Via EDGAR
Stephen G. Krikorian
Accounting Branch Chief
United States Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20549
Re: | NeoMedia Technologies, Inc. |
Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2012
Filed April 5, 2013
Form 10-Q for Fiscal Quarter Ended September 30, 2013
Filed October 28, 2013
File No. 000-21743
Dear Mr. Krikorian:
Set forth below is a schedule providing additional support to the December 19, 2013 response of NeoMedia Technologies, Inc., a Delaware corporation (the “Company” or “we”), to the comments received from the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated November 22, 2013, with respect to the review of the Company’s Amendment No. 1 to the Form 10-K for the fiscal year ended December 31, 2012 as filed with the Commission on April 5, 2013 and the Form 10-Q for the fiscal quarter ended September 30, 2013 filed on October 28, 2013 under Commission File No. 000-21743. The schedule is being provided in connection with our conversation with the Staff on February 18, 2014.
* * * * * *
NeoMedia Technologies, Inc.
As of September 30, 2013
Fair Value Summary Calculation | YA Debentures | Non-YA Debentures | Total | Description | ||||||||||
Maturity date of debentures: | 8/1/2015 | 8/1/2015 | Per debenture agreements | |||||||||||
Period from 9/30/2013 to Maturity (years): | 1.84 | 1.84 | Calculation per maturity date | |||||||||||
Discount rate: | 6.59 | % | 6.59 | % | Per publicly available corporate bond curves for similar instruments & US Treasury-based risk-free rates | |||||||||
Debenture interest rate: | 0% or 9.5% | 9.50 | % | Per debenture agreements. Certain YA debentures are non-interest bearing | ||||||||||
Total principal as of 9/30/2013 | $ | 34,642,091 | $ | 6,277,251 | Per debenture agreements. Due 8/1/2015 | |||||||||
Total interest as of 9/30/2013 | $ | 529,186 | $ | 2,216,522 | $ | 2,745,708 | Calculation per debenture agreements | |||||||
Present value of principal as of 9/30/2013 | $ | 30,812,526 | $ | 5,583,322 | $ | 36,395,848 | Present value using discount rate, period, and principal future value per above | |||||||
Embedded Derivative Value | ||||||||||||||
Fair value determination basis - P+I | $ | 35,171,277 | $ | 8,493,773 | Debenture principal plus interest as of 9/30/2013 | |||||||||
Weighted conversion price | $ | 0.000183 | $ | 0.000180 | Lowest volume-weighted average price over trailing 125 days from 9/30/2013, including applied discount of 90% or 95% | |||||||||
Shares indexed to debt | 191,799,672,222 | 47,187,628,278 | Basis for fair value determination divided by weighted average | |||||||||||
Value per Flexible Monte Carlo technique | $ | 0.00028343 | $ | 0.00028638 | Based on Flexible Monte Carlo technique | |||||||||
Fair value of Embedded Derivative | $ | 54,362,466 | $ | 13,513,593 | $ | 67,876,059 | Shares indexed to debt time Flexible Monte Carlo value | |||||||
Total Debentures payable - carried at fair value | $ | 107,017,615 | Present value of P+I, plus fair value of embedded derivative |
“YA” | YA Global Investments, L.P. |
“P+I” | Principal plus interest |
Flexible Monte Carlo Inputs | YA Debentures Non-Interest Bearing | YA Debentures Interest Bearing | Non-YA Debentures | |||||||||
125 day lookback conversion price discount | 95 | % | 90 | % | 90 | % | ||||||
125 day lowest volume-weighted average price | ||||||||||||
Conversion price | $ | 0.000190 | $ | 0.000180 | $ | 0.000180 | ||||||
Approximate volatility | 165 | % | 165 | % | 165 | % | ||||||
Interest rate risk | 0.00 | % | 9.50 | % | 9.50 | % | ||||||
Risk-adjusted yields | 6.59 | % | 6.59 | % | 6.59 | % | ||||||
Estimated exercise behaviors (conversion consideration as % of conversion price): | ||||||||||||
25% conversion probability | 129 | % | 135 | % | 135 | % | ||||||
50% conversion probability | 155 | % | 162 | % | 162 | % | ||||||
75% conversion probability | 181 | % | 189 | % | 189 | % | ||||||
9/30/2013 Principal balance | $ | 12,299,384.00 | $ | 22,342,707.00 | $ | 6,277,251 | ||||||
9/30/2013 Accrued interest balance | $ | - | $ | 529,186 | $ | 2,216,522 | ||||||
Value per Flexible Monte Carlo technique | $ | 0.00027765 | $ | 0.00028638 | $ | 0.00028638 |
* * * * * *
In addition, we acknowledge the Staff’s comment that we are responsible for the accuracy and adequacy of the disclosures made. We formally acknowledge that:
· | The adequacy and accuracy of the disclosure in filing is the responsibility of the Company. |
· | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing. |
· | The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
Please do not hesitate to contact the undersigned with any comments or questions that you may have regarding the foregoing at (303) 546-7946.
Sincerely, | ||
NeoMedia Technologies, Inc. | ||
By: | /s/ Laura Marriott | |
Laura Marriott | ||
Chief Executive Officer |
Enclosures
cc: | Tamara Tangen, Securities and Exchange Commission |
Clayton Parker, K&L Gates LLP