Mobile barcode company NeoMedia responds to shareholders
GoMo News has been inundated with requests about NeoMedia for the past few days. The company had issued an 8k form - it’s a report used to notify investors and relevant authorities of unscheduled events. Shareholders and other observers noted two things. First, that a reverse stock split had greatly increased the value of individual shares, but also greatly reduced the number of shares available. Second, that that an outside agency called Yorkville Advisors had been granted a 52% voting control - and no explanation was given for this. Yesterday we let concerned shareholders know that a response was coming from NeoMedia CEO Iain McCready within a day or two. And here it is:
“Dear NeoMedia shareholders and stakeholders,
On Monday, January 11, 2010, our Company filed a Form 8-K with the U.S. Securities and Exchange Commission which disclosed a transaction between NeoMedia and YA Global Investments, L.P. (“Yorkville”). Yorkville has consistently funded our operations, investing over $50 million since 2006. Yorkville has much to gain from their investment, but no investor has more to lose.
Until we begin to generate sufficient positive cash flow we will continue to require additional investments, which we will seek from Yorkville and/or other investors. Because of our prior agreements with Yorkville, investments by other investors require Yorkville’s approval. We believe that Yorkville may be open to approving investments by others, as they have been willing to do so in the past.
We are a company which, until recently, has been ahead of its time. This investment provides us with funds so that we can continue to execute upon our business strategy. Additional funds will be required for us to fully execute our strategies. Any investment includes risk, and it is our commitment to all of our investors, including Yorkville, to continue to work to accelerate our market leadership by leveraging the important initiatives we have embarked upon.
Broadly, these initiatives include:
· Expansion in Europe; North and South America
· Investments in new and deepening partner channels as the mobile barcode ecosystem continues to mature
· Continuing work with handset providers which are now pre-loading the NeoReader application
· Active participation in the establishment of standards which ensure that barcode advertising campaigns work nationally and internationally
We appreciate the frustration our shareholders feel, and even more so appreciate your continued confidence and belief that NeoMedia will reach that day when the industry and the marketplace recognize our success. We hope that our investors will continue to follow our progress, the progress of our competitors and the broader ecosystem.
In the near future we will file the proxy statement for the Special Meeting of Shareholders. This document will include further information about the company, the proposals and the meeting itself. At the meeting there will be opportunities to discuss the business and for our shareholders to voice opinions and share ideas in an open, constructive setting.
Sincerely,
Iain A. McCready
Chief Executive Officer“
This ‘response’ conveniently ignores the real issues common shareholders have with the recent 8K filing. It appears that Mr. McCready is willing to virtually destroy the potential returns for the common shareholder while insuring that Yorkville, who already get a guaranteed return through selling shares obtained at a newly reduced par value, will profit enormously regardless of the success or failure of the company. Yorkville’s only ‘risk’ is that they won’t be able to sell shares.
On the other hand, people whose return relies on the value of their investment to increase with the success of the company they have invested and patiently believed in are left with practically worthless shares, diluted into oblivion to benefit Yorkville and Yorkville alone. The terms of the recent 8K show complete disregard for common shareholder concerns. Our frustration is not based in NeoMedia’s continued borrowing from Yorkville as much as it is about unnecessary destruction of common shareholder’s investments to insure Yorkville’s already guaranteed profits. How much of the $50 Million Yorkville has invested has it already recouped through selling shares? Give us that number Mr. McCready, and we will subtract it from $50M to find what Yorkville’s truly has at ‘risk’.
Shareholders have a voice in these matters with the votes represented by their shares, but Mr. McCready and the NeoMedia board of directors have also guaranteed that Yorkville will now hold a temporary majority stake and can vote in any terms they wish, purely to benefit themselves. Clearly, Mr. McCready is not committed to ANY investor except Yorkville.
Indeed, Yorkville has already sold BILLIONS of Neomedia shares into the market to recoup their investment (a lot of that was since the USPTO ruling last year brought more international attention to the Company). They do not have $50 million on the line as Mr McCready misleadingly insinuated.
