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): August 11, 2022

NEONODE INC.

(Exact name of issuer of securities held pursuant to the plan)

Commission File Number 1-35526

Delaware	94-1517641
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

Karlavägen 100, 115 26 Stockholm, Sweden

(Address of Principal Executive Office, including Zip Code)

+46 (0) 86671717

Registrant’s telephone number, including area code:

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	NEON	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 11, 2022, Neonode Inc. (the “Company”) reported its earnings for the three and six months ended June 30, 2022 (the “Earnings Release”) and posted on the Neonode website the Second Quarter 2022 Presentation (the “Presentation”). A copy of the Earnings Release and the Presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.

The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure

As previously announced, the Company will conduct a conference call today, Thursday, August 11, 2022 at 10:00 a.m. ET. The presentation slides to be used during the call, attached hereto as Exhibit 99.2, will be available on the “Investor Relations” section of the Company’s website at www.neonode.com immediately prior to the call.  The information contained in, or that can be accessed through the Company’s website is not a part of this filing.

The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
Exhibit 99.1	Earnings Release of the Company dated August 11, 2022
Exhibit 99.2	Second Quarter 2022 Presentation of Neonode
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

1 

SIGNATURES

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.

Date: August 11, 2022	NEONODE INC.
	By:	/s/ Fredrik Nihlén
	Name:	Fredrik Nihlén
	Title:	Chief Financial Officer

2

EX-99.1

Exhibit 99.1

Press Release

For Release, 09:10AM ET August 11, 2022

Neonode Reports Quarter Ended June 30, 2022 Financial Results

STOCKHOLM, SWEDEN, August 11, 2022 — Neonode Inc. (NASDAQ: NEON), today reported financial results for the three and six months ended June 30, 2022.

FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED JUNE 30, 2022:

· Revenue of $1.3 million, a decrease of 26.3% compared to the same period in the prior year.

· Operating expenses of $2.8 million, a decrease of 13.7% compared to the same period in the prior year.

· Net loss of $1.5 million, or $0.11 per share, compared to $1.7 million, or $0.14 per share, for the same period in the prior year.

· Cash used by operations of $2.9 million compared to $1.4 million for the same period in the prior year.

· Cash and accounts receivable of $13.5 million as of June 30, 2022, compared to $18.7 million as of December 31, 2021.

FINANCIAL SUMMARY FOR THE SIX MONTHS ENDED JUNE 30, 2022:

· Revenue of $2.6 million, a decrease of 23.6% compared to the same period in the prior year.

· Operating expenses of $5.5 million, a decrease of 13.0% compared to the same period in the prior year.

· Net loss of $2.9 million, or $0.22 per share, compared to $3.2 million, or $0.28 per share, for the same period in the prior year.

· Cash used by operations of $5.2 million compared to $3.4 million for the same period in the prior year.

THE CEO’S COMMENTS

“Our overall sales and results for the second quarter of 2022 were below expectations and were impacted by the fact that customers in several of our key markets, particularly Asia, are still being affected by lock-downs associated with the COVID-19 pandemic. Many of our customers are also having to navigate supply chain constraints due to a shortage of semiconductor components and other issues they are faced with in the current economic climate, slowing their product sales, and in some cases their development and launches of new products, which affects our business negatively,” said Dr. Urban Forssell, Neonode's CEO.

“Our products business continues to develop and we are seeing a growing interest in our Touch Sensor Modules (“TSM”) from elevator customers and interactive kiosk manufacturers in the transportation, retail, hospitality, and medical segments. To date we have had the best traction in Japan and South Korea, but other markets such as China, Western Europe, and North America are also showing potential. Together with our distributors and value-added resellers we continue to work to expand the TSM business and increase our sales volumes,” continued Dr. Forssell.

“In our efforts to re-vitalize our licensing business we focus on automotive OEM and tier 1 customers, and we are encouraged by the interest we are seeing for our object detection, gesture sensing and driver and in-cabin monitoring solutions. Short- and medium-term the revenue potential is sales of non-recurring engineering services in application development projects linked to new vehicle platforms. These projects pave the way for increased license revenues in the medium- and long-term when vehicles based on the new platforms start being produced. We continue to execute on our strategy and remain optimistic about the potential to grow this business in the coming years,” concluded Dr. Forssell.

