NeoMedia Technologies, Inc (NEOM)

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Investment Report for NeoMedia Technologies Inc. (NEOM)
Submitted by admin on Monday, 27 July 2009
NeoMedia Technologies Inc. (OTCBB: NEOM)

http://www.beaconequity.com/investment-report-for-neomedia-technologies-inc-neom/

NeoMedia Technologies Inc. (NEOM) develops and sells device software and hardware for reading 1D and 2D barcodes. The Company’s software applications enable advertisers to market products in a mobile environment, including direct sales, couponing, ticketing and payments. Its NeoReader technology converts mobile camera phones into barcode readers; the NeoReader Enterprise and LavaSphere Enerprise software products equip mobile devices to read 1D and 2D barcodes; the NeoSphere management system to aid marketing professionals launch and manage Web-based marketing campaigns; NeoMedia Code Routing Service to exchange Internet content between device and Web platform; and the NeoMedia MSS to facilitate third-party ticketing and coupon database systems.

The Company’s hardware products include the multi-application EXIO II smart scanner for mobile couponing and ticketing software applications; and the XELIA for desktop 2D scanning solutions. The Company also provides integrated utilities to migrate Wang VS COBOL applications to UNIX or Windows NT environments.

Founded in 1989, the Company is headquartered in Atlanta, Georgia.

Share Statistics

Financial Summary

NEOM is an emerging technology company in infancy, with little revenue at this early stage of development.

Net loss for the first quarter of fiscal 2009 totaled $106.6 million, a very significant loss from a $3.6 million profit reported for the same quarter of fiscal 2008. The Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) showed losses in “fair value of hybrid financial instruments” of $23.0 million; a loss of $33.3 million in the fair value of warrants; and a loss of 47.7 million in the fair value of debentures.

The Company’s total shares outstanding for the quarter ended March 31, 2009, was 1,503,082,652, down significantly from 9,570,919,928 shares outstanding reported for the quarter ended March 31, 2008.

Analyst Consensus

The Company is not covered by any major equities research firms at this stage of development.

Investment Highlights

NEOM develops and sells device software and hardware for reading 1D and 2D barcodes.

The market size for 1D and 2D barcode scanners in North America is expected to reach $968.2 million in 2012, according to Frost & Sullivan in its report entitled, Migration of 1D to 2D Barcode Scanners Market in North America. The growth to market maturity of both technologies differ widely, with the market for 1D barcode scanners and related technologies expected to grow at a CAGR of 5.7%, while the growth rate of the 2D market is anticipated to grow at 14.5% per year, the report revealed.

The 2D barcode technology is popular in Japan, but is still in its infancy in North America and Europe. The market is dependent upon device and software makers’ acceptance of the technology. In the United States, 45 million American cellphone users who use their phones to access the Internet, only 6.4 million actually purchases something from the Internet, according to research firm Nielsen.

Microsoft has recently shown interest in barcode technology, debuting Windows Live Barcode in 2006 to enable the transfer of information between computers, billboards and magazines. The barcode application received very little interest at that time, but Microsoft continued tweaking the product. With the recent release of Microsoft’s TagReader software, its compatibility with several smart devices such as Apple’s iPhone, Research in Motion’s BlackBerry, Nokia’s Symbian and Windows Mobile handset is expected to take the technology to the next important step in market adoption.

Google’s entrance into the market with its alliance with the Dallas-based company behind the Shopsavvy application–which has been widely adopted in Japan–is expected to further market acceptance of the technology.

On July 23, 2009, NEOM Europe announced the Company is increasing its presence in the Philippines with a pilot program with the Philippines’ Batangas Port. The exclusive deal with the Batangas Port involves a program to replace the longstanding ATM card ticketing system with NEOM’s real-time terminal ticket issuance. If accepted by the Port, the real-time ticketing system will be rolled out to ports throughout the Philippines’ 7,000 island archipelago.

On July, the Company signed a collaboration agreement with RCBC, Omniprime, and MRT-3, in which passengers will now be able to use their cellphones to purchase train tickets, allowing transactions to be monitored and traced by MRT management.

In addition, NEOM’s 2D barcode system technology will be rolled out at 100 Phoenix Petroleum gas stations within the Philippines. Customers can now pay for gasoline with their cellphones to earn loyalty points.


Technical Analysis

neom Investment Report for NeoMedia Technologies Inc. (NEOM)

Source: http://stockcharts.com/h-sc/ui

NEOM trades below its 13-day moving average. This bearish sign is even more significant because the moving average also trends lower.

The MACD for NEOM currently indicates a bearish signal. The MACD is below the signal line, a 9-day moving average, and is below the critical level of 0, which implies that the underlying moving averages are trending lower. Overall, the chart is bearish.

Comparative Analysis

NEOM competes with three privately-held North American companies, including Mobile Discovery, Scanbuy and SnapTell. NeoMedia Technologies Inc. is in the development stage.

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