As filed with the Securities and Exchange Commission on June 16, 1998
Registration No. 333-51811
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEOMEDIA TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 36-3680347
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2201 SECOND STREET, SUITE 600
FORT MYERS, FLORIDA 33901-3083
941-337-3434
941-337-3668 - FAX
---------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive
offices)
CHARLES W. FRITZ
2201 SECOND STREET, SUITE 600
FORT MYERS, FLORIDA 33901-3083
941-337-3434
941-337-3668 - FAX
--------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
BARTON J. SPRINGER, ESQ. MARIANNE LEPERA, ESQ.
FISHMAN, MERRICK, MILLER, GENELLY, NEOMEDIA TECHNOLOGIES, INC.
SPRINGER, KLIMEK & ANDERSON, P.C. 2201 SECOND STREET
125 S. WACKER DRIVE, SUITE 2800 SUITE 600
CHICAGO, ILLINOIS 60606 FORT MYERS, FLORIDA 33901
312-726-1224 941-337-3434
312-726-2649 FAX 941-337-3668 FAX
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO PUBLIC: From time to time following
the effective date of this
Registration Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment, check the following box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
TITLE OF SHARES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
UNIT (1)(5) PRICE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK 1,216,000 (2) $ 8.64 $ 10,506,240 $ 3,099.34
- -------------------------------------------------------------------------------------------------------------
COMMON STOCK 340,000 (3) $ 8.64 $ 2,937,600 $ 866.59
- -------------------------------------------------------------------------------------------------------------
COMMON STOCK 1,162,332 (4) $ 8.64 $ 10,042,549 $ 2,962.55
- -------------------------------------------------------------------------------------------------------------
TOTAL $ 23,486,389 $ 6,928.48
- -------------------------------------------------------------------------------------------------------------
<FN>
- ------------------------
(1) Estimated solely for purposes of computing the registration fee pursuant to Rule 457.
(2) Represents issued and outstanding shares of Common Stock offered for resale by the
holders thereof.
(3) Represents shares of Common Stock issuable upon exercise of a warrant to
purchase 170,000 units of the Registrant's securities issued by the
Registrant, and which were registered, in connection with its initial
public offering in November, 1996. Each unit consists of one share of
Common Stock and one warrant to purchase one share of Common Stock.
(4) Represents shares of Common Stock issuable upon exercise of common stock
purchase warrants for resale by the holders thereof.
(5) In accordance with Rule 457(c), the price represents the average of the
high and low prices of the Registrant's Common Stock on May 1, 1998.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
NEOMEDIA TECHNOLOGIES, INC.
2,718,332 SHARES OF COMMON STOCK,
$.01 PAR VALUE
This Prospectus covers up to 2,718,332 shares of common stock, $.01 par
value ("Common Stock") of NeoMedia Technologies, Inc., a Delaware corporation
(the "Company") to be offered for resale for the accounts of certain
stockholders of the Company and warrant holders holding warrants to purchase
shares of Common Stock, (collectively the "Selling Stockholders"). Of the
2,718,332 shares of Common Stock, 1,216,000 shares are currently issued and
outstanding, and 1,502,332 shares are issuable upon the exercise of common stock
purchase warrants. The shares of Common Stock issuable upon the exercise of the
common stock purchase warrants are being registered so that if and when such
warrants are exercised the shares of Common Stock received upon the exercise may
be offered and resold to the public by the Selling Stockholder owning such
shares. The Company will not receive any of the proceeds from the resale of the
Common Stock by the Selling Shareholders, although it will receive approximately
$12,100,000 from the payment of the exercise prices of the warrants if all of
the warrant holders exercise their warrants to the fullest extent. See "Use of
Proceeds". There is no assurance, however, that any of the warrants will be
exercised. All costs and expenses of registration and qualifying these shares
under federal and state securities laws are being borne by the Company, although
all commissions, selling and other expenses incurred in connection with the
resale of shares by a Selling Stockholder will be borne by such Selling
Stockholder. See "Selling Stockholders" and "Plan of Distribution".
The Common Stock is traded on The Nasdaq Stock Market/SM/ ("NASDAQ") under
the symbol "NEOM". On _______, 1998, the closing price of the Common Stock on
NASDAQ was $_____ per share.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SHOULD NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT.
INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION DISCUSSED UNDER "RISK
FACTORS" BEGINNING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1998.
<PAGE>
[INSIDE FRONT COVER]
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder and, in accordance therewith, files annual and quarterly reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission, Room 1024, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549, and at the offices of the
Commission's New York Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048 and the Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of these
materials may be obtained from the Public Reference Section of the Commission,
Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a Web site on the Internet that contains
reports, proxy and information statements and other information regarding
registrants, such as the Company, that file such reports, statements and
information electronically with the Commission. The Commission's Web site
address is http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement on Form S-3
which the Company has filed with the Commission pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), relating to the shares of the
Company's Common Stock offered hereby (referred to herein, together with
amendments and exhibits, as the "Registration Statement"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Common Stock offered hereby, reference is hereby made to the Registration
Statement. Statements made or incorporated by reference in this Prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
such exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
Copies of the Registration Statement and the exhibits may be inspected, without
charge, at the offices of the Commission, or obtained at prescribed rates from
the Public Reference Section of the Commission at the address set forth above.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR
FROM ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO
SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE)
ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST DIRECTED TO
NEOMEDIA TECHNOLOGIES, INC., 2201 SECOND STREET, SUITE 600, FORT MYERS, FLORIDA
33901, ATTENTION: INVESTOR RELATIONS; TELEPHONE NUMBER 941-337-3434.
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The information in the following documents filed by the Company with the
Securities and Exchange Commission ("Commission") are incorporated in this
Prospectus by this reference:
(a) The Company's Annual Report on Form 10-KSB as amended, for the year
ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998;
(c) The Current Reports of the Company on Form 8-K dated February 9,
1998, as amended, March 27, 1998 and April 27, 1998; and
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any amendment or report filed
for the purpose of updating such description.
All reports and other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the filing of a post-effective amendment to the Registration
Statement that indicates that all of the shares of Common Stock offered hereby
have been sold or that deregisters all shares of Common Stock then remaining
unsold shall be deemed to be incorporated by reference in this Prospectus and to
be a part hereof from the respective dates of filing such reports and other
documents. Any statement or information contained herein or in any report or
document, all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed report or document which also is or is deemed to be
incorporated by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference herein may be
deemed to constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and factors include, without limitation, risks associated with the
expansion of the Company's business and the management of growth, dependence on
key personnel, growth by acquisitions, changing economic conditions, rapidly
changing technology and the competitive environment of the industry in which the
Company transacts business, and other risks, uncertainties and factors described
from time to time in the Company's reports filed with the Commission. Such
risks, uncertainties and factors also include, without limitation, those
described herein under the heading "Risk Factors."
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS
PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. EACH PROSPECTIVE INVESTOR IS
URGED TO CAREFULLY READ THIS PROSPECTUS IN ITS ENTIRETY, INCLUDING BUT NOT
LIMITED TO THE RISK FACTORS.
THE COMPANY
The Company provides computer software and consulting services:
* through its Intelligent Document/TM/ Solutions Unit ("IDOCs/TM/")
to embed active data elements in standard printed documents or on
physical objects for the purpose of launching computer programs
and creating automated links to the World Wide Web;
* through its Document Systems Solutions Unit to assist clients in
optimizing the creation, production and management of printed
documents and printed document processes; and
* through its Year 2000 / Migration Solutions Unit to enable and
assist clients to implement mass changes in computer software and
hardware systems, including (i) identifying, seeking and
automatically correcting restrictive source and application fields
which store data, including among other items, dates (adding two
digits to a two-digit date field when four digits are required to
correct the Year 2000 problem), stock prices (converting stock
prices from a fractional to a decimal measurement system) and
European currencies (converting to the new European Monetary Unit
of Measure, commonly known as the "Eurodollar"), and (ii)
conversions from legacy to open systems.
The Company currently offers its services and products through its three
principal business units the Intelligent Document/TM/ Solutions Unit, the
Document Systems Solutions Unit and the Year 2000 / Migration Solutions Unit -
which, although separate in name, often function as a team in providing
solutions for its customers.
