U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 30, 2005
NEOMEDIA TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-21743 36-3680347
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction Identification No.)
Incorporation)
2201 Second Street, Suite 402, Fort Myers, Florida 33901
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(Address of Principal Executive Offices) (Zip Code)
(239)-337-3434
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 30, 2005, NeoMedia Technologies, Inc. ("NeoMedia") and Cornell
Capital Partners LP ("Cornell") entered into a Standby Equity Distribution
Agreement under which Cornell agreed to purchase up to $100 million of
NeoMedia's common stock over a two-year period, with the timing and amount of
the purchase at NeoMedia's discretion. The maximum amount of each purchase would
be $2,000,000 with a minimum of five business days between advances. The shares
would be valued at 98% of the lowest closing bid price during the five-day
period following the delivery of a notice of purchase by NeoMedia, and NeoMedia
would pay 5% of the gross proceeds of each purchase to Cornell. As a commitment
fee for Cornell to enter into the agreement, NeoMedia issued 50 million warrants
to Cornell with an exercise price of $0.20 per share, and a term of three years,
and also paid a cash commitment fee of $1 million. NeoMedia also issued 4
million warrants with an exercise price of $0.229 to an independent third party
as a fee for negotiating and structuring the Standby Equity Distribution
Agreement. NeoMedia expects to file a registration statement with the US
Securities and Exchange Commission during 2005 to register the shares underlying
the $100 million Standby Equity Distribution Agreement. The Standby Equity
Distribution Agreement would become active at the time the SEC declares
effective a registration statement containing such shares.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION
On March 30, 2005, NeoMedia borrowed from Cornell the principal amount of
$10,000,000 before discounts and fees in the form of a secured promissory note
(the "Note"). Cornell withheld structuring and escrow fees of $68,000 related to
the Note. As of March 30, 2005, NeoMedia had not made any payments against the
principal of the Note. The Note is scheduled to be repaid at a rate of
$1,120,000 per month commencing May 1, 2005 and continuing until principal and
interest are paid in full. The Note accrues interest at a rate of 8% per annum
on any unpaid principal. NeoMedia has the option to prepay any remaining
principal of the Note in cash without penalty. In connection with the Note,
NeoMedia and Cornell entered into a security agreement under which the Note is
secured by all of NeoMedia's assets other than its patents and patent
applications. NeoMedia also escrowed 25,000,000 shares of its common stock as
security for the Note.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NeoMedia Technologies, Inc.
(Registrant)
Date: March 30, 2005 By:/s/ Charles T. Jensen
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Charles T. Jensen, President,
Chief Executive Officer, and
Director
EXHIBIT INDEX
Exhibit
No. Description
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16.1 Standby Equity Distribution Agreement, dated March 30, 2005, between
NeoMedia and Cornell
16.2 Placement Agent Agreement, dated March 30, 2005, between NeoMedia
and Cornell
16.3 Escrow Agreement, dated March 30, 2005, between NeoMedia and Cornell
16.4 Registration Rights Agreement, dated March 30, 2005, between
NeoMedia and Cornell
16.5 Promissory Note, dated March 30, 2005, between NeoMedia and Cornell
16.6 Security Agreement, dated March 30, 2005, between NeoMedia and
Cornell