-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GQfB/h6yJql2/5fgU+gfU9EzPPpUDN4tMwBXJB81/ecSuZah2SbAf7if+SGcgvOp g9UnIWo7fwdXu+SNh4gfzA== /in/edgar/work/20000809/0001021408-00-002421/0001021408-00-002421.txt : 20000921 0001021408-00-002421.hdr.sgml : 20000921 ACCESSION NUMBER: 0001021408-00-002421 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOMEDIA TECHNOLOGIES INC CENTRAL INDEX KEY: 0001022701 STANDARD INDUSTRIAL CLASSIFICATION: [7373 ] IRS NUMBER: 363680347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-21743 FILM NUMBER: 689056 BUSINESS ADDRESS: STREET 1: 2201 SECOND ST STE 600 STREET 2: STE 600 CITY: FORT MYERS STATE: FL ZIP: 33901 BUSINESS PHONE: 6303554404 MAIL ADDRESS: STREET 1: 2201 SECOND STREET STREET 2: SUITE 600 CITY: FORT MYERS STATE: FL ZIP: 33901 FORMER COMPANY: FORMER CONFORMED NAME: DEVSYS INC DATE OF NAME CHANGE: 19960911 10QSB 1 0001.txt FORM 10-QSB U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10 - QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2000 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-21743 NEOMEDIA TECHNOLOGIES, INC. (Exact Name of Small Business Issuer as Specified In Its Charter) Delaware 36-3680347 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 2201 Second Street, Suite 600, Fort Myers, Florida 33901 (Address of Principal Executive Offices) (Zip Code) Issuer's Telephone Number (Including Area Code) 941-337-3434 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- As of July 20, 2000, there were outstanding 14,413,584 shares of the issuer's Common Stock. PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NeoMedia Technologies, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
June 30, December 31, 2000 1999 -------- -------- (Unaudited) (Audited) ASSETS (Dollars in thousands except share data) Current assets: Cash and cash equivalents, including restricted amounts of $944 in 2000 and $944 in 1999.................................................................. $ 5,800 $ 3,404 Short-term investments............................................................. 156 150 Trade accounts receivable, net of allowance for doubtful accounts of $469 in 2000 and $888 in 1999.................................................................. 7,542 3,419 Costs and Estimated earnings in excess of billings on uncompleted contracts........ 130 --- Inventories........................................................................ 72 57 Prepaid expenses and other current assets.......................................... 400 264 -------- -------- Total current assets.............................................................. 14,100 7,294 -------- -------- Property and equipment, net.......................................................... 440 545 Intangible assets, net............................................................... 5,854 5,296 Other long-term assets............................................................... 4,575 522 -------- -------- Total assets......................................................................... $ 24,969 $ 13,657 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable................................................................... $ 6,484 $ 4,892 Accrued expenses................................................................... 1,422 720 Accrued patent cost................................................................ --- 1,863 Current portion of long-term debt.................................................. 147 625 Sales taxes payable................................................................ 469 454 Billings in excess of costs and estimated earnings on uncompleted contracts........ 24 131 Deferred revenues.................................................................. 138 265 Other.............................................................................. 11 11 -------- -------- Total current liabilities......................................................... 8,695 8,961 -------- -------- Long-term debt, net of current portion............................................... 609 676 -------- -------- Total liabilities................................................................. 9,304 9,637 -------- -------- Commitments and contingencies Shareholders' equity: Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued or outstanding............................................................. --- --- Common stock, $.01 par value, 50,000,000 shares authorized, 14,413,384 shares issued and outstanding in 2000 and 12,398,389 shares issued in 1999 (12,023,389 outstanding).......................................................... 144 119 Additional paid-in capital......................................................... 52,508 36,367 Accumulated deficit................................................................ (36,987) (32,466) -------- -------- Total shareholders' equity........................................................ 15,665 4,020 -------- -------- Total liabilities and shareholders' equity........................................... $ 24,969 $ 13,657 ======== ========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements. 2 NeoMedia Technologies, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations
