-----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, P05+t3r7SV++Q0jJ8aH8oLzYRUkmP5ozs7sHdUK11r9LA/9XuAr/6gMlCvtBEBUb 2mlMOhumuYFVzPPjucXX6Q== 0001144204-06-018906.txt : 20060509 0001144204-06-018906.hdr.sgml : 20060509 20060508192137 ACCESSION NUMBER: 0001144204-06-018906 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060223 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060509 DATE AS OF CHANGE: 20060508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOMEDIA TECHNOLOGIES INC CENTRAL INDEX KEY: 0001022701 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 363680347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21743 FILM NUMBER: 06818278 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 8-K/A 1 v042335_8ka.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): February 23, 2006 NEOMEDIA TECHNOLOGIES, INC. --------------------------- (Exact Name of Registrant as Specified in its Charter)
Delaware 0-21743 36-3680347 - ---------------------------- ---------------------------- --------------------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.) Incorporation) 2201 Second Street, Suite 600, Fort 33901 - ------------------------------------ ---------- Myers, Florida (Zip Code) (Address of Principal Executive Offices)
(239) - 337-3434 -------------------------------- (Registrant's Telephone Number, including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS Completion of Acquisition of Gavitec AG. On February 17, 2006, NeoMedia and Gavitec AG ("Gavitec") of Wurselen, Germany (www.gavitec.com) signed a definitive sale and purchase agreement, subject to closing conditions, under which NeoMedia acquired all of the outstanding shares of Gavitec in exchange for $1,800,000 cash and $5,400,000 in shares of NeoMedia common stock. The $5,400,000 stock portion of the purchase price is represented by 13,660,511 shares of NeoMedia common stock, calculated by dividing $5,400,000 by the volume-weighted average closing price of NeoMedia common stock for the ten days up to and including February 16, 2006. On February 23, 2006, NeoMedia and Gavitec completed the closing requirements and the acquisition became effective. Gavitec was founded in 1997 as a specialized provider and manufacturer of products and solutions for mobile marketing and mobile information technology. As a technology leader in code-reading systems and software for mobile applications, Gavitec offers its clients standardized or individual solutions in the areas of mobile marketing, mobile ticketing, mobile couponing, and mobile payment systems. This Form 8-K/A is being filed as Amendment No. 1 to NeoMedia's Form 8-K filed with the SEC on February 24, 2006, in order to provide the financial statements required by Items 7(a) and (b) of Form 8-K. 2 ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS (a) Financial Statements of Acquired Businesses - Gavitec AG Report of Independent Auditors Balance sheets as of December 31, 2005 and 2004 Statements of operations for the years ended December 31, 2005 and 2004 Statements of stockholders' equity (deficit) for the years ended December 31, 2005 and 2004 Statements of cash flows for the years ended December 31, 2005 and 2004 Notes to financial statements (b) Pro Forma Financial Information Notes to pro forma combined financial statements Pro forma combined balance sheet as of December 31, 2005 (unaudited) Pro forma combined statement of operations for the twelve months ended December 31, 2005 (unaudited) (c) Exhibits 23.1 - Consent of Ernst & Young AG, Independent Auditors of Gavitec AG 3 (a) Financial Statements of Acquired Business - Gavitec AG. Report of Independent Auditors The Supervisory Board and Shareholders of Gavitec AG We have audited the accompanying balance sheets of Gavitec AG as of December 31, 2005 and 2004, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gavitec AG at December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming that Gavitec AG will continue as a going concern. As more fully described in Note 1, the Company has incurred recurring operating losses and has working capital and net capital deficiencies. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Mannheim, April 5, 2006 /s/ Ernst & Young AG Wirtschaftsprufungsgesellschaft Julie Teigland Thorsten Reiter 4 Gavitec AG Balance Sheets
December 31 --------------------------------- 2005 2004 ASSETS Current assets Cash and cash equivalents (euro) 80,434 (euro) 123,213 Trade receivables, net of doubtful accounts (euro) 73,292 in 2005 and (euro) 69,250 in 2004 145,150 95,548 Inventory 154,035 341,873 Prepaid expenses, current 8,255 3,287 Other assets, current 45,703 51,856 ---------------- --------------- Total current assets 433,577 615,777 ---------------- --------------- Non-current assets Property and equipment, net 13,963 25,203 Intangible assets, net 2,926 3,375 ---------------- --------------- Total non-current assets 16,889 28,578 ---------------- --------------- Total ASSETS (euro) 450,466 (euro) 644,355 ================ =============== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Trade payables (euro) 134,703 (euro) 43,803 Liabilities to banks 46 0 Accrued liabilities 42,600 246,900 Deferred revenue 108,966 0 Other current liabilities 197,230 15,584 ---------------- --------------- Total current liabilities 483,545 306,287 ---------------- --------------- Stockholders' equity (deficit) Common stock, shares with a nominal value (euro) 1 each, 222,000 and 146,450 shares issued and outstanding as of December 31, 2005 and 2004, respectively 222,000 146,450 Additional paid-in capital 996,119 529,300 Accumulated deficit -1,251,198 -337,682 ---------------- --------------- Total stockholders' equity (deficit) -33,079 338,068 ---------------- --------------- Total LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) (euro) 450,466 (euro) 644,355 ================ ===============
