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, 2021

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) 8 667 17 17

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, 2021, Neonode Inc. (the “Company”) reported its earnings for the three and six months ended June 30, 2021 (the “Earnings Release”) and posted on the Neonode website the Second Quarter 2021 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, 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, Wednesday, August 11, 2021 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 Exhibits 99.1 and 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, 2021
Exhibit 99.2		Second Quarter 2021 Presentation of Neonode

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, 2021	NEONODE INC.

	By:	/s/ Fredrik Nihlén
	Name:	Fredrik Nihlén
	Title:	Chief Financial Officer

Exhibit 99.1

PRESS RELEASE

For Release, 9:10AM EST August 11, 2021

Neonode Reports Quarter Ended June 30, 2021 Financial Results

STOCKHOLM, SWEDEN – August 11, 2021 – Neonode Inc. (NASDAQ: NEON), today reported financial results for the three and six months ending June 30, 2021.

FINANCIAL SUMMARY FOR THE QUARTER ENDED JUNE 30, 2021:

●

Revenue of $1.7 million, an increase of 127% compared to the same period in the prior year.

●

Operating expenses of $3.3 million, an increase of 37.8% compared to the same period in the prior year.

●

Net loss of $1.7 million, or $0.14 per share, compared to $1.6 million, or $0.18 per share, for the same period in the prior year.

●

Cash used by operations of $1.4 million compared to $1.0 million for the same period in the prior year.

●

Cash and accounts receivable of $7.8 million as of June 30, 2021, compared to $12.2 million as of December 31, 2020.

THE CEO’S COMMENTS

“During the second quarter we continued to execute on our strategies and build our business pipeline. As I have discussed over the past few quarters, our focus continues to be on contactless touch solutions for elevators and kiosks where our Touch Sensor Modules (”TSMs”) can offer an intuitive and safer user experience. We expected that the first adopters of our TSM solutions would be in Asia and our first and second quarter sales confirmed our expectations. Over 70% of our TSM sales during the first six months this year is to Asian customers, who are using the TSMs for contactless touch applications for elevators and different types of kiosk applications. We also have numerous development and pilot projects underway for elevators plus an array of different public space kiosks, such as contactless touch systems in airport self check-in and retail self check-out kiosks, in Asia. Asian customers are leading the way but we continue to see increasing interest in our contactless touch technology and our TSM solutions from European and North American customers as well,” said Dr. Urban Forssell, CEO of Neonode.

“We also continued to invest in recruitment of talented and experienced people in sales, marketing, and engineering who will strengthen our team to help us create and capitalize on the growing market opportunities. This includes both contactless touch opportunities with elevator and kiosk customers and other opportunities for us to leverage our extensive IP portfolio and deep knowledge in touch, gesture sensing, and camera-based scene analysis where we also have a lot of interest from customers worldwide,” concluded Dr. Forssell.

FINANCIAL OVERVIEW FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

Net revenues increased 127% and 65% for the three and six months ended June 30, 2021, respectively as compared to the same periods in 2020. The increase is related to both higher license revenues and higher revenues from TSM sales, partially offset by a decrease in non-recurring engineering revenues. License revenues in 2020 were depressed by the general COVID-19 driven economic slow-down. During the second half of 2020 our license revenues started to re-bound and this trend has continued during the first and second quarters of this year. The interest for contactless touch is the main driver for the increase in revenues from sales of our TSMs. As expected, our customers in Asia, mainly in Japan and South Korea, have been the first adopters of our contactless touch technology. Our TSM sales to date have primarily related to retrofit solutions for existing installations in the elevator and kiosk markets. New Original Equipment Manufacturer (“OEM”) product releases using our embedded TSMs typically have a longer time to market due to longer sales, product development and testing cycles, and therefore we expect this portion of our business to grow during the coming years.

Our combined total gross margin was 87% and 85% for the three and six months ended June 30, 2021, respectively, and 84% and 92% for the three and six months ended June 30, 2020, respectively. For the three and six months ended June 30, 2021, gross margin related to product sales was 39% and 31%, respectively compared to a negative 9% and 34% the same periods in 2020. The reason for the decrease in the six months ended June 30, 2021, compared to the same period 2020 is the inclusion of low-margin AirBar sales during the first three months of 2021. Our operating expenses increased 38% and 33% in the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020. The increase in operating expenses is primarily due to our hiring of additional employees and external consultants as compared to the comparable periods in 2020 in which we experienced reduced employee working hours, as dictated by the Swedish governmental pandemic related support program and tighter control over other costs during the period we participated in the program.

