8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 30, 2007

NEONODE INC.

(Exact name of registrant as specified in its charter)

Delaware	0-8419	94-1517641
(State or other jurisdiction	(Commission File Number)	(IRS Employer Identification No.)
of incorporation)

Biblioteksgatan 11 S111 46 Stockholm, Sweden
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

+468 678 18 50 — Sweden

(925) 355-7700 — USA

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 7.01. REGULATION FD DISCLOSURE

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 14, 2007, Neonode Inc. announced its results of operations for the three and nine months ended September 30, 2007. A copy of the related press release is being furnished as Exhibit 99.1 this Current Report on Form 8-K and incorporated by reference herein.

7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits.

(99.1) Press release issued by Neonode Inc.

EXHIBIT NUMBER EXHIBIT

99.1 Neonode third quarter of fiscal 2007 earnings release.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NEONODE INC.
Dated: November 14, 2007	By:	/s/ David W. Brunton
		David W. Brunton
		Chief Financial Officer andVice President, Finance

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EX-99.1

EXHIBIT 99.1	For more information contact:
	David Brunton, Chief Financial Officer
	Neonode Inc.
	925-355-7700
	david.brunton@neonode.com

Neonode Inc. Announces Third Quarter 2007 Results

STOCKHOLM, SWEDEN — November 14, 2007—Neonode Inc. (Nasdaq: NEON), the Swedish company focusing on the development of unique user experiences, technologies and products within the mobile phone industry, todayreported results for the three and nine months ended September 30, 2007.

“This quarter has been very exciting and satisfying and saw us achieving some very important milestones. In August, we were pleased to announce that we began trading on NASDAQ under the NEON symbol. We also addressed our near term working capital requirements by completing financing rounds that raised almost $9 million.” said Mikael Hagman, President and Chief Executive Officer of Neonode. “We also restructured our sourcing and manufacturing operations and, as a result, expect to free up some working capital going forward. On the sales and marketing front, we began shipping our production ready N2 phones to customers through our distributor network and our web store. We now have a presence in several major European markets and the N2 is sold through a wide range of respected carriers and retailers. Our gross profit margins and sales related costs are within the expected ranges and we ended the quarter with a nice sales backlog of $6 million.” continued Hagman.

Net sales for the third quarter ended September 30, 2007 were $1.2 million, compared with $252,000 for the third quarter of fiscal 2006. Net loss for the third quarter of 2007 was $25.2 million, or $1.38 per share, basic and diluted, compared to a net loss for the third quarter of 2006 of $1.2 million, or $0.12 per share, basic and diluted. The net loss for the third quarter ended September 30, 2007 includes non-cash charges totaling $23.2 million related to various accounting valuations including the amortization of deferred financing fees, debt discount, loss on extinguishment of convertible debt and the valuation of embedded conversions features on debt that was converted to common stock prior to the completion of the merger transaction.

Net sales for the nine months ended September 30, 2007 were $1.7 million, compared with $1.4 million for the same nine months in 2006. Net loss was $47.3 million, or $3.27 per share, basic and diluted, for the nine months ended September 30, 2007 compared to a net loss of $3.7 million, or $0.37 per share, basic and diluted, for the same nine months in 2006.The net loss for the nine months ended September 30, 2007 includes non-cash charges totaling $40.3 million related to various accounting valuations including the amortization of deferred financing fees, debt discount, loss on extinguishment of convertible debt and the valuation of embedded conversions features on debt that was converted to common stock prior to the completion of the merger transaction.

Significant events during the nine months ended September 30, 2007:

· July 2007, the Company shipped the first N2 to customers and opened its web shop selling the N2 to customers on a direct basis.

· The Company signed agreements with six European distributors and has a sales presence in 12 countries.

· August 8, 2007, the Company received $3,250,000 in debt financing from the sale of convertible notes, bearing interest at 8% per annum.

· August 10, 2007, the Company completed the previously announce merger transaction and was renamed, Neonode Inc.

· August 13, 2007, the Company began trading on NASDAQ under the new trading symbol “NEON”.