The accompanying notes are an integral part of these financial statements. 5 Gavitec AG Statements of Operations Year ended December 31 ---------------------------------- 2005 2004 ------------- ------------- Net sales (euro) 624,051 (euro) 733,408 Cost of sales 583,710 469,411 -------------- -------------- Gross margin 40,341 263,997 Research and development costs 407,487 311,028 Sales and marketing expenses 468,407 253,399 General and administrative expenses 316,453 415,589 -------------- -------------- Total operating expenses 1,192,347 980,016 -------------- -------------- Results of operations -1,152,006 -716,019 Other income (See Note 8) 238,584 208,252 Interest income 875 26,428 Interest expenses 969 962 -------------- -------------- Net loss before taxes -913,516 -482,301 Provision for income taxes 0 0 -------------- -------------- Net loss (euro)-913,516 (euro)-482,301 ============== ============== The accompanying notes are an integral part of these financial statements. 6 Gavitec AG Statements of Stockholder's Equity (Deficit)
Accumulated Common Stock Additional Earnings Shares Amount Paid-in-Capita (Deficit) Total -------------- -------------- ---------------- ---------------- ---------------- Balance at January 1, 2004 146,450 (euro) 146,450 (euro) 529,300 (euro) 1,744,619 (euro) 2,420,369 -------------- -------------- -------------- ---------------- ---------------- Dividends declared and paid -- -- -- -1,600,000 -1,600,000 Net loss -- -- -- -482,301 -482,301 ---------------- Comprehensive loss -482,301 - ------------------------------------------------------------------------------------------------------------------------ Balance at December 31, 2004 146,450 (euro) 146,450 (euro) 529,300 (euro) -337,682 (euro) 338,068 Net loss -- -- -- -913,516 -913,516 ---------------- Comprehensive loss -913,516 Capital increase by cash subscription, July 2005 net of capital procurement costs of (euro) 57,631 75,550 75,550 466,819 -- 542,369 - ------------------------------------------------------------------------------------------------------------------------ Balance at December 31, 2005 222,000 (euro) 222,000 (euro) 996,119 (euro) -1,251,198 (euro) -33,079 ========================================================================================================================
The accompanying notes are an integral part of these financial statements. 7 Gavitec AG Statements of Cash Flows
Year ended December 31 ---------------------------------- 2005 2004 -------------- --------------- Operating activities Net loss (euro)-913,516 (euro) -482,301 Adjustments to reconcile net loss to net cash used in operating activities: Net loss from the disposal of property and equipment 3,894 891 Depreciation and amortization 23,808 2,598 Changes in operating assets and liabilities: Trade receivables -49,602 173,994 Inventory 187,838 -260,878 Prepaid expenses -4,968 422 Other assets 6,153 -2,294 Trade payables 90,900 -316,480 Accrued liabilities -204,300 -255,871 Other current liabilities, including deferred revenue 290,613 -519 -------------- --------------- Net cash used in operating activities -569,180 -1,140,438 -------------- --------------- Investing activities Investments in property and equipment -15,204 -21,323 Investments in intangible assets -810 -2,541 -------------- --------------- Net cash used in investing activities -16,014 -23,864 -------------- --------------- Financing activities Cash received from equity contributions, net 542,369 0 Cash received/(paid to) from banks 46 -242 Cash paid for dividends 0 -1,600,000 -------------- --------------- Net cash provided by (used in) financing activities 542,415 -1,600,242 -------------- --------------- Decrease in cash and cash equivalents -42,779 -2,764,544 Cash and cash equivalents at the beginning of the period 123,213 2,887,757 -------------- --------------- Cash and cash equivalents at the end of the period (euro) 80,434 (euro) 123,213 ============== =============== Supplemental disclosures of cash flow information: Interest paid: (euro) 967 (euro) 962
The accompanying notes are an integral part of these financial statements. 8 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- December 31, 2005 (1) Basis of Presentation and Summary of Operations: Basis of Presentation Gavitec AG, a German corporation referred to as "Gavitec" or the "Company," was originally incorporated in Wurselen in 1997 and is a specialized provider and manufacturer of products and solutions for mobile marketing and mobile information technology. Gavitec offers its clients standardized or individual solutions in the areas of mobile marketing, mobile ticketing, mobile couponing, and mobile payment systems.. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of its liabilities in the normal course of business. The Company recorded a net loss of (euro) 913,516 for the year ended December 31, 2005 and a net loss of (euro) 482,301 for the year ended December 31, 2004. The Company has an accumulated deficit of (euro) 1,251,198 and a working capital deficit of (euro) 49,968 as of December 31, 2005. The Company cannot be certain that anticipated revenues from operations will be sufficient to satisfy its ongoing capital requirements. Management's belief is based on the Company's operating plan, which in turn is based on assumptions that may prove to be incorrect. If the Company's financial resources are insufficient the Company may require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity, debt, or another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion, pay its current obligations as they become due or respond to competitive pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations. (2) Summary of Significant Accounting Policies: Estimates The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires the Company's management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, intangibles, valuation allowances for deferred income tax assets, accounts receivable, accruals and other factors. Actual results could differ from those estimates. Cash For the purposes of the balance sheet and statement of cash flows, all highly liquid investments with original maturities of three months or less are considered cash equivalents. 