FINANCIAL OVERVIEW FOR THE THREE MONTHS ENDED JUNE 30, 2022

Net revenues for the quarter ended June 30, 2022 were $1.3 million, a 26.3% decrease compared to the same period in 2021. For the 2022 period, license revenues were $1.0 million, a decrease of 29.8% compared to the same period in 2021. The decrease is primarily the result of component shortages within the printer and automotive markets related to the COVID-19 pandemic, which in turn impacted our license revenues for the second quarter of 2022.

Revenues from product sales during the second quarter were $0.2 million, a decrease of 39.3% compared to the same period in 2021. In the first half of 2021 several early adopters of our technology developed and launched retrofit solutions, which affected our TSM sales positively during this period. However, our product sales for the second quarter of 2022 continue to be negatively impacted by COVID-19 driven lock-downs in Asia and we are also affected by the comparatively long development and launch periods, often 12 to 18 months, or longer, for customer new equipment solutions, which slow down our sales growth.

Gross margin related to products was 55.7% for the second quarter of 2022 compared to 38.7% for the same period in 2021.

Our operating expenses decreased 13.7% for the second quarter of 2022 compared to the same period in 2021, primarily due to lower staff expenses and depreciation and amortization.

Net loss attributable to Neonode for the three months ended June 30, 2022 was $1.5 million, or $0.11 per share, compared to a net loss of $1.7 million, or $0.14 per share, for the same period in 2021. Cash used by operations was $2.9 million in the second quarter compared to $1.4 million for the same period in 2021. The increase is primarily the result of increased inventory to secure our future product deliveries.

Cash and accounts receivable totaled $13.5 million and working capital was $16.4 million as of June 30, 2022 compared to $18.7 million and $19.1 million as of December 31, 2021, respectively.

For more information, please contact:

Chief Financial Officer

Fredrik Nihlén

E-mail: fredrik.nihlen@neonode.com

Phone: +46 703 97 21 09

Chief Executive Officer

Urban Forssell

E-mail: urban.forssell@neonode.com

Phone: +46 734 10 03 59

About Neonode

Neonode Inc. (NASDAQ:NEON) is a publicly traded company, headquartered in Stockholm, Sweden and established in 2001. The company provides advanced optical sensing solutions for contactless touch, touch, gesture control, and in-cabin monitoring. Building on experience acquired during years of advanced R&D and technology licensing, Neonode’s technology is currently deployed in more than 80 million products and the company holds more than 100 patents worldwide. Neonode’s customer base includes some of the world’s best-known Fortune 500 companies in the consumer electronics, office equipment, automotive, elevator, and self-service kiosk markets.

NEONODE and the NEONODE logo are trademarks of Neonode Inc. registered in the United States and other countries.

For further information please visit www.neonode.com

Follow us at:

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LinkedIn

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Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to our expectations for growth and the growing demand for our products, future performance or future events. These statements are based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown risks, uncertainties and other factors that may cause Neonode’s actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements.

These risks, uncertainties, and factors include risks related to our reliance on the ability of our customers to design, manufacture and sell their products with our touch technology, the length of a customer’s product development cycle, our dependence and our customers’ dependence on suppliers, the global economy generally and other risks discussed under “Risk Factors” and elsewhere in Neonode’s public filings with the SEC from time to time, including Neonode’s annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no assurance that its expectations will be fulfilled. Forward-looking statements are made as of today’s date, and Neonode undertakes no duty to update or revise them.

3 

NEONODE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	June 30,			December 31,
	2022			2021
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	12,426		$	17,383
Accounts receivable and unbilled revenues, net		1,095			1,293
Inventory		4,400			2,520
Prepaid expenses and other current assets		536			836
Total current assets		18,457			22,032
Property and equipment, net		351			376
Operating lease right-of-use assets, net		306			584
Total assets	$	19,114		$	22,992
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	279		$	776
Accrued payroll and employee benefits		1,052			1,037
Accrued expenses		392			371
Contract liabilities		112			106
Current portion of finance lease obligations		133			258
Current portion of operating lease obligations		134			425
Total current liabilities		2,102			2,973
Finance lease obligations, net of current portion		81			65
Operating lease obligations, net of current portion		70			117
Total liabilities		2,253			3,155
Commitments and contingencies
Stockholders’ equity:
Common stock, 25,000,000 shares authorized, with par value of $0.001; 13,579,952 and 13,575,952 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		14			14
Additional paid-in capital		226,964			226,880
Accumulated other comprehensive loss		(334	)		(408	)
Accumulated deficit		(205,536	)		(202,608	)
Total Neonode Inc. stockholders’ equity		21,108			23,878
Noncontrolling interests		(4,247	)		(4,041	)
Total stockholders’ equity		16,861			19,837
Total liabilities and stockholders’ equity	$	19,114		$	22,992

