What changed in this filing

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Item 1. Business

2022-03-10 compared with 2021-03-10 · 241 added, 254 removed, 20 unchanged (96% of the section changed)

We develop advanced optical sensing solutions for contactless

touch, touch, gesture sensing, and in-cabin monitoring.

We market and sell our contactless touch, touch, and gesture sensing products

and solutions using our zForce technology platform, and our in-cabin monitoring solutions using our MultiSensing technology platform.

In 2010, we began licensing to Original

Equipment Manufacturers (“OEMs”) and Tier 1 suppliers who embed our technology into products they develop, manufacture

Since 2010, our licensing customers have sold approximately 79 million devices that use our technology.

In October 2017,

we augmented our licensing business and began manufacturing and shipping sensor modules that incorporate our technology.

these embedded sensors modules to OEMs, Original Design Manufacturers (“ODMs”) and Tier 1 suppliers for use in their

To reduce time to market, we started selling AirBar in the fourth

quarter of 2016, a Neonode branded consumer product, which incorporates one of our sensor modules to enable laptop touchscreen

functionalities, through distributors and directly to consumers.

We have no current plans to develop new Neonode branded products

for the consumer markets.

Since the beginning of 2020 we manage our sales and business

development work through three separate business areas, HMI Solutions, HMI Products, and Remote Sensing Solutions.

They offer products

and solutions to customers in different market segments using different business models as described below.

“HMI”

for Human Machine Interaction.

HMI Solutions

This business area offers bespoke touch

and gesture sensing solutions that we develop together with our customers based on our patented, infrared (“IR”)-based

zForce technology.

The revenues from this business area come from sales of prototypes, non-recurring engineering services, and

technology licenses.

Some revenues also come from support services under separate agreements with licensing customers.

Our licensing customers may use our Application

Specific Integrated Circuit (“ASIC”) controllers, which are designed specifically for our optical sensing technology.

These ASICs are developed together with and sold by Texas Instruments and ST Microelectronics, respectively, under special agreements.

Until 2019, our main focus was developing

touch solutions for and licensing the zForce technology to e-Reader manufacturers, printer manufacturers, and Automotive OEMs and

Tier 1 system suppliers.

During 2020, we have changed this and are now focusing mainly on customers in the Military & Avionics

and Industrial segments where we think we can better leverage our advanced zForce technology and our knowhow to grow our business

and increase our profitability.

As of December 31, 2020, we have entered into forty-two technology

license agreements with global OEMs, ODMs and Tier 1 suppliers and our licensing customers have to date sold more than 79 million

systems and products that use our licensed technology.

Fourteen of our licensing customers are currently shipping products that

embed our technology.

This business unit designs, manufactures and sells our standardized

Touch Sensor Modules (“TSM”) that can be used to create contactless touch interfaces to elevator control panels, keypads,

displays, and other human-machine interfaces as well as to create touch and gesture sensing features for various application areas.

We sell our TSM through a combination of direct sales with our own salespersons and indirect sales using distributors, value-added

resellers, and other types of partners.

We also sell our Neonode branded AirBar product, which incorporates our sensor module to

enable laptop touchscreen functionalities through distributors.

Our HMI Products business areas mainly targets customers in

the Elevator and Interactive Kiosk segments, but we also sell the TSMs to customers in other segments.

Remote Sensing Solutions

This business area, which was just established in 2020, offers

driver and in-cabin monitoring solutions based on our software platform MultiSensing to Automotive OEMs and Tier 1 system suppliers,

which we address directly with our own salespersons and indirectly with sales representatives.

In the future we may also have indirect

sales through partners.

This business unit did not generate any revenues for 2020, but

similar to our HMI Solutions business area, we expect the revenues from this business area will come from sales of prototypes,

non-recurring engineering services, and technology licenses.

Some revenues may also come from support services under separate agreements

with licensing customers.

company provides advanced optical sensing solutions for contactless touch, touch, and gesture sensing.

We also provide software solutions

for scene analysis that feature advanced machine learning algorithms to detect and track persons and objects in video streams for cameras

and other types of imagers.

