----

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the Fiscal Year Ended December 31, 2010 |
|---|-----------------------------------------------------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| Delaware                        |   | 36-3680347          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer    |
| incorporation or organization)  |   | Identification No.) |

| Securities Registered Under Section 12(b) of the Exchange Act: | None - Quoted on the OTC Bulletin Board® (OTCBB) |
|----------------------------------------------------------------|-------------------------------------------------------|
| Name of exchange on which registered:                          |                                                  |
| Securities registered pursuant to Section 12(g) of the Act:    | None                                                  |

| Large accelerated filer  ̈ | Accelerated filer  ̈ | Non-accelerated filer  ̈ | Smaller Reporting Company x |
|--------------------------------|--------------------------|------------------------------|-----------------------------|

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|          |                                                                                         |   | Page   |
|---------------|----------------------------------------------------------------------------------------------|--------|--------|
| PART I        |                                                                                         |   |   |
| Item 1.  | Business.                                                                                    |   | 3      |
| Item 1A. | Risk Factors.                                                                                |   | 9      |
| Item 1B. | Unresolved Staff Comments.                                                                   |   | 17     |
| Item 2.  | Properties.                                                                                  |   | 17     |
| Item 3.  | Legal Proceedings.                                                                           |   | 17     |
| Item 4.  | (Removed and Reserved)                                                                       |   | 18     |
|          |                                                                                         |   |   |
| PART II       |                                                                                         |   |   |
| Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and                 |   |   |
|          | Issuer Purchases of Equity Securities.                                                       |   | 19     |
| Item 6.  | Selected Financial Data.                                                                     |   | 20     |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |   | 21     |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk.                                  |   | 32     |
| Item 8.  | Financial Statements.                                                                        |   | 33     |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial                    |   |   |
|          | Disclosure.                                                                                  |   | 72     |
| Item 9A. | Controls and Procedures.                                                                     |   | 72     |
|          |                                                                                         |   |   |
| PART III      |                                                                                         |   |   |
| Item 10. | Directors, Executive Officers and Corporate Governance.                                      |   | 75     |
| Item 11. | Executive Compensation.                                                                      |   | 78     |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and                           |   |   |
|          | Related Stockholder Matters.                                                                 |   | 84     |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence.                   |   | 86     |
| Item 14. | Principal Accountant Fees and Services.                                                      |   | 86     |
|          |                                                                                         |   |   |
| Part IV       |                                                                                         |   |   |
| Item 15. | Exhibits and Financial Statement Schedules.                                                  |   | 87     |
|          |                                                                                         |   |   |
| SIGNATURES    |                                                                                         |   | 96     |

----

----

|   | · | Mobile Tag:  On July 28, 2009, we entered into a three year non-exclusive patent licensing agreement with Mobile Tag, Inc. (“Mobile Tag”). Under the terms of that agreement, we will receive annual minimum royalties and then a percentage of revenue generated by Mobile Tag through the use of our barcode ecosystem patent portfolio within a defined field of use in the United States. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Neustar:  On October 2, 2009, we entered into a four year agreement with Neustar, Inc. (“Neustar”) in which we granted to Neustar a right to sub-license our barcode ecosystem patent portfolio to their customers primarily for the purpose of establishing and providing registry and clearinghouse services within a defined field of use in the territory of the United States and Mexico. Neustar’s sub-license rights were originally exclusive within their territory. However, on December 14, 2010, this right was changed to a non-exclusive right. Since February 12, 2010 we have participated in and have helped to facilitate the Neustar Mobile Codes Pilot Program. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Scanbuy: On October 16, 2009, we entered into a ten year settlement and license agreement with Scanbuy, Inc. (“Scanbuy”), in which we and Scanbuy settled all of our pending litigation against each other and we granted non-exclusive licenses and a sublicense to each other. Under the terms of that agreement, we will receive annual minimum royalties and then a percentage of revenue generated by Scanbuy through the use of our barcode ecosystem patent portfolio within a defined field of use in the United States. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | eBay: On December 21, 2010, we entered into a license, covenant not to sue and release agreement to grant a five year, non-exclusive, non-sublicensable license to eBay Inc. (“eBay”). The license grants freedom to operate to eBay, its affiliates and certain third parties, by providing a worldwide right to use our barcode technology patents. We received a license fee from eBay for the initial term. The Agreement also provided mutual covenants not to sue and mutual releases to the parties. The Agreement also granted to eBay a sixty (60) day option to a similar license for our search technology patents, which they exercised on February 15, 2011, and for which we received an additional license fee for the initial term. The initial term of the licenses expires on December 31, 2015, and the licenses may be extended for successive 3 year terms, for additional license fees, from eBay. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Sony Ericsson: On November 27, 2009, we entered into an agreement with Sony Ericsson Mobile Communications, AB, through which they have selected NeoMedia as their strategic 2D barcode partner and NeoReader will be pre-installed across all Sony Ericsson platforms. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Samsung Electronics Italy: On September 13, 2010, we entered into an agreement with Samsung Electronics Italy, Italian subsidiary of Samsung Electronics, to pre-load NeoReader onto Samsung’s Omnia II devices. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | NeoReader – a barcode scanning application that transforms mobile camera phones into universal barcode readers. Users simply launch the NeoReader application on their mobile phone, scan the barcode and are linked either directly or indirectly through a resolution server to a specific web page. There they can access real-time product or service information, download content or complete a mobile commerce transaction. Any product, magazine/newspaper, retail display or billboard with a 2D barcode provides access to the multimedia capability of the mobile web anytime, anywhere. NeoReader features our patented resolution technology with an ultra-small footprint and platform-independent algorithms.  This application provides interoperability among 2D barcodes in the market and operates on a wide variety of handsets. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | NeoReader SDK & Lavasphere Enterprise – software solutions for commercial applications where mobile devices are utilized to manage products through manufacturing or distribution channels. These applications equip mobile devices to read 1D and 2D barcodes with their built-in camera. The mobile devices become universal barcode readers, allowing users to “track and trace” products and services anytime, anywhere. These solutions are ideal tools for a variety of business applications including data collection, logistics, content linking, and accessing information on the go. They provide the ability to capture lifecycle data for products and services in real time and to share relevant data in a secure and selective manner. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | NeoReader SDK: a standard solution utilizing our NeoReader technology to route transactions to a customer’s existing mobile web application |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Lavasphere Enterprise: a customized solution using LavaSphere barcode-reading technologies for functions that are too complex to be handled by a mobile web application |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | NeoSphere - a web-based system that supports barcode management and allows users (typically agencies and brands) to easily develop, launch and manage a mobile barcode campaign by delivering three critical components: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Barcode creation tools |
|--------|---|------------------------|

|   | o | Campaign management tools |
|--------|---|---------------------------|

|   | o | Reporting and analytics |
|--------|---|-------------------------|

|   | · | NeoMedia Code Routing Service – is used in conjunction with NeoSphere and includes an intelligent gateway configurable to support global interoperability and a barcode resolution server designed to retrieve and deliver any form of internet content to mobile phones worldwide.  Our Code Resolution Service uniquely provides: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Interoperability with other campaign management systems |
|--------|---|---------------------------------------------------------|

|   | o | Access to all barcode-enabled handsets worldwide |
|--------|---|--------------------------------------------------|

|   | o | Data tracking, collection, and monetization of each mobile transaction |
|--------|---|------------------------------------------------------------------------|

|   | · | NeoMedia MSS – MSS is a completely stand-alone system supporting third-party ticketing/couponing systems and databases as well as adding all missing components to existing mobile systems essential for the successful completion and fulfillment of mobile applications.  Based on our customers’ needs and requirements, we believe that we provide the best solution by: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | o | Integrating third-party ticketing and couponing systems |
|--------|---|---------------------------------------------------------|

|   | o | Providing marketing databases and our own coupon system |
|--------|---|---------------------------------------------------------|

|   | o | Encrypting and sending codes to mobile phones |
|--------|---|-----------------------------------------------|

|   | o | Decrypting and analyzing code contents |
|--------|---|----------------------------------------|

|   | o | Enabling customer’s own coupon and ticket configuration |
|--------|---|---------------------------------------------------------------|

|   | o | Supplying statistics and information on mobile activities, and |
|--------|---|----------------------------------------------------------------|

|   | o | Implementing and delivering customized hardware and software solutions |
|--------|---|------------------------------------------------------------------------|

|   | · | EXIO II - a multi-application smart scanner for mobile couponing and ticketing applications. The cutting-edge technology of the EXIO II smart scanner allows customers to redeem mobile tickets and coupons making it easy and affordable to use creative new mobile marketing text messaging programs to track and reach customers. EXIO II is the evolution of EXIO® and combines all the advantages of EXIO® with improved reading capabilities and a programmable Linux platform that was developed based on customer feedback we have received during our more than 10 years of operation. The EXIO II is the ideal tool for one-to-one marketing applications and highly targeted customer campaigns. With its color LCD touch-screen and video playback capability, the EXIO II can be customized to display targeted content and brand messages. Prior to 2009, we offered EXIO®, a complete solution including printer, display, keypad and GSM/GPRS module. EXIO® read and processed 2-D symbologies such as Data Matrix from mobile phone displays as well as printed 1D barcodes. Utilizing a high-speed Digital Signal Processor (DSP) and a high-resolution camera, EXIO® automatically recognizes 2D barcodes such as Data Matrix, sent as MMS (Multimedia Message Service), EMS (Enhanced Message Service) or Picture Message (Smart Message) to any compatible mobile phone. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | XELIA – a versatile desktop scanner that incorporates Honeywell Adaptus® Imaging Technology 5.0 to enable high-performance reading of 2D codes from mobile phone displays. Equipped with a high-speed Digital Signal Processor (DSP), XELIA automatically recognizes 2D codes sent as text messages (SMS, MMS or EMS) as well as printed 1D barcodes. It processes rapidly and with extreme accuracy. Its compact size and sleek design make XELIA ideal for counter-top use at a point-of-sale or service desk. It can also be used for sweepstakes, mobile advertising (tickets and coupons) and boarding passes. Prior to 2009, we offered our model MD-20 – a high-performance OEM code reader providing unparalleled flexibility in scanning 2-D symbologies such as Data Matrix from mobile phone displays as well as printed 1-D barcodes.  Because of its compact size, speed and flexibility, MD-20 was the ideal high-performance fixed-position 2-D code reader for a wide range of applications where mobile code reading, mobile couponing, mobile ticketing and mobile marketing was required, thus enabling the phone to be used as the single universal mobile device. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | · | adapting corporate infrastructure and administrative resources to accommodate additional customers and future growth; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | developing products, distribution, marketing, and management for the broadest possible market; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | broadening customer technical support capabilities; |
|--------|--------|-----------------------------------------------------|

|   | · | developing or acquiring new products and associated technical infrastructure; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | developing additional indirect distribution partners; |
|--------|--------|-------------------------------------------------------|

|   | · | increased costs from third party service providers; |
|--------|--------|-----------------------------------------------------|

|   | · | improving data security features; and |
|--------|--------|---------------------------------------|

|   | · | incurring legal fees and settlements associated with litigation and contingencies. |
|--------|--------|------------------------------------------------------------------------------------|

----

----

----

|   | · | maintain and increase our client base; |
|--------|--------|----------------------------------------|

|   | · | implement and successfully execute our business and marketing strategy; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | continue to develop and upgrade our products; |
|--------|--------|-----------------------------------------------|

|   | · | continually update and improve service offerings and features; |
|--------|--------|----------------------------------------------------------------|

|   | · | respond to industry and competitive developments; and |
|--------|--------|-------------------------------------------------------|

|   | · | attract, retain and motivate qualified personnel. |
|--------|--------|---------------------------------------------------|

----

|   | · | with a price of less than $5.00 per share; |
|--------|--------|--------------------------------------------|

|   | · | that are not traded on a “recognized” national exchange; |
|--------|--------|----------------------------------------------------------------------|

|   | · | whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share); or |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | in issuers with net tangible assets less than $2 million (if the issuer has been in continuous operation for at least three years) or $5 million (if in continuous operation for less than three years), or with average revenues of less than $6 million for the last three years. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | we have contractually limited our liability for such claims adequately or at all |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | Or that we would have sufficient resources to satisfy any liability resulting from any such claim. |
|--------|--------|----------------------------------------------------------------------------------------------------|

----

|   | · | rapid technological change; |
|--------|--------|-----------------------------|

|   | · | changes in user and customer requirements and preferences; |
|--------|--------|------------------------------------------------------------|

|   | · | frequent new product and service introductions embodying new technologies; and |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | the emergence of new industry standards and practices that could render proprietary technology and hardware and software infrastructure obsolete. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | enhance and improve the responsiveness and functionality of our products and services; |
|--------|--------|----------------------------------------------------------------------------------------|

----

|   | · | license or develop technologies useful in our business on a timely basis; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | enhance our existing services, and develop new services and technologies that address the increasingly sophisticated and varied needs of our prospective or current customers; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------------|

|                 |   | High   |   |   | Low    |   |
|----------------------|--------|--------|--------|--------|--------|--------|
| 2010:                |   |   |   |   |   |   |
|  Fourth quarter |   | $      | 0.23   |   |   | $      | 0.07 |   |
|  Third quarter  |   | $      | 0.25   |   |   | $      | 0.16 |   |
|  Second quarter |   | $      | 0.58   |   |   | $      | 0.15 |   |
|  First quarter  |   | $      | 1.14   |   |   | $      | 0.45 |   |
| 2009:                |   |   |   |   |   |   |   |   |
|  Fourth quarter |   | $      | 2.37   |   |   | $      | 0.79 |   |
|  Third quarter  |   | $      | 1.74   |   |   | $      | 0.40 |   |
|  Second quarter |   | $      | 3.21   |   |   | $      | 1.22 |   |
|  First quarter  |   | $      | 3.70   |   |   | $      | 0.12 |   |

|                             |   |                           |    |   |                          |   |   | Number of                          |   |
|----------------------------------|--------|--------------------------------|---------|--------|-------------------------------|--------|--------|-----------------------------------------|--------|
|                             |   |                           |    |   |                          |   |   | securities remaining               |   |
|                             |   | Number of securities |    |   |                          |   |   | available for future          |   |
|                             |   | to be issued         |    |   | Weighted-average              |   |   | issuance under equity         |   |
|                             |   | upon exercise of     |    |   | exercise price of   |   |   | compensation plans                 |   |
|                             |   | outstanding options,      |    |   | outstanding options,     |   |   | (excluding securities              |   |
|                             |   | warrants and rights  |    |   | warrants and rights |   |   | reflected in column (a)) |   |
| Plan Category               |   | (a)                            |    |   | (b)                           |   |   | (c)                                     |   |
| Equity compensation plans        |   |                           |    |   |                          |   |   |                                    |   |
| approved by security holders     |   |                           | 701,878 |   |                          | $      | 1.55   |                                    |   |   | 1,413,431 |   |
|                             |   |                           |    |   |                          |   |   |                                    |   |   |   |   |
| Equity compensation plans        |   |                           |    |   |                          |   |   |                                    |   |   |   |   |
| not approved by security holders |   |                           | -       |   |                          |   | -      |                                    |   |   | - |   |
|                             |   |                           |    |   |                          |   |   |                                    |   |   |   |   |
|     Total    |   |                           | 701,878 |   |                          | $      | 1.55   |                                    |   |   | 1,413,431 |   |

----

|   | · | Holders are entitled to dividends at a rate of 8% per annum, if, as and when declared by the Board of Directors; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Holders receive proceeds of $100 per share upon our liquidation, dissolution or winding up; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Each Series D preferred share is convertible, at the option of the holder, into shares of our common stock at the lesser of (i) $0.02 or (ii) 97% of the lowest closing bid price of our common stock for the 125 trading days immediately preceding the date of conversion; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Holders have voting rights on an as-converted basis with our common stock. |
|--------|--------|----------------------------------------------------------------------------|

----

|   | · | Mobile Tag:  On July 28, 2009, we entered into a three year non-exclusive patent licensing agreement with Mobile Tag, Inc. (“Mobile Tag”). Under the terms of that agreement, we will receive annual minimum royalties and then a percentage of revenue generated by Mobile Tag through the use of our barcode ecosystem patent portfolio within a defined field of use in the United States. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Neustar:  On October 2, 2009, we entered into a four year agreement with Neustar, Inc. (“Neustar”) in which we granted to Neustar a right to sub-license our barcode ecosystem patent portfolio to their customers primarily for the purpose of establishing and providing registry and clearinghouse services within a defined field of use in the territory of the United States and Mexico. Neustar’s sub-license rights were originally exclusive within their territory. However, on December 14, 2010, this right was changed to a non-exclusive right. Since February 12, 2010 we have participated in and have helped to facilitate the Neustar Mobile Codes Pilot Program. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Scanbuy: On October 16, 2009, we entered into a ten year settlement and license agreement with Scanbuy, Inc. (“Scanbuy”), in which we and Scanbuy settled all of our pending litigation against each other and we granted non-exclusive licenses and a sublicense to each other. Under the terms of that agreement, we will receive annual minimum royalties and then a percentage of revenue generated by Scanbuy through the use of our barcode ecosystem patent portfolio within a defined field of use in the United States. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | eBay: On December 21, 2010, we entered into a license, covenant not to sue and release agreement to grant a five year, non-exclusive, non-sublicensing license to eBay Inc. (“eBay”). The license grants freedom to operate to eBay, its affiliates and certain third parties, by providing a worldwide right to use our barcode technology patents. We received a license fee from eBay for the initial term. The Agreement also provided mutual covenants not to sue and mutual releases to the parties. The Agreement also granted to eBay a 60 day option to a similar license for our search technology patents, which they exercised on February 15, 2011, and for which we received an additional license fee for the initial term. The initial term of the licenses expires on December 31, 2015 and the licenses may be extended for successive 3 year terms, for additional license fees, from eBay. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Sony Ericsson: On November 27, 2009, we entered into an agreement with Sony Ericsson Mobile Communications, AB, through which they have selected NeoMedia as their strategic 2D barcode partner and NeoReader will be pre-installed across all Sony Ericsson platforms. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Samsung Electronics Italy: On September 13, 2010, we entered into an agreement with Samsung Electronics Italy, Italian subsidiary of Samsung Electronics, to pre-load NeoReader onto Samsung’s Omnia II devices. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Intangible Asset Valuation – The determination of the fair value of certain acquired assets and liabilities is subjective in nature and often involves the use of significant estimates and assumptions. Determining the fair values and useful lives of intangible assets especially requires the exercise of judgment.  Although there are a number of different generally accepted valuation methods to estimate the value of intangible assets acquired, we primarily use the weighted-average probability method outlined in FASB ASC Topic 360, Property, Plant, and Equipment.  This method requires significant management judgment to forecast the future operating results used in the analysis. In addition, other significant estimates are required such as residual growth rates and discount factors. The estimates we have used are consistent with the plans and estimates that we use to manage our business, based on available historical information and industry averages. The judgments made in determining the estimated useful lives assigned to each class of assets acquired can also significantly affect our net operating results. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Derivative Financial Instruments – We generally do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks. However, certain financial instruments, such as warrants and the embedded conversion features of our convertible preferred stock and convertible debentures, which are indexed to our common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control.  In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement.  Derivative financial instruments are initially recorded, and continuously carried, at fair value. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Revenue Recognition – We derive revenues from the following sources:  (1) license fees relating to patents and internally-developed software, and (2) hardware, software, and service revenues related to mobile marketing campaign design and implementation. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | License revenues, including intellectual property licenses, represent revenue from the licensing of our intellectual property and proprietary software tools and application products.  We license our development tools and application products under non-exclusive and non-transferable license agreements.  The basis for license fee revenue recognition is substantially governed by FASB ASC 985-605, Software Revenue Recognition. License revenue is recognized if persuasive evidence of an agreement exists, delivery has occurred, pricing is fixed and determinable, and collectability is reasonably assured. We defer revenue related to license fees for which amounts have been invoiced and/or collected in accordance with the payment terms of the licensing agreements, but for which the above criteria have not been fully met. We recognize licensing revenue over the term of the licensing agreement, and we evaluate our deferrals periodically for any potential adjustments. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hardware, software, and service revenues, which includes sales of software and technology equipment and service fees, is recognized based on guidance provided in FASB ASC 650-10-S99, Revenue Recognition in Financial Statements. Software and technology equipment resale revenue is recognized when persuasive evidence of an arrangement exists, the price to the customer is fixed and determinable, delivery of the service has occurred and collectability is reasonably assured.  Service revenues, including maintenance fees for providing system updates for software products, user documentation and technical support, are recognized over the life of the contract.  We defer revenue related to technology service and product revenue for which amounts have been invoiced and/or collected but for which the requisite service has not been provided.  Revenue is then recognized over the matching service period. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | We recognize shipping and handling costs at the time of invoice. All associated transportation and handling costs for products shipped are borne by the customer and are recognized as part of revenue at the time of invoicing and are accrued as cost of revenues. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We recognize tax billings related to our sales revenue at the time of invoicing. The customer is responsible for paying all associated taxes to us in connection with the sale as part of the terms and conditions of the sales invoice. Taxes on billings in connection with invoices are paid to the corresponding taxing authority directly by us and recovered from the customer upon payment of the customer invoice. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | When sales transactions include multiple deliverables or shipments, we recognize revenue on only that part of the transaction that has been shipped to the customer. Revenue on subsequent shipments as part of an original order or deliverable is recognized upon each new shipment or release of deliverables to the customer. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Valuation of Accounts Receivable – Judgment is required when we assess the likelihood of ultimate realization of recorded accounts receivable, including assessing the likelihood of collection and the credit worthiness of customers.  If the financial condition of our customers were to deteriorate or their operating climate were to change, resulting in an impairment of either their ability or willingness to make payments, an increase in the allowance for doubtful accounts would be required.  Similarly, a change in the payment behavior of customers generally may require an adjustment in the calculation of an appropriate allowance.  Each month we assess the collectability of specific customer accounts, the aging of accounts receivable, our history of bad debts, and the general condition of the industry.  If a major customer’s credit worthiness deteriorates, or our customers’ actual defaults exceed historical experience, our estimates could change and impact our reported results. At December 31, 2010 and 2009, we concluded that no allowance for doubtful accounts was required. For the years ended December 31, 2010 and 2009, our bad debt expense (recovery) was $197,000 and $(9,000), respectively. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inventory – Inventories are stated at the lower of cost (using the first-in, first-out method) or market. We continually evaluate the composition of our inventories, assessing slow-moving and ongoing products and maintain a reserve for slow-moving and obsolete inventory as well as related disposal costs.  As of December 31, 2010 and 2009, we had recorded reserves for inventory shrinkage and obsolescence of $114,000 and $136,000, respectively. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Stock-based Compensation – We record stock-based compensation in accordance with FASB ASC 718, Compensation-Stock Compensation, which requires measurement of all employee stock-based compensation awards using a fair-value method and the recording of such expense in the consolidated financial statements. We use the Black-Scholes-Merton option pricing model and recognize compensation cost on a straight-line basis over the vesting periods of the awards.  Inherent in this model are assumptions related to expected stock-price volatility, option life, risk-free interest rate and dividend yield. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Contingencies – We are subject to proceedings, lawsuits and other claims related to lawsuits and other regulatory proceedings that arise in the ordinary course of business. We are required to assess the likelihood of any adverse judgments or outcomes of these matters as well as potential ranges of possible losses.  A determination of the amount of the loss accrual required, if any, for these contingencies, is made after careful analysis of each individual issue.  We generally accrue attorney fees and interest in addition to an estimate of the expected liability.  We consult with legal counsel and other experts when necessary to assess any contingencies.  The required accrual may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income Tax Valuation Allowance – Deferred tax assets are reduced by a valuation allowance when, in the opinion of our management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. We recorded a 100% valuation allowance at December 31, 2010 and 2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     | · | Foreign Currency Translation – The U.S. dollar is the functional currency of our operations, except for our operations at NeoMedia Europe, which use the Euro as their functional currency.  Foreign currency transaction gains and losses are reflected in income. Translation gains and losses arising from translating the financial statements of NeoMedia Europe into U.S. dollars for reporting purposes are included in “Accumulated other comprehensive income (loss).” |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                          |   | Year Ended December 31, |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                          |   | 2010                                   |   |   | 2009 |   |
|                                                                                                          |   | (in thousands)                         |   |
|                                                                                                          |   |                                   |   |   |   |   |
| Revenues                                                                                                      |   | $                                      | 1,522  |   |   | $ | 1,662 |   |
| Cost of revenues                                                                                              |   |                                   | 1,065  |   |   |   | 1,557 |   |
| Gross profit                                                                                                  |   |                                   | 457    |   |   |   | 105 |   |
|                                                                                                          |   |                                   |   |   |   |   |   |   |
| Sales and marketing expenses                                                                                  |   |                                   | 1,103  |   |   |   | 809 |   |
| General and administrative expenses                                                                           |   |                                   | 3,854  |   |   |   | 3,942 |   |
| Research and development costs                                                                                |   |                                   | 1,683  |   |   |   | 1,381 |   |
| Impairment of investment                                                                                      |   |                                   | -      |   |   |   | 261 |   |
| Operating loss                                                                                                |   |                                   | (6,183 | ) |   |   | (6,288 | ) |
|                                                                                                          |   |                                   |   |   |   |   |   |   |
| Loss on extinguishment of debt                                                                                |   |                                   | (6,006 | ) |   |   | - |   |
| Gain (loss) from change in fair value of hybrid financial instruments                                         |   |                                   | 10,932 |   |   |   | (17,786 | ) |
| Gain (loss) from change in fair value of derivative liability - warrants                                      |   |                                   | 11,615 |   |   |   | (8,723 | ) |
| Gain (loss) from change in fair value of derivative liability - Series C and D preferred stock and debentures |   |                                   | 26,949 |   |   |   | (31,442 | ) |
| Interest expense related to convertible debt                                                                  |   |                                   | (2,217 | ) |   |   | (3,139 | ) |
|                                                                                                          |   |                                   |   |   |   |   |   |   |
| Net income (loss)                                                                                             |   | $                                      | 35,090 |   |   | $ | (67,378 | ) |
|                                                                                                          |   |                                   |   |   |   |   |   |   |
| Net income (loss) per share, basic and diluted:                                                               |   |                                   |   |   |   |
| Basic                                                                                                         |   | $                                      | 1.44   |   |   | $ | (3.41 | ) |
| Fully diluted                                                                                                 |   | $                                      | (0.01  | ) |   | $ | (3.41 | ) |