Net loss attributable to Neonode of $1.7 million and $3.2 million for the three and six months ended June 30, 2021, respectively, and $1.6 million and $2.6 million for the same periods in 2020 respectively. Cash used by operations was $1.4 million and $3.4 million for three and six months ended June 30, 2021, respectively, compared to $1.0 million and $1.9 million in the same periods of 2020. This was primarily the result of a higher net loss and increased inventory to secure our future deliveries.

Cash and accounts receivable totaled $7.8 million and working capital was $7.1 million as of June 30, 2021, compared to $12.2 million and $10.4 million as of December 31, 2020.

For more information, please contact:

Investor Relations

David Brunton

Email: [email protected]

Chief Financial Officer

Fredrik Nihlén

E-mail: [email protected]

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

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 expectations, 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 are discussed under “Risk Factors” and elsewhere in Neonode’s public filings with the SEC from time to time, including Neonode’s annual report 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.

NEONODE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	June 30,			December 31,
	2021			2020
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	6,611		$	10,473
Accounts receivable and unbilled revenue, net		1,224			1,743
Inventory		2,086			1,273
Prepaid expenses and other current assets		650			1,161
Total current assets		10,571			14,650

Property and equipment, net		660			1,003
Operating lease right-of-use assets		628			919
Total assets	$	11,859		$	16,572

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	754		$	1,084
Accrued payroll and employee benefits		1,170			1,170
Accrued expenses		435			545
Deferred revenues		130			138
Current portion of finance lease obligations		501			769
Current portion of operating lease obligations		437			504
Total current liabilities		3,427			4,210

Finance lease obligations, net of current portion		39			95
Operating lease obligations, net of current portion		74			377
Total liabilities		3,540			4,682

Commitments and contingencies

Stockholders’ equity:
Common stock, 25,000,000 shares authorized, with par value of $0.001; 11,504,665 shares issued and outstanding at June 30, 2021 and December 31, 2020		12			12
Additional paid-in capital		211,708			211,663
Accumulated other comprehensive loss		(514	)		(404	)
Accumulated deficit		(199,383	)		(196,158	)
Total Neonode Inc. stockholders’ equity		11,823			15,113
Noncontrolling interests		(3,504	)		(3,223	)
Total stockholders’ equity		8,319			11,890
Total liabilities and stockholders’ equity	$	11,859		$	16,572

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020
Revenues:
License fees	$	1,358		$	674		$	2,653		$	1,843
Sensor modules		346			66			701			164
Non-recurring engineering		16			18			31			45
Total revenues		1,720			758			3,385			2,052

Cost of revenues:
Sensor modules		212			72			482			108
Non-recurring engineering		9			51			16			59
Total cost of revenues		221			123			498			167

Total gross margin		1,499			635			2,887			1,885

Operating expenses:
Research and development		1,379			1,043			2,521			2,038
Sales and marketing		769			648			1,557			1,193
General and administrative		1,147			700			2,234			1,499

Total operating expenses		3,295			2,391			6,312			4,730
Operating loss		(1,796	)		(1,756	)		(3,425	)		(2,845	)

Other expense:
Interest expense		3			7			8			14
Total other expense		3			7			8			14

Loss before provision for income taxes		(1,799	)		(1,763	)		(3,433	)		(2,859	)

Provision for income taxes		37			3			73			19
Net loss including noncontrolling interests		(1,836	)		(1,766	)		(3,506	)		(2,878	)
Less: Net loss attributable to noncontrolling interests		179			154			281			256
Net loss attributable to Neonode Inc.	$	(1,657	)	$	(1,612	)	$	(3,225	)	$	(2,622	)

Loss per common share:
Basic and diluted loss per share	$	(0.14	)	$	(0.18	)	$	(0.28	)	$	(0.29	)
Basic and diluted – weighted average number of common shares outstanding		11,504			9,171			11,504			9,171

