Replies to post #83442 on NeoMedia Technologies, Inc (NEOM)

[ct24]

SS, well said <eom>

[icgreen22]

They can't,they're too busy digging a hole.

[in4it]

Ditto

in4it

[ss9173]

The issue is liquidity. Per the 10Q, on June 30, 2006, Neom had $2.5MM in cash. Excluding stock based compensation expense, Neom is averaging $2.3MM per month for SG&A and R&D expenses. Gross profit only averaged $696K per month for Q2. So the net cash burn (again excluding stock based compensation)is approximately $1.6MM per month.

Per the 10Q, Neom needed $25MM to complete the financing of the acquisition companies (and that was at a pps of .165). Every .01 drop in pps is going to make it more difficult to strike a palatable deal with the acquisition companies. The owners / management of the acquisition companies are now committed to Neomedia whether they like it or not. They will "sink or swim" together IMO. They need to strike an agreement whereby the Company will continue to survive until mobile marketing becomes more mainstream in the marketplace.

NMPR is not generating the cash to fund the Neomedia Mobile business unit as originally planned. While I was impressed with their operation and people in Ft. Myers during the SHM, the bottom line is it is taking too long for this business unit to generate positive cash flow. I have no doubt that this will eventually be a profitable business unit, but I am concerned that the reason Neom invested in NMPR is not materializing as fast as it should. And, I have always been concerned that it distracts or dilutes Management's focus from the Mobile Marketing core competency.

As I view Neom's liquidity issues at a crisis stage, perhaps Neomedia should quickly sell NMPR to DuPont or PPG to raise cash that could fund the acquisitions.

IMO, Neom should be working fast to strike a deal with a News Corp, Microsoft, Nokia or P&G type company to get some significant cash infused into the business...even if it means giving up some control of running the business.

The bottom line is we shareholders need to see a plan for how the company is going to fund the acquisitions and sustain business operations without massive undesirable dilution by Cornell.

All JMHO.

SS9173

[beam11]

SS - I noted that you are in the manufacturing business. When revenue is increasing and operating expenses are increasing faster, where is the first place you look to take control?

You got it! One knows the first place to look and start taking control when you read the financial statement summary of internal control!

One of you reported back from the Shareholder's meeting that NEOM was burning approx. 1 Mil per month in expenses. Based on your write up, NEOM is burning 1.6.

NEOM now has too many chief's and little oversight. It appears to me that all the subs and various dept heads at NEOM are free to run up whatever cost of operating deemed necessary, with no oversight.

Based on my years of experience, and the general comments of the accountants regarding internal control, or lack of indepth comments, this is the first place I would look to bust it wide open. It is my opinion, that you will find some big spenders, and big spending by those "in control", which others are afraid to deal with.

I would love to see a complete write up of every departments internal control procedures, and then be able to test those procedures.

When you find one officer in control of so much, even sitting on the the board that determines his salary, any internal control accountant will generally find big problems!

Just my expert opinion!