SBE and Neonode Announce Execution of Merger Agreement

  
    
  
  
    
      SBE, Inc. (Nasdaq:SBEI) and Neonode, Inc., a privately-held, Swedish 
      mobile handset developer, announced today the execution of a definitive 
      merger agreement. Although the exact number of shares to be issued in 
      the merger will be determined at closing according to a formula 
      contained in the merger agreement, it is currently estimated that SBE 
      will issue approximately 57 million shares of its common stock in 
      exchange for outstanding shares of Neonode common stock and will assume 
      options and warrants exercisable for approximately 17 million additional 
      shares of SBE common stock. It is expected that the current board of 
      directors of Neonode will become the board of directors of SBE upon the 
      closing.
    
    
      SBE expects to complete the transaction in its second fiscal quarter, 
      subject to satisfaction of closing conditions set forth in the merger 
      agreement. In addition to customary closing conditions, the transaction 
      is subject to the approval of the SBE and Neonode stockholders and a 
      reverse split of SBE’s outstanding common 
      stock. The number of shares referenced above is presented on a pre-split 
      basis. After the merger is completed, the combined company's 
      headquarters will be in Stockholm, Sweden, where Neonode’s 
      corporate headquarters and research and development activities are 
      located. The combined company’s stock is 
      expected to continue to trade on the Nasdaq Capital Market.
    
    
      The securities offered in the merger will not be registered under the 
      Securities Act of 1933 and may not be offered or sold in the United 
      States absent registration or an applicable exemption from registration 
      requirements.
    
    
      About Neonode
    
    
      Neonode is a Swedish based developer and manufacturer of multimedia 
      mobile handsets. With over five years of research and development 
      Neonode is today a leader and trendsetter in buttonless touch screen 
      mobile phones and gesture based user interfaces. Neonode mobile phones 
      are based on patented technologies. With Neonode's open Microsoft based 
      platform consumers can themselves upgrade and customize their handsets 
      similar to a PC.
    
    
      In close collaboration with leading electronic manufacturers Neonode 
      strives to create a leading alternative brand within the premium mobile 
      device market. Neonode was founded in 2001 and has its main office in 
      Stockholm, Sweden. More information is available at www.neonode.com
    
    
      About SBE
    
    
      SBE designs and provides IP-based storage networking solutions for an 
      extensive range of business critical applications, including back-up and 
      disaster recovery. SBE delivers a portfolio of scalable, standards-based 
      hardware and software products designed to enable optimal performance 
      and rapid deployment across a wide range of next-generation storage 
      systems. Based in San Ramon, California, SBE is a publicly-traded 
      company (NASDAQ:SBEI) with products sold worldwide through direct sales, 
      OEMs and system integration partners. More information is available at www.sbei.com.
    
    
      Forward-Looking Statements
    
    
      This news release contains certain forward-looking statements that 
      involve risks and uncertainties, including statements about consummation 
      of the proposed merger transaction. Such statements are only predictions 
      and the company’s actual results may differ 
      materially from those anticipated in these forward-looking statements. 
      Factors that may cause such differences include, but are not limited to, 
      the ability of SBE and Neonode to comply with the closing conditions 
      necessary in order to consummate the transaction. These factors and 
      others are more fully discussed in the documents SBE files from time to 
      time with the Securities and Exchange Commission, particularly, the Form 
      8-K that will be filed with the Securities and Exchange Commission 
      describing the terms of the merger agreement and SBE’s 
      most recent Form 10-K and Form 10-Q.
    
    
      SBE and the SBE logo are registered trademarks of SBE, Inc. All other 
      brand or product names are trademarks or registered trademarks of their 
      respective holders.
    
    
      Additional Information and Where to Find It
    
    
      In connection with the proposed merger and required stockholder 
      approval, SBE intends to file with the Securities and Exchange 
      Commission, or SEC, a proxy statement on Schedule 14A that will be 
      mailed to the stockholders of SBE. INVESTORS AND SECURITY HOLDERS OF SBE 
      ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT MATERIALS 
      WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT 
      INFORMATION ABOUT THE PROPOSED MERGER. The definitive proxy statement 
      will be mailed to the stockholders as of a record date to be established 
      for voting on the proposed merger. Investors and security holders will 
      be able to obtain free copies of the proxy statement, as well as other 
      filed materials containing information about SBE, at www.sec.gov, 
      the SEC’s website. Investors may also access 
      the proxy statement and the other materials at www.sbei.com, 
      or obtain copies of such material by request to SBE’s 
      Corporate Secretary at: SBE, Inc., 4000 Executive Parkway, Suite 200, 
      San Ramon, CA 94583.
    
    
      SBE and its officers and directors may be deemed to have participated in 
      the solicitation of proxies from SBE's stockholders in favor of the 
      approval of the merger. Information concerning SBE's directors and 
      executive officers is set forth in the publicly-filed documents of SBE. 
      Stockholders may obtain more detailed information regarding the direct 
      and indirect interests of SBE and its directors and executive officers 
      in the merger by reading the preliminary and definitive proxy statements 
      regarding the merger, which will be filed with the SEC.