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020

Net loss	$	(1,836	)	$	(1,766	)	$	(3,506	)	$	(2,878	)
Other comprehensive income (loss):
Foreign currency translation adjustments		56			64			(110	)		(23	)
Comprehensive loss		(1,780	)		(1,702	)		(3,616	)		(2,901	)
Less: Comprehensive loss attributable to noncontrolling interests		179			154			281			256
Comprehensive loss attributable to Neonode Inc.	$	(1,601	)	$	(1,548	)	$	(3,335	)	$	(2,645	)

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except for Preferred Stock Shares Issued)

(Unaudited)

For the Quarter to Date periods ended June 30, 2020 through June 30, 2021

	Preferred Stock Shares Issued			Preferred Stock Amount			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, 2019		-		$	-			9,171	$	9		$	197,543		$	(639	)	$	(190,520	)	$	6,393		$	(2,546	)	$	3,847

Foreign currency translation adjustment		-			-			-		-			-			(87	)		-			(87	)		-			(87	)

Net loss		-			-			-		-			-			-			(1,010	)		(1,010	)		(102	)		(1,112	)

Balances, March 31, 2020		-		$	-			9,171	$	9		$	197,543		$	(726	)	$	(191,530	)	$	5,296		$	(2,648	)	$	2,648

Foreign currency translation adjustment		-			-			-		-			-			64			-			64			-			64

Net loss		-			-			-		-			-			-			(1,612	)		(1,612	)		(154	)		(1,766	)

Balances, June 30, 2020		-		$	-			9,171	$	9		$	197,543		$	(662	)	$	(193,142	)	$	3,748		$	(2,802	)	$	946

Issuance of shares for cash, net of offering costs		3,932			3,932			1,612		1			9,597			-			-			13,530			-			13,530

Series C-2 Preferred Stock issued for repayment of short-term borrowings and accrued interest		517			517			-		-			(1)			-			-			516			-			516

Conversion of Series C-1 and C-2 Preferred Stock to common stock		(4,449	)		(4,449	)		684			1		4,448			-			-			-				-		-

Preferred dividends			-			-		-			-			-			-		(33)			(33)				-		(33)

Foreign currency translation adjustment		-			-			-		-			-			(228	)		-			(228	)		-			(228	)

Net loss		-			-			-		-			-			-			(1,638	)		(1,638	)		(110	)		(1,748	)

Balances, September 30, 2020		-		$	-			11,467	$	11		$	211,587		$	(890	)	$	(194,813	)	$	15,895		$	(2,912	)	$	12,983

Stock-based compensation		-			-			37		1			76			-			-			77			-			77

Foreign currency translation adjustment		-			-			-		-			-			486			-			486			-			486

Net loss		-			-			-		-			-			-			(1,345	)		(1,345	)		(311	)		(1,656	)

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

NEONODE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six months ended June 30,
	2021			2020
Cash flows from operating activities:
Net loss (including noncontrolling interests)	$	(3,506	)	$	(2,878	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		45			-
Depreciation and amortization		376			373
Amortization of operating lease right-of-use assets		259			183
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue, net		511			588
Projects in process		-			7
Inventory		(880	)		(42	)
Prepaid expenses and other current assets		481			155
Accounts payable and accrued expenses		(343	)		(169	)
Deferred revenues		(6	)		33
Operating lease obligations		(342	)		(178	)
Net cash used in operating activities		(3,405	)		(1,928	)

Cash flows from investing activities:
Purchase of property and equipment		(67	)		(7	)
Net cash used in investing activities		(67	)		(7	)

Cash flows from financing activities:
Proceeds from short-term borrowings		-			966
Proceeds from short-term tax credits		-			542
Principal payments on finance lease obligations		(295	)		(164	)
Net cash (used in) provided by financing activities		(295	)		1,344

Effect of exchange rate changes on cash		(95	)		7

Net decrease in cash		(3,862	)		(584	)
Cash at beginning of period		10,473			2,357
Cash at end of period	$	6,611		$	1,773

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	73		$	19
Cash paid for interest	$	8		$	13

Exhibit 99.2

Neonode Inc. Second Quarter 2021 Presentation Dr. Urban Forssell, CEO Mr. Fredrik Nihlén, CFO Mr. David Brunton, Head of Investor Relations August 11, 2021

2 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Disclaimer This presentation contains oral and written statements of Neonode Inc. (“Neonode” or the “Company”) and its management and ma y contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward - looking statements include information about current expectations, potential financial performance or future events. These may also i ncl ude statements about market and sales growth, financial results, use of free cash flow, product development and introduction, reg ula tory matters and sales efforts. They 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 t hes e forward-looking statements. These uncertainties and risks include, but are not limited to, those outlined in filings of the C omp any with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, including sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Yo u are advised to carefully consider these various risks, uncertainties and other factors. Forward-looking statements are made a s o f 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 believe s 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.

