NeoMedia Technologies, Inc (NEOM)

[ASTOCKCOLLAPSE N0W]

jonesie,

You are correct, NEOM would receive funds should Cornell elect to convert the warrants.

With that said, and history as our only guide, NEOM will likely default on the outstanding debentures thus converting the warrants to a "cashless" exercise.

You might respond with something like .. "History?! What history?"


As of December 31, 2006, the Company was in default of this instrument due to the Company’s pending registration statement to register the underlying shares of previous convertible instruments not becoming effective by the specified date. As a result of the default, the holder of the securities could redeem the convertible debentures and preferred stock for cash at their discretion, and could convert warrants on a cashless basis at their discretion.

And the "cashless" exercise equation:

[I]f at the time of exercise, the Warrant Shares are not subject to an effective registration statement or if an Event of Default has occurred, by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):

Net Number = ((A x B) - (A x C)) / B

For purposes of the foregoing formula:

A = the total number of Warrant Shares with respect to which this Warrant is then being exercised.

B = the Closing Bid Price of the Common Stock on the date of exercise of the Warrant.

C = the Warrant Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.