Hello, everyone. Thank you for standing by, and welcome to Neonode’s Second Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session with the company’s covering analysts. [Operator Instructions].

At this time for opening remarks and introduction, I would like to turn the call over to David Brunton, Neonode’s Head of Corporate Investor Relations. David please go ahead..

Welcome and thank you for joining us. On today’s call, we will review our second quarter 2020 financial results and provide a corporate update. Our update will include details of customer activities, technology developments and other items of interest. Before turning the call over to our CEO, Dr. Urban Forssell and CFO, Maria Ek.

I would like to make the following remarks concerning forward-looking statements.

All statements in this conference call other than historical facts are forward-looking statements the words anticipate, believe, estimate, expect, tend, will, guide, confidence, targets, projects, and other similar expressions typically are used to identify forward-looking statements.

These forward-looking statements do not guarantee the future performance that may be made involve or be subject to risks, uncertainties and other factors that may affect Neonode’s business financial position and other operating results which include but are not limited to the risk factors and other qualifications contained in Neonode’s annual report on 10-K quarterly reports on 10-Q, and other reports filed by Neonode with the SEC to which your attention is directed.

Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward-looking statements. Neonode expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is my pleasure to turn the call over to Urban. Urban, please go ahead..

Thank you, Dave. Hello, this is Urban Forssell, I’m the CEO of Neonode since the beginning of the year. Thank you for joining the call. I will take you through business and strategy update today. And I would like to start with this slide here showing a summary of the Neonode’s legacy.

And as many of you know Neonode started as a smartphone company back in 2001. And launched what is the world’s first [indiscernible] based mobile phone in 2004. This phone made the headlines in several newspapers and got a lot of attention and featured Neonode’s IR based touch already back in 2004.

So the origins of our touch technology can be traced back to these early smartphone years. Later on Neonode shifted focus on into more business with E-reader manufacturers, printer manufacturers and automotive Tier 1 suppliers and the business model changed from offering business to consumer products to technology licensing mainly.

Today in 2020, we are working to establish a new strategy and a new direction for the company. And we are aiming at substantially growing the business and making Neonode a much more profitable company.

And we have presented the outline for this strategy in other presentations for instance, with Redeye and April 2, and also with Redeye in June 2, and some information has also been included in our first quarter press release. This is an interesting journey for me being quite new in the company, a little bit more than six months in.

And as all of you know, 2020 has not been what we saw or thought it would be in 2019 mainly because of this guy. Some of you have heard of him COVID-19. For us, this has meant both headwinds and tailwind. Headwinds, we will come back to, we can some slower things in the printer market and automotive market.

But regarding tailwinds, we have seen and are seeing a huge increase in demand for our contactless touch solutions. From customers all over the world. And we simply see this as the starting point now for new normal in society and also new normal for Neonode.

What we certainly believes is that going forward, people do not want to touch buttons in elevators, on vending machines and other self service kiosks. This is the new normal, people are afraid of getting infected by bacteria viruses, like the COVID virus.

And people are obviously trying to avoid getting affected and companies are scrambling now to find technical solutions to these problems and the risks. So for instance, how can we find different ways to interact with machines? And here we have the what we believe the right answer. A simple intuitive solution to many of these problems.

So, our belief is that we are one of the few companies in the world today that has a very suitable proven technology. And the fact is that our zForce touch technology is already implemented in over 75 million different products out there from leading OEMs in the consumer electronics, the printer business, and automotive.

We have over the last 15-years, 20-years built up an extensive technical expertise and knowhow around this technology in different application areas. Our technology protected by more than 120 patents. And we are today in a position where we have existing products that we are shifting to customers, and that are easy to use that are scalable.

And that allows for short time to market. We at Neonode also have built up the last couple of years, and especially this year, a strong focus has been to expand our ecosystem of partners.

So for instance, today, we have well established corporations with Digi-Key and CAL two large fulfillment distributors, we have a partnerships with other types of distributors and value added partners like HY-LINE in Germany, Advanced Silicon and Helix in Switzerland and other companies.

We also cooperate with a lot of interesting tech companies like Yesar, Easpeed, Holo Industries and further engineering firms and integrators like Happy Hour. We also have a network of sales reps and sales partners in the U.S.

For instance, we work with a network called Convergence that has some hundred sales reps meeting customers every week and promoting our technology. So this is guiding us now going forward.

