STOCKHOLM - Neonode Inc . (NASDAQ: NASDAQ:NEON), a Swedish company specializing in optical sensing technology, has entered into its first license agreement for its Touch Sensor Module (TSM) technology with YesAR, a Chinese firm focused on holographic display technology. The deal, announced today, marks a significant step in Neonode's shift from product sales to a licensing business model, a transition that began in December 2023.
The licensing agreement will allow YesAR to incorporate Neonode's TSM technology into its development and manufacturing of holographic infotainment solutions. These solutions are intended for use in the automotive and elevator industries, among other sectors. The agreement entails an upfront technology access fee, followed by royalties from future sales.
Fredrik Nihlén, interim President and CEO and CFO of Neonode, expressed enthusiasm about the momentum of TSM technology and its role in the expanding market of holographic interfaces. The partnership is seen as a testament to Neonode's commitment to innovation through licensing.
Johan Swartz, Vice President of Marketing & Sales at Neonode, highlighted the ongoing collaboration with YesAR since 2020. He anticipates that the licensing arrangement will further strengthen their relationship and is optimistic about the innovative applications YesAR will create using the TSM technology platform.
Neonode's patented TSM technology is based on its zForce® optical sensing platform, which detects touch input or objects across an infrared projected plane. The technology is designed to deliver precise touch accuracy and can be integrated into various applications requiring touch input, including contactless midair interaction with holographic images.
The information is based on a press release statement from Neonode.
InvestingPro Insights
Neonode Inc. (NASDAQ: NEON) is navigating a transformative phase as it pivots from product sales to a licensing business model. The recent licensing agreement with YesAR is a critical step in this direction, and the market is responding to Neonode's strategic moves. According to InvestingPro data, Neonode's market capitalization stands at 37.17 million USD, reflecting the company's current valuation in the market.
InvestingPro Tips indicate that Neonode holds more cash than debt on its balance sheet, which could provide financial flexibility in pursuing further strategic partnerships similar to the YesAR agreement. However, analysts have flagged concerns, such as the company's quick cash burn rate and weak gross profit margins, which are underscored by a gross profit margin of -16.2% over the last twelve months as of Q1 2024. Additionally, Neonode has not been profitable over the past year, with a reported operating income margin of -271.4% for the same period.
Despite these challenges, Neonode has experienced significant price movement, with a strong return over the last three months of 60.0%, and an even more impressive six-month price total return of 110.53%. This suggests that investors may be optimistic about the company's future prospects and its ability to capitalize on emerging opportunities in the holographic and interactive display markets.
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