NEOM NeoMedia Technologies Inc (CE)

NeoMedia Technologies, Inc. (“ we ,” “ us ,” “ our ,” “ NeoMedia ,” or the “ Company ”) has pioneered 2D mobile barcode technology and infrastructure solutions that enable the mobile barcode ecosystem world-wide with state-of-the-art mobile barcode services and technology. With this technology, mobile phones with cameras become barcode scanners, which enable a range of practical applications including mobile marketing, mobile commerce and advertising. The Company also offers barcode management services, reader solutions as well as licensing of its intellectual property portfolio.

Qode Services Corporation, which this information statement refers to as “ Merger Sub ,” is a newly formed Delaware corporation. Merger Sub is a wholly owned subsidiary of NeoMedia and has not conducted any business operations except for activities incidental to its formation and as contemplated by the Merger Agreement.

The Merger   ( page 8 of this information statement )

On February 21, 2014, the Company entered into an Agreement and Plan of Merger with Merger Sub (the “ Merger Agreement ”). Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “ Merger ”). Merger Sub has no operations; the sole purpose of the merger is to effect the Charter amendments contemplated by the Merger Agreement. The Merger Agreement is attached as Annex A to this information statement, and we encourage you to read it carefully and in its entirety because it and not this information statement is the legal document that governs the Merger.

Reasons for the Merger; Recommendation of our Board of Directors (page 8 of this information statement)

The Company’s Charter obligates it to reserve and keep available out of its authorized Company Common Stock the full number of shares of Company Common Stock of the Company issuable upon conversion of all outstanding shares of Preferred Stock. The Company is not in compliance with these Charter provisions, which means, among other things, that all of the outstanding dividends owed to its holders of Preferred Stock may be due and payable. It is questionable whether the Company has lawfully available funds to pay these dividends. In addition, the failure of the Company to comply with the Charter provisions at issue triggers a requirement that the Company hold a meeting of stockholders within thirty (30) calendar days of it failing to have sufficient authorized but unissued shares of Company Common Stock solely for purposes of voting on a proposal to increase the number of authorized shares of Company Common Stock. The Company also has certain obligations under its convertible debt instruments to reserve sufficient shares of Company Common Stock for the conversion of those securities. The holder of a majority of the outstanding secured convertible debentures issued by the Company has communicated its intent to foreclose on all of the Company’s assets in the event that the Company’s share reserves are not sufficient to honor conversions under such instruments (a potential default thereunder). At its 2013 annual meeting of stockholders (the “ 2013 Annual Meeting ”), the Company asked its stockholders to approve several amendments to the Charter to increase the number of authorized but unissued shares available for issuance upon conversion of its convertible debentures and Preferred Stock, but was unable to obtain the requisite votes for such amendments from its stockholders. Accordingly, the Company considered other means of increasing the number of authorized but unissued shares of Company Common Stock. The Board of Directors determined that the Merger Agreement (and the actions contemplated thereby with respect to amending the Charter) was the only option available to avoid the threat of such default which could lead to foreclosure of the Company’s assets and/or bankruptcy. Further, the holder of the majority of the Company’s outstanding secured convertible debentures agreed to decrease the aggregate amount of the debt under such instruments by $5.0 million dollars. After careful consideration, the Board of Directors unanimously (a) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger and the Charter amendments contemplated thereunder, in accordance with the DGCL; (b) recommended that the stockholders of the Company adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger and Charter amendments; and (c) authorized the execution, delivery and performance of the Merger Agreement and the transactions contemplated by the Merger Agreement.

For a discussion of the material factors considered by the Board of Directors in reaching its conclusion, please see the section titled “The Merger—Reasons for the Merger” beginning on page 8.

Required Stockholder Approval  (page 4 of this information statement)

On March 3, 2014, subsequent to the execution of the Merger Agreement, the holders of Company stock representing a majority of the outstanding voting power with respect to the adoption of the Merger Agreement (the “ Majority Holders ”), delivered a written consent (the “ Merger Consent ”) adopting the Merger Agreement within the meaning of Section 251 of the DGCL and the transactions contemplated by the Merger Agreement, including, without limitation, the Merger and Charter amendments contemplated thereunder. As a result, no further action by any other stockholder of NeoMedia is required to adopt the Merger Agreement and NeoMedia has not solicited, and will not be soliciting, your adoption of the Merger Agreement and does not intend to call a stockholders’ meeting for purposes of voting on the adoption of the Merger Agreement.

Financing of the Merger   (page 10 of this information statement)

The Company is funding the Merger and the other transactions contemplated by the Merger Agreement from its cash on hand.

Regulatory Approvals Required for the Merger   (page 10 of this information statement)

Other than the acceptance of the certificate of merger by the Secretary of State of the State of Delaware, the Company does not believe that any other regulatory approvals are required to consummate the Merger.

Conditions to the Merger   (page 18 of this information statement)

The obligations of each of Merger Sub and the Company to complete the Merger are subject to the satisfaction or waiver of the conditions described on page 18 of this information statement.

Termination of the Merger Agreement; Effect of Termination; Termination Fee   (page 18 of this information statement)

The Merger Agreement may be terminated at any time before the effective time of the Merger, whether before or after stockholder approval of the Merger has been obtained, by either the Board of Directors or the board of directors of Merger Sub, for any reason whatsoever.

Effect of Termination

In the event of termination of the Merger Agreement, the Merger Agreement would become void and there would be no further obligation on the part of Merger Sub or the Company to consummate the Merger.

