Unassociated Document
As
filed with the Securities and Exchange Commission on November 15,
2007
Registration
No. 333-_____________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
NEONODE
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
94-1517641
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
Biblioteksgatan
11
S111
46 Stockholm, Sweden
+46
8 678
18 50 — Sweden
(925)
355-7700 — USA
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
David
Brunton
Chief
Financial Officer
Neonode
Inc.
4000
Executive Parkway, Suite 200
San
Ramon, California 94583
(925)
355-7700
(Address,
including zip code, and telephone number, including area code, of agent for
service)
APPROXIMATE
DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From
time to time after the effective date of this registration
statement.
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box: o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. o
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
CALCULATION
OF REGISTRATION FEE
| |
|
|
|
|
|
|
|
|
|
|
Title of each class of
securities to be
registered
|
|
Amount to be
registered (1)
|
|
Proposed maximum
offering price per share (2)
|
|
Proposed maximum
aggregate offering price (2)
|
|
Amount of
registration fee
|
|
|
Common
stock, par value $0.01 per share
|
|
|
4,673,137(3
|
)
|
$
|
3.655
|
|
$
|
17,080,315.75
|
|
$
|
524.37
|
|
| (1) |
Pursuant
to Rule 416 under the Securities Act of 1933, as amended (the “Securities
Act”), the shares being registered hereunder include such indeterminate
number of shares of the registrant’s common stock as may be issuable with
respect to the shares being registered hereunder to prevent dilution
by
reason of any stock dividend, stock split, recapitalization or other
similar transaction.
|
| (2) |
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) of the Securities Act. The proposed maximum
offering price per share and proposed maximum aggregate offering
price are
based upon the average of the high $3.82 and low $3.49 sales prices
of the
registrant’s common stock on November 12, 2007, as reported on the Nasdaq
Capital Market. It is not known how many shares will be sold under
this registration statement or at what price or prices such shares
will be
sold.
|
| (3) |
The
amount represents the shares of the registrant’s common stock, the shares
of common stock issuable upon exercise of the registrant’s warrants and
150% of the shares of common stock issuable upon conversion of the
registrant’s convertible promissory notes held by certain selling
stockholders named in the prospectus contained herein and any supplements
thereto (the “Selling Stockholders”), as well as 125% of the registrant’s
common stock underlying the warrant to purchase units held by Empire
Asset
Management, Inc. and Robert Giannini, the registrant’s placement agents in
the private placement pursuant to which the securities held by the
selling
stockholders were issued, as partial payment fee.
|
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
The
information in this preliminary prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities, and the selling
stockholders are not soliciting offers to buy these securities, in any
jurisdiction where the offer or sale of these securities is not
permitted.
SUBJECT
TO COMPLETION, DATED ___________, 2007
PROSPECTUS
NEONODE
INC.
4,673,137
SHARES
COMMON
STOCK
This
prospectus relates to the resale of up to 4,673,137 shares of common stock
of
Neonode Inc., a Delaware corporation, that the selling stockholders named in
this prospectus or any prospectus supplement may offer from time to time. The
selling stockholders are those holders named in the table under the section
entitled “Selling Stockholders” beginning on page 15 of this prospectus or named
in a supplement to this prospectus.
We
will
not receive any of the proceeds from the sale of the shares of our common stock
by the selling stockholders. We will bear the cost of the registration of these
shares.
Subject
to the restrictions described in this prospectus, the selling stockholders
(directly or through agents or dealers designated from time to time) may sell
the shares of our common stock being offered by this prospectus from time to
time on terms to be determined at the time of sale. The prices at which these
selling stockholders may sell the shares will be determined by the prevailing
market price for the shares or in negotiated transactions.
Our
common stock is listed on the Nasdaq Capital Market under the symbol
“NEON.”
On
November 13, 2007, the last reported sales price of our common stock, as
reported on the Nasdaq Capital Market, was $3.53 per share.
INVESTING
IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE THE SECTION ENTITLED
“RISK FACTORS” BEGINNING ON PAGE 3 OF THIS PROSPECTUS TO READ ABOUT FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date of this prospectus
is
, 2007.
TABLE
OF CONTENTS
|
About
This Prospectus
|
ii
|
|
|
|
|
Prospectus
Summary
|
1
|
|
|
|
|
Risk
Factors
|
3
|
|
|
|
|
Cautionary
Statement Concerning Forward-Looking Information
|
14
|
|
|
|
|
Use
of Proceeds
|
14
|
|
|
|
|
Selling
Stockholders
|
15
|
|
|
|
|
Relationship
of Selling Stockholders to the Company
|
19
|
|
|
|
|
Plan
of Distribution
|
19
|
|
|
|
|
Legal
Matters
|
21
|
|
|
|
|
Experts
|
21
|
|
|
|
|
Where
You Can Find More Information
|
22
|
| |
|
|
Incorporation
of Certain Documents by Reference
|
22
|
You
should rely only on the information contained or incorporated by reference
in
this prospectus and in any prospectus supplement. We have not authorized,
and the selling stockholders may not authorize, any other person to provide
you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
selling stockholders are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate only as of the
date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that
date.
This
prospectus is part of a registration statement that we are filing with the
Securities and Exchange Commission, or the SEC, on behalf of the selling
stockholders, who are named in the table under the section entitled “Selling
Stockholders” beginning on page 15 of this prospectus, using a “shelf”
registration process. Under this shelf registration process, the selling
stockholders may, from time to time until this registration statement is
withdrawn from registration by us, sell the shares of our common stock being
offered under this prospectus in one or more offerings.
This
prospectus provides you with a general description of the securities that the
selling stockholders may offer. To the extent required, the number of shares
of
our common stock to be sold, the purchase price, the public offering price,
the
names of any agent or dealer and any applicable commission or discount with
respect to a particular offering by any selling stockholder may be set forth
in
an accompanying prospectus supplement. The prospectus supplement may also
add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with the
additional information described in the section entitled “Where You Can Find
More Information.”
To
the
extent permitted by applicable law, rules or regulations, we may add, update
or
change the information contained in this prospectus by means of a prospectus
supplement or post-effective amendments to the registration statement of which
this prospectus forms a part, through filings we make with the SEC that are
incorporated by reference into this prospectus or by another method as may
then
be permitted under applicable law, rules or regulations.
You
should rely only on the information contained in this prospectus or any related
prospectus supplement, including the content of all documents now or in the
future incorporated by reference into the registration statement of which this
prospectus forms a part. The selling stockholders may not authorize anyone
to provide you with different information. We are not, and the selling
stockholders are not, making an offer of the shares of our common stock to
be
sold under this prospectus in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information contained in this
prospectus or any related prospectus supplement is accurate as of any date
other
than the date on the front cover of this prospectus or the related prospectus
supplement, or that the information contained in any document incorporated
by
reference is accurate as of any date other than the date of the document
incorporated by reference. Other than as required under the federal securities
laws, we undertake no obligation to publicly update or revise such information,
whether as a result of new information, future events or any other
reason.
PRIOR
TO MAKING A DECISION ABOUT INVESTING IN OUR COMMON STOCK, YOU SHOULD CAREFULLY
CONSIDER THE SPECIFIC RISKS CONTAINED IN THE SECTION ENTITLED “RISK FACTORS” IN
THIS PROSPECTUS, AND ANY APPLICABLE PROSPECTUS SUPPLEMENT, TOGETHER WITH ALL
OF
THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT
OR APPEARING IN THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A
PART.
The
following is only a summary. This summary does not contain all the
information that you should consider before investing in our common stock.
You should read this entire prospectus, including all documents incorporated
by
reference, carefully, especially “Risk Factors” and our financial statements and
related notes incorporated by reference herein. Please see the section
entitled “Where You Can Find More Information.”
We
use
the terms “we,” “us,” “our,” “Neonode” and “New Neonode” in this prospectus to
refer to Neonode Inc., formerly known as SBE, Inc., and its consolidated
subsidiaries. We use “Old Neonode” in this prospectus to refer to the Company
now known as Cold Winter, Inc., (a wholly owned subsidiary of ours) and its
wholly-owned subsidiary, Neonode AB
Overview
of our Business
Historically,
we designed, manufactured and sold embedded communications hardware and storage
software products. Our hardware business generated the overwhelming majority
of
our sales and cash flow. Our business was characterized by a concentration
of
sales to a small number of OEMs and distributors who provide products and
services to the communications and data storage markets. On March 30, 2007,
we
sold our hardware business to One Stop Systems, Inc. for
$2.2
million in cash. We received $1.7 million of the cash on the date of the sale
and an additional $500,000 in cash on June 5, 2007. In addition, One Stop
assumed the lease for the building housing our corporate headquarters and
certain equipment leases. We
transferred our entire inventory and the engineering and test equipment used
to
support the hardware business to One Stop. As of March 30, 2007, we no longer
participate in the embedded communications hardware business.
On
August
10, 2007, we completed a merger with Old Neonode, a Delaware corporation
pursuant to the terms of the Agreement and Plan of Merger and Reorganization,
dated January 19, 2007 and amended on May 16, 2007, referred to in this
prospectus as the Merger Agreement. As a result of the merger, we changed
our name from “SBE, Inc.” to “Neonode Inc.” Effective
as of the merger, the business and operations of Old Neonode prior to the merger
became our primary business and operations.
On
August
20, 2007, we sold our storage software business and transferred all customer
contracts, intellectual property and engineering and test equipment used to
support the software business to Rising Tide Software LLC.
Our
continuing operations will be focused on developing, manufacturing and selling
multimedia touchscreen mobile phones with a focus on design, enhanced user
experience and customization in addition to licensing our touchscreen and other
technologies to third party companies. Old Neonode developed a multimedia mobile
phone that converts the functionality of a desktop computer to a mobile phone
interface. In addition to connecting to any GSM supported cellular telephone
network, this multimedia mobile phone allows the user to watch movies in full
screen, play music videos, play music, take pictures with its two mega pixel
camera and play games, all with internet pod casting capabilities. The user
interface on the multimedia phone incorporates one hand on screen navigation
with a user interface that recognizes gestures rather than defined keys. This
user interface allowed for the design and manufacture of a mobile phone with
a
large display without physical buttons using the smallest form factor in the
mobile phone industry. The multimedia phone’s design is based on patent pending
zForce ™ and Neno™ software and hardware technologies. The new generation of
phone, the N2, was introduced in February 2007 and launched in July 2007.