We base our contactless touch, touch, and gesture sensing products and solutions using our zForce technology

platform and our scene analysis solutions on our MultiSensing technology platform.

zForce (zero force) is the name for our patented optical

sensing technology built on infrared light, invisible to the human eye.

Our MultiSensing platform was designed to provide advanced, safe

and traceable software applications to provide situational context.

We market and sell our solutions to customers in many different markets

and segments including, but not limited to, office equipment, automotive, industrial automation, medical, military and avionics.

2010, we began licensing to Original Equipment Manufacturers (“OEMs”) and Tier 1 suppliers who embed our technology into

products they develop, manufacture, and sell.

Since 2010, our licensing customers have sold approximately 85 million devices that use

our technology.

In October 2017, we augmented our licensing business and began manufacturing and shipping touch sensor modules (“TSMs”)

that incorporate our patented technology.

We sell these embedded sensors modules to OEMs, Original Design Manufacturers (“ODMs”),

and systems integrators for use in their products.

of December 31, 2021, we had 11 agreements with value added resellers (“VARs”) for integration of our sensor modules in the

products they offer to global OEMs, ODMs and systems integrators.

In addition to this, we distribute our embedded sensor modules through

Digi-Key Corporation, Serial Microelectronics HK Ltd, and Nexty Electronics Corporation.

In our operations, we have since the beginning of 2020 focused on three

different business areas, HMI Solutions, HMI Products and Remote Sensing Solutions (“HMI” is short for Human-Machine Interaction).

On May 4, 2021, we announced a new strategy and organizational update targeting an increased focus on our contactless touch business and

on current market opportunities in North America (“AMER”), Asia-Pacific (“APAC”), and Europe, Middle East and

Africa (“EMEA”).

As a result, we transitioned from a business area organization to a regional sales organization going forward.

Revenues are however primarily monitored for each of our revenue streams consisting of license fees, product sales and non-recurring engineering

(“NRE”) services.

2021 and 2020 we continued to focus our efforts on maintaining our current licensing customers and achieving design wins for new products

both with current and future customers.

We made investments enhancing the design and improving the production yield of our TSMs and improving

the related firmware and configuration tools software platforms.

We also made investments to expand our partner networks for sales and

distribution of TSMs.

We intend to continue expanding our TSM product offerings in 2022 and beyond, including new TSM variants and new

sensor products for delivery to our key markets.

We expect that over time the sales of TSMs and other sensor products may constitute

the majority of our revenue.

license our zForce technology to OEMs and Tier 1 suppliers who embed our technology into products they develop, manufacture and sell.

Since 2010, our licensing customers have sold approximately 85 million devices that use our patented technology.

of December 31, 2021, we had 34 valid technology license agreements with global OEMs, ODMs and Tier 1 suppliers.

Our licensing customer base is primarily in the automotive and printer

Eleven of our licensing customers are currently shipping products that embed our technology.

We anticipate current customers

will continue to ship products with our technology in 2022 and in future years.

We also expect to expand our customer base with a number

of new customers who will be looking to ship new products incorporating our zForce and MultiSensing technologies as they complete final

product development and release cycles.

We typically earn our license fees on a per unit basis when our customers ship products using

our technology, but in the future also other business models may be used.

addition to our technical solutions business, we design and manufacture TSMs that incorporate our patented technology.

We sell our TSMs

to OEMs, ODMs and systems integrators for use in their products.

We also sell our Neonode branded AirBar product that incorporates one

of our TSMs through distributors.

utilize a robotic manufacturing process designed specifically for our components.

Our TSMs are commercial-off-the-shelf products based

on our patent-protected zForce technology platform and can support the development of contactless touch, touch, gesture and object sensing

solutions that, paired with our technology licensing offering, give us a full range of options to enter and compete in key markets.

October 2017, we began selling our TSMs to customers in the industrial and consumer electronics segments.

Over time, we expect a significant

portion of our revenues will be derived from TSM sales.

Non-recurring

engineering services

also offer NRE services related to application development linked to our TSMs and our zForce and MultiSensing technology platforms on

a flat rate or hourly rate basis.

our licensing customers require engineering support during the development and initial manufacturing phase for their products using our

technology, while our TSM customers require hardware or software modifications to our standard products or support during the development

and initial manufacturing phases of their products using our technology.