As part of the services provided in connection with the solutions it
offers, the Company often recommends, specifies, supplies and installs equipment
and software products from third-party suppliers, many of whom have strategic
alliances with the Company. The Company acts as a re-marketer of equipment and
software products for a number of suppliers, such as IBM Corporation, Sun
Microsystems Computer Company, Xerox Corporation, Symbol Technologies, Inc. and
Oracle Corporation, and, to date, has generated the largest portion of its
revenue from these activities.
1
<PAGE>
INTELLIGENT DOCUMENT/TM/ ("IDOCS/TM/") SOLUTIONS UNIT
The Company has developed its own technology, and has rights to use the
technology of others, to generate printed documents and enhance physical objects
which can be automatically "read" by machines, such as computers equipped with
scanners and appropriate software. These "machine readable" documents or
physical objects incorporate printed codes which contain thousands of bytes of
information, including computer programs rendering them functionally equivalent
to a computer floppy disk. With this functionality, a user may access additional
information about, assess validity of, or determine authenticity of the document
or object. These codes are referred to in the industry as "high capacity
symbologies" and "multi-dimensional" or "two-dimensional" bar codes.
Two-dimensional bar code technology has been thoroughly designed, developed
and tested during the past decade. The Company believes its technology is broad
and generally innovative enough to be applied to a variety of industries
including information management services, banking and financial services,
health care and pharmaceuticals, government services, publishing, advertising,
gaming, travel and entertainment. To date, a variety of applications have been
commercially introduced in the United States and abroad, including virtually
fraud-proof negotiable instruments ("Secure Documents"), traceable shipping
documents, and public and medical identification cards.
THE COMPANY'S IDOCS/TM/ TECHNOLOGY LINKS THE WORLDS OF PRINT AND ELECTRONIC
MEDIA. Printed documents provide the basis and infrastructure for formal
communication and commerce worldwide. In addition, the generation of printed
documents has increased significantly, not decreased, with the adoption of
electronic data processing systems during the past half century. However, the
improvement in processes to generate printed documents has been a one way street
- -- from electronic media to a printed form. The process to re-convert human
readable text to machine readable form, which is required in all business
operations, has been labor intensive and exceedingly difficult. Therefore,
management believes that, among other applications, the Company's technology can
be used in all businesses to increase operational efficiencies by reducing
manual re-entry of data for business transaction document and record management
purposes. Management believes, therefore, its Intelligent Documents/TM/
technology will provide the industry standard for linking the worlds of print
and electronic media. Furthermore, the Company intends to label any printed
document or physical object incorporating its technology as "IDOCs/TM/ Enabled".
To date, the Intelligent Document/TM/ Solutions Unit has provided only
limited software and consulting services. However, due to the rapidly emerging
era of electronic commerce fostered by the proliferation of the Internet and the
World Wide Web, the Company anticipates that the large number of potential
Intelligent Document/TM/ applications will, in terms of revenue, make this a
fast growing unit of the Company, although to date this has not occurred and no
assurances can be given that this will occur in the future.
2
<PAGE>
DOCUMENT SYSTEMS SOLUTIONS UNIT
The Document System Solutions Unit assists clients in optimizing their
document creation, production and management processes. These efforts have
historically focused on designing and providing complete, client specific, high
speed and high volume document formatting and printing solutions. Recently,
services of the Document System Solutions Unit have been expanded to include
Integrated Document Factories ("IDF's"), a complete, client specific system
solution for automating, monitoring and managing print-to-mail processes. IDF's
incorporate manufacturing principles and IDOCs/TM/ technology, enabling clients
not only to achieve maximum efficiencies in their print processes, but to also
ensure document integrity and traceability.
The Company's customers currently using the Document Systems Solutions
Unit's services and products, include Principal Financial Group, Fidelity
Investments, Discover Card Services, Inc., Charles Schwab & Co., Inc. and the
State of Wisconsin, and they are able to reduce their costs through
efficiencies, by generating on demand customized forms instead of purchasing
expensive pre-printed stock forms, and by enabling implementation of their
printing systems on lower-cost distributed client-server platforms. In addition,
clients in the future may realize significant cost savings from obtaining
postage discounts which may be awarded by the United States Postal Service
("USPS") to businesses that, through use of the Document System Solutions Unit's
services and products, prepare and print mail in USPS specified delivery
sequence.
In providing complete document system solutions and IDF's, the Company
often "partners" with companies such as Xerox Corporation, IBM Corporation,
Dazel Corporation, and I-Data. These arrangements often result (i) in the
"partner" introducing to the Company customers which purchase the Company's and
the partner's services and products, (ii) in the use by the partner of the
Company as a subcontractor, (iii) in the re-marketing by the Company of the
partner's hardware and software products, and (iv) in the sharing of the
responsibility with the partner. Depending upon the product or service involved,
the association with the partner may be on an exclusive basis.
Currently, in connection with the services of the Document Systems
Solutions Unit, the Company is a supplier of proprietary and third-party
software and third-party equipment. The companies represented by the Company in
the re-marketing of software and equipment include Oracle Corporation, IBM
Corporation, Sun Microsystems Computer Company, Xerox Corporation, Symbol
Technologies, Dazel Corporation, Elixir Technologies and I-Data.
YEAR 2000 / MIGRATION SOLUTIONS UNIT
The Year 2000 / Migration Solutions Unit provides proprietary and
third-party software tools to assist clients in (i) identifying and
automatically correcting software with the "Year 2000 problem," and (ii)
converting ("migrating") from closed legacy systems to more cost effective and
functional open systems. In addition, due to the unique, flexible architecture
on which the Year 2000 / Migration Solutions Unit's software tools are built,
solutions for other mass change problems (such as, but not limited to, the
impending Eurodollar problem and the conversion of stock prices from a
fractional to a decimal measurement system) may be easily developed.
3
<PAGE>
RESOLVING "YEAR 2000" AND OTHER RESTRICTIVE SOURCE AND APPLICATION CODE
PROBLEMS. The "Year 2000 problem" refers to the use of a two-digit date field
primarily found in legacy software programs. For example, "89" represents the
calendar year "1989." Programs using such two-digit year codes will become
invalid on January 1, 2000, as they will read "00" as "1900." As a result,
serious errors will occur in calculations dependent upon dates, such as mortgage
calculations, in particular, and calculations used throughout the financial
industry in general.
The Company sells licenses to proprietary software tools (including
"ADAPT/2000") that unlike many other competitive tools, not only identify
occurrences of the date code problem in software programs, but automatically
correct ("remediate") up to what the Company believes to be potentially 90% of
these occurrences. The Company's ADAPT/2000 tool, unlike other competitive
tools, works across various hardware platforms and remediates legacy programs
written in COBOL and new IBM COBOL ("MLE") computer languages. In addition,
ADAPT/2000 works to convert other restrictive source and application code, such
as fractions to a decimal measurement system and monetary systems such as the
impending European Economic Community's Eurodollar.
MIGRATION SOLUTIONS. Prior to the late 1980's, software and hardware
manufacturers developed business software that would only run on their
proprietary systems in an attempt to "lock in" existing customers. This in turn
resulted in the development of business software which would run only on these
closed proprietary systems. These "closed" systems and applications are referred
to in the industry as "legacy systems." However, in the late 1980's and early
1990's, technological advances resulted in widespread development of software
and hardware in standard computer languages that could be installed in a variety
of systems. Subsequently, these "open" systems have generated price and
performance advantages and greater functionality.
Through the use of the Company's migration tools and services, businesses
desiring to convert from a legacy system may avoid the time and cost of
rewriting applications or the loss of an application's functionality when
transferred directly to an open client-server system. Instead, the Company's
migration tools automatically translate legacy applications from proprietary
source code to code that can be run directly on open systems. This automated
solution provides advantages such as (i) most, if not all, of the functionality
of the original legacy application is maintained, (ii) the conversion entails
less time, resources and disruption risk than the other methods, and (iii) the
conversion provides a base for modernization of the legacy application in the
new open environment.
The Company's "migration and modernization" approach provides one-stop
shopping for clients to migrate existing legacy systems to open platforms and
then modernize these same systems to incorporate current or new technologies. A
variety of modernization paths are available to clients upon completing
migration. The Company management intends to use this approach to further the
introduction of their IDOCs/TM/ technology.