And to explain a little bit more about our technology I would take you through a couple of slides regarding that before we go into more examples and more information about our business. So the key technologies for our contactless touch on our normal touch businesses is called zForce, it is an optical touch technology based on infrared lights.

So invisible to the human eye, but still, light-based. It supports contactless touch applications together with displays.

So in this slide, if you look bottom left, for instance, you see a typical example of a medical display, and these type of applications you have a doctor or a nurse that operates a system through the interface that the display provides. They often have rubber gloves on their fingers.

The gloves could be covered with different kinds of fluids, could be contrast fluid water. It could be blood, they don’t want to touch the screen for that reason, or because the screen sits in a sterile environment like a surgery room. Then our technology can be adapted and applied in a way that the operator doesn’t need to touch the display.

So it is still a touch display, but there is no requirement to physically touch anything to control it. This can be extended then to touch in mid-air using holographic displays, or we can also offer solutions with touch on any other surface, like glass window, sheet of metal, a wooden panel, and so on. Also gesture sensing.

It is another way to interact with machines. And if you take the example here in the slide bottom, right, kitchen fan. So using our technology you can turn the fan off and on and you can also regulate the speed of the fan using simple hand gestures in mid-air.

So all this is possible with zForce, our patented technology and it is a very versatile technology. So, some of the unique selling points we have is that we can offer a safer way to interact with machines, equipment, and in general different types of IT systems.

There are no requirements to physically touch, the display or touch surface when you work with zForce technology from Neonode. Both are very robust, it is based on light beams being either broken or reflected. So no moving parts, no things that can wear out or break. Very flexible.

In this few slides here and on the following slides, you will see a number of examples that our technology has been applied in different ways. But still, it is the same core technology from us. So our technology is very flexible, scalable, and easy to integrate.

Also, like I mentioned, in this case with a medical display or in other demanding applications like military displays, shown here in example button right, our technology is more or less ideal, because we don’t interfere at all with the display itself. We have like an add-on feature to the system.

And if desirable, you can have the touch functionality sit a few millimeters in front of the display or that surface that you are using. So, overall, we think and we believe and we have customer feedback, telling us that our zForce technology is a very strong offer in many different application areas.

And looking at typical application examples, I have already mentioned, contactless in touch and holographic displays. And those of you that follow us you have seen our press releases for different corporations in these fields this year. I was going to highlight here, the possibility to do mechanical controls replacement using our zForce technology.

So when you realize that you can have in a touch or mid holographic displays, and if you think then a little bit longer.

You realize that you don’t necessarily need to keep the mechanical controls, the buttons, the switches, like you have in an elevator for instance, you could replace physical buttons that we show in the picture here second left by simply having printed symbols to guide a user where to place your finger or to point to control the elevator.

Another example we show here is the front of the washing machine, normally modern washing machines has a combination of display with touch or without and physical buttons, switches and rulers and similar.

Using our sensor modules mounted at the top of the washing machine or on the side and programming the software applications, in a suitable way we could touch enable the whole front of this washing machine and then you could remove all the physical buttons and switches till you can control, turn the machine on and off, you can change the program, you can set timers, and temperatures and so on.

That is pretty neat, it can be very cost saving and also offer more than endless opportunities to develop really good user friendly interfaces to, in this case a washing machine, but it could be basically anything. So I want to highlight it here. Moving over to our business.

So what we are doing in the company and that from the last 10-years focus on technology licensing with customers like printer manufacturers, manufacturers of e-readers and automotive Tier 1 suppliers.

This has been the main business for Neonode over the last 10-years, it has generated something like $5 million to $7 million or $5 million to $10 million per year in revenue. This has mainly been royalties. So there is a good margin on this. But still the potential has been a little bit limited.

What we are now doing, we are shifting our main focus into products. And right now we have a range of sensor module products that we produce in our own subsidiary promo in the West coast Sweden. And going forward, we may also add other product lines and new variants.

But where see the biggest potential for growth and expansion is with contactless touch in this post COVID environments. And the flexibility application of our technologies and these products that we offer, give us basically endless verticals or segments to operate. And in many of them, we have both a new equipment play and a retrofit play.

And to give you some examples, we are very much focusing and working on different types of kiosks. So interactive kiosks, self service kiosks that can be in airports, in retail stores, could be ticketed machines, could be ATMs and similar. Also elevators, super interesting segment where we see a lot of interest and we see a lot of opportunities.