In both cases we can offer NRE services and earn NRE revenues.

Our Organization

was incorporated in the State

of Delaware on September 4, 1997.

was incorporated in the State of Delaware on September 4, 1997.

Our principal executive office is located in Stockholm, Sweden.

Our office in the United States

is located in San Jose, California.

We have the following wholly owned

subsidiaries:

Neonode Technologies AB (Sweden) (established in 2008 to develop and license touchscreen technology);

Japan Inc., (Japan) (established in 2013);

Neonode Korea Ltd.

Our office in the United States is located in San Jose, California.

have the following wholly owned subsidiaries:

Neonode Technologies AB (Sweden) (established in 2008 to develop and license touchscreen

Neonode Japan Inc., (Japan) (established in 2013);

and Neonode Korea Ltd.

(South Korea) (established in 2014).

and Neonode Taiwan Ltd

(Taiwan) (established in 2015).

In 2015, we established a 51% majority owned consolidated subsidiary, Pronode Technologies AB

In 2016, we entered into a joint venture, Neoeye AB (Sweden), which we sold in November 2020.

Strategy and Focus Areas

Our customers use contactless touch, touch on surface, gesture

sensing, and remote sensing technologies to grow their businesses, drive efficiencies, and seek competitive advantages.

is to deliver value-adding HMI and remote sensing solutions and products that enable our customers to achieve these targets.

strategy is further to offer specialized engineering services related to the integration of our solutions and products into customer

systems and products to ensure that optimal functionality and performance is achieved.

Our goal is to become a market leader in the area of contactless

touch interfaces, expanding our touch sensor module (“TSM”) sales in markets where our contactless touch technology

provides end-customer value and increased competitiveness for our customers, value-added resellers, and partners, while continuing

to be a leader in optical touch and gesture sensing technology by licensing customized solutions.

We also aim to capture a share

of the growing driver and in-cabin monitoring market by developing our remote sensing business.

We are innovators in the HMI and

in-cabin monitoring spaces and our goal is to introduce next-generation products in these areas that offer better price and performance

we established a 51% majority owned consolidated subsidiary, Pronode Technologies AB (Sweden).

and Focus Areas

Our customers use contactless touch, touch on surface, gesture sensing,

and scene analysis technologies to grow their businesses, drive efficiencies, and seek competitive advantages.

Our strategy is to deliver

value-adding human-machine interaction (“HMI”) and scene analysis solutions and products that enable our customers to achieve

these targets.

Our strategy is further to offer specialized NRE services related to the integration of our solutions and products into

customer systems and products to ensure that optimal functionality and performance is achieved.

goal is to become a market leader in the area of contactless touch interfaces, expanding our TSM sales in markets where our contactless

touch technology provides end-customer value and increased competitiveness for our customers, value-added resellers, and technology partners,

while continuing to be a leader in optical touch and gesture sensing technology by licensing customized solutions.

We also aim to capture

a share of the growing driver and in-cabin monitoring market by developing our scene analysis business.

We are innovators in the HMI

and scene analysis areas and our goal is to introduce next-generation products in these areas that offer better price and performance

and architectural advantages compared to our current offers and those of our competitors.

We intend to execute on this strategy

through portfolio transformation, internal innovation, and co-development of products with our customers and the building of strategic

partnerships.

The Automotive value chain consists of OEMs (vehicle manufacturers)

and tiered suppliers (Tier 1 system suppliers, Tier 2 component suppliers, etc.).

In this market, we mainly act as a Tier 2 technology

provider to Tier 1 suppliers who license our technology and deliver different kinds of systems to OEMs, such as infotainment system

displays featuring our touch technology.

In some cases, we are also engaged directly with OEMs, following the trend that OEMs are

insourcing more and more of their systems and software development.

During 2020, our customers shipped approximately

0.8 million products compared to approximately 0.9 million in 2019.

Printers and Office Equipment

Multi-function printers typically feature

touch displays for user interaction with feature-rich menus and settings.

We have operational license agreements with three of

the leading global printers and office equipment OEMs.

During 2020 our customers shipped approximately four million printers using

our touch technology and since mid-2014 they have shipped approximately 42 million printers using our touch technology.

