NeoMedia Technologies, Inc (NEOM)

[jonesieatl]

I ran across a situation re: "Authorized Shares" count ...

... which illustrates some of Yorkville's options when the total number of shares they could convert their instruments into at specific PPS levels exceeds a company's Authorized Shares count.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29553988

As I pointed out earlier the number of converted shares Yorkville has rights to at current NEOM PPS levels far exceeds NEOM's Authorized Shares count.

I speculated that a Reverse Split could modify that situation to Yorkville's advantage by causing a substantial increase in Yorkville's percentage ownership of NeoMedia.

They have other options as well.

Apparently Yorkville can also demand a company's Authorized Share count to be increased if they want to when they have sufficient voting rights or if they have the leverage of legal action in default situations.

From the example given in the above link we see that they can , under threat of legal action against a company and its executives , induce a company to give them a Warrant for 500,000,000 more shares at a cheap price (which can be lowered even further later as we have seen).

Okay , let me stop right there and say .... we have perhaps become so jaded by NEOM 'giving' or 'printing' or 'whatever' so many shares that 500 million shares might not seem like a big number to us any more. However in this example that's a warrant for 500 Million shares of stock of a company which "As of May 16, 2008, the Company had outstanding 595,000,000".

Today's NEOM analogy would be Yorkville telling Chip , oops , Iain , that he has to give them a warrant for a Billion shares with an exercise price of $0.00075 per share. Yep , 3 zeroes before the number.

To continue, Yorkville can require the company to call a Special Shareholders' Meeting to raise the Authorized Share count , can induce the company to reduce Warrant prices in other outstanding financings by 90% , force the company to waive with 65 days notice previous "Yorkville can't exceed 4.99% ownership" provisions , and induce a company to change previous conversion provisions to 25% discounts on a VWAP basis.

They can also stipulate that a Special Shareholder's Meeting becomes a 'written consent of stockholders' situation where , with Yorkville being the majority stockholder , the outcome is certain.

I believe this effectively illustrates that Yorkville is indeed mindful of their overall conversion rights , and if they want to they will take action to create the necessary room in the Authorized Shares number to accommodate each and every one of their rights.

It will be interesting to see Yorkville's plan play out with NeoMedia over time.

jonesie