4
<PAGE>
Dev-Tech Associates, Inc., an Illinois corporation ("Dev-Tech"), the
Company's predecessor, was incorporated in December, 1989. NeoMedia
Technologies, Inc. (the "Company") was incorporated under the laws of the State
of Delaware on July 29, 1996. On August 5, 1996, as the result of a tax-free
merger, the Company acquired all of the shares of Dev-Tech in exchange for the
issuance of shares of the Company's Common Stock to the stockholders of
Dev-Tech. As a result of this merger, the Company is the successor to the
business and operations of Dev-Tech. Immediately prior to the date of the
Company's initial public offering, Dev-Tech Migration, Inc., an Illinois
corporation ("Migration") and an affiliate of Dev-Tech, was merged into NeoMedia
Migration, Inc., a wholly-owned subsidiary of the Company in exchange for the
issuance of shares of the Company's Common Stock to the sole stockholder of
Migration. In November, 1996, the Company completed the initial public offering
(the "Public Offering") of units of its securities. Each unit consisted of one
share of Common Stock and one warrant (the "Public Warrants") to purchase a
share of common stock at $7.375. Joseph Charles & Associates, Inc. was the
representative (the "Representative") of the underwriters in the Public
Offering. In November, 1997, the Company called for the redemption in December,
1997, of all of its then outstanding Public Warrants ("Warrant Redemption"), and
accordingly, as of the date of this Prospectus, there are no Public Warrants
issued and outstanding. Unless otherwise specified, all references herein to the
Company mean and refer to the Company and its wholly-owned subsidiaries,
Migration, NeoMedia Tech, Inc., NeoMedia Technologies Holding Company B.V. (a
Netherlands company), NeoMedia Technologies de Mexico, S.A. de C.V. (a Mexican
company), NeoMedia Migration de Mexico, S.A. de C.V. (a Mexican company),
NeoMedia Technologies do Brasil Ltd. (a Brazilian company), NeoMedia
Technologies UK Limited (a United Kingdom company) and Distribuidora Vallarta
S.A., (a Guatemalan corporation). The Company's executive offices are located at
2201 Second Street, Suite 600, Fort Myers, Florida 33901. Its telephone number
is 941-337-3434.
UNLESS OTHERWISE INDICATED, ALL SHARE AND PER SHARE DATA AND INFORMATION
CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS RELATING TO THE
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING (I) DOES NOT INCLUDE 1,292,793
SHARES OF COMMON STOCK RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS EITHER
OUTSTANDING OR AVAILABLE FOR GRANT UNDER THE COMPANY'S 1996 STOCK OPTION PLAN
(THE "1996 STOCK OPTION PLAN"), (II) DOES NOT INCLUDE 8,000,000 SHARES OF COMMON
STOCK RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS EITHER OUTSTANDING OR
AVAILABLE FOR GRANT UNDER THE COMPANY'S 1998 STOCK OPTION PLAN (THE "1998 STOCK
OPTION PLAN"), (III) DOES NOT INCLUDE 170,000 UNITS OF THE COMPANY'S SECURITIES
(EACH CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE WARRANT, AND THE COMMON
STOCK ISSUABLE UPON THE EXERCISE OF SUCH WARRANTS) RESERVED FOR ISSUANCE TO THE
REPRESENTATIVE UPON EXERCISE OF WARRANTS ISSUED TO THE REPRESENTATIVE UPON
CONSUMMATION OF THE PUBLIC OFFERING (THE "REPRESENTATIVE'S OPTIONS"), (VI) DOES
NOT INCLUDE 114,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF A WARRANT
(THE "PRINCIPAL STOCKHOLDER'S WARRANT") ISSUED TO CHARLES W. FRITZ, THE
COMPANY'S PRESIDENT AND CHIEF EXECUTIVE OFFICER, (V) DOES NOT INCLUDE 173,332
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF A WARRANT TO PURCHASE SHARES OF
COMMON STOCK ISSUED TO COMPASS CAPITAL, INC. ("COMPASS CAPITAL WARRANT"), (VI)
DOES NOT INCLUDE 135,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF A
WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED TO THORNHILL CAPITAL, L.L.C.
("THORNHILL WARRANT"), (VII) DOES NOT INCLUDE 300,000 SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF A WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED TO
CHARLES W. FRITZ (THE "FRITZ WARRANT"), (VIII) DOES NOT INCLUDE 65,000 SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF A WARRANT TO PURCHASE SHARES OF COMMON
STOCK ISSUED TO JOSEPH CHARLES & ASSOCIATES, INC. ("JOSEPH CHARLES WARRANT"),
(IX) DOES NOT INCLUDE 375,000 SHARES OF COMMON STOCK RESERVED FOR ISSUANCE UPON
EXERCISE OF A WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED TO DOMINICK &
DOMINICK, INCORPORATED ("DOMINICK WARRANT"), AND (X) DOES NOT INCLUDE 100,000
SHARES OF COMMON STOCK RESERVED FOR ISSUANCE UPON EXERCISE OF A WARRANT TO
PURCHASE SHARES OF COMMON STOCK ISSUED TO SOUTHEAST RESEARCH PARTNERS, INC.
("SOUTHEAST WARRANT").
5
<PAGE>
RISK FACTORS
THE PURCHASE OF THE COMMON STOCK BEING OFFERED HEREBY IS SPECULATIVE AND
INVOLVES A HIGH DEGREE OF RISK AND SUBSTANTIAL DILUTION. THE PURCHASE OF THE
COMMON STOCK SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A
TOTAL LOSS OF THEIR INVESTMENT IN THE COMPANY. PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER ALL OF THE INFORMATION CONTAINED IN THIS PROSPECTUS AND, IN
PARTICULAR, THE FOLLOWING FACTORS WHICH COULD MATERIALLY AND ADVERSELY AFFECT
THE OPERATIONS AND PROSPECTS OF THE COMPANY OR AN INVESTMENT THEREIN BEFORE
MAKING A DECISION TO PURCHASE THE COMMON STOCK BEING OFFERED HEREBY. THE
FOLLOWING IS NOT INTENDED AS, AND SHOULD NOT BE CONSIDERED, AN EXHAUSTIVE LIST.
RISK FACTORS RELATING TO THE COMPANY
1. HISTORY OF OPERATING LOSSES AND NEGATIVE OPERATING RESULTS. For the
years ended December 31, 1995, 1996 and 1997 and for the three months ended
March 31, 1998, the Company's results of operations were losses of $1,131,000,
$3,076,000, $5,973,000 and $1,276,000, respectively. No assurances can be given
that this pattern will not continue or that the Company will ever become
profitable. In addition, the Company is developing further a third business
unit, its Intelligent Document Solutions Unit, which will provide services and
products in an emerging technological market in which the Company has little
prior experience. The Company's further development of this new unit could
materially adversely affect the Company's future operating results. See "Risk
Factors Relating to the Company B No Assurance of Success of New Business Unit".
In addition, the Company's quarterly operating results may be subject to
significant fluctuations due to many factors not within the Company's control,
such as the unpredictability of when a customer will order products and
services, the size of a customer's order, the demand for the Company's products
and services, the level of competition and general economic conditions.
6
<PAGE>
2. NO ASSURANCE OF SUCCESS OF NEW BUSINESS UNIT. Prior to the Public
Offering, the business of the Company was to provide system analysis and
integration services for information processing systems, to migrate applications
from closed proprietary legacy systems to open systems platforms and to serve as
a supplier of third party equipment and software products, as well as
proprietary software products, required to implement solutions. In addition to
continuing to offer these "core" services and products, the Company is
developing a third business unit, its Intelligent Document Solutions Unit, the
function of which is to provide software that employs high capacity symbologies
which allows the user to both embed and extract data and programs from printed
materials or physical objects, as well as link these documents to on-line
sources of information, such as the Internet and the World Wide Web. No
assurances can be given that the Company's Intelligent Document Solutions Unit
will be successful, or that the Company's two other business units, which
provide transition and document systems solutions, will not be materially
adversely affected by the Company focusing its efforts and resources in the
Intelligent Document Solutions Unit. No sales of the products and services to be
provided by this Unit have occurred to date and no assurances can be given that
this Unit will ever achieve profitability. In addition, the technology initially
used by the Intelligent Document Solutions Unit has not been developed by the
Company but by third parties and the Company has been granted rights to its use.
Accordingly, failure to maintain these rights would materially adversely affect
the operations of this Unit.