Military & Avionics

Mechanical switches and buttons and

older types of touch displays in airplane cockpits are increasingly being replaced with larger touch displays with higher

performance capabilities.

Our zForce technology has demonstrable advantages for these type of applications, as it provides low latency,

superior image clarity, can be operated by pilots wearing gloves, has excellent electro-magnetic interference and

electro-magnetic compatibility properties, and works well with night vision systems.

We see interesting opportunities for our

optical touch and gesture control solutions in the rugged industrial touchscreen market.

We also see potential demand for our

remote sensing solutions in industrial settings.

Elevators and Interactive Kiosks

The COVID-19 pandemic has created strong consumer demand for

technologies that eliminate direct physical contact between users and different types of machines and systems in public environment

such as self-service kiosks, vending machines, and elevators.

Using our TSMs, OEMs can easily create safe, intuitive, and easy-to-use

contactless touch interfaces for their elevator and kiosk products.

Our TSMs are also very suitable for retrofit applications and

many of our OEM customers, value-added resellers, and partners have or are developing such solutions and marketing and selling

them in their respective markets.

We have a strong and increasing demands for our TSMs from customers in these markets and expect

to grow this business significantly in the coming years.

Product Backlog

Our TSM product backlog on December 31,

We intend to execute on this strategy through

portfolio transformation, internal innovation, and co-development of products with our customers and the building of strategic partnerships

with technology companies.

Automotive value chain consists of OEMs (vehicle manufacturers) and tiered suppliers (Tier 1 system suppliers, Tier 2 component

suppliers etc.).

In this market, we mainly act as a Tier 2 technology provider to Tier 1 suppliers who license our technology and

deliver different types of systems to OEMs, (e.g.

infotainment system displays featuring our touch technology).

In some cases, we

are also engaged directly by OEMs, following the trend that OEMs are insourcing more and more of their systems and software

development directly.

each of 2021 and 2020, our Automotive customers shipped approximately 0.8 million products.

and Office Equipment

Multi-function

printers typically feature touch displays for user interaction with feature-rich menus and settings.

We have operational license agreements

with three of the leading global printers and office equipment OEMs.

During 2021 our customers shipped approximately five million printers

using our touch technology and since mid-2014 they have shipped approximately 47 million printers using our touch technology.

switches and buttons and older types of touch displays in airplane cockpits are increasingly being replaced with larger touch displays

with higher performance capabilities.

Our zForce technology has demonstrable advantages for these type of applications, as it provides

low latency, superior image clarity, can be operated by pilots wearing gloves, has excellent electro-magnetic interference and electro-magnetic

compatibility properties, and works well with night vision systems.

zForce is also suitable for other military applications for these

see interesting opportunities for our optical touch and gesture control solutions in the rugged industrial touchscreen market.

see potential demand for our scene analysis solutions in industrial settings.

sell our TSMs to customers manufacturing and selling medical imaging systems with touch screens.

Looking to the future, we see interesting

opportunities for our TSMs to be incorporated into similar touch applications, and for various contactless touch applications, and opportunities

for our zForce-based optical touch and gesture control solutions in the medical touchscreen market.

and Interactive Kiosks

COVID-19 pandemic has created strong consumer demand for technologies that eliminate direct physical contact between users and different

types of machines and systems in public environments such as self-service kiosks, vending machines, and elevators.

Using our TSMs, OEMs

can easily create safe, intuitive, and easy-to-use contactless touch interfaces for their elevator and kiosk products.

Our TSMs are also

very suitable for retrofit applications and many of our OEM customers, value-added resellers, and technology partners have or are developing

such solutions and marketing and selling them in their respective markets.

We have a strong and increasing demands for our TSMs from

customers in these markets and expect to grow this business significantly in the coming years.

Our TSM product backlog as of December 31, 2021

was approximately $239,000.

The product backlog includes orders confirmed for products planned to be shipped within five

months to seven customers.

Our cycle time between order and shipment is generally short and customers occasionally change delivery

Additionally, orders can be cancelled without significant penalties.

As a result of these factors, we do not believe

that our product backlog, as of any particular date, is necessarily indicative of actual product revenue for any future period.

