As filed with the Securities and Exchange Commission on June 26, 2002
                              File No. ____________

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM S-8
                             Registration Statement
                        Under the Securities Act of 1933

                           NEOMEDIA TECHNOLOGIES, INC.
                       (Name of Registrant in its charter)

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

                          2201 SECOND STREET, SUITE 600
                            FORT MYERS, FLORIDA 33901
                                  941-337-3434
               (Address, including zip code, and telephone number,
        including area code, of Registrant's principal executive offices)

                           NEOMEDIA TECHNOLOGIES, INC.
                             2002 STOCK OPTION PLAN
                            (Full Title of the Plan)

                                CHARLES W. FRITZ
                          2201 SECOND STREET, SUITE 600
                            FORT MYERS, FLORIDA 33901
                                  941-337-3434
                               941-337-3668 - FAX
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 With copies to:


      Clay Parker                                 Charles W. Fritz
      Kirkpatrick & Lockhart LLP                  Charles T. Jensen
      Suite 200                                   NeoMedia Technologies, Inc.
      201 South Biscayne Blvd.                    2201 Second Street, Suite 600
      Miami, FL 33131                             Fort Myers, Florida 33901
      (305) 539-3300                              (239) 337-3434
      (305) 358-7095 Fax                          (239) 337-3668 Fax



<PAGE>

<TABLE>
<CAPTION>
                                   CALCULATION OF REGISTRATION FEE

-------------------------------------------------------------------------------------------------------
                                                          PROPOSED        PROPOSED
                                                           MAXIMUM        MAXIMUM
                                            AMOUNT        OFFERING       AGGREGATE       AMOUNT OF
          TITLE OF SECURITIES               TO BE         PRICE PER       OFFERING      REGISTRATION
           TO BE REGISTERED               REGISTERED      SHARE (2)         PRICE            FEE
-------------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>             <C>            <C>
Common Stock from Option Exercise (1)      3,000,000       $0.0100         30,000          $2.76

-------------------------------------------------------------------------------------------------------
Common Stock from Option Exercise (1)      3,040,000       $0.0500        152,000         $13.98
-------------------------------------------------------------------------------------------------------
Common Stock from Option Exercise (3)      3,400,000       $0.0900        340,000         $28.15
-------------------------------------------------------------------------------------------------------
  TOTAL REGISTRATION FEE                   9,440,000                      522,000         $44.89
-------------------------------------------------------------------------------------------------------

(1)    Represents  shares of common stock issued  directly to  consultants  and  employees of the Company
       under the  NeoMedia  2002 Stock  Option  Plan,  which would result from the exercise of the option
       rights granted to each of the individual shareholders.

(2)    Pursuant to Rule  457(h),  registration  fee is computed  upon the basis of the price at which the
       options may be exercised.

(3)    These shares being registered under this Registration  Statement are subject to issuance at prices
       that are currently undeterminable;  consequently,  $28.15 of the total registration fee being paid
       hereunder has been estimated/determined pursuant to Rule 457(h), and is based on the closing price
       of the Company's Common Stock on the OTCBB market on June 25, 2002.

</TABLE>

                                                    2
<PAGE>


                                     PART I

Pursuant to the Note to Part I of Form S-8,  information  required under Items 1
and 2 of Form S-8 is omitted as a part of this Registration Statement.

                                     PART II

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
------------------------------------------------

The following  documents  filed with the Securities and Exchange  Commission are
hereby incorporated by reference:

(a)  The Annual  Report of the  Company  on Form 10-K for the fiscal  year ended
     December 31, 2001.
(b)  Form 10-Q for the three-month period ending March 31, 2002.
(c)  Form 10-Q/A for the three- and  nine-month  periods  ending  September  30,
     2001.
(d)  Form 10-Q for the three- and six-month periods ending June 30, 2001.
(e)  Form 10-Q/A for the three-month period ending March 31, 2001.
(f)  Form  8-K/A  dated  November  5,  2001,  disclosing  change in  independent
     accountants.
(g)  Form 8-K/A dated June 6, 2001,  disclosing material purchase of assets from
     Qode.com,  Inc., except for the December 31, 2000 financial  statements and
     audit opinion  thereon  dated May 4, 2001 and the  financial  statements of
     Qode.Com,  Inc. (A Development  Stage  Enterprise) at December 31, 1999 and
     for the period from March 29, 1999  (inception)  through  December 31, 1999
     and the audit opinion dated July 21, 2000.  Such  financial  statements are
     included in this registration statement.
(h)  The  description  of the Company's  Common Stock,  par value $.01 per share
     (the "Common  Stock"),  which is contained  in the  Company's  Registration
     Statement on Form 8-A filed under the  Securities  Exchange Act of 1934, as
     amended (the "Exchange Act") on November 18, 1996,  including any amendment
     or report  filed  with the  Commission  for the  purpose of  updating  such
     description of Common Stock.

All  documents  subsequently  filed by the Company  pursuant to Sections  13(a),
13(c),  14 and 15(d) of the Securities  Exchange Act of 1934 prior to the filing
of a post-effective  amendment which indicates that all securities  offered have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be incorporated by reference in this Registration  Statement and to be
a part hereof from the date of filing such documents.


ITEM 4. DESCRIPTION OF SECURITIES.
---------------------------------

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
-----------------------------------------------

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
--------------------------------------------------

As permitted  by Delaware  General  Corporation  Law  ("DGCL"),  the Company has
included in its  Certificate  of  Incorporation  a provision  to  eliminate  the
personal  liability of its directors for monetary  damages for breach or alleged
breach of their fiduciary duties as directors,  except for liability (i) for any
breach of director's  duty of loyalty to the Company or its  stockholders,  (ii)
for acts or omissions not in good faith or which involved intentional misconduct
or a knowing  violation of law,  (iii) in respect of certain  unlawful  dividend
payments or stock redemptions or repurchases,  as provided in Section 174 of the
DGCL, or (iv) for any  transaction  from which the director  derived an improper
personal benefit.  The effect of this provision in the Company's  Certificate of
Incorporation  is to  eliminate  the rights of the Company and its  stockholders
(through  stockholders'  derivative  suits on behalf of the  Company) to recover
monetary  damages against a director for breach of the fiduciary duty of care as


                                       3
<PAGE>

a director  except in the situations  described in (i) through (iv) above.  This
provision  does not  limit  nor  eliminate  the  rights  of the  Company  or any
stockholder to seek  non-monetary  relief such as an injunction or rescission in
the event of a breach of a director's  duty of care.  These  provisions will not
alter the liability of directors under federal securities laws.


The Certificate of Incorporation and the by-laws of the Company provide that the
Company is required  and  permitted to  indemnify  its  officers and  directors,
employees and agents under certain  circumstances.  In addition, if permitted by
law, the Company is required to advance  expenses to its officers and  directors
as incurred in connection with  proceedings  against them in their capacity as a
director  or  officers  for which  they may be  indemnified  upon  receipt of an
undertaking  by or on behalf of such director or officer to repay such amount if
it  shall  ultimately  be  determined  that  such  person  is  not  entitled  to
indemnification.  At  present,  the  Company  is not  aware  of any  pending  or
threatened litigation or proceeding involving a director,  officer,  employee or
agent of the Company in which  indemnification  would be required or  permitted.
The Company has obtained directors and officers liability insurance. The Company
believes  that  its  charter  provisions  and  indemnification   agreements  are
necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification  for liabilities arising under the Securities Act may
be permitted to directors and officers of the Company  pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of the
Securities  and Exchange  Commission  ("Commission"),  such  indemnification  is
against  public  policy as expressed in the  Securities  Act and is,  therefore,
unenforceable.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
--------------------------------------------

Not Applicable


                                       4
<PAGE>


INDEX OF FINANCIAL STATEMENTS





Qode.com, Inc. financial statements for the year ended December 31, 2000.....F-2

Qode.com, Inc. (A Development Stage Enterprise) financial statements for Period
 from March 29, 1999 (inception) to December 31, 1999.......................F-21



                                      F-1


FINANCIAL INFORMATION

Report of Independent Certified Public Accountants

To Qode.com, Inc.:

We have audited the  accompanying  balance  sheet of  Qode.com,  Inc. (a Florida
corporation in the  development  stage) as of December 31, 2000, and the related
statements   of   operations,   changes  in  redeemable   preferred   stock  and
stockholders'  deficit,  and cash flows for the year then ended and the  related
statements of operations and cash flows for the period from inception (March 29,
1999) to December 31, 2000. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements  based  on our  audit.  We did  not  audit  the  financial
statements of Qode.com, Inc. for the period from inception to December 31, 1999.
Such  statements are included in the cumulative  inception to December 31, 2000,
totals of the statements of operations and cash flows and reflect total revenues
and net  loss of zero  percent  and 13  percent,  respectively,  of the  related
cumulative totals. Those statements were audited by other auditors, whose report
has been furnished to us, and our opinion,  insofar as it relates to amounts for
the period from  inception  to December  31,  1999,  included in the  cumulative
totals, is based solely upon the report of the other auditors.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit and the  report of the other  auditors
provide a reasonable basis for our opinion.

In our  opinion,  based on our audit and the report of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of  Qode.com,  Inc. as of December  31,  2000,  and the
results of its operations and its cash flows for the year then ended and for the
period from  inception to December  31,  2000,  in  conformity  with  accounting
principles generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,  the Company has suffered  losses from operations and the
current cash position of the Company raises  substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                                /s/ ARTHUR ANDERSEN LLP

Tampa, Florida,
May 4, 2001 (except with respect to the matter discussed in Note 13, as to which
the date is June 30, 2001)


                                       F-2
<PAGE>


                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

                        BALANCE SHEET - DECEMBER 31, 2000

                                         ASSETS                          Amount
                                                                         ------
CURRENT ASSETS:
      Cash and cash equivalents                                          $18,686
      Accounts receivable                                                  6,041
      Inventory                                                          218,690
      Other current assets                                                13,499
                                                                       ---------

                        Total current assets                             256,916

PROPERTY AND EQUIPMENT, net                                              875,263

CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                            2,359,932

DEPOSITS                                                                  39,539
                                                                       ---------
                                  Total assets                        $3,531,650
                                                                      ==========

                                      F-3
<PAGE>



                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

                        BALANCE SHEET - DECEMBER 31, 2000

                                   (continued)

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT       Amount
                                                                        ------

CURRENT LIABILITIES:
      Accounts payable                                                 $982,610
      Dividends payable                                                  94,119
      Accrued expenses                                                  425,103
      Current portion of notes payable                                3,617,323
      Current portion of capital lease obligations                      368,574
      Loans from officers                                               224,740
                                                                      ---------

                 Total current liabilities                            5,712,469

NOTES PAYABLE, net of current portion                                     5,857

CAPITAL LEASE OBLIGATIONS, net of current portion                       168,176
                                                                      ---------
                             Total liabilities                        5,886,502
                                                                      ---------
COMMITMENTS AND CONTINGENCIES

SERIES A 15% CUMULATIVE CONVERTIBLE REDEEMABLE
      PREFERRED STOCK, $.0001 par value; 3,000,000 shares
      authorized, 2,044,560 shares issued and outstanding,
      liquidation value of $2,502,641                                 2,480,991

STOCKHOLDERS' DEFICIT:
      Common stock, $.0001 par value; 25,000,000 shares
           authorized, 8,023,000 shares issued and outstanding              802
      Additional paid-in capital - common stock                       1,927,313
      Series U convertible preferred stock, $.0001
           par value; 1,500,000 shares authorized, issued
           and outstanding                                                  150
       Additional paid-in capital - preferred stock                   2,999,850
       Accumulated deficit                                           (9,763,958)
                                                                     -----------

                             Total stockholders' deficit             (4,835,843)

                             Total liabilities, redeemable
                                 preferred stock and
                                 stockholders' deficit               $3,531,650
                                                                     ===========

The accompanying notes are an integral part of this balance sheet.

                                      F-4

<PAGE>




                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

                             STATEMENT OF OPERATIONS

               FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD

       FROM MARCH 29, 1999 (DATE OF INCEPTION), THROUGH DECEMBER 31, 2000

                                                                   Cumulative
                                                                 from Inception
                                                                  March 29, 1999
                                                 Year Ended             to
                                                December 31,        December 31
                                                    2000               2000
                                                    ----               ----

REVENUE                                          $211,952           $211,952

COST OF GOODS SOLD                                213,345            213,345
                                                 --------           --------

GROSS MARGIN                                       (1,393)            (1,393)

COSTS AND EXPENSES:
      Research and development                 1,109,686           1,505,928
      Sales and marketing                        556,541             598,516
      General and administrative               5,839,413           6,686,825

              Total costs and expenses         7,505,640           8,791,269

NET INTEREST EXPENSE                           1,008,938             971,296
                                               ---------           ---------

NET LOSS                                      (8,515,971)         (9,763,958)

PREFERRED STOCK DIVIDENDS                       (356,203)           (552,200)

ACCRETION OF BENEFICIAL CONVERSION
     FEATURE ON PREFERRED STOCK                  (15,296)            (20,010)
                                                ---------           ---------

Net LOSS AVAILABLE TO COMMON STOCKHOLDERS    $(8,887,470)       $(10,336,168)
                                             ============       =============
NET LOSS PER SHARE - BASIC AND DILUTED            $(1.11)             $(1.29)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES       8,023,000           8,018,071
                                             ============       =============

The accompanying notes are an integral part of these statements.


