U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
FORM 10 - QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-21743
NEOMEDIA TECHNOLOGIES, INC.
---------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified In Its Charter)
DELAWARE 36-3680347
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2201 SECOND STREET, SUITE 600, FORT MYERS, FLORIDA 33901
- -------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number (Including Area Code) 941-337-3434
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of October 21, 1999, there were outstanding 11,308,965 shares of the
issuer's Common Stock (excluding 375,000 shares held in escrow as security for
loans).
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEOMEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(Unaudited) (Audited)
ASSETS (Dollars in thousands
except share data)
<S> <C> <C>
Current assets:
Cash and cash equivalents, including restricted amounts of $900 in 1999
and $750 in 1998 .................................................. $ 3,728 $ 1,350
Trade accounts receivable, net of allowance for doubtful
accounts of $219 in 1999 and $225 in 1998 ......................... 5,164 5,912
Amounts due from related parties ...................................... 250 4
Inventories ........................................................... 78 --
Prepaid expenses and other current assets ............................. 780 849
-------- --------
Total current assets .............................................. 10,000 8,115
-------- --------
Property and equipment, net ............................................... 624 786
Intangible assets, net .................................................... 3,811 3,729
-------- --------
Total assets .............................................................. $ 14,435 $ 12,630
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................................................... $ 3,596 $ 5,898
Accrued expenses ...................................................... 1,202 1,000
Current portion of long-term debt ..................................... 586 577
Sales taxes payable ................................................... 544 430
Deferred revenues ..................................................... 491 656
Other ................................................................. 10 7
-------- --------
Total current liabilities ......................................... 6,429 8,568
-------- --------
Long-term debt, net of current portion .................................... 708 801
-------- --------
Total liabilities ................................................. 7,137 9,369
-------- --------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized,
none issued or outstanding ........................................ -- --
Common stock, $.01 par value, 50,000,000 shares authorized,
11,654,965 shares issued in 1999 (11,279,965 outstanding) and
9,074,080 shares issued in 1998 (8,699,080 outstanding) ........... 113 87
Additional paid-in capital ........................................ 35,770 25,168
Accumulated deficit ................................................... (28,585) (21,994)
-------- --------
Total shareholders' equity ........................................ 7,298 3,261
-------- --------
Total liabilities and shareholders' equity ................................ $ 14,435 $ 12,630
======== ========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.
</TABLE>
2
<PAGE>
NEOMEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
1999 1998
------------ -----------
(Unaudited) (Unaudited)
(Dollars in thousands,
except per share data)
<S> <C> <C>
NET SALES:
License fees ........................................... $ 2,329 $ 1,685
Resales of software and technology equipment ........... 15,047 10,920
Service fees ........................................... 2,789 2,768
----------- -----------
Total net sales .................................... 20,165 15,373
----------- -----------
COST OF SALES:
License fees ........................................... 530 148
Resales of software and technology equipment ........... 13,249 9,436
Service fees ........................................... 2,813 2,574
Amortization of capitalized software costs ............. 631 413
----------- -----------
Total cost of sales ................................ 17,223 12,571
----------- -----------
GROSS PROFIT ............................................... 2,942 2,802
Sales and marketing expenses ............................... 5,127 7,357
General and administrative expenses ........................ 3,463 4,128
Research and development costs ............................. 780 590
----------- -----------
Loss from operations ....................................... (6,428) (9,273)
Interest expense (income), net ............................. 163 (156)
----------- -----------
LOSS BEFORE INCOME TAXES ................................... 6,591) (9,117)
Income tax (benefit) ....................................... -- --
----------- -----------
NET LOSS ................................................... $ (6,591) $ (9,117)
----------- -----------
NET LOSS PER SHARE - BASIC AND DILUTED ..................... $ (0.67) $ (1.07)
----------- -----------
Weighted average number of common shares - basic and diluted 9,882,097 8,515,339
=========== ===========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.