3. DEPENDENCE ON PRODUCT LINE AND SERVICES; LIMITATION ON FINANCING TO
PURCHASE SOFTWARE AND EQUIPMENT. For the years ended December 31, 1995, 1996 and
1997 and for the three months ended March 31, 1998, the Company derived
approximately 76%, 83%, 79% and 66%, respectively, of its net revenue from
software and equipment resales, especially those related to the open systems
computing environment. Absent diversification of the Company's revenue over
other products and services, loss of this revenue would have a materially
adverse effect on the Company. If the marketplace does not continue to accept
this computing environment, or even if accepted, grows less rapidly than
anticipated, or if the Company fails to offer products and services which
respond to the needs of this market, the Company would be materially and
adversely affected. In addition, the Company, in the future, intends to develop
further new software products and to offer products and services related to high
print capacity symbologies thereby reducing its reliance on one or several
products and services by diversifying. There can be no assurance that the
Company will achieve or sustain significant sales growth in either its
historical sales and products or that applications using high print capacity
symbologies can be successfully developed, or if developed, will gain market
acceptance or successfully compete with the products of others. To the extent
demand for the Company's services and products do not develop, due to
competition, product performance, customer assessment of the Company's resources
and expertise, technological change or other factors, the Company's operations
will be materially adversely affected.
The Company receives short-term financing from a finance company to
purchase computer equipment and software that it re-markets. Historically, the
amount of financing which the Company was able to obtain was limited by its
financial condition and results of operations. No assurances can be given that
in the future increased financing commitments will be available to the Company.
Consequently, the Company's ability to increase its revenue through computer
equipment and software resales may be limited until the Company is able to
increase its financing commitments. No assurances can be given that the Company
will obtain an increased line of credit, or if obtained, that increased resales
or revenue will result.
7
<PAGE>
4. DEPENDENCE ON RELATIONSHIPS. The Company maintains many relationships
with companies whose products and services it offers. Among other things, these
relationships provide the Company with discounts when purchasing the products of
such companies. In addition, these relationships often result in the Company
providing services to or for these companies and their customers. The most
significant of these relationships are with Sun Microsystems Computer Company,
IBM Corporation and Xerox Corporation. The Company believes that its
relationships with Sun, IBM and Xerox have been beneficial, and any termination,
or deterioration, of any one or all of these relationships would have a material
adverse effect on the Company's business, operating results and financial
condition.
5. RELIANCE ON MAJOR CUSTOMER AND SINGLE SUPPLIER. Historically, one or
several of the Company's customers has accounted for a significant percentage of
the Company's revenue. One customer, Ameritech Services, Inc., accounted for
approximately 49%, 38%, 39% and 9% of the Company's revenues for the years ended
December 31, 1995, 1996, 1997 and the three months ended March 31, 1998, and for
approximately 49%, 50%, 47% and 8% of the Company's receivables as of December
31, 1995, 1996 and 1997 and March 31, 1998, respectively. The Company hopes that
this trend of declining sales to Ameritech Services, Inc. as a percentage of
total sales will continue; however, no assurances of this can be given. The
Company does not have a written agreement with Ameritech obligating it to
purchase equipment and software from the Company. Accordingly, purchases by
Ameritech could be discontinued at any time. In addition, the equipment and
software which is re-marketed to this customer is supplied by a single supplier.
Accordingly, the loss of this supplier would materially adversely affect the
Company. Furthermore, the Company does not have a written agreement with this
supplier which obligates it to supply the Company. Thus, the purchases of
equipment and software from this supplier that are re-marketed could be
discontinued at any time. The loss of any significant customer, or further
significant reductions by them in buying products and services offered by the
Company, or the inability to collect accounts receivable from them, absent
diversification of the Company's revenue over other customers, products and
services, would materially and adversely affect the Company's revenue and
results of operations.
8
<PAGE>
6. SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL CAPITAL. The
Company's capital requirements have been and will continue to be significant.
Prior to the Public Offering, there was limited equity investment in the
Company. As of December 31, 1997 and March 31, 1998, the Company's accumulated
deficit was $10,499,000 and $11,775,000, respectively, and total stockholders'
equity was $13,126,000 and $11,925,000, respectively. A significant portion of
the proceeds of the Public Offering was used to fund ongoing operations as well
as to implement proposed expansion plans and repay loans. The Company
anticipated that the proceeds to it from the Public Offering, together with
projected cash flow from operations, would be sufficient to fund its operations
during the twelve months following the consummation of the Public Offering.
However, the Company's experience following the Public Offering was that the
proceeds from the Public Offering, together with the cash flow from operations,
were sufficient to fund its operations for approximately nine months. From
September, 1997, through December 18, 1997, the Company received net proceeds of
approximately $12.9 million from the partial exercise of the Principal
Stockholder's Warrant and the Public Warrants, both of which were used to fund
operations. No assurances can be given that additional financing will not be
required by the Company. Any additional equity financing may involve substantial
dilution to the Company's then-existing stockholders. The Company has no current
commitments or arrangements with respect to, or readily available sources of,
additional financing. There can be no assurance that additional financing will
be available to the Company when needed or, if available, that it can be
obtained on commercially reasonable terms. Any inability to obtain additional
financing when needed would have a material adverse effect on the Company
including requiring the Company to curtail the expansion of its operations and
possibly causing the Company to cease its operations. In addition, the Company's
current business plan is highly dependent upon the realization of revenue from
certain migration tools and software, including Intelligent Documents, in which
the Company has made substantial capital investments. If the Company's
substantial capital investments in these migration tools and software are not
recovered through revenue generated from them, and given the Company's continued
reliance on obtaining additional financing, substantial concerns exist
concerning the Company's ability to achieve its business plan which could result
in the Company materially curtailing, and possibly ceasing, operations.
Prospective investors should be aware that if the Company is not successful in
its operations, future acquisitions or expansion, their entire investment in the
Company could become worthless. Even if the Company is successful in its
expansion plans, no assurances can be given that such expansion or acquisitions
will be successful or that investors will derive a profit from their investment.
7. DEPENDENCE ON KEY PERSONNEL. The Company's success depends to a
significant extent on the continued service of certain key management personnel,
in particular Charles W. Fritz, the Company's President. The loss or
interruption of Mr. Charles Fritz's services, for whatever reason, would have a
material adverse effect on the Company. The loss of services of Robert T. Durst,
Jr., Executive Vice-President and the Company's Chief Technical Officer, would
materially adversely effect the Company and, in particular, the Company's
operations with respect to its high capacity symbologies operations and the
further development of its Intelligent Document Solutions Unit. In the event of
the loss of services of either Messrs. Fritz or Durst, no assurances can be
given that the Company will be able to obtain the services of adequate
replacement personnel. The Company has entered into five year employment
agreements with both Messrs. Fritz and Durst, which terminate on April 30, 2001
and March 31, 2001, respectively. Under the terms of his employment agreement,
Mr. Fritz may perform services for family owned businesses, other entities and
individuals whether or not affiliated with the Company provided that such
services do not prevent him from attending to the affairs of the Company and he
is not in competition with the Company. The Company currently maintains $2.4
million and $1 million life insurance policies on the lives of Messrs. Fritz and
Durst, respectively. The Company's success also depends in part on its ability
to attract and retain qualified professional, technical, managerial and
marketing personnel. Competition for such personnel in the markets in which the
Company competes is intense, and there can be no assurance the Company will be
successful in attracting and retaining the personnel it requires to conduct its
operations successfully. The Company's results of operations could be materially
adversely affected if the Company were unable to attract, hire, train and manage
these personnel.
9
<PAGE>
8. ABILITY TO MANAGE GROWTH OF THE COMPANY. The introduction of products
and services using high capacity symbologies will require the Company to
continue to expand and grow. In addition, the Company intends to expand and grow
through acquisitions. Accordingly, the Company could experience a period of
significant growth, which could place a significant strain on the Company's
management, infra-structure and other resources. The Company's ability to manage
and sustain growth effectively will depend, in part, on the ability of its
management to manage growth through the implementation of appropriate
management, operational and financial systems and controls, and successfully to
train, motivate and manage its employees. If the Company's management is unable
to manage its growth effectively, the Company's results of operations could be
materially adversely affected. While management believes it can manage such
growth, there can be no assurance that it will be able to do so.