As of both December 31, 2020 and 2019, we have entered into

42 technology license agreements.

Fourteen of our licensing customers are currently shipping products that embed our touch and

gesture technology.

The products related to these license agreements include e-readers, tablets, commercial and consumer printers,

Automotive infotainment system displays, and global positioning system (GPS) devices.

Our customers are primarily located in North America, Europe

As of December 31, 2020, four of our

customers represented approximately 62% of our consolidated accounts receivable and unbilled revenues.

As of December 31, 2019, three of our

customers represented approximately 72% of our consolidated accounts receivable and unbilled revenues.

Customers who accounted for 10% or more

of our revenues during the year ended December 31, 2020 are as follows.

Hewlett-Packard Company –

Epson –

Alpine –

Customers who accounted for 10% or more

of our revenues during the year ended December 31, 2019 are as follows.

Hewlett-Packard Company –

Epson –

Alpine –

The product backlog includes orders confirmed for products planned to be shipped within eight months to seven

Our cycle time between order and shipment is generally short and customers occasionally change delivery schedules.

Additionally,

orders can be cancelled without significant penalties.

As a result of these factors, we do not believe that our product backlog, as of

any particular date, is necessarily indicative of actual product revenue for any future period.

As of December 31, 2021 we had 34 valid technology

license agreements.

As of December 31, 2020, that number was 42.

During the year ended December 31, 2021, we had 11 customers using our

touch technology in products that were being shipped to their customers.

The products related to these license agreements include e-readers,

tablets, commercial and consumer printers, automotive infotainment system displays, and global positioning system (GPS) devices.

customers are primarily located in North America, Europe and Asia.

As of December 31, 2021, four of our customers

represented approximately 76% of our consolidated accounts receivable and unbilled revenues.

As of December 31, 2020, four of our customers

represented approximately 62% of our consolidated accounts receivable and unbilled revenues.

who accounted for 10% or more of our revenues during the year ended December 31, 2021 are as follows.

Hewlett-Packard Company – 32%

Seiko Epson – 18%

who accounted for 10% or more of our revenues during the year ended December 31, 2020 are as follows.

Hewlett-Packard Company – 27%

Seiko Epson – 19%

Alps Alpine – 11%

Customers by Market

The following table presents our revenues

by market as a percentage of total revenues for the years ended December 31:

The following table presents our revenues by market

as a percentage of total revenues for the years ended December 31:

Automotive (licensing)

1 unchanged sentence

Touch Sensor Modules (products)

Non-recurring engineering (“NRE”) revenues

Geographical Data

The following table presents our revenues

by geographic region as a percentage of total revenues for the years ended December 31:

Non-recurring engineering revenues

The following table presents our revenues by geographic

region as a percentage of total revenues for the years ended December 31:

The following table presents our total assets

by geographic region for the years ended December 31 (in thousands):

There are various technologies for touch and gesture control

solutions available and competing with our optical, IR-based zForce technologies.

The competing technologies have differing profiles

such as performance, power consumption, level of maturity and cost.

For touch solutions, the main competition comes from resistive

and capacitive touch solutions.

For touch displays, projective capacitive technology is the prevalent standard in mobile phones

and tablets and therefore an important competing technology to ours that many suppliers offer with price being a major differentiation

This means we must continuously develop our technology and improve our offers to defend and grow our market share.

control the main competition comes from other optical technologies and from both ultrasonic and radar technologies.

Detection range,

resolution and cost are the main differentiators.

For contactless touch opportunities, competing

technologies include camera-based technologies for detecting finger placement and gestures in the airspace in front of a kiosk

or button panel, capacitive sensors capable of detecting a finger hovering above a display or button, as well as voice-activated

interfaces and interfaces using one’s mobile phone to interact with a kiosk or button panel.

There are various driver and in-cabin monitoring solutions that

compete with our remote sensing technologies.

Our competitors among Tier 2 software providers include SmartEye, Xperi, EyeSight,

Seeing Machines, PUX and Jungo.

Intellectual Property

We rely on a combination of intellectual

property laws and contractual provisions to establish and protect the proprietary rights in our technology.