4 

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Revenues:
License fees	$	953		$	1,358		$	2,057		$	2,653
Products		210			346			357			701
Non-recurring engineering		104			16			171			31
Total revenues		1,267			1,720			2,585			3,385
Cost of revenues:
Products		93			212			144			482
Non-recurring engineering		17			9			26			16
Total cost of revenues		110			221			170			498
Total gross margin		1,157			1,499			2,415			2,887
Operating expenses:
Research and development		1,146			1,379			2,169			2,521
Sales and marketing		644			769			1,260			1,557
General and administrative		1,053			1,147			2,063			2,234
Total operating expenses		2,843			3,295			5,492			6,312
Operating loss		(1,686	)		(1,796	)		(3,077	)		(3,425	)
Other income (expense):
Interest expense		(4	)		(3	)		(6	)		(8	)
Other income		21			-			21			-
Total other income (expense)		17			(3	)		15			(8	)
Loss before provision for income taxes		(1,669	)		(1,799	)		(3,062	)		(3,433	)
Provision for income taxes		28			37			72			73
Net loss including noncontrolling interests		(1,697	)		(1,836	)		(3,134	)		(3,506	)
Less: Net loss attributable to noncontrolling interests		149			179			206			281
Net loss attributable to Neonode Inc.	$	(1,548	)	$	(1,657	)	$	(2,928	)	$	(3,225	)
Loss per common share:
Basic and diluted loss per share	$	(0.11	)	$	(0.14	)	$	(0.22	)	$	(0.28	)
Basic and diluted – weighted average number of common shares outstanding		13,578			11,504			13,577			11,504

5 

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Net loss	$	(1,697	)	$	(1,836	)	$	(3,134	)	$	(3,506	)
Other comprehensive income (loss):
Foreign currency translation adjustments		41			56			74			(110	)
Comprehensive loss		(1,656	)		(1,780	)		(3,060	)		(3,616	)
Less: Comprehensive loss attributable to noncontrolling interests		149			179			206			281
Comprehensive loss attributable to Neonode Inc.	$	(1,507	)	$	(1,601	)	$	(2,854	)	$	(3,335	)