Again, both for new equipment installations and then our customers will be OEMs, elevator OEMs or companies producing the control panels for the elevator OEMs.

Also retrofit, it could be a retrofit business with the OEMs, but also and what we see right now happening already is with third-party companies, service companies, maintenance companies, could be installation companies, could be tech companies. So elevators is a very interesting opportunity for us.

Next, to exemplify this more and give you a little bit more color to this. We will take you through some of our pipeline opportunities as we are working on to show the breadth of these opportunities and also give you examples of interaction with large OEM customers and smaller and local engineering firms.

So next, I wanted to go through this opportunity with self checkout kiosk. Here we are working with a leading a kiosk manufacturer in the world. And then one of the really the largest and the market leaders here, with the multinational reach. The application is a touch-less display intended for self checkout kiosks in retail.

We show an example on the right here in the picture.

Customer reached out to us in April, May timeframe and told us that they have been using our touch sensor modules in their labs and developed different kinds of prototypes and tested them for instance for this type of application and they now decided that they want to start a pilot with initially it was said one major retail firm in the U.S.

Right now we are in the middle of this pilot and it involves in total seven major retailers. It was six, but I have recently learned that they added a seventh retail chain in Russia. So this is started in the U.S.

but now it also includes retail chains that either they are multinational or they are local, but in different parts of the world, like Australia, Colombia, Singapore, and Russia.

We are looking here at this project only at an initial stage, depending on the success of this pilot and how many of these major retailers will accept the offer to have this type of retrofit solution that we are developing together with these is OEMs.

We expect and our customer told us that the potential is 50,000 to 200,000 units in the initial order. And here we estimate that our sales price can be $30 to $50 per unit. Maybe little bit higher.

Today we are selling these sensor modules for between $50 and $80 per unit at those prices that we have today for customers buying form for instance, Digi-Key that they gave us a gross margin of 40 to 50%.

If you talk here about a bigger commitment from a large OEM, and it could also be multiyear commitment, I think that we will be forced to go a little bit lower in price. Still we think they can maintain a pretty good gross margin in this case. Probably the distribution will be directed from us to these OEM customers.

We see this is very, very strong, and we have advanced discussions with this customer, and this pilot is well underway, and we have some initial feedback. We also know that this OEM has prioritized this project and due to the pressure they have from the market and from customers to develop this type of contactless touch interfaces on their devices.

And they also have pressure from other competitors and also local engineering firms. And I will show you an example later, what type of competition this OEM is facing out there. So we know that their target is to have something production ready and be shipped to customers before the end of the year.

So it is also quite soon, lead times are not too long. So it is a super interesting. And this company we are working with here, of course, there are many self checkout kiosks and similar kiosks in the world, but this company, they are doing a lot of these type of products, but they also do ATMs. So that is the next case I want to take you through here.

It is similar to the previous one, but slightly different ATMs are found all over the world. There are millions of ATMs only in U.S. some 500,000, ATM 3.2 million, something ATMs all over the world. They are an example of a self service kiosk obviously, but they are also managed transaction equipment.

So they are subject to different types of regulations and safety measures. So both the banks and the authorities in different countries and the OEMs that sell these, they want to take a measures so that people cannot hack these ATMs or installed skimming devices on them and so on. So what you can expect is a higher complexity.

It is also very much more business with the OEMs and not so much with third-party engineering firms or tech companies. But since we were already engaged with this large OEM, that also is a major player in ATMs. We basically have, together with them developed some proposals to replace the physical keypads.

And this is an example of removing the mechanical controls to save cost and having quite open to us here. This customer in saying that I appreciate the possibility to save costs both in their production. They don’t need to keep as many SKUs active in the production, but especially for keeping these ATMs up in running.

So for maintenance and service operations out there in the world. They see a huge potential to save costs. So in addition to this demand for contactless touch interface, driven by the COVID concerns out there. They have here really pointed at the cost saving potential.

So please motivate us and tells us that ATMs could be also a very, very interesting opportunity. And for many of the ATMs today, we see actually multiple opportunities in the same equipment. So we could touch an angle the screen and also replace the keypad with two sensors or three depending on the size of the screen.

So in some cases, it is actually possible to have an increased sales on this type of equipment, if you do it right. And of course, we are trying to do it right. The third example I want to talk about is elevators. Actually, this is a number of opportunities this is not just one.

