Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On September 13, 2017, Andreas Bunge and Ulf
Rosberg were appointed as members of the Board of Directors of Neonode Inc. Mr. Bunge will serve as a Class I director and Mr.
Rosberg will serve as a Class II director.
Mr. Bunge, age 57, since 2015 has been Chief
Executive Officer of Merkatura AB, a private holding company, and provides business consulting for technology companies. Between
2012 and 2015, he served as Chief Executive Officer of Spago Nanomedical AB (formerly Spago Imaging AB) until its public listing
on the NASDAQ OMX Nordic stock exchange. Between 2005 and 2012, Mr. Bunge founded and served as Chief Executive Officer of Accelerator
Nordic AB, which spun-off Spago Imaging in 2012. Prior to Accelerator Nordic, he founded and served as Chief Executive Officer
of Applied Sensor AB and held various managerial positions at Intentia AB. He also has served as a member of the boards of directors
of numerous companies during the past 15 years. Mr. Bunge has an MSc in Engineering and Management from Linköping University.
Mr. Rosberg, age 52, currently serves as Chief
Executive Officer of UMR Invest AB, a private holding company, and as Chairman of Payair Technologies AB. He previously served
in various leadership positions at Nordic Capital AB from 1994 until June 2017, including as investment manager, director, partner,
and most recently as senior advisor since 2012. Prior to joining Nordic Capital, Mr. Rosberg held corporate finance positions with
SEB Investment Banking and Leimdörfer & Partners. He has an M.Sc. in Economics from the Stockholm School of Economics
and a degree with a major in finance from New York University, Stern School of Business in New York.
Subsequent to the 2017 Annual Meeting of Stockholders
to be held on October 3, 2017, the Board of Directors anticipates determining on which committee(s) Messrs. Bunge and Rosberg will
serve. As directors, Messrs. Bunge and Rosberg will be entitled to compensation for their service in the same manner as other members
of the Board of Directors.
The appointment of Messrs. Bunge and Rosberg
was made as a result of a Securities Purchase Agreement dated August 2, 2017 pursuant to which the purchasers of a majority of
the securities became entitled to designate up to two individuals to join the Board of Directors no later than the 2017 Annual
Meeting of Stockholders. Messrs. Bunge and Rosberg were the designees. The Securities Purchase Agreement does not provide the majority
purchasers with any ongoing representation. Subsequent to the initial appointment to the Board of Directors, Messrs. Bunge and
Rosberg are not assured of being nominated for election at a future annual meeting of stockholders. In the event either Messrs.
Bunge or Rosberg cease to serve as director for any reason, the Board of Directors is not obligated under the Securities Purchase
Agreement to appoint any replacement individual to fill the vacancy.
Entities controlled by Messrs Bunge and Rosberg
were among the purchasers of Neonode common stock at $1.00 per share and warrants with an exercise price of $2.00 per share, exercisable
12 months from the date of issuance until expiration three years from the date of issuance, in the Securities Purchase Agreement
dated August 2, 2017. Specifically, Mr. Bunge beneficially acquired 750,000 shares of common stock and a warrant to purchase 250,000
additional shares of common stock, and Mr. Rosberg beneficially acquired 3,500,000 shares of common stock and a warrant to purchase
1,166,667 additional shares of common stock. Mr. Bunge and Mr. Rosberg thereby beneficially own 1.3% and 6.0%, respectively, of
shares of Neonode common stock. As a result, all current directors and executive officers of Neonode and nominees for election
at the 2017 Annual Meeting of Stockholders beneficially own 11,653,681 shares, representing 19.6%, of Neonode common stock.