Back in mid-May NeoMedia Technologies, Inc. (OTCBB: NEOM) sunk to a 52-week low of 0.0132, due in large part to weak quarterly numbers that validated concerns about the company’s operating expenses as well as their liquidity. Since that time NEOM has experienced significant volatility as heavy trading volume has contributed to a run as a high as 0.075 on June 13, 2011, a low of 0.031 two weeks later, a climb to 0.064 on July 8, 2011, another dip down to 0.041 on July 11, 2012, and now shares are moving around the 0.056 – 0.059 range.
While the activity of NEOM shares has been obvious, the motivation behind that activity remains somewhat clouded as the company has done little to really cement itself as a legitimate business concern. In late May NEOM received a favorable ruling from the United States Patent and Trademark Office (PTO) that validated their US Patent 6,199,048, ‘System And Method For Automatic Access Of A Remote Computer Over A Network,’ ending a lengthy battle with a third-party challenge to the patent’s validity.
According to Laura Marriott, Chief Executive Officer of NeoMedia Technologies, Inc. the ruling allows NEOM “to realize the potential of our efforts and innovations, further strengthening our partnerships,” but that has yet to be seen.
Concentrating on 2D mobile barcode technology along with infrastructure solutions which enable the mobile barcode ecosystem world-wide, NEOM “transforms mobile devices with cameras into barcode scanners, enabling a range of practical and engaging applications including consumer oriented advertising, mobile ticketing and couponing, and business-to-business commercial track and trace solutions.”
Essentially what NEOM’s technology is capable of doing is allowing a mobile phone to act as a scanner for barcodes which links brands, advertisers, carriers, retailers, and consumers using the mobile Internet. By scanning the barcode the user is then directed to a specific web page where they can “access real-time product or service information, download content or complete a mobile commerce transaction.” The idea being that the technology promotes interactive mobile marketing for advertisers while enhancing the consumer experience.
Unfortunately for NEOM they aren’t the only game in town as there are a great number of applications available for mobile phones that provide similar services. Where NEOM does separate itself from the pack is in their ability to provide a full end-to-end solution for global mobile 2D barcode implementations; providing solutions for mobile barcode creation, management, resolution, and data reporting as well as mobile coupon, ticketing and hardware scanning solutions.
This means that NEOM is more than just an application for a consumer, it’s invested in the development of the mobile barcode ecosystem and all of its players- counting handset manufacturers, platform providers, brands and agencies as part of their current customer list.
Recognizing that their success will only come through continued growth of the mobile barcode ecosystem NEOM has expressed willingness to license their IP and platforms to the entire ecosystem, including competitors. This is something they will have to do, and do soon, as their most recent quarterly numbers showed revenue of $369,000 yet their net operating losses totaled $1.4 million during the three-month period.
Shareholders of NEOM have seen this kind of quarter before and that’s why they state in their filings that they have “historically incurred net losses from operations and we expect that we will continue to have negative cash flows as we implement our business plan.”
Just how long it takes for NEOM to implement that business plan is where the problem lies as they face continued competition in the marketplace and with their limited resources they could have significant problems keeping up with the new technology that dominates and determines the industry.