Six months Ended June 30, --------------------- 2000 1999 -------- -------- (Dollars in thousands, except per share data) Net Sales: License fees.............................................................. $ 364 $ 1,972 Resales of software and technology equipment ............................. 12,786 10,889 Service fees.............................................................. 491 2,285 ----------- ---------- Total net sales....................................................... 13,641 15,146 ----------- ---------- Cost of sales: License fees.............................................................. 1 379 Resales of software and technology equipment.............................. 11,079 9,259 Service fees.............................................................. 615 2,170 Amortization of capitalized software costs ............................... 527 385 ----------- ---------- Total cost of sales................................................... 12,222 12,193 ----------- ---------- Gross profit............................................................... 1,419 2,953 Sales and marketing expenses .............................................. 3,004 3,531 General and administrative expenses ....................................... 2,357 2,453 Research and development costs ............................................ 662 503 ----------- ---------- Loss from operations ...................................................... (4,604) (3,534) Interest expense (income), net............................................. (83) 120 ----------- ---------- Loss before income taxes .................................................. (4,521) (3,654) Income tax (benefit)....................................................... --- --- ----------- ---------- Net loss................................................................... $ (4,521) $ (3,654) =========== ========== Net loss per share - basic and diluted..................................... $ (0.34) $ (0.40) =========== ========== Weighted average number of common shares - basic and diluted............... 13,464,757 9,047,615 =========== ==========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements. 3 NeoMedia Technologies, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations
Three months Ended June 30, -------------- 2000 1999 -------- -------- (Dollars in thousands, except per share data) Net Sales: License fees........................................................... $ 132 $ 939 Resales of software and technology equipment........................... 9,111 5,484 Service fees........................................................... 304 919 ----------- ----------- Total net sales.................................................... 9,547 7,342 ----------- ----------- Cost of sales: License fees ......................................................... --- 145 Resales of software and technology equipment........................... 8,027 4,787 Service fees........................................................... 329 921 Amortization of capitalized software costs............................. 312 220 ----------- ----------- Total cost of sales................................................ 8,668 6,073 ----------- ----------- Gross profit............................................................... 879 1,269 Sales and marketing expenses .............................................. 1,740 1,716 General and administrative expenses ....................................... 961 1,110 Research and development costs ............................................ 327 283 ----------- ----------- Loss from operations....................................................... (2,149) (1,840) Interest expense (income), net............................................. (64) 48 ----------- ----------- Loss before income taxes................................................... (2,085) (1,888) Income tax (benefit)....................................................... --- --- ----------- ----------- Net loss................................................................... $ (2,085) $ (1,888) =========== =========== Net loss per share - basic and diluted..................................... $ (0.15) $ (0.19) =========== =========== Weighted average number of common shares - basic and diluted............... 14,169,239 $ 9,951,056 =========== ===========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements. 4 NeoMedia Technologies, Inc. and Subsidiaries Unaudited Consolidated Statements of Cash Flows (In thousands)
Six months ended June 30, ------------------------- 2000 1999 -------- -------- Cash flows from operating activities: Net loss............................................................................... $ (4,521) $ (3,654) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization........................................................ 970 761 Loss on disposal of property and equipment........................................... 8 --- Provision for doubtful accounts ..................................................... 456 151 Fair value of stock based compensation granted for professional services............. --- --- Changes in operating assets and liabilities: Trade accounts receivable......................................................... (5,059) (918) Costs and est. earnings in excess of billings on uncompleted contracts............ (130) --- Other current assets.............................................................. 25 (135) Accounts payable and accrued expenses............................................. 516 (1,394) Billings in excess of costs and est. earnings on uncompleted contracts............ (107) --- Deferred revenue.................................................................. (127) --- Other current liabilities......................................................... --- 246 -------- -------- Net cash used in operating activities............................................. (7,969) (4,943) -------- -------- Cash flows from investing activities: Capitalization of software development and purchased intangible assets................. (1,290) (602) Long Term Assets....................................................................... (194) --- Acquisition of property and equipment.................................................. --- (53) -------- -------- Net cash used in investing activities............................................. (1,484) (655) -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock, net of issuance costs.......................... 