· September 26, 2007, the Company sold $5.7 million of securities in a private placement, comprised of $2.9 million of three-year promissory notes bearing the higher of LIBOR plus 3% or 8% interest per annum, convertible into shares of its common stock at a conversion price of $3.50 per share, 952,499 shares of its common stock and warrants to purchase 1,326,837 shares of its common stock at a price of $3.92 per share.

Neonode ended the third quarter of 2007 with a sales backlog for our N2 mobile phone of $6 million and working capital (current assets less current liabilities, excluding non-cash liabilities) of $4.1 million, compared to working capital deficit of $6 million at December 31, 2006.

About Neonode

Neonode designs, develops and sells patented technologies and products focused on unique user experiences (UX).With offices in Stockholm, Sweden and San Ramon, California, Neonode Inc. is a publicly traded company (NASDAQ: NEON) with licenses and products sold worldwide through both direct web sales and local distribution partners. More information is available atwww.neonode.com.

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This news release contains certain forward-looking statements that involve risks and uncertainties, including statements about market opportunity for new products and the demand for services that may be offered by Neonode’s customers. Such statements are only predictions and the company’s actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include, but are not limited to, risks related to the company’s reliance on the ability of its customers to sell the company’s products to end users, rapidly changing product requirements, the introduction of new products, market acceptance of the company’s products, and reliance on strategic partners. These factors and others are more fully discussed in the documents the company files from time to time with the Securities and Exchange Commission, particularly, the company's most recent Form 10-K and Form 10-Q.

Neonode and the Neonode logo are registered trademarks of Neonode Inc. All other brand or product names are trademarks or registered trademarks of their respective holders.

- Tables Follow -

NEONODE INC.

STATEMENTS OF OPERATIONS

for the three and nine months ended September 30, 2007 and 2006

(In thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
Net revenue	$	1,193		$	252		$	1,668		$	1,423
Cost of sales		1,050			495			1,053			1,270
Gross profit		143			(243	)		615			153
Operating expenses
Product research and development		1,036			578			3,120			1,548
Sales and marketing		670			172			1,640			415
General and administrative		991			136			3,480			1,313
Total operating expenses		2,691			886			8,240			3,276
Operating loss		(2,554	)		(1,129	)		(7,625	)		(3,123	)
Interest and other income		243			34			424			100
Interest and other expense		(678	)		(59	)		(927	)		(396	)
Charges related to the amortization of
debt discounts, deferred financing fees
and the extinguishment of convertible debt		(3,587	)		(71	)		(3,760	)		(161	)
Valuation charge related to embedded
conversion feature		(18,657	)		---			(35,383	)		---
Total interest and other income (expense)		(22,679	)		(96	)		(39,646	)		(457	)
Net loss		(25,233	)		(1,225	)		(47,271	)		(3,580	)
Non-cash inducement charges related
to Feb 26, 2006 reorganization		---			---			---			106
Net loss available to shareholders	$	(25,233	)	$	(1,225	)	$	(47,271	)	$	(3,686	)
Basic and diluted loss per share
Basic and diluted loss per share	$	(1.38	)	$	(0.12	)	$	(3.27	)	$	(0.37	)
Basic and diluted - weighted average
shares used in per share computations		18,337			10,282			14,443			10,058

NEONODE INC.

BALANCE SHEETS

(In thousands)

(Unaudited)

	September 30, 2007			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	5,758		$	369
Restricted cash		5,430			---
Trade accounts receivable		431			46
Inventory		580			---
Prepaid expense and accrued income		1,241			621
Other		264			117
Total current assets		13,704			1,153
Property, plant and equipment, net		419			65
Intangible assets, net		112			155
Total assets	$	14,235		$	1,373
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion long term debt	$	103		$	5,112
Accounts payable		2,140			245
Accrued expenses		549			893
Deferred revenues		---			462
Other liabilities		954			437
Embedded notes conversion features and warrants		12,255			---
Total current liabilities		16,001			7,149
Long term debt		128			854
Total long-term liabilities		128			854
Total liabilities		16,129			8,003
Stockholders' deficit:
Common stock and additional paid in capital		55,293			3,509
Accumulated other comprehensive income		311			88
Accumulated deficit		(57,498	)		(10,227	)
Total stockholders' equity deficit		(1,894	)		(6,630	)
Total liabilities and stockholders' deficit	$	14,235		$	1,373