Hello everyone, thank you for standing by and welcome to Neonode’s Third Quarter 2013 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. At this time for opening remarks and introductions, I would like to turn the call over to Daniel Gelbtuch, our Senior Vice President of Corporate Finance and Investor Relations. Daniel, please go ahead and start the conference.

Thank you, welcome and thank you for joining us. On today’s call, we’ll review our third quarter 2013 financial results, and provide a corporate update. Our update will include details of our design wins, technology developments, and new customer agreements that we recently announced. The prepared remarks will be provided by Thomas Eriksson, our CEO and David Brunton, our CFO. Before turning the call over to Thomas and David, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, believe, estimate, expect, tend, will, guides, confidence, targets, projects, and other similar expressions typically are used to identify forward-looking statements. These forward statements do not guarantee the future performance that may involve or are subject to risks, uncertainties and other factors that may affect Neonode’s business, financial position, and other operating results, which include but are not limited to the risk factors and other qualifications contained in Neonode’s Annual Report on 10-K, quarterly reports on 10-Q and other reports filed by Neonode with the SEC to which your attention is directed. Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward-looking statements. Neonode expressly disclaims any intent or obligation to update these forward-looking statements. At this time it’s now my pleasure to turn the call over to Thomas Eriksson, Chief Executive Officer of Neonode. Thomas, please go ahead.

Thank you, Daniel. Good morning everyone, and welcome to the call. To start with I'm very happy to announce that we signed license agreements with two large consumer electronics OEM in Korea. We have initiated projects with both of these customers across multiple sectors such as mobile computing, children's tablets, smartwatches and white goods. The inventory into companies of this caliber is a major milestone for us, so they can quickly drive higher volumes across many sectors that we expect this customer should be a major source of growth for Neonode in the coming year. Our Q2 GAAP revenues of $1.1 million excluded approximately $160,000 of revenues that were earned in September quarter, they reported after our auditor's reporting deadline. Our Q3 revenues included two brand new royalty streams, one from Leapfrog and other from Volvo. Our soft comparisons were due to the weak e-reader market, as retail ASPs are still well above $100, which is increasingly uncompetitive relative to color tablets. However, on the positive side we have reengaged with major Tier One eReader OEM which should help us recapture the market share that we lost over the last year. Moreover these OEMs are particularly focused on aggressively driving down retail price points in order to transform e-readers into a compelling giveaway and promotional product which will hopefully revive unit growth in 2014. We're now engaged with numerous [indiscernible] and semiconductor OEMs and have multiple development projects ongoing. In parallel, we're working with the Operating Systems players to make sure our technology fulfills their requirement. Not only will our solution drive notebook and large monitor touch screen dealer materials down to the single digits, but it will enable OEMs to add features like low power 2D and 3D proximity sensing, air gestures [indiscernible] while substantially reducing overall system costs…

Thanks Thomas. Earlier today we filed our form 10-Q with the SEC as well as released our third quarter financial results and a press release. Both of these are available for download from the investor section of our website at neonode.com. For the third quarter ended September 30, 2013 revenues decreased 35% to $1.1 million compared to $1.7 million for the same period in 2012. Our revenues for the three months ended September 30 2013 included $900,000 from license fees plus $200,000 of non recurring engineering or NRE fees for the engineering services, design services, compared to $1.6 million of license fees plus $100,000 of NRE fees in the same quarter of the prior year. For the nine months ended September 30, 2013, revenues decreased 44% to $2.7 million compared to $4.8 million for the same period in 2012. Our revenue for the nine months ended September 30 2013, included $2.1 million from license fees plus $600,000 of NRE fees compared to $4.1 million of license fees plus $700,000 of NRE fees in the prior year. Although our total revenue was lower in 2013 compared to 2012, we did see a continued diversification of our customer base. We had 12 customers shipping products incorporating our license technology during the nine months ended September 30 2013, compared to six in the same period of 2012. Several of the customers products just started ramping in the last month of the third quarter of 2013 and we expect them to continue to ramp over the next couple of months and beyond. The decrease in overall revenue for the three and nine months ended September 30, 2013 compared with the same period in 2012 is primarily due to a decrease in license fees from Amazon. Amazon contributed approximately 46% of our total revenues during…

Thank you, David. To recap Neonode continues to add key partnerships and customers, gain seeing momentum, improve visibility and develop the touch solution, all of which will allow the company to accelerate growth in the coming years. We’re not only securing new design wins and premier licensees, but we are aggressively investing in our business to meet customer demand and remaining on the leading edge of touch solutions. I would like to take this opportunity to thank all of our customers, partners, investors and our very talented and dedicated employees for the trust and support. This concludes the prepared remarks and we’ll open the call for questions. Thank you very much.

(Operator Instructions). Our first question comes from the line of Mike Malouf of Craig-Hallum Capital.