Corporate
Headquarters
As
a
result of the merger with Old Neonode, our corporate headquarters moved to
Stockholm, Sweden, although we continue to maintain a U.S. office in San Ramon,
California. Our
headquarters are located at Biblioteksgatan 11, S111 46 Stockholm, Sweden and
our telephone number at this address is 468 678 18 50. Our office in the U.S.
is
located at 4000 Executive Parkway, Suite 200, San Ramon, California 94583 and
our telephone number at this address is (925) 355-7700. Our website
address is www.neonode.com. Information contained on our website, or that
can be accessed through our website, is not a part of this
prospectus.
See
the
section entitled “Where You Can Find More Information” on page
21.
The
Offering
This
prospectus relates to the resale by certain selling stockholders of up to
4,673,137 shares of common stock, including up to 1,322,135 shares of our common
stock issuable upon conversion of certain of our convertible promissory notes
and 1,632,449 shares of our common stock issuable upon exercise of certain
warrants to purchase common stock. We will not receive any proceeds from the
sale of securities by the selling stockholders listed herein.
See
the
section entitled “Plan of Distribution” on page 19.
Our
common stock is traded on the Nasdaq Capital Market under the symbol
“NEON.”
An
investment in our common stock involves a high degree of risk. Before investing
in our common stock, you should consider carefully the specific risks detailed
in this “Risk Factors” section and any applicable prospectus supplement,
together with all of the other information contained in this prospectus and
any
prospectus supplement or incorporated by reference herein or therein. See “Where
You Can Find More Information” on page 21. If any of these risks occur, our
business, results of operations and financial condition could be harmed, the
price of our common stock could decline, and you may lose all or part of your
investment.
Risks
Related To Our Business
Our
operating results are subject to fluctuations, and if we fail to meet the
expectations of any securities analysts who follow our stock or investors,
our
stock price may decrease significantly.
Our
operating results are difficult to forecast. Our future operating results may
fluctuate significantly and may not meet our expectations or those of securities
analysts or investors. If this occurs, the price of our common stock will likely
decline. Many factors may cause fluctuations in our operating results including,
but not limited to, the following:
|
|
· |
timely
introduction and market acceptance of new products and
services;
|
|
|
· |
changes
in consumer and enterprise spending
levels;
|
|
|
· |
quality
issues with our products;
|
|
|
· |
changes
in consumer, enterprise and carrier preferences for our products
and
services;
|
|
|
· |
loss
or failure of carriers or other key sales channel
partners;
|
|
|
· |
competition
from other mobile telephone or handheld devices or other devices
with
similar functionality;
|
|
|
· |
competition
for consumer and enterprise spending on other
products;
|
|
|
· |
failure
by our third party manufacturers or suppliers to meet our quantity
and
quality requirements for products or product components on
time;
|
|
|
· |
failure
to add or replace third party manufacturers or suppliers in a timely
manner;
|
|
|
· |
changes
in terms, pricing or promotional
program;
|
|
|
· |
variations
in product costs or the mix of products
sold;
|
|
|
· |
failure
to achieve product cost and operating expense
targets;
|
|
|
· |
excess
inventory or insufficient inventory to meet
demand;
|
|
|
· |
seasonality
of demand for some of our products and
services;
|
|
|
· |
litigation
brought against us; and
|
|
|
· |
changes
in general economic conditions and specific market
conditions.
|
Any
of
the foregoing factors could have a material adverse effect on our business,
results of operations and financial condition.
We
have never been profitable and Old Neonode has not been profitable since
inception. We anticipate significant additional losses in the
future.
Old
Neonode was formed in 2006 as a holding company owning and operating Neonode
AB,
which was formed in 2004, and has been primarily engaged in the business of
developing and selling mobile phones. Effective as of the merger, the business
and operations of Old Neonode prior to the merger became our primary business
and operations. We have a limited operating history on which to base an
evaluation of our business and prospects. Our prospects must be considered
in
light of the risks and uncertainties encountered by companies in the early
stages of development, particularly companies in new and rapidly evolving
markets. Our success will depend on many factors, including, but not limited
to:
| |
·
|
the
growth of mobile telephone usage;
|
| |
·
|
the
efforts of our marketing partners;
|
| |
·
|
the
level of competition faced by us; and
|
| |
·
|
our
ability to meet customer demand for products and ongoing service.
|
There
can
be no assurance that we will succeed in addressing any or all of these risks,
and the failure to do so would have a material adverse effect on our business,
operating results and financial condition.
In
addition, Old Neonode has experienced substantial net losses in each fiscal
period since its inception. These net losses resulted from a lack of substantial
revenues and the significant costs incurred in the development of our products
and infrastructure. Our ability to continue as a going concern is dependent
on
our ability to raise additional funds and implement our business plan.
Our
limited operating history and the emerging nature of our market, together with
the other risk factors set forth in this prospectus, make prediction of our
future operating results difficult. There can also be no assurance that we
will
ever achieve significant revenues or profitability or, if significant revenues
and profitability are achieved, that they could be sustained.
We
will require additional capital in the future to fund our operations, which
capital may not be available on commercially attractive terms or at all and
may
affect our ability to continue as a going concern.
We
require sources of capital in addition to cash on hand to continue operations
and to implement our strategy. We intend to seek credit line facilities from
financial institutions and/or additional equity investment to fund our
operations for the near term. No assurances can be given that we will be
successful in obtaining such additional financing on reasonable terms, or at
all. If adequate funds are not available on acceptable terms, or at all, we
may
be unable to fund our business plans and it could have a negative effect on
our
business, results of operations and financial condition. In addition, if funds
are available, the issuance of equity securities or securities convertible
into
equity could dilute the value of shares of our common stock and cause the market
price to fall and the issuance of debt securities could impose restrictive
covenants that could impair our ability to engage in certain business
transactions.
BDO
Seidman, LLP, independent registered public accounting firm, has included an
explanatory paragraph in their report on our consolidated financial statements
for the fiscal year ended October 31, 2006, which highlights that the recurring
losses and negative cash flows from our operations pre-merger raised substantial
doubt about our ability to continue as a going concern. Öhrlings
PricewaterhouseCoopers AB, Old Neonode’s independent registered public
accounting firm, included a similar explanatory paragraph in their report on
Old
Neonode’s financial statements for the year ended December 31, 2006. The
uncertainty regarding our ability to continue as a going concern, as identified
by the inclusion of a going concern explanatory paragraph in BDO Seidman LLP’s
report on our consolidated financial statements and in Öhrlings
PricewaterhouseCoopers AB’s report on the financial statements of Old Neonode,
could have a detrimental effect on our stock price and ability to raise
additional capital. Our consolidated financial statements have been prepared
on
the basis of a going concern, which contemplates the realization of assets
and
the satisfaction of liabilities in the normal course of business. We have not
made any adjustments to the consolidated financial statements as a result of
the
outcome of the uncertainty described above.
We
are dependent on a single product for a majority of our revenues and our future
success will depend on market acceptance of that
product.
Going
forward, a majority of our revenues will be derived from the sale of our mobile
phone, the N2. Our success will depend, in significant part, upon our ability
to
make timely and cost-effective enhancements and additions to the N2 and to
introduce new products and services that meet customer demands. We expect new
products to be developed and introduced by other companies that compete with
our
products. The proliferation of new products and services by our current and
future competitors may reduce demand for our product. There can be no assurance
that we will be successful in responding to these or other technological
changes, to evolving industry standards or to new products offered by our
current and future competitors. In addition, we may not have access to
sufficient capital for our research and development needs in order to develop
or
acquire new products and product enhancements.
If
we fail to develop and introduce new products and services successfully and
in a
cost effective and timely manner, we will not be able to compete effectively
and
our ability to generate revenues will suffer.
We
operate in a highly competitive, rapidly evolving environment, and our success
depends on our ability to develop and introduce new products and services that
our customers and end users choose to buy. If we are unsuccessful at developing
and introducing new products and services that are appealing to our customers
and end users with acceptable quality, prices and terms, we will not be able
to
compete effectively and our ability to generate revenues will suffer.
The
development of new products and services is very difficult and requires high
levels of innovation. The development process is also lengthy and costly. If
we
fail to anticipate our end users’ needs or technological trends accurately or
are unable to complete the development of products and services in a cost
effective and timely fashion, we will be unable to introduce new products and
services into the market or successfully compete with other
providers.
As
we
introduce new or enhanced products or integrates new technology into new or
existing products, we face risks including, among other things, disruption
in
customers’ ordering patterns, excessive levels of older product inventories,
delivering sufficient supplies of new products to meet customers’ demand,
possible product and technology defects, and a potentially different sales
and
support environment. Premature announcements or leaks of new products, features
or technologies may exacerbate some of these risks. Our failure to manage the
transition to newer products or the integration of newer technology into new
or
existing products could adversely affect our business, results of operations
and
financial condition.
We
are dependent on third parties to manufacture and supply our products and
components of our products.
Our
products are built by a limited number of independent manufacturers. Although
we
provide manufacturers with key performance specifications for the phones, these
manufacturers could:
| |
·
|
manufacture phones with
defects that fail to perform to our specifications;
|
| |
·
|
fail
to meet delivery schedules; or
|
| |
·
|
fail
to properly service phones or honor warranties.
|
Any
of
the foregoing could adversely affect its ability to sell our products and
services, which, in turn, could adversely affect our revenues, profitability
and
liquidity, as well as our brand image.
We may
become highly dependent on wireless carriers for the success of our
products.
Our
business strategy includes significant efforts to establish relationships with
international wireless carriers. We cannot assure you that we will be successful
in establishing new relationships, or maintaining such relationships, with
wireless carriers or that these wireless carriers will act in a manner that
will
promote the success of our multimedia phone products. Factors that are largely
within the control of wireless carriers, but which are important to the success
of our multimedia phone products, include:
|
|
· |
testing
of our products on wireless carriers’
networks;
|
|
|
· |
quality
and coverage area of wireless voice and data services offered by
the
wireless carriers;
|
|
|
· |
the
degree to which wireless carriers facilitate the introduction of
and
actively market, advertise, promote, distribute and resell our multimedia
phone products;
|
|
|
· |
the
extent to which wireless carriers require specific hardware and software
features on our multimedia phone to be used on their
networks;
|
|
|
· |
timely
build out of advanced wireless carrier networks that enhance the
user
experience for data centric services through higher speed and other
functionality;
|
|
|
· |
contractual
terms and conditions imposed on them by wireless carriers that, in
some
circumstances, could limit our ability to make similar products available
through competitive carriers in some market
segments;
|
|
|
· |
wireless
carriers’ pricing requirements and subsidy programs;
and
|
|
|
· |
pricing
and other terms and conditions of voice and data rate plans that
the
wireless carriers offer for use with our multimedia phone
products.
|
For
example, flat data rate pricing plans offered by some wireless carriers may
represent some risk to our relationship with such carriers. While flat data
pricing helps customer adoption of the data services offered by carriers and
therefore highlights the advantages of the data applications of its products,
such plans may not allow its multimedia phones to contribute as much average
revenue per user, or ARPU, to wireless carriers as when they are priced by
usage, and therefore reduces our differentiation from other, non-data devices
in
the view of the carriers. In addition, if wireless carriers charge higher rates
than consumers are willing to pay, the acceptance of our wireless solutions
could be less than anticipated and our revenues and results of operations could
be adversely affected.
