CORRESP 11 filename11.txt June 6, 2005 Barbara C. Jacobs Assistant Director United States Securities and Exchange Commission Mail Stop 4-6 Washington, D.C. 20549 RE: NEOMEDIA TECHNOLOGIES, INC. REGISTRATION STATEMENT ON FORM S-4 FILED APRIL 5, 2005 FILE NO. 333-123848 FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 FILE NO. 0-32262 Dear Ms. Jacobs: This letter has been prepared in response to your request for NeoMedia Technologies, Inc. to respond to the staff's comments in the letter dated May 4, 2005 with respect to the Registration Statement on Form S-4 filed April 5, 2005 by NeoMedia Technologies, Inc. FORM S-4 GENERAL COMMENT 1. We note disclosures in your registration statement that Kirkpatrick & Lockhart will pass on the validity of the shares and that you will file an exhibit pursuant to item 601(b)(5) of Regulation S-K. However, it appears you anticipate this transaction will be a tax-free reorganization but have not provided an opinion regarding tax matters pursuant to Item 601(b)(8) of Regulation S-K. Please advise. RESPONSE: We have provided a tax opinion as Exhibit 8.1 to the amended S-4, and revised the disclosure accordingly. United States Securities And Exchange Commission June 6, 2005 Page 2 COMMENT 2. Please revise your discussion of the $100 million Cornell Capital equity line to also describe the general terms and the existence of the Secured Promissory Note. In addition, Exhibit 10.62 indicates that the note is dated March 24, 2005 but your Form 8-K filed April 1, 2005 indicates that the note is dated March 30, 2005. RESPONSE: We have revised the disclosure with respect to the $100 million Cornell Capital equity line and the general terms and existence of the Secured Promissory Note as requested. In the S-4 table of exhibits, exhibits number 10.60, 10.61, 10.62, and 10.63 were incorrectly disclosed as being dated March 24, 2005. The actual date on each of these agreements was March 30, 2005. We have corrected this misprint in the amendment. COMMENT 3. Consider revising to provide a toll-free number that BSD shareholders can call to determine the number of shares on a per share basis. RESPONSE: We have revised the disclosure as requested. We have established a toll-free line which BSD shareholders can call to determine the number of shares to be issued on a per shares basis. PROSPECTUS COVER PAGE COMMENT 4. Update your disclosure to provide the number of shares that would be issued on a per share basis using the volume-weighted average price of your stock for the five days prior to the latest practicable date. RESPONSE: We have revised the disclosure as requested. COMMENT 5. Please revise to disclose on this page to more prominently disclose that the BSD shareholders will not know the number of shares they will receive until the effective date of the merger. Also indicated the date by which BSD shareholders wishing to exercise their dissenters' rights must give notice to you. RESPONSE: We have revised the disclosure as requested. United States Securities And Exchange Commission June 6, 2005 Page 3 RISK FACTORS, PAGE 8 COMMENT 6. We note that since the filing of this Form S-4 your stock has been subject to dramatic price increases. Please revise your subheading "Risks Related to the Merger" and disclosure throughout your document to describe any risks related to volatility of your common stock since April 5, 2005. RESPONSE: We have revised the disclosure as requested. THE MERGER, PAGE 26 DISSENTERS' RIGHTS, PAGE 29 COMMENT 7. Include a more detailed summary of the relevant sections of the Florida Business Corporation Act relating to dissenters' rights. Highlight the date by which dissenters must deliver notice to you that they intend to exercise their rights ad, if applicable, the possibility that such dissenters may not know the exchange rate at the time such notice is submitted. Provide a similar discussion of this notice deadline in the summary section of page 7 under the heading "Dissenters' Rights." RESPONSE: We have revised the disclosure as requested. FORM 10-KSB CONTROLS AND PROCEDURES COMMENT 8. We note that your statement in the Form 10-KSB referenced above, that the principal executive and financial officers have concluded that the company's disclosure controls and procedures were "effective and designed to ensure that material information relating to NeoMedia and its consolidated subsidiaries is accumulated and would be made known to them by others within those entities as appropriate to allow timely decisions regarding required disclosure..." This definition of disclosure controls and procedures appears to be narrower than Rule 13a-15(e). Please revise your Form 10-KSB. RESPONSE: We have revised the disclosure as requested, please refer to Amendment No. 1 of our Form 10-KSB, as filed on May 17, 2005. United States Securities And Exchange Commission June 6, 2005 Page 4 COMMENT 9. We note your statement under changes in internal controls that you do not "believe" there are "significant deficiencies." Please unambiguously advise if there are significant deficiencies or material weaknesses in your internal controls and procedures. Further, your definition of internal controls that includes the terms "...adversely affect its ability to record, process... appears to be narrower than Rule 13a-15(f). Please revise your Form 10-KSB. RESPONSE: We have revised the disclosure as requested, please refer to Amendment No. 1 of our Form 10-KSB, as filed on May 17, 2005. COMMENT 10. We note your statement concerning changes in internal controls. In this regard it does not appear that your disclosure is consistent with the requirements of Item 308(c) of Regulation S-B and Rule 13a-15(d). Please revise your Form 10-KSB to indicate if during the quarter ended December 31, 2004 there was "any change" that materially affected or was reasonably likely to materially effect, your internal controls over financial reporting. Please also advise if policy reviews, improvement of documentation or general improvement in the state of your internal controls as discussed in this paragraph led to any change during the quarter that materially affected or was reasonably likely to materially affect, your internal controls over financial reporting. RESPONSE: We have revised the disclosure as requested, please refer to Amendment No. 1 of our Form 10-KSB, as filed on May 17, 2005. Very truly yours, /S/ Charles T. Jensen Charles T. Jensen President, Chief Executive Officer & Director