9,137 4,655 Proceeds from exercise of stock warrants............................................... 2,876 528 Proceeds from exercise of stock options................................................ 381 --- Borrowings under short term debt....................................................... --- 2,000 Repayments on notes payable and long-term debt......................................... (545) (61) -------- -------- Net cash provided by financing activities......................................... 11,849 7,122 -------- -------- Net increase in cash and cash equivalents.............................................. 2,396 1,524 Cash and cash equivalents, beginning of year........................................... 2,460 450 -------- -------- Cash and cash equivalents, end of period............................................... $ 4,856 $ 1,974 ======== ======== Supplemental cash flow information: Restricted cash balances at June 30.................................................. $ 944 $ 900 Interest paid/(received)............................................................. (83) 85 Non-cash activities: Issuance costs for shares issued through private placements....................... 74 --- Fixed assets purchased with shares of common stock................................ 3,520 --- Prepaid expenses paid with shares of common stock................................. 182 --- Accrued expenses paid with shares of common stock................................. 70 --- Accounts receivable converted to fixed asset...................................... 480 ---
The accompanying notes are an integral part of these consolidated financial statements. 5 NeoMedia Technologies, Inc. and Subsidiaries Unaudited Notes to Condensed Consolidated Financial Statements 1. Basis of Presentation and Nature of Business Operations Basis of Presentation The condensed consolidated financial statements include the financial statements of NeoMedia Technologies, Inc. and its wholly-owned subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. These condensed consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-KSB for the fiscal year ended December 31, 1999. In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the consolidated financial position of NeoMedia as of June 30, 2000 and December 31, 1999, and the results of operations for the three months and six months ended June 30, 2000 and 1999, and cash flows for the three months and six months ended June 30, 2000 and 1999. The results of operations for the six months ended June 30, 2000 are not necessarily indicative of the results which may be expected for the entire fiscal year. All significant intercompany accounts and transactions have been eliminated in preparation of the condensed consolidated financial statements. Certain reclassifications have been made to the first quarter 2000 financial statements to conform to the second quarter 2000 presentation. Nature of Business Operations Since inception, NeoMedia has been helping customers and partners assimilate new technology without discarding their investment in programs and processes. To help accomplish these objectives, NeoMedia operates as two distinct business units: Application Service Provider (NeoMedia ASP) and Systems Integration Services (NeoMedia SI). NeoMedia ASP provides systems and services that link print and print on products to web-based information. NeoMedia SI provides computer technology equipment and systems integration services to customers. NeoMedia ASP ------------ NeoMedia ASP was launched to commercialize NeoMedia's patented technology for seamlessly linking printed material to the internet. This technology has been developed over the past four years. Management believes this technology has the potential to provide the industry standard for linking the worlds of print and electronic media. The commercialization of products using this technology was begun during 1999. NeoMedia SI ------------ NeoMedia SI re-markets equipment and software products from third-parties, renders system integration services, provides proprietary software for document management and production systems, migrates programs and databases from closed system to open system platforms, and adds customized applications to an existing system platform. This business unit is establishing itself in the technology industry by working closely with customers and business partners in integrating new technologies while leveraging previous system infrastructure investments. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Through the six months ended June 30, 2000, a substantial part of NeoMedia's revenue was derived from resales of software and technology equipment. NeoMedia couples its proprietary software products with independent vendor products it resells, enabling it to provide a complete "turn-key" service for its customers. Currently, NeoMedia's revenue consists of (i) software license fees, (ii) resales of software and technology equipment from independent vendors and (iii) service fees, including consulting and post contract software support. During the first two quarters of 2000, the Company's focus continued to shift from Systems Integration and Migration products toward its Applications Service Provider (ASP) business. NeoMedia's strategy is to become the world's leading provider of systems and services that link print and print on products to web based