As a long-term shareholder, I second Mr. Andersen’s response. I also encourage all other share-holders to voice their concern’s by supporting Mr. Andersen’s comments by following a similar response as I have started.
I agree 100% with the sentiments of Mr. David James Anderson. Ian McReady’s response clearly indicates that he has little or no regard for the retail shareholder. We, the retail shareholder, do not view Yorkville Advisors (YA) as an investor, we view them as a loan shark. Make no mistake, YA has already made huge profits on their loaning of $50 million to NEOM to date, and the terms of this new agreement as defined by the 8K ensures they will make astounding profits on this latest $2.5 million.
I am confident NEOM is doing the right things to become successful, but unfortunately the deplorable massive dilution of shares will prevent the retail shareholder from seeing any return on their investment.
This summary from a poster wraps things up into a tidy, little ball for us.
This latest round of 2.5 million loaned by YA Global, forces a reduction of par down to .001 and demands a reverse split of its stock 100:1. The AS (available shares) REMAINS @ 5 billion.
“Let’s take all of the 2.3 bil OS - now factor a 100 to 1 Reverse Split = 23 mil shares outstanding correct? ok its clear YA has set itself up to reap the benefits of any sell so here goes.
Sell price of 250 million (example figure only). Sell occurs and YA decides to convert all in lieu of cash (of which they can) - maxing A/S to 5 billion - leaving them with 4.977 billion shares.
Net result 250 mil / 5 bil = .05 a share
Common shareholders get 23 mil * .05 = $1,150,000.00
YA Global gets 4.977 bil * .05 = $248,850,000.00 ”
How is it possible for YA Global to gain 52% of the voting power, temporarily, to vote in such blatant sabotage against ALL other shareholders of this company.
This is mutiny financing.
Currently, I own 2.5 million shares of Neomedia. The value of my account as we speak is $15000. Not bad for investing 50k into this company! After a split, I’ll own 25000 shares. If the above scenerio took place, my shares will be worth $1250. That’s a $48750 loss. Just keeps getting better.
Doesnt it make sense that Yorkville would be taken care of prior to any common shareholder? They have $50 Million invested. How much do you have invested? LOL. You people are forgetting how this works. Common shareholders are always last in the food chain. If you dont understand that then maybe you should stop trading stock. As far as dilution goes, thats always been a clear risk with NEOM. Its not like they didnt make it clear that this could happen long ago. Stop complaining everytime this stock takes a crap and either sell, hold or buy more. Bottom line is nobody knows how this will turn out, it’s all speculation until its official so go with your gut and don’t listen to the non-sense that people try to claim as fact when really it’s anyone guess at this point.
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To my knowledge it is a violation of SEC rules and regulations to have not released the above material CEO letter to shareholders in an 8-K.
This shareholder’s outrage is based on continued financing through YA Global rather than licensing Google and other companies operating NeoMedia’s IP.
The recent debt obligations grant YA a 120 day majority vote to guarantee its nominees for the Board get voted in. All appointees to the Board are YA’s nominees. The grant of majority vote is a violation of the anti-takeover provision of the stockholders rights plan adopted by NeoMedia’s Board in December 1999. The current Board of Directors has wantonly violated the anti-takeover provision of the stockholders rights plan. A Delaware State Chancery Court may be an avenue to force NeoMedia to rescind the provisions granting YA Global a majority stake based on the fact that same is a violation of the poison pill provision. Only Charles Fritz, Wiliam Fritz and The Fritz Family Trust Limited Partnership and their holdings are exempt from triggering the poison pill provision. NeoMedia is incorporated in the State of Delaware.
