Neonode Earnings Presentation Q1 2018neonode.com/wp...1Q-2018-Slide-Deck-Presentation.pdf•Q1...

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Copyright Neonode © 2001-2018 All rights reserved. Stockholm – San Jose – Seoul – Tokyo – Taipei Nasdaq (NEON)

Neonode Earnings Presentation Q1 20188 May, 2018Håkan Persson, CEO Lars Lindqvist, CFODavid Brunton, Head of Investor Relations

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This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and

Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995.

Statements that are not purely historical may be forward-looking. You can identify some forward-looking statements by the use of words

such as "believes," "anticipates," "expects," "intends" and similar expressions. Forward looking statements involve inherent risks and

uncertainties regarding events, conditions and financial trends that may affect Neonode’s future plans of operation, business strategy,

results of operations and financial position. A number of important factors could cause actual results to differ materially from those

included within or contemplated by such forward-looking statements, including, but not limited to risks relating to the uncertainty of

growth in market acceptance for Neonode technology, a history of losses since inception, Neonode’s ability to remain competitive in

response to new technologies, the costs to defend, as well as risks of losing, patents and intellectual property rights, a reliance on current

and future Neonode customers’ ability to develop and sell products that incorporate Neonode technology, customer concentration and

dependence on a limited number of customers, the uncertainty of demand for Neonode technology in certain markets, the ability to

manage growth effectively, dependence on key members of Neonode management and development team, limited experience in

conducting operations internationally, and the ability to obtain adequate capital to fund future operations, For a discussion of these and

other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion

under ‘‘Risk Factors’’ contained in Neonode’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in Neonode’s

publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect Neonode’s analysis only as of

the date hereof. Actual events or results may differ materially from the results discussed in or implied by the forward-looking statements.

We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking

statements, whether as a result of new information, future events or otherwise.

Forward Looking Statements

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• Sales of $2.4M

• Net loss of $0.7M or $0.01 per share

• Cash used by operations $0.6M

• Two new sensor module OEM development projects– Automotive external door sensor– Aeronautic instrument panel sensors

Neonode Q1 2018 – Key Highlights

zForce AIR Technology

zForce CORE Technology

zForce CORE in 53 million products zForce CORE in 3 million cars

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• Strong technology base - passionate and competent employees

• Enthusiasm, future-orientation and creativity

• Create direction and alignment between sales and R&D focusing on high value segments and customers

Observations and actions needed

• Value proposition and Customer value

• Direction and Prioritization

• Market and customer focus

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• Capture the full potential of our licensing business, zForce CORE, to build a stable foundation and secure a steady cash flow

• Grow customer-driven projects creating NRE revenues leading up to licensing and sensor module sales

• Step up product sales of zForce AIR and build on close relationships with key customers in selected strategic markets.

Our Way Forward

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• Infotainment Systems (IVI)

• Interior Control SystemsIn cooperation with Autoliv (Steering Wheel System).

• Entry Systems Door and trunk/tailgate opening and door collision avoidance.

Automotive Opportunities

IVI Wake on Approach Steering Wheel System

Entry Systems

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• Launched new product line zForce AIR in Q4 2017

• Continue to build on our three key offerings

– Touch Interaction– Mid-Air Interaction– Object Sensing• Customer-driven development

Development in close collaboration with customers and partners

Opportunity in zForce AIR

Touch InteractionAdd Touch to Any Display or Surface Object Sensing

Enhanced Object Detection

Mid-Air InteractionAdvanced Gesture Control

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• The new revenue recognition standard ASC606 has been implemented in Q1 2018.– The consequense is that Neonode need to report revenues that corresponds to our customers

sales in the same period.

License Fees ModulesQ1 Revenues OLD GAAP ($K) $2,553 $52

Q1 Revenues NEW GAAP ($K) $2,323 $52

______________________________________________________

Variance $ (230) $ 0

New Revenue Recognition standard ASC606

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• Q1 revenue increase of 2% YoY• License fees $2.3M and

modules $52K compared to license fees $2.1M and modules $200K in Q1 2017

• Net loss of $0.7M or $0.01 per share compared to $0.9M or $0.02 per share loss in Q1 2017

• Expenses on plan towards $3M Run Rate per quarter

Q1-2018: In Summary

0,0

1,0

2,0

3,0

4,0

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

Revenues ($M)

License Fees NRE Sensor Modules

-2

-1,5

-1

-0,5

0Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

Net Income ($M)

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• License fees increased 10% YoY• Printer license fees increased

40% driven primarily by Epson and HP

• Automotive license fees increased 20% QoQ

• License customers shipped 2.9 million products during Q1 2018, accumulated >59 million since 2011

Q1-2018: Stable License Revenues

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

License Fee by Market ($M)

e-Readers Printers Automotive

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• Actions taken and on track to secure balanced cash flow • Working capital of $6.8 million as of March 31, 2018• $4.9 million in cash and $2.0 million in accounts receivables as of March 31, 2018

Cash and Balance Sheet Summary

-2

-1,5

-1

-0,5

0Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

Cash Used By Operations ($M)Group Balance Sheet Summary ($M)

Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018Total Assets 8,4 10,8 15,7 13,1 13,0Equity 3,7 2,8 10,9 7,9 8,5Equity Ratio 44% 26% 69% 60% 65%Cash 1,7 1,4 6,9 5,8 4,9Current Liabilities 4,3 6,7 3,9 3,6 3,0Working Capital 2,1 0,4 8,2 6,2 6,8

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• Impressive technology and close customer relationships

• Growing licensing business and emerging sensor module sales provide solid foundation

• Optimistic about future growth opportunity

In Short

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Q&A

Neonode Earnings Presentation Q1 2018neonode.com/wp...1Q-2018-Slide-Deck-Presentation.pdf•Q1...

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