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
30, 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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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
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¨
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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
YA
Global Financing
On
May
30, 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 Seven Hundred Ninety Thousand Dollars ($790,000). The
Debenture shall mature, unless extended by the holder in accordance with the
terms of the Debenture, on May 30, 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 Seventy Thousand Dollars
($70,000) 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 Twenty Thousand Dollars
($20,000) directly from the proceeds of the closing and (c) issued a warrant
for
the Investor to purchase Fifty Million (50,000,000) shares of the Company’s
common stock at an exercise price of $0.01 per share, which such warrant expires
on May 30, 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 30, 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.
Settlement
and Release Agreement (Hoffman)
On
June
3, 2008, in connection with the resignation of Mr. William Hoffman which was
effective on May 22, 2008, the Company and Mr. Hoffman consummated a Settlement
Agreement and Release (the “Agreement”)
whereby the parties agreed to terminate Mr. Hoffman’s June 18, 2007 Employment
Agreement, effective May 29, 2008. Pursuant to the Hoffman Agreement, the
Company agreed to pay to Mr. Hoffman a severance payment equal to One Hundred
Eighty-Seven Thousand Five-Hundred Dollars ($187,500), of which Ninety-Three
Thousand Seven Hundred Fifty Dollars ($93,750) has already been paid and the
remainder shall be paid to the Executive in four (4) equal monthly installments
of Twenty-Three Thousand Four Hundred Thirty-Seven Dollars and Fifty Cents
($23,437.50) commencing on November 1, 2008 in accordance with the Company's
customary payroll practices.
Additionally,
pursuant to the terms of the Hoffman Agreement, Mr. Hoffman is entitled to
continue to participate in or receive health, welfare, life insurance, long-term
disability insurance and similar benefits as the Company provides generally
from
time to time to its senior executives, and to its employees, generally, through
and until the earlier of (a) the last day of the month in which the final
installment payment is paid (the “Expiration
Date”)
and
(b) such date that Mr. Hoffman obtains employment and becomes eligible for
benefits of such employer. Mr. Hoffman was also granted an option to purchase
Ten Million (10,000,000) shares of the Company’s common stock, par value $0.01
per share, at $0.01 per share. All of such options have vested and are
exercisable through the Expiration Date. A copy of the Hoffman Agreement is
attached hereto as Exhibit 10.5 and a copy of Mr. Hoffman’s Resignation Letter
is attached hereto as Exhibit 10.6.
Settlement
and Release Agreement (Pazera)
On
June
2, 2008, the Company and Frank J. Pazera entered into a Settlement Agreement
and
Release (the “Pazera
Agreement”)
whereby the parties agreed to terminate Mr. Pazera’s January 1, 2008 Employment
Agreement, effective June 2, 2008. Pursuant to the Pazera Agreement, the Company
agreed to pay to Mr. Pazera a severance payment equal to Sixty-Six Thousand
Six
Hundred Sixty-Seven Dollars ($66,667), which such payment shall be made to
Mr.
Pazera in eight (8) equal semi-monthly installments of Eight-Thousand
Three-Hundred Thirty-Three Dollars and Thirty-Eight Cents ($8,333.38) commencing
on June 15, 2008 (the “Commencement
Date”)
in
accordance with the Company's customary payroll practices.
Additionally,
pursuant to the terms of the Pazera Agreement, Mr. Pazera is entitled to
continue to participate in or receive medical, life, and disability insurance
as
the Company provides generally from time to time to its senior executives,
and
to its employees, generally, through and until the until the earlier of (a)
the
last day of the month in which the final installment payment is paid in
accordance with Section 3 herein above (the “Expiration
Date”)
and
(b) such date that the Executive obtains employment and becomes eligible for
benefits of such employer. Furthermore, the Company shall pay to Mr. Pazera
Ten
Thousand Dollars ($10,000) within five (5) days of the Commencement Date, which
such payment represents fifty percent (50%) of Mr. Pazera’s first quarter 2008
bonus under his now terminated Employment Agreement. A copy of the Pazera
Agreement is attached hereto as Exhibit 10.7.
ITEM
5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGMENTS OF CERTAIN OFFICERS
On
June
2, 2008, the Board of Directors of the Company appointed J. Scott Womble to
serve as the Company’s Chief Financial Officer, effective May 22, 2008. Mr.
Womble replaces Mr. Frank J. Pazera, who had joined the Company on October
19,
2007 as Chief Financial Officer and amicably resigned effective as of May
22,
2008. A copy of Mr. Pazera’s resignation letter is attached hereto as Exhibit
10.8.
Mr.
Womble previously served as the Company’s interim Chief Financial Officer from
June 2007 through October 19, 2007 and then as a consultant to the Company
through May 22, 2008. Prior to his service as interim CFO, Mr. Womble had worked
as the Company’s Director of Financial Reporting and Controller since April
2006, where he has been responsible of all aspects of the Company’s financial
reporting process. Prior to joining the Company, Mr. Womble was Corporate
Controller for Bonded Builders, a Port Charlotte, Florida based insurance
company.
Mr.
Womble shall receive a base salary equal to $150,000, payable semi-monthly,
plus
health, welfare, life insurance, long-term disability insurance and similar
benefits as the Company provides generally from time to time to its senior
executives. Additionally, Mr. Womble shall receive a bonus equal to 30% of
his
base salary subject to the satisfaction by Mr. Womble of certain performance
targets as determined by the Board of Directors.
ITEM
3.02. UNREGISTERED SALES OF EQUITY SECURITIES
See
Item
1.01 herein above.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not
applicable.
(b) Not
applicable.
(c)
Not
applicable.
(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 30, 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 30, 2008, issued by the Company to YA Global Investments,
L.P.
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Provided
herewith
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EXHIBIT
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DESCRIPTION
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LOCATION
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Exhibit
10.3
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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
10.4
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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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Exhibit
10.5
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Settlement
Agreement and Release, dated June 3, 2008, by and between the Company
and
William Hoffman
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Provided
herewith
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Exhibit
10.6
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Resignation
Letter, effective May 22, 2008, executed by William Hoffman
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Provided
herewith
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Exhibit
10.7
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Settlement
Agreement and Release, dated June 2, 2008, by and between the Company
and
Frank J. Pazera
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Provided
herewith
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Exhibit
10.8
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Resignation
Letter, effective May 22, 2008, executed by Frank J. Pazera
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Provided
herewith
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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: June
5, 2008
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NEOMEDIA
TECHNOLGIES, INC.
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By:
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/s/
Scott
Womble
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Name:
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Scott
Womble
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Its:
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Chief
Financial Officer
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