NeoMedia Technologies, Inc (NEOM)

[RisknReturn]

The logic is that NEOM owes YA Global about $45 million and the only way to pay any amount of that debt has been from death spiral conversions. As of today, that debt is convertible into about 150 billion shares but NEOM has no authorized shares to issue.

There are 2 feasible ways to solve the problem: increase authorized shares (to 500 billion as NEOM proposed)or do the RS (1,700 to 1 as proposed). Both proposals free up authorized shares so YA can continue to convert and sell. Due to the virtually unlimited shares for sale and fewer and fewer buyers that can stomach a nearly 99.9% drop in PPS, the laws of supply and demand take over and the death spiral will continue to drive PPS down.

For Q1 2013, NEOM had an operating loss and it used $660,000 of cash to fund its operating activities. The bottom line is that NEOM is insolvent with liabilities in excess of assets by $62 million; meanin NEOM is grossly over-valued even at today's price of $0.0003 per share.