5 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Fredrik Nihlén Previous Positions: Finance Director Nordics Group CFO Head of Finance Finance need to be a true business partner Transform data to information driven decisions Always strive be more effective and develop

6 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Summary and Highlights • We continue to execute on our strategies and build our business pipeline • The COVID - 19 pandemic still negatively impacts our business, but despite this we continue our growth journey • Sales revenues during the second quarter increased by 127% compared to the same period last year • The demand for our contactless touch solutions and our Touch Sensor Modules continues to increase ; Asia is leading the way , but we are also starting to see an increasing interest from customers in Europe and North America • Our license revenues have recovered well after the dip we saw during the second quarter 2020

8 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 2Q 2021 Financial Update – Revenues 0 200 400 600 800 1,000 1,200 AMER APAC EMEA AMER APAC EMEA AMER APAC EMEA AMER APAC EMEA AMER APAC EMEA AMER APAC EMEA Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Thousands Revenues by Revenue Stream and Region License fees Sensor modules Non-recurring engineering REVENUE TOTAL $1.7 million 127% YoY REVENUE SENSOR MODULES $345 thousand 439% YoY

9 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 2Q 2021 Financial Update – Operating Expenses -4,000 -3,500 -3,000 -2,500 -2,000 -1,500 -1,000 -500 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Thousands Operating Expenses OPERATING EXPENSES $3.3 million 38% YoY

10 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 2Q 2021 Financial Update – Gross Profit/Margin 0% 20% 40% 60% 80% 100% 120% 0 500 1,000 1,500 2,000 2,500 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Thousands Gross Profit/Margin Total Gross Profit Gross Margin GROSS MARGIN TOTAL 87% 3pp YoY GROSS MARGIN PRODUCTS 39% 15pp QoQ -150% -100% -50% 0% 50% 100% 150% ( 200) ( 150) ( 100) ( 50) - 50 100 150 200 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Thousands Gross Profit/Margin Products Gross Profit Gross Margin

11 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 2Q 2021 Financial Update – Cash NET CASH BURN OPERATING ACTIVITES $1.4 million 29% QoQ CASH AND ACCOUNTS RECEIVABLES $7.8 million $4.4 million H1 -2,500 -2,000 -1,500 -1,000 -500 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Thousands Net cash used in operating activities

14 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Application Areas and Market Focus TOUCH OBJECT DETECTION CONTACTLESS TOUCH GUESTURE CONTROL SCENE ANALYSIS ELEVATORS INTERACTIVE KIOSKS MEDICAL MILITARY & AVIONICS INDUSTRIAL AUTOMATION DIGITAL SIGNAGE AUTOMOTIVE CONSUMER ELECTRONICS Mission: We create innovative technology that enhances the human experience MAIN FOCUS AREA

15 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Contactless, but “touch - like”, interaction with displays, keypads, buttons and holographic images. With our Touch Sensor Modules natural, easy - to - use contactless touch features can be created in a simple and cost - effective way. What Is Contactless Touch? Display or keypad

16 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Why Contactless Touch? The average self - check kiosk in an airport contains around 253,857 colony - forming units (CFU) Much of the bacteria found on surfaces in public areas originates from people’s intestines, gut, nose, mouth, throat and feces as a result of poor hand hygiene Source: insuranceQuotes Source: SC Johnson Professional

17 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Why Neonode? Solution Neonode Contactless Touch IR T ouch F rame Projected Capacitive Camera s Interaction via M obile P hone Voice Control Foot P edals Overall look and feel 9 8 9 8 8 8 8 Total cost of owner - ship* $ $$ $ $$$ $ $ $$$ User experience - - - Interaction time Fast Fast Fast Fast Slow Medium Slow Ease of retrofit 9 9 8 9 9 9 8 Feature * Cost represents total cost of ownership, not just hardware and software cost