</TABLE>
3
<PAGE>
NEOMEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED SEPTEMBER 30,
1999 1998
----------- ----------
(Unaudited) (Unaudited)
(Dollars in thousands,
except per share data)
<S> <C> <C>
NET SALES:
License fees ........................................... $ 357 $ 290
Resales of software and technology equipment ........... 4,158 3,383
Service fees ........................................... 504 651
------------ -----------
Total net sales .................................... 5,019 4,324
------------ -----------
COST OF SALES:
License fees ........................................... 151 34
Resales of software and technology equipment ........... 3,990 3,076
Service fees ........................................... 643 952
Amortization of capitalized software costs ............. 246 188
------------ -----------
Total cost of sales ................................ 5,030 4,250
------------ -----------
GROSS PROFIT ............................................... (11) 74
Sales and marketing expenses ............................... 1,596 2,739
General and administrative expenses ........................ 1,010 1,133
Research and development costs ............................. 277 110
------------ -----------
Loss from operations ....................................... (2,894) (3,908)
Interest expense (income), net ............................. 43 (19)
------------ -----------
LOSS BEFORE INCOME TAXES ................................... (2,937) (3,889)
Income tax (benefit) ....................................... -- --
------------ -----------
NET LOSS ................................................... $ (2,937) $ (3,889)
------------ -----------
NET LOSS PER SHARE - BASIC AND DILUTED ..................... $ (0.27) $ (0.45)
============ ===========
Weighted average number of common shares - basic and diluted 10,837,138 8,665,908
============ ===========
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.
</TABLE>
4
<PAGE>
NEOMEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
1999 1998
----------- -----------
(Unaudited) (Unaudited)
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................................... $ (6,591) $ (9,117)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization .......................................... 1,067 715
Provision for doubtful accounts ........................................ (6) 341
Changes in operating assets and liabilities:
Trade accounts receivable .......................................... 504 2,366
Other current assets ............................................... (5) 70
Accounts payable and accrued expenses .............................. (2,093) (969)
Other current liabilities .......................................... (48) 78
-------- --------
Net cash used in operating activities .............................. (7,172) (6,516)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capitalization of software development costs and purchased intangible assets (891) (1,091)
Acquisition of customer list ............................................... -- (292)
Acquisition of property and equipment ...................................... (96) (436)
-------- --------
Net cash used in investing activities .............................. (987) (1,819)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from exercise of stock options ................................ 955 342
Borrowings under short term debt ........................................... 2,000 --
Repayments on long term debt ............................................... (84) (156)
Net proceeds from the issuance of stock .................................... 7,666 --
-------- --------
Net cash provided by financing activities .......................... 10,537 186
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS .................................. 2,378 (8,149)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ............................. 1,350 10,283
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................................... $ 3,728 $ 2,134
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid .......................................................... $ 102 $ 95
Stock issued to acquire customer list .................................. -- 826
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Conversion of short-term debt to equity ................................ $ 2,000 --
The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.
</TABLE>
5
<PAGE>
NEOMEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS
BASIS OF PRESENTATION
The condensed consolidated financial statements include the financial
statements of NeoMedia Technologies, Inc. and its wholly-owned subsidiaries. The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not include
all of the information and footnotes required by generally accepted accounting
principles for complete consolidated financial statements. In the opinion of
management, these condensed consolidated financial statements reflect all
adjustments which are of a normal recurring nature and which are necessary to
present fairly the consolidated financial position of NeoMedia as of September
30, 1999 and December 31, 1998, and the results of operations for the nine
months ended September 30, 1999 and 1998, and cash flows for the nine months
ended September 30, 1999 and 1998. The results of operations for the nine months
ended September 30, 1999 are not necessarily indicative of the results which may
be expected for the entire fiscal year. All significant intercompany accounts
and transactions have been eliminated in preparation of the condensed
consolidated financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Through the nine months ended September 30, 1999, a substantial part of
NeoMedia's revenue was derived from resales of software and technology
equipment. NeoMedia couples its proprietary software products with independent
vendor products it resells, enabling it to provide a complete "turn-key" service
for its customers. Currently, NeoMedia's revenue consists of (i) software
license fees, (ii) resales of software and technology equipment from independent
vendors and (iii) service fees, including consulting and post contract software
support.
NeoMedia's strategy is to increase sales of its proprietary Intelliget
Documents(TM) technology as a percentage of total sales. The Company is
currently developing an internet service offering for its print-to-internet
Intelligent Documents(TM) technology called PaperClick(SM). Paperclick(SM) is
expected to be offered as a free service to allow users to link printed material
to web pages on the Internet. Revenue for PaperClick(SM) is expected to come
from advertising, affiliate arrangements, consulting, and demographic reporting
services. NeoMedia has built and intends to continue to build an infrastructure
that assumes this strategy will succeed. Therefore, failure to achieve this
strategy could have a material adverse effect on NeoMedia's business, financial
condition and results of operations.