9 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) Revenue Recognition Software and technology equipment revenue is recognized when persuasive evidence of an arrangement exists, the price to the customer is fixed and determinable, delivery of the service has occurred and collectability is reasonably assured. Fees for providing system updates for software products, user documentation and technical support and are recognized over the life of the contract. Other service revenues, including training and consulting, are recognized as the services are performed. In cases where the Company delivers multiple products or services within the same contractual arrangement (a "multiple element arrangement"), the individual deliverables within the contract are separated and recognized upon delivery based upon their fair values relative to the total contract value, to the extent that the fair values are readily determinable and to the extent that the deliverables have stand-alone value to the customer (the "relative fair value method"). In cases where the fair value is not determinable, or the deliverables do not have stand-alone value to the customer, the individual elements are considered to be one unit of accounting and revenue is recognized when all the revenue recognition criteria have been met for the particular contract. Shipping and Handling Costs The Company's contractual agreements stipulate the Company to deliver the goods at the Company's place of business. All other transportation costs and risks are assumed by the buyer. Reimbursements for shipping and handling costs are included in net sales and cost of sales respectively. Allowance for Doubtful Accounts The allowance for doubtful accounts is the Company's estimate of uncollectible accounts receivable. The Company periodically reviews its receivables and assesses an allowance based upon historical collection experience and a review of the current status of the accounts receivables. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. It is at least reasonably possible that the Company's estimate of the allowance for doubtful accounts will change in the near-term. Inventory Inventories are stated at the lower of cost or market. At December 31, 2005 and December 31, 2004 inventory was comprised of raw material, work in progress and finished products. Cost is determined using the first-in, first-out method. Property and Equipment Property and equipment consists primarily of computer hardware and telecommunication equipment having useful lives of 3 years for the computer hardware and 10 years for the telecommunication equipment. The assets are carried at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Repairs and maintenance are charged to expense as incurred. Upon retirement or sale, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. 10 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) Intangible Assets Intangible assets consist of acquired software products. These intangible assets are carried at cost, net of accumulated amortization. Amortization is calculated using the straight-line method over estimated useful life of 3 years. The software products are utilized in revenue producing activities, as well as research and development activities. Impairment of Long-Lived and Intangible Assets The Company has adopted Statement of Financial Accounting Standard ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-lived assets", which requires that long-lived and intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. In the event that facts and circumstances indicate an impairment, the carrying amount of the asset is compared with the asset's fair value to determine whether a write-down to fair value must be recorded. The fair value is calculated based on the estimated sales and market prices of long-lived assets and, in the case of intangible assets, based on discounted cash-flows expected over their estimated useful lives. No impairment charges have been recognized in the years ended December 31, 2005 and December 31, 2004. Income Taxes In accordance with SFAS No. 109, "Accounting for Income Taxes", income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be recognized. Advertising Costs The Company expenses the cost of advertising and promoting as incurred. Advertising expenses incurred for the year ended December 31, 2005 and December 31, 2004 were (euro) 95,987 and (euro) 26,431, respectively and are included in sales and marketing expenses in the statements of operations. Research and Development Expenses Costs associated with the planning and designing phase of software development, including coding and testing activities, and related overhead, necessary to establish technological feasibility of the Company's internally-developed software products, are classified as research and development and expensed as incurred. 11 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) Concentration of Credit Risks The Company's accounts receivable are unsecured and thus the Company is at risk to the extent such amounts become uncollectible. In the years ended December 31, 2005 and December 31, 2004 the Company generated revenue with three customers aggregating approximately 42.7 % and 59.5 % of total revenues, respectively. There are no amounts outstanding from these customers in accounts receivable at December 31, 2005 and a total of (euro) 1,340 outstanding in accounts receivable as of December 31, 2004. Comprehensive Income (Loss) Comprehensive loss amounted to (euro) 913,516 and (euro) 482,301 for the years ended December 31, 2005 and December 31, 2004, respectively. There are currently no differences between net loss and comprehensive loss. Recently Issued Accounting Pronouncements: In May 2005, the Financial Accounting Standards Board ("FASB") issued SFAS No. 154, Accounting Changes and Error Corrections. This new standard replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. Among other changes, SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. SFAS 154 also provides that (1) a change in method of depreciating or amortizing a long-lived nonfinancial asset be accounted for as a change in estimate (prospectively) that was effected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a "restatement." The new standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Early adoption of this standard is permitted for accounting changes and correction of errors made in fiscal years beginning after June 1, 2005. In November 2004, the FASB issued SFAS No. 151, "Inventory Costs", an amendment of Accounting Research Bulletin ("ARB") No. 43, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS 151 requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal", as defined in the statement. In addition, SFAS 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. Companies are required to adopt the provisions of this Statement for fiscal years beginning after June 15, 2005. The adoption of this standard will not have any impact on the Company's results of operations or financial position. 12 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (3) Inventory: Inventory is comprised of the following at December 31:
2005 2004 -------------- -------------- Raw Materials (euro) 51,350 (euro) 45,001 Work in process 10,913 177,287 Finished Goods 91,772 119,585 -------------- -------------- Total (euro) 154,035 (euro) 341,873 ============== ==============
(4) Property and Equipment: Property and equipment consist of the following at December 31:
2005 2004 -------------- -------------- Computer and telecommunication equipment (euro) 120,113 (euro)210,841 Less accumulated depreciation -106,150 -185,638 -------------- ------------- Property and equipment, net (euro) 13,963 (euro) 25,203 ============== =============
Depreciation expense totaled (euro) 22,550 and (euro) 27, 816 for the years ended December 31, 2005 and December 31, 2004, respectively. In 2005 property, plant and equipment of (euro) 105,932 and accumulated depreciation of (euro) 102,038 was retired. The respective loss of (euro) 3,894 was recorded in general and administrative expenses. 13 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (5) Intangible Assets: Intangible assets consist of the following at December 31:
2005 2004 ------------- ------------- Purchased software (euro) 11,891 (euro) 11,082 Less accumulated amortization -8,965 -7,707 ------------- ------------- Intangible assets, net (euro) 2,926 (euro) 3,375 ============= =============
Amortization expense totaled (euro) 1,258 and (euro) 1,410 for the years ended December 31, 2005 and December 31, 2004, respectively. Amortization expense is estimated as follows in future years : 2006 (euro) 1,395 2007 1,395 2008 136 ------------- Total (euro) 2,926 ============= (6) Deferred Revenue The Company has recorded a total of (euro) 108,966 in deferred revenue at December 31, 2005. This revenue relates to post customer support services contractually granted by the Company in connection with multi-element software contracts. The Company will recognize this revenue in the upcoming 12 month period. 14 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (7) Other Current Liabilities Other current liabilities comprised of the following at December 31:
2005 2004 -------------- ------------- Cognex (euro)144,613 (euro) -- Supervisory Board compensation 32,000 -- Social insurance liability 10,333 7,610 Wage tax liability 9,001 7,974 Other 1,283 -- -------------- ------------- Total (euro) 197,230 (euro) 15,584 ============== =============
The liability to Cognex relates to an overpayment received in 2005 from the sale of the Company's industrial products division in 2003 to Cognex. (8) Other Income Other income recorded in 2005 related primarily to a payment of (euro) 200,000 related to additional consideration from the release of held back amounts for potential patent infringement matters relating to the sale of the Company's industrial products division in 2003. There are no further indemnifications provided for these matters and no further amounts to be received by the Company. Other income in 2004 related primarily to a payment from High-Tech Trade GmbH for the fulfillment of contractual obligations in the amount of (euro) 50,000, as well as a payment received of (euro) 100,000 related to additional consideration from the release of held back amounts for potential patent infringement matters in the sale of the industrial products division in 2003. 15 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (9) Income Taxes As a result of the net losses incurred by the Company, no provision for income taxes has been recorded. As of December 31, 2005 and 2004, the Company had accumulated tax net operating loss carry forwards in Germany of approximately of (euro) 1,373,000 and (euro) 530,383, respectively. Under German tax law, these loss carry forwards generally have an indefinite life and may be used to offset the Company's future taxable income. However, the loss carry forward deduction is limited to 60% of the Company's annuals net taxable income. Net operating loss carry forwards are subject to review and possible adjustment by the German taxing authorities. Furthermore, under current German law, certain substantial changes in the Company's ownership may limit the amount of net operating loss carry forwards which could be used to offset future taxable income. Significant components of the Company's deferred tax assets and consist of the following at December 31: 2005 2004 ------------- -------------- Net operating loss carry forwards (NOL) (euro)535,592 (euro) 206,849 Deferred revenue 42,497 -- ------------- -------------- Total deferred tax assets 578,089 206,849 Valuation allowance -578,089 -199,342 ------------- -------------- Net deferred income tax asset (euro) -- (euro) 7,507 ============= ============== Deferred tax liabilities (euro) -- (euro) 7,507 ============= ============== Net deferred tax asset and liabilities (euro) -- (euro) -- ============= ============== Due to the degree of uncertainty related to the ultimate utilization and recoverability of the loss carry forwards and other deferred tax assets, the Company has reserved for the deferred tax assets to the extent it exceeds any tax liabilities. For the years ended December 31, 2005 and 2004, the income tax benefit derived from the net loss reported is computed by applying the statutory German combined tax rate of 39% (considering both corporate tax of 25%, solidarity surcharge of an additional 5.5 % and the German trade tax of approximately 13%) as follows:
2005 2004 --------------- --------------- Benefit at federal statutory rate (euro) -356,271 (euro) -188,097 Permanent Differences (costs of capital) -22,476 -- Changes in valuation allowance 378,747 188,097 --------------- --------------- Provision for income taxes (euro) -- (euro) -- =============== ===============
