2023 and December 31, 2022, 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, 2023 and 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, 2023 and 2022 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 as accumulated other comprehensive income (loss) in the accompanying 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 rates for the condensed consolidated statements of operations were as follows:
| | |
Three
months ended
March 31, | |
| | |
2023 | | |
2022 | |
| Swedish
Krona | |
| 10.46 | | |
| 9.34 | |
| Japanese
Yen | |
| 132.34 | | |
| 116.23 | |
| South
Korean Won | |
| 1,276.12 | | |
| 1,205.29 | |
| Taiwan
Dollar | |
| 30.41 | | |
| 28.00 | |
The exchange rates for the
condensed consolidated balance sheets were as follows:
| | |
As
of | |
| | |
March 31, | | |
December 31, | |
| | |
2023 | | |
2022 | |
| Swedish
Krona | |
| 10.36 | | |
| 10.43 | |
| Japanese
Yen | |
| 132.83 | | |
| 131.12 | |
| South
Korean Won | |
| 1,304.60 | | |
| 1,261.91 | |
| Taiwan
Dollar | |
| 30.49 | | |
| 30.66 | |
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. Recent 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 effective for fiscal years beginning after December 15, 2022, as we were a smaller reporting company
as of November 15, 2019, the determination date. We adopted ASU 2016-13 on January 1, 2023. Based on the composition of our accounts receivable,
and other financial assets, including current market conditions and historical credit loss activity, the adoption of this standard did
not have a material impact on our consolidated financial statements or disclosures. Specifically, our estimate of expected credit losses
as of March 31, 2023, using our expected credit loss evaluation process described above, resulted in no adjustments to the provision for
credit losses and no cumulative-effect adjustment to accumulated deficit on the adoption date of the standard.
|