Wireless
carriers have substantial bargaining power as we enter into agreements with
them. They may require contract terms that are difficult for us to satisfy
and
could result in higher costs to complete certification requirements and
negatively impact our results of operations and financial condition. Moreover,
we may not have agreements with some of the wireless carriers with whom they
will do business and, in some cases, the agreements may be with third-party
distributors and may not pass through rights to us or provide us with recourse
or contact with the carrier. The absence of agreements means that, with little
or no notice, these wireless carriers could refuse to continue to purchase
all
or some of our products or change the terms under which they purchase our
products. If these wireless carriers were to stop purchasing our products,
we
may be unable to replace the lost sales channel on a timely basis and our
results of operations could be harmed.
Wireless
carriers could also significantly affect our ability to develop and launch
products for use on their wireless networks. If we fail to address the needs
of
wireless carriers, identify new product and service opportunities or modify
or
improve our multimedia phone products in response to changes in technology,
industry standards or wireless carrier requirements, our products could rapidly
become less competitive or obsolete. If we fail to timely develop products
that
meet carrier product planning cycles or fail to deliver sufficient quantities
of
products in a timely manner to wireless carriers, those carriers may choose
to
emphasize similar products from our competitors and thereby reduce their focus
on its products which would have a negative impact on our business, results
of
operations and financial condition.
Carriers,
who control most of the distribution and sale of, and virtually all of the
access for, multimedia phone products could commoditize multimedia phones,
thereby reducing the average selling prices and margins for our products which
would have a negative impact on our business, results of operations and
financial condition. In addition, if carriers move away from subsidizing the
purchase of mobile phone products, this could significantly reduce the sales
or
growth rate of sales of mobile phone products. This could have an adverse impact
on our business, revenues and results of operations.
As
we build strategic relationships with wireless carriers, we may be exposed
to
significant fluctuations in revenue for our multimedia phone
products.
Because
of their large sales channels, wireless carriers may purchase large quantities
of our products prior to launch so that the products are widely available.
Reorders of products may fluctuate quarter to quarter, depending on end-customer
demand and inventory levels required by the carriers. As we develop new
strategic relationships and launches new products with wireless carriers, our
revenue could be subject to significant fluctuation based on the timing of
carrier product launches, carrier inventory requirements, marketing efforts
and
our ability to forecast and satisfy carrier and end-customer
demand.
The
mobile communications industry is highly competitive and many of our competitors
have significantly greater resources to engage in product development,
manufacturing, distribution and marketing.
The
mobile communications industry, in which we are engaged, is a highly competitive
business with companies of all sizes engaged in business in all areas of the
world, including companies with far greater resources than we have. There can
be
no assurance that other competitors, with greater resources and business
connections, will not compete successfully against us in the future. Our
competitors may adopt new technologies that reduce the demand for our products
or render our technologies obsolete, which may have a material adverse effect
on
the cost structure and competitiveness of our products, possibly resulting
in a
negative effect on our revenues, profitability or liquidity.
Our
future results could be harmed by economic, political, regulatory and other
risks associated with international sales and
operations.
Because
we sell our products worldwide and most of the facilities where our devices
are
manufactured, distributed and supported are located outside the United States,
our business is subject to risks associated with doing business internationally,
such as:
| |
·
|
changes
in foreign currency exchange rates;
|
| |
·
|
the
impact of recessions in the global economy or in specific sub
economies;
|
| |
·
|
changes
in a specific country’s or region’s political or economic conditions,
particularly in emerging markets;
|
| |
·
|
changes
in international relations;
|
| |
·
|
trade
protection measures and import or export licensing
requirements;
|
| |
·
|
compliance
with a wide variety of laws and regulations which may have civil
and/or
criminal consequences for them and our officers and directors who
they
indemnify;
|
| |
·
|
difficulty
in managing widespread sales operations;
and
|
|
|
· |
difficulty
in managing a geographically dispersed workforce in compliance with
diverse local laws and customs.
|
In
addition, we are subject to changes in demand for our products resulting from
exchange rate fluctuations that make our products relatively more or less
expensive in international markets. If exchange rate fluctuations occur, our
business and results of operations could be harmed by decreases in demand for
our products or reductions in margins.
While
we
sell our products worldwide, one component of our strategy is to expand our
sales efforts in countries with large populations and propensities for adopting
new technologies. We have limited experience with sales and marketing in some
of
these countries. There can be no assurance that we will be able to market and
sell our products in all of our targeted international markets. If our
international efforts are not successful, our business growth and results of
operations could be harmed.
We
must significantly enhance our sales and product development
organizations.
We
will
need to improve the effectiveness and breadth of our sales operations in order
to increase market awareness and sales of our products, especially as we expand
into new markets. Competition for qualified sales personnel is intense, and
we
may not be able to hire the kind and number of sales personnel we are targeting.
Likewise, our efforts to improve and refine our products require skilled
engineers and programmers. Competition for professionals capable of expanding
our research and development organization is intense due to the limited number
of people available with the necessary technical skills. If we are unable to
identify, hire or retain qualified sales marketing and technical personnel,
our
ability to achieve future revenue may be adversely affected.
We
are dependent on the services of our key personnel.
We
are
dependent on our current management for the foreseeable future. The loss of
the
services of any member of management could have a materially adverse effect
on
our operations and prospects.
If
third parties infringe our intellectual property or if we are unable to secure
and protect our intellectual property, we may expend significant resources
enforcing our rights or suffer competitive injury.
Our
success depends in large part on our proprietary technology and other
intellectual property rights. We rely on a combination of patents, copyrights,
trademarks and trade secrets, confidentiality provisions and licensing
arrangements to establish and protect our proprietary rights. Our intellectual
property, particularly our patents, may not provide them a significant
competitive advantage. If we fail to protect or to enforce our intellectual
property rights successfully, our competitive position could suffer, which
could
harm our results of operations.
Our
pending patent and trademark applications for registration may not be allowed,
or others may challenge the validity or scope of our patents or trademarks,
including patent or trademark applications or registrations. Even if our patents
or trademark registrations are issued and maintained, these patents or
trademarks may not be of adequate scope or benefit to them or may be held
invalid and unenforceable against third parties.
We
may be
required to spend significant resources to monitor and police our intellectual
property rights. Effective policing of the unauthorized use of our products
or
intellectual property is difficult and litigation may be necessary in the future
to enforce our intellectual property rights. Intellectual property litigation
is
not only expensive, but time-consuming, regardless of the merits of any claim,
and could divert attention of our management from operating the business.
Despite our efforts, we may not be able to detect infringement and may lose
competitive position in the market before they do so. In addition, competitors
may design around our technology or develop competing technologies. Intellectual
property rights may also be unavailable or limited in some foreign countries,
which could make it easier for competitors to capture market
share.
Despite
our efforts to protect our proprietary rights, existing laws, contractual
provisions and remedies afford only limited protection. Intellectual property
lawsuits are subject to inherent uncertainties due to, among other things,
the
complexity of the technical issues involved, and we cannot assure you that
we
will be successful in asserting intellectual property claims. Attempts may
be
made to copy or reverse engineer aspects of our products or to obtain and use
information that we regard as proprietary. Accordingly, we cannot assure you
that we will be able to protect our proprietary rights against unauthorized
third party copying or use. The unauthorized use of our technology or of our
proprietary information by competitors could have an adverse effect on our
ability to sell our products.
We
have an international presence in countries with laws that may not provide
protection of our intellectual property rights to the same extent as the laws
of
the United States, which may make it more difficult for us to protect our
intellectual property.
As
part
of our business strategy, we target customers and relationships with suppliers
and original distribution manufacturers in countries with large populations
and
propensities for adopting new technologies. However, many of these countries
do
not address misappropriation of intellectual property or deter others from
developing similar, competing technologies or intellectual property. Effective
protection of patents, copyrights, trademarks, trade secrets and other
intellectual property may be unavailable or limited in some foreign countries.
In particular, the laws of some foreign countries in which we do business may
not protect our intellectual property rights to the same extent as the laws
of
the United States. As a result, we may not be able to effectively prevent
competitors in these regions from infringing our intellectual property rights,
which would reduce our competitive advantage and ability to compete in those
regions and negatively impact our business.
If
we do not correctly forecast demand for our products, we could have costly
excess production or inventories or we may not be able to secure sufficient
or
cost effective quantities of our products or production materials and our
revenues, cost of revenues and financial condition could be adversely
impacted.
The
demand for our products depends on many factors, including pricing and channel
inventory levels, and is difficult to forecast due in part to variations in
economic conditions, changes in consumer and enterprise preferences, relatively
short product life cycles, changes in competition, seasonality and reliance
on
key sales channel partners. It is particularly difficult to forecast demand
by
individual variations of the product, such as the color of the casing or size
of
memory. Significant unanticipated fluctuations in demand, the timing and
disclosure of new product releases or the timing of key sales orders could
result in costly excess production or inventories or the inability to secure
sufficient, cost-effective quantities of our products or production materials.
This could adversely impact our revenues, cost of revenues and financial
condition.
We
rely on third parties to sell and distribute our products and we rely on their
information to manage our business. Disruption of our relationship with these
channel partners, changes in their business practices, their failure to provide
timely and accurate information or conflicts among its channels of distribution
could adversely affect our business, results of operations and financial
condition.
The
distributors, wireless carriers, retailers and resellers who sell or may sell
and or distribute our products also sell products offered by our competitors.
If
our competitors offer our sales channel partners more favorable terms or have
more products available to meet their needs or utilize the leverage of broader
product lines sold through the channel, those wireless carriers, distributors,
retailers and resellers may de-emphasize or decline to carry our products.
In
addition, certain of our sales channel partners could decide to de-emphasize
the
product categories that we offer in exchange for other product categories that
they believe provide higher returns. If we are unable to maintain successful
relationships with these sales channel partners or to expand our distribution
channels, our business will suffer.
Because
we intend to sell our products primarily to distributors, wireless carriers,
retailers and resellers, we are subject to many risks, including risks related
to product returns, either through the exercise of contractual return rights
or
as a result of its strategic interest in assisting them in balancing
inventories. In addition, these sales channel partners could modify their
business practices, such as inventory levels, or seek to modify their
contractual terms, such as return rights or payment terms. Unexpected changes
in
product return requests, inventory levels, payment terms or other practices
by
these sales channel partners could negatively impact our business, results
of
operations and financial condition.
