SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
__________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) of the
SECURITIES
EXCHANGE ACT OF 1934
__________________
Date
of
Report: May
16, 2008
NeoMedia
Technologies, Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-21743
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36-3680347
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Two
Concourse Parkway, Suite 500, Atlanta, GA
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30328
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(Address
of principal executive offices)
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(Zip
code)
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Registrant's
telephone number, including area code:
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(678)
638-0460
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Not
Applicable
(Former
Name or Former Address, If Changed Since Last Report)
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:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
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| o |
Pre-commencement
communications pursuant to Rule 13c-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item
1.01. Entry Into a Material Definitive Agreement
On
May
16, 2008, NeoMedia Technologies, Inc., a Delaware corporation (the "Company")
issued
and sold a secured convertible debenture (the “Debenture”)
to YA
Global Investments, L.P. (the “Investor”)
in the
principal amount of Five Hundred Thousand Dollars ($500,000). The Debenture
shall mature, unless extended by the holder in accordance with the terms of
the
Debenture, on May 16, 2010 (“Maturity
Date”).
The
Debenture shall accrue interest at a rate equal to fifteen percent (15%) per
annum and such interest shall be paid quarterly in arrears beginning on July
1,
2008 and on the Maturity Date or sooner as provided therein) in cash. At any
time after the Transaction Date, the Investor shall be entitled to convert
any
portion of the outstanding and unpaid principal and accrued interest thereon
into fully paid and non-assessable shares of Common Stock at a price equal
to
the lesser of $0.015 and eighty percent (80%) of the lowest volume weighted
average price of the Common Stock during the ten (10) trading days immediately
preceding each conversion date. The Company shall not affect any conversion,
and
the Investor shall not have the right to convert any portion of the Debenture
to
the extent that after giving effect to such conversion, the Investor (together
with the Investor’s affiliates) would beneficially own in excess of 4.99% of the
number of shares of Common Stock outstanding immediately after giving effect
to
such conversion.
The
Company shall pay an amount equal to the principal amount being redeemed plus
a
redemption premium equal to twenty percent (20%) of the principal amount being
redeemed, and accrued interest.
In
connection with the Debenture, the Company (a) paid Forty-Four Thousand Dollars
($44,000) directly from the proceeds of the closing to Yorkville Advisors LLC
(“Investment
Manager”)
to
compensate the Investment Manager for monitoring and managing the purchase
and
investment made by the Investor pursuant to the Investment Manager’s existing
advisory obligations to the Investor, (b) paid a nonrefundable structuring
and
due diligence fee to the Investment Manager equal to Fifteen Thousand Dollars
($15,000) directly from the proceeds of the closing and (c) issued a warrant
for
the Investor to purchase 7,500,000 shares of the Company’s common stock at an
exercise price of $0.0175 per share, which such warrant expires on May 16,
2015.
In accordance with the terms of the warrant, a copy of which is attached hereto,
in no event shall the holder be entitled t exercise the warrant for a number
of
shares in excess of that number of warrant shares which, upon giving effect
to
such exercise, would cause the aggregate number of shares of the Company’s
common stock beneficially owned by the holder and its affiliates to exceed
4.99%
of the outstanding shares of the Company’s common stock following such exercise,
except within sixty (60) days of May 16, 2015. If at the time of exercise the
warrant shares are not subject to an effective registration statement or if
an
event of default thereunder has occurred, the holder may make a cashless
exercise of the warrant in accordance with the formula set forth in the warrant.
In
case
of any (1) merger or consolidation of the Company or any subsidiary of the
Company with or into another person, or (2) sale by the Company or any
subsidiary of the Company of more than one-half of the assets of the Company
in
one or a series of related transactions, the Investor shall have the right
to
(A) declare the entire amount due and owing under the Debenture, (B) exercise
its rights available as if an Event of Default has occurred (as such term is
defined in the Debenture, (C) convert the aggregate amount of the Debenture
then
outstanding into the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common Stock following such
merger, consolidation or sale, and the Investor shall be entitled upon such
event or series of related events to receive such amount of securities, cash
and
property as the shares of Common Stock into which such aggregate principal
amount of the Debenture could have been converted immediately prior to such
merger, consolidation or sales would have been entitled, or (D) in the case
of a
merger or consolidation, require the surviving entity to issue to the Investor
a
convertible debenture with a principal amount equal to the aggregate principal
amount of the Debenture then held by the Investor, plus all accrued and unpaid
interest and other amounts owing thereon, which such newly issued convertible
debenture shall have terms identical (including with respect to conversion)
to
the terms of the Debenture, and shall be entitled to all of the rights and
privileges of the Investor of the Debenture set forth therein and the agreements
pursuant to which the Debenture was issued. The terms of any such merger, sale
or consolidation shall include such terms so as to continue to give the Investor
the right to receive the securities, cash and property upon any conversion
or
redemption following such event.
The
Debenture is secured by (a) certain Pledged Property, as such term is defined
in
that certain Security Agreement, dated August 24, 2007, by and among the
Company, each of the Company’s subsidiaries made a party thereto and the
Investor and perfected pursuant to UCC-1 Financing Statements filed with the
Delaware Department of State (the UCC Filing Section) on or about August 24,
2007 and with the Florida Secured Transaction Registry on or about August 24,
2007 and (b) certain Patent Collateral, as such term is defined in that certain
Security Agreement (Patent), dated August 24, 2007, by and among the Company,
each of the Company’s subsidiaries made a party thereto and the
Investor.
ITEM
3.02. UNREGISTERED SALES OF EQUITY SECURITIES
See
Item
1.01 herein above.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS
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(d) |
Exhibit
No. Description:
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EXHIBIT
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DESCRIPTION
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LOCATION
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Exhibit
10.1
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Secured
Convertible Debenture, dated May 16, 2008, issued by the Company
to YA
Global Investments, L.P.
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Provided
herewith
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Exhibit
10.2
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Warrant,
dated May 16, 2008, issued by the Company to YA Global Investments,
L.P.
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Provided
herewith
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Exhibit
10.2
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Security
Agreement, dated August 24, 2007, by and among the Company, each
of the
Company’s subsidiaries made a party thereto and YA Global Investments,
L.P.
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Incorporated
by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K
as filed with the SEC on August 30, 2007
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Exhibit
10.3
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Patent
Security Agreement, dated August 24, 2007, by and among the Company,
each
of the Company’s subsidiaries made a party thereto and YA Global
Investments, L.P.
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Incorporated
by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K
as filed with the SEC on August 30, 2007
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Date: May
22, 2008
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NEOMEDIA
TECHNOLGIES, INC. |
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By: |
/s/
Scott
Womble
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Name: |
Scott
Womble
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Its: |
Chief
Financial Officer
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