information. The Company discontinued its Y2K product line during the fourth quarter of 1999. NeoMedia's quarterly operating results have been subject to variation and will continue to be subject to variation, depending upon factors, such as the mix of business among NeoMedia's services and products, the cost of material, labor and technology, particularly in connection with the delivery of business services, the costs associated with initiating new contracts, the economic condition of NeoMedia's target markets, and the cost of acquiring and integrating new businesses. Results of operations for the six months ended June 30, 2000 as compared to the six months ended June 30, 1999 Net sales. Total net sales for the six months ended June 30, 2000 were $13.6 million, which represented a $1.5 million, or 10%, decrease from $15.1 million for the six months ended June 30, 1999. This decrease primarily resulted from discontinuation of the Company's Y2K product line. License fees. License fees for the six months ended June 30, 2000 were $0.4 million compared to $2.0 million for the six months ended June 30, 1999, a decrease of $1.6 million or 80%. This decrease resulted primarily from discontinuation of the Company's Y2K product line as well as a sale of a NeoLink software license in 1999. In April 2000, this NeoLink software license was repurchased by NeoMedia as part of the acquisition of the Daystar Services, L.L.C. assets. There were insignificant costs related to license sales during 2000. Cost of sales as a percentage of related sales was 19.2% during 1999. This decrease in the cost of sales as a percentage of related sales was primarily due to the sale in 1999 of Y2K licenses on which the Company paid royalties. Resales of software and technology equipment. Resales of software and technology equipment increased by $1.9 million, or 17%, to $12.8 million for the six months ended June 30, 2000, as compared to $10.9 million for the six months ended June 30, 1999. This increase primarily resulted from greater sales of Sun Microsystems hardware in 2000 as customers chose the Sun platform for the implementation of their E-business applications. Cost of sales as a percentage of related sales was 86.6% during 2000, compared to 85.0% during 1999. Service fees. NeoMedia's service fees decreased by $1.8 million or 78%, to $0.5 million for the six months ended June 30, 2000, compared to $2.3 million for the six months ended June 30, 1999. This decrease was primarily due to the discontinuation of the Company's Y2K services. Cost of service fees as a percentage of related sales increased to 125% during 2000 from 95.0% during 1999 primarily due to the fixed nature of consulting costs coupled with an overall decline in service fee revenue. Sales and marketing. A portion of the compensation to the sales and marketing staff constitutes salary and is fixed in nature and the remainder of this compensation, which is paid as a commission, is directly related to sales volume. Sales and marketing expenses were $3.0 million for the six months ended June 30, 2000, compared to $3.5 million for the six months ended June 30, 1999, a decrease of $0.5 million or 14%. This decrease primarily resulted from an overall reduction in the sales staff during the second half of 1999 due to the discontinuation of the Company's Y2K business. 7 General and administrative. General and administrative expenses decreased by $0.1 million, or 4%, to $2.4 million for the six months ended June 30, 2000, compared to $2.5 million for the six months ended June 30, 1999. Research and development. During the six months ended June 30, 2000, NeoMedia charged to expense $0.7 million of research and development costs, an increase of $0.2 million or 40% compared to $0.5 million charged to expense for the six months ended June 30, 1999. This increase was due to increased resources directed toward the development of the ASP business. Interest expense (income), net. Interest expense consists primarily of interest paid to creditors as part of financed purchases, capitalized leases, notes payable and NeoMedia's asset-based collateralized line of credit net of interest earned on cash equivalent investments. Interest expense decreased by $203,000, or 169%, to an income of $(83,000) for the six months ended June 30, 2000 from $120,000 expense for the six months ended June 30, 1999. This was due to reduced interest expense resulting from the repayment of notes in the first quarter of 2000, as well as interest income from higher cash balances in 2000. Net Loss. The net loss for the six months ended June 30, 2000 was $4.5 million, which represented a $0.8 million, or 22% increase from a $3.7 million loss for the six months ended June 30, 1999. The increase in net loss primarily resulted from an increased investment by NeoMedia in the ASP business offset by increased profit in the systems integration business as a result of discontinuation of the unprofitable Y2K business. Results of operations for the three months ended June 30, 2000 as compared to the three months ended June 30, 1999 Net sales. Total net sales for the three months ended June 30, 2000 were $9.5 million, which represented a $2.2 million, or 30%, increase from $7.3 million for the three months ended June 30, 1999. This increase primarily resulted from an increase in technology equipment resales offset by a decrease in licenses and services. License fees. License fees for the three months ended June 30, 2000 were $0.1million compared to $0.9 million for the three months ended June 30, 1999, a decrease of $0.8 million or 89%. This decrease resulted primarily from the discontinuation of the Company's Y2K product line as well as a sale of a NeoLink software