Appraisal Rights   (page 19 of this information statement)

Under Section 262 of the DGCL, each holder of Company Common Stock and Preferred Stock (other than the Majority Holders), who delivers a written demand for appraisal of his, her or its shares to the Company within twenty (20) days after the date of the mailing of this notice , who continuously holds of record the shares of Company Common Stock or Preferred Stock for which appraisal is sought from the date of the demand through the effective date of the Merger will have the right to seek an appraisal of the "fair value" of such shares of Company stock determined by the Delaware Court of Chancery, but only if such holder complies with all applicable requirements of the DGCL. Stockholders of the Company electing to exercise appraisal rights must comply in all respects with the procedures set forth in Section 262, of the DGCL, the full text of which appears as Annex B to this information statement. Failure to so comply will result in termination or waiver of such stockholder’s appraisal rights. Please see the section titled “Appraisal Rights” beginning on page 19.

QUESTIONS AND ANSWERS ABOUT THE MERGER

Set forth below are commonly asked questions and answers regarding the Merger and the Merger Agreement. These questions and answers may not address all questions that may be important to you as a Company stockholder. For a more complete description of the legal and other terms of the Merger and the Merger Agreement, please read carefully this entire information statement, including the Merger Agreement attached as Annex A to this information statement.

FORWARD-LOOKING STATEMENTS

This information statement, and the documents to which we refer you in this information statement, contain forward-looking statements that involve numerous risks and uncertainties which may be difficult to predict. The statements contained in this communication that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “ Securities Act ”), and Section 21E of the Exchange Act, including, without limitation, the management of the Company and the Company’s expectations, beliefs, strategies, objectives, plans, intentions and similar matters. All forward-looking statements included in this communication are based on information available to the Company on the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “can,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,” “targets,” “goals,” “projects,” “outlook,” “continue,” “preliminary,” “guidance,” or variations of such words, similar expressions, or the negative of these terms or other comparable terminology.

Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements.

We caution against placing undue reliance on forward-looking statements, which reflect our current beliefs and are based on information currently available to us as of the date a forward-looking statement is made. Forward-looking statements speak only as of the date of this information statement. We undertake no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs except as required by law. In the event that we do update any forward-looking statements, no inference should be made that we will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements may appear in the Company’s public filings with the SEC, which are available to the public at the SEC’s website at www.sec.gov or at the Company’s website at www.neom.com . Our website address is being provided as an inactive textual reference only. The information provided on our website is not part of this information statement. For additional information, please see the section titled “Where To Find More Information” beginning on page 26.

THE PARTIES TO THE MERGER

NeoMedia Technologies, Inc., a Delaware corporation (“ NeoMedia ” or the “ Company ”) has pioneered 2D mobile barcode technology and infrastructure solutions that enable the mobile barcode ecosystem world-wide with state-of-the-art mobile barcode services and technology. With this technology, mobile phones with cameras become barcode scanners, which enable a range of practical applications including mobile marketing, mobile commerce and advertising. The Company also offers barcode management services, reader solutions as well as licensing of its intellectual property portfolio.

Qode Services Corporation, which this information statement refers to as “ Merger Sub ,” is a newly formed Delaware corporation. Merger Sub is a wholly owned subsidiary of NeoMedia and has not conducted any business operations except for activities incidental to its formation and as contemplated by the Merger Agreement.

THE MERGER

The Company’s certificate of incorporation (the “ Charter ”) obligates it to reserve and keep available out of its authorized Common Stock the full number of shares of Company Common Stock issuable upon conversion of all outstanding shares of Preferred Stock. The Company is not in compliance with these Charter provisions, which means, among other things, that all of the outstanding dividends owed to its holders of Preferred Stock may be due and payable. It is unclear whether the Company has any lawfully available funds to pay such dividends. In addition, the outstanding and unissued shares of Company Common Stock are currently insufficient to satisfy the Company’s contractual obligations under certain convertible debt instruments (the “ Financing Documents ”) previously entered into by the Company with YA Global Investments, L.P. (“ YA Global ”). In order to increase the number of authorized and available shares of Company Common Stock to avoid situations of default under the Financing Documents and the Charter, the Company sought approval from its stockholders at the 2013 Annual Meeting of an amendment to the Charter authorizing a 1-for-1,700 reverse stock split of the outstanding Company Common Stock. In the alternative, the Company also sought approval of an amendment to the Charter to increase the number of authorized shares of Company Common Stock from 5,000,000,000 to 500,000,000,000. Both of these proposals were made with the intention of creating sufficient authorized but unissued shares of Company Common Stock in order to avoid a default under the Financing Documents and the Charter and the negative consequences to the Company that would result if there is an event of default, primarily consisting of the foreclosure on the Company’s assets and/or the Company declaring bankruptcy. The Company did not receive sufficient votes in favor of either proposal, and YA Global informed the Company of its intent to declare a default under the Financing Documents if the Company does not increase the authorized but unissued shares of Company Common Stock. The hurdle the Company faced in obtaining approval for the proposed amendments was stockholder participation, as the holders of Company Common Stock who voted on the matter were in favor of the amendments yet the volume of such stockholders was not enough in order to approve the amendments.

The Company considered re-soliciting the votes of its stockholders (either at a special meeting or by written consent) to approve an amendment to its Charter to create sufficient authorized but unissued shares of Company Common Stock to meet its obligations under the Financing Documents and the Charter. However, given its recent experience at the 2013 Annual Meeting and the likely class voting requirements for the approval of such amendment, under Section 242(b)(2) of the DGCL, the Company determined that an amendment under Section 242 of the DGCL was not feasible. Specifically, under Section 242(b)(2) of the DGCL, holders of the outstanding shares of a class of stock shall be entitled to vote as a class upon a proposed amendment to the certificate of incorporation, if the amendment would increase or decrease the aggregate number of authorized shares of the class, increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely.