As to Mr. McCready’’s statement that YA has more to lose than any other investor that is not true. Since Mr. McCready took office as CEO, deemed dividends rose from $21,000 to $631,000 and as of 9-30-09 deemed dividends stand at $977,00. The deemed dividend high was almost $1.8 million. See 10Q filed 5-15-08 at pages 3 and 4 and the 10Q filed 11-16-09 at page 5. Paid in Capital increased by $33 million since YA become a debt holder in NeoMedia in March of 2006 which is evidence that YA Global received most, all or more than its invested monies through stock conversions and, I submit, premature selling and other stock price manipulation. YA Global is the defendant in a lawsuit filed by Cobalis where YA is averred to have engaged in securities fraud and contract violations, including exceeding the 4.99% limit.
The CEO stated in an interview with Gomo News on December 17, 2009 that when “all players see and relish success” from the IP, then they will come to NeoMedia. In the CEO’s statement today he states the $2.5 million received from YA Global will be used to implement the CEO’s strategy. The CEO is contradicting himself here. In the aforesaid December 17 interview the CEO has stated he is waiting for companies to voluntarily come to NeoMedia for a license after such companies achieve relished success from the free operation of NeoMedia’s IP. Such strategy does not cost $2.5 million to implement. Fire everyone except perhaps Dean Woods or Terry Griffin and hire a secretary to answer the phone for if and when all those “players” voluntarily come to NeoMedia to request a license. The cherry on top is the CEO wishing filthy rich Google success with 2d codes (i.e., success through free operation of shareholders’ patents). Of course the 180 degree change in stance regarding licensing is contrary to the CEO’s previous licensing of Scanbuy, Mobile Tags and Bems. Why weren’t those companies permitted free use of the IP until relished success was achieved? This shareholder expected licenses from Google and Microsoft after the Scanbuy licensing and Court settlement. The proceeds from said licenses would enable a pay off YA’s loans and set NeoMedia on a course of growth through collection of royalty payments as the market adoption of 2d codes expands here and abroad. But no, the CEO puts a halt to licensing for a specious reason and proceeds to enter into a equity destroying deal with YA Global for a mere $2.5 million. Further, the deal has given complete control of the Board to YA Global. A useful tool for YA to implode the company and abscond with the patents in the near future. I suspect same will occur shortly after the CEO’s tenure ends on 5-28-10.
Under the CEO’s employment contract 6 month written notice to extend was due by 11-29-09. The contract states that following receipt of such notice, the parties mutually agree or not to extend. To date there has been no announcement from NeoMedia’s management on extension of Mr. McCready’s employment contract or the search for a new CEO even though it is approaching only four months away from the expiration date of the CEO’s tenure, May 28, 2010. See filing dated 6-16-08 at sec.gov.
On 2-19-09 the CEO knowingly and willingly permitted YA to have approximately 10% of the then o/s of common stock. (See 10Q filed 5-15-09 at page 7). A total of over 1.1 billion shares of common stock was issued to YA during the 16 month period ending with the last known conversion on 10-26-09 I10Q filed 11-16-09 at page 11). Where the CEO willing and knowingly failed to enforce the 4.99% limit on one known occasion, there can be no assurance the CEO ever enforced the 4.99% limit. Under the new debt obligations, YA is permitted to hold 9.99% of common stock.
Shareholders have a voice at the next shareholder meeting to the extent of extracting responses from the CEO and CFO that will be useful in a future shareholder lawsuit. Other than that shareholders have no say here because YA has been given 120 day majority vote and the shareholder meeting is to take place within that same 120 day period.
Any shareholder wishing to file an action in Delaware State Chancery Court may get a victory forcing the Board to withdraw the majority vote illegally and/or improperly given to YA Global by the Board.
The CEO is paid 160,000 British Pounds Sterling sterling annually, plus a fixed bonus of $20,000 annually payable in BPS plus an additional bonus of 37.5% of 160k British Pounds Sterling at the end of each fiscal year if the Board on which the CEO sits approves of the bonus payable in British Pounds Sterling. If you ask this shareholder whether YA has bought and paid for the CEO, I’d say the answer is an unequivocal yes. In the CEO’s first interview with Gomo News he states it was via Yorkville Advisors that he came to NeoMedia.
This response by CEO Iain McCready is nothing more than a slap in the face of retail shareholders who have supported the company for many years.
