1022701--4/3/2007--NEOMEDIA_TECHNOLOGIES

related topics

{product, market, service}

{control, financial, internal}

{stock, price, share}

{acquisition, growth, future}

{loss, insurance, financial}

{personnel, key, retain}

{regulation, change, law}

{provision, law, control}

{property, intellectual, protect}

{debt, indebtedness, cash}

{customer, product, revenue}

Risks Related to NeoMedia s Business NeoMedia Has Historically Lost Money And Losses May Continue NeoMedia s Independent Registered Public Accounting Firm Have Added Going Concern Language To Their Report On NeoMedia s Consolidated Financial Statements, Which Means That NeoMedia May Not Be Able To Continue Operations NeoMedia Will Need to Raise Additional Funds to Continue Its Operations Material Weaknesses in Its Internal Control over Financial Reporting that May Prevent The Company from Being Able to Accurately Report Its Financial Results or Prevent Fraud, which Could Harm Its Business and Operating Results. NeoMedia Has Guaranteed The Value Of Stock Issued In Connection With Recent Mergers Through The Registration Of The Shares, Which Could Result In A Material Cash Liability All Of The Company s Assets Are Pledged To Secure Certain Debt Obligations, Which The Company Could Fail To Repay NeoMedia Has Contractual Commitments To Pay Silent Partners There Is Limited Information Upon Which Investors Can Evaluate NeoMedia s Business Because The Physical-World-To-Internet Market Has Existed For Only A Short Period Of Time NeoMedia s Future Success Depends On The Timely Introduction Of New Products And The Acceptance Of These New Products In The Marketplace. NeoMedia s Common Stock Is Deemed To Be Penny Stock, Which May Make It More Difficult For Investors To Sell Their Shares Due To Suitability Requirements Existing Shareholders Will Experience Significant Dilution When Certain Investors Convert Their Preferred Stock to Common Stock, Convert Outstanding Convertible Debentures, Or When the Investors Exercise Their Warrants and Receive Common Stock Shares Under The Investment Agreement With The Investors Due To The Accounting Treatment Of Certain Convertible Preferred Stock And Convertible Debenture Instruments Issued By NeoMedia, A Fluctuation In NeoMedia s Stock Price Could Have A Material Impact On NeoMedia s Results Of Operations NeoMedia Is Uncertain Of The Success Of Its NeoMedia Mobile Business Unit And The Failure Of This Unit Would Negatively Affect The Price Of NeoMedia s Stock A Large Percentage Of NeoMedia s Assets Are Intangible Assets, Which Will Have Little Or No Value If NeoMedia s Operations Are Unsuccessful Certain Of NeoMedia s Emerging Products And Services Have Limited History And May Not Result In Success NeoMedia s Internally Developed Systems Are Inefficient And May Put NeoMedia At A Competitive Disadvantage NeoMedia Could Fail To Attract Or Retain Key Personnel NeoMedia Depends Upon Its Senior Management And Their Loss Or Unavailability Could Put NeoMedia At A Competitive Disadvantage NeoMedia May Be Unsuccessful In Integrating Its Gavitec Acquisition With Its Current Business NeoMedia May Be Unable To Protect Its Intellectual Property Rights And May Be Liable For Infringing The Intellectual Property Rights Of Others NeoMedia Is Exposed To Product Liability Claims And An Uninsured Claim Could Have A Material Adverse Effect On NeoMedia s Business, Prospects, Financial Condition, And Results Of Operations, As Well As The Value Of NeoMedia s Stock NeoMedia Will Not Pay Cash Dividends And Investors May Have To Sell Their Shares In Order To Realize Their Investment Some Provisions Of NeoMedia s Certificate of Incorporation And bylaws May Deter Takeover Attempts, Which May Limit The Opportunity Of NeoMedia s Stockholders To Sell Their Shares At A Premium To The Then-Current Market Price Risks Relating To NeoMedia s Industry The Security Of The Internet Poses Risks To The Success Of NeoMedia s Entire Business NeoMedia Will Only Be Able To Execute Its Physical-World-To-Internet Business Plan If Internet Usage and Electronic Commerce Continue To Grow NeoMedia May Not Be Able To Adapt As The Internet, Physical-World-To-Internet, And Customer Demands Continue To Evolve NeoMedia May Not Be Able To Compete Effectively In Markets Where Its Competitors Have More Resources In The Future There Could Be Government Regulations And Legal Uncertainties Which Could Harm NeoMedia s Business

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1022701--4/3/2007--NEOMEDIA_TECHNOLOGIES_INC