NeoMedia Technologies, Inc (NEOM)

[srowen]

Been following this conversation a bit and I think there are several bits of confusion.

frac: yes, YA is not buying more warrants in any event. But, in no situation would YA be acquiring shares on the open market. Literally, they would be receiving shares from Neomedia.

yj: Whether Neomedia settles from treasury stock, or acquires it on the open market, is up to them. I don't think they have treasury stock, so, yes, in theory Neomedia would acquire the shares.

frac: Arp is right that this provision, forcing the warrant exercise, is not something YA desires. Their upside is therefore capped. (But, I do imagine many people would be happy for the share price to rise to that level anyway!)

Arp: I actually imagine this whole thing would be settled in cash anyway. I am not sure what you are talking about when you say YA would purchase warrants? They have warrants now. It is that they will be exercised -- they will be forced to purchase, for the exercise price of 0.01 or whatever it is, shares of stock. They'll be happy about that, as the market price would then be 0.11+. This provision just caps the upside from this extra warrant added to the debt at a gain of 0.10 per share, and the provision only makes YA pony up the exercise and take on an actual position in the stock.