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General
3 Months Ended
Mar. 31, 2013
General [Abstract]  
General and Going Concern [Text Block]

Note 1 - General

 

Business NeoMedia Technologies, Inc., a Delaware corporation (“NeoMedia”, and also referred to herein as “us”, “we” and “our”), was founded in 1989 and is headquartered in Boulder, Colorado. We have pioneered 2D mobile barcode technology and infrastructure solutions that enable the mobile barcode ecosystem world-wide. NeoMedia strives to harness the power of the mobile phone in innovative ways with state-of-the-art mobile barcode technology. With this technology, mobile phones with cameras become barcode scanners and this enables a range of practical applications including mobile marketing, mobile commerce and advertising. In addition, we offer barcode management reader solutions as well as intellectual property licensing.

 

Going Concern – We have historically incurred net losses from operations and we expect that we will continue to have negative cash flows as we implement our business plan. There can be no assurance that our continuing efforts to execute our business plan will be successful and that we will be able to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplates our continuation as a going concern. Net income/(loss) for the three months ended March 31, 2013 and 2012, respectively, was $9.0 million and $(165.5) million, of which $9.6 million and $(164.7) million, respectively, were non-cash net income/(loss) related to our financing instruments. Net cash used by operations during the three months ended March 31, 2013 and 2012 was $660,000 and $966,000, respectively. At March 31, 2013, we have an accumulated deficit of $255.6 million. We also have a working capital deficit of $57.3 million, of which $57.5 million is related to our financing instruments which includes the fair value of warrants and those debentures that are recorded as hybrid financial instruments.

 

The items discussed above raise doubt about our ability to continue as a going concern.

 

We currently do not have sufficient cash, or commitments for financing to sustain our operations for the next twelve months. Our plan is to develop new client and customer relationships and substantially increase our revenue derived from improved products and IP licensing. If our revenues are not to plan and our operating expenses cannot be reduced to sustain our operations, we may require additional financing in order to execute our operating plan; however, we believe that such additional financing will not be necessary. If additional financing is required, we cannot predict whether this additional financing will be in the form of equity, debt, or another form and we may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that these financing sources do not materialize, or that we are unsuccessful in increasing our revenues and profits, we may be unable to implement our current plans for expansion, repay our debt obligations or respond to competitive pressures, any of which circumstances would have a material adverse effect on our business, prospects, financial condition and results of operations.

 

The Convertible Debentures and preferred stock used to finance the Company, which may be converted into common stock at the sole option of the holders, have a highly dilutive impact when they are converted, greatly increasing the number of common shares outstanding. During the three months ended March 31, 2013, there were 1,238,981,350 shares of common stock issued for these conversions. The Company cannot predict if and when each holder may or may not elect to convert into common shares.