Thursday, June 29, 2006 10:31:15 PM
In the past we made arrangements with Cornell to fund our expansion. At the time these arrangements were made we did not have the revenue/cash flow to get better financing. In lieu of the fact that it appears that we are generating more revenue yet still burning cash at about $1,000,000 per month. (1) when are we going to go cash flow positive? (2) This leads to my second question which deals with achieving better financing deals? (3) I propose that the board consider a rights offering. Right now we pay Cornell high fees and then give them shares to loan us money. These shares are then sold into the market. Why not let existing shareholders have the right to purchase shares over a certain period of time. I believe that you will be able to raise cash and will not have to pay the high fees. Most shareholders in this room will be happy to purchase shares as part of a rights offering. In the end NeoMedia gets cash, doesn't have to pay fees to raise the cash and also has these new shares in the hands of people that will more than likely hold on to them.
That's it. I saw nods from a few board members and also got a little applause from others.
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