6 

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

For the Quarter to Date periods ended June 30, 2021 through June 30, 2022

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Neonode Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balances, December 31, 2020		11,504	$	12	$	211,663	$	(404	)	$	(196,158	)	$	15,113		$	(3,223	)	$	11,890
Stock-based compensation		-		-		23		-			-			23			-			23
Foreign currency translation adjustment		-		-		-		(166	)		-			(166	)		-			(166	)
Net loss		-		-		-		-			(1,568	)		(1,568	)		(102	)		(1,670	)
Balances, March 31, 2021		11,504	$	12	$	211,686	$	(570	)	$	(197,726	)	$	13,402		$	(3,325	)	$	10,077
Stock-based compensation		-		-		22		-			-			22			-			22
Foreign currency translation adjustment		-		-		-		56			-			56			-			56
Net loss		-		-		-		-			(1,657	)		(1,657	)		(179	)		(1,836	)
Balances, June 30, 2021		11,504	$	12	$	211,708	$	(514	)	$	(199,383	)	$	11,823		$	(3,504	)	$	8,319
Issuance of common stock under the ATM, net		94		-		593		-			-			593			-			593
Stock-based compensation		13		-		46		-			-			46			-			46
Foreign currency translation adjustment		-		-		-		(37	)		-			(37	)		-			(37	)
Net loss		-		-		-		-			(1,721	)		(1,721	)		(135	)		(1,856	)
Balances, September 30, 2021		11,611	$	12	$	212,347	$	(551	)	$	(201,104	)	$	10,704		$	(3,639	)	$	7,065
Issuance of shares for cash, net of offering costs		1,950		2		14,467		-			-			14,469			-			14,469
Stock-based compensation		15		-		66		-			-			66			-			66
Foreign currency translation adjustment		-		-		-		143			-			143			-			143
Net loss		-		-		-		-			(1,504	)		(1,504	)		(402	)		(1,906	)
Balances, December 31, 2021		13,576	$	14	$	226,880	$	(408	)	$	(202,608	)	$	23,878		$	(4,041	)	$	19,837
Stock-based compensation		-		-		39		-			-			39			-			39
Foreign currency translation adjustment		-		-		-		33			-			33			-			33
Net loss		-		-		-		-			(1,380	)		(1,380	)		(57	)		(1,437	)
Balances, March 31, 2022		13,576	$	14	$	226,919	$	(375	)	$	(203,988	)	$	22,570		$	(4,098	)	$	18,472
Stock-based compensation		4		-		45		-			-			45			-			45
Foreign currency translation adjustment		-		-		-		41			-			41			-			41
Net loss		-		-		-		-			(1,548	)		(1,548	)		(149	)		(1,697	)
Balances, June 30, 2022		13,580	$	14	$	226,964	$	(334	)	$	(205,536	)	$	21,108		$	(4,247	)	$	16,861

7 

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six months ended June 30,
	2022			2021
Cash flows from operating activities:
Net loss (including noncontrolling interests)	$	(3,134	)	$	(3,506	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		84			45
Depreciation and amortization		87			376
Amortization of operating lease right-of-use assets		224			259
Recoveries of bad debt		(79	)		-
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue, net		253			511
Inventory		(2,312	)		(880	)
Prepaid expenses and other current assets		232			481
Accounts payable and accrued expenses		(287	)		(343	)
Deferred revenues		12			(6	)
Operating lease obligations		(294	)		(342	)
Net cash used in operating activities		(5,214	)		(3,405	)
Cash flows from investing activities:
Purchase of property and equipment		(47	)		(67	)
Net cash used in investing activities		(47	)		(67	)
Cash flows from financing activities:
Principal payments on finance lease obligations		(99	)		(295	)
Net cash used in financing activities		(99	)		(295	)
Effect of exchange rate changes on cash		403			(95	)
Net decrease in cash		(4,957	)		(3,862	)
Cash at beginning of period		17,383			10,473
Cash at end of period	$	12,426		$	6,611
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	2		$	73
Cash paid for interest	$	6		$	8
Supplemental disclosure of non-cash investing and financial activities:
Property and equipment obtained in exchange for lease obligations	$	24		$	-

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EX-99.2

Exhibit 99.2

Q2 2 0 22 Earni n gs Call August 11, 2022 2022 - 08 - 11 1 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Today’s Presenters U rb an F o rssell CEO 2022 - 08 - 11 2 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) Fr edrik Nihlén CFO

Legal Disclaimer 2022 - 08 - 11 3 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) This presentation contains, and related oral and written statements of Neonode Inc. (the “Company”) and its management may contain, forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward - looking statements include information about current expectations, strategy, plans, potential financial performance or future events. They also may include statements about market opportunity and sales growth, financial results, use of cash, product development and 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. These uncertainties and risks include, but are not limited to, our ability to secure financing when needed on acceptable terms, risks related to new product development, our ability to protect our intellectual property, our ability to compete, general economic conditions including as a result of the ongoing COVID - 19 pandemic or geopolitical conflicts such as the war in Ukraine, as well as other risks outlined in filings of the Company with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 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.

