Neonode Inc.

and welcome to the Neonode Q1 2023 earnings call. We will start today by a company presentation by the company, followed by a presentation of the Q1 results. After that, we'll continue with the Q&A session in the end. So with that said, I welcome on stage the company's CEO, Uwam Fossel. Welcome.

Thank you, Jesper. And also from my side, welcome to our Q1 earnings call. Today's call will be managed by me and our CFO, Fredrik Nylén. And before we start the company presentation, and the main content of this call, let me go through a legal disclaimer with you. So please read the text shown on the screen and I will summarize it here. This presentation contains and related oral and written statements of Neonode Inc., the company, and its management may contain forward-looking statements. Forward-looking statements include information about current expectations, strategy plans, potential financial performance, or future events. They may also include statements about market opportunity and sales growth, financial results, use of cash, product development and its introduction, regulatory matters and sales efforts. Forward-looking statements are based on assumptions, expectations and information available to the company and its management and involve a number of known and unknown risks, uncertainties and other factors that may cause the company's actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements. Prospective investors are advised to carefully consider these various risks, uncertainties and other factors. Any forward-looking statements included in this presentation are made as of today's date. The company and its management undertake no duty to update or revise forward-looking statements. This presentation has been prepared by the company based on its own information as well as information from public sources. Certain of the information contained herein may be derived from information provided by industry sources. The company believes such information is accurate and that the sources from which it has been obtained are reliable. However, the company has not independently verified such information and cannot guarantee the accuracy of such information. Thank you for your patience. And with this, I would like to go through the fairly brief agenda today. I will next give a summary of the key points for the quarter, after which I will give the word to Fredrik, who will go through the Q1 financial results. After his presentation, I will come back and share some brief business updates. And after this, we go to the Q&A, which Jesper will lead from his stage here. Summary of key points for Q1. Our licensing revenues were stable in the first quarter. And we conclude by this, that the worldwide semiconductor supply shortage situation has begun to improve. Several of our customers have been hampered by lack of semiconductors and other supply issues during the last two years, and this situation is now starting to improve. Also, our printer and automotive customers' sales have stabilized. So, in turn, our license volumes and our license revenues are on a good level and stable compared to previous quarters. Product sales in Q1 was below our targets. We regret it, but that's just a fact. So we've had a slow start of the year and we see in many markets that indeed after the Christmas holidays and the Chinese New Year, in many markets the businesses were slow. And in our case also, Q1 product sales is held back by the fact that some of our key customers stocked up a lot of products in the end of last year, so they were sitting on high inventory levels after the fourth quarter of last year. Third point, we continue to execute on our strategy, and the focus is to establish beachheads in the key segments that we have identified, and I will elaborate more on that later. So no major deviation or change in strategy. We continue to execute on our strategy and the plans we have laid for the year. We are recruiting currently. to add talent and experience to our sales and engineering teams. And I'm glad to say that the market for recruiting new talent is quite good right now, both in Sweden and also internationally. So we have made some strong recruitments recently that we are very glad to bring on board in the team. So these were the four key points I wanted to highlight here at the beginning of the presentation. And now, without further ado, I give the word to Fredrik, who will come up here and go through the Q1 financial results.

Thank you, Urban. I will do a summary of the financial results in this presentation. You can find more details in our 10Q and earnings release. Total revenues for Q1 2023 reached 1.3 million. That is a decrease of 5% compared to the same period last year. License revenue reached 1.1 million. That is an increase of 4% compared to last year. As Urban said, the issue with semiconductor shortages for our customers within automotive and printer has been improved and so has our revenues. Revenue from products was 0.1 million, a decrease of 31% year-on-year. Q1 is a slow quarter for us, but the customers we have have also stocked up, as Urban said, in Q4 2022 when we delivered TSM's to them. Gross margin Q1 2023 for products was 54%. It's a decrease of 11 percentage points compared to the same period last year. The gross margin for products varies with the product mix, but we think the level is quite good. Operating expenses was 2.8 million in Q1 2023. It's an increase of 5% compared to the same period last year. It is mainly an increase in professional fees. Net cash burn for operating activities in Q1 2023 decreased with 25% and reached 1.7 million. It is a combination of that we have bought less components and it's offset by higher accounts receivable due to the timing of customer payments. So as of 31st of March 2023, we have quite a good cash and accounts receivable balance of 22.9 million. It's an increase of 6.7 million from year end 2022. And as we disclosed in the previous earnings call, we used the ATM in January. And with that, I will leave the word back to you, Urban.