                                      F-5
<PAGE>



                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

STATEMENT OF CHANGES IN REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

                      FOR THE YEAR ENDED DECEMBER 31, 2000
<TABLE>
<CAPTION>

                                                                                          Additional
                                                Series A                                   Paid-in      Series U Convertible
                                               Redeemable                                Capital for       Preferred Stock
                                               Preferred           Common Stock            Common
                                                Stock         Shares          Amount        Stock        Shares      Amount
                                             -------------  ---------      ----------  --------------  ---------    --------

<S>                                          <C>            <C>             <C>         <C>              <C>          <C>
BALANCE, December 31, 1999                     $2,154,711    8,023,000        $802         $(49,557)         --         $--
     Issuance of 19,560 shares of Series A
       preferred stock in exchange for
       services                                   48,900           --              --           --           --          --
     Issuance of Series U preferred stock             --           --              --           --     1,500,000        150
     Issuance of 372,780 warrants in
       exchange for services                          --           --              --     1,126,790          --          --
     Issuance of 326,666 warrants attached
       with notes payable                             --           --              --       675,681          --          --
     Issuance of employee stock options
       with exercise price below market
       value                                          --           --              --       150,216          --          --
     Re-pricing of employee stock options             --           --              --       395,682          --          --
     Series A preferred stock dividends           262,084          --              --      (262,084)         --          --
     Series U preferred stock dividends               --           --              --       (94,119)         --          --
     Accretion of beneficial conversion
       feature on preferred stock                 15,296           --              --       (15,296)         --          --
     Net loss                                         --           --              --           --           --          --
                                                      __           __              __           __           __          __
                                             -------------  ---------      ----------  --------------  ---------    --------
BALANCE, December 31, 2000                     $2,480,991    8,023,000        $802       $1,927,313    1,500,000       $150
                                             =============  ==========     ==========  ==============  =========    ========

                                               Additional
                                                Paid-in
                                               Capital for                       Total
                                                Preferred      Accumulated    Stockholders'
                                                 Stock           Deficit        Deficit

BALANCE, December 31, 1999                           --       $(1,247,987)     $(1,296,742)
     Issuance of 19,560 shares of Series A
       preferred stock in exchange for
       services                                      --               --               --
     Issuance of Series U preferred stock      2,999,850              --         3,000,000
     Issuance of 372,780 warrants in
       exchange for services                         --               --         1,126,790
     Issuance of 326,666 warrants attached
       with notes payable                            --               --           675,681
     Issuance of employee stock options
       with exercise price below market              --               --           150,216
       value
     Re-pricing of employee stock options            --               --           395,682
     Series A preferred stock dividends              --               --          (262,084)
     Series U preferred stock dividends              --               --           (94,119)
     Accretion of beneficial conversion
       feature on preferred stock                    --               --           (15,296)
     Net loss                                        --        (8,515,971)      (8,515,971)
                                               ----------     ------------     ------------

BALANCE, December 31, 2000                     $2,999,850     $(9,763,958)     $(4,835,843)
                                               ==========     ============     ============

The accompanying notes are integral part of this statement.

</TABLE>


                                       F-6
<PAGE>

                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

                             STATEMENT OF CASH FLOWS

               FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD

FROM MARCH 29, 1999 (DATE OF INCEPTION), THROUGH DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                                                    Cumulative from Inception
                                                                                     Year Ended         (March 29, 1999
                                                                                    December 31,              to
                                                                                       2000             December 31, 2000)
                                                                                       ----             ------------------
<S>                                                                             <C>                    <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                       $(8,515,971)            $(9,763,958)
     Adjustments to reconcile net loss to net cash used in
         operating activities-
              Depreciation and amortization                                             417,410                 434,932
              Series A preferred stock issued for services                               48,900                  48,900
              Warrants issued in exchange for services                                1,126,790               1,884,627
              Stock options issued with exercise price below market value               150,216                 150,216
              Expense related to the re-pricing of employee stock options               395,682                 395,682
              Changes in assets and liabilities-
                 Accounts receivable                                                     (6,041)                 (6,041)
                 Inventory                                                             (218,690)               (218,690)
                 Other current assets                                                     4,652                 (13,499)
                 Deposits                                                                (9,310)                (39,539)
                 Accounts payable                                                       831,022                 982,610
                 Accrued expenses                                                       377,857                 425,103
                                                                                        -------                 -------

                     Net cash used in operating activities                           (5,397,483)             (5,719,657)
                                                                                     -----------             -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                                (382,222)               (509,013)
     Capitalization of software development costs                                    (2,498,752)             (2,498,752)
                                                                                     -----------             -----------

                     Net cash used in investing activities                           (2,880,974)             (3,007,765)
                                                                                     -----------             -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of notes payable and detachable warrants                  4,298,861               3,623,180
     Proceeds from loans from officers                                                  151,407                 224,740
     Principal repayments of capital lease                                             (125,612)               (125,612)
     Proceeds from the issuance of common stock                                             --                   23,800
     Proceeds from the issuance of Series A redeemable preferred stock
          net of issuance costs of $25,000                                                  --                2,000,000
     Proceeds from issuance of Series U convertible preferred stock                   3,000,000               3,000,000
                                                                                      ----------              ---------

                     Net cash provided by financing activities                        7,324,656               8,746,108
                                                                                      ----------              ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                              (953,801)                 18,686

CASH AND CASH EQUIVALENTS, beginning of year                                            972,487                     --
                                                                                      ----------              ---------

CASH AND CASH EQUIVALENTS, end of year                                                  $18,686                 $18,686
                                                                                      ==========                =======
</TABLE>

                                      F-7
<PAGE>



                                 QODE.COM, INC.

                         A Development Stage Enterprise

                             STATEMENT OF CASH FLOWS

                      FOR THE YEAR ENDED DECEMBER 31, 2000
            AND THE PERIOD FROM MARCH 29, 1999 (DATE OF INCEPTION),
                           THROUGH DECEMBER 31, 2000

                                   (continued)

                                                                Cumulative from
                                                                   Inception
                                                                (March 29, 1999
                                              Year Ended               To
                                             December 31,          December 31,
                                                 2000                 2000)
                                                 ----                 ----

SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:
  Cash paid for interest                      $180,000             $160,189

SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:
    Accretion of redeemable preferred
     stock                                     $15,296               20,010
    Accrued dividends on Series A
     preferred stock                          $262,084              458,081
    Accrued dividends on Series U
     preferred stock                           $94,119               94,119
    Property and equipment acquired
     under capital lease                      $662,362              662,362


The accompanying notes are an integral part of these statements.


                                      F-8
<PAGE>


                                 QODE.COM, INC.

                        (A Development Stage Enterprise)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

1     NATURE OF BUSINESS ORGANIZATION

      Qode.com, Inc. (Qode.com or the Company) commenced operations on March 29,
      1999,  and  is  incorporated  in  the  State  of  Florida.  Qode.com  is a
      development stage company, as defined in Statement of Financial Accounting
      Standards  (SFAS) No. 7,  "Accounting  and Reporting By Development  Stage
      Enterprises".  The Company  intends to provide  manufacturers,  retailers,
      advertisers and users a unique tool for Website navigation through the use
      of imbedded  standard bar codes and Uniform Product Codes (UPC). It is the
      Company's  mission to develop,  operate,  maintain  and promote the use of
      Qode.com  technologies  to enable  any bar code to  interface  with  their
      technology.

      The Company's  financial  statements have been prepared  assuming that the
      Company will continue as a going concern.  The Company has incurred losses
      since its  inception  and during its  development  stage as it has devoted
      substantially  all of its efforts toward building network  infrastructure,
      internal  staffing,   developing  systems,  expanding  into  new  markets,
      building a  proprietary  database  and  raising  capital.  The Company has
      generated  little  revenue  to date and is  subject  to a number of risks,
      including  dependence  on key  individuals,  the  ability  to  demonstrate
      technological  feasibility,  and the need to  obtain  adequate  additional
      financing  necessary to fund the development and marketing of its products
      and services, and customer acceptance.  These conditions raise substantial
      doubt about the  Company's  ability to continue  as a going  concern.  The
      financial  statements  do not  include  any  adjustments  to  reflect  the
      possible future effects on the recoverability and classification of assets
      or the amounts and classification of liabilities that may results from the
      outcome of this uncertainty.

2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      USE OF ESTIMATES

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally accepted in the United States requires management to
      make estimates and assumptions  that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial  statements and the reported amounts of revenues and
      expenses  during the reporting  period.  Actual  results could differ from
      those estimates.

      CASH AND CASH EQUIVALENTS

      For purposes of reporting  cash flows,  the Company  considers  all highly
      liquid investments  purchased with an original maturity of three months or
      less to be cash equivalents.

      INVENTORY

      Inventory  is stated at the lower of cost or market,  and at December  31,
      2000  was  comprised  of  QoderTM  handheld  scanning  systems.   Cost  is
      determined using the weighted average method.


                                      F-9
<PAGE>

      PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost less  accumulated  depreciation.
      Repairs and maintenance  are charged to expense as incurred.  Depreciation
      is computed using the straight-line method over the estimated useful lives
      of the related assets.  Computer hardware and purchased software are being
      depreciated over a three-year period, and furniture and fixtures are being
      depreciated over a five-year period.

      Depreciation expense was $278,590 for the year ended December 31, 2000.

      CAPITALIZED SOFTWARE DEVELOPMENT COSTS

      In accordance with the American  Institute of Certified Public Accountants
      Statement of Position No. 98-1, "Accounting for Costs of Computer Software
      Developed  or  Obtained  for  Internal  Use,"  all  costs  related  to the
      development or purchase of internal use software other than those incurred
      during the application  development  stage are to be expensed as incurred.
      Costs incurred during the application development stage are required to be
      capitalized  and  amortized  over the  useful  life of the  software.  The
      Company has expensed  $1,109,686 in research and development costs for the
      year ended  December 31, 2000. The Company has  capitalized  $2,498,752 in
      software   development  costs  for  the  year  ended  December  31,  2000.
      Amortization expense was $138,820 for the year ended December 31, 2000.

      REDEEMABLE PREFERRED STOCK

      Redeemable  preferred  stock is  carried at the net  consideration  to the
      Company at time of issuance,  increased  by accrued and unpaid  cumulative
      dividends and periodic  accretion to  redemption  value using the interest
      method. Accrued and unpaid dividends and redemption accretion are affected
      by charges  against  retained  earnings,  or, in the  absence of  retained
      earnings, additional paid-in capital.

      REVENUE RECOGNITION

      Revenue is  generated  from the sale of Qode's  proprietary  hand held bar
      code scanners.  Revenue is recognized when the product is delivered to the
      customer.

      INCOME TAXES

      In accordance with Statement of Financial  Accounting Standards (SFAS) No.
      109,  "Accounting for Income Taxes",  income taxes are accounted for using
      the assets and liabilities  approach.  Deferred tax assets and liabilities
      are recognized for the future tax consequences attributable to differences
      between the financial  statement  carrying  amounts of existing assets and
      liabilities,  and their  respective  tax  bases.  Deferred  tax assets and
      liabilities  are  measured  using  enacted tax rates  expected to apply to
      taxable  income  in the years in which  those  temporary  differences  are
      expected to be recovered or settled.  Deferred tax assets are reduced by a
      valuation allowance when, in the opinion of management,  it is more likely
      than not that some  portion or all of the  deferred tax assets will not be
      recognized.  The Company has  recorded a 100%  valuation  allowance  as of
      December 31, 2000.


                                      F-10
<PAGE>

      COMPUTATION OF NET LOSS PER SHARE

      Basic and diluted  net loss per share is computed by dividing  net loss by
      the weighted average number of shares of common stock  outstanding  during
      the period. The Company has excluded all common stock equivalents from the
      calculation  of diluted net loss per share  because these  securities  are
      anti-dilutive.  The shares  excluded from the  calculation  of diluted net
      loss per share and reserved for future  issuance are detailed in the table
      below:

                                                                   2000
                                                                   ----
      Outstanding stock options                                 1,540,511
      Outstanding warrants                                      1,229,146
      Shares issuable on conversion of notes payable            6,800,000
      Shares issuable on conversion of Series A
         preferred stock                                        4,049,701

      Shares  issuable on conversion of notes payable were  calculated  based on
      the terms of the notes as if they were converted on December 31, 2000.

      FINANCIAL INSTRUMENTS

      The  Company  believes  that the fair value of its  financial  instruments
      approximate carrying value.

      CONCENTRATION OF CREDIT RISK

      Revenue  was  generated   from  the  selling  of  barcode   scanners  with
      approximately 91 percent of those sales to one customer.

      ACCOUNTING FOR STOCK-BASED COMPENSATION

      The  Company  has  adopted  SFAS  No.  123,  "Accounting  for  Stock-Based
      compensation."  The  provisions  of SFAS 123  allow  companies  to  either
      expense the estimated fair value of stock options or to continue to follow
      the intrinsic value method set forth in Accounting  Principles Board (APB)
      Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25), but
      disclose the pro forma  effects on net income or loss as if the fair value
      had been  expensed.  The Company has elected to apply APB 25 in accounting
      for its employee stock options and,  accordingly  recognizes  compensation
      expense for the difference between the fair value of the underlying common
      stock and the grant price of the option at the measurement date.

      RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998 the FASB  issued  SFAS No. 133,  "Accounting  for  Derivative
      Instruments and Hedging  Activities",  as amended by SFAS No. 137 and SFAS
      138.  SFAS No. 133,  as  amended,  establishes  accounting  and  reporting
      standards  for  derivative   instruments,   including  certain  derivative
      instruments  embedded in other contracts,  and for hedging activities.  It
      requires  that an entity  recognize  all  derivatives  as either assets of
      liabilities  in the balance  sheet and measure those  instruments  at fair
      value.  The  adoption of these new  accounting  standards  did not have an
      impact on the Company's financial position or results of operations.

      On December 3, 1999 the  Securities  and Exchange  Commission  (SEC) staff
      released Staff Accounting  Bulletin (SAB) No. 101, "Revenue  Recognition".
      This SAB provides guidance on the recognition, presentation and disclosure
      of revenue in financial  statements.  The Company  implemented SAB No. 101
      for the  quarter  ended  June 30,  2000.  It did not have an impact on the
      Company's results of operations.

                                      F-11
<PAGE>



      COMPREHENSIVE INCOME

      For the year ended December 31, 2000,  there were no  differences  between
      the balance  sheet and income  statement  and  therefore no  comprehensive
      income.

3     LOANS FROM OFFICERS

      Between  October and  December  2000,  several of the  Company's  officers
      elected to defer their salaries due to cash flow difficulties  experienced
      by the Company. The total amount deferred was $83,154.

      On November  28, 2000,  the Company  issued  promissory  notes to officers
      totaling  $135,000,  with an interest rate of 6.09 percent.  The principal
      and interest are payable on February 26, 2001

4     PROPERTY AND EQUIPMENT

      Property and equipment consists of the following as of December 31, 2000:

                                                                      2000
                                                                      ----

      Computer hardware and purchased software                    $1,139,578
      Furniture and fixtures                                          31,797
                                                                      ------

                                                                   1,171,375
        Less- Accumulated depreciation                              (296,112)
                                                                    ---------
                                                                    $875,263
                                                                    =========

5     NOTES PAYABLE

      Convertible Notes

      On January 18, 2000,  the Company  entered into a note purchase  agreement
      with an investor for $3,000,000,  with an interest rate of 12 percent. The
      principal and interest were due July 17, 2000.  The principal and interest
      are  convertible  at the option of the holder  upon or after a $10 million
      financing. The conversion rate is 85 percent of the price per share in the
      financing. In connection with this note, 200,000 warrants were issued with
      an exercise price of $4.50 per share for the Company's common stock. These
      warrants  may be  exercised  at  anytime  following  the  closing of a $10
      million  financing and expire January 17, 2005. The Company  allocated the
      proceeds from the issuance of the note between the note and warrants based
      on the relative fair value method.  The difference between the face amount
      of the note and the amount allocated to it was recorded as a discount, and
      amortized to interest expense over the life of the note.

      On August 1, 2000, the Company extended this note to November 17, 2000. As
      additional  consideration  for the  extension  of the  note,  the  Company
      reduced  the  exercise  price  of  the  200,000  warrants  to  $1.00.  The
      additional  expense of  $63,180  that  resulted  from the  re-pricing  was
      charged to interest  expense.  As of December 31,  2000,  the note had not
      been repaid.


                                      F-12
<PAGE>

      During  2000,  the  Company  entered  into  four  separate  note  purchase
      agreements  with  investors  totaling  $400,000 with interest  rates of 12
      percent. The principal and interest on three of the notes were due October
      9, 2000 through  November 4, 2000, and principal and interest on the other
      note is due January 6, 2001. The principal and interest are convertible at
      the  option  of the  holder  upon or  after a $7  million  financing.  The
      conversion rate is 85 percent of the price per share in the financing.  In
      connection with these notes,  26,666 warrants were issued with an exercise
      price of $2.00 per share for the Company's  common stock.  These  warrants
      may  be  exercised  at  anytime  following  the  closing  of a $7  million
      financing. The proceeds from the issuance of these notes and warrants were
      allocated  between  the two using the  relative  fair  value  method.  The
      resulting discount on the notes was amortized to interest expense over the
      life of the notes.

      OTHER NOTE PAYABLE

      During March 2000, the Company entered into a note agreement in the amount
      of $42,500, bearing interest at a rate of 11 percent per year and expiring
      on March 15,  2002,  to finance its phone  system.  The note is secured by
      telephone equipment.

      On November  28,  2000 and  December  14,  2000,  the  Company  signed two
      promissory notes in the amounts of $20,000 and $200,000,  bearing interest
      at a rate of 6.09  percent and 15 percent  per year,  with  principal  and
      accrued   interest  payable  February  26,  2001  and  January  28,  2001,
      respectively.  In  connection  with the  December  14, 2000 note,  100,000
      warrants  were  issued  with an  exercise  price of $.50 per share for the
      Company's  common  stock.  These  warrants  may be  exercised  at  anytime
      following  the  closing of the Next  Financing,  as defined in the warrant
      agreement.  The proceeds  from the issuance of this note and warrants were
      allocated  between  the two using the  relative  fair  value  method.  The
      resulting discount on the note is being amortized to interest expense over
      the life of the note.

      Notes payable consists of the following:

                                                                        Amount
                                                                        ------

Convertible notes, interest bearing at 12% per annum                 $3,400,000
Note payable, interest bearing at 11% per annum, due in monthly
  installments through March 2002                                        27,679
Note payable, unsecured interest bearing at 6.09% per annum, due
       February 2001                                                     20,000
Note payable, unsecured interest bearing at 15% per annum, due
       January 2001                                                     200,000
                                                                     ----------

                      Total notes payable                             3,647,679
Less discount                                                           (24,499)
Less- Current portion                                                (3,617,323)
                                                                     -----------

                      Notes payable, net of current portion              $5,857
                                                                         ======

      As of December 31, 2000 there was $197,740 of accrued interest.

6     INCOME TAXES

For the years ended December 31, 2000, the components of income tax expense were
as follows:

                                                                      2000
                                                                      ----
Current                                                                $-
Deferred                                                                -
                                                                        -
                                                                      ----
Income tax expense                                                     $-



                                      F-13
<PAGE>

The net amounts of deferred tax assets recorded in the balance sheet at December
31, 2000, are as follows:

                                                                        2000
                                                                        ----
Deferred tax asset:
      Depreciation of property and equipment                          $17,901
      Start-up costs                                                  199,566
      Net operating loss carryforward                               3,443,643
      Less- Valuation allowance                                    (3,661,110)

                Total deferred tax asset                                 $--
                                                                   ===========
Deferred tax liabilities:                                                $--
                                                                   -----------
                Total net deferred taxes                                 $--
                                                                   ===========

      SFAS No. 109  requires a valuation  allowance  to reduce the  deferred tax
      assets reported if, based on the weight of the evidence, it is more likely
      than not,  that some portion or all of the deferred tax assets will not be
      realized.  After  consideration  of all the  evidence,  both  positive and
      negative,  management has determined that a $3,661,110 valuation allowance
      at December 31, 2000 is necessary to reduce the deferred tax assets to the
      amount  that will more  likely  than not be  realized.  The  change in the
      valuation  allowance for the current year is  $3,194,880.  At December 31,
      2000,  the Company has  available  net  operating  loss  carryforwards  of
      $9,151,323, which expire in the year 2020 and 2019.

      A reconciliation  of income taxes computed at the U.S.  federal  statutory
      tax rate to income tax expense for the year ended December 31, 2000, is as
      follows:

                                                                       2000
                                                                       ----
      Taxes at the U.S. statutory rate                            $(2,895,430)
      State taxes, net of federal benefit                            (309,129)
      Nondeductible items                                               9,679
      Change in valuation allowance                                 3,194,880
                                                                  ------------

                         Total income tax expense                        $-
                                                                  ============

7     COMMITMENTS AND CONTINGENCIES

      LEGAL PROCEEDINGS

      The Company is not presently a party to any significant  litigation.  From
      time to time,  however,  the Company is involved in various  legal actions
      arising in the normal course of business,  which the Company believes will
      not materially affect the financial position or results of operations.

      EMPLOYMENT CONTRACTS

      The Company has employment  contracts with William Carpenter,  Greg Miller
      and Michael Miller beginning November 1, 2000.

      Future payments under the above employment contracts are:


                                      F-14
<PAGE>


      2001                                                           $450,000
      2002                                                            450,000
      2003                                                            375,000
                                                                      -------

                   Total                                           $1,275,000
                                                                   ==========

      CAPITAL LEASE OBLIGATIONS

      During April 2000, the Company  acquired  computer  equipment for $662,362
      under  a  capital   lease,   expiring  on  April  26,  2002.   Accumulated
      depreciation  on this  equipment  was  approximately  $166,000 at December
      31,2001

      Future minimum lease payments on capital lease  obligations as of December
      31,2000, are as follows:

      Year                                                            Amount
                                                                      ------
      2001                                                           $415,358
      2002                                                            173,519
                                                                     --------

                                                                      588,877
      Less - Amount representing interest on
             obligations under capital leases (15%)                   (52,127)
        Current portion of capital lease obligations                 (368,574)
                                                                     ---------

        Capital lease obligations, net of current portion            $168,176
                                                                     ========

      OPERATING LEASE OBLIGATIONS

      The Company leases its office  facility under a  non-cancelable  operating
      lease expiring in March 2005. Rental expense, net of sub-lease income, was
      $73,036 for the year ended December 31, 2000.

      Lease  commitments  under  this  non-cancelable  operating  leases  as  of
      December 31, 2000, are as follows:

           Year Ending                                         Amount
                                                               ------

              2001                                            $391,399
              2002                                             233,876
              2003                                             154,905
              2004                                             117,768
              2005                                               5,103
                                                                 -----

                                                               $903,051
                                                               ========

8     PREFERRED STOCK

      SERIES A 15% CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK

      The Board of Directors  (the Board) has  authorized  the issuance of up to
      3,000,000  shares  of  Series  A 15  percent  $.0001  par  value,  voting,
      cumulative, redeemable, convertible

                                      F-15
<PAGE>


      preferred stock (the Series A Preferred  Stock).  Series A Preferred Stock
      is  convertible  at any  time at the  option  of the  holder  prior to the
      closing of a Public  Offering,  as defined in the agreement,  or within 20
      days  following  receipt  of a Notice of  Redemption,  as  defined  in the
      agreement,  into the Company's common stock for each share of the Series A
      Preferred  Stock held plus  accrued and unpaid  dividends  on the Series A
      Preferred  Shares.   The  Series  A  Preferred  Stock  has  a  liquidation
      preference  of $1 per share  and is  mandatorily  redeemable  on April 15,
      2004.

      In June 2000,  the Company  issued 19,560 shares of the Series A Preferred
      Stock at $2.50 per share for services rendered.

      Dividends  on the  Series A  Preferred  Stock  accrue,  on a daily  basis,
      commencing  on the date of issuance at an interest  rate of 15 percent per
      annum and are payable on a semi-annual basis. The Company,  at its option,
      may pay dividends  either in cash or by the issuance of additional  shares
      of Series A Preferred Stock.  Aggregate cumulative dividends in arrears at
      December  31, 2000  totaled  $458,081,  and are  included in Series A 15 %
      cumulative  convertible  redeemable  preferred  stock on the  accompanying
      balance sheet.

      SERIES U CONVERTIBLE PREFERRED STOCK

      The Board has authorized the issuance of up to 1,500,000  shares of Series
      U, 8 percent $.0001 par value, voting,  cumulative,  convertible preferred
      stock  (the  Series  U  Preferred  Stock).  Series  U  Preferred  Stock is
      convertible  at any time at the option of the holder  prior to the closing
      of a Public Offering into the Company's common stock for each share of the
      Series U Preferred  Stock held plus  accrued and unpaid  dividends  on the
      Series U  Preferred  Shares.  Between May and  October  2000,  the Company
      issued  1,500,000  at $2  per  share,  with  proceeds  to the  Company  of
      $3,000,000.

      Dividends  on the  Series U  Preferred  Stock  accrue,  on a daily  basis,
      commencing  on the date of issuance  at an interest  rate of 8 percent per
      annum and are payable on a semi-annual basis. The Company,  at its option,
      may pay dividends  either in cash or by the issuance of additional  shares
      of Series U Preferred Stock.  Aggregate cumulative dividends in arrears at
      December 31, 2000, totaled $94,119.

9     COMMON STOCK

      The Company is authorized  to issue up to 25,000,000  shares of its $.0001
      par value  common  stock.  During  2000,  no shares of common  stock  were
      issued.  As of  December  31,  2000,  8,023,000  shares  were  issued  and
      outstanding.

10    STOCK BASED COMPENSATION

      STOCK WARRANTS GRANTED IN EXCHANGE FOR SERVICES

      During 2000, the Company  granted 372,780  warrants,  with exercise prices
      ranging from $1.00 to $4.50 per share, to consultants for certain advisory
      and consulting  services.  The warrants vest immediately upon issuance and
      can be exercised over a five-year period. In August 2000, 250,000 warrants
      granted at $4.50 were  re-priced to $1.00 per share.  In  September  2000,
      100,000  warrants  granted at $1.50 were re-priced to $0.01 per share. The
      Company  valued these  warrants,  and their  re-pricing,  at $1,126,790 in
      accordance  with SFAS 123,  and  recognized  the entire  amount in 2000 as
      general and  administrative  expenses  in the  accompanying  statement  of
      operations.