We see incredibly deep market potential in the elevator segment, because we can interact with OEMs and manufacturers of control panels. With them, we can have both in new equipment and retrofit play. Then, we also have engagements and corporations with several medium sized and small tech companies, maintenance companies and engineering firms.

Two examples is Easpeed and Yesar, their companies offering holographic displays and they have developed special applications of their technology for elevators. And they have also secured some significant contracts retrofits elevators in China with their solution. So we see pictures for example, left Yesar and right Easpeed in these pictures.

We also have other examples anywhere from Hong Kong to Europe to U.S. And another company I can mentioned is Noble Elevators in the U.S. that have developed a pretty need solution for contactless interface in their elevators in the U.S. There are some 19 million elevators in the world. This number is growing by 5% to 7% or 1.3 million per year.

We estimate that at least 10% of the elevators out there are being refurbished, upgraded updated every year. That is why for me personally, elevators is a super interesting segment to operate in. And we are already there. There are more and more companies adopting this and launching this type of solutions out there in the field.

So I think this shows that we are already underway. From the you know side, we focus our resources on direct sales to elevator OEMs and in the future also control panel suppliers. And we have also many partners in our ecosystem that are also trying to penetrate this market to be there first. And for us, it doesn’t matter.

We are selling the same type of sensor modules. And we see that they are growing volumes going into elevators in the future, super interesting. The fourth opportunity is a different example again, this is from the Changi Airport in Singapore.

And I would say all airports and all airlines in the world, passenger safety is key now in the post COVID world. Everyone in this business wants people to return to travelling into flying. And what I’m telling you here about Changi and air transportation also is applicable to trains, subways, and buses and similar.

So, Changi Airport ranked as the number one airport in the world, top modern, and new airport. They decided early on this year in during the early phases of the pandemic something like February, March.

They want to make sure that their airport is not only the best airport in the world, but also the safest for travelers and employees working in the airport. And they found our technology and they zoom in on using that to upgrades their different ticketing checking kiosks and similar to contactless touch operation.

And there was a local engineering firm that we have incorporated with here that saw this opportunity they quickly developed different retrofit solutions and install them in the different terminals in the airport. It is working well. Passengers find it very attractive, intuitive, easy to use. The airport management is super happy.

They have actually asked this engineering firm to come back and retrofit all the elevators and other equipment in the airport with a similar solution. For us, this is just one example. But here we are using a channel with a local engineering firm, we are covering actually multiple verticals.

So, self check-in kiosks, elevators, and vending machines and so on. And there are some 17,000 airports in the world.

If you add to this as I mentioned, train stations, bus stations, even hotel lobbies, and you can add shopping malls, there are many similar opportunities out there and mainly we have local partners that are addressing this market, but for us it shows also the flexibility and the applicability of the sensor modules and our technology.

And also it shows here and you can go and see in the internet Changi Airport has also posted several promotional videos and instructional videos how to operate these equipment in the airport. Also, there are several TV features and newspaper articles written about this. So a very good example.

And sure enough, we are getting calls now basically every week from other airports around the world, from the U.S., from Europe and also Asia. So how can they also do this, what Changi has done in their airport.

So that is why we want to highlight this here and shows the trend that we think is also coming into other transportation hubs and shopping malls and similar.

Fifth example, just to round this off, and to make it complete, we will of course keep our existing license agreements with the printer manufacturers and e-reader companies and we will also try to expand and extend those relationships.

We are also today in active discussions and in some development projects with other customers like companies manufacturing displays for military and avionics applications and industrial control systems.

So here is where we will have the main focus for our technology and licensing, and this is going to be more niche applications and more demanding, more high performance applications than printers. So that is a clear shift in strategy and a clear focus now going forward.

To really use the power of our technology and the quality and a good for instance, the good resolution and the good image quality that you can get using our touch technology compared to competing solutions like Pcap and Resistive Touch. The difference here is that again, this is technology licensing.

So what you can expect is a slightly lower average sales price, because it is a royalty that we get in the end. Also, we should be aware of the longer lead times. First there is typically the customer is a large OEM company. They have their own processes. Their lead times are longer.

Here we will also be involved in pretty extensive development projects ranging from one year to maybe three-years, depending on application and the type of industry.

On the other hand, if we win this type of business and we carry out this development, the underlying products will typically be in production and generates royalty revenues to us for between five to 10-years. And this is what we see today, obviously with the printers and the automotive displays and the e-readers.