----

|              |   | Year Ended December 31, |   |
|-------------------|--------|----------------------------------------|--------|
|              |   | 2010                                   |   |   | 2009 |   |
|              |   | (in thousands)                         |   |
| Revenues:         |   |                                   |   |   |   |   |
| Hardware          |   | $                                      | 199    |   |   | $ | 881 |   |
| Lavasphere        |   |                                   | 152    |   |   |   | 167 |   |
| Barcode ecosystem |   |                                   | 30     |   |   |   | 9 |   |
| Patent licensing  |   |                                   | 1,080  |   |   |   | 313 |   |
| Legacy products   |   |                                   | 2      |   |   |   | 270 |   |
| Other             |   |                                   | 59     |   |   |   | 22 |   |
| Total revenues    |   | $                                      | 1,522  |   |   | $ | 1,662 |   |

----

----

|                                      |   | Year Ended December 31, |   |
|-------------------------------------------|--------|----------------------------------------|--------|
|                                      |   | 2010                                   |   |   | 2009 |   |
|                                      |   | (in thousands)                         |   |
|                                      |   |                                   |   |   |   |   |
| Cash and cash equivalents                 |   | $                                      | 80     |   |   | $ | 198 |   |
|                                      |   |                                   |   |   |   |   |   |   |
| Net cash used in operating activities     |   | $                                      | (5,679 | ) |   | $ | (4,202 | ) |
| Net cash used in investing activities     |   |                                   | (15    | ) |   |   | (100 | ) |
| Net cash provided by financing activities |   |                                   | 5,565  |   |   |   | 3,226 |   |
| Effect of exchange rate changes on cash   |   |                                   | 11     |   |   |   | 15 |   |
| Net (decrease) increase in cash           |   | $                                      | (118   | ) |   | $ | (1,061 | ) |

----

|   | · | Gross proceeds of $2,500,000 from our Series D preferred stock, offset by fees paid of $100,000 and the repayment of a $500,000 promissory note issued on December 23, 2009 and due to YA Global, resulting in net proceeds of $1,900,000; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $500,000 in connection with a promissory note issued to YA Global on April 1, 2010, accruing interest at 8% per annum, less structuring fees of $10,000 and monitoring fees of $15,000, resulting in net proceeds of $475,000; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $2,006,137 in connection with a secured convertible debenture entered into with YA Global on May 27, 2010, accruing interest at 14% per annum and payable on the maturity date of July 29, 2012, less repayment of the April 1, 2010 promissory note of $500,000, less accrued interest on the promissory note of $6,137, less structuring and due diligence fees of $90,000, resulting in net proceeds of $1,410,000; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $550,000 in connection with a secured convertible debenture entered into with YA Global on August 13, 2010, accruing interest at 14% per annum and payable on the maturity date of July 29, 2012, less structuring and due diligence fees of $20,000, resulting in net proceeds of $530,000; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $475,000 in connection with a secured convertible debenture entered into with YA Global on September 28, 2010, accruing interest at 14% per annum and payable on the maturity date of July 29, 2012, less structuring and due diligence fees of $25,000, resulting in net proceeds of $450,000;and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $400,000 in connection with a secured convertible debenture entered into with YA Global on October 28, 2010, accruing interest at 14% per annum and payable on the maturity date of July 29, 2012, less structuring and due diligence fees of $25,000, resulting in net proceeds of $375,000; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross proceeds of $450,000 in connection with a secured convertible debenture entered into with YA Global on December 15, 2010, accruing interest at 14% per annum and payable on the maturity date of July 29, 2012, less structuring and due diligence fees of $25,000, resulting in net proceeds of $425,000. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | enter into any debt arrangements in which YA Global is not the borrower, |
|--------|--------|--------------------------------------------------------------------------|

|   | · | grant any security interest in any of our assets, or |
|--------|--------|------------------------------------------------------|

|   | · | grant any security below market price. |
|--------|--------|----------------------------------------|

| Pronouncement   |   | Issued              |   | Title                                                                                                                                                                                                                    |
|-----------------|--------|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                |   |                                                                                                                                                                                                                     |
| ASU No. 2010-26 |   | October  2010  |   | Financial Services—Insurance (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (a consensus of the FASB Emerging Issues Task Force)                                      |
|            |   |                |   |                                                                                                                                                                                                                     |
| ASU No. 2010-27 |   | December  2010 |   | Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers (a consensus of the FASB Emerging Issues Task Force)                                                                     |
|            |   |                |   |                                                                                                                                                                                                                     |
| ASU No. 2010-28 |   | December  2010 |   | Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts (a consensus of the FASB Emerging Issues Task Force) |
|            |   |                |   |                                                                                                                                                                                                                     |
| ASU No. 2010-29 |   | December  2010 |   | Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the FASB Emerging Issues Task Force)                                                      |
|            |   |                |   |                                                                                                                                                                                                                     |
| ASU No. 2011-01 |   | January  2011  |   | Receivables (Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20                                                                                          |

----

----

|                                                                                                        |   | Page   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                        |   |   |
| Report of Independent Registered Public Accounting Firm                                                     |   | 34     |
|                                                                                                        |   |   |
| Consolidated Balance Sheets at December 31, 2010 and 2009                                              |   | 35     |
|                                                                                                        |   |   |
| Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2010 and 2009 |   | 36     |
|                                                                                                        |   |   |
| Consolidated Statement of Shareholders’ Deficit for the years ended December 31, 2010 and 2009   |   | 37     |
|                                                                                                        |   |   |
| Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009                        |   | 38     |
|                                                                                                        |   |   |
| Notes to Consolidated Financial Statements                                                                  |   | 39     |

----

----

|                                                                                                                                                                                                                  |   | December 31, |     |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                                                                                                                                  |   | 2010              |     |   | 2009              |   |
| ASSETS                                                                                                                                                                                                                |   |              |     |   |              |   |
| Current assets:                                                                                                                                                                                                       |   |              |     |   |              |   |
| Cash and cash equivalents                                                                                                                                                                                             |   | $                 | 80       |   |              | $      | 198 |   |
| Trade accounts receivable, net of allowance of $0 and $0                                                                                                                                                              |   |              | 345      |   |              |   | 374 |   |
| Inventories, net of allowance of $114 and $136                                                                                                                                                                        |   |              | 112      |   |              |   | 124 |   |
| Prepaid expenses and other current assets                                                                                                                                                                             |   |              | 151      |   |              |   | 294 |   |
| Total current assets                                                                                                                                                                                                  |   |              | 688      |   |              |   | 990 |   |
|                                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| Property and equipment, net                                                                                                                                                                                           |   |              | 96       |   |              |   | 129 |   |
| Goodwill                                                                                                                                                                                                              |   |              | 3,418    |   |              |   | 3,418 |   |
| Proprietary software, net                                                                                                                                                                                             |   |              | 1,414    |   |              |   | 2,076 |   |
| Patents and other intangible assets, net                                                                                                                                                                              |   |              | 2,048    |   |              |   | 1,996 |   |
| Cash surrender value of life insurance policies                                                                                                                                                                       |   |              | 738      |   |              |   | 659 |   |
| Other long-term assets                                                                                                                                                                                                |   |              | 171      |   |              |   | 156 |   |
| Total assets                                                                                                                                                                                                          |   | $                 | 8,573    |   |              | $      | 9,424 |   |
|                                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ DEFICIT                                                                                                                                                                           |   |              |     |   |              |   |   |   |
| Current liabilities:                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                      |   | $                 | 435      |   |              | $      | 558 |   |
| Taxes payable                                                                                                                                                                                                         |   |              | 126      |   |              |   | 4 |   |
| Accrued expenses                                                                                                                                                                                                      |   |              | 9,413    |   |              |   | 7,292 |   |
| Deferred revenues and customer prepayments                                                                                                                                                                            |   |              | 1,417    |   |              |   | 791 |   |
| Note payable                                                                                                                                                                                                          |   |              | 69       |   |              |   | 69 |   |
| Note payable - YA Global                                                                                                                                                                                              |   |              | -        |   |              |   | 500 |   |
| Accrued purchase price guarantee                                                                                                                                                                                      |   |              | 4,535    |   |              |   | 4,535 |   |
| Deferred tax liability                                                                                                                                                                                                |   |              | 706      |   |              |   | 706 |   |
| Derivative financial instruments - warrants                                                                                                                                                                           |   |              | 2,213    |   |              |   | 9,912 |   |
| Derivative financial instruments - Series C and D preferred stock and debentures payable                                                                                                                              |   |              | 28,092   |   |              |   | 50,985 |   |
| Debentures payable - carried at amortized cost                                                                                                                                                                        |   |              | 14,560   |   |              |   | 12,523 |   |
| Debentures payable - carried at fair value                                                                                                                                                                            |   |              | 27,484   |   |              |   | 37,678 |   |
| Total current liabilities                                                                                                                                                                                             |   |              | 89,050   |   |              |   | 125,553 |   |
|                                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| Commitments and contingencies (Note 12)                                                                                                                                                                               |   |              |     |   |              |   |   |   |
|                                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| Series C convertible preferred stock, $0.01 par value, 27,000 shares authorized, 8,336 and 8,642 shares issued and outstanding, liquidation value of $8,336 and $8,642                                                |   |              | 8,336    |   |              |   | 8,642 |   |
| Series D convertible preferred stock, $0.01 par value, 25,000 shares authorized, 25,000 and 0 shares issued and outstanding, liquidation value of $2,500 and $0                                                       |   |              | 2,500    |   |              |   | - |   |
|                                                                                                                                                                                                                  |   |              |     |   |              |   |   |   |
| Shareholders’ deficit:                                                                                                                                                                                          |   |              |     |   |              |   |   |   |
| Common stock, $0.001 par value, 5,000,000,000 shares authorized, 25,695,392 and 22,707,093 shares issued and 25,678,978 and 22,675,678 shares outstanding as of December 31, 2010 and December 31, 2009, respectively |   |              | 26       |   |              |   | 23 |   |
| Additional paid-in capital                                                                                                                                                                                            |   |              | 153,974  |   |              |   | 153,059 |   |
| Accumulated deficit                                                                                                                                                                                                   |   |              | (244,395 | )      |              |   | (276,985 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                                  |   |              | (139     | )      |              |   | (89 | ) |
| Treasury stock, at cost, 2,012 shares of common stock                                                                                                                                                                 |   |              | (779     | )      |              |   | (779 | ) |
| Total shareholders’ deficit                                                                                                                                                                                     |   |              | (91,313  | )      |              |   | (124,771 | ) |
| Total liabilities and shareholders’ deficit                                                                                                                                                                     |   | $                 | 8,573    |   |              | $      | 9,424 |   |

----

|                                                                                                          |   | Year ended December 31, |        |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------|-------------|
|                                                                                                          |   | 2010                    |        |   | 2009 |   |
|                                                                                                          |   |                    |        |   |   |   |
| Revenues                                                                                                      |   | $                       | 1,522       |   |   | $ | 1,662 |   |
| Cost of revenues                                                                                              |   |                    | 1,065       |   |   |   | 1,557 |   |
| Gross profit                                                                                                  |   |                    | 457         |   |   |   | 105 |   |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Sales and marketing expenses                                                                                  |   |                    | 1,103       |   |   |   | 809 |   |
| General and administrative expenses                                                                           |   |                    | 3,854       |   |   |   | 3,942 |   |
| Research and development costs                                                                                |   |                    | 1,683       |   |   |   | 1,381 |   |
| Impairment of investment                                                                                      |   |                    | -           |   |   |   | 261 |   |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Operating loss                                                                                                |   |                    | (6,183      | ) |   |   | (6,288 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Loss on extinguishment of debt                                                                                |   |                    | (6,006      | ) |   |   | - |   |
| Gain (loss) from change in fair value of hybrid financial instruments                                         |   |                    | 10,932      |   |   |   | (17,786 | ) |
| Gain (loss) from change in fair value of derivative liability - warrants                                      |   |                    | 11,615      |   |   |   | (8,723 | ) |
| Gain (loss) from change in fair value of derivative liability - Series C and D preferred stock and debentures |   |                    | 26,949      |   |   |   | (31,442 | ) |
| Interest expense related to convertible debt                                                                  |   |                    | (2,217      | ) |   |   | (3,139 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Net income (loss)                                                                                             |   |                    | 35,090      |   |   |   | (67,378 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Dividends on convertible preferred stock                                                                      |   |                    | (2,500      | ) |   |   | (977 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Net income (loss) attributable to common shareholders                                                         |   |                    | 32,590      |   |   |   | (68,355 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Comprehensive income (loss):                                                                                  |   |                    |        |   |   |   |   |   |
| Net income (loss)                                                                                             |   |                    | 35,090      |   |   |   | (67,378 | ) |
| Other comprehensive loss -                                                                                    |   |                    |        |   |   |   |   |   |
| foreign currency translation adjustment                                                                       |   |                    | (50         | ) |   |   | (103 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Comprehensive income (loss)                                                                                   |   | $                       | 35,040      |   |   | $ | (67,481 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Net income (loss) per share, basic and diluted:                                                               |   |                    |        |   |   |   |   |   |
| Basic                                                                                                         |   | $                       | 1.44        |   |   | $ | (3.41 | ) |
| Fully diluted                                                                                                 |   | $                       | (0.01       | ) |   | $ | (3.41 | ) |
|                                                                                                          |   |                    |        |   |   |   |   |   |
| Weighted average number of common shares:                                                                     |   |                    |        |   |   |   |   |   |
| Basic                                                                                                         |   |                    | 22,681,031  |   |   |   | 20,064,869 |   |
| Fully diluted                                                                                                 |   |                    | 629,687,199 |   |   |   | 20,064,869 |   |

----

|                                                            |   | Common Stock |       |   | Additional |   |   | Accumulated OtherComprehensive Income |   |   |  Accumulated |   |   | Treasury Stock |   |   | Total  |   |
|----------------------------------------------------------------------|--------|-------------------|------------|--------|------------|--------|--------|-------------------------------------------------|--------|--------|-------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                                                 |   | Shares            |       |   | Amount     |   |   | Paid-in Capital                            |   |   | (Loss)            |   |   | Deficit             |   |   | Shares |   |   | Amount |   |   |  Shareholders' Deficit |   |
| Balance, December 31, 2008                                           |   |              | 13,719,050 |   |       | $      | 14     |                                            |   | $      | 134,135           |   |   | $                   | 14     |   |   | $      | (211,305 | ) |   |   | 2,012 |   |   | $ | (779 | ) |   | $ | (77,921 | ) |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to YA Global on conversion of Series C preferred stock |   |              | 8,675,835  |   |       |   | 9      |                                            |   |   | 15,498            |   |   |                | -      |   |   |   | (1,338 | ) |   |   | - |   |   |   | - |   |   |   | 14,169 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued on excercisng of employee options                      |   |              | 116,000    |   |       |   | -      |                                            |   |   | 116               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 116 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for prior year acquisition                             |   |              | 25         |   |       |   | -      |                                            |   |   | -                 |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment for estimate of Series C preferred stock converstions     |   |              | -          |   |       |   | -      |                                            |   |   | 2,530             |   |   |                | -      |   |   |   | 3,036 |   |   |   | - |   |   |   | - |   |   |   | 5,566 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based compensation expense                                     |   |              | -          |   |       |   | -      |                                            |   |   | 357               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 357 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of shares issued to pay liabilities                       |   |              | 164,768    |   |       |   | -      |                                            |   |   | 423               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 423 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income - foreign currency translation adjustment       |   |              | -          |   |       |   | -      |                                            |   |   | -                 |   |   |                | (103   | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (103 | ) |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                             |   |              | -          |   |       |   | -      |                                            |   |   | -                 |   |   |                | -      |   |   |   | (67,378 | ) |   |   | - |   |   |   | - |   |   |   | (67,378 | ) |
| Balance, December 31, 2009                                           |   |              | 22,675,678 |   |       |   | 23     |                                            |   |   | 153,059           |   |   |                | (89    | )      |   |   | (276,985 | ) |   |   | 2,012 |   |   |   | (779 | ) |   |   | (124,771 | ) |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to YA Global on conversion of Series C preferred stock |   |              | 2,443,300  |   |       |   | 2      |                                            |   |   | 631               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 633 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to YA Global on conversions of convertible debentures  |   |              | 560,000    |   |       |   | 1      |                                            |   |   | 119               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 120 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deemed dividend on Series D preferred stock                          |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued to YA Global                                                  |   |              | -          |   |       |   | -      |                                            |   |   | -                 |   |   |                | -      |   |   |   | (2,500 | ) |   |   | - |   |   |   | - |   |   |   | (2,500 | ) |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based compensation expense                                     |   |              | -          |   |       |   | -      |                                            |   |   | 165               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 165 |   |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income - foreign currency translation adjustment       |   |              | -          |   |       |   | -      |                                            |   |   | -                 |   |   |                | (50    | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (50 | ) |
|                                                                 |   |              |       |   |       |   |   |                                            |   |   |              |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                           |   |              | -          |   |       |   | -      |                                            |   |   | -                 |   |   |                | -      |   |   |   | 35,090 |   |   |   | - |   |   |   | - |   |   |   | 35,090 |   |
| Balance, December 31, 2010                                           |   |              | 25,678,978 |   |       | $      | 26     |                                            |   | $      | 153,974           |   |   | $                   | (139   | )      |   | $      | (244,395 | ) |   |   | 2,012 |   |   | $ | (779 | ) |   | $ | (91,313 | ) |