The number of our issued

and pending patents and patents filed in each jurisdiction as of December 31, 2020 is set forth in the following table:

by geographic region as of December 31 (in thousands):

There are various technologies for touch and gesture

control solutions available that compete with our optical zForce technology.

The competing technologies have differing profiles such

as performance, power consumption, level of maturity and cost.

For touch solutions, the main competition comes from resistive and capacitive

touch solutions.

For touch displays, projective capacitive technology is the prevalent standard in mobile phones and tablets and therefore

an important competing technology to ours that many suppliers offer with price being a major differentiation point.

This means we must

continuously develop our technology and improve our offers to defend and grow our market share.

For gesture control the main competition

comes from other optical technologies and from both ultrasonic and radar technologies.

Examples of competitors active in the area of

gesture sensing include Ultraleap and suppliers of radar and ultrasonic sensor chips, for instance Texas Instruments and Acconeer.

range, resolution and cost are the main differentiators.

contactless touch opportunities, competing technologies include camera-based technologies for detecting finger placement and gestures

in the airspace in front of a kiosk or button panel, capacitive sensors capable of detecting a finger hovering above a display or button,

as well as voice-activated interfaces and interfaces using one’s mobile phone to interact with a kiosk or button panel.

are various driver and in-cabin monitoring solutions that compete with our MultiSensing technology.

Our competitors among Tier 2 software

providers include SmartEye, Xperi, EyeSight, Seeing Machines, PUX and Jungo.

rely on a combination of intellectual property laws and contractual provisions to establish and protect the proprietary rights in our

The number of our issued and pending patents and patents filed in each jurisdiction as of December 31, 2021 is set forth

in the following table:

Issued Patents

of Patents Pending

United States

2 unchanged sentences

Not Applicable

Our patents cover five main categories:

user interfaces, optics, controller integrated circuits, drivers and applications.

Our user interface software may also be protected by copyright

laws in most countries, including Sweden and the European Union, which will not grant patent protection for the software itself,

if the software is deemed new and original.

patents cover optical blocking technologies for touchscreens and head-up displays, optical reflective technologies for contactless interaction

with kiosks and elevators, as well as optical solutions for vehicle cabin monitoring and driver interfaces.

software may also be protected by copyright laws in most countries, including Sweden and the European Union, which will not grant patent

protection for the software itself, if the software is deemed new and original.

Protection can be claimed from the date of creation.

In 2020 we filed eight new patent applications,

while abandoning certain patents that were no longer in our product plans.

The duration of our patent protection for

utility patents is generally 20 years.

The duration of our patent protection for design patents varies throughout the world between

10 and 25 years, depending on the jurisdiction.

We believe the duration of our intellectual property rights is adequate relative

to the expected lives of our products.

We also protect and promote our brand by

registering trademarks in key markets around the world.

2021 we filed eight new patent applications and had six new patent grants issued;

certain other patents have lapsed.

duration of our patent protection for utility patents is generally 20 years.

The duration of our patent protection for design patents

varies throughout the world between 10 and 25 years, depending on the jurisdiction.

We believe the duration of our intellectual property

rights is adequate relative to the expected lives of our products.

also protect and promote our brand by registering trademarks in key markets around the world.

Our trademarks include:

Neonode (21 registrations), the Neonode logo (14

registrations), zForce (9 registrations), zForce AIR (1 registration), AlwaysON (6 registrations), MultiSensing (4 registrations),

Touch In Everything (1 registration), AirBar (worldwide registrations) and the AirBar logo (1 registration) as well as pending

trademark applications for the marks zForce DRIVE and MultiSensing.

Research and Development

In fiscal years 2020 and 2019, we

spent $4.1 million and $5.2 million, respectively, on research and development activities.

Our research and development is

performed predominantly in-house, but may also be performed in collaboration with external partners and specialists.

The development, attraction and retention

of employees is a critical success factor for Neonode.

We took steps to increase our employee focus

during 2020, including the engagement of a dedicated Human Relations (“HR”) Manager to ensure clear and beneficial

Neonode (22 registrations),

the Neonode logo (15 registrations) and zForce (10 registrations), as well as a pending European trademark application for the mark MultiSensing.

