<PAGE>
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 June 30, 2000
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 July 20, 2000, there were outstanding 14,413,584 shares of the
issuer's Common Stock.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NeoMedia Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------- --------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS (Dollars in thousands
except share data)
Current assets:
Cash and cash equivalents, including restricted amounts of $944 in 2000
and $944 in 1999.................................................................. $ 5,800 $ 3,404
Short-term investments............................................................. 156 150
Trade accounts receivable, net of allowance for doubtful accounts of $469 in 2000
and $888 in 1999.................................................................. 7,542 3,419
Costs and Estimated earnings in excess of billings on uncompleted contracts........ 130 ---
Inventories........................................................................ 72 57
Prepaid expenses and other current assets.......................................... 400 264
-------- --------
Total current assets.............................................................. 14,100 7,294
-------- --------
Property and equipment, net.......................................................... 440 545
Intangible assets, net............................................................... 5,854 5,296
Other long-term assets............................................................... 4,575 522
-------- --------
Total assets......................................................................... $ 24,969 $ 13,657
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................... $ 6,484 $ 4,892
Accrued expenses................................................................... 1,422 720
Accrued patent cost................................................................ --- 1,863
Current portion of long-term debt.................................................. 147 625
Sales taxes payable................................................................ 469 454
Billings in excess of costs and estimated earnings on uncompleted contracts........ 24 131
Deferred revenues.................................................................. 138 265
Other.............................................................................. 11 11
-------- --------
Total current liabilities......................................................... 8,695 8,961
-------- --------
Long-term debt, net of current portion............................................... 609 676
-------- --------
Total liabilities................................................................. 9,304 9,637
-------- --------
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, 14,413,384 shares
issued and outstanding in 2000 and 12,398,389 shares issued in 1999
(12,023,389 outstanding).......................................................... 144 119
Additional paid-in capital......................................................... 52,508 36,367
Accumulated deficit................................................................ (36,987) (32,466)
-------- --------
Total shareholders' equity........................................................ 15,665 4,020
-------- --------
Total liabilities and shareholders' equity........................................... $ 24,969 $ 13,657
======== ========
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
condensed consolidated financial statements.
2
<PAGE>
NeoMedia Technologies, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Six months
Ended June 30,
---------------------
2000 1999
-------- --------
(Dollars in thousands,
except per share data)
<S> <C> <C>
Net Sales:
License fees.............................................................. $ 364 $ 1,972
Resales of software and technology equipment ............................. 12,786 10,889
Service fees.............................................................. 491 2,285
----------- ----------
Total net sales....................................................... 13,641 15,146
----------- ----------
Cost of sales:
License fees.............................................................. 1 379
Resales of software and technology equipment.............................. 11,079 9,259
Service fees.............................................................. 615 2,170
Amortization of capitalized software costs ............................... 527 385
----------- ----------
Total cost of sales................................................... 12,222 12,193
----------- ----------
Gross profit............................................................... 1,419 2,953
Sales and marketing expenses .............................................. 3,004 3,531
General and administrative expenses ....................................... 2,357 2,453
Research and development costs ............................................ 662 503
----------- ----------
Loss from operations ...................................................... (4,604) (3,534)
Interest expense (income), net............................................. (83) 120
----------- ----------
Loss before income taxes .................................................. (4,521) (3,654)
Income tax (benefit)....................................................... --- ---
----------- ----------
Net loss................................................................... $ (4,521) $ (3,654)
=========== ==========
Net loss per share - basic and diluted..................................... $ (0.34) $ (0.40)
=========== ==========
Weighted average number of common shares - basic and diluted............... 13,464,757 9,047,615
=========== ==========
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
condensed consolidated financial statements.