16 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (10) Equity Common Stock Each of the stockholders of the Company's common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders. Holders of common stock have preemptive rights as provided under German stock corporation law. Common stockholders have no rights to convert their common stock into any other securities. The outstanding common stock is duly authorized and validly issued and fully-paid. In 2005 the company issued 75,550 new shares, with a nominal value of (euro) 1 each for a total capital contribution of (euro) 600,000. In connection with this capital issuance the Company incurred procurement costs of (euro) 57,631 which have been deducted directly from the contribution received. Dividends In 2004 the Company declared and paid a dividend in the amount of (euro) 1,600,000 to its common shareholders. (11) Commitments and Contingencies The Company leases its office facility under an operating lease with an expiration date in September 2008. For the years ended December 31, 2005 and December 31, 2004, Gavitec incurred rent expense of (euro) 29,745 and (euro) 23,220 respectively. In addition, Gavitec leases company cars. The following is a schedule of the future minimum payments under the non-cancelable operating leases in effect as of December 31, 2005: 2006 (euro) 76,035 2007 70,440 2008 47,646 2009 1,220 -------------- Total minimum payments (euro) 195,341 (12) Related Party The Company has a contractual arrangement governing consulting services which were performed by a significant shareholder during the years 2005 and 2004. The total amounts paid and expensed under this arrangement amounted to (euro) 84,113 in 2005 and (euro) 162,604 in 2004. The Company believes the prices for the consulting services were based on current market rates. (13) Litigation The Company is involved in various legal actions arising in the normal course of business as a claimant. While it is not possible to determine with certainty the outcome of these matters, it is the opinion of management that the eventual resolution will not have a material adverse effect on the Company's financial position or operating results. 17 Gavitec AG Notes to Financial Statements - -------------------------------------------------------------------------------- (continued) (14) Subsequent Events The Company was acquired by Neomedia Technologies, Inc. on February 23, 2006 in exchange for a total of USD 7,200,000, of which USD 1,800,00 is a cash payment and the remainder in shares of Neomedia Technologies, Inc. 18 (b) Pro Forma Financial Information Notes to Unaudited Pro Forma Condensed Combined Financial Statements 1. Basis of Presentation Acquisition of Gavitec AG On February 17, 2006, NeoMedia and Gavitec signed a definitive sale and purchase agreement, subject to closing conditions, under which NeoMedia acquired all of the outstanding shares of Gavitec in exchange for $1,800,000 cash and $5,400,000 in shares of NeoMedia common stock. The $5,400,000 stock portion of the purchase price is represented by 13,660,511 shares of NeoMedia common stock, calculated by dividing $5,400,000 by the volume-weighted average closing price of NeoMedia common stock for the ten days up to and including February 16, 2006. On February 23, 2006, NeoMedia and Gavitec completed the closing requirements and the acquisition became effective. In the event that NeoMedia's stock price at the time the consideration shares are saleable is less than $0.389, NeoMedia is obligated to compensate Gavitec shareholders in cash for the difference between the price at the time the shares become saleable and $0.389. Acquisition of 12Snap AG On February 10, 2006, NeoMedia and 12Snap signed a definitive sale and purchase agreement, subject to closing conditions, under which NeoMedia acquired all of the outstanding shares of 12Snap in exchange for $2,500,000 cash and 49,294,581 shares of NeoMedia common stock. On February 28, 2006, NeoMedia and 12Snap completed the closing requirements and the acquisition became effective. Pursuant to the terms of the merger agreement, the number of shares of NeoMedia common stock to be issued as consideration was calculated using a share price of $0.3956. In the event that NeoMedia's stock price at the time the consideration shares are saleable is less than $0.3956, NeoMedia is obligated to compensate 12Snap shareholders in cash for the difference between the price at the time the shares become saleable and $0.3956. Acquisition of Mobot, Inc. On February 17, 2006, NeoMedia Technologies, Inc. ("NeoMedia) acquired all of the outstanding shares of Mobot, Inc. (www.mobot.com) ("Mobot") in exchange for $3,500,000 cash and $6,500,000 in shares of NeoMedia common stock. The $6,500,000 stock portion of the purchase price is represented by 16,931,493 shares of NeoMedia common stock. Pursuant to the terms of the merger agreement, the number of shares of NeoMedia common stock to be issued as stock consideration was calculated using a share price of $0.3839. In the event that NeoMedia's stock price at the time the consideration shares are saleable is less than $0.3839, NeoMedia is obligated to compensate Mobot shareholders in cash for the difference between the price at the time the shares become saleable and $0.3839. In addition to cash and stock, at closing NeoMedia forgave notes payable totaling $1,500,000 due from Mobot. This amount is considered other additional consideration in the purchase price allocation. Audited financials statements for Mobot were included in amendment no. 1 to form 8-K filed with SEC on May 3, 2006. Audited financials statements for 12Snap were included in amendment no. 1 to form 8-K filed with SEC on May 8, 2006. Mobot and 12Snap balance sheets as of December 31, 2005 and statements of operations for the year ended December 31, 2005 are shown for pro forma purposes only. 19 Presentation The unaudited pro forma condensed combined historical statement of operations for the year ended December 31, 2005 gives effect to the acquisitions of Gavitec, 12Snap and Mobot as if they had occurred as of January 1, 2005, combining the historical results of NeoMedia for the year ended December 31, 2005 with the historical results of Gavitec, 12Snap and Mobot for the year ended December 31, 2005. The unaudited pro forma condensed combined