In contrast, under Section 251 of the DGCL, a merger agreement does not require for its adoption a class vote of any holders of the Company Common Stock or Preferred Stock. Rather, a merger agreement must be approved by the affirmative vote of a majority in voting power of the corporation’s outstanding capital stock, voting together as a class. The Company’s Board of Directors determined that the Merger Agreement was the only option available to avoid the threat of such default which would have led to foreclosure of the Company’s assets and/or bankruptcy.

YA Global, the holder of a majority of the outstanding secured convertible debentures issued by the Company has communicated its intent to foreclose on all of the Company’s assets in the event that the Company’s share reserves are not sufficient to honor conversions under such instruments (a potential default thereunder). The Company also is not in compliance with its obligations to its Preferred Stockholders under the Charter which means, among other things, that the dividends owed to such stockholders may be due and payable. It is questionable whether the Company has lawfully available funds to pay such dividends. The Company’s Board of Directors determined that the Merger Agreement (and the actions contemplated thereby) was the only option available to avoid the threat of such default, since the consummation of the actions contemplated by the Merger Agreement would result in the increase of the Company’s share reserves, enabling the Company to have authorized but unissued shares available for issuance pursuant to conversion requests for the debentures under the Financing Documents and the Charter. The consummation of the Merger will also obviate the need (and eliminate the associated expenses) for the Company to call a special meeting of its stockholders for the sole purpose of asking its stockholders to approve an amendment to its Charter to increase the number of authorized shares of Company Common Stock as required by the Charter. After careful consideration, the Board of Directors unanimously (i) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger and Charter amendments contemplated thereunder, in accordance with the DGCL; (ii) recommended that the stockholders of the Company adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger and Charter amendments; and (iii) authorized the execution, delivery and performance of the Merger Agreement and the transactions contemplated by the Merger Agreement.

In making its determination, the Board of Directors consulted with the Company’s management, as well as its legal and financial advisors, and considered a variety of factors weighing in favor of or relevant to the Merger Agreement and the transactions contemplated thereby, including, without limitation, those described below:

• The outstanding and unissued shares of Company Common Stock are currently insufficient to have authorized but unissued shares available for conversions of debentures under the Financing Documents previously entered into by the Company with YA Global and for the conversion of the Company’s outstanding Preferred Stock.

• The Company does not likely have lawfully available funds to pay the dividends that are likely due as a result of non-compliance with its Charter.

• The Company’s prior attempt to avoid default under the Financing Documents and the Charter by amending its Charter via holding a stockholder meeting was unsuccessful.

• The hurdle the Company faced in obtaining approval for the proposed amendments at the stockholder meeting was stockholder participation, as the majority of holders of Company Common Stock who voted on the matter were in favor of the amendments yet the volume of such stockholders was not enough in order to approve the amendments.

• The Company’s Board of Directors determined that the Merger Agreement was the only option available to avoid the threat of default which would have led to foreclosure of the Company’s assets and/or bankruptcy. Under Section 251 of the DGCL, an agreement and plan of merger may provide for the amendment of the certificate of incorporation at the effective time of the merger. A merger agreement, including one effecting amendments to a corporation’s certificate of incorporation generally need only be approved by a majority of the corporation’s outstanding voting power, voting together as a class.

• The holders of Series C Preferred Stock could carry the required vote, to adopt the Merger Agreement, to provide for the amendments of the Charter, which would enable the Company to avoid falling into default under the Financing Documents and regain compliance with its Charter.

• The Reverse Split effected by the Charter amendments will likely result in administrative cost savings for the Company.

• YA Global has agreed to enter into amendments to the secured convertible debentures to decrease the aggregate amount of debt thereunder by $5.0 Million dollars.

The above discussion includes the principal information and factors, both positive and negative, considered by the Board of Directors, but is not intended to be exhaustive and may not include all of the information and factors considered by the Board of Directors. The above factors are not presented in any order of priority. The Board of Directors did not quantify or assign relative or specific weights to the factors considered in reaching their respective determinations. Rather, the Board of Directors views its positions and recommendations as being based on the totality of the information presented to and considered by it. In addition, individual members of the Board of Directors may have given different weights to different factors. It should be noted that this explanation of the reasoning of the Board of Directors and certain information presented in this section is forward-looking in nature and should be read in light of the factors discussed in the section titled “Forward-Looking Statements” beginning on page 6 of this information statement.

The Company is funding the Merger and the other transactions contemplated by the Merger Agreement from its cash on hand.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Company Common Stock, each share of Company Common Stock issued and outstanding immediately prior to the effective time shall continue to remain outstanding as one share of Company Common Stock and remain unchanged, except that (i) the par value shall change from $0.001 per share to no par value per share, and (ii) each fifteen (15) shares of Common Stock issued and outstanding shall be combined and converted into one (1) share of Common Stock. The amount of authorized shares of Company Common Stock will increase from 5,000,000,000 to 7,500,000,000 shares. Further, the Merger may alter the voting rights of the Company Common Stock to the extent that the Charter amendments (i) specify that the holders of Company Common Stock are not entitled to a separate class vote with respect to the increase or decrease of the amount of authorized shares of Company Common Stock and (ii) specify that the holders of Company Common Stock shall not be entitled to vote on any amendment to the terms of any outstanding series of Preferred Stock which solely affects the rights, powers, preferences, qualifications, powers or restrictions of such series of Preferred Stock.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Series C Preferred Stock, each share of Series C Preferred Stock issued and outstanding immediately prior to the effective time shall remain unchanged and continue to remain outstanding as one share of Series C Preferred Stock.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Series D Preferred Stock, each share of Series D Preferred Stock issued and outstanding immediately prior to the effective time shall remain unchanged and continue to remain outstanding as one share of Series D Preferred Stock.