license in 1999. In April 2000, this NeoLink software license was repurchased by NeoMedia as part of the acquisition of the Daystar Services, L.L.C. assets. There were insignificant costs related to license sales during 2000. Cost of sales as a percentage of related sales was 15.4% during 1999. This decrease in the cost of sales as a percentage of related sales was primarily due to the sale in 1999 of Y2K licenses on which the Company paid royalties. Resales of software and technology equipment. Resales of software and technology equipment increased by $3.6 million, or 65%, to $9.1 million for the three months ended June 30, 2000, as compared to $5.5 million for the three months ended June 30, 1999. This increase primarily resulted from greater sales of Sun Microsystems hardware in 2000 as customers expanded eBusiness activities. Cost of sales as a percentage of related sales was 88% during 2000, compared to 87.3% during 1999. Service fees. NeoMedia's service fees decreased by $0.6 million or 67%, to $0.3 million for the three months ended June 30, 2000, compared to $0.9 million for the three months ended June 30, 1999. This decrease was primarily due to the discontinuation of the Company's Y2K services. Cost of service fees as a percentage of related sales increased to 108% during 2000 from 100.2% during 1999 primarily due to the fixed nature of consulting costs coupled with an overall decline in service fee revenue. Sales and marketing. A portion of the compensation to the sales and marketing staff constitutes salary and is fixed in nature and the remainder of this compensation, which is paid as a commission, is directly related to sales volume. Sales and marketing expenses remained at $1.7 million for the three months ended June 30, 2000 and the three months ended June 30, 1999. 8 General and administrative. General and administrative expenses decreased by $0.1 million, or 9%, to $1.0 million for the three months ended June 30, 2000, compared to $1.1 million for the three months ended June 30, 1999. Research and development. During the three months ended June 30, 2000, NeoMedia charged to expense $0.3 million of research and development costs which remained the same for the three months ended June 30, 1999. Interest expense (income), net. Interest expense consists primarily of interest paid to creditors as part of financed purchases, capitalized leases, notes payable and NeoMedia's asset-based collateralized line of credit net of interest earned on cash equivalent investments. Interest expense decreased by $112,000, or 233 %, to an income of $(64,000) for the three months ended June 30, 2000 from $48,000 for the three months ended June 30, 1999 This was due to reduced interest expense resulting from the repayment of notes in the first quarter of 2000, as well as interest income from higher cash balances in the second quarter of 2000. Net Loss. The net loss for the quarter ended June 30, 2000 was $2.1 million, which represented a $0.2 million, or 10.5% increase from a $1.9 million loss for the three months ended June 30, 1999. The increase in net loss primarily resulted from lower license revenue in the ASP business offset by increased profit in the systems integration business as a result of discontinuation of the Y2K business. Liquidity and Capital Resources During the first quarter of 2000, the Company successfully obtained approximately $9.2 million of equity financing and $3.0 million from exercises of warrants and employee stock options. The Company also received a commitment from an unrelated third party to invest up to $7.5 million in the Company through the purchase of unissued shares of common stock at a price the lower of $7.50 per share or a 35% discount to the five-day average trading price immediately prior to the receipt of the signed subscription agreement. In connection with this committment, 125,000 warrants at an exercise price of $7.50 and 125,000 warrants at an exercise price of $15.00 will be issued upon completion of the transaction. Management believes that this additional financing together with revenue from operations, will be sufficient to sustain operations for the remainder of 2000. Net cash used in operating activities for the six months ended June 30, 2000 and 1999, was $8.0 million and $4.9 million, respectively. An increase of $1.9 million was attributable to a non-recurring payment for a patent during the second quarter of 2000. During 2000 cash from trade accounts receivable, inclusive of costs in excess of billings, decreased $5.2 million due to increased sales in the second quarter, while accounts payable, accrued expenses and deferred revenue increased $282,000. During 1999, trade accounts receivable increased $918,000, while accounts payable and accrued expenses and other current liabilities decreased $1.1 million. NeoMedia's net cash flow used in investing activities for the six months ended June 30, 2000 and 1999, was $1,408,000 and $655,000, respectively.The increase was primarily due to cash used in developing the ASP business. Net cash provided by financing activities for the six months ended June 30, 2000 and 1999, was $11.8 million and $7.1 million, respectively. The increase was primarily due to $12.2 million raised during the first quarter of 2000 through the issuance of common stock, as well as the exercise of warrants and stock options. The Company has entered into a migration contract (specifically Year 2000 remediation) with a Colombian customer related to the remediation of certain of the customer's computer systems to be Year 2000 compliant. The total contract is approximately $780,000, of which approximately $761,000 has been recognized as revenue by the Company as of June 9 30, 2000. As an