A g enda 2022 - 08 - 11 4 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 1. Q2 2 0 22 Fin a n c i a l R e s u lts 2. Stra tegy a nd Business Update 3. Conc l uding Re marks 4. Q&A N e onod e I n c . Q2 20 2 2 | A u g u st 1 1 , 20 2 2

$1.3 million Revenue Total Q2, 2022 但 26 % Y oY $0.2 million R e v e n u e Pr o d u ct s Q2, 2022 但 39 % Y oY 1,400 1,200 1,000 800 600 400 200 0 A M E R A P A C EM E A A M E R APAC E M E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A A M E R APAC EM E A Q 1 - 20 Q 2 - 20 Q 3 - 20 Q 4 - 20 Q 1 - 21 Q 2 - 21 Q 3 - 21 Q 4 - 21 Q 1 - 22 Q 2 - 22 T h o us a nd s Q2/’22 Financial Results – Revenues Revenues by Revenue Stream and Region L i c e n s e fe e s Pr o d u cts N RE 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 - 200 Q 1 - 2 0 Q 2 - 2 0 Q 3 - 2 0 Q 4 - 2 0 Q 1 - 2 1 Q 2 - 2 1 Q 3 - 2 1 Q 4 - 2 1 Q 1 - 2 2 Q 2 - 2 2 Thousands Revenues by Revenue Stream License fees Products N RE 2022 - 08 - 11 5 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Q2/’22 Financial Results – Gross Profit/Margin 6% GM Products Q2, 2022 似 17pp YoY - 25 0 % - 20 0 % - 10 0 % - 50% 0% 50% 100% - 200 - 100 - 150 - 150% 200 150 100 50 0 - 50 Q 1 - 20 Q 2 - 20 Q 3 - 20 Q 4 - 20 Q 1 - 21 Q 2 - 21 Q 3 - 21 Q 4 - 21 Q 1 - 22 Q 2 - 22 T h o us a nd s Gross Profit/Margin Products Gross profit Gross margin 0% 30% 20% 10% 40% 50% 60% 70% 0 60 40 20 80 100 120 140 Q 1 - 20 Q 2 - 20 Q 3 - 20 Q 4 - 21 Q 1 - 22 Q 2 - 22 T h o us a nd s Gross Profit/Margin TSMs Adjusted Q 4 - 20 Q 1 - 21 Gross profit Q2 - 21 Q3 - 21 Gross margin 2022 - 08 - 11 6 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 56% GM Products Q2, 2022 似 17pp YoY

Q2/’22 Financial Results – Operating Expenses $2.8 million O p e r a t i n g E x p e n s e s Q2, 2022 但 14 % Y oY - 3 ,000 - 3 ,500 2022 - 08 - 11 7 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) - 2 ,500 - 2 ,000 - 1 ,500 - 1 ,000 - 500 0 Q 1 - 20 Q 2 - 20 Q 3 - 20 Q 3 - 21 Q 4 - 21 Q 1 - 22 Q 2 - 22 T h o us a nd s Operating Expenses Q4 - 20 Q1 - 21 Q2 - 21

Q2/’22 Financial Results – Cash $2.9 million Net Cash Burn O p e r a t i n g A ct i v i t i e s Q2, 2022 似 29 % QoQ $13.5 million Cash and Accounts Receivables June 30, 2022 但 5.0 Million Dec. 3 1 ,20 2 1 - 3 ,000 - 3 ,500 2022 - 08 - 11 8 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) - 2 ,500 - 2 ,000 - 1 ,500 - 1 ,000 - 500 T h o us a nd s Net cash used in operating activities Q1 - 20 Q2 - 20 Q3 - 20 Q4 - 20 Q1 - 21 Q2 - 21 Q3 - 21 Q4 - 21 Q1 - 22 Q2 - 22 0

A g enda 2022 - 08 - 11 9 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 1. Q2 2 0 22 Finan c ial R e sults 2. Str ateg y a n d B u siness Up d ate 3. Conc l uding Re marks 4. Q&A N e onod e I n c . Q2 20 2 2 | A u g u st 1 1 , 20 2 2

Business Strategy: Technology Licensing and Product Sales INTERACTIVE KIOSKS ELEVATORS PRI N TER AUTOMOTIVE T A R GET S E GM E N TS B US I N E SS M O D ELS PRODUCT SALES TECHNOLOGY LICENSING C U S T O M ER OFFERI NGS TOUCH SENSOR MODULES (ZFORCE) ZFORCE MULTISENSING 2022 - 08 - 11 10 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