We
will
rely on distributors, wireless carriers, retailers and resellers to provide
us
with timely and accurate information about their inventory levels as well as
sell-through of products purchased from us. We will use this information as
one
of the factors in our forecasting process to plan future production and sales
levels, which in turn will influence our public financial forecasts. We will
also use this information as a factor in determining the levels of some of
our
financial reserves. If we do not receive this information on a timely and
accurate basis, our results of operations and financial condition may be
adversely impacted.
Distributors,
retailers and traditional resellers experience competition from Internet-based
resellers that distribute directly to end-customers, and there is also
competition among Internet-based resellers. We also sell our products directly
to end-customers from our Neonode.com web site. These varied sales channels
could cause conflict among our channels of distribution, which could harm our
business, revenues and results of operations.
If
our multimedia phone products do not meet wireless carrier and governmental
or
regulatory certification requirements, we will not be able to compete
effectively and our ability to generate revenues will
suffer.
We
are
required to certify our multimedia phone products with governmental and
regulatory agencies and with the wireless carriers for use on their networks.
The certification process can be time consuming, could delay the offering of
our
products on carrier networks and affect our ability to timely deliver products
to customers. As a result, carriers may choose to offer, or consumers may choose
to buy similar products from our competitors and thereby reduce their purchases
of our products, which would have a negative impact on our products sales
volumes, our revenues and our cost of revenues.
We
depend on our suppliers, some of which are the sole source and some of which
are
our competitors, for certain components, software applications and elements
of
our technology, and our production or reputation could be harmed if these
suppliers were unable or unwilling to meet our demand or technical requirements
on a timely and/or a cost-effective basis.
Our
multimedia products contain software applications and components, including
liquid crystal displays, touch panels, memory chips, microprocessors, cameras,
radios and batteries, which are procured from a variety of suppliers, including
some who are our competitors. The cost, quality and availability of software
applications and components are essential to the successful production and
sale
of our device products. For example, media player applications are critical
to
the functionality of our multimedia phone devices.
Some
components, such as screens and related integrated circuits, digital signal
processors, microprocessors, radio frequency components and other discrete
components, come from sole source suppliers. Alternative sources are not always
available or may be prohibitively expensive. In addition, even when we have
multiple qualified suppliers, we may compete with other purchasers for
allocation of scarce components. Some components come from companies with whom
we compete in the multimedia phone device market. If suppliers are unable or
unwilling to meet our demand for components and if we are unable to obtain
alternative sources or if the price for alternative sources is prohibitive,
our
ability to maintain timely and cost-effective production of our multimedia
phone
will be harmed. Shortages affect the timing and volume of production for some
of
our products as well as increasing our costs due to premium prices paid for
those components. Some of our suppliers may be capacity-constrained due to
high
industry demand for some components and relatively long lead times to expand
capacity.
If
we are unable to obtain key technologies from third parties on a timely basis
and free from errors or defects, we may have to delay or cancel the release
of
certain products or features in our products or incur increased
costs.
We
license third-party software for use in our products, including the operating
systems. Our ability to release and sell our products, as well as our
reputation, could be harmed if the third-party technologies are not delivered
to
them in a timely manner, on acceptable business terms or contain errors or
defects that are not discovered and fixed prior to release of our products
and
we are unable to obtain alternative technologies on a timely and cost effective
basis to use in our products. As a result, our product shipments could be
delayed, our offering of features could be reduced or we may need to divert
our
development resources from other business objectives, any of which could
adversely affect our reputation, business and results of
operations.
Our
product strategy is to base our products on software operating systems that
are
commercially available to competitors.
Our multimedia
phone is based on a commercially available version of Microsoft’s Windows CE. We
cannot assure you that we will be able to maintain this licensing agreement
with
Microsoft and that Microsoft will not grant similar rights to our competitors
or
that we will be able to sufficiently differentiate our multimedia phone from
the
multitude of other devices based on Windows CE.
In
addition, there is significant competition in the operating system software
and
services market, including proprietary operating systems such as Symbian and
Palm OS, open source operating systems, such as Linux, other proprietary
operating systems and other software technologies, such as Java and RIM’s
licensed technology. This competition is being developed and promoted by
competitors and potential competitors, some of which have significantly greater
financial, technical and marketing resources than we have, such as Access,
Motorola, Nokia, Sony-Ericsson and RIM. These competitors could provide
additional or better functionality than we do or may be able to respond more
rapidly than we can to new or emerging technologies or changes in customer
requirements. Competitors in this market could devote greater resources to
the
development, promotion and sale of their products and services and the
third-party developer community, which could attract the attention of
influential user segments.
If
we are
unable to continue to differentiate the operating systems that we include in
our
mobile computing devices, our revenues and results of operations could be
adversely affected.
The
market for multimedia phone products is volatile, and changing market
conditions, or failure to adjust to changing market conditions, may adversely
affect our revenues, results of operations and financial condition, particularly
given our size, limited resources and lack of
diversification.
We
operate in the multimedia phone market which has seen significant growth during
the past years. We cannot assure you that this significant growth in the sales
of multimedia devices will continue. If we are unable to adequately respond
to
changes in demand for our products, our revenues and results of operations
could
be adversely affected. In addition, as our products mature and face greater
competition, we may experience pressure on our product pricing to preserve
demand for our products, which would adversely affect our margins, results
of
operations and financial condition.
This
reliance on the success of and trends in our industry is compounded by the
size
of our organization and our focus on multimedia phones. These factors also
make
us more dependent on investments of our limited resources. For example, Neonode
faces many resource allocation decisions, such as: where to focus our research
and development, geographic sales and marketing and partnering efforts; which
aspects of our business to outsource; and which operating systems and email
solutions to support. Given the size and undiversified nature of our
organization, any error in investment strategy could harm our business, results
of operations and financial condition.
Our
products are subject to increasingly stringent laws, standards and other
regulatory requirements, and the costs of compliance or failure to comply may
adversely impact our business, results of operations and financial
condition.
Our
products must comply with a variety of laws, standards and other requirements
governing, among other things, safety, materials usage, packaging and
environmental impacts and must obtain regulatory approvals and satisfy other
regulatory concerns in the various jurisdictions where our products are sold.
Many of our products must meet standards governing, among other things,
interference with other electronic equipment and human exposure to
electromagnetic radiation. Failure to comply with such requirements can subject
us to liability, additional costs and reputational harm and in severe cases
prevent us it selling our products in certain jurisdictions.
For
example, many of our products are subject to laws and regulations that restrict
the use of lead and other substances and require producers of electrical and
electronic equipment to assume responsibility for collecting, treating,
recycling and disposing of our products when they have reached the end of their
useful life. In Europe, substance restrictions began to apply to the products
sold after July 1, 2006, when new recycling; labeling, financing and
related requirements came into effect. Failure to comply with applicable
environmental requirements can result in fines, civil or criminal sanctions
and
third-party claims. If products we sell in Europe are found to contain more
than
the permitted percentage of lead or another listed substance, it is possible
that we could be forced to recall the products, which could lead to substantial
replacement costs, contract damage claims from customers, and reputational
harm.
We expect similar requirements in the United States, China and other parts
of
the world.
As
a
result of these new European requirements and anticipated developments
elsewhere, we are facing increasingly complex procurement and design challenges,
which, among other things, require us to incur additional costs identifying
suppliers and contract manufacturers who can provide, and otherwise obtain,
compliant materials, parts and end products and re-designing products so that
they comply with these and the many other requirements applicable to
them.
Allegations
of health risks associated with electromagnetic fields and wireless
communications devices, and the lawsuits and publicity relating to them,
regardless of merit, could adversely impact our business, results of operations
and financial condition.
There
has
been public speculation about possible health risks to individuals from exposure
to electromagnetic fields, or radio signals, from base stations and from the
use
of mobile devices. While a substantial amount of scientific research by various
independent research bodies has indicated that these radio signals, at levels
within the limits prescribed by public health authority standards and
recommendations, present no evidence of adverse effect to human health, we
cannot assure you that future studies, regardless of their scientific basis,
will not suggest a link between electromagnetic fields and adverse health
effects. Government agencies, international health organizations and other
scientific bodies are currently conducting research into these issues. In
addition, other mobile device companies have been named in individual plaintiff
and class action lawsuits alleging that radio emissions from mobile phones
have
caused or contributed to brain tumors and the use of mobile phones pose a health
risk. Although our products are certified as meeting applicable public health
authority safety standards and recommendations, even a perceived risk of adverse
health effects from wireless communications devices could adversely impact
use
of wireless communications devices or subject them to costly litigation and
could harm our reputation, business, results of operations and financial
condition.
Changes
in financial accounting standards or practices may cause unexpected fluctuations
in and adversely affect our reported results of
operations.
Any
change in financial accounting standards or practices that cause a change in
the
methodology or procedures by which we track, calculate, record and report our
results of operations or financial condition or both could cause fluctuations
in
and adversely affect our reported results of operations and cause our historical
financial information to not be reliable as an indicator of future results.
Wars,
terrorist attacks or other threats beyond its control could negatively impact
consumer confidence, which could harm our operating
results.
Wars,
terrorist attacks or other threats beyond our control could have an adverse
impact on the United States, Europe and world economy in general, and consumer
confidence and spending in particular, which could harm our business, results
of
operations and financial condition.
Risks
Related To Owning Our Stock
If
we continue to experience losses, we could experience difficulty meeting our
business plan and our stock price could be negatively
affected.
If
we are
unable to gain market acceptance of our mobile phone handsets, we will
experience continuing operating losses and negative cash flow from our
operations. Any failure to achieve or maintain profitability could
negatively
impact
the market price of our common stock. We anticipate that we will continue to
incur product development, sales and marketing and administrative expenses.
As a
result, we will need to generate significant revenue if we are to achieve and
maintain profitability. A substantial failure to achieve profitability could
make it difficult or impossible for us to grow our business. Our business
strategy may not be successful, and we may not generate significant revenues
or
achieve profitability. Any failure to significantly increase revenues would
also
harm our ability to achieve and maintain profitability. If we do achieve
profitability in the future, we may not be able to sustain or increase
profitability on a quarterly or annual basis.
Our
common stock is at risk for delisting from the Nasdaq Capital Market if we
fail
to maintain minimum listing maintenance standards. If it is delisted, our stock
price and your liquidity may be impacted.
Our
common stock is listed on the Nasdaq Capital Market under the symbol NEON.
