NeoMedia Technologies, Inc (NEOM)

[Bucks4Buckeyes]

A Dose of Reality For NEOM Shareholders:

Not all links are provided, but I have them available in my research.

GENERAL FACTS:
1. Dr. Soon-Shiong has previously announced he is assembling an advanced-care health network.
2. The main “parent” companies Dr. Soon-Shiong are assembling for this system are: NantWorks, NantHealth, NantMobile, NantHoldings & NantInternational.
3. Among Dr. Soon-Shiong’s companies which get involved in the public companies are: Global Grid, California Capital Equity,
4. Just a few of the companies which he has acquired/controls in this health network:
Institute for Advanced Health
Lambda Rail
LookTel
Ziosoft
Vodafone
Dossia
Toumaz
Vitality
Boston Life Labs
Strand Diagnostics
Net.Orange
Equipois
NanoH2O
Ingenious Innovations Group

Especially (for our purposes) publicly-traded companies:
Conjuchem
APP
KeyOn


5. Now, Dr. Patrick Soon-Shiong/Global Grid LLC purchased 29% of common shares of NeoMedia on open market March 16-18, 2012.

Interesting link for recent events with Dr. Soon-Shiong:
http://us.generation-nt.com/s/patrick+soon+shiong/


REASONABLE ASSUMPTIONS:
1. Since Dr. Soon-Shiong has patented his health “system,” AND since he is investing a few billion dollars in it – I think it only reasonable that he would want complete control over his entire health system – hence the “need” even for Lamda Rail, he is building his own, personal internet. He will not rely on Google, Bing, etc. to allow them to mess with his machine.
2. Each company which he deems integral to his health system are simply components to the overall machine. Thus, he needs complete control over these companies – without it, his entire “machine” will break down. The whole is much more important than the individual parts.
3. The more progress he makes with his “machine,” the more likely the new “parts” will cost.
4. Some companies will cooperate and work together (like Cysco with Lamda Rail and the multiple independent companies in Dossia – I haven’t bothered to examine Ericsson’s ties with Soon-Shiong yet).
5. Once the “machine” is completely assembled and operating well, he can charge what he wishes for other companies/professionals/health insurance companies to cooperate, since it will most likely be the “crown jewels” of all health care systems.

PRIVATE COMPANIES:
The man is a genius, let’s face it. He can also recognize talent and he is rapidly capitalizing many private companies who have a unique niche in the market or have the potential to bring a unique specialty to his health care system. He is funding them and giving them governance and letting them grow, and many are becoming profitable.

He is the private company’s generous benefactor!

PUBLIC COMPANIES:
However, I find a common thread, so far, in the public companies which Dr. Soon-Shiong acquires/controls.

CONJUCHEM
Conjuchem was a publicly-traded company in Canada. It went bankrupt and now it is a private company relocated in LA – privately-owned by Soon-Shiong.

Announces bankruptcy 7/21/2010
http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=CJB:CN&sid=aqC8yRv3QZ1k

Officially Restructured 8/30/2011
http://article.wn.com/view/2011/08/30/ConjuChem_Resumes_Operations_Led_by_Dr_Patrick_SoonShiong/


APP PHARMACEUTICALS
APP underwent a successful IPO in 2001. It became Abraxis and then they spun off the APP Pharmaceuticals in 2007.
http://pro.edgar-online.com/ipo.aspx?ColLeft=3c2bcac1-dbf5-4776-9d3b-89001baee8d5&ColRight=76baaeb6-2549-44f5-8e1d-cd700701e704&cikid=91266&tabIndex=2&coname=APP+PHARMACEUTICALS%2C+INC.&fnid=15098&ipo=1&ColLeft=3c2bcac1-dbf5-4776-9d3b-89001baee8d5&ColRight=76baaeb6-2549-44f5-8e1d-cd700701e704&cikid=91266&tabIndex=2&coname=APP%20PHARMACEUTICALS,%20INC.&fnid=15098&ipo=1

APP Pharmaceuticals is a big deal, they are the primary producer of heparin (for diabetes) in the US. Within a year they went through a reverse merger with Fresenius Kabi Pharmaceutical Holding, Inc. (Just so happens that Soon-Shiong is on the BOD).
http://people.forbes.com/profile/patrick-soon-shiong/623

The shareholders who owned APP stock in 2008 – 3 YEARS LATER – were finally looking forward to receiving a good payout.
http://www.stockmarketsreview.com/news/104844/

Analysts Expect $6 a Share Payout for APCVZ Owners Following Q4 Results
February 15, 2011, Tuesday, 14:03 GMT
Analysts are expecting a payout of $6 a share from Fresenius Kabi Pharmaceuticals Holdings inc. (NASDAQ: APCVZ) to its owners following the release of its annual report later this month.