The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Other than the acceptance of the certificate of merger by the Secretary of State of the State of Delaware, the Company does not believe that any other regulatory approvals are required to consummate the Merger.

THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger Agreement and is qualified in its entirety by reference to the complete text of the Merger Agreement, which is attached as Annex A to this information statement and is incorporated into this information statement by reference. This summary does not purport to be complete and may not contain all the information about the Merger Agreement that is important to you. We urge you to read the Merger Agreement carefully and in its entirety because it, and not this information statement, is the legal document that governs the Merger.

The Merger Agreement has been included to provide our stockholders with information regarding its terms. It is not intended to provide to any person not a party thereto any other factual information about the Company. The Merger Agreement contains representations and warranties of the Company and Merger Sub, negotiated between the parties and made as of specific dates solely for purposes of the Merger Agreement, including setting forth the respective rights of the parties with respect to their obligations to complete the Merger. This description of the representations and warranties is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. As a result, no person should rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Merger Sub or any of their respective subsidiaries or affiliates.

At the effective time of the Merger, upon the terms and subject to the satisfaction or waiver of the conditions of the Merger Agreement and in accordance with the DGCL, Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will survive. Merger Sub has no operations; the sole purpose of the merger is to effect the Charter amendments contemplated by the Merger Agreement.

Amendments and Text of Amendments

Pursuant to the Merger, from and after the effective time, the Charter shall be the restated Charter of the Company provided that Article IV thereof shall be amended to increase the amount of authorized shares of Company Common Stock from 5,000,000,000 shares to 7,500,000,000 shares, to change the par value of the Company Common Stock from $0.001 per share to no par value per share, to specify that the voting rights of the Company Common Stock holders do not include the ability to vote as a separate class on increases or decreases to the amount of authorized Company Common Stock shares or on matters that solely relate to series of Preferred Stock, to specify that the Board of Directors can fix the rights and preferences of each new series of preferred stock upon its authorization and issuance and to effect the Reverse Split (as described in “The Reverse Split” below), and shall otherwise remain unchanged, with Article IV reading in its entirety as follows:

“The Company is authorized to issue two (2) classes of capital stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of capital stock that the Company is authorized to issue is 7,525,000,000 shares. 7,500,000,000 shares shall be Common Stock, no par value per share, and 25,000,000 shares shall be Preferred Stock, par value $0.01 per share.

The 25,000,000 shares of Preferred Stock may be issued in one or more series at such time or times and for such consideration as shall be authorized from time to time by the Board of Directors. The Board of Directors will be authorized to fix the designation of each series of Preferred Stock and the relative rights, preferences, limitations, qualifications, powers or restrictions thereof, including the number of shares comprising each series, the dividend rates, redemption rights, rights upon voluntary or involuntary liquidation, provisions with respect to a retirement or sinking fund, conversions rights, voting rights, if any, preemptive rights, other preferences, qualifications, limitations, restrictions and the special or relative rights of each series.

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of the majority of the outstanding voting power of all shares of capital stock of the Company, without a separate class vote of the holders of the outstanding shares of Common Stock irrespective of Section 242(b)(2) of the General Corporation Law of the State of Delaware.

To the fullest extent permitted by law, the holders of Common Stock shall not be entitled to vote on any amendment to the terms of any outstanding series of Preferred Stock which solely affects the rights, powers, preferences, qualifications, powers or restrictions of such series of Preferred Stock.

Upon the filing and effectiveness pursuant to the General Corporation Law of the State of Delaware of this certificate (the “ Effective Time ”), each fifteen (15) shares of Common Stock issued and outstanding or held by the Company as treasury stock shall, automatically and without any action on the part of the holders thereof, be combined and converted into one (1) share of Common Stock of the Company. No fractional shares shall be issued and, in lieu of a fractional share of Common Stock to which any stockholder is entitled, such stockholder shall receive a cash payment in an amount equal to the product obtained by multiplying (a) the fraction to which the stockholder would otherwise be entitled by (b) the per share closing sales price of the Company’s Common Stock on the day immediately prior to the Effective Time, as reported on the OTC Markets Bulletin Board.”

A marked copy of the amendments to the Charter is attached to this information statement as Annex C . The amendments will be effected pursuant to the Company filing a Certificate of Merger as set forth in Annex D . The increase in the amount of authorized shares of Company Common Stock to 7,500,000,000, and the change in the par value thereof to no par value per share, combined with the Reverse Split, would enable the Company to have authorized but unissued shares available for conversions of debentures as required by the Financing Documents and the Charter. The change in the par value of the Company Common Stock will decrease the Company’s franchise taxes.