In 2021, we strengthened our Neonode brand globally with 12 new applications for the mark NEONODE in Asia, Europe and the Middle East.

fiscal years 2021 and 2020, we spent $3.5 million and $4.1 million, respectively, on research and development activities.

and development is performed predominantly in-house, but may also be performed in collaboration with external partners and specialists.

Human Capital

development, attraction and retention of employees is a critical success factor for Neonode.

We took steps to increase our employee focus during

2021, including hiring of a dedicated Human Relations (“HR”) Manager and expanding our effort to ensure clear and beneficial

HR-related processes, such as talent management, employee engagement and recruitment performance.

During the year we also changed pension

partner and upgraded our pension plan and health insurances for our Swedish employees.

While on parental leave, the Swedish Government

pays a basic salary to the employee and this is topped-up by the Company since 2020.

Since the COVID-19 pandemic outbreak, our employees have had

the opportunity to work remotely to avoid being infected.

For those choosing to come to the office, free parking spaces has been

offered and social distancing has been promoted.

We work proactively against all types of

discrimination, harassment and other abusive behavior to ensure the work environment is good and healthy.

On December 31, 2020, we had forty-six employees

and ten full-time consultants.

There was a total of eight employees in our general and administrative group, eight in our sales

and marketing group, twenty-five in our engineering group, and five in our production group.

We have employees or consultants located

in the United States, Sweden, Germany, United Kingdom, Japan, South Korea and Taiwan.

None of our employees is represented by a

We have experienced no work stoppages.

Since the COVID-19 pandemic emerged, our employees

have been permitted to work remotely.

For those choosing to come to the office, free parking has been offered and social distancing has

been promoted.

As the COVID-19 pandemic has begun to subside, our employees are gradually returning to the office.

We work proactively against all discrimination,

harassment and other abusive behavior to ensure the work environment at Neonode is good and healthy.

On December 31, 2021, we had 47 employees (including 45 full-time employees)

and 10 consultants.

There was a total of six employees in our general and administrative team, eight in our sales and marketing team,

25 in our engineering team, and eight in our production team at Pronode Technologies AB.

We have employees and/or consultants located

in the United States, Sweden, United Kingdom, Japan, South Korea and Taiwan.

None of our employees is represented by a labor union.

have experienced no work stoppages.

We believe our employee relations are positive.

Additional Information

We are subject to the informational requirements

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and we file or furnish reports, proxy statements,

and other information with the Securities and Exchange Commission (“SEC”).

The reports and other information filed

by us with the SEC are available free of charge on the SEC’s website at www.sec.gov.

are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and

we file or furnish reports, proxy statements, and other information with the Securities and Exchange Commission (“SEC”).

The reports and other information filed by us with the SEC are available free of charge on the SEC’s website at www.sec.gov.

Our website is www.neonode.com .

Through our website, we make available free of charge all of our filings with the SEC, including our annual reports on Form 10-K,

quarterly reports on Form 10-Q, and current reports on Form 8-K as well as Form 3, Form 4, and Form 5 reports for

our directors, officers, and principal stockholders, together with amendments to those reports filed or furnished pursuant to Sections

13(a), 15(d), or 16 under the Exchange Act.

These reports are available as soon as reasonably practicable after their electronic

filing or furnishing with the SEC.

Our website also includes corporate governance information, such as our Code of Business Conduct

(including a Code of Ethics for the Chief Executive Officer and Senior Financial Officers) and our Board of Directors’

We are not including the information contained on our website as part of, nor incorporating it by reference into, this

Annual Report.

available free of charge through our website all of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports

on Form 10-Q, and current reports on Form 8-K as well as Form 3, Form 4, and Form 5 reports for our directors, officers,

and principal stockholders, together with amendments to those reports filed or furnished pursuant to Sections 13(a), 15(d), or 16 under

the Exchange Act.

These reports are available as soon as reasonably practicable after their electronic filing or furnishing with the SEC.

Our website also includes corporate governance information, such as our Code of Business Conduct (including a Code of Ethics for the Chief

Executive Officer and Senior Financial Officers) and our Board of Directors’ Committee Charters.

The information contained on our

website is not a part of, nor is it incorporated by reference into, this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business