3 - step Approach for Growth 3 In v es tments i n to mar ket ing an d sa l e s Expansion of pa r tn e r network Sca l ing b u sines s i n k e y markets Expanding c u st omer off e r in g s an d inc r e as ing ve rtic a l inte g r a t ion O u ts o u r c ing TSM production Expanding b u sines s sco pe to n e w ma r ke t s e g men ts a nd fur t h e r ge o gr a ph ic a l markets Develop i ng ne w HW p r od uct s a nd e xt e nd ing SW off e r in g s Ac c e l e r a ting g r owt h th r o u g h st r a t e g ic pa r tn e r sh ips an d acquisitions 2 1 2022 - 08 - 11 11 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 2021 → 2022 → 2023 →

Growth Potential Per Revenue Stream Continue to offer engineering services to facilitate new licensing businesses and to support and drive product sales License R e v en u e s Product R e v en u e s NRE Revenues 2021 → 2022 → 2023 → Existing business with more than a dozen customers, mainly printer manufacturers and automotive Tier 1s Support current customers and work to win new businesses in automotive, military & avionics, and other segments Continue to expand licensing business to further customers and segments, and to SW - only solutions Touch Sensor Module sales, mainly for contactless touch applications in elevators and interactive kiosks Broaden the product portfolio and continue to expand to further market segments Scale business in key markets JP, KR, CN, FR Widen the market scope to include additional market segments and geographical markets N ow License Product N RE 2022 - 08 - 11 12 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Neonode Touch Sensor Modules Standardized COTS products featuring zForce Reflective technology 374mm 1 0 1 m m 2022 - 08 - 11 13 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Contactless Touch Solutions Two ways to go with our Touch Sensor Modules! Parallel plane solution Touch interaction area hovering above or in front of a display or surface Holographic solution Touch in t er acti o n o n an i n - air displ ay 2022 - 08 - 11 14 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Example of contactless interface using the parallel plane approach: 2022 - 08 - 11 15 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) Contactless check - in and bagage drop kiosks at Hamad Airport Retrofit solution developed and installed by Happymeter

Example of holographic display interfaces: Contactless medical carts and patient monitors Launched by Holo Industries 2022 - 08 - 11 16 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Other Application Examples • Self - Ordering Kiosks • Vending Machines • Coffee Machines • Digital Signage • Point - of - Sale Terminals • Ticketing Machines • Feedback Terminals • Elevators 2022 - 08 - 11 17 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Communication Framework We Transform the Way Humans Interact with Machines • Pas s e ng e r T e r m i na l E x p o • H a ma d Na med W o r ld ’ s Best A i rpor t 202 2 • New V A R Ag r ee ment w i th M Z announcement • 7 - E l e v e n g o e s H o lo g r a p h i c i n Japan • 7 - E l e v e n Press R e l e a se CON T AC T L E SS T O U C H C ON TE N T CONTENT K EY S T ON E APPLICATION TECHNOLOGY SE C TOR OPP O RT U N I T I E S T O U C H SCENE A N A L YS I S GESTURE CONTROL PU R P O SE 80% 20% OBJECT DETECTION • Neonode Provides Crucial Sensor T e c h n o lo g y f o r H e a d - u p D i s p lays • Driver Distraction Warning Systems • I nnovat i on i n th e D r i v e r ’ s S e a t TRANSPORTATION HOSPITALITY RE T AIL OTHER TARGETED & TRENDING SECTORS A U T O M O TI VE PURSUADE INSPIRE MOTIVATE EL E V A T O R S INTERACTIVE KIOSKS • M e d i c a l E q u i pment E m p lo ys H o lo g r a p h i c T e c h n o lo g y STRATEGIC POSITIONING 2022 - 08 - 11 18 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Transportation 2022 - 08 - 11 19 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) Strong focus on the Aviation Sector, specifically, people movement in airports.

Passenger Terminal Expo 2022 - 08 - 11 20 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Passenger Terminal Expo, Paris, June 15 - 17 De whu r s t Neonode Merim Happy Meter Image Holders MZ Technologie New Pitches 2022 - 08 - 11 21 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) Ink Aviation The World’s Biggest Airport Conference & Exhibition

Neonode Extends VAR Agreement with MZ Technologie to Access the Middle East 2022 - 08 - 11 22 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Automotive 2022 - 08 - 11 23 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) Product releases for the Automotive Industry: Advanced Driver Distraction Warning Systems and Object Detection for Head - up Displays.