balance sheet as of December 31, 2005 gives effect to the acquisitions of Gavitec, 12Snap and Mobot as if they had occurred as of December 31, 2005. The unaudited pro forma combined financial statements included in this filing have been prepared by the managements of NeoMedia, Gavitec, 12Snap, and Mobot without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, the managements of NeoMedia, Gavitec, 12Snap, and Mobot believe that the disclosures are adequate to make the information not misleading. The pro forma adjustments are based on currently available information and upon estimates and assumptions that we believe are reasonable under the circumstances. The unaudited pro forma financial data do not purport to represent what NeoMedia's financial position or results of operations would actually have been if such transactions had occurred on those dates and are not necessarily representative of NeoMedia's financial position or results of operations for any future period. The unaudited pro forma financial statements should be read in conjunction with the separate historical financial statements and footnotes of NeoMedia included in Form 10-KSB for the year ended December 31, 2005, and with the separate historical financial statements and footnotes of Gavitec for the years ended December 31, 2005 and 2004 (included herein), with the separate historical financial statements and footnotes of 12Snap for the years ended December 31, 2005 and 2004 (included in Form 8-K/A filed with the SEC on May 5, 2006), and with the separate historical financial statements and footnotes of Mobot for the years ended December 31, 2005 and 2004 (included in Form 8-K/A filed with the SEC on May 3, 2006). 2. Preliminary Purchase Price Allocation A final determination of the allocation of the purchase price to the assets acquired and liabilities assumed has not been made for Gavitec, 12Snap and Mobot. The allocation reflected in the unaudited pro forma combined financial statements is based on management's best judgment and estimate of the fair values of intangible assets being acquired, and should be considered preliminary and is subject to the completion of a comprehensive independent valuation of the assets acquired and liabilities assumed. The final allocation of purchase price could differ materially from the pro forma allocation included herein. NeoMedia expects to obtain the final independent valuation, currently in process, prior to the filing of the 2nd quarter Form 10 Q in August 2006. Any additional consideration issued pursuant to the stock purchase price protection clause would also change the purchase price allocation. 3. Pro forma Net Loss Per Share The pro forma basic and dilutive net loss per share are based on the weighted average number of shares of pro forma NeoMedia's common stock as if the shares issued to acquire Gavitec, 12Snap and Mobot had been issued at the beginning of the period shown. Dilutive shares are not included in the computation of pro forma dilutive net loss per share as their effect would be anti-dilutive. 20 NeoMedia Technologies, Inc. Unaudited Pro-forma Condensed Combined Balance Sheet December 31, 2005 (In thousands of US Dollars)
Pro Pro Forma Forma (A) (A) (A) (A) Adjust- Consol- ASSETS NeoMedia Mobot Gavitec 12Snap ments idated --------- --------- --------- --------- --------- ---------- Current assets: * * * * (unaudited) (unaudited) Cash and cash equivalents $ 2,291 $ 909 $ 95 $ 1,341 $ (7,800)(G) $ (3,164) Trade accounts receivable, net 341 78 172 2,117 -- 2,708 Inventories, net 423 -- 182 -- -- 605 Investment in marketable securities 104 -- -- 52 -- 156 Prepaid expenses and other current assets 151 8 64 751 -- 974 --------- --------- --------- --------- --------- --------- Total current assets 3,310 995 513 4,261 (7,800) 1,279 Property and equipment, net 236 22 17 224 -- 499 Capitalized patents, net 3,134 -- -- -- -- 3,134 Micro paint repair chemical formulations and proprietary process 1,450 -- -- -- -- 1,450 Customer contracts and relationships -- -- -- -- 800(C) 800 Capitalized software platform -- -- -- -- 15,000(C) 15,000 Other intangible assets 246 20 3 98 2,200(C) 2,568 Goodwill 1,099 -- -- -- 26,854(C) 27,953 Advances to Mobot, Inc. 1,500 -- -- -- (1,500) -- Cash surrender value of life insurance policy 769 -- -- -- -- 769 Other long-term assets 667 -- -- -- (147)(D) 520 --------- --------- --------- --------- --------- --------- Total assets $ 12,411 $ 1,037 $ 533 $ 4,583 $ 35,407 $ 53,971 ========= ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 1,574 $ 344 $ 160 $ 775 $ -- $ 2,853 Accrued expenses 1,844 148 50 2,153 -- 4,195 Amounts payable under settlement agreements 97 -- -- -- -- 97 Taxes payable 80 -- -- -- -- 80 Deferred revenues and other 898 236 362 1,780 -- 3,276 Liabilities in excess of assets of discontinued business unit 676 -- -- -- -- 676 Notes and loans payable 3,015 1,500 -- 4,145 (1,500)(E) 7,160 --------- --------- --------- --------- --------- --------- Total current liabilities 8,184 2,228 572 8,853 (1,500) 18,337 --------- --------- --------- --------- --------- --------- Long-term debt and convertible debentures -- 500 -- -- (500)(F) -- Minority Interest -- -- -- 7 -- 7 Shareholders' deficit: Preferred stock -- -- -- -- -- -- Common stock (B) 4,676 -- 263 5,825 (5,006)(C) 5,758 Additional paid-in capital 106,456 1 1,180 49,675 (20,538)(C) 136,774 Deferred equity financing costs (13,256) -- -- -- -- (13,256) Deferred stock-based compensation (169) -- -- -- -- (169) Accumulated other comprehensive income (loss) (177) -- -- 946 (946)(C) (177) Retained earnings (accumulated deficit) (92,524) (1,692) (1,482) (60,158) 63,332(C) (92,524) Treasury stock (779) -- -- (565) 565 (779) --------- --------- --------- --------- --------- --------- Total shareholders' deficit 4,227 (1,691) (39) (4,277) 37,407 35,627 --------- --------- --------- --------- --------- --------- Total liabilities and shareholders' deficit $ 12,411 $ 1,037 $ 533 $ 4,583 $ 35,407 $ 53,971 * - Derived from audited ========= ========= ========= ========= ========= ========= financial statements