Effect on Stock

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of common stock, par value $0.01 per share, of Merger Sub (the “ Subsidiary Common Stock ”), each share of Subsidiary Common Stock issued and outstanding immediately prior to the effective time (along with all shares of Subsidiary Common Stock that are held by Merger Sub in treasury or otherwise) shall be canceled and no consideration shall be issued in respect thereof.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Company Common Stock, each fifteen (15) shares of Common Stock issued and outstanding shall be combined and reclassified into one (1) share of Common Stock (the “ Reverse Split ”). The par value of a share of Company Common Stock shall change from $0.001 per share to no par value per share. Further, the Merger may alter the voting rights of the Company Common Stock to the extent that the Charter amendments (i) specify that the holders of Company Common Stock are not entitled to a separate class vote with respect to the increase or decrease of the amount of authorized shares of Company Common Stock and (ii) specify that the holders of Common Stock shall not be entitled to vote on any amendment to the terms of any outstanding series of Preferred Stock which solely affects the rights, powers, preferences, qualifications, powers or restrictions of such series of Preferred Stock.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Series C Preferred Stock, each share of Series C Preferred Stock issued and outstanding immediately prior to the effective time shall remain unchanged and continue to remain outstanding as one share of Series C Preferred Stock.

Upon the effective time, by virtue of the Merger and without any action on the part of the holder of any outstanding share of Series D Preferred Stock, each share of Series D Preferred Stock issued and outstanding immediately prior to the effective time shall remain unchanged and continue to remain outstanding as one share of Series D Preferred Stock.

The Charter amendments also restates the “blank check” treatment for the Company’s authorization and issuance of preferred stock, regarding series of preferred stock that can be established by the resolution or resolutions providing for the issue of such stock adopted by the Board of Directors. The Board of Directors shall maintain the power to establish the rights and preferences for series of preferred stock. The availability of this type of preferred stock will enable our Board of Directors, without further stockholder approval, to issue shares of new series of preferred stock as may be required for proper business purposes, such as raising additional capital for ongoing operations, business and asset acquisitions, and other corporate purposes, that our Board of Directors believe will benefit our stockholders. One of the effects of the blank check preferred stock authorized by the Charter amendments might be to enable our Board of Directors to render it more difficult to, or discourage an attempt to, obtain control of us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of present management.  Our Board of Directors would, unless prohibited by applicable law, have additional shares of preferred stock available to effect transactions (such as private placements) in which the number of our outstanding shares would be increased, and would thereby dilute the interest of any party attempting to gain control of us.  Such action could discourage an acquisition of us that stockholders might view as desirable.

Reverse Stock Split in General

As of the record date, we had 4,984,827,279 shares of Company Common Stock outstanding and an additional 15,172,721 shares of Company Common Stock reserved for issuance upon the exercise of issued and outstanding options, warrants, debentures, Series C Stock and Series D Stock. As of the record date, we had a total of 5,000,000,000 authorized shares of Company Common Stock. If we amend our charter as set forth in the Merger Agreement to effect a reverse stock split of our outstanding Company Common Stock at a ratio of 1-for-15 while raising the authorized amount of shares of Company Common Stock to 7,500,000,000, the number of shares of authorized but unissued Company Common Stock will enable the Company to have authorized but unissued shares available for conversions of debentures under the Financing Documents. The Company also is not in compliance with its obligation to all holders of its Preferred Stock under the Charter to reserve and keep out of its authorized Common Stock the full number of shares of Common Stock of the Company issuable upon conversion of all outstanding shares of its outstanding Preferred Stock. As described throughout this information statement, the Company’s Board of Directors deems it necessary and imperative to avoid a situation in which it would not have sufficient authorized but unissued Company Common Stock available for conversions of debentures under the Financing Documents to avoid a default under the Financing Documents. Defaulting under the Financing Documents would result in (a) amounts owed under the Financing Documents becoming immediately due and payable, (b) potential foreclosure on all of the Company’s assets, and (c) interest rates on such amounts increasing, collectively in such amounts owed that, (d) it would result in a substantial likelihood that the Company would need to declare bankruptcy. The Company would also like to regain compliance with the reserve requirements in its Charter for shares of Company Common Stock. Otherwise, the Company is likely obligated to pay all accrued and unpaid dividends to its holders of Preferred Stock. It is unclear whether the Company could pay such dividends.

The Reverse Split will be effected pursuant to the Company filing a Certificate of Merger as set forth in Annex D . Except for any changes resulting from the treatment of fractional shares, each holder of Company Common Stock will hold the same percentage of Company Common Stock outstanding immediately after the Reverse Split as such holder did immediately prior to the Reverse Split.

The number of outstanding shares of Series C Preferred Stock and Series D Preferred Stock will not change as a result of the Reverse Split. The conversion price of the Series C Preferred Stock and Series D Preferred Stock, however, will be adjusted as a result of the Reverse Split which will result in the number of shares of Company Common Stock issuable upon conversion of the Series C Preferred Stock and Series D Preferred Stock being reduced in proportion to the Reverse Split.

The following table presents the impact of the amendments to the Charter, to be effected by the Merger, including the Reverse Split, on the Company Common Stock authorized, issued and outstanding and authorized but unissued:

(1) As of the Record Date, we do not have sufficient authorized and unissued shares of Company Common Stock to provide for the exercise and conversion of all of our potentially convertible and exercisable instruments which such series of instruments were initially issued by the Company in 2006 to YA Global.

(2) Upon the Reverse Split, all of the Company Common Stock issued and outstanding would be reduced by a factor of 1 share for 15 shares.

Certain Advantages and Disadvantages Associated With the Reverse Split

We also believe that if the reverse stock split is implemented, there may be a proportional increased market price of Company Common Stock. An increased stock price may improve the marketability and liquidity of Company Common Stock and may encourage interest and trading in Company Common Stock. Because of the trading volatility and low or sporadic trading volume often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers' commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of Company Common Stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher. It should be noted, however, that the liquidity of Company Common Stock may in fact be adversely affected by the Reverse Split, given the reduced number of shares that would be outstanding after the Reverse Split.