----

|                                                                                                          |   | Year Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                          |   | 2010                                   |    |   | 2009 |   |
| Cash Flows from Operating Activities:                                                                         |   |                                   |    |   |   |   |
| Net income (loss)                                                                                             |   | $                                      | 35,090  |   |   | $ | (67,378 | ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities:                          |   |                                   |    |   |   |   |   |   |
| Depreciation and amortization                                                                                 |   |                                   | 990     |   |   |   | 1,012 |   |
| Impairment of investment                                                                                      |   |                                   | -       |   |   |   | 261 |   |
| Loss on extinguishment of debt                                                                                |   |                                   | 6,006   |   |   |   | - |   |
| (Gain) loss from change in fair value of hybrid financial instruments                                         |   |                                   | (10,932 | ) |   |   | 17,786 |   |
| (Gain) loss from change in fair value of derivative liability - warrants                                      |   |                                   | (11,615 | ) |   |   | 8,723 |   |
| (Gain) loss from change in fair value of derivative liability - Series C and D preferred stock and debentures |   |                                   | (26,949 | ) |   |   | 31,442 |   |
| Interest expense related to convertible debt                                                                  |   |                                   | 2,217   |   |   |   | 3,139 |   |
| Interest paid on convertible debenture                                                                        |   |                                   | (1,000  | ) |   |   | - |   |
| Stock-based compensation expense                                                                              |   |                                   | 165     |   |   |   | 357 |   |
| Increase in value of life insurance policies                                                                  |   |                                   | (79     | ) |   |   | (151 | ) |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Changes in operating assets and liabilities                                                                   |   |                                   |    |   |   |   |   |   |
| Trade and other accounts receivable                                                                           |   |                                   | 29      |   |   |   | (272 | ) |
| Inventories                                                                                                   |   |                                   | 12      |   |   |   | (7 | ) |
| Prepaid expenses and other assets                                                                             |   |                                   | 128     |   |   |   | 524 |   |
| Accounts payable and accrued liabilities                                                                      |   |                                   | (367    | ) |   |   | (26 | ) |
| Deferred revenue and other current liabilities                                                                |   |                                   | 626     |   |   |   | 388 |   |
| Net cash used in operating activities                                                                         |   |                                   | (5,679  | ) |   |   | (4,202 | ) |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Cash Flows from Investing Activities:                                                                         |   |                                   |    |   |   |   |   |   |
| Acquisition of property and equipment                                                                         |   |                                   | (15     | )  |   |   | (100 | ) |
| Net cash used in investing activities                                                                         |   |                                   | (15     | ) |   |   | (100 | ) |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Cash Flows from Financing Activities:                                                                         |   |                                   |    |   |   |   |   |   |
| Proceeds from issuance of Series D preferred stock                                                            |   |                                   | 2,500   |   |   |   | - |   |
| Costs attributed to issuance of Series D convertible preferred stock                                          |   |                                   | (100    | ) |   |   | - |   |
| Borrowing (repayment) of note payable - YA Global                                                             |   |                                   | (500    | ) |   |   | 500 |   |
| Borrowings under convertible debt instruments, net                                                            |   |                                   | 3,665   |   |   |   | 2,610 |   |
| Net proceeds from exercise of stock options                                                                   |   |                                   | -       |   |   |   | 116 |   |
| Net cash provided by financing activities                                                                     |   |                                   | 5,565   |   |   |   | 3,226 |   |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                                       |   |                                   | 11      |   |   |   | 15 |   |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                          |   |                                   | (118    | ) |   |   | (1,061 | ) |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                                                |   |                                   | 198     |   |   |   | 1,259 |   |
| Cash and cash equivalents, end of period                                                                      |   | $                                      | 80      |   |   | $ | 198 |   |
|                                                                                                          |   |                                   |    |   |   |   |   |   |
| Supplemental cash flow information:                                                                           |   |                                   |    |   |   |   |   |   |
| Interest paid during the period                                                                               |   | $                                      | 1,001   |   |   | $ | 4 |   |
| Acquisition of patent rights included in accounts payable                                                     |   | $                                      | 333     |   |   |   | - |   |
| Accretion of dividends on Series C preferred stock                                                            |   | $                                      | -       |   |   | $ | 977 |   |
| Series C preferred stock converted to common stock                                                            |   | $                                      | 631     |   |   | $ | 10,663 |   |
| Deemed dividend on Series D preferred stock issued                                                            |   | $                                      | 2,500   |   |   | $ | - |   |
| Issuance of common shares to settle outstanding liabilities                                                   |   | $                                      | -       |   |   | $ | 423 |   |
| Convertible debentures converted into common stock                                                            |   | $                                      | 119     |   |   | $ | - |   |

----

----

|   | · | License revenues, including intellectual property licenses, represent revenue from the licensing of our intellectual property and proprietary software tools and application products.  We license our development tools and application products under non-exclusive and non-transferable license agreements.  The basis for license fee revenue recognition is substantially governed by FASB ASC 985-605, Software Revenue Recognition. License revenue is recognized if persuasive evidence of an agreement exists, delivery has occurred, pricing is fixed and determinable, and collectability is reasonably assured. We defer revenue related to license fees for which amounts have been invoiced and/or collected in accordance with the payment terms of the licensing agreements, but for which the above criteria have not been fully met. We recognize licensing revenue over the term of the licensing agreement, and we evaluate our deferrals periodically for any potential adjustments. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hardware, software, and service revenues, which includes sales of software and technology equipment and service fees, is recognized based on guidance provided in FASB ASC 650-10-S99, Revenue Recognition in Financial Statements. Software and technology equipment resale revenue is recognized when persuasive evidence of an arrangement exists, the price to the customer is fixed and determinable, delivery of the service has occurred and collectability is reasonably assured.  Service revenues, including maintenance fees for providing system updates for software products, user documentation and technical support, are recognized over the life of the contract.  We defer revenue related to technology service and product revenue for which amounts have been invoiced and/or collected but for which the requisite service has not been provided.  Revenue is then recognized over the matching service period. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We recognize shipping and handling costs at the time of invoice. All associated transportation and handling costs for products shipped are borne by the customer and are recognized as part of revenue at the time of invoicing and are accrued as cost of revenues. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We recognize tax billings related to our sales revenue at the time of invoicing. The customer is responsible for paying all associated taxes to us in connection with the sale as part of the terms and conditions of the sales invoice. Taxes on billings in connection with invoices are paid to the corresponding taxing authority directly by us and recovered from the customer upon payment of the customer invoice. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | When sales transactions include multiple deliverables or shipments, we recognize revenue on only that part of the transaction that has been shipped to the customer. Revenue on subsequent shipments as part of an original order or deliverable is recognized upon each new shipment or release of deliverables to the customer. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                           |   | Year Ended December 31, 2010                            |        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|-------------|
|                                                                                                                                                           |   | 2010                                                                        |        |   | 2009 |   |
|                                                                                                                                                           |   | (in thousands except share and per sharedata) |        |
| Numerator:                                                                                                                                                     |   |                                                                        |        |   |   |   |
| Net income (loss)                                                                                                                                              |   | $                                                                           | 35,090      |   |   | $ | (67,378 | ) |
| Adjustments to reconcile net income to income (loss) applicable to common stockholders:                                                                        |   |                                                                        |        |   |   |   |   |   |
| Accretion of preferred stock dividends                                                                                                                         |   |                                                                        | (2,500      | ) |   |   | (977 | ) |
| Numerator for basic earnings per share - income available to common stockholders                                                                               |   | $                                                                           | 32,590      |   |   | $ | (68,355 | ) |
|                                                                                                                                                           |   |                                                                        |        |   |   |   |   |   |
| Effect of dilutive securities:                                                                                                                                 |   |                                                                        |        |   |   |   |   |   |
| Adjustment for change in fair value of derivative liability-Series C and D preferred stock and debentures                                                      |   |                                                                        | (26,949     | ) |   |   | - |   |
| Adjustment for change in fair value of derivative liability- warrants                                                                                          |   |                                                                        | (11,615     | ) |   |   | - |   |
| Adjustment for loss on extinguishment of debt (excluding non-dilutive instrument)                                                                              |   |                                                                        | 5,643       |   |   |   | - |   |
| Adjustment for change in fair value of hybrid financial instruments                                                                                            |   |                                                                        | (10,932     | ) |   |   | - |   |
| Adjustment for interest expense related to convertible debt (excluding non-dilutive instrument)                                                                |   |                                                                        | 2,174       |   |   |   | - |   |
|                                                                                                                                                           |   |                                                                        | (41,679     | ) |   |   | - |   |
| Numerator for diluted earnings per share- income available for  common stockholders after assumed conversions of debentures and exercise of warrants |   | $                                                                           | (9,089      | ) |   | $ | (68,355 | ) |
|                                                                                                                                                           |   |                                                                        |        |   |   |   |   |   |
| Denominator:                                                                                                                                                   |   |                                                                        |        |   |   |   |   |   |
| Weighted average shares used to compute basic EPS                                                                                                              |   |                                                                        | 22,681,031  |   |   |   | 20,064,869 |   |
| Effect of dilutive securities:                                                                                                                                 |   |                                                                        |        |   |   |   |   |   |
| Convertible debentures                                                                                                                                         |   |                                                                        | 447,441,832 |   |   |   | - |   |
| Convertible preferred stock                                                                                                                                    |   |                                                                        | 159,564,336 |   |   |   | - |   |
| Dilutive potential common shares                                                                                                                               |   |                                                                        | 607,006,168 |   |   |   | - |   |
|                                                                                                                                                           |   |                                                                        |        |   |   |   |   |   |
| Denominator for diluted earnings per share-adjusted weighted average shares and assumed conversions                                                            |   |                                                                        | 629,687,199 |   |   |   | 20,064,869 |   |
|                                                                                                                                                           |   |                                                                        |        |   |   |   |   |   |
| Basic net income (loss) per share                                                                                                                              |   | $                                                                           | 1.44        |   |   | $ | (3.41 | ) |
| Fully diluted loss per share                                                                                                                                   |   | $                                                                           | (0.01       | ) |   | $ | (3.41 | ) |

----

|                        |   | Year Ended December 31 |       |
|-----------------------------|--------|---------------------------------------|------------|
|                        |   | 2010                                  |       |   | 2009 |   |
| Stock options               |   |                                  | 701,878    |   |   |   | 945,612 |   |
| Warrants                    |   |                                  | 20,846,000 |   |   |   | 10,061,958 |   |
| Convertible debt            |   |                                  | -          |   |   |   | 70,053,946 |   |
| Convertible preferred stock |   |                                  | -          |   |   |   | 135,723,064 |   |
|                        |   |                                  | 21,547,848 |   |   |   | 216,784,581 |   |

----

----

|                                                 |   | As of December 31, |   |
|------------------------------------------------------|--------|-----------------------------------|--------|
|                                                 |   | 2010                              |   |   | 2009 |   |
|                                                 |   | (in thousands)                    |   |
| Raw material                                         |   | $                                 | 42     |   |   | $ | 55 |   |
| Finished goods                                       |   |                              | 184    |   |   |   | 205 |   |
| Total                                                |   |                              | 226    |   |   |   | 260 |   |
| Less: reserve for slow-moving and obsolete inventory |   |                              | (114   | ) |   |   | (136 | ) |
| Total Inventory, net of reserves                     |   | $                                 | 112    |   |   | $ | 124 |   |

| Capitalized patents              |   | 5 - 17 years |
|----------------------------------|--------|--------------|
|  Customer contracts         |   | 5 years      |
|  Copyrighted materials      |   | 5 years      |
|  Acquired software products |   | 7 years      |
|  Brand names                |   | 10 years     |

----

| Furniture and fixtures |   | 7 years     |
|------------------------|--------|-------------|
| Equipment              |   | 3 - 5 years |

----

| Pronouncement   |         | Issued              |         | Title                                                                                                                                                                                                                    |
|-----------------|--------------|---------------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |         |                |         |                                                                                                                                                                                                                     |
| ASU No. 2010-26 |         | October  2010  |         | Financial Services—Insurance (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (a consensus of the FASB Emerging Issues Task Force)                                      |
|            |         |                |         |                                                                                                                                                                                                                     |
| ASU No. 2010-27 |         | December  2010 |         | Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers (a consensus of the FASB Emerging Issues Task Force)                                                                     |
|            |         |                |         |                                                                                                                                                                                                                     |
| ASU No. 2010-28 |         | December  2010 |         | Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts (a consensus of the FASB Emerging Issues Task Force) |
|            |         |                |         |                                                                                                                                                                                                                     |
| ASU No. 2010-29 |         | December  2010 |         | Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the FASB Emerging Issues Task Force)                                                      |
|            |         |                |         |                                                                                                                                                                                                                     |
| ASU No. 2011-01 |    | January  2011  |    | Receivables (Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20                                                                                          |

| · | To effect a 1 share for 100 shares reverse stock split of our outstanding common stock; and |
|--------|---------------------------------------------------------------------------------------------|

| · | To fix the amount of authorized shares of common stock at 5,000,000,000 shares; and |
|--------|-------------------------------------------------------------------------------------|

| · | To effect a change in our common stock par value from $0.01 to $0.001. |
|--------|------------------------------------------------------------------------|

----

|   | · | The right to receive mandatory cash dividends equal to the greater of $0.001 per share or 100 times the amount of all dividends (cash or non-cash, other than dividends of shares of common stock) paid to holders of the common stock, which dividend is payable 30 days after the conclusion of each calendar quarter and immediately following the declaration of a dividend on common stock; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | One hundred votes per share of Series A Preferred on each matter submitted to a vote of our shareholders; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | The right to elect two directors at any meeting at which directors are to be elected, and to fill any vacancy on our Board of Directors previously filled by a director appointed by the Series A Preferred holders; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The right to receive an amount, in preference to the holders of common stock, equal to the amount per share payable to holders of common stock, plus all accrued and unpaid dividends, and following payment of 1/100th of the liquidation preference to the holders of each share of common stock, an additional amount per share equal to 100 times the per share amount paid to the holders of common stock; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The right to exchange each share of Series A Preferred for 100 times the consideration received per share of common stock in connection with any merger, consolidation, combination or other transaction in which shares of common stock are exchanged for or converted into cash, securities or other property; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The right to be redeemed in accordance with our shareholder rights plan. |
|--------|--------|-------------------------------------------------------------------------------|

----

|   | · | Series A Convertible Preferred was convertible into shares of common stock at a one-to-one ratio, which was proportionally adjusted to a one-to-one hundred ratio pursuant to a reverse stock split in the spring of 2010, and which is subject to a proportional adjustment in the event of further stock splits or combinations, and dividends or distributions of shares of common stock, at the option of the holder; shares are subject to automatic conversion as determined in each agreement relating to the purchase of shares of Series A Convertible Preferred; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Each share of Series A Convertible Preferred is entitled to receive a liquidation preference equal to the original purchase price of such share in the event of liquidation, dissolution, or winding up; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Upon merger or consolidation, or the sale, lease or other conveyance of all or substantially all of our assets, shares of Series A Convertible Preferred are automatically convertible into the number of shares of stock or other securities or property (including cash) to which the common stock into which it is convertible would have been entitled; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares of Series A Convertible Preferred are entitled to one vote per share of such stock, and vote together with holders of common stock. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series B Preferred shares accrue dividends at a rate of 12% per annum, or $1.20 per share, between the date of issuance and the first anniversary of issuance; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series B Preferred is redeemable to the maximum extent permitted by law (based on funds legally available for redemption) at a price per share of $15.00, plus accrued dividends (a total of $16.20 per share) on the first anniversary of issuance; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series B Preferred receive proceeds of $12.00 per share upon our liquidation, dissolution or winding up; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | To the extent not redeemed on the first anniversary of issuance, Series B Preferred is automatically convertible into the then existing general class of common stock on the first anniversary of issuance at a price equal to $16.20 divided by the greater of $20.00 or the lowest publicly-sold share price during the 90 day period preceding the conversion date, but in no event more than 19.9% of our outstanding capital stock as of the date immediately prior to conversion. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Upon merger or consolidation, or the sale, lease or other conveyance of all or substantially all of our assets, shares of Series B Preferred are automatically convertible into the number of shares of stock or other securities or property (including cash) to which the common stock into which it is convertible would have been entitled; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares of Series B Preferred are entitled to one vote per share and vote with common stock, except where the proposed action would adversely affect the Series B Preferred or where the non-waivable provisions of applicable law mandate that the Series B Preferred vote separately, in which case Series B Preferred vote separately as a class, with one vote per share. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Series C preferred shares are entitled to dividends at a rate of 8% per annum, if, as and when declared by the Board of Directors. As of December 31, 2010 and 2009, accumulated undeclared unpaid dividends were $3.4 million and $2.7 million, respectively. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series C preferred shares receive proceeds of $1,000 per share upon our liquidation, dissolution or winding up; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Each share of Series C preferred stock is convertible, at the option of the holder, into shares of our common stock at the lesser of (i) $50.00 or (ii) 97% of the lowest closing bid price of our common stock for the 125 trading days immediately preceding the date of conversion; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series C preferred shares have voting rights on an as-converted basis with the common stock. |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Series D preferred shares are entitled to dividends at a rate of 8% per annum, if, as and when declared by the Board of Directors. As of December 31, 2010, accumulated undeclared unpaid dividends were $200,000. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series D preferred shares receive proceeds of $100 per share upon our liquidation, dissolution or winding up; |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | · | Each share of Series D preferred stock is convertible, at the option of the holder, into shares of our common stock at the lesser of (i) $2.00 or (ii) 97% of the lowest closing bid price of our common stock for the 125 trading days immediately preceding the date of conversion; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Series D preferred shares have voting rights on an as-converted basis with the common stock; and. |
|--------|--------|---------------------------------------------------------------------------------------------------|

----

----

----

|                                  |   | Proceeds       |   |   | Deemed   |   |   | Total      |   |
|---------------------------------------|--------|----------------|--------|--------|----------|--------|--------|------------|--------|
|                                  |   | Allocation     |   |   | Dividend |   |   | Allocation |   |
|                                  |   | (in thousands) |   |
|                                  |   |           |   |   |     |   |   |       |   |
| Gross proceeds                        |   | $              | 2,500  |   |     |   |   |       | $      | 2,500 |   |
| Financing costs paid to investor      |   |           | (100   | )      |     |   |   |       |   | (100 | ) |
|                                  |   | $              | 2,400  |   |     |   |   |       | $      | 2,400 |   |
|                                  |   |           |   |   |     |   |   |       |   |   |   |
| Derivative liabilities:               |   |           |   |   |     |   |   |       |   |   |   |
| Investor warrants                     |   | $              | (2,431 | )      |     |   |   |       | $      | (2,431 | ) |
| Compound derivative                   |   |           | (4,551 | )      |     |   |   |       |   | (4,551 | ) |
| Total derivative liabilities          |   |           | (6,982 | )      |     |   |   |       |   | (6,982 | ) |
|                                  |   |           |   |   |     |   |   |       |   |   |   |
| Redeemable preferred stock:           |   |           |   |   |     |   |   |       |   |   |   |
| Series D Preferred Stock              |   |           | -      |   |     |   | -      |       |   |   | - |   |
| Deemed dividend                       |   |           | -      |   |     | $      | (2,500 | )          |   |   | (2,500 | ) |
| Total redeemable preferred stock      |   |           | -      |   |     |   | (2,500 | )          |   |   | (2,500 | ) |
|                                  |   |           |   |   |     |   |   |       |   |   |   |   |
| Accumulated deficit (deemed dividend) |   |           | -      |   |     |   | 2,500  |       |   |   | 2,500 |   |
|                                  |   |           |   |   |     |   |   |       |   |   |   |   |
| Day-one derivative loss               |   |           | 4,582  |   |     |   |   |       |   |   | 4,582 |   |
|                                  |   | $              | (2,400 | )      |     | $      | -      |       |   | $ | (2,400 | ) |

----

|                                    |   | May 27, 2010 |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |
|----------------------------------------------|--------|------------------------|--------|--------|---------------------------------------------|--------|--------|--------|--------|--------|------------------------------------|--------|--------|---------------------------------------|--------|
|                                         |   | debenture              |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |
|                                         |   | Proceeds Received |   |   | Settlement of April2010 note |   |   | Total  |   |   | August 13, 2010debenture |   |   | September 29, 2010debenture |   |   | October 28, 2010debenture |   |   | December 15, 2010debenture |   |
|                                         |   | (in thousands)    |   |
|                                         |   |                   |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |   |   |   |   |   |   |
| Gross proceeds                               |   | $                      | (1,500 | )      |                                        | $      | (506   | )      |   | $      | (2,006                             | )      |   | $                                     | (550   | ) |   | $ | (475 | ) |   | $ | (400 | ) |   | $ | (450 | ) |
| Structuring and due diligence fee            |   |                   | 90     |   |                                        |   | -      |   |   |   | 90                                 |   |   |                                  | 20     |   |   |   | 25 |   |   |   | 25 |   |   |   | 25 |   |
|                                         |   | $                      | (1,410 | )      |                                        | $      | (506   | )      |   | $      | (1,916                             | )      |   | $                                     | (530   | ) |   | $ | (450 | ) |   | $ | (375 | ) |   | $ | (425 | ) |
|                                         |   |                   |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities:                      |   |                   |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investor warrants                            |   | $                      | (684   | )      |                                        | $      | (228   | )      |   | $      | (912                               | )      |   | $                                     | (233   | ) |   | $ | (167 | ) |   | $ | (82 | ) |   | $ | (91 | ) |
| Compound derivative                          |   |                   | (1,473 | )      |                                        |   | (491   | )      |   |   | (1,964                             | )      |   |                                  | (704   | ) |   |   | (493 | ) |   |   | (391 | ) |   |   | (341 | ) |
|                                         |   |                   |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total derivative liabilities                 |   |                   | (2,157 | )      |                                        |   | (719   | )      |   |   | (2,876                             | )      |   |                                  | (937   | ) |   |   | (660 | ) |   |   | (473 | ) |   |   | (432 | ) |
|                                         |   |                   |   |   |                                        |   |   |   |   |   |                               |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Day one derivative loss                      |   |                   | 747    |   |                                        |   | -      |   |   |   | 747                                |   |   |                                  | 407    |   |   |   | 210 |   |   |   | - |   |   |   | - |   |
| Convertible debenture-initial carrying value |   |                   | -      |   |                                        |   | (150   | )      |   |   | (150                               | )      |   |                                  | -      |   |   |   | - |   |   |   | 98 |   |   |   | 7 |   |
| Loss on extinguishment                       |   |                   | -      |   |                                        |   | 363    |   |   |   | 363                                |   |   |                                  | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                         |   | $                      | (1,410 | )      |                                        | $      | (506   | )      |   | $      | (1,916                             | )      |   | $                                     | (530   | ) |   | $ | (450 | ) |   | $ | (375 | ) |   | $ | (425 | ) |

|                     |   | May 27, 2010 Financing |   |   | August 13, 2010Financing |   |   | September 29, 2010Financing |   |   | October 28, 2010Financing |   |   | December 15, 2010Financing |   |
|--------------------------|--------|---------------------------------------|--------|--------|------------------------------------|--------|--------|---------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------------|--------|
|                     |   |                                  |   |   |                               |   |   |                                  |   |   |                                |   |   |                                 |   |
| Conversion price         |   | $                                     | 0.1425 |   |                               | $      | 0.1425 |                                  |   | $      | 0.1520                              |   |   | $                                    | 0.1000 |   |   | $ | 0.0665 |   |
| Equivalent volatility    |   |                                  | 183    | %      |                               |   | 181    | %                                     |   |   | 166                                 | %      |   |                                 | 158    | % |   |   | 163 | % |
| Equivalent interest risk |   |                                  | 13.15  | %      |                               |   | 13.12  | %                                     |   |   | 13.30                               | %      |   |                                 | 14.00  | % |   |   | 14.00 | % |
| Equivalent credit risk   |   |                                  | 8.59   | %      |                               |   | 8.13   | %                                     |   |   | 7.79                                | %      |   |                                 | 7.73   | % |   |   | 7.78 | % |