As a long-term shareholder, I second Mr. Andersen’s response.
What YA Global (aka Yorkville Advisors) is doing with this company with the CEO’s blessings is illegal and violates SEC laws. I smell a lawsuit against the company.
GOMO News - How can you keep these comments on your site? These people have their numbers and facts distorted beyond belief.
Kick the bums out and put in honorable people, like the persons who ran Scanbuy as a bare bones operations. According to McCready’s prior statement he is waiting for companies that currently operate the IP to voluntarily come to NeoMedia (see Gomo News interview of 12-17-09). Then why doesn’t the CEO cut back operational costs to bare bones and wait for the companies to voluntarily walk through the door as he said that is his plan? Hasn’t the CEO now been caught in a lie because now the CEO states he needs $2.5 million plus additional funding to implement his business strategy. The truth is the CEO is working to destroy the public company NeoMedia and hand the patents over to YA Global who brought the CEO to NeoMedia in the first place.
To the Lawyer Clawmann at Ihub. I suggest that on behalf of the Streetstylz led community of NeoMedia shareholders, you kick start an action in a Delaware State Chancery Court to enforce the poison pill provision of the stockholder rights plan. That way YA Global can be stripped of majority vote at the upcoming shareholder meeting. Once YA gains control of the Board, the company will be dissolved and the patents transferred to YA without need of intervention of any Court because mgt and YA will be on the same team. gladly executing any and all documents required to liquidate the company and transfer assets to YA Global.
Attorney Clawmann can kick start issues to be placed on a ballot for vote by the shareholders including removal of the CEO and removal of every Director who voted in favor of the new debt obligations. This can be turned around by Attorney Clawmann himself by immediately undertaking the aforesaid initiatives to quash the attempt by this management and YA Global to give control of NeoMedia to YA.
To understand what’s going on, shareholders need only refer back to Bena Roberts 6 June 2008 interview with McCready, shortly after he was appointed CEO of Neomedia.
At the urging of Yorkville, McCready joined Neomedia as a consultant, and not long after, he was appointed CEO. Even though he stated during this interview, that he’d introduce new investment, Yorkville has continued to be the only “investor”. During all tele-conferences held since McCready became CEO, shareholders have left him with no doubt about their displeasure with funding arrangements. As a long term shareholder, I have asked McCready to allow all shareholders participate in fund raising, through for example, a carefully structured Share Purchase Plan. This would be far more equitable, shareholders couldn’t complain if they chose not to participate, and Neomedia could have raised more than the paltry amounts they have, without destroying shareholder value to the extent they have, and for the sole benefit of Yorkville.
I applaud the progress that the company has made during McCready’s tenure as CEO. However, much of this can be attributed to the confirmation of Neomedia’s 048 patent by the USPTO.
Shareholders must ask…why has McCready not given all shareholders the opportunity to participate in funding arrangements? Why has he continued to allow Yorkville to be the sole beneficiary of funding arrangements, when he’s known for sometime how unhappy shareholders are about the company’s funding arrangement with Yorkville, and how destructive it has been, and continues to be to their investment in the company?
I believe this whole unhappy saga requires independent investigation.
I have edited a few comments and deleted some. I am very offended that many of you feel that you can use very bad language on this site. I will not accept any bad language.
YA [Yorkville] cannot lose that which they have already recovered by converting low and selling shares much higher into increases in share price of this stock. I contend that YA has near nothing left at risk. If YA had anywhere near the $ 50 million as implied by the CEO of Neomedia at risk, they [YA] would not allow the impending storm surrounding this stock to continue to grow and run the risk of destroying everything many have wished for this company and their investments for so long. I contend that YA has much to gain if this recent financial agreement with Neomedia goes forward and nothing to lose. Otherwise the CEO of Neomedia who is required to seek YA’s permission to release public information would be allowed to clear this up immediately, before this storm passes the point of no return.