Thanks for taking my question. I wanted to talk a little bit about the PC market. How do you see this playing out with regards to OEMs looking at your prototypes with both on the notebook side and on the monitors? For instance how long does it take for them to take a look at the prototype and understand if that’s what they want? Have you gotten any feedback yet? And is there a chance that we could see Windows 8 certification on your products or maybe you’ve already done that? Thank you.

This is Daniel, we can’t really comment on exactly the time tables for our customers. We’re in the , it's a constant give and take; it’s a very iterative process. We deliver prototypes for their specifications. There is always some feedback that goes back and forth. The feedback to-date has been extremely positive. The OEMs that we delivered, who are very excited or very bullish about the prospects for our touch solutions in both monitors and in laptops. In terms of Windows 8 testing, that is something that we believe will take place in the near term. But that is not something that we necessarily control. So it’s something that we expect to happen relatively soon. We’re very confident that we will pass those tests or customers will pass those tests with their products. And we will get to you as soon as that takes place. But right now we’re in advanced stages of engagement. The customers are very, perspective customers are and major OEMs on both the semiconductor side and the PC semiconductor side and on the OEM side on the PC OEM side and all them are very engaged, very excited and the feedback has been excellent to-date.

Well, that’s great to hear. Maybe Thomas I could ask you this question; with regards to the actual PC notebook solution and I guess for the monitor solution, the price difference between a competing product is obviously very dramatic. What is the trade off that an OEM has to take on? What’s the downside with taking on your technology versus either the traditional ITO technology which is obviously more expensive or even some of the new metal mesh or silver nanowire technologies that are out there?

We don’t know any things that makes this worse, and that’s the notion. We both support a naked window solution which means there is no front glass and we support solution with the glass. And using our solution, you get 100% transparent window compared to like a capacity solution with a metal-mesh or ITO, that matter is not fully transparent. So our customer can use added solution depending on the application.

Basically to your point about, your question about is there any trade off or any, are we giving up any or are customers giving up anything in terms of quality or performance by using us? Absolutely not. Our speech are better than the capacitive solutions out there. We shine particularly in PC space, particularly because these are large environments where projected capacitor is challenged in terms of performance, especially at larger sizes. We have no size challenges whatsoever and we have said in our prepared remarks we are easily going up to 27 in sizes with full performance and full speed and all the requirements for Windows 8. In addition we do not have any issues in terms of having a cover glass, there are no glare issues. PC OEMs for the most part do want, do request some sort of bezel, so that fits perfectly into our current solutions. And as Thomas just mentioned down the road we will have our Flush solution ready towards the end of this year or early next. And we're offering everything to the PC customers at this point. Again they are very excited, the feedback has been excellent, the performance of our solutions is excellent. And I think we're going to really disrupt the market. I think this is going to be our sweet spot.

That's great. One of things I didn't hear a lot of and I am wondering if you could give us a little color is on the auto side. What's been the progress with regards to the auto side and particularly you are getting into anything else besides the standard counsel?

As we said previously we have multiple projects with numerous top 10 automotive customers both on the OEM side and on the system OEM side. While we rolling out mobile BYD this NEON and Alpine by name we have more than two dozen projects with many eCORP systems in automotive OEMs. In terms of new markets, or new opportunities beyond the center stack, we're now engaged with one of the largest global suppliers of door handles. As you might have seen already many auto OEMs are quickly integrating sensors into door handles to enhance the keyless entry features of the car. Car solutions use capacitive sensors which are at least three to four times more expensive than our optical solutions and are extremely limited in terms of features and performance. For example capacitive sensors have a very difficult time using gloved hands and also are not optimized for extreme environments, extreme cold or extreme heat. So this is an area that we’re really excelling and we could do it for a much, much, much lower price. And remember the car door handle is roughly three to four times bigger than the overall auto market which is expected to be 80 million units. In addition, we have also, as we display back in CES, we have also developed a steering wheel, a touch steering wheel that uses proximity sensing for heads up displays and we have more than a few very high end automobile OEMs that are evaluating this product as we speak. And then finally the last, I guess the fourth or fifth opportunity in the car is the knobs, the circular touch sensor which we developed can be integrated into things like BMW iDrive where we have the steering, we control the telematics, gets controlled by a round knob right below the center stack. And we can add sort of a mouse feature to it.

Our next question comes from the line of James Medvedeff from Cowen. James Medvedeff - Cowen & Co: I wanted to see if you might be able to provide any more color on the ramp of the printer OEM? You said they are producing now and expect to deliver units in December. Do you have any sense of the volumes that you might see?