----

|                |   | May 27, 2010 |    |   | August 13, 2010 |   |    | September 29, 2010 |   |   | October 28, 2010 |   |   | December 15 2010 |    |
|--------------------------|--------|------------------------|---------|--------|---------------------------|--------|---------|------------------------------|--------|--------|----------------------------|--------|--------|----------------------------|---------|
|                |   |                   |    |   |                      |   |    |                         |   |   |                       |   |   |                       |    |
| Exercise price           |   | $                      | 0.26    |   |                      | $      | 0.20    |                         |   | $      | 0.20                       |   |   | $                          | 0.19    |   |   | $ | 0.09 |   |
| Expected life            |   | 5 years                |    |   | 5 years                   |   |    | 5 years                      |   |   | 5 years                    |   |   | 5 years                    |    |
| Estimated volatility     |   |                   | 156     | %      |                      |   | 156     | %                            |   |   | 155                        | %      |   |                       | 154     | % |   |   | 154 | % |
| Risk free rate of return |   |                   | 2.18    | %      |                      |   | 1.47    | %                            |   |   | 1.27                       | %      |   |                       | 1.23    | % |   |   | 2.11 | % |
| Dividend yield           |   |                   | — |   |                      |   | — |                         |   |   | —                    |   |   |                       | — |   |   |   | — |   |

|                           |   |   |      |    |      |     |   |     |   | Conversion Price – Lower of Fixed Price or Percentage of |   |
|--------------------------------|--------|--------|-----------|--------------|-----------|----------|--------|----------|--------|-------------------------------------------------------------------------------------------------------------|--------|
|                      |   |   |      |    |      |     |   | Default  |   | VWAP for Preceding Period                                                                    |   |
|                      |   | Face   |      |    |      | Interest |   | Interest |   | Fixed                                                                                                       |   |   |   | Default |   | Preceding |   |
| Debenture Issue Date |   | Amount |      | Maturity     |      | Rate     |   | Rate     |   | Price                                                                                                       |   | % |   | % |   | Period |   |
|                           |   |   |      |         |      |     |   |     |   |                                                                                                        |   |   |   |   |   |   |   |
| August 24, 2006                |   | $      | 5,000,000 |         | 7/29/2012 |     | 10%    |     | n/a    |                                                                                                        | $2.00  |   | 90% |   | n/a |   | 125 Days |   |
| December 29, 2006              |   | $      | 2,500,000 |         | 7/29/2012 |     | 10%    |     | n/a    |                                                                                                        | $2.00  |   | 90% |   | n/a |   | 125 Days |   |
| March 27, 2007                 |   | $      | 7,458,651 |         | 7/29/2012 |     | 13%    |     | n/a    |                                                                                                        | $2.00  |   | 90% |   | n/a |   | 125 Days |   |
| August 24, 2007                |   | $      | 1,775,000 |         | 7/29/2012 |     | 14%    |     | n/a    |                                                                                                        | $2.00  |   | 80% |   | n/a |   | 125 Days |   |
| April 11, 2008                 |   | $      | 390,000   |         | 7/29/2012 |     | 15%    |     | 24%    |                                                                                                        | $1.50  |   | 80% |   | 75% |   | 125 Days |   |
| May 16, 2008                   |   | $      | 500,000   |         | 7/29/2012 |     | 15%    |     | 24%    |                                                                                                        | $1.50  |   | 80% |   | 50% |   | 125 Days |   |
| May 29, 2008                   |   | $      | 790,000   |         | 7/29/2012 |     | 15%    |     | 24%    |                                                                                                        | $1.00  |   | 80% |   | 50% |   | 125 Days |   |
| July 10, 2008                  |   | $      | 137,750   |         | 7/29/2012 |     | 15%    |     | 24%    |                                                                                                        | $1.00  |   | 80% |   | 50% |   | 125 Days |   |
| July 29, 2008                  |   | $      | 2,325,000 |         | 7/29/2012 |     | 14%    |     | 24%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| October 28, 2008               |   | $      | 2,325,000 |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| May 1, 2009                    |   | $      | 258,037   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| June 5, 2009                   |   | $      | 715,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| July 15, 2009                  |   | $      | 535,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| August 14, 2009                |   | $      | 475,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $2.00  |   | 95% |   | 50% |   | 125 Days |   |
| May 27, 2010                   |   | $      | 2,006,137 |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $0.30  |   | 95% |   | 50% |   | 60 Days |   |
| August 13, 2010                |   | $      | 550,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $0.20  |   | 95% |   | 50% |   | 60 Days |   |
| September 29, 2010             |   | $      | 475,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $0.20  |   | 95% |   | 50% |   | 60 Days |   |
| October 28, 2010               |   | $      | 400,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $0.20  |   | 95% |   | 50% |   | 60 Days |   |
| December 15, 2010              |   | $      | 450,000   |         | 7/29/2012 |     | 14%    |     | 20%    |                                                                                                        | $0.10  |   | 95% |   | 50% |   | 60 Days |   |

----

----

|                     |   |       |   | Remaining |   |       |   | Equivalent         |   | Equivalent         |   |
|--------------------------|--------|------------|--------|-----------|--------|------------|--------|--------------------|--------|--------------------|--------|
|                     |   | Conversion |   | Term      |   | Equivalent |   | Interest-Risk      |   | Credit-Risk        |   |
|                     |   | Prices     |   | (years)   |   | Volatility |   | Adjusted Rate |   | Adjusted Rate |   |
|                     |   |       |   |      |   |       |   |               |   |               |   |
| Series C preferred stock |   | $0.07      |   | 1.58      |   | 170%       |   | 8.00%              |   | 7.73%              |   |
| Series D preferred stock |   | $0.07      |   | 1.58      |   | 170%       |   | 8.00%              |   | 7.73%              |   |
|                     |   |       |   |      |   |       |   |               |   |               |   |
| August 24, 2006          |   | $0.06      |   | 1.58      |   | 170%       |   | 10.00%             |   | 7.73%              |   |
| December 29, 2006        |   | $0.06      |   | 1.58      |   | 170%       |   | 10.00%             |   | 7.73%              |   |
| July 10, 2008            |   | $0.06      |   | 1.58      |   | 170%       |   | 15.00%             |   | 7.73%              |   |
| July 29, 2008            |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| October 28, 2008         |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| May 1, 2009              |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| June 5, 2009             |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| July 15, 2009            |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| August 14, 2009          |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| May 27, 2010             |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| August 13, 2010          |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| September 29, 2010       |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| October 28, 2010         |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |
| December 15, 2010        |   | $0.07      |   | 1.58      |   | 170%       |   | 14.00%             |   | 7.73%              |   |

----

----

|                                                     |   |                |   |   |     |   |   |     |   |   | Embedded   |   |   |            |   |   | Common |   |
|----------------------------------------------------------|--------|---------------------|--------|--------|----------|--------|--------|----------|--------|--------|------------|--------|--------|-----------------|--------|--------|--------|--------|
| December 31, 2010                              |   | Face                |   |   | Carrying |   |   | Accrued  |   |   | Conversion |   |   |            |   |   | Stock  |   |
|                                                     |   | Value               |   |   | Value    |   |   | Interest |   |   | Feature    |   |   | Fair Value |   |   | Shares |   |
|                                                     |   | (in thousands) |   |
|                                                     |   |                |   |   |     |   |   |     |   |   |       |   |   |            |   |   |   |   |
| Series C Convertible Preferred Stock |   | $                   | 8,336  |   |     | $      | 8,336  |     |   | $      | -          |   |   | $               | 6,706  |   |   | $      | - |   |   |   | 125,348 |   |
| Series D Convertible Preferred Stock                     |   | $                   | 2,500  |   |     | $      | 2,500  |     |   | $      | -          |   |   |            | 1,918  |   |   |   | - |   |   |   | 36,819 |   |
|                                                     |   |                |   |   |     |   |   |     |   |   |       |   |   |            |   |   |   |   |   |   |   |   |   |   |
| August 24, 2006                                |   | $                   | 5,000  |   |     | $      | 5,000  |     |   | $      | 1,876      |   |   |            | 5,007  |   |   |   | - |   |   |   | 109,154 |   |
| December 29, 2006                                   |   |                | 2,500  |   |     |   | 2,500  |     |   |   | 940        |   |   |            | 2,502  |   |   |   | - |   |   |   | 54,596 |   |
| March 27, 2007                                           |   |                | 7,459  |   |     |   | -      |     |   |   |       |   |   |            | -      |   |   |   | 17,905 |   |   |   | 118,391 |   |
| August 24, 2007                                          |   |                | 1,775  |   |     |   | -      |     |   |   |       |   |   |            | -      |   |   |   | 4,888 |   |   |   | 31,696 |   |
| April 11, 2008                                           |   |                | 390    |   |     |   | -      |     |   |   |       |   |   |            | -      |   |   |   | 1,106 |   |   |   | 6,964 |   |
| May 16 ,2008                                             |   |                | 500    |   |     |   | -      |     |   |   |       |   |   |            | -      |   |   |   | 1,392 |   |   |   | 8,929 |   |
| May 29, 2008                                             |   |                | 790    |   |     |   | -      |     |   |   |       |   |   |            | -      |   |   |   | 2,193 |   |   |   | 14,107 |   |
| July 10, 2008                                            |   |                | 138    |   |     |   | 138    |     |   |   | 51         |   |   |            | 180    |   |   |   | - |   |   |   | 3,387 |   |
| July 29, 2008                                            |   |                | 2,325  |   |     |   | 2,325  |     |   |   | 792        |   |   |            | 2,381  |   |   |   | - |   |   |   | 46,873 |   |
| October 23, 2008                                         |   |                | 2,325  |   |     |   | 2,325  |     |   |   | 709        |   |   |            | 2,279  |   |   |   | - |   |   |   | 46,873 |   |
| May 1, 2009                                              |   |                | 258    |   |     |   | 258    |     |   |   | 92         |   |   |            | 237    |   |   |   | - |   |   |   | 5,249 |   |
| June 5, 2009                                             |   |                | 715    |   |     |   | 668    |     |   |   | 158        |   |   |            | 771    |   |   |   | - |   |   |   | 13,139 |   |
| July 15, 2009                                            |   |                | 535    |   |     |   | 535    |     |   |   | 111        |   |   |            | 404    |   |   |   | - |   |   |   | 9,719 |   |
| August 14, 2009                                          |   |                | 475    |   |     |   | 475    |     |   |   | 93         |   |   |            | 482    |   |   |   | - |   |   |   | 8,546 |   |
| May 27, 2010                                             |   |                | 2,006  |   |     |   | 302    |     |   |   | 168        |   |   |            | 2,785  |   |   |   | - |   |   |   | 32,690 |   |
| August 13, 2010                                          |   |                | 550    |   |     |   | 13     |     |   |   | 29         |   |   |            | 732    |   |   |   | - |   |   |   | 8,715 |   |
| September 29, 2010                                       |   |                | 475    |   |     |   | 9      |     |   |   | 17         |   |   |            | 620    |   |   |   | - |   |   |   | 7,398 |   |
| October 28, 2010                                         |   |                | 400    |   |     |   | 6      |     |   |   | 10         |   |   |            | 517    |   |   |   |   |   |   |   | 6,163 |   |
| December 15, 2010                                        |   |                | 450    |   |     |   | 6      |     |   |   | 3          |   |   |            | 571    |   |   |   |   |   |   |   | 6,811 |   |
| Total                                                    |   | $                   | 29,066 |   |     | $      | 14,560 |     |   | $      | 5,049      |   |   | $               | 28,092 |   |   | $      | 27,484 |   |   |   | 701,567 |   |

|                                                |   |                |   |   |     |   |   |     |   |   | Embedded   |   |   |            |   |   | Common |   |
|----------------------------------------------------------|--------|---------------------|--------|--------|----------|--------|--------|----------|--------|--------|------------|--------|--------|-----------------|--------|--------|--------|--------|
| December 31, 2009                              |   | Face                |   |   | Carrying |   |   | Accrued  |   |   | Conversion |   |   |            |   |   | Stock  |   |
|                                                     |   | Value               |   |   | Value    |   |   | Interest |   |   | Feature    |   |   | Fair Value |   |   | Shares |   |
|                                                     |   | (in thousands) |   |
|                                                     |   |                |   |   |     |   |   |     |   |   |       |   |   |            |   |   |   |   |
| Series C Convertible Preferred Stock |   | $                   | 8,642  |   |     | $      | 8,642  |     |   | $      | -          |   |   | $               | 16,397 |   |   | $      | - |   |   |   | 22,158 |   |
|                                                     |   |                |   |   |     |   |   |     |   |   |       |   |   |            |   |   |   |   |   |   |   |   |   |   |
| August 24, 2006                                |   | $                   | 5,000  |   |     | $      | 5,000  |     |   |   | 1,377      |   |   |            | 14,131 |   |   |   | - |   |   |   | 13,889 |   |
| December 29, 2006                                   |   |                | 2,500  |   |     |   | 2,500  |     |   |   | 690        |   |   |            | 6,926  |   |   |   | - |   |   |   | 9,260 |   |
| March 27, 2007                                           |   |                | 7,459  |   |     |   | -      |     |   |   | -          |   |   |            | -      |   |   |   | 25,046 |   |   |   | 20,718 |   |
| August 24, 2007                                          |   |                | 1,775  |   |     |   | -      |     |   |   | -          |   |   |            | -      |   |   |   | 6,573 |   |   |   | 5,547 |   |
| April 11, 2008                                           |   |                | 390    |   |     |   | -      |     |   |   | -          |   |   |            | -      |   |   |   | 1,412 |   |   |   | 1,219 |   |
| May 16 ,2008                                             |   |                | 500    |   |     |   | -      |     |   |   | -          |   |   |            | -      |   |   |   | 1,803 |   |   |   | 1,563 |   |
| May 29, 2008                                             |   |                | 790    |   |     |   | -      |     |   |   | -          |   |   |            | -      |   |   |   | 2,844 |   |   |   | 2,469 |   |
| July 10, 2008                                            |   |                | 137    |   |     |   | 127    |     |   |   | 31         |   |   |            | 337    |   |   |   | - |   |   |   | 430 |   |
| July 29, 2008                                            |   |                | 2,325  |   |     |   | 2,109  |     |   |   | 466        |   |   |            | 4,618  |   |   |   | - |   |   |   | 6,118 |   |
| October 28, 2008                                         |   |                | 2,325  |   |     |   | 2,130  |     |   |   | 384        |   |   |            | 4,594  |   |   |   | - |   |   |   | 6,118 |   |
| May 1, 2009                                              |   |                | 294    |   |     |   | 120    |     |   |   |       |   |   |            | 580    |   |   |   | - |   |   |   | 774 |   |
| June 5, 2009                                             |   |                | 715    |   |     |   | 71     |     |   |   | 57         |   |   |            | 1,410  |   |   |   | - |   |   |   | 1,882 |   |
| July 15, 2009                                            |   |                | 535    |   |     |   | 253    |     |   |   | 35         |   |   |            | 1,056  |   |   |   | - |   |   |   | 1,408 |   |
| August 14, 2009                                          |   |                | 475    |   |     |   | 213    |     |   |   | 26         |   |   |            | 936    |   |   |   | - |   |   |   | 1,250 |   |
| Total                                                    |   | $                   | 25,220 |   |     | $      | 12,523 |     |   | $      | 3,066      |   |   | $               | 50,985 |   |   | $      | 37,678 |   |   |   | 94,803 |   |

----

|                                                         |   | Year ended December 31, |   |
|--------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                         |   | 2010                                   |   |   | 2009 |   |
|                                                         |   | (in thousands)                    |   |
|                                                         |   |                                   |   |   |   |   |
| March 27, 2007                                               |   | $                                      | 7,062  |   |   | $ | (11,568 | ) |
| August 24, 2007                                              |   |                                   | 1,940  |   |   |   | (3,356 | ) |
| April 11, 2008                                               |   |                                   | 436    |   |   |   | (676 | ) |
| May 16, 2008                                                 |   |                                   | 578    |   |   |   | (848 | ) |
| May 29, 2008                                                 |   |                                   | 916    |   |   |   | (1,338 | ) |
| Gain (loss) from changes in fair value of hybrid instruments |   | $                                      | 10,932 |   |   | $ | (17,786 | ) |

----

|                                                                        |   | Year Ended December 31, |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                        |   | 2010                                   |   |   | 2009 |   |
|                                                                        |   | (in thousands)                    |   |
| Series C preferred stock                                                    |   | $                                      | 9,361  |   |   | $ | (13,904 | ) |
| Series D preferred stock                                                    |   |                                   | 2,633  |   |   |   | - |   |
|                                                                        |   |                                   |   |   |   |   |   |   |
| August 24, 2006                                                             |   |                                   | 9,600  |   |   |   | (6,871 | ) |
| December 29, 2006                                                           |   |                                   | 4,662  |   |   |   | (3,370 | ) |
| July 10, 2008                                                               |   |                                   | 230    |   |   |   | (179 | ) |
| July 29, 2008                                                               |   |                                   | 2,788  |   |   |   | (2,291 | ) |
| October 28, 2008                                                            |   |                                   | 2,627  |   |   |   | (2,367 | ) |
| April 6, 2009                                                               |   |                                   | -      |   |   |   | (95 | ) |
| May 1, 2009                                                                 |   |                                   | 338    |   |   |   | (324 | ) |
| June 5, 2009                                                                |   |                                   | 744    |   |   |   | (730 | ) |
| July 15, 2009                                                               |   |                                   | 786    |   |   |   | (689 | ) |
| August 14, 2009                                                             |   |                                   | 562    |   |   |   | (622 | ) |
| May 27, 2010                                                                |   |                                   | (820   | ) |   |   | - |   |
| August 13, 2010                                                             |   |                                   | (29    | ) |   |   | - |   |
| September 29, 2010                                                          |   |                                   | (127   | ) |   |   | - |   |
| October 28, 2010                                                            |   |                                   | (124   | ) |   |   | - |   |
| December 15, 2010                                                           |   |                                   | (231   | ) |   |   | - |   |
|                                                                        |   |                                   | 33,000 |   |   |   | (31,442 | ) |
| Less:  Day-one loss from Series D Convertible Preferred financing |   |                                   | (4,582 | ) |   |   | - |   |
| Less:  Day-one loss from May 27, 2010 financing                   |   |                                   | (747   | ) |   |   | - |   |
| Less: Day-one loss from August 13, 2010 financing                           |   |                                   | (407   | ) |   |   | - |   |
| Less: Day-one loss from September 29, 2010 financing                        |   |                                   | (210   | ) |   |   | - |   |
| Less: Day-one loss from October 28, 2010 financing                          |   |                                   | (98    | ) |   |   | - |   |
| Less: Day-one loss from December 15, 2010 financing                         |   |                                   | (7     | ) |   |   | - |   |
| Gain (loss) from change in fair value of derivative liability               |   | $                                      | 26,949 |   |   | $ | (31,442 | ) |

----

|                               |   | December 31 |   |   | December 31 |   |       |   | December 31 |   |   | December 31 |   |
|-----------------------------------------|--------|------------------|--------|--------|------------------|--------|------------|--------|------------------|--------|--------|------------------|--------|
|                                    |   | 2010             |   |   | 2009             |   |       |   | 2010             |   |   | 2009             |   |
|                                    |   |             |   |   |             |   |       |   |             |   |   |             |   |   |   |   |   |   |   |
|                                    |   | Exercise         |   |   | Exercise         |   | Expiration |   |             |   |   | Fair             |   |   |   |   |   | Fair |   |
|                                    |   | Price            |   |   | Price            |   | Date       |   | Warrants         |   |   | Value            |   |   | Warrants |   |   | Value |   |
|                                    |   |             |   |   |             |   |       |   |             |   |   |             |   |   |   |   |   |   |   |
| Series C preferred stock |   | $0.06            |   |   | $0.32            |   | 2/17/2011  |   |             | 750    |   |             | $      | 53 |   |   |   | 750 |   |   | $ | 712 |   |
| Series D preferred stock                |   | $0.10            |   |   | —          |   | 1/5/2017   |   |             | 2,250  |   |             |   | 255 |   |   |   | — |   |   |   | — |   |
|                                    |   |             |   |   |             |   |       |   |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| August 24, 2006                         |   | $0.06            |   |   | $0.32            |   | 8/24/2011  |   |             | 1,750  |   |             |   | 148 |   |   |   | 1,750 |   |   |   | 1,697 |   |
| December 29, 2006                       |   | $0.06            |   |   | $0.32            |   | 12/29/2011 |   |             | 420    |   |             |   | 37 |   |   |   | 420 |   |   |   | 412 |   |
| March 27, 2007                          |   | $0.06            |   |   | $0.32            |   | 3/27/2012  |   |             | 1,250  |   |             |   | 122 |   |   |   | 1,250 |   |   |   | 1,238 |   |
| August 24, 2007                         |   | $0.06            |   |   | $0.32            |   | 8/24/2012  |   |             | 750    |   |             |   | 72 |   |   |   | 750 |   |   |   | 750 |   |
| May 16, 2008                            |   | $0.06            |   |   | $0.32            |   | 5/16/2015  |   |             | 75     |   |             |   | 8 |   |   |   | 75 |   |   |   | 77 |   |
| May 29, 2008                            |   | $0.06            |   |   | $0.32            |   | 5/29/2015  |   |             | 500    |   |             |   | 56 |   |   |   | 500 |   |   |   | 515 |   |
| July 29, 2008                           |   | $0.07            |   |   | $0.95            |   | 7/29/2015  |   |             | 1,000  |   |             |   | 112 |   |   |   | 1,000 |   |   |   | 1,000 |   |
| July 29, 2008                           |   | $0.10            |   |   | $0.95            |   | 7/29/2015  |   |             | 3,500  |   |             |   | 383 |   |   |   | 3,500 |   |   |   | 3,500 |   |
| May 27, 2010                            |   | $0.10            |   |   | —          |   | 5/27/2015  |   |             | 5,000  |   |             |   | 563 |   |   |   | — |   |   |   | — |   |
| August 13, 2010                         |   | $0.10            |   |   | —          |   | 8/13/2015  |   |             | 1,000  |   |             |   | 113 |   |   |   | — |   |   |   | — |   |
| September 29, 2010                      |   | $0.10            |   |   | —          |   | 9/29/2015  |   |             | 750    |   |             |   | 84 |   |   |   | — |   |   |   | — |   |
| October 28, 2010                        |   | $0.10            |   |   | —          |   | 10/28/2015 |   |             | 600    |   |             |   | 67 |   |   |   |   |   |   |   |   |   |
| December 15, 2010                       |   | $0.10            |   |   | —          |   | 12/15/2015 |   |             | 1,250  |   |             |   | 140 |   |   |   |   |   |   |   |   |   |
| Other warrants                          |   | $1.10            |   |   | $1.10- $3.50     |   | 1/16/2011  |   |             | 1      |   |             |   | — |   |   |   | 67 |   |   |   | 11 |   |
|                                    |   |             |   |   |             |   | Total      |   |             | 20,846 |   |             | $      | 2,213 |   |   |   | 10,062 |   |   | $ | 9,912 |   |