As a long term investor I ask why has NEOM allowed two message boards (and now this forum) and a handful of posters to take over the distribution of public information/perception of their company. My guess is incompetence. The only thing missing from the bs mish mash of numbers and scenarios are green men loading patents and barcode readers into their space ships. NEOM - get going Monday morning and start acting like people with real jobs in a real company and manage the PR - put and ent to this BS. PLEASE!
Call me naive, but shareholders may be interested to know, that following the last shareholder tele-conference on 2 September 2009, I asked Iain McCready on at least two occasions to confirm by way of a simple public statement, that he has the best interests of Neomedia and all shareholders at heart. To date he has not done what should be a simple thing for him to do.
Neomedia’s latest funding agreement with YA Global, indirectly provides the answer.
I call on Iain McCready to answer the following questions:
(a) As CEO and director of Neomedia, do you have the best interests of the company and all its shareholders at heart?
(b) Why have you agreed to the agreement with YA Global, outlined in Neomedia’s recent 8K filing to the SEC?
(c) Do you honestly believe that this agreement is in the best interests of Neomedia and all its shareholders?
(d) Why did you not seek shareholder approval, before entering into this agreement?
(e) Why have you not given all Neomedia shareholders the opportunity to participate in funding arrangements?
(f) Will YA Global takeover the assets of Neomedia, as is the fear of many shareholders?
Iain McCready…you can elimenate shareholder anxiety and restore confidence, by answering these simple question. By so doing, you would be acting in the best interests of Neomedia and all its shareholders. It’s in your hands.
Wow, so much misinformation and misinterpretation.
The CEO said YA has invested 50 million since 2006. That statement is 100 percent accurate to this day. Whether YA has converted shares and sold stock to recover some of that investment does not change the fact they indeed invested over 50 million in the company over the past 4 years.
Then there are those who want to blame YA for Neomedias situation today. In 2006 Neomedia forfeited a 2005 SEDA for 100 million dollars, because they needed a large infusion of cash to dispose of the subs that bought that couldnt sustain themselves financially. Neomedia went to YA asking for a 20 million loan I believe it was, thus forfietting the SEDA that had just been agreed to. That is how YA acquired the preferred stock they are now converting and selling on the markets.
Then some want to blame the current CEO. Well to an extent the top dog is responsible for the companies performance. However its hard for a company to perform in a market that all these griping shareholders knew was not ready for this technology yet. In the meantime the bills still have to be paid so loans are still necessary.
None of these investors commenting here and elsewhere want to admit they are the one responsible for their poor judgement and poor investment strategy. Its far too easy to blame everyone else like the CEO, management, or the Investment firm YA. Had they listened objectively to what was beind said going back to 2005 by some investors, they wouldnt be in the situation they are in now.
Bena, we have had our differences in the past, but I urge you to not let your forum and the comments be taken over by disgruntled investors, whose sole intent is to libely attack others, instead of discussing facts. I believe at one time you told me you were not going to let your forum get into discussing company financial issues, yet thats all thats being discussed here.
Maybe this thread needs to be ended to stop the comments.
One thing that ought to be clarrified however is the assumption that the CEOs statement is false and YA is no good because they have acted to minimize their losses.
These commentors seem to forget how open market trading works when it applies to someone other then themselves.
Yes YA has recovered some of their investment back, through fees, penalties, interest, dividends and the sale of stock on the open market. This is smart business pratice. Some of the same posters here and elsewhere were advocating the same principles when the pps was declining. They actively posted to others that they should by the lower priced stock to therefore lower their initial cost basis by averaging down. They also suggested others should buy the stock low and sell it high in order to recover some of their investment losses.
But when YA follows these same practices, according to these same posters, they are up to no good. The system and methods apply to all investors in a security, whether they bought 100 shares of a stock or millions of shares. Of course the one with millions of shares has more control over the pps fluctuations then the one with 100 shares, but thats the same with any security.