In many cases, they generate revenues from licensing many, many years after they were first launched. So we can definitely continue this.

I also want to mention here to you listening to this call that I see certainly also opportunities that elevator OEMs, or a kiosk OEMs may, if this grows and when this grows, they may want to integrate the hardware that we use in our sensor modules type into their designs into their hardware. And they may ask also if they can license our technology.

And I think we will of course offer this and that is a strength of our offer. Our total offer to these customers. They can grow with us starting out very small. It is very quick to buy for instance, from Digi-Key, they can use the if the case that they can download from our website, create the first application.

When these goes, they are typically reaching out to us and we would help them to develop a little bit more refined solution. This would be further refined into an integrated solution where in the end they will produce all the hardware and they will license the zForce technology from us.

So still that business model is viable, we have certainly not giving up on that, but the main focus in the next couple of years will be to drive the product sales so that is also true. But these two business areas that we have introduced in April, they certainly go well together and they are mutually supporting.

They are separate, but mutually supporting. And the big difference is the business model we use, technology licensing or product sales. Technology or software licensing is also what we do in our third business area. We call that business area remote sensing, and here we are offering a software platform that we call multi sensing.

And the focus here is driving monitoring and in cabin monitoring mainly for automotive, but maybe also other types of applications.

We are here entering a very interesting market opportunity, because in Europe, in North America also China, there are already laws, regulations in place that require some type of camera based driver or in cabin monitoring system in the vehicles.

In Europe, the regulation is called GSR, it comes into effect from 2024, it applies to all light vehicles, but also commercial vehicles.

And typically, all the OEMs and many of the Tier 1s are now rapidly trying to develop features, driving monitoring feature, in-cabin monitoring features that meet the safety requirements, but that is also offer additional and convenience features.

And here we are working very hard to further develop our software platform to market this and to sell it. And we have some good reference with several European OEMs and some Asian OEMs and also the Tier 1s.

And our target here is to establish ourselves as a very reliable and innovative Tier 2 supplier of this software package that Tier 1 can integrate with their camera system and then offer to OEMs. So, this is the business model, we use here and the focus we have here.

Similar to technology licensing regarding our zForce Technology, we must expect here that there is certain lead time to sell this and still we have to wait some months before we can announce the first major of design win, we are in the progress of development and evaluation.

But then it is typically follow a development project that extends through two or three-years and then this processing production maybe 2024 or something like this. So, this is the opportunity we are looking at here.

And the interesting thing with all these six or seven opportunities I have discussed with you is that they span actually several application areas and some are shorter lead times in and some requires on more patience and they have longer lead times. But Neonode is using only two technology platforms to achieve all this.

And internally that makes me certain that are efficiency can be kept at a particular level, although we span many different verticals and application areas. And that is the beauty of our solutions.

The zForce Technology, which is ideal for contactless touch, and the master sensing technology, which is ideal for driver monitoring and in cabin monitoring here. So this, hopefully gives you a good feeling for what we are working on in the company right now.

And of course, we continue as we speak so while we are having this call, other people in Neonode are actively continuing to market this and sell this to customers and develop underlying technical solutions. I also want to move on here and briefly summarize the news about our private placement that we closed last week on August 7th.

Those of you that follow us, you have of course, seen the press releases, and read all the details about this. But on August 7th, we closed this private placement that generated some $13 million in cash net.

In total we raised close to $14 million but due to cost been the transaction, the net loss some $13.1 million in connection to this placement, we also converted the loans from Petrus and ALMI Företags into preferred stock and that gave another $1 million contribution to our financing.

And in connection to this transaction management, the members of the Board participated with $3.1 million in the new cash contribution plus the $1 million conversion of the loans to the company. I’m quite happy about this. The outcome of this financing round was very quick. We managed to raise this money in just a matter of weeks.

And we also think that the amount that we could rise is very good looking at our, for instance, our market cap on our knees.

So we have now the means and the cash to go after and accelerate our growth and to go after new customers in these target segments, for instance, elevators, interactive kiosks, and military, on its rugged, industrial and automotive drive monitoring and in-cabin monitoring.

So really, this will be growth money to accelerate what we already have been working on earlier this year and what we will certainly focus more on going forward. So I’m very happy to announce this private placements and it will certainly strengthen us and motivate us in the months to come.