element to the contract, the Company has guaranteed its work product and resulting Year 2000 compliance of the customer. To this end, during 1999 the Company established bank guarantees in the form of certificates of deposit totaling approximately $150,000 in favor of the customer. The Company has satisfied this guarantee and is in the process of releasing the bank guarantee. The Company believes that it has the ability and intent to complete such remediation in a satisfactory manner and is accounting for this project on a percentage of completion basis. Safe Harbor Provision of the Private Securities Litigation Act of 1995 NeoMedia operates in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. The market for software products is generally characterized by rapidly changing technology, frequent new product introductions and changes in customer requirements which can render existing products obsolete or unmarketable. The statements contained in Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations) that are not historical facts may be forward-looking statements (as such term is defined in the rules promulgated pursuant to the Securities Exchange Act of 1934) that are subject to a variety of risks and uncertainties more fully described in NeoMedia's filings with the Securities and Exchange Commission including, without limitation, those described under "Risk Factors" in NeoMedia's Form S-3/A Registration Statement , effective May 2, 2000. The forward-looking statements are based on the beliefs of the management of NeoMedia, as well as assumptions made by, and information currently available to, NeoMedia's management. Accordingly, these statements are subject to significant risks, uncertainties and contingencies which could cause NeoMedia's actual growth, results, performance and business prospects and opportunities in 2000 and beyond to differ materially from those expressed in, or implied by, any such forward-looking statements. Wherever possible, words such as "anticipate," "plan," "expect," "believe," "estimate," and similar expressions have been used to identify these forward-looking statements, but are not the exclusive means of identifying such statements. These risks, uncertainties and contingencies include, but are not limited to, NeoMedia's limited operating history on which expectations regarding its future performance can be based, competition from, among others, high technology companies that have greater financial, technical and marketing resources and distribution capabilities than NeoMedia, the availability of sufficient capital, NeoMedia's ability to identify the right product mix, NeoMedia's ability to operate effectively in geographical areas in which it has no prior experience, the maturation and success of NeoMedia's strategy to develop, market and sell its products and services, risks inherent in conducting international business, risks associated with selling proprietary licenses and conducting a consulting services business, changes in NeoMedia's product and service mix and product and service pricing, the effectiveness of NeoMedia's efforts to control operating expenses, general economic and business conditions affecting NeoMedia and its customers in the United States and other countries in which NeoMedia sells and anticipates to sell its products and services, and NeoMedia's ability to: (i) obtain additional financing on terms acceptable to the Company, or at all, to allow the Company to continue its operations as currently proposed; (ii) develop, market and sell existing and acquired products for its patented technology; (iii) adjust to changes in technology, customer preferences, enhanced competition and new competitors in the print-to-internet technology market; (iv) protect its proprietary patent rights from infringement or misappropriation; (v) maintain or enhance its relationships with business partners and vendors; and (vi) attract and retain key employees. There can be no assurance that NeoMedia will be able to identify, develop, market, sell or support new products or enhancements successfully, that any such new products or enhancements will gain market acceptance, or that NeoMedia will be able to respond effectively to technological changes. There can be no assurance that NeoMedia will not encounter technical or other difficulties that could delay introduction of new products in the future. If NeoMedia is unable to introduce new products or enhancements and respond to industry changes on a timely basis, its business could be materially adversely affected. NeoMedia is not obligated to update or revise these forward-looking statements to reflect new events or circumstances. 10 PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (None) (b) Reports on Form 8-K (None) 11 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NEOMEDIA TECHNOLOGIES, INC. --------------------------- Registrant Date July 28, 2000 By: /s/ Charles W. Fritz ------------- -------------------------------------------- President, Chief Executive Officer, Chairman of the Board and Director Date July 28, 2000 By: /s/ Charles T. Jensen ------------- -------------------------------------------- Charles T. Jensen, Vice President, Chief Financial Officer, Treasurer and Director 12 EXHIBIT INDEX ------------- Sequential Exhibit Page Number Number Document - ----------- ------ -------- 12 27.1 Article 5 Financial Data Schedule for June 30, 2000 13 EX-27.1 2 0002.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JUN-30-2000 5,800 0 7,542 456 72 14,100 1,416 (976) 24,969 8,695 0 0 0 52,652 (36,987) 24,969 9,547 9,547 8,668 8,668 3,028 (2,149) (64) (2,085) 0 (2,085) 0 0 0 (2,085) (0.15) (0.15)
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