----

|                     |   | Year Ended December 31, |   |
|--------------------------|--------|----------------------------------------|--------|
|                     |   | 2010                                   |   |   | 2009 |   |
|                     |   | (in thousands)                         |   |
| Series C preferred stock |   | $                                      | 660    |   |   | $ | (689 | ) |
| Series D preferred stock |   |                                   | 2,175  |   |   |   | - |   |
|                     |   |                                   |   |   |   |   |   |   |
| August 24, 2006          |   |                                   | 1,549  |   |   |   | (1,504 | ) |
| December 29, 2006        |   |                                   | 375    |   |   |   | (362 | ) |
| March 27, 2007           |   |                                   | 1,116  |   |   |   | (1,088 | ) |
| August 24, 2007          |   |                                   | 678    |   |   |   | (660 | ) |
| May 16, 2008             |   |                                   | 69     |   |   |   | (67 | ) |
| May 28, 2008             |   |                                   | 459    |   |   |   | (445 | ) |
| July 29, 2008            |   |                                   | 4,005  |   |   |   | (3,898 | ) |
| May 27, 2010             |   |                                   | 349    |   |   |   | - |   |
| August 13, 2010          |   |                                   | 120    |   |   |   | - |   |
| September 29, 2010       |   |                                   | 83     |   |   |   | - |   |
| October 28, 2010         |   |                                   | 15     |   |   |   | - |   |
| December 15, 2010        |   |                                   | (49    | ) |   |   | - |   |
| Other warrants           |   |                                   | 11     |   |   |   | (10 | ) |
| Total                    |   | $                                      | 11,615 |   |   | $ | (8,723 | ) |

----

|                                  |   | Compound   |    |   |       |   |    |   |   |
|---------------------------------------|--------|------------|---------|--------|------------|--------|---------|--------|--------|
|                                  |   | Embedded   |    |   | Warrant    |   |    |   |   |
|                                  |   | Derivative |    |   | Derivative |   |    | Total  |   |
|                                  |   |       |    |   |       |   |    |   |   |
| Beginning balance, December 31, 2009: |   | $          | 50,985  |   |       | $      | 9,912   |   |   | $ | 60,897 |   |
|                                  |   |       |    |   |       |   |    |   |   |   |   |   |
| Issuances:                            |   |       |    |   |       |   |    |   |   |   |   |   |
| January 5, 2010                       |   |       | 4,551   |   |       |   | 2,431   |   |   |   | 6,982 |   |
| May 27, 2010                          |   |       | 1,964   |   |       |   | 912     |   |   |   | 2,876 |   |
| August 13, 2010                       |   |       | 704     |   |       |   | 233     |   |   |   | 936 |   |
| September 29, 2010                    |   |       | 493     |   |       |   | 167     |   |   |   | 659 |   |
| October 28, 2010                      |   |       | 392     |   |       |   | 82      |   |   |   | 474 |   |
| December 15, 2010                     |   |       | 341     |   |       |   | 91      |   |   |   | 432 |   |
|                                  |   |       |    |   |       |   |    |   |   |   |   |   |
| Extinguished                          |   |       | 2,076   |   |       |   | -       |   |   |   | 2,076 |   |
|                                  |   |       |    |   |       |   |    |   |   |   |   |   |
| Fair value adjustments:               |   |       |    |   |       |   |    |   |   |   |   |   |
| Compound embedded derivatives         |   |       | (33,000 | )      |       |   | -       |   |   |   | (33,000 | ) |
| Warrant derivatives                   |   |       | -       |   |       |   | (11,615 | )      |   |   | (11,615 | ) |
|                                  |   |       |    |   |       |   |    |   |   |   |   |   |
| Conversions:                          |   |       |    |   |       |   |    |   |   |   |   |   |
| Series C preferred stock              |   |       | (330    | )      |       |   | -       |   |   |   | (329 | ) |
| May 1, 2009 financing                 |   |       | (84     | )      |       |   |    |   |   |   | (83 | ) |
|                                  |   |       |    |   |       |   |    |   |   |   |   |   |
| Ending balance, December 31, 2010     |   | $          | 28,092  |   |       | $      | 2,213   |   |   | $ | 30,305 |   |

|                              |   | As of December 31, |   |
|-----------------------------------|--------|-----------------------------------|--------|
|                              |   | 2010                              |   |   | 2009 |   |
|                              |   | (in thousands)                    |   |
|                              |   |                              |   |   |   |   |
| Furniture and fixtures            |   | $                                 | 108    |   |   | $ | 419 |   |
| Equipment                         |   |                              | 457    |   |   |   | 444 |   |
| Total                             |   |                              | 565    |   |   |   | 863 |   |
| Less: Accumulated depreciation    |   |                              | (469   | ) |   |   | (734 | ) |
| Total property and equipment, net |   | $                                 | 96     |   |   | $ | 129 |   |

----

|                                                    |   | Patents andOtherIntangibles |   |   | ProprietarySoftware |   |   | TotalIntangibles andProprietarySoftware |   |
|---------------------------------------------------------|--------|----------------------------------|--------|--------|---------------------|--------|--------|----------------------------------------------|--------|
|                                                    |   | (in thousands)                   |   |
| December 31, 2008                                       |   | $                                | 2,293  |   |                | $      | 2,738  |                                         |   | $ | 5,031 |   |
|                                                    |   |                             |   |   |                |   |   |                                         |   |   |   |   |
| Additions                                               |   |                             | -      |   |                |   | -      |                                         |   |   | - |   |
| Amortization                                            |   |                             | (297   | )      |                |   | (662   | )                                            |   |   | (959 | ) |
| December 31, 2009                                       |   |                             | 1,996  |   |                |   | 2,076  |                                         |   |   | 4,072 |   |
|                                                    |   |                             |   |   |                |   |   |                                         |   |   |   |   |
| Additions                                               |   |                             | 333    |   |                |   | -      |                                         |   |   | 333 |   |
| Amortization                                            |   |                             | (281   | )      |                |   | (662   | )                                            |   |   | (943 | ) |
| December 31, 2010                                       |   | $                                | 2,048  |   |                | $      | 1,414  |                                         |   | $ | 3,462 |   |
|                                                    |   |                             |   |   |                |   |   |                                         |   |   |   |   |
| Weighted-average remaining amortization period in years |   |                             | 6.9    |   |                |   | 2.1    |                                         |   |   |   |   |

|                              |   |   |   |
|-----------------------------------|--------|--------|--------|
|                              |   |   |   |
| 2011                              |   | $      | 941    |   |
| 2012                              |   | $      | 937    |   |
| 2013                              |   | $      | 378    |   |
| 2014                              |   | $      | 259    |   |
| 2015                              |   | $      | 244    |   |
| Thereafter                        |   | $      | 703    |   |
| Total future amortization expense |   | $      | 3,462  |   |

----

|                                |   | As of December 31, |   |
|-------------------------------------|--------|--------------------|--------|
|                                |   | 2010               |   |   | 2009 |   |
|                                |   | (in thousands)     |   |
|                                |   |               |   |   |   |   |   |   |
| Beginning balance                   |   | $                  | -      |   |   | $ | - |   |
| Bad debt recovery (expense)         |   |               | (197   | ) |   |   | (9 | ) |
| Write-off of uncollectible accounts |   |               | 197    |   |   |   | 9 |   |
| Ending balance                      |   | $                  | -      |   |   | $ | - |   |

|              |   | As of December 31, |   |
|-------------------|--------|--------------------|--------|
|              |   | 2010               |   |   | 2009 |   |
|              |   | (in thousands)     |   |
|              |   |               |   |   |   |   |   |   |
| Beginning balance |   | $                  | (136   | ) |   | $ | (81 | ) |
| Provision         |   |               | 22     |   |   |   | (55 | ) |
| Charge-off        |   |               | -      |   |   |   | - |   |
| Ending balance    |   | $                  | (114   | ) |   | $ | (136 | ) |

|                             |   | December 31,   |   |
|----------------------------------|--------|----------------|--------|
|                             |   | 2010           |   |   | 2009 |   |
|                             |   | (in thousands) |   |
|                             |   |           |   |   |   |   |
| Accruals for disputed services   |   | $              | 2,318  |   |   | $ | 2,412 |   |
| Accrued operating expenses       |   |           | 2,042  |   |   |   | 1,608 |   |
| Accrued payroll related expenses |   |           | -      |   |   |   | 158 |   |
| Accrued interest                 |   |           | 5,053  |   |   |   | 3,114 |   |
| Total                            |   | $              | 9,413  |   |   | $ | 7,292 |   |

----

|                                    |   | Year Ended December 31, |   |
|-----------------------------------------|--------|----------------------------------------|--------|
|                                    |   | 2010                                   |   |   | 2009 |   |
|                                    |   | (in thousands)                         |   |
|  Beginning balance:                |   |                                   |   |   |   |   |
| Foreign currency translation adjustment |   | $                                      | (89    | ) |   | $ | 14 |   |
|                                    |   |                                   |   |   |   |   |   |   |
|  Annual Activity:                  |   |                                   |   |   |   |   |   |   |
| Foreign currency translation adjustment |   |                                   | (50    | ) |   |   | (103 | ) |
|                                    |   |                                   |   |   |   |   |   |   |
|  Ending balance                    |   | $                                      | (139   | ) |   | $ | (89 | ) |

|                                                    |   | As of December 31, |    |
|---------------------------------------------------------|--------|-----------------------------------|---------|
|                                                    |   | 2010                              |    |   | 2009 |   |
|                                                    |   | (in thousands)                    |    |
| Net operating loss carryforwards (NOL)                  |   | $                                 | 59,507  |   |   | $ | 57,200 |   |
| Capital loss                                            |   |                              | 3,343   |   |   |   | 3,343 |   |
| Write-off of long-lived assets                          |   |                              | 501     |   |   |   | 501 |   |
| Amortization of intangibles                             |   |                              | (579    | ) |   |   | (528 | ) |
| Stock-based compensation                                |   |                              | 2,397   |   |   |   | 2,337 |   |
| Capitalized software development costs and fixed assets |   |                              | 26      |   |   |   | 35 |   |
| Deferred revenue                                        |   |                              | 644     |   |   |   | 419 |   |
| Alternative minimum tax credit carryforward             |   |                              | 39      |   |   |   | 39 |   |
| Inventory reserve                                       |   |                              | 21      |   |   |   | 29 |   |
| Accruals                                                |   |                              | 2,459   |   |   |   | 2,319 |   |
| Impairment loss                                         |   |                              | 2,618   |   |   |   | 2,618 |   |
| Derivative gain/loss                                    |   |                              | 8,107   |   |   |   | 22,922 |   |
| Interest expense                                        |   |                              | 2,926   |   |   |   | 3,998 |   |
| Total deferred tax assets                               |   |                              | 82,009  |   |   |   | 95,232 |   |
| Valuation allowance                                     |   |                              | (82,009 | ) |   |   | (95,232 | ) |
| Net deferred tax asset                                  |   | $                                 | -       |   |   | $ | - |   |

----

|                                        |   | Year Ended December 31, |   |
|---------------------------------------------|--------|----------------------------------------|--------|
|                                        |   | 2010                                   |   |   | 2009 |   |
|                                        |   | (in thousands)                         |   |
| Expense/(benefit) at federal statutory rate |   | $                                      | 11,888 |   |   | $ | (22,880 | ) |
| State income taxes, net of federal benefit  |   |                                   | 709    |   |   |   | - |   |
| Permanent and other difference, net         |   |                                   | 626    |   |   |   | 539 |   |
| Decrease/(increase) in valuation allowance  |   | $                                      | 13,223 |   |   | $ | (22,341 | ) |

----

|   | · | Operating leases for office facilities, certain office and computer equipment; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | Consulting agreements that carry payment obligations into future years; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | Various payment arrangements with our vendors that call for fixed payments on past due liabilities; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | Notes payable to certain vendors that mature at various dates in the future; |
|--------|--------|------------------------------------------------------------------------------|

|   | · | An outstanding purchase price guarantee obligation of $4.5 million related to our 2006 acquisition of 12Snap, which we disposed of in 2007; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Convertible debentures with outstanding face amounts of $29.1 million. |
|--------|--------|------------------------------------------------------------------------|

|                                        |   | 2011           |   |   | 2012   |   |   | 2013   |   |   | 2014 |   |   | 2015   |   |   | Total  |   |
|---------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|--------|--------|--------|
|                                        |   | (in thousands) |   |
| Operating leases                            |   | $              | 218    |   |   | $      | 44     |   |   | $      | 9    |   |   | $      | -      |   |   | $      | - |   |   | $ | 271 |   |
| Vendor and consulting  agreements |   |           | 823    |   |   |   | 378    |   |   |   | 378  |   |   |   | 378    |   |   |   | 378 |   |   |   | 2,335 |   |
| Notes payable                               |   |           | 69     |   |   |   | -      |   |   |   | -    |   |   |   | -      |   |   |   | - |   |   |   | 69 |   |
| Purchase price guarantee obligation         |   |           | 4,535  |   |   |   | -      |   |   |   | -    |   |   |   | -      |   |   |   | - |   |   |   | 4,535 |   |
| Convertible debentures                      |   |           | -      |   |   |   | 29,066 |   |   |   | -    |   |   |   | -      |   |   |   | - |   |   |   | 29,066 |   |
| Total                                       |   | $              | 5,645  |   |   | $      | 29,488 |   |   | $      | 387  |   |   | $      | 378    |   |   | $      | 378 |   |   | $ | 36,276 |   |

----

----

|                 |   |               |   |                 |      |   | Shares Available For |   |
|---------------------------|--------|--------------------|--------|----------------------|-----------|--------|--------------------------------|--------|
|                      |   |               |   | Shares Reserved |      |   | Issuance at               |   |
| Plan                      |   | Date Adopted  |   | For Issuance    |      |   | December 31, 2010    |   |
|                 |   |               |   |                 |      |   |                           |   |
| 2005 Stock Option Plan    |   | December 16, 2005  |   |                 | 600,000   |   |                           |   | 600,000 |   |
| 2003 Stock Option Plan    |   | September 24, 2003 |   |                 | 1,500,000 |   |                           |   | 426,353 |   |
| 2003 Stock Incentive Plan |   | October 31, 2003   |   |                 | 300,000   |   |                           |   | 287,078 |   |
| 2002 Stock Option Plan    |   | June 6, 2002       |   |                 | 100,000   |   |                           |   | 100,000 |   |
|                      |   |               |   |                 |      |   |                           |   | 1,413,431 |   |

|                     |   | Year Ended December 31, |       |
|--------------------------|--------|----------------------------------------|------------|
|                     |   | 2010                                   |       |   | 2009 |   |
| Volatility               |   |                                   | 145-210%   |   |   |   | 138-282% |   |
| Expected dividends       |   |                                   | -          |   |   |   | - |   |
| Expected term (in years) |   |                                   | 6.79       |   |   |   | 5.62 |   |
| Risk-free rate           |   |                                   | 2.35-2.90% |   |   |   | 0.50% |   |

|                             |   |                |   |   |      |   |   |                |   |   | Weighted-     |   |
|----------------------------------|--------|---------------------|--------|--------|-----------|--------|--------|---------------------|--------|--------|---------------|--------|
|                             |   |                |   |   |      |   |   |                |   |   | Average       |   |
|                             |   |                |   |   | Weighted- |   |   |                |   |   | Contractual   |   |
|                             |   |                |   |   | Average   |   |   | Aggregate           |   |   | Life          |   |
|                             |   |                |   |   | Exercise  |   |   | Intrinsic           |   |   | Remaining     |   |
|                             |   | Shares              |   |   | Price     |   |   | Value               |   |   | in Years |   |
|                             |   | (in thousands) |   |   |      |   |   | (in thousands) |   |   |          |   |
| Outstanding at January 1, 2009   |   |                | 997    |   |      | $      | 2.00   |                |   |   |          |   |   |   |
| Granted                          |   |                | 283    |   |      | $      | 1.00   |                |   |   |          |   |   |   |
| Exercised                        |   |                | (116   | )      |      | $      | 1.00   |                |   |   |          |   |   |   |
| Forfeited                        |   |                | (218   | )      |      | $      | 6.00   |                |   |   |          |   |   |   |
| Outstanding at December 31, 2009 |   |                | 946    |   |      | $      | 2.00   |                |   | $      | 34            |   |   |   | 8.1 |   |
| Exercisable at December 31, 2009 |   |                | 697    |   |      | $      | 3.00   |                |   | $      | 25            |   |   |   | 7.8 |   |
|                             |   |                |   |   |      |   |   |                |   |   |          |   |   |   |   |   |
| Outstanding at December 31, 2009 |   |                | 946    |   |      | $      | 2.00   |                |   |   |          |   |   |   |   |   |
| Granted                          |   |                | 230    |   |      | $      | 0.20   |                |   |   |          |   |   |   |   |   |
| Exercised                        |   |                | -      |   |      | $      | -      |                |   |   |          |   |   |   |   |   |
| Forfeited                        |   |                | (474   | )      |      | $      | 2.24   |                |   |   |          |   |   |   |   |   |
| Outstanding at December 31, 2010 |   |                | 702    |   |      | $      | 1.55   |                |   | $      | -             |   |   |   | 6.8 |   |
| Exercisable at December 31, 2010 |   |                | 582    |   |      | $      | 1.70   |                |   | $      | -             |   |   |   | 7.0 |   |

----

|                           |   |           |   |   | Weighted   |   |
|--------------------------------|--------|----------------|--------|--------|------------|--------|
|                           |   |           |   |   | Average    |   |
|                           |   |           |   |   | Grant Date |   |
| Nonvested Shares               |   | Shares         |   |   | Fair Value |   |
|                           |   | (in thousands) |   |   |       |   |   |
| Nonvested at December 31, 2009 |   |           | 249    |   |       | $      | 1.00 |   |
| Granted                        |   |           | 230    |   |       | $      | 0.19 |   |
| Vested                         |   |           | (112   | )      |       | $      | 0.95 |   |
| Forfeited                      |   |           | (247   | )      |       | $      | 0.44 |   |
| Nonvested at December 31, 2010 |   |           | 120    |   |       | $      | 0.71 |   |

| Options Outstanding |   |                  | Options Exercisable |   |
|--------------------------|--------|-----------------------|--------------------------|--------|
|                     |   |                  |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise Prices     |   | Number of Shares |                     |   | Weighted-AverageRemainingLife |   |   | Weighted-Average ExercisePrice |   |   | Number of Shares |   |   | Weighted-AverageExercise Price |   |
|                     |   | (in thousands)   |                     |   | (in years) |   |   |   |   |   | (in thousands) |   |   |   |   |
|                     |   |                  |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| $0.14 to $4.70           |   |                  | 676                      |   |   |   | 7.8 |   |   | $ | 1.23 |   |   |   | 555 |   |   | $ | 1.32 |   |
| $5.00 to $10.00          |   |                  | 18                       |   |   |   | 4.9 |   |   | $ | 7.69 |   |   |   | 18 |   |   | $ | 7.69 |   |
| $12.50                   |   |                  | 5                        |   |   |   | 4.9 |   |   | $ | 12.50 |   |   |   | 6 |   |   | $ | 12.50 |   |
| $17.50                   |   |                  | 3                        |   |   |   | 5.1 |   |   | $ | 17.50 |   |   |   | 3 |   |   | $ | 17.50 |   |
|                     |   |                  | 702                      |   |   |   | 6.8 |   |   | $ | 1.55 |   |   |   | 582 |   |   | $ | 1.70 |   |

----

|               |   | Year Ended December 31, |   |
|--------------------|--------|----------------------------------------|--------|
|               |   | 2010                                   |   |   | 2009 |   |
|               |   | (in thousands)                         |   |
| Revenue:           |   |                                   |   |   |   |   |
| United States      |   | $                                      | 1,140  |   |   | $ | 584 |   |
| Germany            |   |                                   | 382    |   |   |   | 1,078 |   |
| Total              |   | $                                      | 1,522  |   |   | $ | 1,662 |   |
|               |   |                                   |   |   |   |   |   |   |
| Net income (loss): |   |                                   |   |   |   |   |   |   |
| United States      |   | $                                      | 37,004 |   |   | $ | (66,005 | ) |
| Germany            |   |                                   | (1,914 | ) |   |   | (1,373 | ) |
| Total              |   | $                                      | 35,090 |   |   | $ | (67,378 | ) |

|                 |   | As of December 31, |   |
|----------------------|--------|--------------------|--------|
|                 |   |  2010         |   |   |  2009 |   |
| Identifiable assets: |   |               |   |   |   |   |   |   |
| United States        |   | $                  | 8,179  |   |   | $ | 8,738 |   |
| Germany              |   |               | 394    |   |   |   | 686 |   |
| Total                |   | $                  | 8,573  |   |   | $ | 9,424 |   |

----

|   | • | Our senior management did not establish and maintain a proper tone as to internal control over financial reporting.  Specifically, our senior management was unable, due to time constraints, to promptly address all of the control weaknesses brought to their attention throughout this and the previous year’s audit; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We, through our senior management, failed to maintain formalized accounting policies and procedures. Once implemented, the polices and procedures should provide guidance to accounting personnel in the proper treatment and recording of financial transactions, as well as proper internal controls over financial reporting. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Name              |   | Age    |   | Position                                |
|-------------------|--------|--------|--------|-----------------------------------------|
|              |   |   |   |                                    |
| Laura A. Marriott |   | 41     |   | Chief Executive Officer and Chairperson |
| Michael W. Zima   |   | 53     |   | Chief Financial Officer and Secretary   |
| George G. O'Leary |   | 48     |   | Chief Operating Officer and Director    |
| James J. Keil     |   | 83     |   | Director                                |
| Sarah Fay         |   | 48     |   | Director                                |