3
<PAGE>
NeoMedia Technologies, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three months
Ended June 30,
--------------
2000 1999
-------- --------
(Dollars in thousands,
except per share data)
<S> <C> <C>
Net Sales:
License fees........................................................... $ 132 $ 939
Resales of software and technology equipment........................... 9,111 5,484
Service fees........................................................... 304 919
----------- -----------
Total net sales.................................................... 9,547 7,342
----------- -----------
Cost of sales:
License fees ......................................................... --- 145
Resales of software and technology equipment........................... 8,027 4,787
Service fees........................................................... 329 921
Amortization of capitalized software costs............................. 312 220
----------- -----------
Total cost of sales................................................ 8,668 6,073
----------- -----------
Gross profit............................................................... 879 1,269
Sales and marketing expenses .............................................. 1,740 1,716
General and administrative expenses ....................................... 961 1,110
Research and development costs ............................................ 327 283
----------- -----------
Loss from operations....................................................... (2,149) (1,840)
Interest expense (income), net............................................. (64) 48
----------- -----------
Loss before income taxes................................................... (2,085) (1,888)
Income tax (benefit)....................................................... --- ---
----------- -----------
Net loss................................................................... $ (2,085) $ (1,888)
=========== ===========
Net loss per share - basic and diluted..................................... $ (0.15) $ (0.19)
=========== ===========
Weighted average number of common shares - basic and diluted............... 14,169,239 $ 9,951,056
=========== ===========
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
condensed consolidated financial statements.
4
<PAGE>
NeoMedia Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................................................... $ (4,521) $ (3,654)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization........................................................ 970 761
Loss on disposal of property and equipment........................................... 8 ---
Provision for doubtful accounts ..................................................... 456 151
Fair value of stock based compensation granted for professional services............. --- ---
Changes in operating assets and liabilities:
Trade accounts receivable......................................................... (5,059) (918)
Costs and est. earnings in excess of billings on uncompleted contracts............ (130) ---
Other current assets.............................................................. 25 (135)
Accounts payable and accrued expenses............................................. 516 (1,394)
Billings in excess of costs and est. earnings on uncompleted contracts............ (107) ---
Deferred revenue.................................................................. (127) ---
Other current liabilities......................................................... --- 246
-------- --------
Net cash used in operating activities............................................. (7,969) (4,943)
-------- --------
Cash flows from investing activities:
Capitalization of software development and purchased intangible assets................. (1,290) (602)
Long Term Assets....................................................................... (194) ---
Acquisition of property and equipment.................................................. --- (53)
-------- --------
Net cash used in investing activities............................................. (1,484) (655)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs.......................... 9,137 4,655
Proceeds from exercise of stock warrants............................................... 2,876 528
Proceeds from exercise of stock options................................................ 381 ---
Borrowings under short term debt....................................................... --- 2,000
Repayments on notes payable and long-term debt......................................... (545) (61)
-------- --------
Net cash provided by financing activities......................................... 11,849 7,122
-------- --------
Net increase in cash and cash equivalents.............................................. 2,396 1,524
Cash and cash equivalents, beginning of year........................................... 2,460 450
-------- --------
Cash and cash equivalents, end of period............................................... $ 4,856 $ 1,974
======== ========
Supplemental cash flow information:
Restricted cash balances at June 30.................................................. $ 944 $ 900
Interest paid/(received)............................................................. (83) 85
Non-cash activities:
Issuance costs for shares issued through private placements....................... 74 ---
Fixed assets purchased with shares of common stock................................ 3,520 ---
Prepaid expenses paid with shares of common stock................................. 182 ---
Accrued expenses paid with shares of common stock................................. 70 ---
Accounts receivable converted to fixed asset...................................... 480 ---
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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. These condensed
consolidated financial statements and related notes should be read in
conjunction with the Company's Form 10-KSB for the fiscal year ended December
31, 1999. 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 June 30, 2000 and December 31, 1999, and the results of
operations for the three months and six months ended June 30, 2000 and 1999, and
cash flows for the three months and six months ended June 30, 2000 and 1999.
The results of operations for the six months ended June 30, 2000 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.
Certain reclassifications have been made to the first quarter 2000 financial
statements to conform to the second quarter 2000 presentation.
Nature of Business Operations
Since inception, NeoMedia has been helping customers and partners
assimilate new technology without discarding their investment in programs and
processes. To help accomplish these objectives, NeoMedia operates as two
distinct business units: Application Service Provider (NeoMedia ASP) and Systems
Integration Services (NeoMedia SI). NeoMedia ASP provides systems and services
that link print and print on products to web-based information. NeoMedia SI
provides computer technology equipment and systems integration services to
customers.
NeoMedia ASP
------------
NeoMedia ASP was launched to commercialize NeoMedia's patented technology
for seamlessly linking printed material to the internet. This technology has
been developed over the past four years. Management believes this technology has
the potential to provide the industry standard for linking the worlds of print
and electronic media. The commercialization of products using this technology
was begun during 1999.