9. PERSONNEL. The Company's success depends to a significant extent on the
performance of its senior management and certain key employees. In addition, the
Company's growth and expansion (and, in particular, further development of its
Intelligent Document Solutions Unit) is dependent upon hiring and keeping
qualified personnel. Competition for highly skilled employees, including sales,
technical and management personnel, is intense in the computer industry. No
assurances can be given that qualified personnel (including software developers)
can be hired, or if hired, can be retained. The Company's failure to attract
additional qualified employees or to retain the services of key personnel could
materially adversely affect the Company's business.
10
<PAGE>
10. INTENSE COMPETITION. The markets in which the Company competes are
highly competitive and rapidly changing. A number of companies offer products
and services similar to those offered by the Company, and target the same
customers as the Company. The Company's ability to compete depends upon many
factors within and outside its control. Since the Company offers a variety of
products and services, no generalities can be made as to its competitors, all of
which differ depending upon the product or service offered. The Company believes
that it has been able to compete to date primarily through product quality,
technical excellence, customer service and its ability to achieve desired
results. The Company's ability to compete in the future will depend upon many
factors, including the ability to attract new customers and to diversify its
customer base and products and services so as not to be dependent upon any one
or several customers or product or service, to attract and retain qualified
management, sales and technical personnel, to develop new products and services
and to respond quickly and efficiently to new technology. There are many
well-established competitors possessing substantially greater financial,
marketing and technical resources and established, extensive direct and indirect
channels of distribution for their products and services. As a result, they may
be able to respond more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the development,
promotion and sale of their products and services than the Company. The Company
also anticipates that competition within these markets will increase as a result
of the consolidation of companies. In addition, many of the Company's
competitors have established, or may establish, cooperative relationships among
themselves or with prospective customers. Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire
significant market share. There can be no assurance that the Company will be
able to compete successfully against current or future competitors, or that
competitive pressures will not have a material adverse effect on the Company's
business, operating results and financial condition.
11. RAPID TECHNOLOGICAL CHANGE. The markets in which the Company competes
are characterized by rapid technological change, frequent new product and
service introductions, evolving industry standards and changes in customer
demands. The introduction of products and services embodying new technologies
and the emergence of new industry standards can, in a relatively short period of
time, render existing products obsolete and unmarketable. The Company believes
that its success will depend upon its ability continuously to develop new
products and services (and in particular its high capacity symbologies
applications) and to enhance its current products and to introduce them promptly
into the market. There can be no assurance that the Company will be successful
in developing and marketing new product enhancements, new products or services
(and in particular its high capacity symbologies applications) that respond to
technological change or evolving industry standards, that the Company will not
experience difficulties that could delay or prevent the success or development,
introduction and marketing of these products, enhancements and services, or that
any new product, product enhancement and services it may introduce will achieve
market acceptance. Failure to develop and introduce new products, product
enhancements or services, or to gain customer acceptance of such products,
product enhancements or services in a timely fashion could harm the Company's
competitive position and materially adversely affect it.
11
<PAGE>
12. DEPENDENCE ON PROPRIETARY TECHNOLOGY; RISKS OF THIRD PARTY INFRINGEMENT
Claims. The Company presently has patent applications pending with respect to
certain of its proprietary technology; however, no assurances can be given that
any patent for such technology will be granted. Furthermore, if there are other
patents or patents pending by competitors for technology similar to the
Company's, this would materially adversely affect the business of the Company's
Intelligent Document Solutions Unit and the Company's competitive position, and
would materially adversely affect the Company's operating results and financial
condition. The Company currently relies upon copyright and trademark laws, trade
secrets, confidentiality procedures and contractual provisions to protect its
proprietary technology, all of which afford only limited protection.
Accordingly, there can be no assurance that the Company's measures to protect
its current proprietary rights will be adequate to prevent misappropriation of
such rights or that the Company's competitors will not independently develop or
patent technologies that are substantially equivalent or superior to the
Company's technologies. Additionally, although the Company believes that its
products and technologies do not infringe upon the proprietary rights of any
third parties, there can be no assurance that third parties will not assert
infringement claims against the Company. Similarly, infringement claims could be
asserted against products and technologies which the Company licenses, or has
the rights to use, from third parties. Any such claims, if proved, could
materially and adversely affect the Company's business and results of
operations. In addition, although any such claims may ultimately prove to be
without merit, the necessary management attention to, and legal costs associated
with, litigation or other resolution of such claims could materially and
adversely affect the Company's business and results of operations.
13. INSUFFICIENT PRODUCT LIABILITY OR ERRORS AND OMISSIONS INSURANCE. Many
of the Company's engagements involve projects that are critical to the
operations of its clients' businesses. Any failure in a client's information
system could result in a claim for substantial damages against the Company,
regardless of the Company's responsibility for such failure. The Company could,
therefore, be subject to claims in connection with the products and services
that it sells. There can be no assurance that the Company has adequately, or at
all, contractually limited its liability for such claims or that such
limitations of liability, if any, would be enforceable or would otherwise
protect the Company from any liability. In addition, there can be no assurance
that the Company would have sufficient resources to satisfy any liability
resulting from any such claim, or that it would be able to have its customers
indemnify or insure it against any such liability. The Company currently
maintains product liability and errors and omissions insurance; however, there
can be no assurance that, in the future, insurance companies will continue to
provide such coverage or further coverage of certain of the Company's products
and services relating to the Year 2000 problem, or coverage, if available, will
be adequate in term and scope to protect the Company against material adverse
effects in the event of a successful claim, or that the Company's insurer will
not disclaim coverage as to any future claim. The successful assertion of one or
more large claims against the Company that exceed available insurance coverage
or changes in the Company's insurance policies, including premium increases or
the imposition of large deductible or co-insurance requirements, could adversely
affect the Company's business, financial condition and results of operations.
14. DILUTIVE EFFECT OF OPTIONS; INCREASED AUTHORIZED SHARES. A maximum of
1,500,000 and 8,000,000 options to purchase shares of Common Stock of the
Company may be granted under the Company's 1996 Stock Option Plan and 1998 Stock
Option Plan, respectively. Of such 1,500,000 and 8,000,000 options, there are
currently options granted and outstanding to purchase an aggregate of 1,266,445
and 965,000, respectively, shares of Common Stock and 207,207 options under the
1996 Stock Option Plan have been exercised. In addition, the stockholders
approved an increase in the number of shares of Common Stock that the Company is
authorized to issue to 50,000,000 from 15,000,000, and authorized the creation
of 10,000,000 shares of preferred stock, par value $.01. To the extent that
current and subsequent stock options are exercised, and additional shares of
Common Stock are issued by the Company, dilution of the percentage ownership of
the Company's stockholders will occur, and any sales in the public market of the
Common Stock underlying options might adversely affect prevailing market prices
for the Common Stock.
12
<PAGE>
RISK FACTORS RELATING TO THIS OFFERING
1. CONTROL AND INFLUENCE BY PRINCIPAL STOCKHOLDERS. The Company's by-laws
provide that the holders of more than thirty-three and one-third percent of the
issued and outstanding Common Stock constitute a quorum at stockholder meetings,
and the vote of the holders of a majority of Common Stock present at a meeting
will decide any question brought before it, except for certain actions, such as
amendments to the Company's Certificate of Incorporation, mergers or
dissolutions, all of which require the vote of the holders of a majority of the
outstanding Common Stock. In addition, cumulative voting (which provides that a
stockholder can cast votes in the election of directors equal to the number of
shares owned by such stockholder multiplied by the number of directors to be
elected to a single candidate or among the candidates as the stockholders
wishes) is not permitted with respect to the Company's Common Stock. As a
result, the Company's principal stockholders, acting together, may be able to
control or exercise significant influence over all matters requiring stockholder
approval, including the election of directors and the approval of significant
corporate actions. It is likely, therefore, that purchasers of Common Stock in
this offering will have little or no voice in the direction of the Company's
operations.
2. NO DIVIDENDS ON COMMON STOCK. The Company has not previously paid any
cash or other dividends on its Common Stock and does not anticipate payment of
any dividends for the foreseeable future; it being anticipated that any earnings
would be retained by the Company to finance its operations and future growth and
expansion. In addition, the Company's prior credit facility prohibited the
payment of any cash dividends, and any future credit facility may also prohibit
the payment of cash dividends.