18 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Elevators Neonode Touch Sensor Modules help to create a safer environment for health care providers and patients in Canada • Leading supplier of elevator fixtures and elevator car interiors, MAD Elevators, creates the PHANTOM Touchless Sensor using Neonode technology. Roll out of the sensors has begun. • PHANTOM Touchless Sensors installed in elevators in 101 Queensway West, Toronto (building serves as a hub of activity ranging from pediatrics to physiotherapy to dentistry and more) to create a touchless experiences for passengers With the help of our partners at Neonode, we’ve been able to offer a simple solution that has significant benefit without significant cost Steve Reich - Rohrwig, CEO at MAD Elevator.

19 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Airport Self - Service Kiosks Neonode Touch Sensor Modules selected for contactless kiosk trials by global airport solution provider in Japan • Japan Aerospace Corporation, a Neonode value - added reseller, was selected by a major airport solution provider for contactless self check - in kiosk trials at Narita Airport featuring Neonode contactless touch technology • This contactless retrofit solution, called Air Click, has been installed on several kiosks at the departure lounge at Narita Airport Terminal • Travellers who wish to do so can still touch the kiosk displays, making traveller adoption seamless • The field test will run for several months • The kiosks are owned and operated by the solution provider and several SkyTeam airlines, including Air France, KLM, and Korean Air, are joining the field test

20 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Quick Service Restaurant Self - Ordering Kiosks Neonode contactless touch solution for self - service kiosks trialed in Europe for a global burger chain • Neonode Touch Sensor Modules selected over camera - based solutions to avoid implications with GDPR in Europe • Retrofit solution installed on existing self - service solution took less than 30 minutes per kiosk • Time to order is just as fast after the introduction of the new touchless technology • Consumers who wish to do so can still touch the kiosk displays, making customer adoption seamless • Preliminary results suggest that the total purchase value is noticeably higher from contactless kiosks compared to orders placed via traditional touch solutions

21 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Self - Checkout Kiosks In Retail NEC award Neonode with Letter of Appreciation • NEC chose Neonode Touch Sensor Modules for use in self - checkout terminals • NEC award Neonode with letter of appreciation for our efforts and co - operation towards their business development activity.

22 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Neonode technology combined with AI in proof of concept for smart kiosks • The smart kiosk concept developed by MiTAC combines contactless touch and artificial intelligence • Seamless integration with facial recognition, contactless touch, and data driven recommendations based on customer preferences • Integration of Neonode TSM for larger 32” displays Smart AI Kiosks We strongly believe contactless touch is the future of kiosk interaction and thanks to Neonode’s very capable TSM we have been able to develop a high - performing yet economical solution. We are excited to start offering this solution, combining artificial intelligence and contactless touch, to our global customer base. Steven Wen, GM of MiTAC Client Business Unit

24 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Operational Excellence Engineering Sales Marketing Operations People : • Retaining and recruiting talent • Establishing an efficient organization • Training and up skilling Process: • Formal processes • Informal ways - of - working Product: • Product offerings • Configuration tools • Application development • Technical support

25 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Large OEMs Broad market customers ; small tech companies , engineering firms etc . Mid size OEMs, system integrators , engineering firms , and maintenance companies Large , often multi - national, corporations with v olume potential >100k per year . Mid - size corporations , often with regional or national focii , with volume potential 10k - 100k per year . Small, local tech companies , engineering firms etc. with limited vo lume potential < 10k per year . Go - To - Market Strategy

26 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Sales Cycle and Market Potential Retrofits New Installs R&D Highest volume End - user decision makers Shortest sales cycle Partner solutions Sales Cycle OEM decision maker Medium sales cycle Engineering resources Longest sales cycle Solution Dynamics Target Customers Integrators Tech companies (OEMs) Integrators OEMs OEMs Volume Potential

28 NASDAQ: NEON www.neonode.com Copyright Neonode © 2001 - 2021 Summarizing Remarks • We see a high and increasing demand for our contactless touch solutions and our Touch Sensor Modules • Our main focus continues to be » Elevators » Interactive Kiosks • We are well positioned to accelerate growth and capitalize on current and future opportunities and continue to invest in our human resources , product development , marketing, and sales

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