NeoMedia SI
------------
NeoMedia SI re-markets equipment and software products from third-parties,
renders system integration services, provides proprietary software for document
management and production systems, migrates programs and databases from closed
system to open system platforms, and adds customized applications to an existing
system platform. This business unit is establishing itself in the technology
industry by working closely with customers and business partners in integrating
new technologies while leveraging previous system infrastructure investments.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
Through the six months ended June 30, 2000, 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.
During the first two quarters of 2000, the Company's focus continued to
shift from Systems Integration and Migration products toward its Applications
Service Provider (ASP) business. NeoMedia's strategy is to become the world's
leading provider of systems and services that link print and print on products
to web based information. The Company discontinued its Y2K product line during
the fourth quarter of 1999.
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 six months ended June 30, 2000 as compared to the
six months ended June 30, 1999
Net sales. Total net sales for the six months ended June 30, 2000 were
$13.6 million, which represented a $1.5 million, or 10%, decrease from $15.1
million for the six months ended June 30, 1999. This decrease primarily resulted
from discontinuation of the Company's Y2K product line.
License fees. License fees for the six months ended June 30, 2000 were
$0.4 million compared to $2.0 million for the six months ended June 30, 1999, a
decrease of $1.6 million or 80%. This decrease resulted primarily from
discontinuation of the Company's Y2K product line as well as a sale of a NeoLink
software license in 1999. In April 2000, this NeoLink software license was
repurchased by NeoMedia as part of the acquisition of the Daystar Services,
L.L.C. assets. There were insignificant costs related to license sales during
2000. Cost of sales as a percentage of related sales was 19.2% during 1999. This
decrease in the cost of sales as a percentage of related sales was primarily due
to the sale in 1999 of Y2K licenses on which the Company paid royalties.
Resales of software and technology equipment. Resales of software and
technology equipment increased by $1.9 million, or 17%, to $12.8 million for the
six months ended June 30, 2000, as compared to $10.9 million for the six months
ended June 30, 1999. This increase primarily resulted from greater sales of Sun
Microsystems hardware in 2000 as customers chose the Sun platform for the
implementation of their E-business applications. Cost of sales as a percentage
of related sales was 86.6% during 2000, compared to 85.0% during 1999.
Service fees. NeoMedia's service fees decreased by $1.8 million or 78%, to
$0.5 million for the six months ended June 30, 2000, compared to $2.3 million
for the six months ended June 30, 1999. This decrease was primarily due to the
discontinuation of the Company's Y2K services. Cost of service fees as a
percentage of related sales increased to 125% during 2000 from 95.0% during 1999
primarily due to the fixed nature of consulting costs coupled with an overall
decline in service fee revenue.
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 were $3.0 million for the six months ended
June 30, 2000, compared to $3.5 million for the six months ended June 30, 1999,
a decrease of $0.5 million or 14%. This decrease primarily resulted from an
overall reduction in the sales staff during the second half of 1999 due to the
discontinuation of the Company's Y2K business.
7
<PAGE>
General and administrative. General and administrative expenses decreased
by $0.1 million, or 4%, to $2.4 million for the six months ended June 30, 2000,
compared to $2.5 million for the six months ended June 30, 1999.
Research and development. During the six months ended June 30, 2000,
NeoMedia charged to expense $0.7 million of research and development costs, an
increase of $0.2 million or 40% compared to $0.5 million charged to expense for
the six months ended June 30, 1999. This increase was due to increased resources
directed toward the development of the ASP business.
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 decreased by
$203,000, or 169%, to an income of $(83,000) for the six months ended June 30,
2000 from $120,000 expense for the six months ended June 30, 1999. This was due
to reduced interest expense resulting from the repayment of notes in the first
quarter of 2000, as well as interest income from higher cash balances in 2000.
Net Loss. The net loss for the six months ended June 30, 2000 was $4.5
million, which represented a $0.8 million, or 22% increase from a $3.7 million
loss for the six months ended June 30, 1999. The increase in net loss primarily
resulted from an increased investment by NeoMedia in the ASP business offset by
increased profit in the systems integration business as a result of
discontinuation of the unprofitable Y2K business.
Results of operations for the three months ended June 30, 2000 as compared to
the three months ended June 30, 1999
Net sales. Total net sales for the three months ended June 30, 2000 were
$9.5 million, which represented a $2.2 million, or 30%, increase from $7.3
million for the three months ended June 30, 1999. This increase primarily
resulted from an increase in technology equipment resales offset by a decrease
in licenses and services.
