NEONODE INC

PRO FORMA CONSOLIDATED BALANCE SHEET

(in thousands)

(Unaudited)

	October 31, 2008 Balance Sheet Prior to Transactions			Adjustments Related to Transactions			Proforma October 31, 2008 Balance sheet After Adjustments
ASSETS
Current Assets
Cash		8			959	a		967
Prepaid expenses and accrued income		322			(241	)b		81
Other receivables		70			-			70
Total Current Assets		400			718			1,118
Goowill from purchase of NewCO AB		-			7,135	c		7,135
Property and equipment - net		90			-			90
Deferred financing fees related to convertible debt		141			(141	)b		-
Total Assets		631			7,712			8,343
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities								-
Notes payable  - current portion		1,208			(1,208	)d		-
Accounts payable and other liabilities		558			(206	)d		352
Deferred revenue		-			-			-
Embedded derivatives of convertible debt & warrants		18,472			(18,472	)d		-
Total Current Liabilities		20,238			(19,886	)		352
Notes payable - long-term portion		72			(72	)d		-
Total Liabilities		20,310			(19,958	)		352
Stockholders' Equity (Deficit)
Preferred Stock		-			959	a		959
					7,135	c		7,135
Common stock		60,636			19,958	d		80,594
Retained earning (deficit)		(80,315	)		(382	)b		(80,697	)
Total Stockholders' Equity (Deficit)		(19,679	)		27,670			7,991
Total Liabilities and Stockholders' Equity (Deficit)		631			7,712			8,343

Notes:

a) Adjustment to reflect the $959,000 investment in Neonode and the issuance of 95,900 shares of Series A Preferred Stock

b) Adjustment to reflect to wrtie off of prepaid financing fees related to the convertible debt that was converted to equity.

c) Adjustment to reflect the recording of goodwill related to the acquisition of Newco and the issuance of 495,000 shares of Series A Preferred Stock to acquire Newco.

d) Adjustments to reflect the conversion of convertible notes and warrants into shares of Series A and Series B Preferred Stock