NeoMedia's quarterly operating results have been subject to variation and
will continue to be subject to variation, depending upon factors, such as the
mix of business among NeoMedia's services and products, the cost of material,
labor and technology, particularly in connection with the delivery of business
services, the costs associated with initiating new contracts, the economic
condition of NeoMedia's target markets, and the cost of acquiring and
integrating new businesses.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED
TO THE NINE MONTHS ENDED SEPTEMBER 30, 1998
NET SALES. Total net sales for the nine months ended September 30, 1999 were
$20.2 million, which represented a $4.8 million, or 31.2%, increase from $15.4
million for the nine months ended September 30, 1998. This increase primarily
resulted from greater resales of Sun Microsystems hardware during 1999.
LICENSE FEES. License fees for the nine months ended September 30, 1999 were
$2.3 million compared to $1.7 million for the nine months ended September 30,
1998, an increase of $0.6 million or 35.3%. This increase resulted primarily
from a $425,000 sale of a NeoLink(TM) software license during the second quarter
of 1999. Cost of sales as
6
<PAGE>
a percentage of related sales was 22.7% during 1999 compared to 8.8% during
1998. This increase in the cost of sales as a percentage of related sales was
primarily due to the increased sales of software with royalties.
RESALES OF SOFTWARE AND TECHNOLOGY EQUIPMENT. Resales of software and
technology equipment increased by $4.1 million, or 37.6%, to $15.0 million for
the nine months ended September 30, 1999, as compared to $10.9 million for the
nine months ended September 30, 1998. This increase primarily resulted from a
large volume of Sun Microsystems hardware resales. Cost of sales as a percentage
of related sales was 88.1% during 1999, compared to 86.4% during 1998 primarily
due to a lower margin on Sun Microsystems hardware resales.
SERVICE FEES. NeoMedia's service fees remained unchanged at $2.8 million for
the nine months ended September 30, 1999, compared to the nine months ended
September 30, 1998. Cost of service fees as a percentage of related sales
increased to 100.1% during 1999 from 93.0% during 1998 primarily due to lower
margins on Year 2000 services and an increase in salaries and subcontractor
costs.
SALES AND MARKETING. A portion of the compensation to the sales and
marketing staff constitutes salary and is fixed in nature and the remainder of
this compensation, which is paid as a commission, is directly related to sales
volume. Sales and marketing expenses decreased by $2.3 million, or 31.1%, to
$5.1 million for the nine months ended September 30, 1999, compared to $7.4
million for the nine months ended September 30, 1998. The decrease was primarily
due to reductions in marketing expenses and reductions in selling expenses
related to Year 2000 products.
GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased by
$0.6 million, or 14.6%, from $4.1 million for the nine months ended September
30, 1998 to $3.5 million for the nine months ended September 30, 1999. The
decrease was primarily due to a decrease in outside professional and legal
services, as well as a drop in incidental expenses such as travel and lodging.
RESEARCH AND DEVELOPMENT. Research and development expense increased to
$780,000 for the nine months ended September 30, 1999, compared to $590,000 for
the nine months ended September 30, 1998. These expenditures are primarily
attributable to the cost of employees further researching and enhancing
IDOCs(TM) products. To the extent the Company can obtain additional capital, it
will continue to make significant investments in research and development.
INTEREST EXPENSE/(INCOME), NET. Interest expense consists primarily of
interest paid to creditors as part of financed purchases, capitalized leases,
notes payable and NeoMedia's asset-based collateralized line of credit net of
interest earned on cash equivalent investments. Interest expense/(income)
increased by $319,000, or (204.5)%, to $163,000 for the nine months ended
September 30, 1999 from ($156,000) for the nine months ended September 30, 1998,
due to the interest expense incurred on new debt issued during the last quarter
of 1998 and lower cash balances in 1999, from which less interest income was
received.
NET LOSS. The net loss for the nine months ended September 30, 1999 was $6.6
million, which represented a $2.5 million, or 27.5%, decrease from a $9.1
million loss for the nine months ended September 30, 1998. The decrease in net
loss primarily resulted from an increase in sales, as well as a decrease in
selling, marketing and administrative expenses during 1999.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED
TO THE THREE MONTHS ENDED SEPTEMBER 30, 1998
NET SALES. Total net sales for the three months ended September 30, 1999
were $5.0 million, which represented a $0.7 million, or 16.3%, increase from
$4.3 million for the three months ended September 30, 1998. This increase
primarily resulted from greater resales of Sun Microsystems hardware during
1999.
LICENSE FEES. License fees for the three months ended September 30, 1999
were $357,000 compared to $290,000 for the three months ended September 30,
1998, an increase of $67,000 or 23.1%. This increase resulted primarily from
higher sales of Adapt PC(TM) software licenses in 1999. Cost of sales as a
percentage of related sales was 42.3% during
7
<PAGE>
1999 compared to 11.7% during 1998. This increase in the cost of sales as a
percentage of related sales was primarily due to increased sales of lower-margin
Adapt PC(TM) software.