In connection to this, I also want to cover our patent agreements with Aequitas Technologies. This is certainly not money in the bank yet. So all of you should see it rather as an embedded call option in the Neonode share.

The background as many of you know is Neonode was a smartphone company, has a lot of innovation power, has developed a lot of new innovations and new technology and has protected most of this in patents. And this is already from the early years of the company’s existence.

In particular, we have some patent families relating to smartphone technology and some of these patents have actually featured in losses between major smartphone companies in the world and some of them especially a patent related to featured that we refer to as swipe to unlock feature in a patent, or a lawsuit between Apple and Samsung in 2012.

And also with in another lawsuit between Apple and Motorola in 2013. Their judges in the U.S. concluded that actually Neonode and not anyone of the parties involved in those losses, held the original patent or the prior art patent. However, Neonode didn’t want to process and start their own lawsuit. And there are different reasons for that.

But last year Neonode found a way to try to capitalize on these patterns that we have and that we are no longer using because they are closely linked to smartphones. So through the agreements with Aequitas, we will split 50/50 of the next proceeds that they can generate by licensing or selling the rights to these patents if they are successful.

And it is very important to mention that we are not part of any lawsuits, this is 100% managed by Aequitas. They bear all the costs, all the risks, and this is good news for us, but if they are successful, we will split the net proceeds 50/50. So that is why they call it the call option.

And in some of these similar cases or other cases related to smartphones and features in smartphones that can be substantial money, but we will not comment any further, and we just want to bring this to everyone’s attention.

And also clarify that we are not part of the lawsuit that Aequitas filed in June this year in the Western district of Texas, I hope that is clear. And we have to stand by here to see if and when the lawsuits are finalized and what they can generate in terms of revenue for Neonode, but hopefully a good cash contribution later on.

And with this, I will turn the call over to Maria Ek, who is the CFO of Neonode. Maria..

Thanks Urban. You can find our second quarter earnings release and 10-Q available for download from the investors section of our website, at neonod.com. I would like to start out with a summary of the quarter.

Revenues are down by $1.0 million compared to the same quarter, 2019, our operating expenses are lower than planned for the quarter $2.4 million compared to 3.0 million the same quarter 2019. Due to the above our operating loss was up by $0.4 million compared to the same quarter 2019.

We have net revenues of $0.7 million for the second quarter of 2020, which is decreased by 56% from the comparable quarter last year and a decrease by 41% compared to the first quarter.

The main reason of the decrease is that we have no estimation of our license revenues in our business area HMI Solutions due to the COVID-19, but we see indications that automotive will come in a little better than we expected.

For the second quarter of 2020, our customers license our technologies shipped 0.7 million devices with an average price being $1. Compared to the second quarter last year where our customer shipped 1.9 million units with an average license fee of $0.17.

Total license fees for our automotive business in the second quarter 2020 was 147,000 compared to $440,000 the same period last year. For our consumer business, the license fees were 508,000 compared to previous years $1.0 million. This is mainly an effect of the pandemic, and we expect this to rebound.

Within our business are HMI products, we have a low number of shipped products, but we have increased market interest. The sales in the second quarter were slow due to the pandemic related lockdowns. Our gross margin was 84% in the second quarter 2020, compared to 96% in 2019, sorry primarily due to inventory write off in 2020.

And for the same reason there is a negative gross margin for business area HMI products. Operating expenses decreased by 19% to $2.4 million in the second quarter 2020 compared to 2019, which is partially due to COVID-19 that we mentioned for factors lower professional fees and less traveling.

As a result of this, our operating loss increased by 34% to $1.8 million for the second quarter of 2020, compared to 2019. Our net loss for the second quarter of 2020 was $1.6 million or $0.18 per share, compared to net loss of $1.3 million, or $0.14 per share for the second quarter in 2019.

As Urban said the product placement last week January the cash inflow of US$13.1 million, which strengthens our cash position and gives us the possibility to execute our strategy and to accelerate our efforts. Operating activities used $1.0 million in cash during the second quarter of 2020, as well as 2019.

With this, I would like to hand over back to Urban for some closing remarks..

Okay. Thank you Maria. So we are approaching the end of this call and the presentation. Highlights that we want to draw your attention to is the private placements that we closed last week. And through this we have now, what we feel adequate resources to accelerate our growth and to capitalize on the current future opportunities.

