For those that can't open the link here is the information. Don't know who this Anderson dude is buy he makes excellent points as do the others.
David James Andersen This ‘response’ conveniently ignores the real issues common shareholders have with the recent 8K filing. It appears that Mr. McCready is willing to virtually destroy the potential returns for the common shareholder while insuring that Yorkville, who already get a guaranteed return through selling shares obtained at a newly reduced par value, will profit enormously regardless of the success or failure of the company. Yorkville’s only ‘risk’ is that they won’t be able to sell shares.
On the other hand, people whose return relies on the value of their investment to increase with the success of the company they have invested and patiently believed in are left with practically worthless shares, diluted into oblivion to benefit Yorkville and Yorkville alone. The terms of the recent 8K show complete disregard for common shareholder concerns. Our frustration is not based in NeoMedia’s continued borrowing from Yorkville as much as it is about unnecessary destruction of common shareholder’s investments to insure Yorkville’s already guaranteed profits. How much of the $50 Million Yorkville has invested has it already recouped through selling shares? Give us that number Mr. McCready, and we will subtract it from $50M to find what Yorkville’s truly has at ‘risk’.
Shareholders have a voice in these matters with the votes represented by their shares, but Mr. McCready and the NeoMedia board of directors have also guaranteed that Yorkville will now hold a temporary majority stake and can vote in any terms they wish, purely to benefit themselves. Clearly, Mr. McCready is not committed to ANY investor except Yorkville.
Clay Indeed, Yorkville has already sold BILLIONS of Neomedia shares into the market to recoup their investment (a lot of that was since the USPTO ruling last year brought more international attention to the Company). They do not have $50 million on the line as Mr McCready misleadingly insinuated.
Andersen supporter 1 As a long-term shareholder, I second Mr. Andersen’s response. I also encourage all other share-holders to voice their concern’s by supporting Mr. Andersen’s comments by following a similar response as I have started.
David Uram I agree 100% with the sentiments of Mr. David James Anderson. Ian McReady’s response clearly indicates that he has little or no regard for the retail shareholder. We, the retail shareholder, do not view Yorkville Advisors (YA) as an investor, we view them as a loan shark. Make no mistake, YA has already made huge profits on their loaning of $50 million to NEOM to date, and the terms of this new agreement as defined by the 8K ensures they will make astounding profits on this latest $2.5 million. I am confident NEOM is doing the right things to become successful, but unfortunately the deplorable massive dilution of shares will prevent the retail shareholder from seeing any return on their investment.
Mary This summary from a poster wraps things up into a tidy, little ball for us. This latest round of 2.5 million loaned by YA Global, forces a reduction of par down to .001 and demands a reverse split of its stock 100:1. The AS (available shares) REMAINS @ 5 billion.
“Let’s take all of the 2.3 bil OS - now factor a 100 to 1 Reverse Split = 23 mil shares outstanding correct? ok its clear YA has set itself up to reap the benefits of any sell so here goes.
Sell price of 250 million (example figure only). Sell occurs and YA decides to convert all in lieu of cash (of which they can) - maxing A/S to 5 billion - leaving them with 4.977 billion shares.
Net result 250 mil / 5 bil = .05 a share Common shareholders get 23 mil * .05 = $1,150,000.00 YA Global gets 4.977 bil * .05 = $248,850,000.00 ”
How is it possible for YA Global to gain 52% of the voting power, temporarily, to vote in such blatant sabotage against ALL other shareholders of this company.
This is mutiny financing.
Mary Currently, I own 2.5 million shares of Neomedia. The value of my account as we speak is $15000. Not bad for investing 50k into this company! After a split, I’ll own 25000 shares. If the above scenerio took place, my shares will be worth $1250. That’s a $48750 loss. Just keeps getting better.
GRIP Doesnt it make sense that Yorkville would be taken care of prior to any common shareholder? They have $50 Million invested. How much do you have invested? LOL. You people are forgetting how this works. Common shareholders are always last in the food chain. If you dont understand that then maybe you should stop trading stock. As far as dilution goes, thats always been a clear risk with NEOM. Its not like they didnt make it clear that this could happen long ago. Stop complaining everytime this stock takes a crap and either sell, hold or buy more. Bottom line is nobody knows how this will turn out, it’s all speculation until its official so go with your gut and don’t listen to the non-sense that people try to claim as fact when really it’s anyone guess at this point.
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Pietsch To my knowledge it is a violation of SEC rules and regulations to have not released the above material CEO letter to shareholders in an 8-K.
This shareholder’s outrage is based on continued financing through YA Global rather than licensing Google and other companies operating NeoMedia’s IP.