RESALES OF SOFTWARE AND TECHNOLOGY EQUIPMENT. Resales of software and
technology equipment increased by $0.8 million, or 23.5%, to $4.2 million for
the three months ended September 30, 1999, as compared to $3.4 million for the
three months ended September 30, 1998. This increase primarily resulted from
increased sales of Sun Microsystems hardware during 1999. Cost of sales as a
percentage of related sales was 96.0% during 1999, compared to 91.0% during
1998, primarily due to a lower margin on Sun Microsystems hardware.
SERVICE FEES. NeoMedia's service fees decreased by $147,000, or 22.6%, to
$504,000 for the three months ended September 30, 1999, compared to $651,000 for
the three months ended September 30, 1998. This decrease was primarily due to a
decrease in fees related to Year 2000 services during 1999. Cost of service fees
as a percentage of related sales decreased to 127.6% during 1999 from 146.2%
during 1998 primarily due to decreased subcontractor costs during the third
quarter of 1999.
SALES AND MARKETING. A portion of the compensation to the sales and
marketing staff constitutes salary and is fixed in nature and the remainder of
this compensation, which is paid as a commission, is directly related to sales
volume. Sales and marketing expenses decreased by $1.1 million, or 40.7%, to
$1.6 million for the three months ended September 30, 1999, compared to $2.7
million for the three months ended September 30, 1998. The decrease was
primarily due to reductions in marketing expenses and reductions in selling
expenses related to Year 2000 products.
GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased by
$0.1 million, or 9.1%, from $1.1 million for the three months ended September
30, 1998 to $1.0 million for the three months ended September 30, 1999. The
decrease was primarily due to a decrease in outside professional and legal
services, as well as a drop in incidental expenses such as travel and lodging.
RESEARCH AND DEVELOPMENT. Research and development expense increased to
$277,000 for the three months ended September 30, 1999, from $110,000 for the
three months ended September 30, 1998. These expenditures are primarily
attributable to the cost of employees further researching and enhancing
IDOCs(TM) products. To the extent the Company can obtain additional capital, it
will continue to make significant investments in research and development.
INTEREST EXPENSE/(INCOME), NET. Interest expense consists primarily of
interest paid to creditors as part of financed purchases, capitalized leases,
notes payable and NeoMedia's asset-based collateralized line of credit net of
interest earned on cash equivalent investments. Interest expense/(income)
increased by $62,000, or (326.3)%, to $43,000 for the three months ended
September 30, 1999 from ($19,000) for the three months ended Sepetmber 30, 1998,
due to the interest expense incurred on new debt issued during the last quarter
of 1998 and lower cash balances in 1999, from which less interest income was
received.
NET LOSS. The net loss for the three months ended September 30, 1999 was
$2.9 million, which represented a $1.0 million, or 25.6%, decrease from a $3.9
million loss for the three months ended September 30, 1998. The decrease in net
loss primarily resulted from an increase in sales, as well as a decrease in
selling, marketing and administration expenses during 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, NeoMedia's working capital was $3.6 million
which represented a $4.1 million increase from December 31, 1998. As of
September 30, 1999, NeoMedia's cash and cash equivalents were $3.7 million,
which represented a $2.3 million increase from December 31, 1998.
NeoMedia anticipates that its existing cash balances and funds available
from borrowings under its existing financing agreement will have to be
supplemented with additional funds, through loans and/or capital contributions,
to finance NeoMedia's operations in 1999. During the first nine months of 1999,
the Company has successfully obtained
8
<PAGE>
approximately $10.5 million of equity financing. If necessary funds are not
available, NeoMedia's business and operations would be materially adversely
affected and in such event, NeoMedia would attempt to reduce costs and adjust
its business plan.
Net cash used in operating activities for the nine months ended September
30, 1999 and 1998, was $7.2 million and $6.5 million, respectively. During 1999,
trade accounts receivable decreased $504,000, while accounts payable and accrued
expenses and other current liabilities decreased $2.1 million. During the same
period in 1998, trade accounts receivable decreased $2.4 million, while accounts
payable and accrued expenses and other current liabilities decreased $891,000.
NeoMedia's net cash flow used in investing activities for the nine months ended
September 30, 1999 and 1998, was $1.0 million and $1.8 million, respectively.
This decrease resulted from a decrease in purchases of intangible assets and
equipment during 1999.
Net cash provided by financing activities for the nine months ended
September 30, 1999 and 1998, was $10.5 million and $186,000, respectively. The
increase was due to approximately $10.5 million in equity financing received
during 1999, including $955,000 from the exercise of employee stock options.