There can be no assurance that the total market capitalization of the Company Common Stock after the effected Reverse Split would be equal to or greater than the total market capitalization before the Reverse Split or that the per share market price of the Company Common Stock following the Reverse Split will either exceed or remain higher than the current per share market price. There can be no assurance that the market price per share of the Company Common Stock after the Reverse Split would rise or remain constant in proportion to the reduction in the number of old shares of the Company Common Stock outstanding before the Reverse Split. For example, based on the market price of the Company Common Stock on February 28, 2014 of $0.0007 per share, following a 1-for-15 reverse split of the outstanding Company Common Stock there can be no assurance that the post-split market price of the Company Common Stock would be $0.0105 per share or greater. Accordingly, the total market capitalization of the Company Common Stock after the proposed Reverse Split may be lower than the total market capitalization before the proposed Reverse Split and, in the future, the market price of our Common Stock following the Reverse Split may not exceed or remain higher than the market price prior to the proposed Reverse Split.

A decline in the market price for the Company Common Stock after the Reverse Split may result in a greater percentage decline than would occur in the absence of such action and the liquidity of the Company Common Stock could be adversely affected following the Reverse Split.

The market price of the Company Common Stock will also be based on our performance and other factors, some of which are unrelated to the number of shares outstanding. If the market price of the Company Common Stock declines after the Reverse Split, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Split. In many cases, both the total market capitalization of a company and the market price of a share of such company’s common stock following a reverse stock split are lower than they were before the reverse stock split. Furthermore, the liquidity of the Company Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Split.

The number of outstanding shares of Company Common Stock immediately after the Reverse Split will be reduced by a factor of fifteen (15), the Company will be able to issue more shares of Company Common Stock which could result in additional dilution and which could have a negative effect on the market price of the Company Common Stock.

Principal Effects of the Reverse Split

Corporate Matters .  When effected, the Reverse Split will be effected simultaneously for all of the Company Common Stock and the ratio will be the same for all of the Company Common Stock. The Reverse Split will affect all of the Company Common Stock holders uniformly and will not affect any stockholder’s percentage ownership interests in our Company, except to the extent that the Reverse Split results in any of the Company Common Stockholders owning a fractional share. As described below, holders of Company Common Stock holding fractional shares will be entitled to cash payments in lieu of such fractional shares. Such cash payments would reduce the number of post-split holders of Company Common Stock to the extent there are holders of Company Common Stock presently holding fewer than fifteen (15) shares. Company Common Stock outstanding following the Reverse Split will remain fully paid and non-assessable. We will continue to be subject to the periodic reporting requirements of the ’34 Act. Also, the Reverse Split will likely result in administrative cost savings for the Company.

Fractional Shares .  No scrip or fractional certificates will be issued in connection with the Reverse Split. Holders of Company Common Stock who otherwise would be entitled to receive fractional shares because they hold, as of a date prior to the effective time of the Reverse Split, a number of shares of the Company Common Stock not evenly divisible by fifteen (15) will be entitled to a cash payment in lieu thereof. The cash payment will equal the product obtained by multiplying (a) the fraction to which the stockholder would otherwise be entitled by (b) the per share closing sales price of the Company Common Stock on the day immediately prior to the effective time of the Reverse Split, as reported on the OTC Markets Bulletin Board. The ownership of a fractional interest will not give the holder thereof any voting, dividend or other rights except to receive payment therefore as described herein.

Holders of Company Common Stock should be aware that, under the escheat laws of the various jurisdictions where the Company Common Stockholders reside, where we are domiciled and where the funds will be deposited, sums due for fractional interests that are not timely claimed after the effective time may be required to be paid to the designated agent for each such jurisdiction. Thereafter, holders of Company Common Stock otherwise entitled to receive such funds may have to seek to obtain them directly from the state to which they were paid.

The Reverse Split will result in some common stockholders owning "odd lots" of less than 100 shares of the Company Common Stock. Brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in "round lots" of even multiples of 100 shares.

Accounting Matters .  The per share net income or loss and net book value of the Company Common Stock will be restated because there will be fewer shares of Company Common Stock outstanding.

Anti-Takeover Effects. Release No. 34-15230 of the staff of the SEC requires disclosure and discussion of the effects of any proposal that may be used as an anti-takeover device. Although not a factor in the decision by our Board of Directors to affect the increase of our authorized shares of Company Common Stock, one of the effects of having increased additional shares of our authorized Company Common Stock available for issuance may be to enable the Board of Directors to render more difficult or to discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest, or otherwise, and thereby protect the continuity of then present management. Unless prohibited by the regulations of applicable law or other agreements or restrictions, a sale of shares of Company Common Stock by us or other transactions in which the number of our outstanding shares of Company Common Stock would be increased could dilute the interest of a party attempting to obtain control of us. The increase in available authorized Company Common Stock may make it more difficult for, prevent or deter a third-party from acquiring control of the Company or changing our Board of Directors and management, as well as inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts.

Procedure for Effecting the Reverse Stock Split

The Reverse Split will be effected pursuant to the Company filing a Certificate of Merger as set forth in Annex D . The Reverse Split will become effective upon the effectiveness of the Certificate of Merger. Beginning at the effective time, each certificate representing shares of Company Common Stock prior to the effective time of the Reverse Split will be deemed for all corporate purposes to evidence ownership of resulting combined number of shares following such Reverse Split.