In
order for our common stock to continue to be listed on the Nasdaq Capital
Market, we must satisfy various listing maintenance standards established by
Nasdaq. Among other things, as such requirements pertain to us, we are required
to have stockholders’ equity of at least $2.5 million,
or a
market capitalization of at least $35 million or net income of $500,000 and
public float value of at least $1.0 million and our common stock must have
a
minimum closing bid price of $1.00 per share.
Our
management is required to devote substantial time to comply with public company
regulations.
As
a
public company, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act,
requires, among other things, that we maintain effective internal controls
for
financial reporting and disclosure controls and procedures. In particular,
as a
result of the merger with Old Neonode, we must now perform system and process
evaluation and testing of our internal controls over financial reporting to
allow management to report on the effectiveness of our internal controls over
financial reporting commencing in fiscal 2007, as compared to fiscal 2008 prior
to the merger, and our independent registered public accounting firm to provide
its attestation report on internal control over financial reporting in their
annual reports commencing in fiscal 2008, as compared to fiscal 2009 prior
to
the merger, each as required by Section 404
of
the Sarbanes-Oxley Act.
During
the year ended October 31, 2006, our independent registered public accounting
firm communicated to management and the audit committee a material weakness
arising out of an adjustment to revenue related to our software contracts which
they identified during their review of our interim condensed consolidated
financial statements. Our compliance with Section 404 requires that we
incur substantial expense and expend significant management efforts. If we
identify deficiencies in our internal controls over financial reporting that
are
deemed to be material weaknesses, the market price of our stock could decline
and we could be subject to sanctions or investigations by The Nasdaq Capital
Market, SEC or other regulatory authorities.
Our
stock price has been volatile, and your investment in our common stock could
suffer a decline in value.
The
average daily trading volume of our common stock has historically been low,
and
has continued to be low since the merger with Old Neonode. Because of our
relatively low trading volume, our stock price can be highly volatile. Any
large
sales could have a negative effect on our stock price and its volatility. In
addition, the registration of a large number of shares, such as in this
offering, could increase the volatility of our stock and further depress our
stock price. Additional factors that may affect the volatility of our stock
price include:
|
|
· |
actual
or anticipated fluctuations in our operating results or future
prospects;
|
|
|
· |
our
announcements or our competitors’ announcements of new
products;
|
|
|
· |
the
public’s reaction to our press releases, our other public announcements
and our filings with the SEC;
|
|
|
· |
strategic
actions by us or our competitors, such as acquisitions or
restructurings;
|
|
|
· |
new
laws or regulations or new interpretations of existing laws or regulations
applicable to our business;
|
|
|
· |
changes
in accounting standards, policies, guidance, interpretations or
principles;
|
|
|
· |
changes
in our growth rates or our competitors’ growth
rates;
|
|
|
· |
developments
regarding our patents or proprietary rights or those of our
competitors;
|
|
|
· |
our
inability to raise additional capital as
needed;
|
|
|
· |
concern
as to the efficacy of our
products;
|
|
|
· |
changes
in financial markets or general economic
conditions;
|
|
|
· |
sales
of common stock by us or members of our management team;
and
|
|
|
· |
changes
in stock market analyst recommendations or earnings estimates regarding
our common stock, other comparable companies or our industry
generally.
|
Future
sales of our common stock could adversely affect its price and our future
capital-raising activities could involve the issuance of equity securities,
which would dilute your investment and could result in a decline in the trading
price of our common stock.
We
may
sell securities in the public or private equity markets if and when conditions
are favorable, even if we do not have an immediate need for additional capital
at that time. Sales of substantial amounts of common stock, or the perception
that such sales could occur, could adversely affect the prevailing market price
of our common stock and our ability to raise capital. We may issue additional
common stock in future financing transactions or as incentive compensation
for
our executive management and other key personnel, consultants and advisors.
Issuing any equity securities would be dilutive to the equity interests
represented by our then-outstanding shares of common stock. The market price
for
our common stock could decrease as the market takes into account the dilutive
effect of any of these issuances. Furthermore, we may enter into financing
transactions at prices that represent a substantial discount to the market
price
of our common stock. A negative reaction by investors and securities analysts
to
any discounted sale of our equity securities could result in a decline in the
trading price of our common stock.
If
registration rights that we have previously granted are exercised, then the
price of our common stock may be adversely affected.
We
have
agreed to register with the SEC the shares of common issued to former Old
Neonode stockholders in connection with the merger. In the event these
securities are registered with the SEC, they may be freely sold in the open
market, subject to trading restrictions to which our insiders holding the shares
may be subject from time to time. In the event that we fail to register such
shares on a timely basis, we may have liability to such stockholders. We
completed a private placement financing transaction on September 26, 2007 and
pursuant to Section 11.4 of the Subscription Agreement, if
a
Non-Registration event occurs we will be required to pay up to eighteen percent
(18%) of each Subscriber’s Aggregate Purchase Price as liquidated
damages. We
expect
that we also will be required to register any securities sold in future private
financings. The sale of a significant amount of shares in the open market,
or
the perception that these sales may occur, could cause the trading price of
our
common stock to decline or become highly volatile.
Our
certificate of incorporation and bylaws and the Delaware General Corporation
Law
contain provisions that could delay or prevent a change in
control.
Our
board
of directors has the authority to issue up to 2,000,000 shares of preferred
stock and to determine the price, rights, preferences and privileges of those
shares without any further vote or action by the stockholders. The rights of
the
holders of common stock will be subject to, and may be materially adversely
affected by, the rights of the holders of any preferred stock that may be issued
in the future. The issuance of preferred stock could have the effect of making
it more difficult for a third party to acquire a majority of our outstanding
voting stock. Furthermore, certain other provisions of our certificate of
incorporation and bylaws may have the effect of delaying or preventing changes
in control or management, which could adversely affect the market price of
our
common stock. In addition, we are subject to the provisions of Section 203
of
the Delaware General Corporation Law, an anti-takeover law.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This
prospectus contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to the financial
condition, results of operations, business strategies, operating efficiencies
or
synergies, competitive positions, growth opportunities for existing patents,
technologies, products, plans and objectives of management, markets for stock
of
Neonode and other matters. Statements in this prospectus that are not historical
facts are hereby identified as “forward-looking statements” for the purpose of
the safe harbor provided by Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and Section 27A of the Securities Act.
Such forward-looking statements, including, without limitation, those relating
to the future business prospects, revenues and income of Neonode, wherever
they
occur, are necessarily estimates reflecting the best judgment of our senior
management on the date on which they were made, or if no date is stated, as
of
the date of this prospectus. These forward-looking statements are subject to
risks, uncertainties and assumptions, including those described in the section
entitled “Risk Factors,” may affect the operations, performance, development and
results of our business. Because the factors discussed in this prospectus could
cause actual results or outcomes to differ materially from those expressed
in
any forward-looking statements made by us or on our behalf, you should not
place
undue reliance on any such forward-looking statements. New factors emerge from
time to time, and it is not possible for us to predict which factors will arise.
In addition, we cannot assess the impact of each factor on our business or
the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking
statements.
You
are
advised to read carefully the section titled “Risk Factors” beginning on page 3
of this prospectus.
We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or any other
reason. All subsequent forward-looking statements attributable to Neonode or
any
person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to herein. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
prospectus may not occur. Except as required under the federal securities
laws and the rules and regulations of the SEC, we do not have any intention
or
obligation to update publicly any forward-looking statements after we distribute
this prospectus, whether as a result of new information, future events or
otherwise.
All
of
our common stock being offered under this prospectus is being sold by or for
the
account of the selling stockholders. We will not receive any proceeds from
the
sale of our common stock by or for the account of the selling stockholders.
Any
proceeds that we receive from the exercise of outstanding warrants will be
used
by us for general working capital. The actual allocation of proceeds from any
exercise of these warrants will depend on the amount and timing of such
exercises, as well as our cash position and working capital requirements at
the
time of such exercises. There can be no assurance that any of these warrants
will be exercised.
In
September 2007, we completed a private placement, referred to as the Financing,
pursuant to which the Company sold to certain accredited investors, or the
Investors, an aggregate of 2,056.63 units, each with a stated value of $3,000.
Each unit is comprised of (i) a convertible promissory note in a principal
amount of $1,500 and with an initial conversion price of $3.50, (ii) 500 shares
of common stock, and (iii) warrants to purchase 696.5 shares of common stock.
As
part of the Financing, we agreed to issue a warrant to purchase to purchase
14
units to Empire Asset Management, Inc., or Empire, and 128.875 units to Robert
U. Giannini, which, together with Empire, we refer to as the Brokers as
compensation for their services in connection with the financing.
In
connection with the Financing, we agreed to register for resale the shares
of
common stock, the shares of common stock issuable upon exercise of the warrants
and 150% of the shares of common stock issuable upon conversion of the
convertible promissory notes (assuming an initial conversion price of $3.50)
included in the units issued to the investors. In addition, we agreed to
register for resale 125% of the shares underlying the warrant to purchase units
that was issued to the Brokers in connection with the Financing, as well as
an
aggregate of 400,000 shares sold by certain executive officers of the Company
and 200,000 shares underlying certain warrants granted by such executive
officers. Because the conversion price of the convertible promissory notes
may be adjusted, we may issue a number of shares of common stock that may be
more or less than the number of shares being offered under this prospectus,
in
which case, we have agreed to file a new registration statement to cover the
resale of any shares beyond the amounts included in this registration
statement.