----

----

----

|                                      |   |   |   |   |    |   |   |   |    |   |   |   | All          |   |   |   |    |
|-------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------------|--------|--------|--------|---------|
|                                      |   |   |   |   |    |   |   |   |    | Option |   |   | Other        |   |   |   |    |
| Name and                             |   |   |   | Salary |    |   | Bonus  |   |    | Awards |   |   | Compensation |   |   | Total  |    |
| Principal Position                   |   | Year   |   | ($)    |    |   | ($)    |   |    | ($)    |   |   | ($)          |   |   | ($)    |    |
|                                      |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |
| Laura A. Marriott                         |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |
| Chief Executive Officer                   |   | 2010   |   | $      | -       |   |   | $      | -       |   |   | $      | -            |   |   | $      | 146,440 |   |   | $ | 146,440 |   |
|                                      |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Michael W. Zima                           |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Chief Financial Officer                   |   | 2010   |   | $      | 140,000 |   |   | $      | 23,452  |   |   | $      | -            |   |   | $      | 9,162   |   |   | $ | 172,614 |   |
|                                      |   | 2009   |   | $      | 129,500 |   |   |   | -       |   |   | $      | 5,560        |   |   | $      | 3,849   |   |   | $ | 138,909 |   |
|                                      |   | 2008   |   | $      | 46,756  |   |   |   | -       |   |   | $      | 28,866       |   |   | $      | 464     |   |   | $ | 76,086 |   |
|                                      |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| George G. O'Leary                         |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Chief Operating Officer                   |   | 2010   |   | $      | -       |   |   | $      | -       |   |   | $      | -            |   |   | $      | 69,490  |   |   | $ | 69,490 |   |
|                                      |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Christian Steinborn                       |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Chief Executive officer of |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| NeoMedia Europe AG                        |   | 2010   |   | $      | 223,013 |   |   | $      | -       |   |   | $      | -            |   |   | $      | 15,366  |   |   | $ | 238,379 |   |
|                                      |   | 2009   |   | $      | 210,277 |   |   | $      | -       |   |   | $      | 8,432        |   |   | $      | 14,954  |   |   | $ | 233,663 |   |
|                                      |   | 2008   |   | $      | 245,361 |   |   | $      | -       |   |   | $      | -            |   |   | $      | 15,190  |   |   | $ | 260,551 |   |
|                                      |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Iain A. McCready                          |   |   |   |   |    |   |   |   |    |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Former Chief Executive Officer            |   | 2010   |   | $      | 187,412 |   |   | $      | 132,112 |   |   | $      | 2,892        |   |   | $      | 61,310  |   |   | $ | 383,726 |   |
|                                      |   | 2009   |   | $      | 234,982 |   |   | $      | -       |   |   | $      | 9,386        |   |   | $      | 9,699   |   |   | $ | 254,067 |   |
|                                      |   | 2008   |   | $      | 168,893 |   |   | $      | 88,568  |   |   | $      | 149,304      |   |   | $      | 30,327  |   |   | $ | 437,092 |   |

----

----

----

| Option Awards         |
|----------------------------|
|                       |   |   |   |   |   |   |   |   |   |   | Equity Incentive Plan |   |   |   |   |   |
|                       |   |   |   |   | Number of Securities |   |   | Awards: Number of |   |   |   |   |   |
|                       |   |   |   |   | Underlying |   |   | Securities Underlying |   |   | Option |   |   |
|                       |   |   |   |   | Unexercised Options |   |   | Unexercised |   |   | Exercise |   | Option |
|                       |   |   |   |   | Exercisable |   |   | Unexercisable |   |   | Unearned Options |   |   | Price |   | Expiration |
| Name                       |   |   |   |   |   | (#) |   |   |   | (#) |   |   |   | (#) |   |   | ($) |   | Date |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Laura A. Marriott          |   |   | (1 | ) |   |   | 12,500 |   |   |   | 37,500 |   |   |   | - |   |   | $ | 1.00 |   | 1/1/2019 |
| Chief Executive Officer    |   |   | (2 | ) |   |   | 1,775 |   |   |   | - |   |   |   | - |   |   | $ | 2.00 |   | 4/29/2019 |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael W. Zima            |   |   | (3 | ) |   |   | 2,500 |   |   |   | 2,500 |   |   |   | - |   |   | $ | 1.00 |   | 8/28/2018 |
| Chief Financial Officer    |   |   | (4 | ) |   |   | 22,500 |   |   |   | 22,500 |   |   |   | - |   |   | $ | 1.00 |   | 9/17/2018 |
|                       |   |   | (5 | ) |   |   | 5,250 |   |   |   | - |   |   |   | - |   |   | $ | 2.00 |   | 4/29/2019 |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| George G. O'Leary          |   |   | (6 | ) |   |   | 3,881 |   |   |   | - |   |   |   | - |   |   | $ | 4.00 |   | 7/20/2017 |
| Chief Operating Officer    |   |   | (6 | ) |   |   | 1,502 |   |   |   | - |   |   |   | - |   |   | $ | 10.00 |   | 7/20/2017 |
|                       |   |   | (7 | ) |   |   | 1,986 |   |   |   | - |   |   |   | - |   |   | $ | 4.00 |   | 10/3/2017 |
|                       |   |   | (8 | ) |   |   | 2,165 |   |   |   | - |   |   |   | - |   |   | $ | 4.00 |   | 1/21/2018 |
|                       |   |   | (9 | ) |   |   | 2,189 |   |   |   | - |   |   |   | - |   |   | $ | 4.00 |   | 4/17/2018 |
|                       |   |   | (10 | ) |   |   | 7,050 |   |   |   | - |   |   |   | - |   |   | $ | 2.00 |   | 4/29/2019 |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Christian Steinborn        |   |   | (11 | ) |   |   | 1,000 |   |   |   | - |   |   |   | - |   |   | $ | 4.50 |   | 2/23/2016 |
| Chief Executive Officer of |   |   | (11 | ) |   |   | 1,000 |   |   |   | - |   |   |   | - |   |   | $ | 7.50 |   | 2/23/2016 |
| NeoMedia Europe AG         |   |   | (11 | ) |   |   | 1,000 |   |   |   | - |   |   |   | - |   |   | $ | 12.50 |   | 2/23/2016 |
|                       |   |   | (11 | ) |   |   | 1,000 |   |   |   | - |   |   |   | - |   |   | $ | 17.50 |   | 2/23/2016 |
|                       |   |   | (12 | ) |   |   | 5,000 |   |   |   | - |   |   |   | - |   |   | $ | 4.70 |   | 2/15/2017 |
|                       |   |   | (12 | ) |   |   | 5,000 |   |   |   | - |   |   |   | - |   |   | $ | 0.22 |   | 2/15/2017 |
|                       |   |   | (12 | ) |   |   | - |   |   |   | - |   |   |   | 5,000 |   |   | Various |   | 2/15/2017 |
|                       |   |   | (13 | ) |   |   | 12,000 |   |   |   | 4,000 |   |   |   | - |   |   | $ | 1.05 |   | 12/20/2017 |
|                       |   |   | (14 | ) |   |   | 7,962 |   |   |   | - |   |   |   | - |   |   | $ | 2.00 |   | 4/29/2019 |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Iain A. McCready           |   |   | (15 | ) |   |   | 160,256 |   |   |   | - |   |   |   | - |   |   | $ | 1.00 |   | 10/8/2011 |
| Former Chief Executive     |   |   | (16 | ) |   |   | 160,256 |   |   |   | - |   |   |   | - |   |   | $ | 1.00 |   | 10/8/2011 |
| Officer                    |   |   | (17 | ) |   |   | 8,863 |   |   |   | - |   |   |   |   |   |   | $ | 2.00 |   | 10/8/2011 |
|                       |   |   | (18 | ) |   |   | 30,000 |   |   |   | - |   |   |   | - |   |   | $ | 0.20 |   | 10/8/2011 |

----

|   | (1) Ms. Marriott’s option grant on January 1, 2009 vests over a 4 year period, with 25% vesting on each subsequent anniversary date of the grant. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (2) Ms. Marriott’s’s option grant on April 29, 2009 vested in 12 equal monthly installments beginning on May 29, 2009 and was completely vested on April 29, 2010. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) Mr. Zima’s option grant on August 28, 2008 vests over a 4 year period, with 25% vesting on each subsequent anniversary date of the grant. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) Mr. Zima’s option grant on September 17, 2008 vests over a 4 year period, with 25% vesting on each subsequent anniversary date of the grant. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (5) Mr. Zima’s option grant on April 29, 2009 vested in 12 equal monthly installments beginning on May 29, 2009 and was completely vested on April 29, 2010. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) Mr. O’Leary’s option grants on July 20, 2007 vested in their entirety on July 20, 2007. |
|--------|---------------------------------------------------------------------------------------------------------|

|   | (7) Mr. O’Leary’s option grant on October 3, 2007 vested in its entirety on October 3, 2007. |
|--------|----------------------------------------------------------------------------------------------------------|

|   | (8) Mr. O’Leary’s option grant on January 21, 2008 vested in its entirety on January 21, 2008. |
|--------|------------------------------------------------------------------------------------------------------------|

|   | (9) Mr. O’Leary’s option grant on April 17, 2008 vested in its entirety on April 17, 2008. |
|--------|--------------------------------------------------------------------------------------------------------|

|   | (10) Mr. O’Leary’s option grant on April 29, 2009 vested in 12 equal monthly installments beginning on May 29, 2009 and was completely vested on April 29, 2010. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11) Dr Steinborn’s option grant on December 23, 2006 vested over a 3 year period, with 25% vesting on the grant date and 25% on each subsequent anniversary date of the grant. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) Dr. Steinborn’s incentive option agreement dated February 16, 2007 originally provided for up to 20,000 options to purchase our shares. Each year 25% of the original incentive option plan could be earned and vested based on the achievement of goals as determined by the Compensation Committee. It was determined that the first 25% increment of this plan, for options to purchase 5,000 shares, were earned and vested. It was determined that the second 25% increment of this plan was not earned. It was determined that the third 25% increment of this plan, for options to purchase 5,000 shares, were earned and vested. The vesting of the fourth 25% increment of this plan, for options to purchase 5,000 shares, was yet to be determined as of December 31, 2010. The exercise price of each portion of the options earned under this plan is established at the date it is earned. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13) Dr Steinborn’s option grant on December 20, 2007 vests over a 4 year period, with 25% vesting on each subsequent anniversary date of the grant. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14) Dr. Steinborn’s option grant on April 29, 2009 vested in 12 equal monthly installments beginning on May 29, 2009 and was completely vested on April 29, 2010. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (15) Mr. McCready’s option grant on June 10, 2008 vested in 15 equal monthly installments beginning on June 29, 2008 and was completely vested on August 29, 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (16) Mr. McCready’s option grant on November 15, 2008 vested in its entirety on November 29, 2009. |
|--------|----------------------------------------------------------------------------------------------------------|

|   | (17) Mr. McCready’s option grant on April 29, 2009 vested in 12 equal monthly installments beginning on May 29, 2009 and was completely vested on April 29, 2010. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (18) Mr. McCready’s option grant on April 29, 2010 vested in 12 equal monthly installments beginning on May 29, 2010. At the date of his termination, 30,000 options had vested. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|              |   | Fees           |   |   |   |   |   |   |   |   |         |   |   |   |    |
|-------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------------|--------|--------|--------|---------|
|              |   | Earned or |   |   | (a)    |   |   | (b)    |   |   | All          |   |   |   |    |
|              |   | Paid in   |   |   | Stock  |   |   | Option |   |   | Other        |   |   |   |    |
|              |   | Cash           |   |   | Awards |   |   | Awards |   |   | Compensation |   |   | Total  |    |
| Name              |   | ($)            |   |   | ($)    |   |   | ($)    |   |   | ($)          |   |   | ($)    |    |
|              |   |           |   |   |   |   |   |   |   |   |         |   |   |   |    |
| Laura A. Marriott |   | $              | 35,590 |   |   | $      | -      |   |   | $      | -            |   |   | $      | 110,850 |   |   | $ | 146,440 |   |
|              |   |           |   |   |   |   |   |   |   |   |         |   |   |   |    |   |   |   |   |   |
| George G. O'Leary |   | $              | 46,210 |   |   | $      | -      |   |   | $      | -            |   |   | $      | 23,280  |   |   | $ | 69,490 |   |
|              |   |           |   |   |   |   |   |   |   |   |         |   |   |   |    |   |   |   |   |   |
| James J. Keil     |   | $              | 50,120 |   |   | $      | -      |   |   | $      | -            |   |   | $      | -       |   |   | $ | 50,120 |   |
|              |   |           |   |   |   |   |   |   |   |   |         |   |   |   |    |   |   |   |   |   |
| Sarah Fay         |   | $              | -      |   |   | $      | -      |   |   | $      | -            |   |   | $      | -       |   |   | $ | - |   |

|   | · | $4,000 as a quarterly retainer for each independent member of the Board. |
|--------|--------|--------------------------------------------------------------------------|

|   | · | $4,000 for each regular quarterly meeting of the Board of Directors, for each independent member of the Board. |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | $250 for each unanimous consent resolution in-lieu of a meeting of the Board of Directors, for each independent member of the Board. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3,000 per quarter for the Audit Committee Chairman and $2,500 per quarter for each Audit Committee member for each regular quarterly meeting of the Audit Committee of the Board of Directors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3,000 for the Compensation Committee Chairman and $2,500 for each Compensation Committee member for each semi-annual quarterly meeting of the Compensation Committee of the Board of Directors. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $1,000 for the Compensation Committee Chairman and $500 for each Compensation Committee member for each unanimous consent resolution in-lieu of a meeting of the Compensation Committee of the Board of Directors. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $500 for the Stock Option Committee Chairman and $250 for each Stock Option Committee member for each unanimous consent resolution in-lieu of a meeting of the Stock Option Committee of the Board of Directors. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                |   |               |       |   |                 |   |   | Series C Convertible |   |   | Series D Convertible |   |
|---------------------------------------------------------------------|--------|--------------------|------------|--------|----------------------|--------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                                                |   | Common Stock  |       |   | Preferred Stock |   |   | Preferred Stock           |   |
|                                                                |   | Beneficial         |       |   | Percent of      |   |   | Beneficial                     |   |   | Percent of                |   |   | Beneficial |   |   | Percent of |   |
| Name and Address of Beneficial Owner  |   | Ownership (1) |       |   | Class (1)       |   |   | Ownership (1)             |   |   | Class (1)                 |   |   | Ownership (1) |   |   | Class (1) |   |
|                                                                |   |               |       |   |                 |   |   |                           |   |   |                           |   |   |   |   |   |   |   |
| Directors and Named Executive Officers                              |   |               |       |   |                 |   |   |                           |   |   |                           |   |   |   |   |   |   |   |
| Laura A. Marriott (2) (3)                                           |   |               | 26,775     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Michael W. Zima (2) (4)                                             |   |               | 17,750     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| George G. O'Leary (2) (5)                                           |   |               | 28,992     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Christian Steinborn (2) (6)                                         |   |               | 60,131     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| James J. Keil (2) (7)                                               |   |               | 56,025     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Sarah Fay (2) (8)                                                   |   |               | 11,111     |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Iain A. McCready (2) (9)                                            |   |               | 359,375    |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Officers and Directors as a Group (7 Persons) (10)                  |   |               | 560,159    |   |                 |   | *      |                           |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
|                                                                |   |               |       |   |                 |   |   |                           |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Beneficial Owners                                             |   |               |       |   |                 |   |   |                           |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| YA Global Investments, LP (11)                                      |   |               | 3,015,075  |   |                 |   | 5.2    | %                              |   |   | 5,256                          |   |   |   | 69.9 | % |   |   | 3,395 |   |   |   | 13.6 | % |
| Barry Liben (12)                                                    |   |               | 1,005,025  |   |                 |   | 1.7    | %                              |   |   | 660                            |   |   |   | 8.8 | % |   |   | - |   |   |   | * |   |
| Andypolo, LLC (13)                                                  |   |               | 1,005,025  |   |                 |   | 1.7    | %                              |   |   | 660                            |   |   |   | 8.8 | % |   |   | - |   |   |   | * |   |
| Westmount International Holdings Limited (14)                       |   |               | 1,005,025  |   |                 |   | 1.7    | %                              |   |   | 400                            |   |   |   | 5.3 | % |   |   | 21,605 |   |   |   | 86.4 | % |
| JMC Holdings, L.P. (15)                                             |   |               | 3,268,795  |   |                 |   | 5.6    | %                              |   |   | 200                            |   |   |   | 2.6 | % |   |   | - |   |   |   | * |   |
| Garden State Cardiology Retirement Trust (16)                       |   |               | 1,005,025  |   |                 |   | 1.7    | %                              |   |   | 135                            |   |   |   | 1.8 | % |   |   | - |   |   |   | * |   |
| David and Judith Klein JTWROS(17)                                   |   |               | 1,005,025  |   |                 |   | 1.7    | %                              |   |   | 210                            |   |   |   | 2.8 | % |   |   | - |   |   |   | * |   |
| BP GCL Section 3.4, LLC (18)                                        |   |               | 4,000,000  |   |                 |   | 6.9    | %                              |   |   | -                              |   |   |   | * |   |   |   | - |   |   |   | * |   |
| Total                                                               |   |               | 15,308,995 |   |                 |   | 26.2   | %                              |   |   | 7,521                          |   |   |   | 100.0 | % |   |   | 25,000 |   |   |   | 100.0 | % |
|                                                                |   |               |       |   |                 |   |   |                           |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares outstanding                                                  |   |               | 58,418,784 |   |                 |   |   |                           |   |   | 7,521                          |   |   |   |   |   |   |   | 25,000 |   |   |   |   |   |

----

|   |  (1) Applicable percentage of ownership is based on 58,418,784 shares of Common Stock outstanding as of March 22, 2011. Percentage ownership is determined based on shares owned together with securities exercisable or convertible into shares of Common Stock within 60 days of March 22, 2011 for each shareholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable, or exercisable within 60 days of March 22, 2011, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.  Our Common Stock, Series C preferred stock and Series D preferred stock are our only issued and outstanding classes of securities eligible to vote. However, due to contractual restrictions, the Series C preferred stock and Series D preferred stock are currently not eligible to vote. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |  (2) Address of the referenced individual is c/o NeoMedia Technologies, Inc., Two Concourse Parkway, Suite 500, Atlanta, GA, 30328. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) Laura Marriott is acting Chief Executive Officer and Chairperson of our Board of Directors. Ownership includes shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (4) Michael W. Zima is our Chief Financial Officer. Ownership includes shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) George G. O'Leary is our acting Chief Operating Officer and a member of our Board of Directors.  Ownership includes 10,220 shares owned by SKS Consulting of South Florida Corp, a company that Mr. O'Leary currently serves as President, and 18,772 shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) Christian Steinborn is Chief Executive Officer of our subsidiary NeoMedia Europe, AG.  Ownership includes 21,163 shares of common stock and 38,968 shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (7) James J. Keil is a member of our Board of Directors.  Ownership includes 25,000 shares of common stock and 31,025 shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) Sarah Fay is a member of our Board of Directors. Ownership includes 11,111 shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9) Iain A. McCready is our former Chief Executive Officer and former Chairman of our Board of Directors.  Ownership includes shares of common stock issuable upon exercise of stock options that are exercisable within 60 days of March 22, 2011. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (10) Includes an aggregate of 492,664 options to purchase shares of common stock which will have vested within 60 days of March 22, 2011 and 56,384 shares owned directly by our named executive officers and Directors. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11)  The address of YA Global Investments, L.P. (“YA Global”) is 101 Hudson Street, Suite 3700, Jersey City, NJ 07302. The information presented herein is based on information provided by YA Global and based on the records of the Company. Ownership includes 4,613 shares of Series C preferred stock and 3,395 shares of Series D preferred stock owned by YA Global; 61 shares of Series C preferred stock owned by a related entity, Yorkville Advisors GP, LLC; 1,005,025 shares of Common Stock and 319 shares of Series C preferred stock owned by Mr. Mark Angelo, an officer of YA Global; 1,005,025 shares of Common Stock and 94 shares of Series C preferred stock owned by Mr. David Gonzalez, an officer of YA Global; 1,005,025 shares of Common Stock and 169 shares of Series C preferred stock owned by Mr. Gerald Eicke, an officer of YA Global. Our Series C preferred stock and Series D preferred stock are entitled to vote on an as-converted basis with holders of our Common Stock with respect to the amount of Common Shares receivable upon conversion of such preferred stock. However the holders of our Series C preferred stock and Series D preferred stock are subject to contractual limitations in regards to their beneficial ownership, including their ability to exercise their voting rights, to the extent that they can not exceed 9.99% combined beneficial ownership. If such holders were to declare us in default or if they issue a notice waiving the 9.99% limitation, upon 61 days notice, and comply with the SEC’s beneficial ownership reporting requirements for affiliates, they would be able to vote their Series C preferred stock and Series D preferred stock on an as-converted basis. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) The address of Mr. Barry Liben is 5 Scarsdale, Livingston, NJ 07039. The information presented herein is based on our review of a Schedule 13D filed with the SEC by Mr. Liben and the records of the Company. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13) The address of Andypolo, LLC is 4206 Yoakman Blvd. Houston, TX 77006. The information presented herein is based on our review of a Schedule 13D filed with the SEC by Andypolo, LLC and Mr. David Houston, as well as the records of the Company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14) The address of Westmount International Holdings Limited is 433 Plaza Real, Suite 275,  Boca Raton, FL 33432. The information presented herein is based on our review of a Schedule 13D filed with the SEC by Westmount International Holdings Limited and Mr. Chris Alf, as well as the records of the Company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (15) The address of JMC Holdings, L.P. is 51 Madison Avenue, 31st Floor, New York, NY 10010. The information presented herein is based on our review of a Schedule 13D, a Schedule 13D/A, a Form 3 and several Form 4s as filed with the SEC by JMC Holdings, L.P. and Mr. J. Michael Cline, as well as the records of the Company. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (16) The address of Garden State Cardiology Retirement Trust is 10 Devonshire Road, Livingston, NJ 07039. The information presented herein is based on the records of the Company. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (17) The address of David and Judith Klein JTWROS is 14 Zeck Ct., Suffern, NY 10901. The information presented herein is based on the records of the Company. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (18) The address of BP GCL Section 3.4, LLC is 1180 Kane Concourse, Suite 310, Bay Harbor Islands, FL 33154. The information presented herein is based on information provided by BP GCL Section 3.4, LLC and Mr. Leigh M. Rothschild, as well as the records of the Company. Ownership includes 3,600,000 shares of Common Stock owned by BP GCL Section 3.4, LLC and 400,000 shares of Common Stock owned by Mr. Rothschild. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (b) | Exhibits |
|-----|----------|

