Neonode - Neon - August 1st, 2014 - Reasons to Buy

10-Q Accounts Receivable from May 2014

Listed

• Harman Automotive - 11%
• http://www.bloomberg.com/news/2014-04-03/harman-ceo-stakes-future-in-software-as-autos-become-smarter.html

• Magneti Marelli France - 13% - Fiat
• http://www.neonode.com/neonode-and-magneti-marelli-to-jointly-develop-automotive-hmi-solutions/

In dash technology is being implemented almost universally in the automotive industry. Touch is the future.

• Amazon - 15%
• What is Neonode making with\for Amazon?

Not Listed

• Leapfrog - Just launched the LeapPad 3 July 31 accounting for packaging and distribution revenue should be partially recognized last quarter
• http://www.gameskinny.com/vvmeg/leapfrog-unveils-new-leappad3-and-leappad-ultra-xdi-the-best-first-tablet-experiences-for-kids
• LeapFrog Wearable Devices
• http://www.cnn.com/2014/05/01/tech/gaming-gadgets/leapfrog-leapband-wearable-tech/

Apple, Samsung, and Microsoft are getting into the wearable technology device market, it isn't just for kids. This segment is expected to turn into a $12 billion dollar market over the next five years.

• HP Printers
• http://www.neonode.com/neonodes-multisensing-touch-technology-enters-the-global-printer-market/

Texas Instruments Costs to Determine Production and Growth

Neonode and Texas Instruments Inc. (“TI”) entered into an Analog Device Development Agreement (“2010 TI Agreement”) on January 24, 2010 where TI integrated Neonode’s intellectual property into an Application Specific Integrated Circuit (“ASIC”) developed by TI. The TI ASIC is designated as NN1001 and can be sold by TI exclusively to licensees of Neonode. Under the terms of the 2010 TI Agreement, Neonode is obligated to contribute $500,000 of non-recurring engineering development costs (“NRE”) to TI based on shipments of the NN1001. Neonode will contribute to TI the NRE as follows:

For each of the first one million units sold:  $0.08 per unit.

For the next eight million units sold: $0.05 per unit.

• 2013 - $270,000 Total TI Payment 
• First million @ $0.08 ~ $80,000
• Next units @ $0.05 ~ $190,000 = 3.8 million units
• 
  
• 2014 - $338,000 Total TI payments To Date
• March 2014 - $68,000 = 1,360,000 million units

Shows an increase beyond the average production cycle of roughly 950,000 units paid +400,000

Conclusion

Accounting for the private placement last quarter of 2.5 million shares at $4 dollars. Dilution minimizes profits and losses in general. Neonode should surprise on earnings in a positive way as the street currently expects -$0.11 loss per share. If everything falls into line, then Neonode could have one of the best quarters that they've reported in at least a year.


Disclosure: I am a private investor with no ties or affiliations to any organization or corporation. I am investing my own money that I hopefully will be able to purchase a home for my family with. I've spent probably ten hours researching the various aspects of this company and am offering my personal opinion on the future prospects of this organization. I am currently long 10,000 shares and hold options in the $3-5 dollar range.