NeoMedia Technologies, Inc (NEOM)

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NEOMEDIA TECHNOLOGIES (OTC BB: NEOM)

NEOM'S WILD ADVENTURES

It's tough to keep up with all the action in NeoMedia these days.

First, there were the four acquisitions NEOM scooped up, one after another. Its rationale was that it positioned NeoMedia as a real competitor in the burgeoning mobile marketing industry.

We thought that they were definitely in the right church. Whether they were in the right pew, too, we couldn't be sure until we learned more about how all the pieces fit together and how the numbers (i.e., shares and dollars) added up.

Last week, NEOM delivered the news that this serial diluter was not finished. In an 8-K filing the company revealed a $5 million financing through the sale of a secured convertible debenture. Disturbingly, NEOM significantly lowered the exercise price on monster loads of outstanding warrants held by its institutional investor group.

Then NEOM announced it was selling its "square peg" auto micro paint repair business (it has a letter of intent) to enable management to focus all of the company's resources on the mobile opportunity. Yet today NEOM rolled out a press release ballyhooing a re-branding of this business -- with no reference to its sale or the LOI.

As the saying goes, you can't hit a moving target. But sooner or later the dust will settle and we'll have a clearer view of the whole picture.

Even if NEOM's acquisitions synergize and increase in value -- and the micro paint repair business nets a respectable price in cash -- how do we reconcile the huge dilution of shares and warrants?

In any case, we plan to have a serious heart-to-heart with NeoMedia's management this week and we'll report our findings promptly.

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