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<PAGE>
3. NO ASSURANCE OF CONTINUED PUBLIC TRADING MARKET; POSSIBLE VOLATILITY OF
STOCK PRICE. The Common Stock is currently listed for quotation on NASDAQ, and
no assurance can be given that an active trading market for the Common Stock
will continue. If the Company should experience losses from operations, it may
be unable to maintain the standards for continued quotation on NASDAQ. If, for
any reason, the Company's Common Stock is not eligible for continued listing,
purchasers of the Common Stock may have difficulty selling their Common Stock
should they desire to do so. The trading prices of the Company's Common Stock
could be subject to wide fluctuations in response to quarterly variations in
actual or anticipated results of operations of the Company, changes in analysts'
earnings estimates, announcements of technological innovations or new products
or services by the Company or its competitors, general conditions in the
computer industry, or other factors. In addition, the securities markets
frequently experience extreme price and volume fluctuations which affect market
prices for securities of companies generally, and technology companies in
particular. Such fluctuations are often unrelated to the operating performance
of the affected companies. Broad market fluctuations may adversely affect the
market price of the Company's Securities. Furthermore, securities class action
litigation is not uncommon against issuers, particularly following periods of
volatility in the market price of an issuer's securities. There can be no
assurance that such litigation will not occur in the future with respect to the
Company. Such litigation could result in substantial costs and a diversion of
management's attention and resources, which could have a material adverse effect
on the Company's business, financial condition and results of operations. Any
adverse determination in such litigation could subject the Company to
significant liabilities.
4. POTENTIAL FUTURE SALES OF COMMON STOCK. Upon consummation of this
offering, the Company will have 19,470,281 shares of Common Stock outstanding
out of a total of 50,000,000 shares of Common Stock authorized, assuming (1)
exercise of options to purchase 1,292,793 shares of Common Stock under the 1996
Stock Option Plan, (2) 170,000 shares of Common Stock issuable upon exercise of
the Representative's Options, (3) 170,000 shares of Common Stock issuable upon
exercise of the warrants included in the Representative's Options, (4) 114,000
shares of Common Stock issuable upon further exercise of Principal Stockholder's
Warrant, (5) 65,000 shares of Common Stock issuable upon exercise of the Joseph
Charles Warrant, (6) 375,000 shares of Common Stock issuable upon exercise of
the Dominick Warrant, (7) 173,332 shares of Common Stock issuable upon exercise
of the Compass Capital Warrant, (8) 135,000 shares of Common Stock issuable upon
exercise of the Thornhill Warrant, (9) 300,000 shares of Common Stock
exercisable upon exercise of the Fritz Warrant, (10) the exercise of 8,000,000
shares of Common Stock under the 1998 Stock Option Plan and (11) 100,000 shares
of Common Stock issuable upon exercise of the Southeast Warrant. No prediction
can be made as to the effect, if any, that sales of shares of Common Stock or
even the availability of such shares for sale will have on the market prices of
the Common Stock prevailing from time to time. The possibility that substantial
amounts of the Common Stock may be sold in the public market may adversely
affect prevailing market prices for the Common Stock and could impair the
Company's ability to raise capital through the sale of its equity securities. As
of the date of this offering, none of the 10,000,000 shares of preferred stock
were outstanding.
Prospective investors should be aware that the possibility of sales may, in
the future, have a depressive effect on the price of the Common Stock and,
therefore, the ability of any investor to sell his Common Stock may be dependent
directly upon the number of Common Stock that are offered and sold. No
prediction can be made as to the effect, if any, that sales of Common Stock or
even the availability of such Common Stock for sale will have on the market
prices prevailing from time to time.
14
<PAGE>
5. LIMITATION ON DIRECTOR LIABILITY. As permitted by the Delaware General
Corporation Law, the Company's Certificate of Incorporation limits the liability
of directors to the Company or its stockholders for monetary damages for breach
of a director's fiduciary duty except for liability for (i) any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) acts or
omissions not in good faith or which involved intentional misconduct or knowing
violation of law, (iii) unlawful payments of dividends or unlawful stock
purchases or redemptions as provided in Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which the director derived an
improper personal benefit. As a result of the Company's certificate of
incorporation provision and Delaware law, stockholders may have limited rights
to recover against directors for breach of fiduciary duty.
FOR ALL OF THE AFORESAID REASONS, AND OTHERS WHICH MAY NOT BE SET FORTH
HEREIN, THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY SHOULD BE AWARE OF THESE AND
OTHER FACTORS SET FORTH IN THIS PROSPECTUS. THE COMMON STOCK SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD A TOTAL LOSS OF THEIR ENTIRE INVESTMENT IN THE
COMPANY AND HAVE NO IMMEDIATE NEED FOR A RETURN OF THEIR INVESTMENT.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of any of
the Common Stock offered for resale in this Prospectus by the Selling
Stockholders. The Company will, however, receive gross proceeds of approximately
$12,100,000, assuming all of the warrants to purchase Common Stock are exercised
in full by the Selling Stockholders owning such warrants. There is no assurance,
however, that any of the warrants will be exercised. The proceeds received from
the exercise of warrants will be used for working capital and general corporate
purposes of the Company.
15
<PAGE>
SELLING SECURITY HOLDERS
The following table sets forth information with respect to the Selling
Stockholders. An aggregate of 2,718,332 shares of Common Stock are being
registered in the Registration Statement of which this Prospectus forms a part
for resale by the holders of such shares. Of such 2,718,332 shares, 1,070,000
shares were issued in an acquisition in September, 1997, by the Company of all
of the issued and outstanding stock of Allegiant Legacy Solutions, Inc., 146,000
shares were issued to Charles W. Fritz, the Company's President and Chief
Executive Officer upon the partial exercise by him of the original 260,000
shares that were available for purchase under the Principal Stockholder's
Warrant (114,000 shares are still available to be purchased under the Principal
Stockholder's Warrant and are being registered in the Registration Statement of
which this Prospectus forms a part), and 1,502,332 shares are issuable upon the
exercise of warrants to purchase shares of Common Stock ("Selling Stockholders'
Warrants") issued to five of the Selling Stockholders. The Company will not
receive any proceeds from the resale of these shares. The costs and expenses
incurred in qualifying these shares under federal and state securities laws will
be borne by the Company, but all commissions, selling and other expenses
incurred in connection with the resale of shares by a Selling Stockholder will
be borne by such Selling Stockholder. The Company will, however, receive payment
of the exercise prices of the Selling Stockholder's Warrants to the extent any
of the Selling Stockholder's Warrants are exercised. If all of the Selling
Stockholder's Warrants are exercised to their fullest extent, the Company will
receive gross proceeds of approximately $12,100,000. There is no assurance,
however, that any of the Selling Stockholder's Warrants will be exercised. The
Company does not know if any of the Selling Stockholders that currently hold a
Selling Stockholder's Warrant will exercise the Selling Stockholder's Warrant,
and if exercised when such Selling Stockholder will thereafter offer for sale
any or all of the shares of Common Stock received upon exercise. Each Selling
Stockholder will determine when and the number of shares such Selling
Stockholder will sell from time to time. Accordingly, the following list of
Selling Stockholders assumes that all of the Selling Stockholder's Warrants have
been exercised to their fullest extent and that all shares of Common Stock
received upon such exercise and all shares of Common Stock currently owned and
being registered for resale, in the Registration Statement of which this
Prospectus forms a part, are thereafter resold, resulting in no remaining shares
of Common Stock being owned by any such Selling Stockholder.
16
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING
------------------------------ -----------------------------
ISSUABLE UPON
NUMBER OF EXERCISE NUMBER OF PERCENTAGE
SHARES OF OF SELLING SHARES OF OF
NAME OF COMMON STOCKHOLDERS' COMMON COMMON
SELLING STOCKHOLDER STOCK WARRANTS (1) STOCK STOCK (2)
- ------------------- ------------- ------------- --------- -----------
<S> <C> <C> <C> <C>
Gerald L. Willis 535,000 (3)(4) - (5) - (4)(5)
The George Luntz Family
Living Trust, as amended 535,000 (3)(6)(7) - (5) - (5)(7)
Charles W. Fritz (8) 2,032,369 (9) 414,000 (10) 1,472,369 (11) 16.3% (11)
Joseph Charles &
Associates, Inc. 405,000 (12) - (13) - (13)(14)
Dominick & Dominick
Incorporated 375,000 (15) - (13) - (13)(16)
Thornhill Capital, L.L.C. 135,000 (15) - (13) - (13)(17)
Compass Capital, Inc. 173,332 (15) - (13) - (13)(18)
--------- ---------
3,102,369 1,502,332
========= =========
<FN>
- -----------------------------
(1) Except for 146,000 shares of Common Stock issued in September, 1997 on the
partial exercise of the Principal Stockholder's Warrant, none of the other
Selling Stockholders' Warrants were exercised prior to the date of this
Prospectus.