21 Pro-forma Adjustments (A) - All balance sheets are presented as of December 31, 2005. For pro forma presentation purposes, Gavitec and 12Snap balances are converted from Euro to US Dollars at a rate of 0.8444 Euros/US Dollar, which was the exchange rate as of December 31, 2005 . (B) - As of December 31, 2005, NeoMedia's $0.01 par value common stock consists of 1,000,000,000 authorized shares, 475,387,910 historical shares and 583,663,772 pro forma shares issued; and 467,601,717 historical shares and 575,877,579 pro forma shares outstanding (C) - Adjustment for stock and cash issued to acquire Mobot, Gavitec, and 12Snap, assuming acquisitions occurred as of December 31, 2005. Adjustment includes the elimination of $1,082 common stock and $30,318 paid-in capital of the subsidiaries. The purchase price for each acquisition was calculated as follows:
Mobot Gavitec 12Snap Pro forma number of shares of NeoMedia to be treated as purchase price consideration 22,413,793 18,620,690 67,241,379 x NeoMedia closing stock price around December 31, 2005 (measurement date) $0.290 $0.290 $0.290 --------------------------------------- Total stock consideration $6,500,000 $5,400,000 $19,500,000 Plus cash consideration $3,500,000 $1,800,000 $2,500,000 --------------------------------------- Pro forma purchase price $10,000,000 $7,200,000 $22,000,000 =======================================
In accordance with SFAS 141 and EITF 99-12, for the purposes of this unaudited pro forma balance sheet, the fair value of the stock to be issued as purchase price consideration is assumed to be $0.29 per share, which was the average closing price of NeoMedia common stock for the three days up to and including December 31, 2005 (the measurement date). There are no additional options, warrants, or other stock-based consideration expected to be issued as part of the purchase price for either acquisition. Each of the above transactions was completed in the first quarter of 2006. The actual number of shares issued as stock consideration is shown in the following table:
Mobot Gavitec 12Snap Actual Shares Issued as Stock Consideration 16,931,493 13,660,511 49,294,581
22 Based on NeoMedia's stock price around the measurement date of December 31, 2005, and the balance sheets of NeoMedia, Mobot, Gavitec, and 12Snap as of December 31, 2005, the pro forma purchase price for each acquisition would be allocated as follows:
(in thousands of US dollars, except share amounts) ---------------------------------------- Mobot Gavitec 12Snap Purchase Price Consideration Cash $ 3,500 $ 1,800 $ 2,500 Pro forma number of shares of NeoMedia common stock issued 22,413,793 18,620,690 67,241,379 / NeoMedia closing stock price around December 31, 2005 (measurement date) $ 0.29 $ 0.29 $ 0.29 ----------- ----------- ----------- Pro forma fair value of shares issued as purchase price $ 6,500 $ 5,400 $ 19,500 consideration Purchase-related costs 8 26 113 Other purchase consideration 1,500 -- -- ----------- ----------- ----------- Total fair value expected to be treated as purchase price consideration $ 11,508 $ 7,226 $ 22,113 =========== =========== =========== Assets Purchased Cash and cash equivalents $ 909 $ 95 $ 1,341 Investment in marketable securities -- -- 52 Trade accounts receivable, net 78 172 2,117 Inventory 0 182 -- Prepaid expenses and other current assets 8 64 751 Property and equipment, net 22 17 224 Customer contracts and relationships (i)(ii) 400 -- 400 Capitalized software platform (i)(iii) 5,000 5,600 4,400 Other intangible assets (i)(iv) 220 554 1,548 Goodwill (i)(v) 5,599 1,115 20,140 ----------- ----------- ----------- 12,236 7,798 30,973 ----------- ----------- ----------- Liabilities Assumed Accounts payable 344 160 775 Accrued expenses 148 50 2,153 Taxes payable -- -- -- Deferred revenues and other current liabilities 236 362 1,780 Notes payable -- -- 4,145 Long-term debt -- -- 7 ----------- ----------- ----------- 728 572 8,860 ----------- ----------- -----------
(i) - For purposes of these unaudited pro forma financial statements, the excess of fair value of consideration paid over net book value for Mobot, Gavitec, and 12Snap is allocated to the following intangible asset categories: customer contracts and relationships, capitalized software platform, other intangible assets, and goodwill. The allocation is made based on NeoMedia management's judgment and best estimate of the value of each category for each business. As of this filing, NeoMedia has not completed an independent valuation of such intangible assets. NeoMedia is in the process of performing an independent valuation of the intangible assets, and a final allocation of the purchase price of each entity will be made based on the results of such valuation, to be completed no more than one year from closing. It is important to note that the final independent valuation, could vary materially from the pro forma allocation presented above. NeoMedia expects to obtain the final independent valuation, currently in process, prior to the filing of the 2nd quarter Form 10 Q in August 2006. (ii) - Customer contracts and relationships consist of the customers of each business that are under contract, as well as prospects identified for potential future business, the fair value of which is calculated as the discounted after-tax expected earnings from current and identified customers. NeoMedia expects to assign an amortization period of 5 years to this class of assets. (iii) - Capitalized software platforms consist of proprietary software systems acquired. NeoMedia expects to assign an amortization period of 7 years to this class of assets. (iv) - Other intangible assets consist of brand names and other proprietary copyrighted materials. NeoMedia expects to assign an amortization period of 7-10 years to this class of assets. (v) - The remaining excess of purchase price paid over fair value of assets and liabilities assumed is allocated to goodwill, and as such, is not assigned a depreciable life. Goodwill will be tested for impairment as defined by Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. 23 Pro-forma Adjustments (cont'd) (D) - Adjustment to eliminate acquisition-related costs paid by NeoMedia in 2005 that are included in the purchase price allocation (E) - Adjustment to eliminate note payable from Mobot to NeoMedia that was forgiven at closing. (F) - Adjustment to eliminate Mobot convertible debentures that were converted prior to closing. As a result, the above unaudited condensed consolidated pro forma balance sheet is shown assuming the debentures are converted prior to the pro forma closing date. (G) - Negative cash balance is shown for pro forma purposes only. During February 2006, NeoMedia obtained $27 million gross financing in the form of a convertible preferred stock sale, a portion of the proceeds of which were used to acquire Gavitec, Mobot and 12Snap. 24 NeoMedia Technologies, Inc. Unaudited Pro-forma Combined Condensed Statement of Operations For the Year Ended December 31, 2005 (In thousands of US Dollars, except per share data)