| ExhibitNumber |         | Description                                                                                                                                                         |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                                |         |          |         |   |         |    |         |             |
| 3.1           |         | Articles of Incorporation of Dev-Tech Associates, Inc. and amendment thereto                                                                                        |         |          |         | SB-2   |         | 3.1     |         | 11/25/1996       |
| 3.2           |         | Bylaws of DevSys, Inc.                                                                                                                                              |         |          |         | SB-2   |         | 3.2     |         | 11/25/1996       |
| 3.3           |         | Restated Certificate of Incorporation of DevSys, Inc.                                                                                                               |         |          |         | SB-2   |         | 3.3     |         | 11/25/1996       |
| 3.4           |         | By-laws of DevSys, Inc.                                                                                                                                             |         |          |         | SB-2   |         | 3.4     |         | 11/25/1996       |
| 3.5           |         | Articles of Merger and Agreement and Plan of Merger of DevSys, Inc and Dev-Tech Associates, Inc.                                                                    |         |          |         | SB-2   |         | 3.5     |         | 11/25/1996       |
| 3.6           |         | Certificate of Merger of Dev-Tech Associates, Inc. into DevSys, Inc.                                                                                                |         |          |         | SB-2   |         | 3.6     |         | 11/25/1996       |
| 3.7           |         | Articles of Incorporation of Dev-Tech Migration, Inc. and amendment thereto                                                                                         |         |          |         | SB-2   |         | 3.7     |         | 11/25/1996       |
| 3.8           |         | By-laws of Dev-Tech Migration, Inc.                                                                                                                                 |         |          |         | SB-2   |         | 3.8     |         | 11/25/1996       |
| 3.9           |         | Restated Certificate of Incorporation of DevSys Migration, Inc.                                                                                                     |         |          |         | SB-2   |         | 3.9     |         | 11/25/1996       |
| 3.10          |         | Form of By-laws of DevSys Migration, Inc.                                                                                                                           |         |          |         | SB-2   |         | 3.1     |         | 11/25/1996       |
| 3.11          |         | Form of Agreement and Plan of Merger of Dev-Tech Migration, Inc. into DevSys Migration, Inc.                                                                        |         |          |         | SB-2   |         | 3.11    |         | 11/25/1996       |
| 3.12          |         | Form of Certificate of Merger of Dev-Tech Migration, Inc. into DevSys Migration, Inc.                                                                               |         |          |         | SB-2   |         | 3.12    |         | 11/25/1996       |
| 3.13          |         | Certificate of Amendment to Certificate of Incorporation of DevSys, Inc. changing our name to NeoMedia Technologies, Inc.                                           |         |          |         | SB-2   |         | 3.13    |         | 11/25/1996       |
| 3.14          |         | Form of Certificate of Amendment to Certificate of Incorporation of NeoMedia Technologies, Inc. authorizing a reverse stock split                                   |         |          |         | SB-2   |         | 3.14    |         | 11/25/1996       |
| 3.15          |         | Form of Certificate of Amendment to Restated Certificate of Incorporation of NeoMedia Technologies, Inc. increasing authorized capital and creating preferred stock |         |          |         | SB-2   |         | 3.15    |         | 11/25/1996       |
| 3.16          |         | Certificate of Amendment to the Certificate of Designation of the Series "C" Convertible Preferred Stock date January 5, 2010.                                      |         |          |         | 8-K    |         | 3.1     |         | 1/11/2010        |
| 3.17          |         | Certificate of Designation of the Series "D" Convertible Preferred Stock date January 5, 2010.                                                                      |         |          |         | 8-K    |         | 3.2     |         | 1/11/2010        |
| 3.18          |         | Certificate of Amendment to the Certificate of Designation of the Series "D" Convertible Preferred Stock dated January 7, 2010                                      |         |          |         | 8-K    |         | 3.3     |         | 1/11/2010        |
| 3.19          |         | Certificate of amendment to the certificate of designation of the series D convertible preferred stock issued by the Company to YA Global dated January 5, 2010.    |         |          |         | 8-K    |         | 3.1     |         | 3/11/2010        |
| 10.1          |         | Warrant dated March 30, 2005, granted by NeoMedia to Thornhill Capital LLC                                                                                          |         |          |         | S-3/A  |         | 10.12   |         | 7/18/2005        |
| 10.2          |         | Warrant dated March 30, 2005, granted by NeoMedia to Cornell Capital Partners LP                                                                                    |         |          |         | S-3/A  |         | 10.13   |         | 7/18/2005        |
| 10.3          |         | Definitive Sale and Purchase Agreement between NeoMedia and Gavitec                                                                                                 |         |          |         | 8-K    |         | 16.1    |         | 2/21/2006        |
| 10.4          |         | Definitive Sale and Purchase Agreement between NeoMedia and Sponge                                                                                                  |         |          |         | 8-K    |         | 16.1    |         | 2/22/2006        |
| 10.5          |         | Investment Agreement, dated February 17, 2006 between NeoMedia and Cornell Capital Partners                                                                         |         |          |         | 8-K    |         | 10.1    |         | 2/21/2006        |
| 10.6          |         | Investor Registration Rights Agreement, dated February 17, 2006 between NeoMedia and Cornell Capital Partners                                                       |         |          |         | 8-K    |         | 10.2    |         | 2/21/2006        |
| 10.7          |    | Irrevocable Transfer Agent Instruction, dated February 17, 2006, by and among NeoMedia, Cornell Capital Partners and American Stock Transfer & Trust Co.   |    |          |    | 8-K    |    | 10.3    |    | 2/21/2006        |

----

| ExhibitNumber |         | Description                                                                                                                                                          |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                                 |         |          |         |   |         |    |         |             |
| 10.8          |         | Warrant, dated February 17, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.4    |         | 2/21/2006        |
| 10.9          |         | Warrant, dated February 17, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.5    |         | 2/21/2006        |
| 10.10         |         | Warrant, dated February 17, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.6    |         | 2/21/2006        |
| 10.11         |         | Assignment Agreement, dated February 17, 2006 by NeoMedia and Cornell Capital Partners                                                                               |         |          |         | 8-K    |         | 10.7    |         | 2/21/2006        |
| 10.12         |         | Assignment of Common Stock, dated February 17, 2006 between NeoMedia and Cornell Capital Partners                                                                    |         |          |         | 8-K    |         | 10.8    |         | 2/21/2006        |
| 10.13         |         | Securities Purchase Agreement, dated August 24, 2006, between the Company and Cornell Capital Partners, LP                                                           |         |          |         | 8-K    |         | 10.1    |         | 8/30/2006        |
| 10.14         |         | Investor Registration Rights Agreement, dated August 24, 2006, between the Company and Cornell Capital Partners, LP                                                  |         |          |         | 8-K    |         | 10.2    |         | 8/30/2006        |
| 10.15         |         | Pledge and Security Agreement, dated August 24, 2006, between the Company and Cornell Capital Partners, LP                                                           |         |          |         | 8-K    |         | 10.3    |         | 8/30/2006        |
| 10.16         |         | Secured Convertible Debenture, dated August 24, 2006, issued by the Company to Cornell Capital Partners, LP                                                          |         |          |         | 8-K    |         | 10.4    |         | 8/30/2006        |
| 10.17         |         | Irrevocable Transfer Agent Instructions, dated August 24, 2006, by and among the Company, Cornell Capital Partners, LP and American Stock Transfer & Trust Co.   |         |          |         | 8-K    |         | 10.5    |         | 8/30/2006        |
| 10.18         |         | A Warrant, dated August 24, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.6    |         | 8/30/2006        |
| 10.19         |         | B Warrant, dated August 24, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.7    |         | 8/30/2006        |
| 10.20         |         | C Warrant, dated August 24, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.8    |         | 8/30/2006        |
| 10.21         |         | D Warrant, dated August 24, 2006                                                                                                                                     |         |          |         | 8-K    |         | 10.9    |         | 8/30/2006        |
| 10.22         |         | Amendment to Warrant No. CCP-002, dated August 24, 2006,  between the Company and Cornell Capital Partners, LP                                             |         |          |         | 8-K    |         | 10.1    |         | 8/30/2006        |
| 10.23         |         | Amendment to “A” Warrant No. CCP-001,  dated August 24, 2006, between the Company and Cornell Capital Partners, LP                             |         |          |         | 8-K    |         | 10.11   |         | 8/30/2006        |
| 10.24         |         | Amendment to “B” Warrant No. CCP-002, dated August 24, 2006, between the Company and Cornell Capital Partners, LP                                        |         |          |         | 8-K    |         | 10.12   |         | 8/30/2006        |
| 10.25         |         | Amendment to “C” Warrant No. CCP-003,  dated August 24, 2006, between the Company and Cornell Capital Partners, LP                             |         |          |         | 8-K    |         | 10.13   |         | 8/30/2006        |
| 10.26         |         | Definitive share purchase and settlement agreement between NeoMedia and Sponge, dated November 14, 2006                                                              |         |          |         | 8-K    |         | 16.1    |         | 11/20/2006       |
| 10.27         |         | Securities Purchase Agreement, dated December 29, 2006, between the Company and Cornell Capital Partners, LP                                                         |         |          |         | 8-K    |         | 10.1    |         | 1/8/2007         |
| 10.28         |         | Investor Registration Rights Agreement, dated December 29, 2006, between the Company and Cornell Capital Partners, LP                                                |         |          |         | 8-K    |         | 10.2    |         | 1/8/2007         |
| 10.29         |         | Secured Convertible Debenture, dated December 29, 2006, issued by the Company to Cornell Capital Partners, LP                                                        |         |          |         | 8-K    |         | 10.3    |         | 1/8/2007         |
| 10.30         |         | Irrevocable Transfer Agent Instructions, dated December 29, 2006, by and among the Company, Cornell Capital Partners, LP and American Stock Transfer & Trust Co. |         |          |         | 8-K    |         | 10.4    |         | 1/8/2007         |
| 10.31         |         | A Warrant, dated December 29, 2006                                                                                                                                   |         |          |         | 8-K    |         | 10.5    |         | 1/8/2007         |
| 10.32         |         | Amendment to Warrant No. CCP-002, dated December 29, 2006,  between the Company and Cornell Capital Partners, LP                                           |         |          |         | 8-K    |         | 10.6    |         | 1/8/2007         |
| 10.33         |         | Amendment to “A” Warrant No. CCP-001,  dated December 29, 2006, between the Company and Cornell Capital Partners, LP                           |         |          |         | 8-K    |         | 10.7    |         | 1/8/2007         |
| 10.34         |         | Amendment to “B” Warrant No. CCP-002, dated December 29, 2006, between the Company and Cornell Capital Partners, LP                                      |         |          |         | 8-K    |         | 10.8    |         | 1/8/2007         |
| 10.35         |         | Amendment to “C” Warrant No. CCP-003,  dated December 29, 2006, between the Company and Cornell Capital Partners, LP                           |         |          |         | 8-K    |         | 10.9    |         | 1/8/2007         |
| 10.36         |         | Amendment to “A” Warrant No. CCP-001,  dated December 29, 2006, between the Company and Cornell Capital Partners, LP                           |         |          |         | 8-K    |         | 10.1    |         | 1/8/2007         |
| 10.37         |         | Amendment to “B” Warrant No. CCP-001,  dated December 29, 2006, between the Company and Cornell Capital Partners, LP                           |         |          |         | 8-K    |         | 10.11   |         | 1/8/2007         |
| 10.38         |    | Amendment to “C” Warrant No. CCP-001,  dated December 29, 2006, between the Company and Cornell Capital Partners, LP                           |    |          |    | 8-K    |    | 10.12   |    | 1/8/2007         |

----

| ExhibitNumber |         | Description                                                                                                                                          |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                 |         |          |         |   |         |    |         |             |
| 10.39         |         | Securities Purchase Agreement, dated December 29, 2006, between the Company and Cornell Capital Partners, LP                                         |         |          |         | 8-K    |         | 10.13   |         | 1/8/2007         |
| 10.40         |         | Amendment Agreement I to the Sale and Purchase Agreement between NeoMedia and certain former shareholders of Gavitec AG, dated January 23, 2007      |         |          |         | 8-K    |         | 10.1    |         | 1/29/2007        |
| 10.41         |         | Consulting Agreement between the Company and SKS Consulting of South Florida Corp.                                                                   |         |          |         | 8-K    |         | 10.1    |         | 2/6/2007         |
| 10.42         |         | Securities Purchase Agreement between NeoMedia and Cornell Capital Partners LP, dated March 27, 2007                                                 |         |          |         | 8-K    |         | 10.1    |         | 3/27/2007        |
| 10.43         |         | Investor Registration Rights Agreement between NeoMedia and Cornell Capital Partners LP, dated March 27, 2007                                        |         |          |         | 8-K    |         | 10.2    |         | 3/27/2007        |
| 10.44         |         | Secured Convertible Debenture, issued by NeoMedia to Cornell Capital Partners, LP, dated March 27, 2007                                              |         |          |         | 8-K    |         | 10.3    |         | 3/27/2007        |
| 10.45         |         | Irrevocable Transfer Agent Instructions, by and among NeoMedia, Cornell Capital Partners, LP and Worldwide Stock Transfer, dated March 27, 2007      |         |          |         | 8-K    |         | 10.4    |         | 3/27/2007        |
| 10.46         |         | Warrant, issued by NeoMedia to Cornell Capital Partners, LP, dated March 27, 2007                                                                    |         |          |         | 8-K    |         | 10.5    |         | 3/27/2007        |
| 10.47         |         | Master Amendment Agreement, by and between NeoMedia and Cornell Capital Partners, LP, dated March 27, 2007                                           |         |          |         | 8-K    |         | 10.6    |         | 3/27/2007        |
| 10.48         |         | Security Agreement, by and between NeoMedia and Cornell Capital Partners, LP, dated on or about August 24, 2006                                      |         |          |         | 8-K    |         | 10.7    |         | 3/27/2007        |
| 10.49         |         | Security Agreement, by and between NeoMedia and Cornell Capital Partners, LP, dated March 27,2007                                                    |         |          |         | 8-K    |         | 10.8    |         | 3/27/2007        |
| 10.50         |         | Security Agreement (Patent), by and between NeoMedia and Cornell Capital Partners, LP, dated March 27, 2007                                          |         |          |         | 8-K    |         | 10.9    |         | 3/27/2007        |
| 10.51         |         | Pledge Shares Escrow Agreement, by and between NeoMedia and Cornell Capital Partners, dated March 27, 2007                                           |         |          |         | 8-K    |         | 10.1    |         | 3/27/2007        |
| 10.52         |         | Completion of Acquisition of Disposition of Assets of BSD Software Inc.                                                                              |         |          |         | 8-K/A  |         | 10.1    |         | 6/8/2007         |
| 10.53         |         | Registration Rights Agreement, by and between NeoMedia and YA Global Investments, L.P., dated August 24, 2007                                        |         |          |         | 8-K    |         | 10.1    |         | 8/30/2007        |
| 10.54         |         | Secured Convertible Debenture, issued by NeoMedia to YA Global Investments, dated August 24, 2007                                                    |         |          |         | 8-K    |         | 10.2    |         | 8/30/2007        |
| 10.55         |         | Irrevocable Transfer Agent Instructions, by and among NeoMedia, YA Global Investments, L.P. and Worldwide Stock Transfer, LLC, dated August 24, 2007 |         |          |         | 8-K    |         | 10.3    |         | 8/30/2007        |
| 10.56         |         | Warrant issued by NeoMedia to YA Global Investments, L.P., dated August 24, 2007                                                                     |         |          |         | 8-K    |         | 10.4    |         | 8/30/2007        |
| 10.57         |         | Repricing Agreement, by and between NeoMedia and YA Global Investments, L.P., dated August 24, 2007                                                  |         |          |         | 8-K    |         | 10.5    |         | 8/30/2007        |
| 10.58         |         | Security Agreement, by and between NeoMedia and YA Global Investments, L.P., dated August 24, 2007                                                   |         |          |         | 8-K    |         | 10.6    |         | 8/30/2007        |
| 10.59         |         | Security Agreement (Patent), by and between NeoMedia and YA Global Investments, L.P., dated August 24, 2007                                |         |          |         | 8-K    |         | 10.7    |         | 8/30/2007        |
| 10.60         |         | Secured Convertible Debenture, dated April 11, 2008, issued by the Company to YA Global Investments, L.P.                                            |         |          |         | 8-K    |         | 10.1    |         | 4/17/2008        |
| 10.61         |         | Secured Convertible Debenture, dated May 16, 2008, issued by the Company to YA Global Investments, L.P.                                              |         |          |         | 8-K    |         | 10.1    |         | 5/22/2008        |
| 10.62         |    | Warrant, dated May 16, 2008, issued by the Company to YA Global Investments, L.P.                                                                    |    |          |    | 8-K    |    | 10.2    |    | 5/22/2008        |

----

| ExhibitNumber |         | Description                                                                                                                                                             |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                                    |         |          |         |   |         |    |         |             |
| 10.63         |         | Secured Convertible Debenture, dated May 30, 2008, issued by the Company to YA Global Investments, L.P.                                                                 |         |          |         | 8-K    |         | 10.1    |         | 6/5/2008         |
| 10.64         |         | Warrant, dated May 30, 2008, issued by the Company to YA Global Investments, L.P.                                                                                       |         |          |         | 8-K    |         | 10.2    |         | 6/5/2008         |
| 10.65         |         | Settlement Agreement and Release, dated June 3, 2008, by and between the Company and William Hoffman                                                                    |         |          |         | 8-K    |         | 10.5    |         | 6/5/2008         |
| 10.66         |         | Employment Agreement, dated June 10, 2008, by and between NeoMedia Technologies, Inc. and Iain McCready                                                                 |         |          |         | 8-K    |         | 10.1    |         | 6/16/2008        |
| 10.67         |         | Secured Convertible Debenture, dated July 10, 2008, issued by the Company to YA Global Investments, L.P.                                                                |         |          |         | 8-K    |         | 10.1    |         | 7/16/2008        |
| 10.68         |         | Securities Purchase Agreement, dated July 29, 2008, by and between the Company and YA Global Investments, L.P.                                                          |         |          |         | 8-K    |         | 10.1    |         | 8/4/2008         |
| 10.69         |         | Secured Convertible Debenture, dated July 29, 2008, issued by the Company to YA Global Investments, L.P.                                                                |         |          |         | 8-K    |         | 10.2    |         | 8/4/2008         |
| 10.70         |         | Security Agreement, dated July 29, 2008, by and among the Company, each of the Company’s subsidiaries made a party thereto and YA Global Investments, L.P.        |         |          |         | 8-K    |         | 10.3    |         | 8/4/2008         |
| 10.71         |         | Patent Security Agreement, dated July 29, 2008, by and among the Company, each of the Company’s subsidiaries made a party thereto and YA Global Investments, L.P. |         |          |         | 8-K    |         | 10.4    |         | 8/4/2008         |
| 10.72         |         | Warrant 9-1A, dated July 29, 2008, issued by the Company to YA Global Investments, L.P.                                                                                 |         |          |         | 8-K    |         | 10.5    |         | 8/4/2008         |
| 10.73         |         | Warrant 9-1B, dated July 29, 2008, issued by the Company to YA Global Investments, L.P.                                                                                 |         |          |         | 8-K    |         | 10.6    |         | 8/4/2008         |
| 10.74         |         | Warrant 9-1C, dated July 29, 2008, issued by the Company to YA Global Investments, L.P.                                                                                 |         |          |         | 8-K    |         | 10.7    |         | 8/4/2008         |
| 10.75         |         | Warrant 9-1D, dated July 29, 2008, issued by the Company to YA Global Investments, L.P.                                                                                 |         |          |         | 8-K    |         | 10.8    |         | 8/4/2008         |
| 10.76         |         | Escrow Agreement, dated July 29, 2008, by and among the Company, YA Global Investments, L.P., Yorkville Advisors, LLC and David Gonzalez, Esq.                          |         |          |         | 8-K    |         | 10.9    |         | 8/4/2008         |
| 10.77         |         | Irrevocable Transfer Agent Instructions, dated July 29, 2008, by and among the Company, the Investor, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC            |         |          |         | 8-K    |         | 10.1    |         | 8/4/2008         |
| 10.78         |         | Letter Agreement, dated September 24, 2008, by and among NeoMedia Technologies, Inc. and YA Global Investments, L.P.                                                    |         |          |         | 8-K    |         | 10.1    |         | 10/1/2008        |
| 10.79         |         | Second Secured Convertible Debenture, dated October 28, 2008, issued by the Company to YA Global Investments, L.P.                                                      |         |          |         | 8-K    |         | 10.3    |         | 11/3/2008        |
| 10.80         |         | Revised Exhibit A to Escrow Agreement, dated October 28, 2008                                                                                                           |         |          |         | 8-K    |         | 10.12   |         | 11/3/2008        |
| 10.81         |         | Letter Agreement, dated March 27, 2009, by and between the Company and YA Global Investments, L.P.                                                                      |         |          |         | 8-K    |         | 10.13   |         | 4/13/2009        |
| 10.82         |         | Amendment Agreement, dated April 6, 2009, by and between the Company and YA Global Investments, L.P.                                                                    |         |          |         | 8-K    |         | 10.14   |         | 4/13/2009        |
| 10.83         |         | Third Secured Convertible Debenture (first closing), dated April 6, 2009, issued by the Company to YA Global Investments, L.P.                                          |         |          |         | 8-K    |         | 10.15   |         | 4/13/2009        |
| 10.84         |         | Waiver, effective as of December 31, 2008, by and between the Company and YA Global Investments, L.P.                                                                   |         |          |         | 8-K    |         | 10.16   |         | 4/13/2009        |
| 10.85         |    | Fourth Secured Convertible Debenture (second amended third closing), dated May 1, 2009, issued by the Company to YA Global Investments, L.P.                            |    |          |    | 8-K    |    | 10.15   |    | 5/7/2009         |