We expect that our transfer agent, Worldwide Stock Transfer, LLC, will act as exchange agent for purposes of implementing any exchange of stock certificates. Any pre-split share certificates submitted for transfer, whether pursuant to a sale, other disposition or otherwise, will automatically be exchanged for certificates representing post-split shares.  COMPANY COMMON STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNLESS REQUESTED TO DO SO.

Federal Income Tax Consequences of the Reverse Split

The following is a summary of certain material federal income tax consequences of the Reverse Split, does not purport to be a complete discussion of all of the possible federal income tax consequences of the Reverse Split, and is included for general information only. Further, it does not address any state, local or foreign income or other tax consequences. Also, it does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and tax-exempt entities. The discussion is based on the provisions of the United States federal income tax law as of the date hereof, which is subject to change retroactively as well as prospectively. This summary also assumes that the pre-split shares of Company Common Stock were, and the post-split shares of Company Common Stock will be, held as "capital assets," as defined in the Internal Revenue Code of 1986, as amended (the “ Code ”) (i.e., generally, property held for investment). The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. Each stockholder is urged to consult with such stockholder's own tax advisor with respect to the tax consequences of the Reverse Split.

A stockholder that receives only post-split shares in the Reverse Split (i.e., a stockholder that does not receive any cash for fractional shares) should recognize no gain or loss pursuant to the Reverse Split. In such a case, the aggregate tax basis of the post-split shares received in the Reverse Split should be the same as the stockholder’s aggregate tax basis in the pre-split shares.

A stockholder that receives both post-split shares and cash for fractional shares in the Reverse Split should recognize no gain or loss pursuant to the Reverse Split. However, such a stockholder should recognize dividend income in an amount equal to the cash received for such stockholder’s fractional shares in the Reverse Split. Generally, the aggregate tax basis of the post-split shares received in the Reverse Split should be the same as the stockholder’s aggregate tax basis in the pre-split shares.

A stockholder that receives no post-split shares in the Reverse Split (i.e., a stockholder that receives only cash for fractional shares because such stockholder owns fewer than 100 pre-split shares) should recognize gain or loss based on such stockholder’s adjusted basis in the fractional share interest redeemed for cash in the Reverse Split. In such a case, the gain or loss should constitute long-term capital gain or loss if the stockholder has held its shares for more than one year.

Our view regarding the tax consequences of the Reverse Split is not binding on the Internal Revenue Service or the courts. ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT WITH SUCH STOCKHOLDER’S OWN TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES TO SUCH STOCKHOLDER WHICH MIGHT ARISE FROM THE REVERSE SPLIT.

Circular 230 Statement .  To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed within.

The pre-Merger bylaws of the Company shall be the post-Merger bylaws of the Company.

From and after the effective time, the directors and officers of the Company serving as directors or officers of the Company immediately prior to the effective time shall continue to be the directors and officers of the Company, post-Merger.

The Merger shall become effective upon the filing of such certificate of merger with the Secretary of State of the State of Delaware on April 2, 2014 (referred to herein as the “ effective time ”).

In the Merger Agreement, the Company makes representations and warranties that:

In the Merger Agreement, Merger Sub makes representations and warranties that:

The Company is funding the Merger and the other transactions contemplated by the Merger Agreement from its cash on hand.

As Merger Sub has no employees, and the Company will continue is operations post-Merger in the same manner as pre-Merger, the consummation of the Merger will not affect any employees of the Company.

The respective obligation of each party to effect the Merger was subject to the satisfaction or waiver of the following conditions:

(a)          The adoption of the Merger Agreement by the sole stockholder of Merger Sub (the Company), in accordance with the requirements of the DGCL and the certificate of incorporation and bylaws of Merger Sub; and

(b)          The adoption of the Merger Agreement by holders of at least a majority of the outstanding voting power of the Company in accordance with the requirements of the DGCL and the Charter and bylaws of the Company.

The Merger Agreement may be terminated at any time before the effective time of the Merger, whether before or after stockholder approval of the Merger has been obtained, by either the Board of Directors or the board of directors of Merger Sub, for any reason whatsoever. In the event of termination of the Merger Agreement, the Merger Agreement would become void and there would be no further obligation on the part of Merger Sub or the Company to consummate the Merger.

APPRAISAL RIGHTS

The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is attached to this information statement as Annex B . Unless otherwise noted, all references in Section 262 and in this summary to a “stockholder” are to the record holder of the shares of Company stock (including shares of Company Common Stock, Series C Preferred Stock or Series D Preferred Stock) immediately prior to the effective time as to which appraisal rights are asserted. A person having a beneficial interest in shares of Company stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights.

Under the DGCL, persons who hold shares of Company stock immediately prior to the effective time and who (i) follow the procedures set forth in Section 262 and (ii) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their shares of Company stock appraised by the Delaware Court of Chancery and to receive payment of the “fair value” of such shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be “fair value.” In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment.

Under Section 262, where a merger is approved pursuant to Section 228 of the DGCL, then, either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262. If such notice is given after the effective date of the merger, as in the case of the Merger, such notice must also notify such stockholders of the effective date of the merger. This information statement shall constitute such notice to the holders of shares of Company stock, and the applicable statutory provisions are attached to this information statement as Exhibit B . Any holder of Company stock who wishes to exercise such appraisal rights or who wishes to preserve his, her or its right to do so, should review the following discussion and Exhibit B carefully because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights under the DGCL.

A holder of shares of Company stock wishing to exercise his, her or its appraisal rights must, within twenty (20) days after the date of mailing of this formal notice of appraisal rights, make a written demand for the appraisal of their shares to the Company at:

NeoMedia Technologies, Inc.