The
table
below presents information regarding the beneficial ownership of our common
stock by the selling stockholders as of September 10, 2007 and the shares of
our
common stock that they may offer and sell from time to time under this
prospectus. Percentages of beneficial ownership are based upon 23,714,252 shares
of common stock issued and outstanding as of November 5, 2007. We will not
receive any of the proceeds from the sale of the selling stockholders’
securities. Beneficial ownership of the selling stockholders’ securities by such
selling stockholders after the offering will depend on the number of selling
stockholders’ securities sold by each selling stockholder. This assumes that
selling stockholders will still hold shares that are not registered
hereby.
| |
|
NUMBER OF
|
|
|
|
SHARES BENEFICIALLY
|
|
| |
|
SHARES
|
|
|
|
OWNED
|
|
| |
|
BENEFICIALLY
|
|
SHARES OF
|
|
AFTER OFFERING
|
|
| |
|
OWNED
|
|
COMMON STOCK
|
|
|
|
|
|
|
SELLING STOCKHOLDERS (1)
|
|
BEFORE OFFERING
|
|
BEING OFFERED (2)
|
|
NUMBER
|
|
PERCENTAGE
|
|
|
Alpha
Capital Anstalt (3)
|
|
|
245,249
|
|
|
245,249
|
|
|
—
|
|
|
*
|
|
|
Whalehaven
Capital Fund Limited (4)
|
|
|
1,252,701
|
|
|
459,840
|
|
|
792,861
|
|
|
*
|
|
|
Ellis
International L.P. (5)
|
|
|
575,927
|
|
|
575,927
|
|
|
—
|
|
|
*
|
|
|
Longview
Fund, LP(6)
|
|
|
613,120
|
|
|
613,120
|
|
|
—
|
|
|
*
|
|
|
CMS
Capital(7)
|
|
|
61,313
|
|
|
61,313
|
|
|
—
|
|
|
*
|
|
|
Sten
Wranne(8)
|
|
|
55,361
|
|
|
24,526
|
|
|
30,835
|
|
|
*
|
|
|
LRG
Holdings Inc.(9)
|
|
|
122,626
|
|
|
122,626
|
|
|
—
|
|
|
*
|
|
|
Globis
Overseas Fund, LTD.(10)
|
|
|
63,095
|
|
|
30,658
|
|
|
32,437
|
|
|
*
|
|
|
Globis
Capital Partners, LP(11)
|
|
|
313,684
|
|
|
183,936
|
|
|
129,748
|
|
|
*
|
|
|
Centurian
Microcap LP(12)
|
|
|
153,281
|
|
|
153,281
|
|
|
—
|
|
|
*
|
|
|
EL
Equities LLC(13)
|
|
|
127,033
|
|
|
45,985
|
|
|
81,048
|
|
|
*
|
|
|
Puritan
Associates LLC(14)
|
|
|
61,313
|
|
|
61,313
|
|
|
—
|
|
|
*
|
|
|
Aaron
Wolfson(15)
|
|
|
1,445,592
|
|
|
505,822
|
|
|
939,770
|
|
|
*
|
|
|
Chana
Sasha Foundation, Inc.(16)
|
|
|
30,658
|
|
|
30,658
|
|
|
—
|
|
|
*
|
|
|
Wolfson
Equities(17)
|
|
|
1,241,918
|
|
|
383,196
|
|
|
858,722
|
|
|
*
|
|
|
Rockmore
Investment Master Fund LTD.(18)
|
|
|
306,561
|
|
|
306,561
|
|
|
—
|
|
|
*
|
|
|
Iroquois
Master Fund Ltd.(19)
|
|
|
709,840
|
|
|
459,840
|
|
|
250,000
|
|
|
*
|
|
|
Scot
Cohen(20)
|
|
|
61,313
|
|
|
61,313
|
|
|
—
|
|
|
*
|
|
|
Joshua
Silverman(21)
|
|
|
725,169
|
|
|
475,169
|
|
|
250,000
|
|
|
*
|
|
|
Richard
K. Abbe, Custodian for Bennett Abbe(22)
|
|
|
10,219
|
|
|
10,219
|
|
|
—
|
|
|
*
|
|
|
Richard
K. Abbe, Custodian for Samantha Abbe(23)
|
|
|
10,220
|
|
|
10,220
|
|
|
—
|
|
|
*
|
|
|
Richard
K. Abbe, Custodian for Talia Abbe(24)
|
|
|
10,220
|
|
|
10,220
|
|
|
—
|
|
|
*
|
|
|
Truk
Opportunity Fund, LLC(25)
|
|
|
183,027
|
|
|
183,027
|
|
|
—
|
|
|
*
|
|
|
Truk
International Fund LP(26)
|
|
|
34,923
|
|
|
34,923
|
|
|
—
|
|
|
*
|
|
|
North
America Investments Limited(27)
|
|
|
150,000
|
|
|
150,000
|
|
|
|
|
|
*
|
|
|
Jonas
Carlstrom(28)
|
|
|
27,000
|
|
|
27,000
|
|
|
|
|
|
*
|
|
|
Robert
U. Giannini(29)
|
|
|
261,792
|
|
|
261,792
|
|
|
—
|
|
|
*
|
|
|
Empire
Asset Management, Inc.(30)
|
|
|
28,439
|
|
|
28,439
|
|
|
—
|
|
|
*
|
|
| * |
Represents
beneficial ownership of less than
1%
|
| (1) |
This
table is based upon information supplied to us by the selling
stockholders.
|
| (2) |
Assumes
that the selling stockholders sell all of the shares available for
resale.
|
|
(3)
|
The
shares of common stock being offered in this offering are comprised
of
66,667 shares of common stock held directly, 85,715 shares of common
stock
issuable upon conversion of Notes and 92,867 shares of common stock
issuable upon exercise of warrants. Konrad Ackerman has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 150
Central Park South, Second Floor, New York, NY
10019.
|
|
(4)
|
The
shares of common stock being offered in this offering are comprised
of
125,000 shares of common stock held directly, 160,715 shares of common
stock issuable upon conversion of Notes and 174,125 shares of common
stock
issuable upon exercise of warrants. Michael Finkelstein, Arthur Jones
and
Trevor Williams have shared voting and investment control over such
shares. The business address for the selling stockholder is 160
Summit Avenue, Mentvale, NJ 07645.
|
|
(5)
|
The
shares of common stock being offered in this offering are comprised
of
298,696 shares of common stock held directly, 75,467 shares of common
stock issuable upon conversion of Notes and 201,764 shares of common
stock
issuable upon exercise of warrants. Martin Chopp has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is c/o SDC Capital, 20 East Sunrise Hwy., Suite 302,
Valley
Stream, NY 11581.
|
|
(6)
|
The
shares of common stock being offered in this offering are comprised
of
166,667 shares of common stock held directly, 214,286 shares of common
stock issuable upon conversion of Notes and 232,167 shares of common
stock
issuable upon exercise of warrants Peter T. Bent has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 600 Montgomery Street, 44th
Floor, San Francisco, CA 94111.
|
|
(7)
|
The
shares of common stock being offered in this offering are comprised
of
16,667 shares of common stock held directly, 21,429 shares of common
stock
issuable upon conversion of Notes and 23,217 shares of common stock
issuable upon exercise of warrants. Menachem Lipsker and Howard Weiss
have
shared voting and investment control over such shares. The business
address for the selling stockholder is 9612 Van Nuys Blvd., Suite
108,
Panorama City, CA 91402.
|
|
(8)
|
The
shares of common stock being offered in this offering are comprised
of
6,667 shares of common stock held directly, 8,572 shares of common
stock
issuable upon conversion of Notes and 9,287 shares of common stock
issuable upon exercise of warrants Sten Wranne has sole voting and
investment control over such shares. The shares beneficially owned
before
this offering include 2,801 shares of common stock issuable upon
exercise
of outstanding warrants. The business address for the selling stockholder
is Birger Jarlsg 38 11429 Stockholm
Sweden.
|
|
(9)
|
The
shares of common stock being offered in this offering are comprised
of
33,334 shares of common stock held directly, 42,858 shares of common
stock
issuable upon conversion of Notes and 46,434 shares of common stock
issuable upon exercise of warrants Shimshon Gross has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 22 St. Clair Ave. East, Suite 1501, Toronto, Ontario
M4T
DS3.
|
|
(10)
|
The
shares of common stock being offered in this offering are comprised
of
8,334 shares of common stock held directly, 10,715 shares of common
stock
issuable upon conversion of Notes and 11,609 shares of common stock
issuable upon exercise of warrants Paul Packer has sole voting and
investment control over such shares. The shares beneficially owned
before
this offering include 10,812 shares of common stock issuable upon
exercise
of outstanding warrants. The business address for the selling stockholder
is 60 Broad Street, 38th
Floor, New York, NY 1004.
|
|
(11)
|
The
shares of common stock being offered in this offering are comprised
of
50,000 shares of common stock held directly, 64,286 shares of common
stock
issuable upon conversion of Notes and 69,650 shares of common stock
issuable upon exercise of warrants Paul Packer has sole voting and
investment control over such shares. The shares beneficially owned
before
this offering include 43,249 shares of common stock issuable upon
exercise
of outstanding warrants. The business address for the selling stockholder
is 60 Broad Street, 38th
Floor, New York, NY 1004.
|
|
(12)
|
The
shares of common stock being offered in this offering are comprised
of
41,667 shares of common stock held directly, 53,572 shares of common
stock
issuable upon conversion of Notes and 58,0420 shares of common stock
issuable upon exercise of warrants Abraham Schwartz has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 3014 Avenue L, Brooklyn, NY
11210.
|
|
(13)
|
The
shares of common stock being offered in this offering are comprised
of
12,500 shares of common stock held directly, 16,072 shares of common
stock
issuable upon conversion of Notes and 17,413 shares of common stock
issuable upon exercise of warrants Eli Leviton has sole voting and
investment control over such shares. The shares beneficially owned
before
this offering include 27,016 shares of common stock issuable upon
exercise
of outstanding warrants. The business address for the selling stockholder
is One State Street Plaza, New York, NY
10004.
|
|
(14)
|
The
shares of common stock being offered in this offering are comprised
of
16,667 shares of common stock held directly, 21,429 shares of common
stock
issuable upon conversion of Notes and 23,217 shares of common stock
issuable upon exercise of warrants. Chana Friedman and Miriam Gross
have
shared voting and investment control over such shares. The business
address for the selling stockholder is 314 McDonald Avenue, Brooklyn,
NY
12118.
|
|
(15)
|
Also
includes shares of common stock held by Wolfson Equities. The
shares beneficially owned before this offering include 27,016 shares
of
common stock issuable upon exercise of outstanding warrants. The
shares of
common stock being offered in this offering are comprised of 33,334
shares
of common stock held directly, 42,858 shares of common stock issuable
upon
conversion of Notes and 46,434 shares of common stock issuable upon
exercise of warrants. Aaron Wolfson has sole voting and investment
control
over such shares. The business address for the selling stockholder
is One
State Street Plaza, 29th,
Fl., New York, NY 10004.
|
|
(16)
|
The
shares of common stock being offered in this offering are comprised
of
8,334 shares of common stock held directly, 10,715 shares of common
stock
issuable upon conversion of Notes and 11,609 shares of common stock
issuable upon exercise of warrants. Morris Wolfson has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is One State Street Plaza, 29th,
Fl., New York, NY 10004.
|
|
(17)
|
The
shares of common stock being offered in this offering are comprised
of
104,165 shares of common stock held directly, 133,929 shares of common
stock issuable upon conversion of Notes and 145,102 shares of common
stock
issuable upon exercise of warrants. Aaron Wolfson has sole voting
and
investment control over such shares. The shares beneficially owned
before
this offering include 286,241 shares of common stock issuable upon
exercise of outstanding warrants. The business address for the selling
stockholder is One State Street Plaza, 29th,
Fl., New York, NY 10004.
|
|
(18)
|
The
shares of common stock being offered in this offering are comprised
of
83,334 shares of common stock held directly, 107,143 shares of common
stock issuable upon conversion of Notes and 116,084 shares of common
stock
issuable upon exercise of warrants. The business address for the
selling
stockholder is 150 East 58th
Street, New York, NY 10155. Rockmore Capital, LLC (“Rockmore Capital”) and
Rockmore Partners, LLC (“Rockmore Partners”), each a limited liability
Company formed under the laws of the State of Delaware, serve as
the
investment manager and general partner, respectively, to Rockmore
Investments (US) LP, a Delaware limited partnership, which invests
all of
its assets through Rockmore Investment Master Fund Ltd., an exempted
company formed under the laws of Bermuda (“Rockmore Master Fund”). By
reason of such relationships, Rockmore Capital and Rockmore Partners
may
be deemed to share dispositive power over the shares of our common
stock
owned by Rockmore Master Fund. Rockmore Capital and Rockmore Partners
disclaim beneficial ownership of such shares of our common stock.