Then they say that YA recovered some of their investment so Neomedia should not still owe them the full amount of the loans. They forget that when they get a loan from a bank and the bank charges them interest, the interest payment does not lower the principal amount of the loan. When they send in a late payment and are charged a penalty, that penalty amount isnt subtracted from the principal loan amount. If the bank charges a fee to set the new account for the loan, that fee isnt deducted from the principal loan amont. In all the above the bank(lender) recovered some of their investment but the boworrer still owes the entire principal amount.
As to YA selling some of the preferred stock thats a no brainer. As is the case with any shareholder, if they can sell the stock for more then they bought it for, its totally legitimate. When the small investor does the same thing and earns a profit, do they owe the profit back to the company, or should the profit be subtracted from any loan they have made to the company? Of course not. Thats their money for taking the risk in the first place.
These people seem to forget that YA bought stock from Neomedia in 2006 called preferred stock, and they are entitled to sell that stock for a profit any time they wish, and especially after three years of owning it.
To suggest that YA is no good or that YA and Neomedia management are working against the shareholders is ridicules at best. Neomedias doing what it eeds to do to keep the lights on until the technology can start producing eal revenue, and YA is doing what it needs to do to protect and recover as much of that 50 million investment as it can. Both common business practices throughout the industries.
To brewskih: If Neom management would take the time to communicate financials, then perhaps shareholders wouldn’t have to take these measures to be heard. We are 18 days into Q1:2010, yet Neom management has still not provided a forum (conference call) to discuss Q3:2009 results and future direction….so, maybe you would understand where we are coming from since the most recent PR’s and 8k filing point to destruction any shareholder that is not Yorkshire Advisor’s affiliated. We are taking these measures to get our CEO to speak up…how can we make solid investing decisions when shareholders can’t even be heard? WE OWN THE COMPANY, NOT MANAGEMENT!!! We want simple answers to simple questions….that’s all. Based on those answers, we will know whether this company is positioning itself and shareholders for success or positioning itself for YA success.
All these posts CLEARLY show how wrong that 8K was. IMO, this is clearly going legal. Myself, as well as others.. are extremely upset.
I wonder why brewskih is so protective of YA?
So much B.S. manipulation from NEOM/YA management. They use you as a pawn. Nobody can be trusted. We don’t know if the cancer was even real or to deflect negative comments. The only thing that will setlle this horrible situation is YA coming clean or shareholder demands.
I have little respect for Iain McCready right now. He seems to be YAs puppet - spineless - no respect for him and YA (sorry to say). What does a man have if he lacks respect?? Yes we are all in it for the money. Penny stocks are risky but that does not give management a license to pull a fast one. .001 par value?, 120 days for 52% voting rights (What for??) - And still NO EXPLANATION!! but we can guess why.
I have worked for startups in the past and received peanuts for a salary yet IM Mcready enjoys a good salary and gets bonuses?? IM said that they dont want to hold Annual Shareholders Meetings because it is too expensive yet IM takes bonuses - Give me a break.
You would think that NEOM’s new biz dev guy in NYC would have his contact info posted ASAP in case potential companies based in NYC wanted a presentation or a face to face… god forbid an address and contact info generated new business and allayed our fears!!
Iain,
After you get done reading all of these posts about how irate the shareholders are, ask yourself this:
Do you feel that you have done right by the shareholders?
Have you done everything you can to stop what YA is doing to OUR company?
“The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it”
—Albert Einstein
To Banana nana….
Are you a new investor?
The only financials any public company provides to investors are those which they file with the SEC on a timely basis, every quarter or year end.
As for your comments about a forum(CC) to discuss these items, there is no requirement that the company discuss anything with the shareholders, and certainly no requirement that they hold regular quarterly CC to explain the financials to investors. And with most public small companies there are no such meetings of calls, and the only reason the larger companies hold such calls is so they can address the concerns of the brokers and market makers who move their stock. You probably notice in most those CC the person asking the questions typically is an analyst from one broker firm or another.
Certainly the company does not owe you that, and a tech forum like ths is not the place to seek those answers.
Your investment decisions are based on the information made public, not some statement by the CEO because of disgruntled shareholders. Where did you get the notion, the CEO should come out and discuss the quarterly reports, so you know how to invest or not invest?