1515 Walnut Street, Suite 100

Boulder, Colorado 80302

Attention: Laura A. Marriott

The demand must reasonably inform the Company of the identity of the holder as well as the intention of the holder to demand an appraisal of the “fair value” of the shares held by such holder.

Only a holder of record of shares of Company stock issued and outstanding immediately prior to the effective time will be entitled to assert appraisal rights for the shares of Company stock registered in that holder's name. A demand for appraisal in respect of shares of Company stock issued and outstanding immediately prior to the effective time should be executed by or on behalf of the holder of record, fully and correctly, as his, her or its name appears on his, her or its stock certificates, and must state that such person intends thereby to demand appraisal of his, her or its shares of Company stock issued and outstanding immediately prior to the effective time in connection with the Merger. If the shares of Company stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand should be made in that capacity, and if the shares of Company stock are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, the agent is agent for such owner or owners. A record holder, such as a broker who holds shares of Company stock as nominee for several beneficial owners, may exercise appraisal rights with respect to the shares of Company stock issued and outstanding immediately prior to the effective time held for one or more beneficial owners while not exercising such rights with respect to the shares of Company stock held for other beneficial owners; in such case, however, the written demand should set forth the number of shares of Company stock issued and outstanding immediately prior to the effective time as to which appraisal is sought and where no number of shares of Company stock is expressly mentioned the demand will be presumed to cover all shares of Company stock which are held in the name of the record owner. Stockholders who hold their shares of Company stock in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

A beneficial owner of shares of Company stock held in “street name” who desires appraisal should take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record holder of such shares. Shares held through brokerage firms, banks and other financial institutions are frequently deposited with and held of record in the name of a nominee of a central security depository, such as Cede & Co., and others. Any beneficial holder desiring appraisal who holds shares through a brokerage firm, bank or other financial institution is responsible for ensuring that the demand for appraisal is made by the record holder. The beneficial holder of such shares should instruct such firm, bank or institution that the demand for appraisal be made by the record holder of the shares, which may be the nominee of a central security depository if the shares have been so deposited. As required by Section 262, a demand for appraisal must reasonably inform the Company of the identity of the holder(s) of record (which may be a nominee as described above) and of such holder's intention to seek appraisal of such shares.

Within 120 days after the effective time, but not thereafter, the Company or any holder of Company stock who is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of Common Stock. The Company is under no obligation to and has no present intention to file such a petition. Accordingly, it is the obligation of the holders of Company stock to initiate all necessary action to perfect their appraisal rights in respect of such shares of Company stock within the time prescribed in Section 262.

Within 120 days after the effective time, any holder of Company stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Company a statement setting forth the aggregate number of shares not voted in favor of the Merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement must be mailed within ten (10) days after a written request therefor has been received by the Company or within ten (10) days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of such stock may, in such person's own name, file a petition for appraisal or request the statement of shares not voted in favor of the Merger described in this paragraph.

If a petition for an appraisal is timely filed by a holder of shares of Company stock and a copy thereof is served upon the Company, the Company will then be obligated within twenty (20) days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to such stockholders as required by the Court, the Delaware Court of Chancery is empowered to conduct a hearing on such petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the holders of shares of Company stock who demanded payment for their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceeding; and if any stockholder fails to comply with such direction, the Court of Chancery may dismiss the proceedings as to such stockholder.

After determining the holders of Company stock entitled to appraisal, the “fair value” of their shares of Company stock will be determined by the Delaware Court of Chancery in an appraisal proceeding, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Holders of Company stock considering seeking appraisal should be aware that the fair value of their shares of Company stock as determined under Section 262 could be more or less than or the same as the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares of Company stock and that investment banking opinions as to fairness from a financial point of view are not necessarily opinions as to fair value under Section 262. The Delaware Supreme Court has stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in the appraisal proceedings. In addition, Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a appraisal exclusive remedy. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment. The costs of the appraisal proceeding (which do not include attorneys' or experts' fees) may be determined by the Court and taxed upon the parties as the Court deems equitable. The Court may also order that all or a portion of the expenses incurred by any stockholder in connection with an appraisal, including, without limitation, reasonable attorneys' fees and the fees and expenses of experts utilized in the appraisal proceeding, be charged pro rata against the value of all the shares entitled to be appraised.

Any holder of shares of Company stock who has duly demanded an appraisal in compliance with Section 262 is not entitled to vote the shares of Company stock subject to such demand for any purpose or entitled to the payment of dividends or other distributions on those shares of Company stock (except dividends or other distributions payable to holders of record of Common Stocks of a date prior to the effective time).

If any stockholder who demands appraisal of his, her or its shares of Company stock under Section 262 fails to perfect, or effectively withdraws or loses, his, her or its right to appraisal, as provided in the DGCL, the shares of Company stock of such stockholder will be converted into the right to receive the Merger Consideration, but without interest. A stockholder will fail to perfect, or effectively lose or withdraw, his, her or its right to appraisal if no petition for appraisal is filed within 120 days after the effective time, or if the stockholder delivers to the Company a written withdrawal of his, her or its demand for appraisal and an acceptance of the Merger, except that any such attempt to withdraw made more than 60 days after the effective time will require the written approval of the Company. Once a petition for appraisal is filed, the appraisal proceeding may not be dismissed as to any holder absent court approval, provided, however that the foregoing shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the Merger within sixty (60) days after the effective time.

Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights (in which event a holder of Company stock will continue to hold shares of Company stock).