NeoMedia secures USD 8.7 million financing from Yorkville Advisors
YA Global Investments (aka Yorkville Advisors) has committed USD 8.7 million in mobile barcode company NeoMedia.
From the press release
The funds will accelerate implementation of NeoMedia’s aggressive go-to-market plans under new CEO, Iain McCready. These plans will focus on providing mobile barcode scanning infrastructure to carriers, NeoReader scanning software to handset manufacturers and code implementation products to the advertising community. NeoMedia also offers flexible and creative IP licensing models to enable each of these constituents to develop solutions that enrich the mobile barcode ecosystem.
“We have great confidence in Iain and believe he will be a successful steward of our investment by leveraging NeoMedia’s expertise and technology to bring barcode scanning technology into the mainstream. Iain understands the importance of interoperability and standardization in enabling a global ecosystem. More importantly, he understands the path to revenue realization is predicated on disciplined product strategy and operational precision,” stated Jerry Eicke, partner at Yorkville Advisors.
“Obviously, we are pleased by Yorkville’s continued investment in our business. They have been supportive partners in NeoMedia’s efforts to establish a business system the world can embrace. The time is now for NeoMedia to leverage our strong intellectual property, technology solutions and industry expertise to mobilize this mobile barcode ecosystem,” stated Iain McCready, CEO of NeoMedia. “It’s taken a lot of time and effort to get the vision and relationships in place. Now we are well positioned to execute our product roadmap and provide best-in-class experiences for our customers, partners and consumers.”
“By providing access to NeoMedia’s IP and championing interoperability, global adoption of mobile barcode scanning can be achieved. Our funding provides NeoMedia with the support needed to develop next generation products and enable global support of its IP licensing efforts,” added Jerry Eicke, partner at Yorkville Advisors.
What we think?
This is great news for NeoMedia. It will accelerate growth and enable NeoMedia to cement its position in the mobile barcode market. Today, I spent most of the day scanning codes using the Nokia reader on the N95 and NeoReader on the iPhone. I will publish the results tomorrow –but my findings today have made me consider the barcode market very carefully.
More carefully than ever before because the interest in the mobile barcode space and the simplicity of what I could do was … well look/ don’t want to kill my report – so more tomorrow.
I am convinced that mobile barcodes are a fruit that with the right care will blossom year after year. The warfare with the standards market, proprietary issues and everything else only enhance my belief that something huge is about to happen.
Who will be the leader in the mobile barcode space? Well I don’t know. But I do know that standardisation is essential. Only being able to read one type of code is no good for anyone. I really liked Iain McCready when I spoke to him on the phone and I think he has the right attitude to something huge with this additional money.
But I am not saying that it is going to be easy. The foundations are laid and now the right strings need to be pulled to make real music in the mobile advertising and marketing space.
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One Response to “NeoMedia secures USD 8.7 million financing from Yorkville Advisors”
“”"”This is great news for NeoMedia. It will accelerate growth and enable NeoMedia to cement its position in the mobile barcode market”"”
The 8-K was filed with the SEC later this afternoon, and contrary to the statement above, this is going to further hinder Neomedia.
The reasons are obvious after reading the filing. First of all this was not a lump sum 8.7 million loan. It will be paid in Quarterly installments provided certain conditions are met. So it is just more of the same funding that has been occurring for the past year and a half.
But, one condition was Neomedia had to submit a budget, showing this loan would fund their operations until Sept 2009, with a provision that a new budget needs to be submitted soon that extends this money to last until the end of 2009. With Neomedias burn rate, that is going to be very difficult to do, and will require some more cuts, they said previously were not possible. And what about that new sales staff they were going to hire.
And the conditions are they can not stray from this budget plan, without the approval of YA. Now YA even controls the internal operations of the company.
Then there are the costs for this loan, which will make it even more difficult. The fees total something around $900,000.00, and these fees come directly out of the loans as up front structuring and monitoring fees. So in reality Neomedia isn’t going to eventually get the 8.7 million, they get that minus the $900,000.00. And I forgot to mention the 14 percent interest on top of those fees, which when added together is about 30 percent of the loans.
There are a lot more details for those interested in them at the SEC website.
http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001144204-08-043681
Comment made on August 5th, 2008 at 1:13 amLeave a Comment