The Company has entered into a migration contract (specifically Year 2000
remediation) with a Colombian customer related to the remediation of certain of
the customer's computer systems to be Year 2000 compliant. The total value of
the contract is approximately $800,000, of which approximately $740,000 has been
recognized as revenue by the Company as of September 30, 1999. As an element to
the contract the Company has guaranteed its work product and resulting Year 2000
compliance of the customer, including the establishment in 1999 of a $150,000
bank guarantee in the form of a certificate of deposit totaling approximately
$150,000 in favor of the customer. The Company believes that it has the ability
and intent to complete such remediation in a satisfactory manner and is
accounting for this project on a percentage of completion basis.
YEAR 2000 ISSUES
In the next nine months, many companies, including NeoMedia, will face
potentially serious issues associated with the inability of existing data
processing hardware and software to appropriately recognize calendar dates
beginning in the year 2000. Many computer programs that can only distinguish the
final two digits of the year entered may read entries for the year 2000 as the
year 1900. In 1996, NeoMedia began the process of identifying the many software
applications and hardware devices used internally expected to be impacted by
this issue. NeoMedia's analysis encompasses its (i) applications software; (ii)
hardware and (iii) data residing in programs. The software programs used
internally by NeoMedia (primarily its general ledger accounting package) were
purchased from third party vendors. In assessing its risk of non-compliance, the
Company's internal systems department classified vital and non-vital production
systems. NeoMedia has completed the analysis of over 95% of all production
systems software (representing virtually all of the "vital" systems comprising
the corporate backbone), including verification by third party vendors that the
programs are Year 2000 compliant, as well as internal testing which confirms
readiness of those programs. NeoMedia incurred costs of approximately $1,000 in
upgrading the operating system, and about $3,500 in upgrading the application
program, for its existing accounting general ledger program. As an additional
measure of security, routine back-ups of data are performed to preserve
information in various vital systems, and manual or paper files are maintained
if other measures fail with regard to the most vital accounting functions. The
remaining 5% of the application software is considered either non-vital or
capable of compliance with a vendor-provided "patch" on an as-needed basis.
NeoMedia expects to test virtually all remaining application programs in 1999.
NeoMedia believes that the hardware devices supporting production systems which
were not year 2000 compliant have been replaced with those which are year 2000
compliant. The few remaining PC's which are not now compliant are scheduled for
routine replacement during 1999 with compliant hardware, thereby eliminating the
year 2000 concern. Although prudent measures have been taken, there can be no
assurance that NeoMedia will not be adversely affected by the failure of the
upgraded package to be fully year 2000 compliant as represented by the vendor.
With hardware and software matters nearing completion in 1999, NeoMedia is
presently utilizing its proprietary software tools to analyze vital data
residing in application programs, such as accounting spreadsheets, for
non-complaint data. Vital data will be remediated. NeoMedia believes that its
proprietary software, for which it is currently selling licenses, is year 2000
compliant. Remaining year 2000 remediation costs are anticipated to be
insignificant.
9
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K
(None)
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEOMEDIA TECHNOLOGIES, INC.
Registrant
Date NOVEMBER , 1999 By: /s/ CHARLES W. FRITZ
---------------- ---------------------------------------
Charles W. Fritz, President, Chief
Executive Officer and Chairman of the
Board
Date NOVEMBER , 1999 By: /s/ CHARLES T. JENSEN
---------------- ---------------------------------------
Charles T. Jensen, Vice President,
Chief Financial Officer, Treasurer and
Director
11
<PAGE>
EXHIBIT INDEX
SEQUENTIAL EXHIBIT
PAGE NUMBER NUMBER DOCUMENT
12 27.1 Article 5 Financial Data Schedule for September
30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,728
<SECURITIES> 0
<RECEIVABLES> 5,414
<ALLOWANCES> 219
<INVENTORY> 78
<CURRENT-ASSETS> 10,000
<PP&E> 624
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,435
<CURRENT-LIABILITIES> 6,429
<BONDS> 0
0
0
<COMMON> 35,883
<OTHER-SE> (28,585)
<TOTAL-LIABILITY-AND-EQUITY> 14,435
<SALES> 20,165
<TOTAL-REVENUES> 20,165
<CGS> 17,223
<TOTAL-COSTS> 17,223
<OTHER-EXPENSES> 9,370
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 163
<INCOME-PRETAX> (6,591)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,591)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,591)
<EPS-BASIC> (0.67)
<EPS-DILUTED> (0.67)
</TABLE>