The recent debt obligations grant YA a 120 day majority vote to guarantee its nominees for the Board get voted in. All appointees to the Board are YA’s nominees. The grant of majority vote is a violation of the anti-takeover provision of the stockholders rights plan adopted by NeoMedia’s Board in December 1999. The current Board of Directors has wantonly violated the anti-takeover provision of the stockholders rights plan. A Delaware State Chancery Court may be an avenue to force NeoMedia to rescind the provisions granting YA Global a majority stake based on the fact that same is a violation of the poison pill provision. Only Charles Fritz, Wiliam Fritz and The Fritz Family Trust Limited Partnership and their holdings are exempt from triggering the poison pill provision. NeoMedia is incorporated in the State of Delaware.
As to Mr. McCready’’s statement that YA has more to lose than any other investor that is not true. Since Mr. McCready took office as CEO, deemed dividends rose from $21,000 to $631,000 and as of 9-30-09 deemed dividends stand at $977,00. The deemed dividend high was almost $1.8 million. See 10Q filed 5-15-08 at pages 3 and 4 and the 10Q filed 11-16-09 at page 5. Paid in Capital increased by $33 million since YA become a debt holder in NeoMedia in March of 2006 which is evidence that YA Global received most, all or more than its invested monies through stock conversions and, I submit, premature selling and other stock price manipulation. YA Global is the defendant in a lawsuit filed by Cobalis where YA is averred to have engaged in securities fraud and contract violations, including exceeding the 4.99% limit.
The CEO stated in an interview with Gomo News on December 17, 2009 that when “all players see and relish success” from the IP, then they will come to NeoMedia. In the CEO’s statement today he states the $2.5 million received from YA Global will be used to implement the CEO’s strategy. The CEO is contradicting himself here. In the aforesaid December 17 interview the CEO has stated he is waiting for companies to voluntarily come to NeoMedia for a license after such companies achieve relished success from the free operation of NeoMedia’s IP. Such strategy does not cost $2.5 million to implement. Fire everyone except perhaps Dean Woods or Terry Griffin and hire a secretary to answer the phone for if and when all those “players” voluntarily come to NeoMedia to request a license. The cherry on top is the CEO wishing filthy rich Google success with 2d codes (i.e., success through free operation of shareholders’ patents). Of course the 180 degree change in stance regarding licensing is contrary to the CEO’s previous licensing of Scanbuy, Mobile Tags and Bems. Why weren’t those companies permitted free use of the IP until relished success was achieved? This shareholder expected licenses from Google and Microsoft after the Scanbuy licensing and Court settlement. The proceeds from said licenses would enable a pay off YA’s loans and set NeoMedia on a course of growth through collection of royalty payments as the market adoption of 2d codes expands here and abroad. But no, the CEO puts a halt to licensing for a specious reason and proceeds to enter into a equity destroying deal with YA Global for a mere $2.5 million. Further, the deal has given complete control of the Board to YA Global. A useful tool for YA to implode the company and abscond with the patents in the near future. I suspect same will occur shortly after the CEO’s tenure ends on 5-28-10.
Under the CEO’s employment contract 6 month written notice to extend was due by 11-29-09. The contract states that following receipt of such notice, the parties mutually agree or not to extend. To date there has been no announcement from NeoMedia’s management on extension of Mr. McCready’s employment contract or the search for a new CEO even though it is approaching only four months away from the expiration date of the CEO’s tenure, May 28, 2010. See filing dated 6-16-08 at sec.gov.
On 2-19-09 the CEO knowingly and willingly permitted YA to have approximately 10% of the then o/s of common stock. (See 10Q filed 5-15-09 at page 7). A total of over 1.1 billion shares of common stock was issued to YA during the 16 month period ending with the last known conversion on 10-26-09 I10Q filed 11-16-09 at page 11). Where the CEO willing and knowingly failed to enforce the 4.99% limit on one known occasion, there can be no assurance the CEO ever enforced the 4.99% limit. Under the new debt obligations, YA is permitted to hold 9.99% of common stock.
Shareholders have a voice at the next shareholder meeting to the extent of extracting responses from the CEO and CFO that will be useful in a future shareholder lawsuit. Other than that shareholders have no say here because YA has been given 120 day majority vote and the shareholder meeting is to take place within that same 120 day period.
Any shareholder wishing to file an action in Delaware State Chancery Court may get a victory forcing the Board to withdraw the majority vote illegally and/or improperly given to YA Global by the Board.
The CEO is paid 160,000 British Pounds Sterling sterling annually, plus a fixed bonus of $20,000 annually payable in BPS plus an additional bonus of 37.5% of 160k British Pounds Sterling at the end of each fiscal year if the Board on which the CEO sits approves of the bonus payable in British Pounds Sterling. If you ask this shareholder whether YA has bought and paid for the CEO, I’d say the answer is an unequivocal yes. In the CEO’s first interview with Gomo News he states it was via Yorkville Advisors that he came to NeoMedia. r
Terrific. Frac and Direct have a brand new forum to trash the stock.
Well done to everyone who decided Bena's blog would be the appropriate communication tool for addressing Iain.
I don't see how trashing NeoMedia on a mobile professional's blog will ever benefit investors. You are simply sending up warning flags for buyers to look elsewhere.
If you must, continue to vent on iHub; not in public.
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