12 Things You Need to Know About
Neonode Inc. (NEON-NASDAQ)

• Neonode’s optical infrared touch technology—zForce®—can be integrated into consumer and industrial electronics to enable touch controls. The Company seeks to compete with today’s advanced capacitive touch solutions. Due to the high costs of the capacitive technology substrates, which have been made popular primarily through smartphones and tablets, lower-cost alternatives such as zForce® are emerging. Neonode has already penetrated the leading eReader suppliers, which are now shipping products using zForce® solutions.

• The patented zForce® optical technology has been licensed to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) in several high-volume markets worldwide.

• The Company’s primary business entails a capital-efficient licensing model through which near-term revenue is driven by global eReader shipments. During 2012 and beyond, Neonode is working to demonstrate its technology in a number of new markets, including tablet PCs, printers, tablets, and mobile phones. Continued future expansion includes automotive touch products and color LCDs, among others.

• During the first six months of 2012, the Company announced seven new licensing agreements and 40 design wins—or the incorporation of Neonode’s technology into the development of a high-volume product by a licensing customer—encompassing a wide range of consumer electronic devices.

• Keeping costs low and enabling the development of devices that have 100% optical transparency for a clear viewing experience without reflection is imperative for Neonode. The Company’s proprietary architecture offers these benefits by reducing the amount of glass required in the manufacture of touchscreens.

• Neonode believes that zForce® is well suited for OEMs/ODMs developing a touch-enabled product. The technology offers advanced functionalities with features that include multi-touch and stylus support as well as enhanced picture quality and low total cost compared to current touch technologies.

• The introduction of an ultra-low-power, single-chip optical touch controller, called NN1001, in January 2012 serves to extend Neonode’s competitive advantage by combining several existing components into one chip. Its single-chip solution requires less space, increasing the suitability of zForce® for handsets. Developed in collaboration with Texas Instruments, NN1001 increases touch performance and reduces manufacturing cost.

• There have been a host of favorable reviews regarding the inclusion of Neonode’s technology on products to date. Positive feedback has been instrumental in enabling the Company to bring onboard new customers as well as maintain relationships with existing customers for follow-on products.

• Researchers forecast that the market for touchscreen technologies, which is estimated to reach roughly $16 billion worldwide during 2012, could almost double by 2018, reaching nearly $32 billion.

• The Company holds a portfolio of issued and pending intellectual property comprising optical technology patents as well as use patents for gestures and other features. Neonode has IP in the U.S., China, Singapore, Australia, and Japan as well as in multiple European countries.

• Neonode’s CEO and cofounder, Mr. Thomas Eriksson, has over 15 years of experience in product design and electronics engineering. The Company is led by individuals with high-level experience in finance, accounting, and communications, as well as by people with considerable backgrounds in the semiconductor industry and leadership experience at other high-tech companies.

• At June 30, 2012, Neonode held cash of $11.3 million and accounts receivable of $1.7 million, after raising net proceeds of $11.2 million in December 2011.