License fees. License fees for the three months ended June 30, 2000 were
$0.1million compared to $0.9 million for the three months ended June 30, 1999, a
decrease of $0.8 million or 89%. This decrease resulted primarily from the
discontinuation of the Company's Y2K product line as well as a sale of a NeoLink
software license in 1999. In April 2000, this NeoLink software license was
repurchased by NeoMedia as part of the acquisition of the Daystar Services,
L.L.C. assets. There were insignificant costs related to license sales during
2000. Cost of sales as a percentage of related sales was 15.4% during 1999.
This decrease in the cost of sales as a percentage of related sales was
primarily due to the sale in 1999 of Y2K licenses on which the Company paid
royalties.
Resales of software and technology equipment. Resales of software and
technology equipment increased by $3.6 million, or 65%, to $9.1 million for the
three months ended June 30, 2000, as compared to $5.5 million for the three
months ended June 30, 1999. This increase primarily resulted from greater sales
of Sun Microsystems hardware in 2000 as customers expanded eBusiness activities.
Cost of sales as a percentage of related sales was 88% during 2000, compared to
87.3% during 1999.
Service fees. NeoMedia's service fees decreased by $0.6 million or 67%, to
$0.3 million for the three months ended June 30, 2000, compared to $0.9 million
for the three months ended June 30, 1999. This decrease was primarily due to
the discontinuation of the Company's Y2K services. Cost of service fees as a
percentage of related sales increased to 108% during 2000 from 100.2% during
1999 primarily due to the fixed nature of consulting costs coupled with an
overall decline in service fee revenue.
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 remained at $1.7 million for the three
months ended June 30, 2000 and the three months ended June 30, 1999.
8
<PAGE>
General and administrative. General and administrative expenses decreased
by $0.1 million, or 9%, to $1.0 million for the three months ended June 30,
2000, compared to $1.1 million for the three months ended June 30, 1999.
Research and development. During the three months ended June 30, 2000,
NeoMedia charged to expense $0.3 million of research and development costs which
remained the same for the three months ended June 30, 1999.
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 decreased by
$112,000, or 233 %, to an income of $(64,000) for the three months ended June
30, 2000 from $48,000 for the three months ended June 30, 1999 This was due to
reduced interest expense resulting from the repayment of notes in the first
quarter of 2000, as well as interest income from higher cash balances in the
second quarter of 2000.
Net Loss. The net loss for the quarter ended June 30, 2000 was $2.1
million, which represented a $0.2 million, or 10.5% increase from a $1.9 million
loss for the three months ended June 30, 1999. The increase in net loss
primarily resulted from lower license revenue in the ASP business offset by
increased profit in the systems integration business as a result of
discontinuation of the Y2K business.
Liquidity and Capital Resources
During the first quarter of 2000, the Company successfully obtained
approximately $9.2 million of equity financing and $3.0 million from exercises
of warrants and employee stock options. The Company also received a commitment
from an unrelated third party to invest up to $7.5 million in the Company
through the purchase of unissued shares of common stock at a price the lower of
$7.50 per share or a 35% discount to the five-day average trading price
immediately prior to the receipt of the signed subscription agreement. In
connection with this committment, 125,000 warrants at an exercise price of $7.50
and 125,000 warrants at an exercise price of $15.00 will be issued upon
completion of the transaction. Management believes that this additional
financing together with revenue from operations, will be sufficient to sustain
operations for the remainder of 2000.
Net cash used in operating activities for the six months ended June 30,
2000 and 1999, was $8.0 million and $4.9 million, respectively. An increase of
$1.9 million was attributable to a non-recurring payment for a patent during the
second quarter of 2000. During 2000 cash from trade accounts receivable,
inclusive of costs in excess of billings, decreased $5.2 million due to
increased sales in the second quarter, while accounts payable, accrued expenses
and deferred revenue increased $282,000. During 1999, trade accounts receivable
increased $918,000, while accounts payable and accrued expenses and other
current liabilities decreased $1.1 million.
