NeoMedia Technologies, Inc (NEOM)

[ASTOCKCOLLAPSE N0W]

Item 3. Default upon Senior Securities

NeoMedia is currently in default of:

(i) the Investor Registration Rights Agreement entered into on February 17, 2006, in connection with the $22 million Series C Convertible preferred Stock Sale,

(ii) the Investor Registration Rights Agreement entered into on August 24, 2006, in connection with the $5 million secured convertible debenture,

(iii) the Investor Registration Rights Agreement entered into on December 29, 2006, in connection with the $2.5 million secured convertible debenture, and

(iv) the Investor Registration Rights Agreement entered into on March 27, 2007, in connection with the $7.5 million secured convertible debenture.



As a result, the Purchaser has certain rights with respect to the financing arrangements, specifically:

(i) the full face value of each instrument is callable in the aggregate amount of $36,616,000,

(ii) up to 325,000,000 warrants held by Purchaser with an exercise price of $0.04 can be exercised on a cashless basis,

(iii) the requirement for the Purchasers to maintain an ownership interest in NeoMedia of less than 5% is waived, and

(iv) NeoMedia is responsible for liquidated damages as required by each financing arrangement.