NeoMedia Technologies, Inc (NEOM)

[ss9173]

In4it, I know I don't have to explain my decision to you or anyone else on why I am selling now. But because I have been a shareholder for 3+ years, a member of this board since August 2004, and have had the privilege of serving this board as Assistant Moderator, and perhaps - more importantly - because I have made many friendships on this board, I would like to give you all a little more insight into my decision.

Let me start with 2 disclaimers right off. First of all, I have no hidden agenda to get more of you to sell. Quite the contrary actually. I would like nothing more than Neom to announce some major news that would send the stock price soaring. I just think the probability of that type of news happening in the short-term is remote. Secondly, all of my views expressed below are strictly my opinions. Some of my assumptions may or may not come to fruition. So do your own DD before making any decisions regarding your Neom investment.

OK...so here goes my rationale for selling now:

1) I did attend the last SHM. See my post http://www.investorshub.com/boards/read_msg.asp?message_id=11808482 I knew full well even then that Neom had its work cut out for them to be successful. Just read my last paragraph again where I stated "I think if you have a relatively long time horizon for this investment, you will do just fine. However, if your investment time horizon is relatively short (say less than 6 months), the risk of pps decline or stagnation for the near-term is potentially an issue as we wait for increased revenues in the face of further dilution. Nearly 9 months later we now know that all those acquisitions has cost Neom and us shareholders dearly. Neom's first big mistake was not including a floor in the top-off agreements with the subs. What a HUGE mistake! The only jewel in all that debacle was Gavitec - I am very pleased we are keeping them in the fold.

2) Word on the street is that 12snap is playing hard ball. My guess is that Neom will end up on the short end of the stick again, and when that news hits, the market may not treat it kindly.

3) I believe it is obvious we are having trouble selling AutoXperience. There have been no good PR's on this division as of late so I am guessing we will not be able to sell it for anywhere near what we were hoping for. Moreover, we have had to continue to support this failing division so its impact on the upcoming 10K filing will be negative.

4) The recent Scanbuy announcements with Nokia and DuPont are very disturbing to me. What irks me most is that instead of Neom trying to become the Mobile Marketing SuperCompany, we should have been more focused on getting qode embraced by these 2 companies. Furthermore, I believe we are in the midst of trying to reach a settlement with Scanbuy rather than continuing the long drawn out litigation process. If a settlement is reached, how will the market perceive it? Will Neom be smart enough to structure a settlement with favorable terms that include significant upfront cash payment as well as continued cash payments for at least 10 years and/or significant royalty payments as well. I hope our new Management team does this one right! If they do, this is the one potential short-term announcement that could have a positive impact to the pps provided they can clearly show the market the $$ now and in the future.

5) While none of us can be sure, my gut feeling is that that our near-term sales pipeline is not very good. I think there could be some good licensing announcements forthcoming but not necessarily a lot of revenues materializing in the short-term. Therefore, I don't expect any of these possible developments to significantly impact the pps in the next 90 days.

6) Neom will be filing its 10K report soon. Last year they filed it on March 30th. I believe that there will be no significant positive news in this filing. Hence, the pps could suffer further decline as a result.

7) Prior to August 2006, I owned 1.6 million shares. I sold about 500,000 shares during late August at $0.15/share because I was concerned about the ever increasing dilution. The share price was dropping quickly after the SHM and I wanted to go ahead and cash in on shares that I had purchased with a $0.06/share cost average. So I made over 2X on that transaction. In hindsight I wish I had sold more then. But I didn't because I continued to believe in Neom's tech and that Management would fulfill its vision. How wrong I was! Oh well, live and learn.

8) While my expertise is definitely not chart technical analysis, I do believe that the current chart is one that shows that there is no bottom in sight. That worries me a lot. In other words, my risk tolerance has been reached right now. I just can't let over 1.1 million shares potentially drop in value from $48K+ to some much lower number. Again, I hope I am wrong about all of this. But my gut feeling is that the pps could continue to decline a lot more. The balance of the stock market is doing relatively well. I just wanted to go ahead and put this $48K+ in some other more conservative big board stocks for now.

9) While I am pleased that we have Roger Pavane and George O'Leary on board, I am concerned that we still have CF as interim CEO. And we still have the former members of the BOD who let last year's debacle happen. I am hopeful that the Letter to Shareholders PR will come to fruition by 2008 or sooner. But right now, I am somewhat concerned that I am not really sure who is calling the shots: Is it Chas, George, Roger, JJ Keil, Cornell or all of them? IMO, you can't have multiple leaders to right this ship. Neom clearly needs one person driving the much needed changes. So the present organizational structure is a big question mark for me, and will remain so, until either I see some tangible evidence the turnaround plan is producing results or we get an announcement of a permanent CEO to replace Chas.

10) Supposedly, there will be no more fluff PRs. That means there will be less PRs but hopefully they will have more material substance. However, I must say that I was not impressed with today's PR as it failed to give any indication of the financial impact and I didn't feel that it was written all that well either.

9) As I said previously, I do believe in Neom's tech. I am excited about the potential of MC2. I am still hopeful that a NewsCorp or a QualComm could do a buyout or take an equity stake in Neom. I am hopeful that we will prevail in the Scanbuy litigation. I like that Neom's new philosophy is to under promise and over deliver. Hopefully they will do exactly that. But right now I see little to help the pps in the short-term, I see a chart that looks terrible with no bottom in sight, and I just feel that there is high potential for the pps to fall substantially below its present level. So I just feel it is prudent for my given situation to go ahead and cash out of Neom for now, put that money elsewhere, and when Neom starts to announce one or more major deals and the pps responds back to an uptrend, I would then consider reinvesting in Neom at that point - presumably at a lower pps than now.

One more factor is that my work schedule has been and will continue to be very demanding for the balance of this year. In addition, I have started a new web based business, which is keeping me busy late at night and on the weekends. It is called Tropical Treasure House - http://www.tropicaltreasurehouse.com . What little time is left is devoted to family time - my lovely wife, a precious 10 year old daughter, a golden retriever, 2 cats and ailing parents.

Regardless, I will find a way to continue to monitor and contribute to this board but with lesser involvement. As long as Koko wants me to do so, I will continue as an Assistant Moderator - mainly moderating and contributing in the early morning hours before work and some time in the evenings after work.

In summary, many of you may not agree with my rationale, and that is fine. I am not looking for you to agree with it. Each of us has our own personal situations and level of risk tolerance. I reached mine Saturday morning while reflecting on Neom. While you may not agree with me, I only hope that you will respect my decision to sell the majority of my holdings at this point in time.

I look forward to better times ahead - probably late 2007 or next year and beyond.

Best regards to all of you,

ss9173