FORT MYERS, Fla.—NeoMedia Technologies Inc. hit a speed bump in its aggressive bid to become a player in the worldwide mobile-marketing space.
The company said its $4.5 million deal to acquire Connecticut-based HipCricket Inc. fell through after the two companies were “at an impasse and unable to agree to material terms” hammered out in a letter of intent signed in February. HipCricket, which develops custom mobile-marketing campaigns, is on the hook for two loans from NeoMedia totaling $500,000 that must be paid within three months.
NeoMedia also said it has secured $5 million in financing from Cornell Capital Partners LP. The short-term note bears an annual interest rate of 10 percent and is convertible at Cornell’s option into shares of NewMedia common stock at a price equal to 90 percent of the lowest closing bid price for 30 days prior to the conversion.
NeoMedia made headlines earlier this year during a $60 million spending spree in which it snapped up a handful of mobile-marketing startups on both sides of the Atlantic. Recent attention has been focused on the company’s bottom, line, however. The company lost more than $9 million last year and, according to a statement released Wednesday regarding the new $5 million loan, “pledged all of its assets as security for the convertible debenture.”
Shares of NeoMedia tumbled 2 cents, or more than 12 percent, to 13 cents per share following both announcements.