A g enda 2022 - 08 - 11 24 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 1. Q2 2 0 22 Finan c ial R e sults 2. Stra tegy a nd Business Update 3. C o n c luding Remarks 4. Q&A N e onod e I n c . Q2 20 2 2 | A u g u st 1 1 , 20 2 2

Concluding Remarks 2022 - 08 - 11 25 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) • Sale s and resu l ts f or Q2 bel o w expect a t i ons o C O V I D - 1 9 re la t ed l o c k - d o wns o Semiconductor shortage affecting our customers o Long sales cycles, long development cycles, protracted new product launches • We continue see a stable and increasing demand for our TSMs, not least for contactless touch solutions using holographic displays • We also see a growing interest in our zForce and MultiSensing technologies from automotive and avionics customers • We remain optimistic about our prospects to grow and improve cash flow during this and the c o ming years

A g enda 2022 - 08 - 11 26 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON) 1. Q2 2 0 22 Finan c ial R e sults 2. Stra tegy a nd Business Update 3. Conc l uding Re marks 4. Q&A N e onod e I n c . Q2 20 2 2 | A u g u st 1 1 , 20 2 2

info@neonode.com neonode.com Subsc r ibe to N e o node n e w s let t e r Thank you. 2022 - 08 - 11 27 © Neonode 2001 - 2021 · www.neonode.com · Nasdaq (NEON) 2022 - 08 - 11 27 © Neonode 2001 - 2022 · www.neonode.com · Nasdaq (NEON)

Appe n dix 2022 - 08 - 11 28 © Neonode 2001 - 2021 · www.neonode.com · Nasdaq (NEON)

Non - GAAP Financial Measures In addition to presenting our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), we use adjusted gross margin to measure our financial performance. We define adjusted gross margin as gross margin excluding AirBar sales revenues and costs and adjusting for costs and lost revenues caused by a quality issue and one - time write - down of inventory. We believe adjusted gross margin is a meaningful measure because it reflects the performance of our TSM business, which is our current focus. Non - GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Our use of adjusted gross margin, a non - GAAP financial measure, has important limitations as an analytical tool because it excludes some, but not all, items that affect the most directly comparable GAAP financial measure. You should not consider adjusted gross margin in isolation or as substitutes for analysis of our results as reported under GAAP. Our definition of non - GAAP adjusted gross margin may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. 2022 - 08 - 11 29 © Neonode 2001 - 2021 · www.neonode.com · Nasdaq (NEON) The following tables presents a reconciliation of adjusted gross margin to gross margin, the most directly comparable GAAP financial measure. kUSD Q1 - 20 Q2 - 20 Q3 - 20 Q4 - 20 Q1 - 21 Q2 - 21 Q3 - 21 Q4 - 21 Q1 - 22 Q2 - 22 Revenue Products 98 66 284 502 355 346 136 118 147 210 Cost of Sales Products - 36 - 72 - 198 - 496 - 270 - 212 - 98 - 342 - 51 - 93 Gross Profit Products 62 - 6 86 6 85 134 38 - 224 96 117 Lost revenues TSM quality issue - - - - - - 14 12 92 - - Cost of sales TSM quality issue - - - - - 4 27 - 61 - - Inventory write - down TSM quality issue - - - - - - - 154 - - Revenue AirBar 1 - 0 - 60 - 21 - 43 - - - - 13 - Cost of Sales AirBar - 23 27 86 123 39 - 4 - 7 149 - - Adjusted Gross Profit Products 40 21 112 109 81 120 70 110 83 117 Gross Margin Products 63,3% - 9,1% 30,3% 1,2% 23,9% 38,7% 27,9% - 189,8% 65,3% 55,7% Adjusted Gross Margin Products 40,4% 31,7% 50,1% 22,6% 25,9% 36,2% 47,3% 52,4% 61,9% 55,7%

XML

Cover	Aug. 11, 2022
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 11, 2022
Entity File Number	1-35526
Entity Registrant Name	NEONODE INC.
Entity Central Index Key	0000087050
Entity Tax Identification Number	94-1517641
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Karlavägen 100
Entity Address, Address Line Two	115
Entity Address, City or Town	Stockholm
Entity Address, Country	SE
Entity Address, Postal Zip Code	26
City Area Code	0
Local Phone Number	86671717
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	NEON
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false