This would be an additional cash payment from a merger that took place on September 10, 2008 when Fresenius Kabi Pharmaceuticals Holdings completed the acquisition of APP Pharmaceuticals, Inc. The holders of APCVZ are entitled to an additional payment which analysts project will be $6 a share.

The company is expected to announce this payout shortly after releasing its fourth quarter results.

The closing price for Fresenius Kabi Pharmaceuticals Holdings (APCVZ) last Friday was around $0.05 per share.

Oh, what a shame! In February 2011 it was realized that APP financials didn’t make enough money to pay out their old shareholders – even though their EBITDA was over $1.1 BILLION!
http://www.businesswire.com/news/home/20110222007664/en

Fresenius Kabi Pharmaceuticals Holding, Inc. Files Form 10-K
for APP Pharmaceuticals, Inc. (APP)
Contingent Value Rights Issued in September 2008 Will Expire Without Value
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Fresenius Kabi Pharmaceuticals Holding, Inc., (NASDAQ: APCVZ) today filed its Form 10-K for APP which provides an update on the Contingent Value Rights (CVRs) granted to APP stockholders in September 2008 in conjunction with Fresenius Kabi Pharmaceuticals Holding’s acquisition of APP.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”
Pursuant to the agreement governing the CVRs, the right to receive a payment with respect to the CVRs was contingent upon APP achieving consolidated cumulative Adjusted EBITDA in excess of $1.268 billion for the measurement period (three years ending December 31, 2010). The consolidated Adjusted EBITDA for the measurement period was $1.126 billion. Since the cumulative Adjusted EBITDA did not exceed the required threshold, CVR holders will not receive any payments on the CVRs and the CVRs will expire without value.
The company will give formal notice to the NASDAQ Capital Market of its intention to deregister under the Securities Exchange Act of 1934 (the “Exchange Act”) and delist the CVRs from the NASDAQ. The Company will also terminate its obligation to file periodic reports, such as a Form 10-K, Form 10-Q or Form 8-K, under the Exchange Act. It is expected that the CVRs will cease trading on NASDAQ on March 4, 2011. The delisting is expected to be made effective by the NASDAQ prior to the end of the first quarter 2011.
About APP Pharmaceuticals, Inc.
APP Pharmaceuticals, Inc. is a fully-integrated pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products with a primary focus on the oncology, anti-infective, anesthetic/analgesic and critical care markets. The company offers one of the most comprehensive product portfolios used in hospitals, long-term care facilities, alternate care sites and clinics within North America and manufactures a comprehensive range of dosage formulations. Fresenius Kabi Pharmaceuticals Holding, Inc., a wholly owned subsidiary of Fresenius Kabi AG, acquired APP Pharmaceuticals, Inc. on September 10, 2008. For more information about APP Pharmaceuticals, Inc., please visit the company’s Web site at www.APPpharma.com.

Less than a month later, Fresenius Kabi Pharmaceutical Holding, Inc. officially delisted any more public connections to APP Pharmaceuticals.
http://www.biospace.com/News/fresenius-kabi-pharmaceuticals-holding-inc-files/213089

Fresenius Kabi Pharmaceuticals Holding, Inc. Files Form 25 to Delist and Deregister Contingent Value Rights for APP Pharmaceuticals
3/7/2011 5:27:21 PM
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Fresenius Kabi Pharmaceuticals Holding, Inc., (NASDAQ: APCVZ) announced today that on March 4, 2011, it filed a Form 25 with the NASDAQ and the United States Securities and Exchange Commission with respect to its Contingent Value Rights (“CVRs”) listed on the NASDAQ Capital Market. As previously disclosed in its 10-K filing on February 23, 2011, the Form 25 will delist the CVRs from the NASDAQ and deregister the CVRs under Section 12(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”). The NASDAQ suspended trading of the CVRs effective the close of trading on March 4, 2011. On or about March 15, 2011, the Company intends to suspend its reporting requirements under the Exchange Act pending deregistration of the CVRs

Personally, I think APCVZ is not long for the public market, their shares are only $.02. Private company, here we come!