In practice, what we will do is to continue on the path that we have been operating on, but we have now the means to strengthen for instance our international sales force to go more aggressively with our marketing to reach new customers and to drive sales. We will also use some of the proceeds to strengthen our engineering and our operation.

And overall, the proceeds will mainly be used to our payroll. So very little or if anything is going to be used for CapEx investments. So it is mainly human resource related and adding people to our already strong team. We have the technology for contactless touch.

As mentioned, this is available robust proven technology, we can offer products, we can offer technology licensing, it is ideally suited.

It is very intuitive to create contactless touch interfaces using this technology and the demand for this type of solution and this type of technology is simply exploding, enormous market opportunities to integrate this technology from Neonode into both new and retrofitted equipment.

And again, I repeat that two of our main focus areas is interactive kiosks and elevators. And within these, we see huge opportunities. There are also other segments that we could operate in and to some extent our partners are doing this already. And of course we are not stopping them, because we are offering the same products to them.

And this only shows the strength and applicability of our technology.

We are also happy to note that we are finding new customers for our zForce touch, for instance in the military, avionics and industrial control systems, markets, and that we also have good resonance with several OEMs and Tier 1s regarding our multi sensing, driver monitoring and in-cabin monitoring software solutions.

So we are very motivated also to expand our customer portfolio there and the product portfolio in these business areas. And the final comment is that with all these opportunities, and now with financing secured for the next years, the focus obviously the rest of this year and also next year will be on executions.

Increasing sales and making Neonode known to all kiosk manufacturers, all elevator companies and third-party companies operating in these markets. So with this, we thank you for your attention and we will open up for some questions..

Thank you [Operator Instructions] There are no questions at this time.

Are there any closing comments?.

Yes. I will take the opportunity here to answer questions forwarded by Viktor Westman analyst from Redeye before the call.

And for instance, one question that Viktor asked was how we are dealing with furloughing? And as we have announced in for instance to Q1 release in May, we are working short - have been working shorter hours for four months from mid of April until today actually, and we are now returning to 100% working hours and actually we will increase also our headcount.

So what we are doing is everyone is coming back to 100% from today and we will also add further resources. And regarding transportation hubs, there is a question that this is what Viktor sees maybe a smaller market.

But as I pointed out, when I was covering the example on the Changi Airport, there are simply more than 10,000 airports actually 17,000 commercial airports in the world.

If you add to this other types of transportation hubs, like train stations, subway stations, bus stations, and if you count that there are a number of today self service kiosks, vending machines, elevators and all these types of transportation hubs. If you further add shopping malls, hotel lobbies, and similar.

Honestly, I think this is a big market and a huge opportunity for Neonode and our product going forward. And another question from Victor here is about lead times to enter into operations with bigger OEMs, for instance, in the elevator segments.

And as we mentioned some minutes ago, what we expect is that the typical sale cycle to come in with a new large OEM customer is three to six months. In some cases we are only already in active dialogue with customers. In some other cases, this is yet to come.

So overall we think that over the next three, six, 12, 18-months, when we should be able to announce some major contracts with large OEM customers, both regarding interactive kiosks, elevators and other types of licensing business.

And that over the next two, three years, we will see certainly a growth of our product portfolio and also a growth of NRE revenues because of the growth of the product portfolio.

But we do not expect any major increase of our royalty revenues in the next couple of years, maybe, but certainly for our product sales and this is why I have this as our main focus now in the next six to 12-months, as I mentioned here at the closing slide.

And I mentioned through the presentation that we are certainly not terminating any existing license agreements or terminating any relations or contacts we have with printer manufacturers, e-reader manufacturers, companies in med tech and so on.

In fact, in some of these cases, we see both possibility and opportunity to do repeat business simply sell them same type of solutions that they are already using, but for new products, new models, new variants.

But in some cases we are shifting from touch on displays to discussing contactless touch solutions, both on display and on other types of systems.

So there is a lot of new opportunities, new customers for us this year and basically every month we are getting to know you customers working in different segments and in different parts of the world, but of course we maintain a close contact and a good relationship to all our existing and all our old customers as well.

So thank you Victor for submitting these questions. And I think this takes us to the end of this call. I thank everyone for your attention and for joining. Please follow us going forward and have a good weekend. Thank you..

Thank you. That does conclude today’s Neonode second quarter 2020 earnings conference call. You may now disconnect your lines and have a wonderful day..