Rockmore
Partners has delegated authority to Rockmore Capital regarding the
portfolio management decisions with respect to the shares of common
stock
owned by Rockmore Master Funs and, as of September 10, 2007, Mr.
Bruce T.
Bernstein and Mr. Brian Daly, as officers of Rockmore Capital, are
responsible for the portfolio management decisions of the shares
of common
stock owned by Rockmore Master Fund. By reason of such authority,
Messrs.
Bernstein and Daly may be deemed to share dispositive power over
the
shares of our common stock owned by Rockmore Master Fund. Messrs.
Bernstein and Daly disclaim any beneficial ownership of such shares
of our
common stock and neither of such persons has any legal right to maintain
such authority. No other person has sole or shared voting or dispositive
power with respect to the shares of our common stock as those terms
are
used for purposes under Regulation 13D-G of the Securities Exchange
Act of
1934, as amended. No person or “group” (as that term is used in Section
13(d) of the Securities Exchange Act of 1934, as amended, or the
SEC’s
Regulation 13D-G) controls Rockmore Master
Fund.
|
|
(19)
|
The
shares of common stock being offered in this offering are comprised
of
125,000 shares of common stock held directly, 160,715 shares of common
stock issuable upon conversion of Notes and 174,125 shares of common
stock
issuable upon exercise of warrants. Joshua Silverman has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 641 Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(20)
|
The
shares of common stock being offered in this offering are comprised
of
16,667 shares of common stock held directly, 21,429 shares of common
stock
issuable upon conversion of Notes and 23,217 shares of common stock
issuable upon exercise of warrants. Scot Cohen has sole voting and
investment control over such shares. The business address for the
selling
stockholder is 641 Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(21)
|
Also
includes shares of common stock held by Iroquois Master Fund Ltd.
The
shares of common stock being offered in this offering are comprised
of
4,167 shares of common stock held directly, 5,358 shares of common
stock
issuable upon conversion of Notes and 5,804 shares of common stock
issuable upon exercise of warrants. Joshua Silverman has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 641 Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(22)
|
The
shares of common stock being offered in this offering are comprised
of
2,778 shares of common stock held directly, 3,572 shares of common
stock
issuable upon conversion of Notes and 3,869 shares of common stock
issuable upon exercise of warrants. Richard Abbe has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 641
Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(23)
|
The
shares of common stock being offered in this offering are comprised
of
2,778 shares of common stock held directly, 3,572 shares of common
stock
issuable upon conversion of Notes and 3,870 shares of common stock
issuable upon exercise of warrants. Richard Abbe has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 641 Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(24)
|
The
shares of common stock being offered in this offering are comprised
of
2,778 shares of common stock held directly, 3,572 shares of common
stock
issuable upon conversion of Notes and 3,870 shares of common stock
issuable upon exercise of warrants. Richard Abbe has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is 641 Lexington Ave., 26th
Fl., New York, NY 10022.
|
|
(25)
|
The
shares of common stock being offered in this offering are comprised
of
69,404 shares of common stock held directly, 46,574 shares of common
stock
issuable upon conversion of Notes and 67,049 shares of common stock
issuable upon exercise of warrants. Michael Fein and Stephen Satterstein
have shared voting and investment control over such shares. The business
address for the selling stockholder is One East 52nd
Street, 6th
Floor, New York, NY 10022.
|
|
(26)
|
The
shares of common stock being offered in this offering are comprised
of
14,717 shares of common stock held directly, 7,582 shares of common
stock
issuable upon conversion of Notes and 12,624 shares of common stock
issuable upon exercise of warrants. Michael Fein and Stephen Satterstein
have shared voting and investment control over such shares. The business
address for the selling stockholder is One East 52nd
Street, 6th
Floor, New York, NY 10022.
|
|
(27)
|
The
shares of common stock being offered in this offering are comprised
of
100,000 shares of common stock held directly and 50,000 shares of
common
stock issuable upon exercise of warrants. Zvi Levy has sole voting
and
investment control over such shares. The business address for the
selling
stockholder is P.O. Box 3236, Ramet Gan, 52131
Israel.
|
|
(28)
|
The
shares of common stock being offered in this offering are comprised
of
18,000 shares of common stock held directly and 9,000 shares of common
stock issuable upon exercise of warrants. Jonas Carlstrom has sole
voting
and investment control over such shares. The business address for
the
selling stockholder is Lokgatay 27 112 62 Stockholm,
Sweden.
|
|
(29)
|
The
shares of common stock being offered in this offering are comprised
of
64,438 shares of common stock held directly, 55,233 shares of common
stock
issuable upon conversion of Notes and 89,762 shares of common stock
issuable upon exercise of warrants. Robert U. Giannini has voting
and
investment control over such shares. The business address for the
selling
stockholder is 2 Rector St., 15th
Floor, New York, NY.
|
|
(30)
|
The
shares of common stock being offered in this offering are comprised
of
7,000 shares of common stock held directly, 6,000 shares of common
stock
issuable upon conversion of Notes and 9,751 shares of common stock
issuable upon exercise of warrants. Gregg Zeoli has sole voting and
investment control over such shares. The business address for the
selling
stockholder is 2 Rector St., 15th
Floor, New York, NY.
|
Selling
stockholders who are registered broker-dealers are “underwriters” within the
meaning of the Securities Act. In addition, selling stockholders who are
affiliates of registered broker-dealers may be deemed to be “underwriters”
within the meaning of the Securities Act if such selling stockholders (a) did
not acquire its common stock, warrants, convertible promissory notes, or common
stock underlying the warrants or convertible promissory notes, in the ordinary
course of business or (b) had any agreement or understanding, directly or
indirectly, with any person to distribute the common stock, warrants,
convertible promissory notes, or common stock underlying the warrants or
convertible promissory notes. As to the shares being sold for their own account,
the Brokers are underwriters. Neither Empire nor Mr. Giannini is underwriting
the resale of any other shares. The Brokers received their respective warrants
to purchase units in the ordinary course of its business and, at the time they
received their warrants, neither Empire nor Mr. Giannini had an agreement or
understanding, directly or indirectly, to distribute its warrants or the common
stock, warrants, convertible promissory notes, or common stock underlying the
warrants or convertible promissory notes, issuable upon exercise of such
warrants.
RELATIONSHIP
OF SELLING STOCKHOLDERS TO THE COMPANY
Empire
is
a financial advisor to the Company, Robert U. Giannini, is an officer of Empire
and a former officer of Griffin Securities, Inc., a former financial advisor
of
ours. None of the other selling stockholders listed above has held any position
or office, or has had any material relationship, with us or any of our
affiliates within the past three years.
We
are
registering the sale of shares of our common stock on behalf of the selling
stockholders. A selling stockholder is a person named in the section entitled
“selling stockholders” and also includes any donee, pledgee, transferee or other
successor-in-interest selling shares received after the date of this prospectus
from a selling stockholder as a gift or other non-sale related
transfer.
We
do not
know of any plan of distribution for the resale of our common stock by the
selling stockholders. We will not receive any of the proceeds from the sale
by
the selling stockholders of any of the resale shares.
Each
selling stockholder of the common stock may, from time to time, sell any or
all
of their shares of common stock on the Nasdaq Capital Market or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated
prices. A selling stockholder may use any one or more of the following
methods when selling shares:
|
|
· |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
|
· |
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
· |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
|
· |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
· |
privately
negotiated transactions;
|
|
|
· |
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
|
|
· |
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
|
· |
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
|
· |
a
combination of any such methods of sale;
or
|
|
|
· |
any
other method permitted pursuant to applicable
law.
|
Upon
notification to us by a selling stockholder that a donee, pledgee, transferee
or
other successor-in-interest intends to sell more than 500 shares, a supplement
to this prospectus will be required. The selling stockholders may also sell
shares under Rule 144 under the Securities Act, if available, rather than under
this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance
with
FINRA Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with FINRA IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions entered into after the effective
date of the registration statement of which this prospectus is a part, or loan
or pledge the common stock to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution
may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each selling
stockholder has informed the Company that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the Common Stock. In no event shall any broker-dealer receive
fees, commissions and markups which, in the aggregate, would exceed eight
percent.
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to
indemnify the selling stockholders against certain losses, claims, damages
and
liabilities, including liabilities under the Securities Act.
Because
selling stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than under this
prospectus. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the selling
stockholders.
We
agreed
to keep this prospectus effective until the earlier of (i) the date on which
the
shares may be resold by the selling stockholders without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities
Act
or any other rule of similar effect. The resale shares will be sold only
through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale shares
may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases
and
sales of shares of the common stock by the selling stockholders or any other
person. We will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including
by
compliance with Rule 172 under the Securities Act).
The
validity of our common stock offered hereby will be passed upon for us by Cooley
Godward Kronish LLP, San Francisco, California.
BDO
Seidman LLP, independent registered public accounting firm, audited our
financial statements included in our Annual Report on Form 10-K as of and for
the year ended October 31, 2006, as set forth in their report (which contains
an
explanatory paragraph describing conditions that raise substantial doubt about
our ability to continue as a going concern as described in Note 1 to the
consolidated financial statements), which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
are incorporated by reference in reliance on BDO Seidman LLP’s report, given on
their authority as experts in accounting and auditing.
