NeoMedia Technologies, Inc. (OTC:NEOM) had headed straight down to the rock-bottom on the charts before it somehow managed to strike back.
Prior to Nov. 9, NEOM stock had been on the decline for almost five months pushing investors away. It was on Wednesday that it suddenly bounced back, taking everybody by surprise. Out of nowhere, NEOM stock gained 21%, shifting a staggering 14.2 million shares. Subsequently, the company’s shares depreciated by 9% on the following day, only to resurrect on Friday, closing the week with a 43% price surge up to a six-week high of $0.0164 per share on a volume of 31.3 million.
Headquartered in Atlanta, Georgia, NeoMedia Technologies, Inc. describes itself as “the global market leader in 2D mobile barcode technology”. Yet, its current financial state does not exactly prove this statement. Rather, the company’s latest 10-Q form covering the three-month period ended Jun. 30, 2011 discloses that NEOM’s balance sheet contains the following numbers among others:
- $68K in cash and cash equivalents;
- working capital deficit of $129 million;
- $767K in revenue as opposed to $221K in Q2 of 2010;
- net quarterly loss in excess of $55 million in comparison with net quarterly income of $9.5 million.
Evidently, NAOM is in dire need of fresh capital. The core of the company’s liabilities is comprised of derivatives and debentures and both instruments have a rather adverse effect on NAOM’s financial health. To plug the working capital void, the company will need substantial external support. Otherwise, becoming a real market leader will be nothing short of an impossible mission.