As a part owner in the company, you have no say over the daily operations of the company. Its not a private business owned by you where you have full control. Its a public company owned by thouusands, and some of those thousands like YA have far more invested and far more control over the day to day operations, due to their investing and negotiating abilities.
BTW the CEO gave you the companies direction in the statement above, which is more then most CEO’s would of done under the same situation, and as you as an investor must well be aware by now, there is an upcoming meeting, after the proxy is finalized and mailed to shareholders, so what do you expect between now and then?
You an attend that meeting and ask questions to your hearts content, as long as you are not looking for information that is not already made available to all the shareholders.
If one feels harmed by fraud in this Neomedia/Yorkville matter, and believe it is in your own best interest to do so, I would suggest you gather as much documentation as you can and consult and seek the advice of a good corporate attorney. His or her advice will be your best course of action to follow. If you choose to invest in such consultation, don’t waste it. Follow said advice. This cannot be resolved good or bad on message boards.
In addition to Charlies Brown’s advise, I would also advise notifying the SEC. Is it not a material event when the CEO releases a shareholder letter regarding his business strategy? If one were to read through the sec.gov filings on NeoMedia, there is no indication there the CEO ever issued a shareholder letter. I have notified the SEC not only to that issue, but many others, including waiting until January 20 to release an 8-K on the extension of McCready’s employment contract signed on January 1, 2010! Accounting discrepancies and what appears to be premature selling by YA Global.
Would the CEO be so kind as to answer the criticism raised here. Particularly, why it costs $2.5 million plus additional financing to engage in a business strategy of waiting for companies to voluntarily come to NeoMedia. (See Gomo News interview of December 17). Would the CEO answer why he hasn’t requested a flat fee from Microsoft for operation of NeoMedia’s IP since January 2009 (MSFT Tags).
On March 27, 2009, YA and NeoMedia entered into a letter agreement extending the debt due dates to 7-29-10. I contend the reason YA was so generous in extending the debt due dates is that the ongoing patent suit against Scanbuy prevented YA from going for the prize at that time. To keep buyers coming for YA’s converted shares, YA kept investors happy by extending the debt due dates in a simple letter agreement. YA did not seek to gain control of NeoMedia’s Board, did not mandate a reverse split, did not mandate an increase authorized shares. However, with the Scanbuy suit settled, YA is ready to go for the prize, NeoMedia’s patents. See Section 3.2 of the Series D issuance where the Board has been granted the right to value the assets of NeoMedia, in good faith of course. (8-K filed 1-11-10 exhibit 3.2).
The reverse split of 1 for 100 is mandatory, regardless of the pps. Failure to effect a reverse split is an event of default under Section 5.1 of the Series D issuance. See Section 6.25 of the Investment Agreement (reverse split), exhibit 10.1 to the above 8-K. Also, see Section 10.5, authorized shares are to be increased. Once the reverse split is effected, YA will be the only shareholder able to sell shares for pennies. I suspect the reverse split will be on the same day as the shareholder meeting. Watch YA drop its ask 90% or more from the share price immediately after the reverse split is consummated. No one will buy NEOM even at ten cents after the reverse split.
Out of the 30 comments, 99% are critical of the CEO. One notable exception is brewskih who may be a participant in business operations to manipulate the stock price of NeoMedia. Going back to at least 2006, in most instances where there is a Streetstylz post, there is Brewskih too. It is ridiculous for this Brewskih to berate a commentator regarding seeking answers from the CEO in this tech forum. The CEO chose this tech forum to release a shareholder letter! No reason to stop at the shareholder letter, the CEO should respond here too!! The former CEO William Hoffman responded to criticism here. Mr. McCready should respond here to the overwhelming criticism. His lack of response is very telling in my opinion. JMHO, shareholders will see in the future news of an SEC investigation into both NeoMedia and YA Global. Web search: SEC launch investigation of managers and firm YA Global, Yorkville Advisors and Cobalis lawsuit.