NeoMedia Technologies, Inc. (OTC:NEOM) was not promoted yesterday. Yet, this did not prevent NEOM stock from shifting 15.7 million shares, setting a new eight-week volume record. The latter, in turn, led to a 5% depreciation in the value of NEOM stock which ultimately closed the session at $0.022 per share.
What could have caused this trading frenzy appears to be a press release which came up on the same day. The news release announced that NEOM had now entered into a new partnership agreement with Global IP Law Group in an attempt to increase the value of NEOM’s patent portfolio.
Neomedia Technologies, Inc. claims to be a global provider of 2D mobile barcode technology and infrastructure solutions. The company has been following an open-door policy regarding its financials, which is why it occupies the premier OTCQB market tier. In accordance with its filing obligations with the SEC, NEOM submitted a complete 10-Q form covering Q2 of 2011 last month. As of Jun. 30, the company’s balance sheet included:
- cash reserves of $68K;
- current assets of $0.67 million vs. current liabilities in excess of $129 million!
- quarterly net loss near the $56 million mark.
In spite of NEOM’s diligent information policy, its financial health is in dire need of a miracle. The gargantuan working capital deficit seems highly unlikely to shrink any time soon. If this were not enough, only 3.6% of the company’s A/S has been issued and outstanding, which means that there are still more than 4.8 billion shares waiting to see the light of day. As soon as their time has come, current (and future) stockholders will most probably be swept away by one of the biggest dilution rates in pennystockland.