      STOCK WARRANTS GRANTED ATTACHED TO DEBT AGREEMENTS

      During 2000, the Company  granted 326,666  warrants,  with exercise prices
      ranging  from $.50 to $4.50,  attached  to various  debt  agreements.  The
      warrants  vest  immediately  upon  issuance  and can be  exercised  over a
      five-year period.  The Company applied APB Opinion No. 14, "Accounting for
      Convertible  Debt and Debt  Issued  with  Stock  Purchase  Warrants",  and
      accounted  for  the  portion  of the  proceeds  of the  debt  issued  with
      warrants,  which was  allocable to the  warrants,  as  additional  paid-in
      capital based on the relative fair values of the securities at the time of
      issuance, and also recognized a discount on the debt as a result.



                                      F-16
<PAGE>

      In September  2000,  200,000  warrants  granted at $4.50 were re-priced to
      $1.00 per share in  connection  with an  extension of the term date of the
      debt.  The Company  valued the  re-pricing at $63,180,  and recognized the
      entire amount in 2000 as interest expense in the accompanying statement of
      operations.

      Warrant activity for the year ended December 31, 2000, is as follows:

       Balance December 31, 1999                           529,700
       Issued                                              699,446
       Exercised                                                 -
       Expired                                                   -

       Balance December 31, 2000                         1,229,146
                                                         =========

      The following table summarizes  information about warrants  outstanding at
December 31, 2000, all of which are exercisable:

                                    Weighted Average
                       Number of        Remaining
Range of Exercise     Outstanding   Contractual Life     Weighted Average
     Prices            Warrants          (Years)          Exercise Price

$0.01 to  $0.50         200,000            3.3                $0.26
$1.00                   527,780            4.2                $1.00
$1.50                   429,700            3.8                $1.50
$2.00                    26,666            4.3                $2.00
$2.50                    45,000            4.2                $2.50
                         ------            ---                -----

                      1,229,146            3.9                $1.13
                      =========            ===                =====


      STOCK OPTIONS

      The Board  approves all  issuances  of stock  options.  All stock  options
      expire five years from the grant date. In general, options vest and become
      exercisable  one third on the one year  anniversary  of the date of grant,
      and the remainder vest evenly over the two years subsequent to that date.

      The following  table  summarizes  stock option activity for the year ended
      December 31, 2000:


                                      F-17
<PAGE>

                                                             2000
                                                            Wtd Avg
                                                 Options             Exercise
                                                (in 000's)             Price
                                                ----------           --------

      Outstanding at Beginning of Year             881                $1.36
      Granted                                    1,000                 1.10
      Exercised                                     --                 0.00
      Forfeited                                   (340)                1.63
                                                 ------               -----

      Outstanding at end of year                 1,541                $1.15
                                                 ------               -----

      Vested Options                               846                $0.56

      Remaining Options available for
      Grant                                      3,459

In June 2000,  the Company  reduced the  exercise  price on all its  outstanding
stock options.  As a result,  the Company  recognized  $395,682 in  compensation
expense in 2000 for the  vested  portion of these  options,  and will  recognize
$933,568 in subsequent periods as these options vest.

The Company  accounts for issuances to employees under APB 25, and  accordingly,
$545,898 of compensation expense, including the amount discussed above, has been
recognized for the year ended December 31, 2000.

SFAS 123 requires pro forma  information  regarding net income as if the Company
has accounted for its employee stock options under the fair value method of that
statement.  The fair value for these  options was estimated at the date of grant
using the Black-Scholes option pricing model with the following assumptions: (i)
risk-free  interest rate of 6 percent,  which  approximates  the four-year  U.S.
Treasury Bill rate at the date of grant,  (ii) dividend yield of 0 percent (iii)
expected  volatility  of 80  percent  (iv) and an average  expected  life of the
option of four years.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information is as follows:

                                                      Year Ended
                                                      December 31,
                                                         2000
                                                         ----
      Net loss:
         As reported                                  $(8,515,971)
         SFAS 123 pro forma                           $(8,902,427)


The  following  table  summarizes  the  weighted  average  fair value of options
granted to employees during the year ended December 31, 2000:


                                      F-18
<PAGE>

                                                          2000
                                                          ----
Stock Price Greater than Exercise Price
     Weighted Average Fair Value                         $2.98

Stock Price Equal to Exercise Price
     Weighted Average Fair Value                         $0.84

Stock Price Less than Exercise Price
     Weighted Average Fair Value                         $0.82


The  following  table  summarizes  information  about  Company's  stock  options
outstanding as of December 31, 2000:

                      Options Outstanding                  Options Exercisable

                     Shares       Wtd. Avg    Wtd. Avg     Options     Wtd. Avg.
Range of Exercise  Outstanding    Remaining   Exercise   Exercisable   Exercise
      Prices        (in 000's)       Life       Price     (in 000's)     Price
-----------------  ------------   ---------   --------   ------------  ---------

$.25                   350            3.5       $0.25        239         $0.25
$.50                   371            4.3       $0.50        341         $0.50
$.75                   375            4.2       $0.75        185         $0.75
$1.00 to $1.50         445            4.4       $1.05         81         $1.26
                       ---            ---       -----        ---         -----

                     1,541                                   846         $0.56
                     =====                                   ===         =====


11    RELATED PARTIES

The Company's  primary legal  counsel  holds  3,200,000  shares of the Company's
common  stock in trust for the law firm's  partners.  During  2000,  the Company
recorded expenses of approximately $123,000 related to services performed by its
primary legal counsel. The Company owed its primary legal counsel  approximately
$61,000 at December 31, 2000.


                                      F-19
<PAGE>


During 2000, Q Productions,  Inc., whose owners also own 4,800,000 shares of the
Company,  provided various information  technology services to the Company.  The
Company  recorded   approximately  $930,364  in  expenses  related  to  services
performed  by Q  Productions,  Inc. for the year ended  December  31, 2000.  The
Company owed Q Productions,  Inc. approximately $171,000 at December 31, 2000. Q
Productions, Inc. rented space from Qode.com in 2000 for $43,167 in total.

During 2000, the Company granted 20,000 warrants with an exercise price of $1.00
per share to Q Productions, Inc.

The Company has issued several promissory notes to officers (see Note 3).

12    SUBSEQUENT EVENTS

On January 11, 2001, the Company entered into a note purchase  agreement with an
investor for $300,000,  with an interest  rate of 18 percent.  The principal and
interest are due March 1, 2001.

In January  2001,  the Company  entered into a short-term  loan  agreement  with
NeoMedia  Technologies,  Inc. ("NeoMedia") for the amount of $440,000.  The note
was  forgiven in March 2001 upon the  acquisition  of  substantially  all of the
Company's assets by NeoMedia.

On March 1, 2001, NeoMedia purchased all of the assets of the Company other than
cash  including  but not limited to,  contracts,  customer  lists,  licenses and
intellectual  property.  In consideration for these assets, the Company received
1,676,500  shares of  NeoMedia's  Common  Stock.  In addition,  NeoMedia  issued
274,699  of its  Common  Stock to  certain  creditors  of the  Company,  for the
repayment of $1,561,037 of debt,  forgave the $440,000  short-term note due from
the Company (see above paragraph),  and assumed approximately  $1,407,000 of the
Company's  liabilities.  The 1,676,500 shares paid to the Company are to be held
in escrow for one year, and are subject to downward  adjustment,  based upon the
achievement of certain  performance  targets over the period of March 1, 2001 to
February 28, 2002.

Notes  payable as of  December  31,  2000 that were not  acquired as part of the
March 1, 2001 sale totaled 3,000,000 as of December 31, 2000.

13    SUBSEQUENT EVENTS

On May 31, 2001, three creditors of Qode.com,  Inc, filed in the U.S. Bankruptcy
Court an involuntary bankruptcy petition for Qode.com,  Inc. Qode.com,  Inc. has
consulted  with legal counsel and will be opposing the Chapter 7 proceeding  and
plans to proceed under Chapter 11, U.S. Code to reorganize its debts.


                                      F-20
<PAGE>


               Report of Independent Certified Public Accountants

The Stockholders and Board of Directors Qode.com, Inc.

We have audited the accompanying  balance sheet of Qode.com,  Inc. (the Company)
(a  development  stage  enterprise)  as of  December  31,  1999 and the  related
statement of operations,  and statement of changes in redeemable preferred stock
and stockholders' deficit, and statement of cash flows for the period from March
29, 1999 (inception)  through December 31, 1999. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Qode.com,  Inc. at December 31,
1999,  and the results of its operations and its cash flows for the period March
29, 1999  (inception)  through  December 31, 1999, in conformity with accounting
standards generally accepted in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As more  fully  described  in Note 1,  the
Company, which is in the developmental stages has incurred a net operating loss,
experienced  negative cash flow from  operations and has a net capital  deficit.
These conditions raise substantial doubt about the Company's ability to continue
as a going  concern.  Management's  plans in regards to these  matters  are also
described in Note 1. The financial  statements do not include any adjustments to
reflect the possible future effects on the  recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

                                                           /s/ ERNST & YOUNG LLP
West Palm Beach, Florida

July 21, 2000,
except for the seventh paragraph of Note 8,
as to which the date is June 30, 2001


                                      F-21
<PAGE>


                                 QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                                  BALANCE SHEET

                                DECEMBER 31, 1999

Assets
Current assets:
    Cash and cash equivalents                                      $972,487
    Other current assets                                             18,151
                                                                    -------

Total current assets                                                990,638

Property and equipment, net                                         109,269
Deposits                                                             30,229
                                                                    -------

Total assets                                                     $1,130,136
                                                                 ==========

Liabilities, redeemable preferred stock and stockholders' deficit
Current liabilities:
    Accounts payable                                               $151,588
    Accrued expenses                                                 47,246
    Due to officers                                                  73,333
                                                                   --------

Total current liabilities                                           272,167

15% cumulative convertible redeemable preferred stock,
    $.0001 par value, 3,000,000 shares authorized,
    2,025,000 shares issued and outstanding, liquidation
    value of $2,221,000                                           2,154,711

Commitments

Stockholders' deficit:
    Common stock, $.0001 par value, 25,000,000 shares
    authorized, 8,023,000 shares issued and outstanding                 802
    Capital deficiency                                              (49,557)
    Deficit accumulated during the development stage             (1,247,987)
                                                                 -----------
Total stockholders' deficit                                      (1,296,742)
                                                                 -----------

Total liabilities, redeemable preferred stock and
    stockholders' deficit                                        $1,130,136
                                                                 ===========

SEE ACCOMPANYING NOTES.


                                      F-22
<PAGE>


                                 QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                             STATEMENT OF OPERATIONS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

Costs and expenses:
     Research and development                                      $396,242
     Sales and marketing                                             41,975
     General and administrative                                     847,412
                                                                  ----------

Total costs and expenses                                          1,285,629
Net interest income                                                 (37,642)
                                                                  ----------

Net loss                                                         (1,247,987)

Preferred dividends and redemption accretion                       (200,711)
                                                                 -----------

Net loss applicable to common stockholders                      $(1,448,698)
                                                                ============

See accompanying notes.


                                      F-23
<PAGE>


                                 QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                       STATEMENT OF CHANGES IN REDEEMABLE
                    PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                                            Deficit
                                                                                          Accumulated
                                   Redeemable          Common Stock                        During the           Total
                                   Preferred                                 Capital       Development      Stockholders'
                                     Stock          Shares       Amount     Deficiency        Stage            Deficit
                                   -----------      ------       ------     ----------    ------------      -------------
<S>                               <C>           <C>            <C>           <C>         <C>              <C>

   Issuance of common stock
     on March 29, 1999                   $--       8,000,000      $800            $--             $--             $800
     (inception)
   Issuance of redeemable
     preferred stock with
     detachable warrants
     valued at $46,000, net
     of issuance costs of           1,954,000            --         --          46,000             --           46,000
     $25,000
   Issuance of common stock               --          23,000         2          22,998             --           23,000
   Issuance of warrants in
     exchange for services                --             --         --          82,156             --           82,156
   Preferred dividends and
     redemption accretion             200,711            --         --        (200,711)            --         (200,711)

   Net loss                               --             --         --             --       (1,247,987)     (1,247,987)
                                   ----------      ---------     ------      ----------    ------------    ------------


Balance at December 31, 1999       $2,154,711      8,023,000      $802        $(49,557)    $(1,247,987)    $(1,296,742)
                                   ==========      =========     ======      ==========    ============    ============
</TABLE>

SEE ACCOMPANYING NOTES.