Pro Pro Forma Forma (A) (A) (A) (A) Adjust- Consol- NeoMedia Mobot Gavitec 12Snap ments idated ------------- -------- -------- -------- ------------- ------------- NET SALES: * * * * (unaudited) (unaudited) License fees $ 523 -- -- -- -- $ 523 Resale of software and technology equipment and service fees 354 -- -- -- -- 354 Micro paint revenue 1,279 -- -- -- -- 1,279 Technology product and service revenue -- 300 772 7,396 -- 8,468 ------------- -------- -------- -------- ------------- ------------- Total net sales 2,156 300 772 7,396 -- 10,624 ------------- -------- -------- -------- ------------- ------------- COST OF SALES: License fees 453 -- -- -- -- 453 Resale of software and technology equipment and -- -- -- -- service fees 206 -- -- -- -- 206 Micro paint direct cost of revenue 913 -- -- -- -- 913 Technology product and service revenue -- -- 722 -- 2,143(B) 2,865 ------------- -------- -------- -------- ------------- ------------- Total cost of sales 1,572 -- 722 -- 2,143 4,437 ------------- -------- -------- -------- ------------- ------------- GROSS PROFIT 584 300 50 7,396 (2,143) 6,187 Selling, general and administrative expenses 7,561 1,180 972 7,147 492(B) 17,352 Impairment charge 335 -- -- -- -- 335 Research and development costs 934 552 503 1,515 -- 3,504 ------------- -------- -------- -------- ------------- ------------- Income (loss) from operations (8,246) (1,432) (1,425) (1,266) (2,635) (15,004) Loss on extinguishment of debt, net 172 -- -- -- -- 172 Other income (loss) -- -- 296 230 -- 526 Impairment charge on investments (780) -- -- -- -- (780) Interest income (expense), net (293) (42) -- (515) -- (850) ------------- -------- -------- -------- ------------- ------------- Income before provision for income taxes (9,147) (1,474) (1,129) (1,551) (2,635) (15,936) Provision for income taxes -- -- -- -- -- -- ------------- -------- -------- -------- ------------- ------------- Net income (loss) (9,147) (1,474) (1,129) (1,551) (2,635) (15,936) Other comprehensive income (loss): Unrealized loss on marketable securities (146) -- -- -- -- (146) Foreign currency translation adjustment 29 -- -- -- -- 29 ------------- -------- -------- -------- ------------- ------------- Comprehensive income (loss) ($9,264) ($1,474) ($1,129) ($1,551) ($2,635) ($16,053) ============= ======== ======== ======== ============= ============= NET INCOME (LOSS) PER SHARE--BASIC AND DILUTED ($0.02) ($0.03) ============= ============= COMPREHENSIVE INCOME (LOSS) PER SHARE--BASIC AND DILUTED ($0.02) ($0.03) ============= ============= Weighted average number of common shares-basic and diluted 451,857,851 120,306,513(C) 572,164,364 ============= ======== ======== ======== ============= ============= * - Derived from audited financial statements
25 Pro-forma Adjustments - --------------------- (A) - All results shown are for the year ended December 31, 2005. For pro forma presentation purposes, Gavitec and 12Snap results are converted from Euro to US Dollars at a rate of 0.80844 Euro/US Dollar, which was the average exchange rate for the period January 1, 2005 - December 31, 2005. (B) - Adjustment to reflect amortization of acquired intangible assets for the year ended December 31, 2005, as if the acquisitions had occurred on January 1, 2005. It is important to note that the actual allocation and estimated useful lives of intangible assets acquired that will be adopted based on an independent valuation could vary from the estimates presented herein (see note C(i) to the pro forma balance sheet for a discussion on useful lives). Such a difference could cause a material difference between the actual periodic amortization charges that NeoMedia will record in its statement of operations, and the amortization amount shown above.Estimated useful lives are based on management's best estimate of the purchase price allocation, and will not be finalized until the results of an independent valuation are received. (C) - Adjustment for shares that would have been issued in connection with acquisitions if they had occurred on January 1, 2005, calculated as follows:
Mobot Gavitec 12Snap Total ----------- ---------- ----------- ----------- NeoMedia stock price around January 1, 2005 $0.261 $0.261 $0.261 (measurement date) Total stock consideration $6,500,000 $5,400,000 $19,500,000 $31,400,000 ----------- ---------- ----------- ----------- Pro forma number of shares of NeoMedia to be treated as purchase price consideration 24,904,215 20,689,655 74,712,644 120,306,513 =========== ========== =========== ===========
26 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NeoMedia Technologies, Inc. ------------------------------------------- (Registrant) Date: May 8, 2006 By: /s/ Charles T. Jensen ----------- ---------------------------------------- Charles T. Jensen, President, Chief Executive Officer and Director 27 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 23.1 Consent of Ernst & Young AG, Independent Auditors of Gavitec AG 28 EX-23.1 2 v042335_ex23-1.txt Consent of Independent Auditors We consent to the use of our report dated April 5, 2006, with respect to the financial statements of Gavitec AG as of December 31, 2005 and 2004 and for the years then ended included in the Amendment No. 1 to Form 8-K filing dated May 9, 2006 incorporated by reference in the previously filed Registration Statements (Form S-8 No. 333-109778, Form S-8 No. 333-110189, Form SB-2/ Amendment 2 No. 333-110329, Form SB-2 No. 333-114123, Form S-4/ Amendment 6 No. 333-123848 and Form S-3/ Amendment 4 No. 333-125239) of NeoMedia Technologies, Inc. /s/ Ernst & Young AG Mannheim, Germany May 8, 2006 -----END PRIVACY-ENHANCED MESSAGE-----