NeoMedia's net cash flow used in investing activities for the six months
ended June 30, 2000 and 1999, was $1,408,000 and $655,000, respectively.The
increase was primarily due to cash used in developing the ASP business. Net cash
provided by financing activities for the six months ended June 30, 2000 and
1999, was $11.8 million and $7.1 million, respectively. The increase was
primarily due to $12.2 million raised during the first quarter of 2000 through
the issuance of common stock, as well as the exercise of warrants and 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 contract
is approximately $780,000, of which approximately $761,000 has been recognized
as revenue by the Company as of June
9
<PAGE>
30, 2000. As an element to the contract, the Company has guaranteed its work
product and resulting Year 2000 compliance of the customer. To this end, during
1999 the Company established bank guarantees in the form of certificates of
deposit totaling approximately $150,000 in favor of the customer. The Company
has satisfied this guarantee and is in the process of releasing the bank
guarantee. 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.
Safe Harbor Provision of the Private Securities Litigation Act of 1995
NeoMedia operates in a dynamic and rapidly changing environment that
involves numerous risks and uncertainties. The market for software products is
generally characterized by rapidly changing technology, frequent new product
introductions and changes in customer requirements which can render existing
products obsolete or unmarketable. The statements contained in Item 2
(Management's Discussion and Analysis of Financial Condition and Results of
Operations) that are not historical facts may be forward-looking statements (as
such term is defined in the rules promulgated pursuant to the Securities
Exchange Act of 1934) that are subject to a variety of risks and uncertainties
more fully described in NeoMedia's filings with the Securities and Exchange
Commission including, without limitation, those described under "Risk Factors"
in NeoMedia's Form S-3/A Registration Statement , effective May 2, 2000. The
forward-looking statements are based on the beliefs of the management of
NeoMedia, as well as assumptions made by, and information currently available
to, NeoMedia's management. Accordingly, these statements are subject to
significant risks, uncertainties and contingencies which could cause NeoMedia's
actual growth, results, performance and business prospects and opportunities in
2000 and beyond to differ materially from those expressed in, or implied by, any
such forward-looking statements. Wherever possible, words such as "anticipate,"
"plan," "expect," "believe," "estimate," and similar expressions have been used
to identify these forward-looking statements, but are not the exclusive means of
identifying such statements. These risks, uncertainties and contingencies
include, but are not limited to, NeoMedia's limited operating history on which
expectations regarding its future performance can be based, competition from,
among others, high technology companies that have greater financial, technical
and marketing resources and distribution capabilities than NeoMedia, the
availability of sufficient capital, NeoMedia's ability to identify the right
product mix, NeoMedia's ability to operate effectively in geographical areas
in which it has no prior experience, the maturation and success of NeoMedia's
strategy to develop, market and sell its products and services, risks inherent
in conducting international business, risks associated with selling proprietary
licenses and conducting a consulting services business, changes in NeoMedia's
product and service mix and product and service pricing, the effectiveness of
NeoMedia's efforts to control operating expenses, general economic and business
conditions affecting NeoMedia and its customers in the United States and other
countries in which NeoMedia sells and anticipates to sell its products and
services, and NeoMedia's ability to: (i) obtain additional financing on terms
acceptable to the Company, or at all, to allow the Company to continue its
operations as currently proposed; (ii) develop, market and sell existing and
acquired products for its patented technology; (iii) adjust to changes in
technology, customer preferences, enhanced competition and new competitors in
the print-to-internet technology market; (iv) protect its proprietary patent
rights from infringement or misappropriation; (v) maintain or enhance its
relationships with business partners and vendors; and (vi) attract and retain
key employees. There can be no assurance that NeoMedia will be able to identify,
develop, market, sell or support new products or enhancements successfully, that
any such new products or enhancements will gain market acceptance, or that
NeoMedia will be able to respond effectively to technological changes. There can
be no assurance that NeoMedia will not encounter technical or other difficulties
that could delay introduction of new products in the future. If NeoMedia is
unable to introduce new products or enhancements and respond to industry changes
on a timely basis, its business could be materially adversely affected. NeoMedia
is not obligated to update or revise these forward-looking statements to reflect
new events or circumstances.
10
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(None)
(b) Reports on Form 8-K
(None)
11
<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 July 28, 2000 By: /s/ Charles W. Fritz
------------- --------------------------------------------
President, Chief Executive Officer, Chairman of
the Board and Director
Date July 28, 2000 By: /s/ Charles T. Jensen
------------- --------------------------------------------
Charles T. Jensen, Vice President, Chief
Financial Officer, Treasurer and Director
12
<PAGE>
EXHIBIT INDEX
-------------
Sequential Exhibit
Page Number Number Document
----------- ------ --------
12 27.1 Article 5 Financial Data Schedule for June 30, 2000
13