                                      F-24
<PAGE>

                                 QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                             STATEMENT OF CASH FLOWS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

Operating activities
Net loss                                                          $(1,247,987)
Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                      17,522
    Issuance of warrants in exchange for services                      82,156
    Changes in assets and liabilities:
       Other current assets                                           (18,151)
       Deposits                                                       (30,229)
       Accounts payable                                               151,588
       Accrued expenses                                                47,246
       Due to officers                                                 73,333
                                                                  ------------

Net cash used in operating activities                                (924,522)
                                                                  ------------

Investing activities
Purchases of property and equipment                                  (126,791)
                                                                  ------------

Net cash used in investing activity                                  (126,791)
                                                                  ------------

Financing activities
Proceeds from the issuance of redeemable
    preferred stock, net of issuance costs
    of $25,000                                                      2,000,000
Proceeds from the issuance of common stock                             23,800
                                                                  ------------

Net cash provided by financing activities                           2,023,800
                                                                  ------------

Net increase in cash and cash equivalents                             972,487
Cash at beginning of period                                                --
                                                                  ------------

Cash at end of period                                                $972,487
                                                                  ============

Supplemental disclosure of cash flow information
Interest paid                                                            $171

Noncash financing and investing activities
Accrued dividends on redeemable preferred stock                      $195,997
Accretion of redeemable preferred stock                                $4,714

SEE ACCOMPANYING NOTES


                                      F-25
<PAGE>


                                 QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          NOTES TO FINANCIAL STATEMENTS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

1. NATURE OF BUSINESS

ORGANIZATION

Qode.com,  Inc.  (the  Company)  commenced  operations  on March 29, 1999 and is
incorporated in the state of Florida.  Qode.com is a development  stage company,
as  defined  in  Statement  of  Financial  Accounting  Standards  (SFAS)  No. 7,
Accounting and Reporting By Development Stage  Enterprises.  The Company intends
to provide manufactures, retailers, advertisers, and users a unique tool for Web
site  navigation by the use of imbedded  standard bar codes and Uniform  Product
Codes  (UPC).  It is the  Company's  mission to develop,  operate,  maintain and
promote the use of  Qode.com  technologies  to enable any bar code to  interface
with their technology.

The  Company  has  incurred  losses  since  its  inception  as  it  has  devoted
substantially  all  of  its  efforts  toward  building  network  infrastructure,
internal staffing,  developing systems,  expanding into new markets,  building a
proprietary  database and raising capital.  The Company has generated no revenue
to date  and is  subject  to a  number  of  risks  similar  to  those  of  other
development  stage  companies,  including  dependence  on key  individuals,  the
ability  to  demonstrate  technological  feasibility,  and the  need  to  obtain
adequate additional financing necessary to fund the development and marketing of
its products and services, and customer acceptance.

The Company's financial  statements have been prepared assuming that the Company
will continue as a going concern.  The Company has a limited  operating  history
and intends to  significantly  increase its operational  expenses in fiscal year
2000 to pursue  certain  sales  and  marketing  plans.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and  classification  of  liabilities  that may results  from the outcome of this
uncertainty.  In  fiscal  year  2000,  the  Company  plans to  raise  additional
financing from private equity  financing.  The Company  entered into a financing
agreement  subsequent  to  year  end  that  will  provide  the  Company  with an
additional $3 million, see Note 8.


                                      F-26
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For purposes of reporting  cash flows,  the Company  considers all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line  method over the  estimated  useful  lives of the related  assets.
Computer  hardware and software are being  depreciated  over a three year period
and furniture and fixtures are being depreciated over a five year period.

SOFTWARE DEVELOPMENT COSTS

In  accordance  with the AICPA SOP No.  98-1,  Accounting  for Costs of Computer
Software  Developed  or Obtained  for  Internal  Use,  all costs  related to the
development  or purchase  of internal  use  software  other than those  incurred
during the application  development stage are to be expensed as incurred.  Costs
incurred during the application development stage are required to be capitalized
and  amortized  over the useful life of the  software.  The Company has incurred
$259,480  in  software  development  costs for the period  from  March 29,  1999
(inception)  through  December 31, 1999.  All costs have been expensed since the
Company has not entered the  application  development  stage as of December  31,
1999.


                                      F-27
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company accounts for income taxes under the liability method, which requires
the  establishment  of a deferred tax asset or liability for the  recognition of
future  deductions  or  taxable  amounts,  and  operating  loss  and tax  credit
carryforwards.  Deferred tax expense or benefit is recognized as a result of the
change in the deferred  asset or liability  during the year. If  necessary,  the
Company will establish a valuation allowance to reduce any deferred tax asset to
an amount which will, more likely than not, be realized.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to a concentration of
credit  risk  consist  principally  of cash and cash  equivalents.  The  Company
maintains its cash and cash equivalents with high quality financial institutions
to mitigate this credit risk.

REDEEMABLE PREFERRED STOCK

Redeemable preferred stock is carried at the net consideration to the Company at
time of  issuance  (fair  value),  increased  by accrued  and unpaid  cumulative
dividends and periodic  accretion to redemption value using the interest method.
Accrued and unpaid  dividends and  redemption  accretion are affected by charges
against  retained  earnings,  or, in the absence of retained  earnings,  paid-in
capital (capital deficiency).

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company has adopted Statement of Financial  Accounting  Standards (SFAS) No.
123, Accounting for Stock-Based  Compensation.  The provisions of SFAS 123 allow
companies  to either  expense the  estimated  fair value of stock  options or to
continue to follow the  intrinsic  value method set forth in  Accounting  Public
Bulletin (APB) Opinion 25, Accounting for Stock Issued to Employees but disclose
the pro  forma  effects  on net  income  or loss as if the fair  value  had been
expensed. The Company has elected to apply APB 25 in accounting for its employee
stock  options  and,  accordingly,   recognizes  compensation  expense  for  the
difference  between the fair value of the underlying  common stock and the grant
price of the option at the date of grant.

                                      F-28
<PAGE>



                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                December 31,
                                                   1999
                                                   ----
      Computer hardware and software             $120,791
      Furniture and fixtures                        6,000
                                                 --------

                                                  126,791
      Less accumulated depreciation               (17,522)
                                                 ---------
                                                 $109,269
                                                 =========

Depreciation and amortization  expense was $17,939 for the period from March 29,
1999 (inception) to December 31, 1999.

4. INCOME TAXES

The net amounts of deferred tax assets recorded in the balance sheet at December
31, 1999 are as follows:

                                                   1999
                                                   ----
      Deferred tax asset:
        Net operating loss carryforward          $469,050
      Less valuation allowance                   (466,230)
                                                 ---------

      Total deferred tax asset                     $2,820

      Deferred tax liabilities:
        Fixed assets                              $(2,820)
                                                 ---------

      Total net deferred taxes                    $-
                                                 =========

FASB 109  requires  a  valuation  allowance  to reduce the  deferred  tax assets
reported  if,  based on the weight of the  evidence,  it is more likely than not
that some portion or all of the deferred tax assets will not be realized.  After
consideration  of all the evidence,  both positive and negative,  management has
determined that a $466,230 valuation allowance at December 31, 1999 is


                                      F-29
<PAGE>

                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

4. INCOME TAXES (CONTINUED)

necessary  to reduce the deferred tax assets to the amount that will more likely
than not be realized. The change in the valuation allowance for the current year
is $466,230.  At December 31, 1999, the Company has available net operating loss
carryforwards of $1,246,478, which expire in the year 2019.

A reconciliation of income taxes computed at the U.S. federal statutory tax rate
to income tax expense for the year ended December 31, 1999 is as follows:

                                                               1999
                                                               ----
      Taxes at the U.S. statutory rate                      $(424,315)
      State taxes, net of federal benefit                     (44,975)
      Nondeductible items                                       3,060
      Change in valuation allowance                           466,230
                                                            ----------

      Total income tax expense                                     $-
                                                            ==========

5. COMMITMENTS

The Company leases its office  facility under a  non-cancelable  operating lease
expiring  March 2005.  Rental  expense was $19,711 for the period from March 29,
1999 (inception) to December 31, 1999.

Lease commitments under these non-cancelable operating leases as of December 31,
1999 are as follows:

          2000                                        $100,656
          2001                                         104,682
          2002                                         108,876
          2003                                         113,238
          2004                                         117,768
                                                      --------

                                                      $545,220
                                                      ========



                                      F-30
<PAGE>

                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY

15% CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK SERIES A

The Board of Directors has authorized the issuance of up to 3,000,000  shares of
Series A 15% $.0001  par value,  voting,  cumulative,  redeemable,  convertible,
preferred stock (the Preferred Stock) which may be issued in series from time to
time with such designations, rights, preferences and limitations as the Board of
Directors may declare by resolution.  In May 1999, the Company issues  2,025,000
shares of Preferred  Stock at $1.00 per share,  less issuance  costs of $25,000.
One detachable  warrant was attached to each share of the Preferred  Stock.  The
Preferred  Stock was recorded at $1,954,000,  net of the value of the detachable
warrants which was estimated to be $46,000.  The detachable warrants were valued
in  accordance  with SFAS No.  123 at $.23 per share  and are  convertible  into
common stock at $1.50 per share.  The Preferred Stock is convertible at any time
at the  option of the  holder  prior to the  closing  of a Public  Offering,  as
defined in the  agreement,  or within 20 days  following  receipt of a Notice of
Redemption,  as defined in the  agreement,  into the Company's  common stock for
each share of the Preferred Stock held plus accrued and unpaid  dividends on the
Series A Preferred Shares.  The Preferred Stock has a liquidation  preference of
$1 per share and is mandatorily redeemable on April 15, 2004. As of December 31,
1999, all 2,025,000 shares of the Preferred Stock and related 202,500 detachable
warrants remain outstanding.

Dividends on the preferred stock accrue on a daily basis  commencing on the date
of  issuance  at an  interest  rate  of 15%  per  annum  and  are  payable  on a
semi-annual basis. The Company,  at its option, may pay dividends either in cash
or by the issuance of additional  shares of Series A Preferred Stock.  Aggregate
cumulative dividends in arrears at December 31, 1999 totaled $195,997.

COMMON STOCK

The Company is  authorized  to issue up to  20,000,000  shares of its $.0001 par
value common stock. On March 29, 1999  (inception) the Company  received $800 by
issuing 8,000,000 shares of its common stock to its founders.


                                      F-31
<PAGE>

                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

Additionally,  the Company  issued  13,000  shares of common  stock to a Company
employee in lieu of  relocation  expense  reimbursement  of $13,000,  and 10,000
shares of common stock to an executive recruiter for a corporate staffing fee of
$10,000. These amounts were expensed.

STOCK OPTIONS AND WARRANTS GRANTED IN EXCHANGE FOR SERVICES

During 1999, the Company  granted 327,200 common stock warrants with an exercise
price of $1.50 per share to  consultants  for certain  advisory  and  consulting
services  performed  during the  Company's  start-up  phase.  The warrants  vest
immediately  upon  issuance  and can be exercised  over a five year period.  The
Company  valued the  warrants at $82,156 in  accordance  with SFAS No. 123,  and
recognized  the entire  amount as a general  and  administrative  expense in the
accompanying   statement  of  operations.   The  Company  had  327,200  warrants
outstanding at December 31, 1999.

During 1999,  the Company  granted  400,000 in common stock  options to purchase
shares of common stock at an exercise  price of $.10 per share to an  investment
advisor in exchange for investment  advisory  services.  The options  expired on
June 30,  2000  without  being  exercised  and  accordingly  no expense has been
recorded.

STOCK OPTIONS

In 1999,  the Company's  Board of Directors and  stockholders  approved the 1999
Equity  Compensation  Plan (the Plan).  The Plan  provides  for the  issuance of
incentive  stock options,  nonqualified  stock options and  restricted  stock to
directors,  officers,  and key employees of the Company as well as  non-employee
directors,  advisors,  and  consultants.  The Board  administers  the Plan.  The
Company has  reserved  5,000,000  shares of common  stock to be issued under the
Plan.

The exercise price (as established by the Board) of the stock options granted is
in excess of fair market value of the Company's  Common Stock on the date of the
grant. All stock options expire five years from the grant date in 2004.  Options
granted under the Plan are exercisable as determined by the Board.


                                      F-32
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

The following table  summarizes  stock option activity for the period from March
29, 1999 (inception) to December 31, 1999:

                                                                    Weighted
                                                     Number of       Average
                                                       Shares     Exercise Price
                                                     ---------    --------------

      Outstanding at March 29, 1999 (inception)             -          $-
          Granted                                     880,600           1.36
          Exercised                                         -           -
          Forfeited                                         -           -
                                                     --------        -------

      Outstanding at December 31, 1999                880,600          $1.36
                                                     ========        =======


At December 31, 1999,  142,642 options are  exercisable,  at a weighted  average
exercise price of $1.28 per share. The  weighted-average  remaining  contractual
life of the options is 4.7 years.

During 1999,  all of the stock  options  issued were granted to employees of the
Company.  The Company  accounts  for  issuances  to  employees  under APB 25 and
accordingly,  no compensation cost has been recognized for the period from March
29, 1999 (inception) to December 31, 1999.

SFAS No.  123  requires  pro forma  information  regarding  net income as if the
Company has accounted for its employee stock options under the fair value method
of that Statement. The fair value for these options was estimated at the date of
grant  using  the   Black-Scholes   option  pricing  model  with  the  following
assumptions: risk-free interest rates equal to the three-year U.S. Treasury Bill
rate on the grant date,  dividend yield of 0%, expected volatility of 81.1%, and
an average expected life of the option of three years.


                                      F-33
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting period.  All employee options
granted to date vest over a one to three year period.  The  Company's  pro forma
information is as follows:

                                          Period from March 29, 1999 (inception)
                                                    to December 31, 1999
                                                    --------------------
      Net loss:
        As reported                                      $(1,247,987)
        SFAS No. 123 pro forma                           $(1,305,831)


The  weighted  average  fair value of options  granted to  employees  during the
period  from March 29, 1999 to December  31, 1999 for which the  estimated  fair
value of the  stock is less than the  exercise  price is $0.29  per  share.  The
weighted  average fair value of options  granted to employees  during the period
from March 29, 1999 to December 31, 1999 for which the  estimated  fair value of
the stock equals the exercise price is $0.47 per share.