Öhrlings
PricewaterhouseCoopers AB, independent registered public accounting firm,
audited the financial statements of Old Neonode, Inc. and its subsidiary at
December 31, 2006 and December 31, 2005, and the results of their operations
and
their cash flows for each of the two years in the period ended December 31,
2006
and the ten month period ended December 31, 2004 as set forth in their report
(which contains an explanatory paragraph describing conditions that raise
substantial doubt about our ability to continue as a going concern as described
in Note 1 to the consolidated financial statements), which is incorporated
by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Öhrlings
PricewaterhouseCoopers AB’s report, given on their authority as experts in
accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
electronically file annual, quarterly and special reports, proxy and information
statements and other information with the SEC. The public may read and copy
any
materials we file with the SEC at the SEC’s Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. The public may obtain information on
the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The
SEC also maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.sec.gov. Our website
address is www.iwsinc.com. Information contained in, or accessible through,
our
website is not a part of this prospectus.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC
allows us to “incorporate by reference” the information we file with them, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the
SEC
will automatically update and supersede this information. We incorporate
by reference the documents listed below and any filings that we will make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the
initial filing date of the registration statement of which this prospectus
forms
a part and prior to the termination of this offering:
|
(1)
|
|
Our
Annual Report on Form 10-K for the year ended October 31, 2006 filed
with
the SEC on January 29, 2007;
|
|
|
|
|
|
(2)
|
|
Our
Quarterly Reports on Form 10-Q filed with the SEC on March 16, 2007,
June
11, 2007 (as amended on June 13, 2007), September 13, 2007 and November
14, 2007; and
|
|
|
|
|
|
(3)
|
|
Our
Current Reports on Form 8-K (other than information contained in
Current
Reports on Form 8-K that is furnished, but not filed) filed with
the SEC
on November 2, 2006, January 12, 2007, January 12, 2007, January
22, 2007
March 23, 2007, April 4, 2007, April 19, 2007, May 29, 2007, July
20,
2007, August 13, 2007 (as amended on August 16, 2007, September 4,
2007
and September 18, 2007) (excluding the pro forma financial information),
August 24, 2007, October 2, 2007, October 10, 2007, October 10, 2007
and
November 15, 2007;
|
|
|
|
|
|
(4)
|
|
Our
definitive proxy statement on Schedule 14A for our August 10, 2007
special
meeting of stockholders, filed with the SEC on July 3, 2007 (except
for
Annex G); and
|
|
|
|
|
|
(5)
|
|
The
description of the common stock included in our registration statement
on
Form 8-A.
|
We
will
furnish without charge to you, upon written or oral request, a copy of any
or
all of the documents incorporated by reference, including exhibits to these
documents. You should direct any requests for documents to:
Corporate
Secretary
Neonode
Inc.
4000
Executive Parkway, Suite 200
San
Ramon, California 94583
Telephone:
(925) 355-7700
You
should rely only on the information contained or incorporated by reference
in
this prospectus and any prospectus supplement. We have not authorized anyone
to
provide you with different information. If anyone provides you with different
or
inconsistent information, you should not rely on it. The selling stockholders
will not make an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus, as well as information we previously filed with the SEC
and
incorporated by reference in this prospectus, is accurate only as of the date
on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that
date.
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table lists the costs and expenses payable by the registrant in
connection with the sale of the common stock covered by this prospectus other
than any sales commissions or discounts, which expenses will be paid by the
selling stockholders. All amounts shown are estimates except for the SEC
registration fee.
|
SEC
registration fee
|
|
$
|
524
|
|
|
Legal
fees and expenses
|
|
|
30,000
|
|
|
Accounting
fees and expenses
|
|
|
35,000
|
|
|
Printing
expenses
|
|
|
10,000
|
|
|
Miscellaneous
fees and expenses
|
|
|
5,000
|
|
|
Total
|
|
$
|
80,524
|
|
Item
15. Indemnification of Directors and Officers
The
registrant is incorporated under the laws of the State of Delaware. Section
145
of the Delaware General Corporation Law (“DGCL”) provides that a Delaware
corporation may indemnify any persons who are, or are threatened to be made,
parties to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation), by reason of the fact that such person
was an officer, director, employee or agent of such corporation, or is or was
serving at the request of such person as an officer, director, employee or
agent
of another corporation or enterprise. The indemnity may include expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the
corporation’s best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his or her conduct was
illegal. A Delaware corporation may indemnify any persons who are, or are
threatened to be made, a party to any threatened, pending or completed action
or
suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation or enterprise. The indemnity may include
expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit
provided such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the corporation’s best interests except that
no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such officer or director has actually and reasonably incurred.
The registrant’s certificate of incorporation and bylaws provide for the
indemnification of directors and officers of the Registrant to the fullest
extent permitted under the DGCL.
Section
102(b)(7) of the DGCL permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duties as a director, except for liability:
·
or any
transaction from which the director derives an improper personal
benefit;
·
for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law;
·
for
improper payment of dividends or redemptions of shares; or
·
for any
breach of a director’s duty of loyalty to the corporation or its
stockholders.
As
permitted by Section 145 of the Delaware General Corporation Law, our Bylaws
provide that (i) we are required to indemnify our directors and executive
officers to the fullest extent permitted by the Delaware General Corporation
Law, (ii) we may, in our discretion, indemnify other officers, employees and
agents as set forth in the Delaware General Corporation Law, (iii) to the
fullest extent permitted by the Delaware General Corporation Law, we are
required to advance all expenses incurred by our directors and executive
officers in connection with a legal proceeding (subject to certain exceptions),
(iv) the rights conferred in our Bylaws are not exclusive, (v) we are authorized
to enter into indemnification agreements with our directors, officers, employees
and agents and (vi) we may not retroactively amend the Bylaws provisions
relating to indemnity.
We
have
entered into agreements with our directors and officers that require us to
indemnify such persons against expenses, judgments, fines, settlements and
other
amounts that such person becomes legally obligated to pay (including expenses
of
a derivative action) in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was our director or officer or any of our affiliated
enterprises. Our obligation to indemnify our officers and directors is subject
to certain limitations set forth in the indemnification agreements. The
indemnification agreements also set forth certain procedures that will apply
in
the event of a claim for indemnification thereunder.
At
present, there is no pending litigation or proceeding involving any of the
registrant’s directors, officers or key employees as to which indemnification is
being sought nor is the registrant aware of any threatened litigation that
may
result in claims for indemnification by any of its officers or
directors.
The
selling security holders have entered into an agreement with us whereby they
jointly and severally agree, to the extent permitted by law, to indemnify and
hold harmless Neonode,
each
officer of Neonode who signs this registration statement and each director
of
Neonode, against all losses, claims, damages or liabilities, joint or several,
to which Neonode or such officer or director may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in this registration
statement, any preliminary prospectus or final prospectus contained therein,
or
any amendment or exhibit thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading in each case, and will
reimburse SBE and each such officer and director for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that the
selling security holders will be liable hereunder in any such case if and only
to the extent that any such loss, claim, damage or liability arises out of
or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information
pertaining to such selling security holders, as such, furnished in writing
to
Neonode by or on behalf of a selling security holder specifically for use in
such registration statement or prospectus, and provided, further, however,
that
the liability of the selling security holders hereunder shall be limited to
the
gross proceeds (net of the amount of any damages the selling security holders
have otherwise been required to pay by reason of such untrue statement or
omission or alleged untrue statement or omission) received by the selling
security holders from the sale of the common stock covered by this registration
statement. The agreement also sets forth certain procedures that will apply
in
the event of a claim for indemnification thereunder.
The
registrant has an insurance policy covering its officers and directors with
respect to certain liabilities, including liabilities arising under the
Securities Act or otherwise.
Item
16. Exhibits
|
Number
|
|
Exhibit
|
|
5.1
|
|
Opinion
of Cooley Godward Kronish LLP
|
|
|
|
|
|
23.1
|
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
|
|
|
23.2
|
|
Consent
of Cooley Godward Kronish LLP (included in their opinion filed as
Exhibit
5.1)
|
|
|
|
|
|
24.1
|
|
Power
of Attorney (included in signature page
hereto)
|
Item
17. Undertakings
(a)
The undersigned registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the “Securities Act”);
(ii)
To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement.
(iii)
To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
Provided, however,
that
paragraphs (i), (ii) and (iii) above do not apply if the information required
to
be included in a post-effective amendment by those paragraphs is contained
in
periodic reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2)
That,
for the purpose of determining any liability under the Securities Act, each
such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act to any
purchaser each prospectus filed pursuant to Rule 424(b) shall be deemed to
be
part of and included in the registration statement as of the date it is first
used after effectiveness; provided, however, that no statement made in the
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use,
supersede or modify any statement that was made in the registration statement
or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act
of 1934, as amended (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934, as amended) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act
may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of
such issue.
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Ramon, State of California, on the 15th day
of
November, 2007.
|
|
NEONODE
INC.
|
|
|
|
|
|
|
By:
|
/s/
Mikael Hagman
|
|
|
|
|
|
Mikael
Hagman
|
|
|
|
Chief
Executive Officer and President
|
POWER
OF ATTORNEY
KNOW
ALL
BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Mikael
Hagman
and
David Brunton, and each of them, as his true and lawful attorney-in-fact and
agent, each with the full power of substitution and resubstitution, for him
and
in his name, place or stead, in any and all capacities, to sign any and all
amendments to this Registration Statement (including any and all post-effective
amendments), and to sign any registration statement for the same offering
covered by this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) promulgated under the Securities Act, and all
post-effective amendments thereto, and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their or his or
substitutes, may lawfully do or cause to be done by virtue hereof. This Power
of
Attorney may be signed in several counterparts.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on
the
dates indicated.
|
Signature
|
|
Title(s)
|
|
Date
|
|
|
|
|
|
|
|
/s/
Mikael Hagman
|
|
Chief
Executive Officer and President (Principal
Executive Officer)
|
|
November
15, 2007
|
|
Mikael
Hagman
|
|
|
|
|
|
|
|
|
|
|
|
/s/
David Brunton
|
|
Chief
Financial Officer
(Principal Financial and Accounting Officer)
|
|
November
15, 2007
|
|
David
Brunton
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Per Bystedt
|
|
Director
|
|
November
15, 2007
|
|
Per
Bystedt
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Johan Ihrfelt
|
|
Director
|
|
November
15, 2007
|
|
Johan
Ihrfelt
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Susan major
|
|
Director
|
|
November
15, 2007
|
|
Susan
Major
|
|
|
|
|
|
|
|
|
|
|
|
/s/
John Reardon
|
|
Director
|
|
November
15, 2007
|
|
John
Reardon
|
|
|
|
|
|
Number
|
|
Exhibit
|
|
5.1
|
|
Opinion
of Cooley Godward Kronish LLP
|
|
|
|
|
|
23.1
|
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
|
|
|
23.2
|
|
Consent
of Cooley Godward Kronish LLP (included in their opinion filed as
Exhibit
5.1)
|
|
|
|
|
|
24.1
|
|
Power
of Attorney (included in signature page
hereto)
|