----

| ExhibitNumber |         | Description                                                                                                                                                                                      |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                                                             |         |          |         |   |         |    |         |             |
| 10.86         |         | Agreement, dated June 5, 2009 (Additional Agreement), by and between the Company and YA Global Investments, L.P.                                                                                 |         |          |         | 8-K    |         | 10.16   |         | 6/5/2009         |
| 10.87         |         | Fifth Convertible Debenture (Additional Agreement closing), dated June 5, 2009, issued by the Company to YA Global Investments, L.P.                                                             |         |          |         | 8-K    |         | 10.17   |         | 6/5/2009         |
| 10.88         |         | Agreement, dated July 15, 2009 (Second Additional Agreement), by and between the Company and YA Global Investments, L.P.                                                                         |         |          |         | 8-K    |         | 10.18   |         | 7/21/2009        |
| 10.89         |         | Sixth Convertible Debenture dated July 15, 2009, (Second Additional Debenture), issued by the Company to YA Global Investments, L.P.                                                             |         |          |         | 8-K    |         | 10.19   |         | 7/21/2009        |
| 10.90         |         | Agreement, dated July 17, 2009, by and between the Company and Silver Bay Software, LLC.                                                                                                         |         |          |         | 8-K    |         | 10.20   |         | 7/21/2009        |
| 10.91         |         | Agreement, dated July 17, 2009, by and between the Company and Mr. Greg Lindholm.                                                                                                                |         |          |         | 8-K    |         | 10.21   |         | 7/21/2009        |
| 10.92         |         | Non-Exclusive License Agreement between the Company and Mobile Tag, Inc. dated July 28, 2009                                                                                                     |         |          |         | 8-K    |         | 10.1    |         | 7/30/2009        |
| 10.93         |         | Agreement dated August 14, 2009 (Third Additional Agreement) by and between the Company and Y.A. Global Investments, L.P.                                                                        |         |          |         | 10-Q   |         | 10.124  |         | 8/14/2009        |
| 10.94         |         | Seventh Convertible Debenture dated August 14, 2009 (Fifth Additional Debenture) issued by the Company to Y.A. Global Investments, L.P.                                                          |         |          |         | 10-Q   |         | 10.125  |         | 8/14/2009        |
| 10.95         |         | Non-exclusive License Agreement with exclusive right to sub-license provision between Company and Neustar, Inc. dated October 2, 2009.                                                           |         |          |         | 8-K    |         | 10.1    |         | 10/6/2009        |
| 10.96         |         | Non-Exclusive License Agreement to use the Licenced Platform between the Company and Brand Extension Mobile Solutions, S.A., a Madrid (Spain) corporation (“BEMS"), dated October 7, 2009. |         |          |         | 8-K    |         | 10.1    |         | 10/13/2009       |
| 10.97         |         | Settlement Agreement and non-exclusive license and a sublicense between the Company and Scanbuy, Inc., dated October 16, 2009.                                                                   |         |          |         | 8-K    |         | 10.1    |         | 10/20/2009       |
| 10.98         |         | Investment Agreement between Company and YA Global dated January 5, 2010.                                                                                                                        |         |          |         | 8-K    |         | 10.1    |         | 1/11/2010        |
| 10.99         |         | Irrevocable Transfer Agent Instructions letter issued by Company to WorldWide Stock Transfer, LLC dated January 5, 2010.                                                                         |         |          |         | 8-K    |         | 10.2    |         | 1/11/2010        |
| 10.100        |         | Monitoring Fee Escrow Agreement between Company and YA Global dated January 5, 2010.                                                                                                             |         |          |         | 8-K    |         | 10.3    |         | 1/11/2010        |
| 10.101        |         | Investor Registration Rights Agreement between Company and YA Global dated January 5, 2010.                                                                                                      |         |          |         | 8-K    |         | 10.4    |         | 1/11/2010        |
| 10.102        |         | Issuance of Warrants by Company to YA Global dated January 5, 2010.                                                                                                                              |         |          |         | 8-K    |         | 10.5    |         | 1/11/2010        |
| 10.103        |         | Amendment to the August 24, 2006 Secured Convertible Debenture No. CCP-1 between the Company and YA Global dated January 5, 2010.                                                                |         |          |         | 8-K    |         | 10.6    |         | 1/11/2010        |
| 10.104        |         | Amendment to the December 29, 2006 Secured Convertible Debenture No. CCP-2 between the Company and YA Global dated January 5, 2010.                                                              |         |          |         | 8-K    |         | 10.7    |         | 1/11/2010        |
| 10.105        |    | Amendment to the March 27, 2007 Secured Convertible Debenture No. NEOM-4-1 between the Company and YA Global dated January 5, 2010.                                                              |    |          |    | 8-K    |    | 10.8    |    | 1/11/2010        |

----

| ExhibitNumber |         | Description                                                                                                                           |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                  |         |          |         |   |         |    |         |             |
| 10.106        |         | Amendment to the August 24, 2007 Secured Convertible Debenture No. NEOM-1-1 between the Company and YA Global dated January 5, 2010.  |         |          |         | 8-K    |         | 10.9    |         | 1/11/2010        |
| 10.107        |         | Amendment to the April 11, 2008 Secured Convertible Debenture No. NEO-2008-1 between the Company and YA Global dated January 5, 2010. |         |          |         | 8-K    |         | 10.10   |         | 1/11/2010        |
| 10.108        |         | Amendment to the May 16, 2008 Secured Convertible Debenture No. NEO-2008-2 between the Company and YA Global dated January 5, 2010.   |         |          |         | 8-K    |         | 10.11   |         | 1/11/2010        |
| 10.109        |         | Amendment to the May 29, 2008 Secured Convertible Debenture No. NEO-2008-3 between the Company and YA Global dated January 5, 2010.   |         |          |         | 8-K    |         | 10.12   |         | 1/11/2010        |
| 10.110        |         | Amendment to the July 10, 2008 Secured Convertible Debenture No. NEO-2008-4 between the Company and YA Global dated January 5, 2010.  |         |          |         | 8-K    |         | 10.13   |         | 1/11/2010        |
| 10.111        |         | Amendment to the July 29, 2008 Secured Convertible Debenture No. NEOM-9-1 between the Company and YA Global dated January 5, 2010.    |         |          |         | 8-K    |         | 10.14   |         | 1/11/2010        |
| 10.112        |         | Amendment to the October 28, 2008 Secured Convertible Debenture No. NEOM-9-2 between the Company and YA Global dated January 5, 2010. |         |          |         | 8-K    |         | 10.15   |         | 1/11/2010        |
| 10.113        |         | Amendment to the May 1, 2009 Secured Convertible Debenture No. NEOM-9-4 between the Company and YA Global dated January 5, 2010.      |         |          |         | 8-K    |         | 10.16   |         | 1/11/2010        |
| 10.114        |         | Amendment to the June 5, 2009 Secured Convertible Debenture No. NEOM-9-5 between the Company and YA Global dated January 5, 2010.     |         |          |         | 8-K    |         | 10.17   |         | 1/11/2010        |
| 10.115        |         | Amendment to the July 15, 2009 Secured Convertible Debenture No. NEOM-9-6 between the Company and YA Global dated January 5, 2010.    |         |          |         | 8-K    |         | 10.18   |         | 1/11/2010        |
| 10.116        |         | Amendment to the August 14, 2009 Secured Convertible Debenture No. NEOM-9-7 between the Company and YA Global dated January 5, 2010.  |         |          |         | 8-K    |         | 10.19   |         | 1/11/2010        |
| 10.117        |         | Amendment to the July 29, 2008 Secured Convertible Debenture No. NEOM-9-1B between the Company and YA Global dated January 5, 2010.   |         |          |         | 8-K    |         | 10.20   |         | 1/11/2010        |
| 10.118        |         | Amendment to the July 29, 2008 Secured Convertible Debenture No. NEOM-9-1C between the Company and YA Global dated January 5, 2010.   |         |          |         | 8-K    |         | 10.21   |         | 1/11/2010        |
| 10.119        |         | Amendment to the July 29, 2008 Secured Convertible Debenture No. NEOM-9-1D between the Company and YA Global dated January 5, 2010.   |         |          |         | 8-K    |         | 10.22   |         | 1/11/2010        |
| 10.120        |         | Amendment of employment agreement entered into on June 10, 2008 between the company and Iain A. McCready.                             |         |          |         | 8-K    |         | 10.2    |         | 1/20/2010        |
| 10.121        |         | Amended and restated licensing agreement dated October 2, 2009 with NeuStar, Inc.                                                     |         |          |         | 8-K    |         | 10.1    |         | 1/28/2010        |
| 10.122        |         | Agreement with Neu Star, Inc., dated February 12, 2010 (the Neu Star Mobile Codes Pilot Program Agreement).                           |         |          |         | 8-K    |         | 10.1    |         | 2/16/2010        |
| 10.123        |         | First amendment to the investment agreement between Company and  YA Global dated January 5, 2010.                           |         |          |         | 8-K    |         | 10.1    |         | 3/11/2010        |
| 10.124        |         | Special meeting of shareholders held March 30, 2010.                                                                                  |         |          |         | 8-K    |         | 10.1    |         | 4/2/2010         |
| 10.125        |    | Notification of new trading symbol "NEOMD" beginning May 10, 2010.                                                                    |    |          |    | 8-K    |    |    |    | 5/11/2010        |

----

| ExhibitNumber |   | Description                                                                                                                                                                                                  |   | FiledHerewith |   | Form   |   | Exhibit |   | Filing Date |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|--------|---------|--------|------------------|
|          |   |                                                                                                                                                                                                         |   |          |   |   |   |    |   |             |
| 10.126        |   | Securities Purchase Agreement, dated May 27, 2010, by and between the Company and YA Global Investments, L.P.                                                                                                |   |          |   | 8-K    |   | 10.1    |   | 6/3/2010         |
| 10.127        |   | Secured Convertible Debenture, dated May 27, 2010,  issued by the Company to YA Global Investments, L.P.                                                                                           |   |          |   | 8-K    |   | 10.2    |   | 6/3/2010         |
| 10.128        |   | Warrant No. 0510, dated May 27, 2010, issued by the Company to YA Global Investments, L.P.                                                                                                                   |   |          |   | 8-K    |   | 10.3    |   | 6/3/2010         |
| 10.129        |   | Global Warrant Amendment, dated May 27, 2010, issued by the Company to YA Global Investments, L.P.                                                                                                           |   |          |   | 8-K    |   | 10.4    |   | 6/3/2010         |
| 10.130        |   | Ratification Agreement, dated May 27, 2010, by and among the Company, each of the Company’s subsidiaries made a party thereto and YA Global Investments, L.P.                                          |   |          |   | 8-K    |   | 10.7    |   | 6/3/2010         |
| 10.131        |   | Irrevocable Transfer Agent Instructions, dated May 27, 2010, by and among the Company, the Investor, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                                                  |   |          |   | 8-K    |   | 10.1    |   | 6/3/2010         |
| 10.132        |   | Agreement, dated August 13, 2010, by and between the Company and YA Global Investments, L.P.                                                                                                                 |   |          |   | 8-K    |   | 10.1    |   | 8/19/2010        |
| 10.133        |   | Secured Convertible Debenture, No. NEOM-10-2, dated August 13, 2010,  issued by the Company to YA Global Investments, L.P.                                                                         |   |          |   | 8-K    |   | 10.2    |   | 8/19/2010        |
| 10.134        |   | Warrant, No. NEOM-0810, dated August 13, 2010, issued by the Company to YA Global Investments, L.P.                                                                                                          |   |          |   | 8-K    |   | 10.3    |   | 8/19/2010        |
| 10.135        |   | Agreement on the Pledge of Intellectual Property Rights as Collateral, dated August 13, 2010, by and between the Company’s wholly-owned subsidiary NeoMedia Europe AG, and YA Global Investments, L.P. |   |          |   | 8-K    |   | 10.6    |   | 8/19/2010        |
| 10.136        |   | Second Ratification Agreement, dated August 13, 2010, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P.                               |   |          |   | 8-K    |   | 10.7    |   | 8/19/2010        |
| 10.137        |   | Irrevocable Transfer Agent Instructions, dated August 13, 2010, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                                                  |   |          |   | 8-K    |   | 10.8    |   | 8/19/2010        |
| 10.138        |   | Security Transfer of Moveable Assets, dated August 13, 2010, by and between the Company’s wholly-owned subsidiary NeoMedia Europe AG, and YA Global Investments, L.P.                                  |   |          |   | 8-K    |   | 10.9    |   | 8/19/2010        |
| 10.139        |   | Agreement, dated September 29, 2010, by and between the Company and YA Global Investments, L.P.                                                                                                              |   |          |   | 8-K    |   | 10.1    |   | 10/1/2010        |
| 10.140        |   | Secured Convertible Debenture, No. NEOM-10-3, dated September 29, 2010,  issued by the Company to YA Global Investments, L.P.                                                                      |   |          |   | 8-K    |   | 10.2    |   | 10/1/2010        |
| 10.141        |   | Warrant, No. NEOM-0910, dated September 29, 2010, issued by the Company to YA Global Investments, L.P.                                                                                                       |   |          |   | 8-K    |   | 10.3    |   | 10/1/2010        |
| 10.142        |   | Third Ratification Agreement, dated September 29, 2010, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P.                             |   |          |   | 8-K    |   | 10.6    |   | 10/1/2010        |
| 10.143        |   | Irrevocable Transfer Agent Instructions, dated September 29, 2010, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                                               |   |          |   | 8-K    |   | 10.7    |   | 10/1/2010        |

----

| ExhibitNumber |         | Description                                                                                                                                                                     |         | FiledHerewith |         | Form   |         | Exhibit |         | Filing Date |
|---------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|--------|--------------|---------|--------------|------------------|
|          |         |                                                                                                                                                                            |         |          |         |   |         |    |         |             |
| 10.144        |         | Compromise Agreement dated October 19, 2010, executed by Iain A. McCready                                                                                                       |         |          |         | 8-K    |         | 10.1    |         | 10/20/2010       |
| 10.145        |         | Resignation Letter dated October 19, 2010, executed by Iain A. McCready                                                                                                         |         |          |         | 8-K    |         | 10.2    |         | 10/20/2010       |
| 10.146        |         | Agreement, dated October 28, 2010, by and between the Company and YA Global Investments, L.P.                                                                                   |         |          |         | 8-K    |         | 10.1    |         | 11/3/2010        |
| 10.147        |         | Secured Convertible Debenture, No. NEOM-10-4, dated October 28, 2010,  issued by the Company to YA Global Investments, L.P.                                           |         |          |         | 8-K    |         | 10.2    |         | 11/3/2010        |
| 10.148        |         | Warrant, No. NEOM-1010, dated October 28, 2010, issued by the Company to YA Global Investments, L.P.                                                                            |         |          |         | 8-K    |         | 10.3    |         | 11/3/2010        |
| 10.149        |         | Fourth Ratification Agreement, dated October 28, 2010, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P. |         |          |         | 8-K    |         | 10.6    |         | 11/3/2010        |
| 10.150        |         | Irrevocable Transfer Agent Instructions, dated October 28, 2010, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                    |         |          |         | 8-K    |         | 10.7    |         | 11/3/2010        |
| 10.151        |         | Agreement, dated December 14, 2010, by and between the Company and Rothschild Trust Holdings, LLC; BP BL Section 3.4, LLC; and Leigh M. Rothschild                              |         |          |         | 8-K    |         | 10.1    |         | 12/15/2010       |
| 10.152        |         | Bylaws of Neomedia Technologies, Inc. adopted December 16, 2010                                                                                                                 |         |          |         | 8-K    |         | 3.2     |         | 12/21/2010       |
| 10.153        |         | Agreement, dated December 15, 2010, by and between the Company and YA Global Investments, L.P.                                                                                  |         |          |         | 8-K    |         | 10.1    |         | 12/21/2010       |
| 10.154        |         | Secured Convertible Debenture, No. NEOM-10-5, dated December 15, 2010,  issued by the Company to YA Global Investments, L.P.                                          |         |          |         | 8-K    |         | 10.2    |         | 12/21/2010       |
| 10.155        |         | Warrant, No. NEOM-1210, dated December 15, 2010, issued by the Company to YA Global Investments, L.P.                                                                           |         |          |         | 8-K    |         | 10.3    |         | 12/21/2010       |
| 10.156        |         | Fifth Ratification Agreement, dated December 15, 2010, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P. |         |          |         | 8-K    |         | 10.6    |         | 12/21/2010       |
| 10.157        |         | Irrevocable Transfer Agent Instructions, dated December 15, 2010, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                   |         |          |         | 8-K    |         | 10.7    |         | 12/21/2010       |
| 10.158        |         | Agreement, dated December 21, 2010, by and between the Company and eBay Inc.                                                                                                    |         |          |         | 8-K    |         | 10.1    |         | 12/22/2010       |
| 10.159        |         | Agreement, dated January 10, 2011, by and between the Company and YA Global Investments, L.P.                                                                                   |         |          |         | 8-K    |         | 10.1    |         | 1/14/2011        |
| 10.160        |         | Secured Convertible Debenture, No. NEOM-11-1, dated January 10, 2011,  issued by the Company to YA Global Investments, L.P.                                           |         |          |         | 8-K    |         | 10.2    |         | 1/14/2011        |
| 10.161        |         | Warrant, No. NEOM-0111, dated January 10, 2011, issued by the Company to YA Global Investments, L.P.                                                                            |         |          |         | 8-K    |         | 10.3    |         | 1/14/2011        |
| 10.162        |    | Sixth Ratification Agreement, dated January 10, 2011, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P.  |    |          |    | 8-K    |    | 10.6    |    | 1/14/2011        |

----

| ExhibitNumber |   | Description                                                                                                                                                                      |   | FiledHerewith |   | Form   |   | Exhibit |   | Filing Date |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|--------|---------|--------|------------------|
|          |   |                                                                                                                                                                             |   |          |   |   |   |    |   |             |
| 10.163        |   | Irrevocable Transfer Agent Instructions, dated January 10, 2011, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                     |   |          |   | 8-K    |   | 10.7    |   | 1/14/2011        |
| 10.164        |   | Agreement, dated February 8, 2011, by and between the Company and YA Global Investments, L.P.                                                                                    |   |          |   | 8-K    |   | 10.1    |   | 2/11/2011        |
| 10.165        |   | Secured Convertible Debenture, No. NEOM-11-2, dated February 8, 2011,  issued by the Company to YA Global Investments, L.P.                                            |   |          |   | 8-K    |   | 10.2    |   | 2/11/2011        |
| 10.166        |   | Warrant, No. NEOM-0211, dated February 8, 2011, issued by the Company to YA Global Investments, L.P.                                                                             |   |          |   | 8-K    |   | 10.3    |   | 2/11/2011        |
| 10.167        |   | Seventh Ratification Agreement, dated February 8, 2011, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P. |   |          |   | 8-K    |   | 10.6    |   | 2/11/2011        |
| 10.168        |   | Irrevocable Transfer Agent Instructions, dated February 8, 2011, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                     |   |          |   | 8-K    |   | 10.7    |   | 2/11/2011        |
| 10.169        |   | Confidential License Agreement, dated December 21, 2010, by and between the Company and eBay Inc.                                                                                |   |          |   | 8-K    |   | 10.1    |   | 2/22/2011        |
| 10.170        |   | Agreement, dated March 11, 2011, by and between the Company and YA Global Investments, L.P.                                                                                      |   |          |   | 8-K    |   | 10.1    |   | 3/17/2011        |
| 10.171        |   | Secured Convertible Debenture, No. NEOM-11-3, dated March 11, 2011,  issued by the Company to YA Global Investments, L.P.                                              |   |          |   | 8-K    |   | 10.2    |   | 3/17/2011        |
| 10.172        |   | Warrant, No. NEOM-0311, dated March 11, 2011, issued by the Company to YA Global Investments, L.P.                                                                               |   |          |   | 8-K    |   | 10.3    |   | 3/17/2011        |
| 10.173        |   | Ratification Agreement, dated March 11, 2011, by and among the Company, each of the Company’s subsidiaries made a party thereto, and YA Global Investments, L.P.           |   |          |   | 8-K    |   | 10.6    |   | 3/17/2011        |
| 10.174        |   | Irrevocable Transfer Agent Instructions, dated March 11, 2011, by and among the Company, the Buyer, David Gonzalez, Esq. and WorldWide Stock Transfer, LLC                       |   |          |   | 8-K    |   | 10.7    |   | 3/17/2011        |
|          |   |                                                                                                                                                                             |   |          |   |   |   |    |   |             |
| 14            |   | Code of Professional Ethics                                                                                                                                                      |   |          |   | 10-K   |   | 14.1    |   | 4/3/2007         |
| 21            |   | Subsidiaries of the Registrant                                                                                                                                                   |   | X             |   |   |   |    |   |             |
| 23.1          |   | Consent of Kingery & Crouse, P.A.                                                                                                                                            |   | X             |   |   |   |    |   |             |
| 31.1          |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                          |   | X             |   |   |   |    |   |             |
| 31.2          |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                          |   | X             |   |   |   |    |   |             |
| 32.1          |   | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                     |   | X             |   |   |   |    |   |             |
| 32.2          |   | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                          |   | X             |   |   |   |    |   |             |

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|                 | NEOMEDIA TECHNOLOGIES, INC. |
|----------------------|-----------------------------|
|                 |                        |
| Date: March 25, 2011 |                        |
|                 |                        |
|                 | By:                         | /s/ Laura A. Marriott |   |
|                 |                        | Laura A. Marriott |
|                 |                        | Acting Chief Executive Officer, Principal Executive Officer |
|                 |                        |   |
|                 |                        | /s/ Michael W. Zima |   |
|                 |                        | Michael W. Zima |
|                 |                        | Chief Financial Officer, Principal Finance Officer and Principal Accounting Officer |

| Signatures                  |   | Title                                                                             |   | Date           |
|-----------------------------|--------|-----------------------------------------------------------------------------------|--------|----------------|
|                        |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
| /s/ Laura A. Marriott       |   | Acting Chief Executive Officer, Principal Executive Officer and Board Chairperson |   | March 25, 2011 |
| Laura A. Marriott           |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
| /s/ Michael W. Zima         |   | Chief Financial Officer, Principal Financial and Accounting  Officer    |   | March 25, 2011 |
| Michael W. Zima             |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
| /s/ George G. O’Leary |   | Acting Chief Operating Officer, Director                                          |   | March 25, 2011 |
| George G. O’Leary     |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
| /s/ James J. Keil           |   | Director                                                                          |   | March 25, 2011 |
| James J. Keil               |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
|                        |   |                                                                              |   |           |
| /s/ Sarah Fay               |   | Director                                                                          |   | March 25, 2011 |
| Sarah Fay                   |   |                                                                              |   |           |

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