KEYON
KeyOn (KEYO) is an interesting story, but is following an all-to-familiar story line, too.

They owed $4.5 to Sun West Bank, and extended the loan six years from June 2009 to June 2015.
http://www.sec.gov/Archives/edgar/data/1335294/000117120009000374/i00179_keyon-8k.htm

Then Cal Cap gave them the money to pay the note 12/3/10.
http://www.sec.gov/Archives/edgar/data/1335294/000117120010001101/0001171200-10-001101-index.htm

After restructuring their loan, they replaced their preferred stock with a more attractive preferred stock on 1/31/10
http://www.sec.gov/Archives/edgar/data/1335294/000117120010000106/0001171200-10-000106-index.htm

The next announcement was a vote put to their shareholders that California Capital Equity would give them a note for $15m if they would issue some preferred stock.
http://www.sec.gov/Archives/edgar/data/1335294/000117120010000108/i00040_keyon-8k.htm

By the time the next shareholder meeting rolled around, Cal Cap was already a 46% shareholder
http://www.sec.gov/Archives/edgar/data/1335294/000117120011000104/i00047_keyon-def14a.htm

Their shareholder meeting allowed them to convert a secured note from California Capital Partnership LP (owned by Patrick Soon Shiong) announced 2/4/11 to be held on 3/11/11
http://www.sec.gov/Archives/edgar/data/1335294/000114420411036857/0001144204-11-036857-index.htm

If you wonder how things are going for KeyOn, check out their filings, they have been buying many, many companies in outlying areas. Why? Soon-Shiong MUST have access to all hospitals and regions for his health network!

So…they must be doing great, right?



NO. Actually look at the chart, they have gone from $3 a share when Soon-Shiong first got involved to around .02 per share currently – and he just appointed one of his employees as CEO there in December 2011.

How much do you want to bet that KEYO goes under soon and to get them out of debt, California Capital will take over, assume all their debt and they will become a private company?

NeoMedia Technologies Inc.
Most people on this board by now should understand the whole toxic financing agreement with YA Global. It is getting worse and worse.

Did you check out the table included in the 8-K this week?



That’s right – NEOM owes $43 MILLION RIGHT NOW to YA Global.

You have read the posts that YA Global is having money problems of its own – since their toxic financing has run a few of the microcap companies they “helped” into bankruptcy. Now their “holdings” in those companies are killing their bottom line.

We will probably read a 10-K next week where the float is either over or near $1B now in NEOM.


SUMMARY:
Check it out for yourself, please. A common denominator among these private companies (that I have found so far – I think there are others)
1. They have the potential to be a key component in his PATENTED health care system.
2. They have poor management models.
3. They are severely over-extended in their credit.
4. Soon-Shiong & Company ride in on white horses; only to position themselves as a creditor when the inevitable becomes reality.
5. The public company no longer is public and can be privately run by Dr. Soon-Shiong.

CONCLUSION:
Ask yourself these questions:
1. Does Dr. Soon-Shiong’s recent (since 2009) track record in publicly-traded companies turn out well for the shareholders when he gets ‘involved’ in them?
2. Is NEOM – WITHOUT THE DOCTOR – an appealing “investment?” Why or why not?
3. If Dr. Soon-Shiong had NOT bought shares in this company, would most of us even cared about NEOM?
4. When we see the 10-K, do you actually think that the revenues will be strong enough to pay off ALL DEBT BY JULY 2012?
5. What do you think is going to happen when/if NEOM defaults on their loan? Do you think anyone is around with deep pockets who can dissolve their debt?
6. If Soon-Shiong was not willing to pay EVEN A LITTLE MORE THAN A BUCK A SHARE for APP Pharmaceutical shareholders a couple years after they went ‘private’ AND THEY MADE OVER $1B DOLLARS LAST YEAR, is it likely with NEOM revenues that shareholders here will get very much when/if they get ‘bought out?’

If Soon-Shiong thinks this is vital to his health care system (and signs point that it is), all he has to do is ‘slap the ask’ for $3m, watch YA Global try to get their money back in a frenzy, then watch the float balloon and stand on the dock and watch the NEOM ship sink. He just ‘happens’ to own the biggest salvage yard in the region. And anything the salvage owner brings up from the sea floor is ALL HIS.

All The Best