SHARES RESERVED FOR FUTURE ISSUANCE

At December 31, 1999, the Company has reserved the following shares of stock for
issuance:

Common stock                                     11,977,000
Convertible preferred stock                         975,000
                                                 ----------
                                                 12,952,000
                                                 ==========



                                      F-34
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

7. RELATED PARTIES

The Company's  primary legal  counsel  holds  3,200,000  shares of the Company's
common stock in trust for the firm's partners. During 1999, the Company recorded
expenses of approximately  $32,000 related to services  performed by its primary
legal counsel.  The Company owed its primary legal counsel  approximately $3,000
at December 31, 1999.

During  1999,  Q  Productions,  Inc.  provided  various  information  technology
services to the Company. Two owners of Q Productions,  Inc. also aggregately own
4,800,000 shares of the Company. The Company recorded  approximately $129,000 in
expenses related to services performed by Q Productions, Inc. The Company owed Q
Productions, Inc. approximately $97,000 at December 31, 1999.

8. SUBSEQUENT EVENTS

On January 18, 2000,  the Company issued a convertible  subordinated  promissory
note  for $3  million  with a  fixed  interest  rate  of  12% to  Novus  Holding
Corporation.  Principal  and accrued  interest on the note are payable  upon the
earlier  of a) the  day  immediately  following  the  closing  of  financing  or
successive financings which cumulatively aggregate proceeds of $10,000,000 or b)
180 days from the date of the note. The debt is convertible into common stock at
a price equal to 85% of the  purchase  price per share paid by  investors in the
next financing or successive financings of $5,000,000 or more.

On February 11, 2000,  the Company  entered into a letter of intent with a major
supplier to produce  portable bar code scanning devices in exchange for payments
ranging from $32,000,000 to $35,000,000 over a 16 month period  commencing April
28, 2000 through August 1, 2001.

On March 15,  2000,  the Company  entered into a two year term note with a major
lender.  The principal amount of the note was $42,500 with a fixed interest rate
of 11%.  Principal  and  interest  payments  of $1,984 are due  monthly  through
maturity on March 15, 2002.

On March 24, 2000, the Company  obtained a letter of credit for $1,400,000  with
the lender of their term note.



                                      F-35
<PAGE>


                                 Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

8. SUBSEQUENT EVENTS (CONTINUED)

On March 27,  2000,  the Company  entered  into a  consulting  agreement  with a
consultant  for a five month period in return for 250,000  common stock  options
convertible  into the Company's  common  stock.  The options have a term of five
years and an exercise price of $2 per share.  125,000  options vest 45 days from
the   commencement  of  the  agreement  based  on  the  fulfillment  of  certain
contractual  obligations.  The remaining  125,000  options vest 90 days from the
commencement of the agreement  based on the  fulfillment of certain  contractual
obligations.  Additionally,  the Company will pay the consultants  $100,000 over
the period of the contract.

On May 22,  2000,  the Board of Directors  authorized  the issuance of 1,500,000
shares of Series U Convertible  Preferred Stock (the Series U Preferred  Stock).
Dividends on the preferred stock accrue on a daily basis  commencing on the date
of issuance at an interest rate of 8% per annum. The Series U Preferred Stock is
convertible  at any time at the option of the holder  prior to the  closing of a
Public  Offering,  as defined in the agreement,  into one share of the Company's
common stock for each share of the Company's  Series U Preferred Stock held plus
accrued and unpaid dividends on the Series U Preferred  Shares.  In the event of
the closing of the next  financing of $4,000,000 or more within 90 days from the
authorization  of the  Series U  Preferred  Stock,  the  holder of the  Series U
Preferred  Stock shall have the right to convert  all Series U Preferred  Shares
into a number of shares of stock issued in the next financing  which  represents
the  equivalent  amount for the  consideration  paid for the Series U  Preferred
Stock.  The Series U Preferred  Stock has a liquidation  preference of $2.00 per
share.  On May 22, 2000, the Company  entered into an agreement for the issuance
of 1,500,000 shares of Series U Preferred Stock in exchange for $3,000,000.  The
shares will be issued in three separate  financings.  The initial 500,000 shares
are to be issued on the date of the agreement. The next 500,000 shares are to be
issued  upon the  Company  meeting  certain  performance  goals  defined  in the
agreement.  The  remaining  500,000  shares are to be issued,  not earlier  than
August 1, 2000 nor later than October 15, 2000, upon the Company meeting certain
performance goals defined in the agreement.

On May 31, 2001, three creditors of Qode.com,  Inc. filed in the U.S. Bankruptcy
Court an involuntary bankruptcy petition for Qode.com,  Inc. Qode.com,  Inc. has
consulted  with legal counsel and will be opposing the Chapter 7 proceeding  and
plans to proceed under Chapter 11, U.S. Code, to reorganize its debts.


                                      F-36
<PAGE>



ITEM 8. EXHIBITS.

Exhibit

   4    NeoMedia Technologies, Inc. 2002 Stock Option Plan
          (incorporated by reference to Appendix A in NeoMedia
          Technologies 14A Definitive Proxy Statement as filed
          with the SEC on May 7, 2002).

   5    Opinion of Kirkpatrick & Lockhart LLP

  23.1  Consent of Ernst & Young, LLP, former independent certified
          public accountants of Qode.com, Inc.

  23.2  Consent of Stonefield Josephson, Inc., current independent auditors
          of NeoMedia Technologies, Inc.

  23.4  Consent of Kirkpatrick & Lockhart LLP (included in Exhibit
          5 opinion letter).

  24    Power of Attorney (included on signature page).

  25

      In accordance with Securities Act Rule 437a, the consent of Arthur
Andersen LLP has not been included as an exhibit herewith. The Company has been
unable to obtain a consent of Arthur Andersen LLP due to the departure of their
engagement team leaders from such firm. Any recovery by investors posed by the
lack of consent is limited by Securities Act Rule 437a.


ITEM 9. UNDERTAKINGS.

(a)   The undersigned registrant hereby undertakes:


      (1) To file, during any period in which offers or sales are being made, a
      post-effective amendment to this registration statement to include any
      material information with respect to the plan of distribution not
      previously disclosed in the registration statement or any material change
      to such information in the registration statement;

      (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any
      of the securities being registered which remain unsold at the termination
      of the offering.


(b)   The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.


<PAGE>

(c)   Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person connected with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.


<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Myers, State of Florida, on June 25, 2002.

                           NEOMEDIA TECHNOLOGIES, INC.

   BY:   /S/ CHARLES T. JENSEN
        ------------------------------------
         CHARLES T. JENSEN, PRESIDENT AND
         CHIEF OPERATING OFFICER


                                    THE PLAN

Pursuant to the requirement of the Securities Act of 1933, the Committee that
administers the 2002 Stock Option Plan has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Myers, State of Florida on June 25, 2002.

                                      PLAN:
                           NEOMEDIA TECHNOLOGIES, INC.
                             2002 STOCK OPTION PLAN

   BY:   /S/ CHARLES T. JENSEN
        ------------------------------------
         CHARLES T. JENSEN, PRESIDENT AND
         CHIEF OPERATING OFFICER

<PAGE>


                                POWER OF ATTORNEY

The undersigned officers and directors of NeoMedia Technologies, Inc. hereby
constitute and appoint Charles W. Fritz with power to act one without the other,
our true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, for us and in our stead, in any and all capacities to sign
any and all amendments (including post-effective amendments) to this
Registration Statement and all documents relating thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
necessary or advisable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or her
substitutes, may lawfully do or cause to be done by virtue hereof.

SIGNATURES                  TITLE                                     DATE
----------                  -----                                     ----

/S/ CHARLES W. FRITZ        CHIEF EXECUTIVE OFFICER,
---------------------       CHAIRMAN OF THE BOARD AND DIRECTOR    JUNE 25, 2002
CHARLES W. FRITZ

/S/ WILLIAM E. FRITZ        SECRETARY AND DIRECTOR                JUNE 25, 2002
---------------------
WILLIAM E. FRITZ

/S/ CHARLES T. JENSEN       PRESIDENT, CHIEF OPERATING OFFICER,
---------------------        AND DIRECTOR                         JUNE 25, 2002
CHARLES T. JENSEN

/S/ DAVID A. DODGE          VICE PRESIDENT, CHIEF FINANCIAL
----------------------      OFFICER, AND CONTROLLER               JUNE 25, 2002
DAVID A. DODGE

/S/ A. HAYES BARCLAY        DIRECTOR                              JUNE 25, 2002
----------------------
A. HAYES BARCLAY

/S/ JAMES J. KEIL           DIRECTOR                              JUNE 25, 2002
----------------------
JAMES J. KEIL

<PAGE>


                                    EXHIBIT 5.1
June 25, 2002


Neomedia Technologies, Inc.
2201 Second Street, Suite 600
Fort Meyers, Florida 33901


RE:   NEOMEDIA TECHNOLOGIES, INC. (THE "CORPORATION")
      REGISTRATION STATEMENT ON FORM S-8 (THE "REGISTRATION STATEMENT")

Gentlemen:

We have acted as special counsel to the Corporation in connection with the
preparation of the Registration Statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "1933 Act"),
relating to the proposed public offering of up to 9,440,000 shares of the
Corporation's common stock, par value $0.01 per share (the "Common Stock").

We are furnishing this opinion to you in accordance with Item 601(b)(5) of
Regulation S-K promulgated under the 1933 Act for filing as Exhibit 5.1 to the
Registration Statement.

We are familiar with the Registration Statement, and we have examined the
Corporation's Certificate of Incorporation, as amended to date, the
Corporation's Bylaws, as amended to date, and minutes and resolutions of the
Corporation's Board of Directors and shareholders. We have also examined such
other documents, certificates, instruments and corporate records, and such
statutes, decisions and questions of law as we have deemed necessary or
appropriate for the purpose of this opinion.

Based upon the foregoing, we are of the opinion that the shares of Common Stock
to be sold by the Selling Stockholders (as defined in the Registration
Statement) to the public, when issued and sold in the manner described in the
Registration Statement (as amended), will be validly issued, fully paid and
non-assessable.

We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof in connection with the matters referred to under the caption
"Legal Matters."

Very truly yours,


/s/ KIRKPATRICK & LOCKHART LLP
------------------------------
KIRKPATRICK & LOCKHART LLP

<PAGE>



EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our report dated July 21, 2000, except for the seventh
paragraph of Note 8, as to which the date is June 30, 2001, with respect to the
financial statements of Qode.com, Inc. (A Development Stage Enterprise) as of
December 31, 1999 and for the period from March 29, 1999 (inception) through
December 31, 1999 in the Registration Statement (Form S-8) for the Registration
of 9,440,000 shares of Neomedia Technologies, Inc.'s common stock.

                                                           /s/ Ernst & Young LLP

West Palm Beach, Florida

June 25, 2002


<PAGE>


                                  EXHIBIT 23.2

               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated March 28, 2002, on our audit of the consolidated
financial statements of Neomedia Technologies, Inc. as of December 31, 2001 and
for the year then ended.


/s/ Stonefield Josephson, Inc.
-----------------------------------
Certified Public Accountants


Irvine, California
June 25, 2002
[{"type": "S-8", "sequence": "1", "filename": "nform_s8.txt", "secsgml_size_bytes": 119661}]
{"company-data": {"conformed-name": "NEOMEDIA TECHNOLOGIES INC", "cik": "0001022701", "assigned-sic": "7373", "irs-number": "363680347", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-91284", "film-number": "02688163"}, "business-address": {"street1": "2201 SECOND ST STE 600", "street2": "STE 600", "city": "FORT MYERS", "state": "FL", "zip": "33901", "phone": "6303554404"}, "mail-address": {"street1": "2201 SECOND STREET", "street2": "SUITE 600", "city": "FORT MYERS", "state": "FL", "zip": "33901"}, "former-company": {"former-conformed-name": "DEVSYS INC", "date-changed": "19960911"}}
As filed with the Securities and Exchange Commission on June 26, 2002
                              File No. ____________

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM S-8
                             Registration Statement
                        Under the Securities Act of 1933

                           NEOMEDIA TECHNOLOGIES, INC.
                       (Name of Registrant in its charter)

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

                          2201 SECOND STREET, SUITE 600
                            FORT MYERS, FLORIDA 33901
                                  941-337-3434
               (Address, including zip code, and telephone number,
        including area code, of Registrant's principal executive offices)

                           NEOMEDIA TECHNOLOGIES, INC.
                             2002 STOCK OPTION PLAN
                            (Full Title of the Plan)

                                CHARLES W. FRITZ
                          2201 SECOND STREET, SUITE 600
                            FORT MYERS, FLORIDA 33901
                                  941-337-3434
                               941-337-3668 - FAX
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 With copies to:

      Clay Parker                                 Charles W. Fritz
      Kirkpatrick & Lockhart LLP                  Charles T. Jensen
      Suite 200                                   NeoMedia Technologies, Inc.
      201 South Biscayne Blvd.                    2201 Second Street, Suite 600
      Miami, FL 33131                             Fort Myers, Florida 33901
      (305) 539-3300                              (239) 337-3434
      (305) 358-7095 Fax                          (239) 337-3668 Fax
CALCULATION OF REGISTRATION FEE

-------------------------------------------------------------------------------------------------------
                                                          PROPOSED        PROPOSED
                                                           MAXIMUM        MAXIMUM
                                            AMOUNT        OFFERING       AGGREGATE       AMOUNT OF
          TITLE OF SECURITIES               TO BE         PRICE PER       OFFERING      REGISTRATION
           TO BE REGISTERED               REGISTERED      SHARE (2)         PRICE            FEE
-------------------------------------------------------------------------------------------------------
Common Stock from Option Exercise (1)      3,000,000       $0.0100         30,000          $2.76

-------------------------------------------------------------------------------------------------------
Common Stock from Option Exercise (1)      3,040,000       $0.0500        152,000         $13.98
-------------------------------------------------------------------------------------------------------
Common Stock from Option Exercise (3)      3,400,000       $0.0900        340,000         $28.15
-------------------------------------------------------------------------------------------------------
  TOTAL REGISTRATION FEE                   9,440,000                      522,000         $44.89
-------------------------------------------------------------------------------------------------------

(1)    Represents  shares of common stock issued  directly to  consultants  and  employees of the Company
       under the  NeoMedia  2002 Stock  Option  Plan,  which would result from the exercise of the option
       rights granted to each of the individual shareholders.