(2) The percentage is based on a total of 8,575,156 outstanding shares of
Common Stock as of May 1, 1998 and assumes that none of the other Selling
Stockholders' Warrants have been exercised.
(3) Mr. Willis, as a consultant, and Mr. Luntz, as an employee, have each
served the Company since September, 1997, when the Company acquired
Allegiant Legacy Solutions, Inc. ("ALS"), which was owned by Messrs. Willis
and Luntz. The shares being registered were received by them in exchange
for all of their shares of common stock of ALS.
(4) Does not include options granted to Mr. Willis to purchase 10,000
shares of Common Stock, none of which are currently exercisable or
exercisable within sixty days of the date of this Prospectus.
(5) Since each Selling Stockholder will determine when and the number of
shares such Selling Stockholder will sell, this assumes that the entire
535,000 shares of Common Stock owned prior to the offering are sold.
If none of these shares are sold, approximately 6.2% of NeoMedia's
outstanding shares of Common Stock will be owned.
(6) George Luntz is the settlor of this Trust and is deemed to be the
beneficial owner of the shares of Common Stock held by the Trust.
(7) Does not include options granted to Mr. Luntz to purchase 15,000 shares
of Common Stock, none of which are currently exercisable or exercisable
within sixty days of the date of this Prospectus.
(8) President and Chief Executive Officer.
17
<PAGE>
(9) Shares beneficial owned include (i) 400 shares of Common Stock (100 shares
owned by each of Mr. Fritz's four minor children for an aggregate of 400
shares), (ii) 114,000 shares of Common Stock issuable upon further exercise
of the Principal Stockholder's Warrant, which is currently exercisable,
(iii) 300,000 shares of Common Stock issuable upon exercise of the Fritz
Warrant, which is currently exercisable, and (iv) options to purchase
40,000 shares of Common Stock granted under the Company's 1998 Stock Option
Plan and which are currently exercisable. Does not include options to
purchase 160,000 shares of NeoMedia Common Stock under the 1998 Stock
Option Plan, which are not currently exercisable or exercisable within
sixty days of the date of this Prospectus. Up to 260,000 shares of Common
Stock were issuable upon exercise of the Principal Stockholder's Warrant.
Mr. Fritz partially exercised this warrant in September, 1997, and
purchased 146,000 shares of Common Stock. 114,000 shares of Common Stock,
all of which are being registered for resale by Mr. Fritz, are issuable
upon further exercise of the Principal Stockholder's Warrant.
(10) Represents (i) 114,000 shares of Common Stock issuable upon further
exercise of the Principal Stockholder's Warrant and (ii) 300,000 shares of
Common Stock issuable upon exercise of the Fritz Warrant.
(11) Since Mr. Fritz will determine when and the number of shares he will
sell, this assumes that (i) the 146,000 shares of Common Stock received
upon partial exercise of the Principal Stockholder's Warrant are sold,
(ii) the 114,000 shares of Common Stock issuable upon further exercise
of the Principal Stockholder's Warrant are purchased and sold, and (iii)
all 300,000 shares of Common Stock issuable upon exercise of the Fritz
Warrant are purchased and sold. If none of these shares are sold, assuming
that the Warrants are exercised to thier fullest extent, Mr. Fritz will own
approximately 22.5% of NeoMedia's outstanding shares of Common Stock.
(12) Joseph Charles & Associates, Inc. ("JCA") was the managing underwriter of
the initial public offering of the Company's securities in the November,
1996 Public Offering. It is also a consultant to the Company. 340,000 of
the shares are issuable upon exercise of a warrant issued to JCA in partial
consideration of the services rendered in the Public Offering and 65,000
shares are issuable upon exercise of a warrant issued in consideration of
services rendered as a consultant to the Company.
(13) Since each Selling Stockholder will determine when and the number of shares
such Selling Stockholder will from time to time sell, this assumes that
each Selling Stockholder exercises its Selling Stockholders' Warrant to its
fullest extent and that all shares received upon such exercise are
thereafter resold, resulting in the Selling Stockholder not owning any
shares of Common Stock.
(14) If none of these shares are sold, assuming that the Warrant is
exercised to its fullest extent, JCA will own approximately 4.5% of
NeoMedia's outstanding shares of Common Stock.
(15) Represents shares issuable upon the exercise of a warrant issued in
consideration of services rendered as a consultant to the Company.
(16) If none of these shares are sold, assuming that the Warrant is
exercised to its fullest extent, Dominick & Dominick, Incorporated will own
approximately 4.2% of NeoMedia's outstanding shares of Common Stock.
(17) If none of these shares are sold, assuming that the Warrant is
exercised to its fullest extent, Thornhill Capital, L.L.C. will own
approximately 1.5% of NeoMedia's outstanding shares of Common Stock.
(18) If none of these shares are sold, assuming that the Warrant is
exercised to its fullest extent, Compass Capital, Inc. will own
approximately 2.0% of NeoMedia's outstanding shares of Common Stock.
</FN>
</TABLE>
Sales of these shares of Common Stock, or even the potential for such sales
at any time, may have a material adverse effect on the market price of the
Company's Common Stock.
18
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock may be sold, from time to time, to purchasers
directly by any of the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made on NASDAQ, in negotiated
transactions, through the writing of options on the shares of Common Stock, or
through a combination of such methods of sale, at market prices prevailing at
the time of sale, prices related to the then-current market price or at
negotiated prices, including pursuant to an underwritten offering or one or more
of the following methods: (a) purchases by a broker/dealer as principal and
resale by such broker or dealer for its account; (b) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (c)
block trades in which the broker/dealer so engaged will attempt to sell the
shares as an agent, but may position and resell a portion of the block as a
principal to facilitate the transaction. The Selling Stockholders may also
pledge the shares of Common Stock as collateral for margin accounts and such
shares could be resold pursuant to the terms of such accounts. In effecting
sales, broker/dealers engaged by the Selling Stockholders may arrange for other
broker/dealers to participate. Such broker/dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of the shares for which such broker/dealers may act as
agent or to whom they may sell as principal, or both, (which compensation is
negotiated and which, as to a particular broker/dealer, may be in excess of
customary compensation). Any broker/dealer may act as broker/dealer on behalf of
one or more of the Selling Stockholders in connection with the offering of
shares of Selling Stockholders. The Company will pay the expenses, in connection
with this offering, other than transfer taxes, discounts, commissions, fees or
expenses of underwriters, selling brokers, dealer, managers or similar
securities industry professionals relating to the distribution of the shares of
Common Stock, or legal expenses of any person other than the Company.
There is no underwriter or coordinating broker acting in connection with
this offering. In offering the shares of Common Stock covered hereby, the
Selling Stockholders and any broker/dealers and any other participating
broker/dealers who execute sales of the Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), in connection with such sales, and any profits realized by
the Selling Stockholders and the compensation of such broker/dealer may be
deemed to be underwriting discounts and commissions. In addition, broker/dealers
that purchase shares of Common Stock from Selling Stockholders as principals for
their own account and then resell such shares would also be deemed underwriters.
At the time a particular sale or distribution is made, a Prospectus
supplement, to the extent required, will be distributed which will set forth the
aggregate amount of shares being offered, the names of the Selling Stockholders,
the purchase price, the amount of expenses and the terms of the sale or
distribution, including the name or names of any underwriters, brokers, dealers
or agents, any discounts, commissions and other items constituting compensation
from the Selling Stockholders and any discounts, commissions or concessions
allowed or paid to underwriters, brokers, dealers or agents.
19
<PAGE>
Underwriters, brokers, dealers and agents may be entitled under agreements
entered into with the Selling Stockholders to indemnification by the Selling
Stockholders against certain civil liabilities, including liabilities under the
Securities Act. Such underwriters, brokers, dealers and agents may be customers
of, may engage in transactions with, or perform services for the Selling
Stockholders in the ordinary course of business.
COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
As permitted by the Delaware General Corporation Law ("DGCL"), the Company
has included in its Certificate of Incorporation a provision to eliminate the
personal liability of its directors for monetary damages for breach or alleged
breach of their fiduciary duties as directors, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involved intentional
misconduct or a knowing violation of law, (iii) in respect of certain unlawful
dividend payments or stock redemptions or repurchases, as provided in Section
174 of the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit. The effect of this provision in the Company's
Certificate of Incorporation is to eliminate the rights of the Company and its
stockholders (through stockholders' derivative suits on behalf of the Company)
to recover monetary damages against a director for breach of the fiduciary duty
of care as a director except in the situations described in (i) through (iv)
above. This provision does not limit nor eliminate the rights of the Company or
any stockholder to seek non-monetary relief such as an injunction or rescission
in the event of a breach of a director's duty of care. These provisions will not
alter the liability of directors under federal securities laws.
The Certificate of Incorporation and the by-laws of the Company provide
that the Company is required and permitted to indemnify its officers and
directors, employees and agents under certain circumstances. In addition, if
permitted by law, the Company is required to advance expenses to its officers
and directors as incurred in connection with proceedings against them in their
capacity as a director or officer for which they may be indemnified upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not entitled to
indemnification. At present, the Company is not aware of any pending or
threatened litigation or proceeding involving a director, officer, employee or
agent of the Company in which indemnification would be required or permitted. In
accordance with its agreement with the Representative, the Company has obtained
directors' and officers' liability insurance. The Company believes that its
charter provisions and indemnification agreements are necessary to attract and
retain qualified persons as directors and officers.
20
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been advised
that in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
VALIDITY OF SHARES
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Fishman, Merrick, Miller, Genelly, Springer, Klimek &
Anderson, P.C., 125 South Wacker Drive, Suite 2800, Chicago, Illinois 60606.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-KSB for the year ended December 31,
1997, have been incorporated in reliance on the report of KPMG Peat Marwick LLP,
independent certified public accountants, regarding the year ended December 31,
1997, and Coopers & Lybrand L.L.P., independent certified public accountants,
regarding the year ended December 31, 1996, given on the authority of those
respective firms as experts in accounting and auditing.
21
<PAGE>
[OUTSIDE BACK COVER]
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THE MATTERS DESCRIBED IN THIS PROSPECTUS OTHER
THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY EITHER THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
BY ANY PERSON IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
securities to be registered, other than underwriting discounts and commissions,
all of which will be paid by the Company, are as follows:
Registration Fee.................................. $ 7,000
Legal Fees and Expenses........................... $15,000
Accounting Fees and Expenses...................... $20,000
Miscellaneous..................................... $10,000
-------
TOTAL............................................. $52,000
=======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law authorizes Delaware
corporations to indemnify their officers and directors under certain
circumstances against expenses and liabilities incurred in legal proceedings
involving such persons because of their being or having been an officer or
director. The Company's Certificate of Incorporation and by-laws require
indemnification of the Company's officers and directors to the fullest extent
permitted by Delaware law. The Company also maintains directors' and officers'
liability insurance.
ITEM 16. EXHIBITS.
The following documents are filed herewith or incorporated by reference
from the Company' Registration Statement on Form SB-2 (Commission File No.
333-5534), and made a part of this Registration Statement. Items marked with an
asterisk are incorporated by reference. Items marked with a double asterick were
previously filed with the Registration Statement.
EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------
*4.1 Articles of Incorporation of Dev-Tech Associates, Inc. and amendment
thereto
*4.2 By-laws of Dev-Tech Associates, Inc.
*4.3 Restated Certificate of Incorporation of DevSys, Inc.
*4.4 By-laws of DevSys, Inc.
23
<PAGE>
*4.5 Articles of Merger and Agreement and Plan of Merger of DevSys, Inc. and
Dev-Tech Associates, Inc.
*4.6 Certificate of Merger of Dev-Tech Associates, Inc. into DevSys, Inc.
*4.7 Form of Certificate for Common Stock for DevSys, Inc.
**4.8 Certificate of Amendment and Restated Certificate of Incorporation of
NeoMedia Technologies, Inc.
5.1 Opinion of Fishman, Merrick, Miller, Genelly, Springer, Klimek &
Anderson, P.C.
23.1 Consent of Fishman, Merrick, Miller, Genelly, Springer, Klimek &
Anderson, P.C. (included in Exhibit 5.1)
23.2 Consent of Coopers and Lybrand L.L.P.
23.3 Consent of KPMG Peat Marwick LLP
**24.1 Power of Attorney (contained on the signature page hereof)
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
24
<PAGE>
(iii) To include any additional or changed material information on
the plan of distribution;
provided, however, that paragraph (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reported filed with or furnished to the
Commission by the Registrant pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fort Myers, State of
Florida, on the 16th day of June, 1998.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ CHARLES W. FRITZ
---------------------
Charles W. Fritz
Pursuant to the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ CHARLES W. FRITZ President, Chief Executive June 16, 1998
- ------------------------- Officer and Director
Charles W. Fritz
* Secretary and Director June 16, 1998
- -------------------------
William E. Fritz
* Chief Financial Officer, June 16, 1998
- ------------------------- Treasurer and Director
Charles T. Jensen
* Director June 16, 1998
- ------------------------
Robert T. Durst, Jr.
* Director June 16, 1998
- ------------------------
A. Hayes Barclay
* Director June 16, 1998
- ------------------------
James J. Keil
Director
- ------------------------
Paul Reece
/s/ CHARLES W. FRITZ
- ------------------------
* by Charles W. Fritz, Attorney-in-fact,
pursuant to a power of attorney heretofore
filed.
</TABLE>
26
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
5.1 Opinion of Fishman, Merrick, Miller, Genelly, Springer, Klimek &
Anderson, P.C.
23.1 Consent of Fishman, Merrick, Miller, Genelly, Springer, Klimek &
Anderson, P.C. (included in Exhibit 5.1)
23.2 Consent of Coopers and Lybrand L.L.P.
23.3 Consent of KPMG Peat Marwick LLP
[LETTERHEAD]
EXHIBIT 5.1
June 16, 1998
NeoMedia Technologies, Inc.
2201 Second Street
Suite 100
Fort Myers, Florida 33901
Attention: President
RE: NEOMEDIA TECHNOLOGIES, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the form of registration statement on Form S-3 (the
"Registration Statement") being filed by NeoMedia Technologies, Inc., a Delaware
corporation (the "Company"), with the United States Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended, of a total of 2,718,332 shares of the Company's common stock, $01
par value ("Common Stock"), for resale by the selling securities holders listed
in the Registration Statement, of which 1,216,000 shares are currently issued
and outstanding and 1,502,332 shares are issuable upon exercise of several
common stock purchase warrants.
We have acted as securities counsel for the Company in connection with the
preparation of the Registration Statement, and we have examined the corporate
proceedings relating to the authorization, issuance and sale of the securities
referred to above. For purposes of this opinion, we have assumed (i) the
accuracy and completeness of all data supplied by the Company, its officers,
directors or agents, and (ii) that all requisite authorizations, approvals,
consents or exemptions under the securities laws of the various states and other
jurisdictions of the United States shall have been obtained.
Based on the foregoing, it is our opinion that the currently issued and
outstanding 1,216,000 shares of Common Stock covered by the Registration
Statement are validly issued, fully paid and non-assessable and the 1,502,332
shares of Common Stock issuable upon
<PAGE>
[LETTERHEAD]
NeoMedia Technologies, Inc.
June 16, 1998
Page Two
exercise of the several common stock purchase warrants when the exercise is paid
in full in accordance with the terms and conditions of each common stock
purchase warrant will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FISHMAN, MERRICK, MILLER, GENELLY,
SPRINGER, KLIMEK & ANDERSON, P.C.
---------------------------------------
Fishman, Merrick, Miller, Genelly,
Springer, Klimek & Anderson, P.C.
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement of
NeoMedia Technologies, Inc.(the "Company") on Form S-3 (File No. 333-51811) of
our report dated October 24, 1997, on our audit of the consolidated financial
statements of NeoMedia Technologies, Inc. and subsidiaries as of December 31,
1996, and for the year then ended. We also consent to the references to our firm
under the heading "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Chicago, Illinois
June 12, 1998
EXHIBIT 23.3
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
NeoMedia Technologies, Inc.:
We consent to the use of our report incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Miami, Florida
June 13, 1998