This is something that we really have to be careful; we can’t really talk about the printer OEM per se and their size, but we do expect that this is going to be definitely into millions on an annual basis, well on millions in annual basis and should proceed up into the double digits or the tens of millions going forward over time. We expect this large tier 1 printer licensee to ramp during the end of this quarter and we have confirmed that they are currently in production. So we expect to generate some revenue from this segment in the fourth quarter and we expect that there will be linear ramps of the many, many projects that has been won and has been manufactured and has been tested already to start rolling out over the next three to four quarters. James Medvedeff - Cowen & Co: And just on revenue recognition for that, if they shift in December do you get revenue in December or do you get that in arrears?

We get it in, we recognize it in the quarter that it is shifting; however we do have a 15 day after quarter cut off for revenue recognition. So this customer, any customer in our customer base, in order for it to be recognized during the quarter, has been, has to report their revenues, has to produce their report for royalties within 15 days of the quarter end. I will let Dave answer, give you more color on it.

With this particular customer actually the fourth quarter revenue will be recognized in the first quarter, because they report 45 days after the end of quarter. And I am not going to be able to budge them into reporting [indiscernible] days, I just want to put that out there. We'll definitely be able to announce the numbers on the next conference call, but the revenue recognition will take place in the first quarter, just don't want to have any false pretenses on that. James Medvedeff - Cowen & Co: And then on the P&L sales and marketing came in down significantly quarter-over-quarter and below what we were expecting. How should we think about that going forward? Is this a new run rate or it’s something, sorry.

Yes. That will be the new run rate. We actually looked at the sales team around the world and decided through an analysis to move some of the sales functions on consolidated. So we cut some of the sales functional.

And at the same time we also moved some up into R&D; that’s something like a judgment call.

(Operator Instructions). Our next question comes from the line of [indiscernible].

You raised $7 million in the last round. Insiders increased their selling of their own shares. How would we be breakeven before year end? You’re saying in the last call that you didn’t need to raise capital. So you raise the 7 million, and my numbers show you went higher 3 million going into the fourth quarter and insiders increased their selling to such a dramatic level, bubble was supposedly being used for tax purposes. And I haven’t seen any insider buyers expect of one Board member.

First of all, as we mentioned in last call, we said that we’ll only raise money for specific projects with high ROI and that major project that we’re focused on is PC, that’s number one. And that’s the reason why we raised money. The second point which is what we said last quarter is that we have new projects, new customers like printer, like children’s tablet, like [indiscernible] which are layering on and those themselves should get us through breakeven. They’ve started to layer on and they will continue to ramp up, and those projects themselves on their own get us through breakeven.

Do they, because we heard about mobile a year ago, and we heard about printers a year ago and so it’s every, the story sense where we keep hearing about new projects but yet we haven’t seen anything from the projects we heard about a year ago.

The projects that was somewhat a year ago, some of them.

With mobile.

Some of the projects got delayed or fell off; that’s number one. Again that’s, those are designed, not every design will make it to market. However the markets that we discussed about and we’re talking about now that get us to breakeven are printer, which is in production now. That will have to be an act of god for it to not to happen, that’s number one.

That will make you breakeven for the fourth quarter in its own way?

We do not talk about the fourth quarter, it’s on right in last quarter we mentioned that we could breakeven over the next few quarters. That is still very much possible. We do not predict and cannot predict the exact amount of pre ramp and initial ramp of new customers. The new customers like in the children’s tablet space, ramp up this quarter, will continue to ramp next quarter and over the next three quarters will continue to ramp. And in the case of order, we cannot control the end market results. However, these customers have ramped, they said they’re going to ramp and they are ramping. So there is proof of the customer. And then in terms of printer which is probably going to be one of our biggest customers and will be the one that probably helps us breakeven, that product, that customer, that very large customer is in significant production right now, as we speak, has already build and anticipation of ramping and going to market and is expected to ramp this quarter, end of this quarter. So all of those three markets, we are not talking about handsets getting us through profitability; we’re not talking about even PC getting us the profitability. The three key markets that we’re talking about, these new markets plus the eReader resurgence hopefully, our goal next year will get us to profitability. And at the same time we have again these new markets which we are getting into like PC which are looking, look like they are about to burst in a very good way in terms of the monitor market where we have a disruptive solution, very disruptive solution with almost no competition, or no viable competition at our price point, and addition to the laptop markets which are also…

Okay. I appreciate the answer. I don’t agree with that answer on the selling of the shareholders over the last few years, but that’s fine. I appreciate the answer thank you very much.

At this time there are no further questions. I would now like to turn the floor back over to management for any closing remarks.

Want to thank you for joining on the call and I would keep you posted on our progress in 2013 and the future. Have a very good day. Thank you.

Want to thank you for joining on the call and I would keep you posted on our progress in 2013 and the future. Have a very good day. Thank you.

Thank you. This concludes today Neonode’s third quarter 2013 earnings conference call. You may now disconnect.