(2)    Pursuant to Rule  457(h),  registration  fee is computed  upon the basis of the price at which the
       options may be exercised.

(3)    These shares being registered under this Registration  Statement are subject to issuance at prices
       that are currently undeterminable;  consequently,  $28.15 of the total registration fee being paid
       hereunder has been estimated/determined pursuant to Rule 457(h), and is based on the closing price
       of the Company's Common Stock on the OTCBB market on June 25, 2002.
2
PART I

Pursuant to the Note to Part I of Form S-8,  information  required under Items 1
and 2 of Form S-8 is omitted as a part of this Registration Statement.

                                     PART II

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
------------------------------------------------

The following  documents  filed with the Securities and Exchange  Commission are
hereby incorporated by reference:

(a)  The Annual  Report of the  Company  on Form 10-K for the fiscal  year ended
     December 31, 2001.
(b)  Form 10-Q for the three-month period ending March 31, 2002.
(c)  Form 10-Q/A for the three- and  nine-month  periods  ending  September  30,
     2001.
(d)  Form 10-Q for the three- and six-month periods ending June 30, 2001.
(e)  Form 10-Q/A for the three-month period ending March 31, 2001.
(f)  Form  8-K/A  dated  November  5,  2001,  disclosing  change in  independent
     accountants.
(g)  Form 8-K/A dated June 6, 2001,  disclosing material purchase of assets from
     Qode.com,  Inc., except for the December 31, 2000 financial  statements and
     audit opinion  thereon  dated May 4, 2001 and the  financial  statements of
     Qode.Com,  Inc. (A Development  Stage  Enterprise) at December 31, 1999 and
     for the period from March 29, 1999  (inception)  through  December 31, 1999
     and the audit opinion dated July 21, 2000.  Such  financial  statements are
     included in this registration statement.
(h)  The  description  of the Company's  Common Stock,  par value $.01 per share
     (the "Common  Stock"),  which is contained  in the  Company's  Registration
     Statement on Form 8-A filed under the  Securities  Exchange Act of 1934, as
     amended (the "Exchange Act") on November 18, 1996,  including any amendment
     or report  filed  with the  Commission  for the  purpose of  updating  such
     description of Common Stock.

All  documents  subsequently  filed by the Company  pursuant to Sections  13(a),
13(c),  14 and 15(d) of the Securities  Exchange Act of 1934 prior to the filing
of a post-effective  amendment which indicates that all securities  offered have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be incorporated by reference in this Registration  Statement and to be
a part hereof from the date of filing such documents.

ITEM 4. DESCRIPTION OF SECURITIES.
---------------------------------

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
-----------------------------------------------

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
--------------------------------------------------

As permitted  by Delaware  General  Corporation  Law  ("DGCL"),  the Company has
included in its  Certificate  of  Incorporation  a provision  to  eliminate  the
personal  liability of its directors for monetary  damages for breach or alleged
breach of their fiduciary duties as directors,  except for liability (i) for any
breach of director's  duty of loyalty to the Company or its  stockholders,  (ii)
for acts or omissions not in good faith or which involved intentional misconduct
or a knowing  violation of law,  (iii) in respect of certain  unlawful  dividend
payments or stock redemptions or repurchases,  as provided in Section 174 of the
DGCL, or (iv) for any  transaction  from which the director  derived an improper
personal benefit.  The effect of this provision in the Company's  Certificate of
Incorporation  is to  eliminate  the rights of the Company and its  stockholders
(through  stockholders'  derivative  suits on behalf of the  Company) to recover
monetary  damages against a director for breach of the fiduciary duty of care as

                                       3
a director  except in the situations  described in (i) through (iv) above.  This
provision  does not  limit  nor  eliminate  the  rights  of the  Company  or any
stockholder to seek  non-monetary  relief such as an injunction or rescission in
the event of a breach of a director's  duty of care.  These  provisions will not
alter the liability of directors under federal securities laws.

The Certificate of Incorporation and the by-laws of the Company provide that the
Company is required  and  permitted to  indemnify  its  officers and  directors,
employees and agents under certain  circumstances.  In addition, if permitted by
law, the Company is required to advance  expenses to its officers and  directors
as incurred in connection with  proceedings  against them in their capacity as a
director  or  officers  for which  they may be  indemnified  upon  receipt of an
undertaking  by or on behalf of such director or officer to repay such amount if
it  shall  ultimately  be  determined  that  such  person  is  not  entitled  to
indemnification.  At  present,  the  Company  is not  aware  of any  pending  or
threatened litigation or proceeding involving a director,  officer,  employee or
agent of the Company in which  indemnification  would be required or  permitted.
The Company has obtained directors and officers liability insurance. The Company
believes  that  its  charter  provisions  and  indemnification   agreements  are
necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification  for liabilities arising under the Securities Act may
be permitted to directors and officers of the Company  pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of the
Securities  and Exchange  Commission  ("Commission"),  such  indemnification  is
against  public  policy as expressed in the  Securities  Act and is,  therefore,
unenforceable.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
--------------------------------------------

Not Applicable

                                       4
INDEX OF FINANCIAL STATEMENTS

Qode.com, Inc. financial statements for the year ended December 31, 2000.....F-2

Qode.com, Inc. (A Development Stage Enterprise) financial statements for Period
 from March 29, 1999 (inception) to December 31, 1999.......................F-21

                                      F-1

FINANCIAL INFORMATION

Report of Independent Certified Public Accountants

To Qode.com, Inc.:

We have audited the  accompanying  balance  sheet of  Qode.com,  Inc. (a Florida
corporation in the  development  stage) as of December 31, 2000, and the related
statements   of   operations,   changes  in  redeemable   preferred   stock  and
stockholders'  deficit,  and cash flows for the year then ended and the  related
statements of operations and cash flows for the period from inception (March 29,
1999) to December 31, 2000. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements  based  on our  audit.  We did  not  audit  the  financial
statements of Qode.com, Inc. for the period from inception to December 31, 1999.
Such  statements are included in the cumulative  inception to December 31, 2000,
totals of the statements of operations and cash flows and reflect total revenues
and net  loss of zero  percent  and 13  percent,  respectively,  of the  related
cumulative totals. Those statements were audited by other auditors, whose report
has been furnished to us, and our opinion,  insofar as it relates to amounts for
the period from  inception  to December  31,  1999,  included in the  cumulative
totals, is based solely upon the report of the other auditors.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit and the  report of the other  auditors
provide a reasonable basis for our opinion.

In our  opinion,  based on our audit and the report of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of  Qode.com,  Inc. as of December  31,  2000,  and the
results of its operations and its cash flows for the year then ended and for the
period from  inception to December  31,  2000,  in  conformity  with  accounting
principles generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,  the Company has suffered  losses from operations and the
current cash position of the Company raises  substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                                /s/ ARTHUR ANDERSEN LLP

Tampa, Florida,
May 4, 2001 (except with respect to the matter discussed in Note 13, as to which
the date is June 30, 2001)

                                       F-2
QODE.COM, INC.

                        (A Development Stage Enterprise)

                        BALANCE SHEET - DECEMBER 31, 2000

                                         ASSETS                          Amount
                                                                         ------
CURRENT ASSETS:
      Cash and cash equivalents                                          $18,686
      Accounts receivable                                                  6,041
      Inventory                                                          218,690
      Other current assets                                                13,499
                                                                       ---------

                        Total current assets                             256,916

PROPERTY AND EQUIPMENT, net                                              875,263

CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                            2,359,932

DEPOSITS                                                                  39,539
                                                                       ---------
                                  Total assets                        $3,531,650
                                                                      ==========

                                      F-3
QODE.COM, INC.

                        (A Development Stage Enterprise)

                        BALANCE SHEET - DECEMBER 31, 2000

                                   (continued)

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT       Amount
                                                                        ------

CURRENT LIABILITIES:
      Accounts payable                                                 $982,610
      Dividends payable                                                  94,119
      Accrued expenses                                                  425,103
      Current portion of notes payable                                3,617,323
      Current portion of capital lease obligations                      368,574
      Loans from officers                                               224,740
                                                                      ---------

                 Total current liabilities                            5,712,469

NOTES PAYABLE, net of current portion                                     5,857

CAPITAL LEASE OBLIGATIONS, net of current portion                       168,176
                                                                      ---------
                             Total liabilities                        5,886,502
                                                                      ---------
COMMITMENTS AND CONTINGENCIES

SERIES A 15% CUMULATIVE CONVERTIBLE REDEEMABLE
      PREFERRED STOCK, $.0001 par value; 3,000,000 shares
      authorized, 2,044,560 shares issued and outstanding,
      liquidation value of $2,502,641                                 2,480,991

STOCKHOLDERS' DEFICIT:
      Common stock, $.0001 par value; 25,000,000 shares
           authorized, 8,023,000 shares issued and outstanding              802
      Additional paid-in capital - common stock                       1,927,313
      Series U convertible preferred stock, $.0001
           par value; 1,500,000 shares authorized, issued
           and outstanding                                                  150
       Additional paid-in capital - preferred stock                   2,999,850
       Accumulated deficit                                           (9,763,958)
                                                                     -----------

                             Total stockholders' deficit             (4,835,843)

                             Total liabilities, redeemable
                                 preferred stock and
                                 stockholders' deficit               $3,531,650
                                                                     ===========

The accompanying notes are an integral part of this balance sheet.

                                      F-4
QODE.COM, INC.

                        (A Development Stage Enterprise)

                             STATEMENT OF OPERATIONS

               FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD

       FROM MARCH 29, 1999 (DATE OF INCEPTION), THROUGH DECEMBER 31, 2000

                                                                   Cumulative
                                                                 from Inception
                                                                  March 29, 1999
                                                 Year Ended             to
                                                December 31,        December 31
                                                    2000               2000
                                                    ----               ----

REVENUE                                          $211,952           $211,952

COST OF GOODS SOLD                                213,345            213,345
                                                 --------           --------

GROSS MARGIN                                       (1,393)            (1,393)

COSTS AND EXPENSES:
      Research and development                 1,109,686           1,505,928
      Sales and marketing                        556,541             598,516
      General and administrative               5,839,413           6,686,825

              Total costs and expenses         7,505,640           8,791,269

NET INTEREST EXPENSE                           1,008,938             971,296
                                               ---------           ---------

NET LOSS                                      (8,515,971)         (9,763,958)

PREFERRED STOCK DIVIDENDS                       (356,203)           (552,200)

ACCRETION OF BENEFICIAL CONVERSION
     FEATURE ON PREFERRED STOCK                  (15,296)            (20,010)
                                                ---------           ---------

Net LOSS AVAILABLE TO COMMON STOCKHOLDERS    $(8,887,470)       $(10,336,168)
                                             ============       =============
NET LOSS PER SHARE - BASIC AND DILUTED            $(1.11)             $(1.29)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES       8,023,000           8,018,071
                                             ============       =============

The accompanying notes are an integral part of these statements.

                                      F-5
QODE.COM, INC.

                        (A Development Stage Enterprise)

STATEMENT OF CHANGES IN REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

                      FOR THE YEAR ENDED DECEMBER 31, 2000
Additional
                                                Series A                                   Paid-in      Series U Convertible
                                               Redeemable                                Capital for       Preferred Stock
                                               Preferred           Common Stock            Common
                                                Stock         Shares          Amount        Stock        Shares      Amount
                                             -------------  ---------      ----------  --------------  ---------    --------
BALANCE, December 31, 1999                     $2,154,711    8,023,000        $802         $(49,557)         --         $--
     Issuance of 19,560 shares of Series A
       preferred stock in exchange for
       services                                   48,900           --              --           --           --          --
     Issuance of Series U preferred stock             --           --              --           --     1,500,000        150
     Issuance of 372,780 warrants in
       exchange for services                          --           --              --     1,126,790          --          --
     Issuance of 326,666 warrants attached
       with notes payable                             --           --              --       675,681          --          --
     Issuance of employee stock options
       with exercise price below market
       value                                          --           --              --       150,216          --          --
     Re-pricing of employee stock options             --           --              --       395,682          --          --
     Series A preferred stock dividends           262,084          --              --      (262,084)         --          --
     Series U preferred stock dividends               --           --              --       (94,119)         --          --
     Accretion of beneficial conversion
       feature on preferred stock                 15,296           --              --       (15,296)         --          --
     Net loss                                         --           --              --           --           --          --
                                                      __           __              __           __           __          __
                                             -------------  ---------      ----------  --------------  ---------    --------
BALANCE, December 31, 2000                     $2,480,991    8,023,000        $802       $1,927,313    1,500,000       $150
                                             =============  ==========     ==========  ==============  =========    ========

                                               Additional
                                                Paid-in
                                               Capital for                       Total
                                                Preferred      Accumulated    Stockholders'
                                                 Stock           Deficit        Deficit

BALANCE, December 31, 1999                           --       $(1,247,987)     $(1,296,742)
     Issuance of 19,560 shares of Series A
       preferred stock in exchange for
       services                                      --               --               --
     Issuance of Series U preferred stock      2,999,850              --         3,000,000
     Issuance of 372,780 warrants in
       exchange for services                         --               --         1,126,790
     Issuance of 326,666 warrants attached
       with notes payable                            --               --           675,681
     Issuance of employee stock options
       with exercise price below market              --               --           150,216
       value
     Re-pricing of employee stock options            --               --           395,682
     Series A preferred stock dividends              --               --          (262,084)
     Series U preferred stock dividends              --               --           (94,119)
     Accretion of beneficial conversion
       feature on preferred stock                    --               --           (15,296)
     Net loss                                        --        (8,515,971)      (8,515,971)
                                               ----------     ------------     ------------

BALANCE, December 31, 2000                     $2,999,850     $(9,763,958)     $(4,835,843)
                                               ==========     ============     ============

The accompanying notes are integral part of this statement.
F-6
QODE.COM, INC.

                        (A Development Stage Enterprise)

                             STATEMENT OF CASH FLOWS

               FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD

FROM MARCH 29, 1999 (DATE OF INCEPTION), THROUGH DECEMBER 31, 2000
Cumulative from Inception
                                                                                     Year Ended         (March 29, 1999
                                                                                    December 31,              to
                                                                                       2000             December 31, 2000)
                                                                                       ----             ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                       $(8,515,971)            $(9,763,958)
     Adjustments to reconcile net loss to net cash used in
         operating activities-
              Depreciation and amortization                                             417,410                 434,932
              Series A preferred stock issued for services                               48,900                  48,900
              Warrants issued in exchange for services                                1,126,790               1,884,627
              Stock options issued with exercise price below market value               150,216                 150,216
              Expense related to the re-pricing of employee stock options               395,682                 395,682
              Changes in assets and liabilities-
                 Accounts receivable                                                     (6,041)                 (6,041)
                 Inventory                                                             (218,690)               (218,690)
                 Other current assets                                                     4,652                 (13,499)
                 Deposits                                                                (9,310)                (39,539)
                 Accounts payable                                                       831,022                 982,610
                 Accrued expenses                                                       377,857                 425,103
                                                                                        -------                 -------

                     Net cash used in operating activities                           (5,397,483)             (5,719,657)
                                                                                     -----------             -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                                (382,222)               (509,013)
     Capitalization of software development costs                                    (2,498,752)             (2,498,752)
                                                                                     -----------             -----------

                     Net cash used in investing activities                           (2,880,974)             (3,007,765)
                                                                                     -----------             -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of notes payable and detachable warrants                  4,298,861               3,623,180
     Proceeds from loans from officers                                                  151,407                 224,740
     Principal repayments of capital lease                                             (125,612)               (125,612)
     Proceeds from the issuance of common stock                                             --                   23,800
     Proceeds from the issuance of Series A redeemable preferred stock
          net of issuance costs of $25,000                                                  --                2,000,000
     Proceeds from issuance of Series U convertible preferred stock                   3,000,000               3,000,000
                                                                                      ----------              ---------

                     Net cash provided by financing activities                        7,324,656               8,746,108
                                                                                      ----------              ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                              (953,801)                 18,686

CASH AND CASH EQUIVALENTS, beginning of year                                            972,487                     --
                                                                                      ----------              ---------

CASH AND CASH EQUIVALENTS, end of year                                                  $18,686                 $18,686
                                                                                      ==========                =======
F-7
QODE.COM, INC.

                         A Development Stage Enterprise

                             STATEMENT OF CASH FLOWS

                      FOR THE YEAR ENDED DECEMBER 31, 2000
            AND THE PERIOD FROM MARCH 29, 1999 (DATE OF INCEPTION),
                           THROUGH DECEMBER 31, 2000

                                   (continued)

                                                                Cumulative from
                                                                   Inception
                                                                (March 29, 1999
                                              Year Ended               To
                                             December 31,          December 31,
                                                 2000                 2000)
                                                 ----                 ----

SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:
  Cash paid for interest                      $180,000             $160,189

SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:
    Accretion of redeemable preferred
     stock                                     $15,296               20,010
    Accrued dividends on Series A
     preferred stock                          $262,084              458,081
    Accrued dividends on Series U
     preferred stock                           $94,119               94,119
    Property and equipment acquired
     under capital lease                      $662,362              662,362

The accompanying notes are an integral part of these statements.

                                      F-8
QODE.COM, INC.

                        (A Development Stage Enterprise)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

1     NATURE OF BUSINESS ORGANIZATION

      Qode.com, Inc. (Qode.com or the Company) commenced operations on March 29,
      1999,  and  is  incorporated  in  the  State  of  Florida.  Qode.com  is a
      development stage company, as defined in Statement of Financial Accounting
      Standards  (SFAS) No. 7,  "Accounting  and Reporting By Development  Stage
      Enterprises".  The Company  intends to provide  manufacturers,  retailers,
      advertisers and users a unique tool for Website navigation through the use
      of imbedded  standard bar codes and Uniform Product Codes (UPC). It is the
      Company's  mission to develop,  operate,  maintain  and promote the use of
      Qode.com  technologies  to enable  any bar code to  interface  with  their
      technology.

      The Company's  financial  statements have been prepared  assuming that the
      Company will continue as a going concern.  The Company has incurred losses
      since its  inception  and during its  development  stage as it has devoted
      substantially  all of its efforts toward building network  infrastructure,
      internal  staffing,   developing  systems,  expanding  into  new  markets,
      building a  proprietary  database  and  raising  capital.  The Company has
      generated  little  revenue  to date and is  subject  to a number of risks,
      including  dependence  on key  individuals,  the  ability  to  demonstrate
      technological  feasibility,  and the need to  obtain  adequate  additional
      financing  necessary to fund the development and marketing of its products
      and services, and customer acceptance.  These conditions raise substantial
      doubt about the  Company's  ability to continue  as a going  concern.  The
      financial  statements  do not  include  any  adjustments  to  reflect  the
      possible future effects on the recoverability and classification of assets
      or the amounts and classification of liabilities that may results from the
      outcome of this uncertainty.

2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      USE OF ESTIMATES

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally accepted in the United States requires management to
      make estimates and assumptions  that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial  statements and the reported amounts of revenues and
      expenses  during the reporting  period.  Actual  results could differ from
      those estimates.

      CASH AND CASH EQUIVALENTS

      For purposes of reporting  cash flows,  the Company  considers  all highly
      liquid investments  purchased with an original maturity of three months or
      less to be cash equivalents.

      INVENTORY

      Inventory  is stated at the lower of cost or market,  and at December  31,
      2000  was  comprised  of  QoderTM  handheld  scanning  systems.   Cost  is
      determined using the weighted average method.

                                      F-9
PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost less  accumulated  depreciation.
      Repairs and maintenance  are charged to expense as incurred.  Depreciation
      is computed using the straight-line method over the estimated useful lives
      of the related assets.  Computer hardware and purchased software are being
      depreciated over a three-year period, and furniture and fixtures are being
      depreciated over a five-year period.

      Depreciation expense was $278,590 for the year ended December 31, 2000.

      CAPITALIZED SOFTWARE DEVELOPMENT COSTS

      In accordance with the American  Institute of Certified Public Accountants
      Statement of Position No. 98-1, "Accounting for Costs of Computer Software
      Developed  or  Obtained  for  Internal  Use,"  all  costs  related  to the
      development or purchase of internal use software other than those incurred
      during the application  development  stage are to be expensed as incurred.
      Costs incurred during the application development stage are required to be
      capitalized  and  amortized  over the  useful  life of the  software.  The
      Company has expensed  $1,109,686 in research and development costs for the
      year ended  December 31, 2000. The Company has  capitalized  $2,498,752 in
      software   development  costs  for  the  year  ended  December  31,  2000.
      Amortization expense was $138,820 for the year ended December 31, 2000.

      REDEEMABLE PREFERRED STOCK

      Redeemable  preferred  stock is  carried at the net  consideration  to the
      Company at time of issuance,  increased  by accrued and unpaid  cumulative
      dividends and periodic  accretion to  redemption  value using the interest
      method. Accrued and unpaid dividends and redemption accretion are affected
      by charges  against  retained  earnings,  or, in the  absence of  retained
      earnings, additional paid-in capital.

      REVENUE RECOGNITION

      Revenue is  generated  from the sale of Qode's  proprietary  hand held bar
      code scanners.  Revenue is recognized when the product is delivered to the
      customer.

      INCOME TAXES

      In accordance with Statement of Financial  Accounting Standards (SFAS) No.
      109,  "Accounting for Income Taxes",  income taxes are accounted for using
      the assets and liabilities  approach.  Deferred tax assets and liabilities
      are recognized for the future tax consequences attributable to differences
      between the financial  statement  carrying  amounts of existing assets and
      liabilities,  and their  respective  tax  bases.  Deferred  tax assets and
      liabilities  are  measured  using  enacted tax rates  expected to apply to
      taxable  income  in the years in which  those  temporary  differences  are
      expected to be recovered or settled.  Deferred tax assets are reduced by a
      valuation allowance when, in the opinion of management,  it is more likely
      than not that some  portion or all of the  deferred tax assets will not be
      recognized.  The Company has  recorded a 100%  valuation  allowance  as of
      December 31, 2000.

                                      F-10
COMPUTATION OF NET LOSS PER SHARE

      Basic and diluted  net loss per share is computed by dividing  net loss by
      the weighted average number of shares of common stock  outstanding  during
      the period. The Company has excluded all common stock equivalents from the
      calculation  of diluted net loss per share  because these  securities  are
      anti-dilutive.  The shares  excluded from the  calculation  of diluted net
      loss per share and reserved for future  issuance are detailed in the table
      below:

                                                                   2000
                                                                   ----
      Outstanding stock options                                 1,540,511
      Outstanding warrants                                      1,229,146
      Shares issuable on conversion of notes payable            6,800,000
      Shares issuable on conversion of Series A
         preferred stock                                        4,049,701

      Shares  issuable on conversion of notes payable were  calculated  based on
      the terms of the notes as if they were converted on December 31, 2000.

      FINANCIAL INSTRUMENTS

      The  Company  believes  that the fair value of its  financial  instruments
      approximate carrying value.

      CONCENTRATION OF CREDIT RISK

      Revenue  was  generated   from  the  selling  of  barcode   scanners  with
      approximately 91 percent of those sales to one customer.

      ACCOUNTING FOR STOCK-BASED COMPENSATION

      The  Company  has  adopted  SFAS  No.  123,  "Accounting  for  Stock-Based
      compensation."  The  provisions  of SFAS 123  allow  companies  to  either
      expense the estimated fair value of stock options or to continue to follow
      the intrinsic value method set forth in Accounting  Principles Board (APB)
      Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25), but
      disclose the pro forma  effects on net income or loss as if the fair value
      had been  expensed.  The Company has elected to apply APB 25 in accounting
      for its employee stock options and,  accordingly  recognizes  compensation
      expense for the difference between the fair value of the underlying common
      stock and the grant price of the option at the measurement date.

      RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998 the FASB  issued  SFAS No. 133,  "Accounting  for  Derivative
      Instruments and Hedging  Activities",  as amended by SFAS No. 137 and SFAS
      138.  SFAS No. 133,  as  amended,  establishes  accounting  and  reporting
      standards  for  derivative   instruments,   including  certain  derivative
      instruments  embedded in other contracts,  and for hedging activities.  It
      requires  that an entity  recognize  all  derivatives  as either assets of
      liabilities  in the balance  sheet and measure those  instruments  at fair
      value.  The  adoption of these new  accounting  standards  did not have an
      impact on the Company's financial position or results of operations.

      On December 3, 1999 the  Securities  and Exchange  Commission  (SEC) staff
      released Staff Accounting  Bulletin (SAB) No. 101, "Revenue  Recognition".
      This SAB provides guidance on the recognition, presentation and disclosure
      of revenue in financial  statements.  The Company  implemented SAB No. 101
      for the  quarter  ended  June 30,  2000.  It did not have an impact on the
      Company's results of operations.

                                      F-11
COMPREHENSIVE INCOME

      For the year ended December 31, 2000,  there were no  differences  between
      the balance  sheet and income  statement  and  therefore no  comprehensive
      income.

3     LOANS FROM OFFICERS

      Between  October and  December  2000,  several of the  Company's  officers
      elected to defer their salaries due to cash flow difficulties  experienced
      by the Company. The total amount deferred was $83,154.

      On November  28, 2000,  the Company  issued  promissory  notes to officers
      totaling  $135,000,  with an interest rate of 6.09 percent.  The principal
      and interest are payable on February 26, 2001

4     PROPERTY AND EQUIPMENT

      Property and equipment consists of the following as of December 31, 2000:

                                                                      2000
                                                                      ----

      Computer hardware and purchased software                    $1,139,578
      Furniture and fixtures                                          31,797
                                                                      ------

                                                                   1,171,375
        Less- Accumulated depreciation                              (296,112)
                                                                    ---------
                                                                    $875,263
                                                                    =========

5     NOTES PAYABLE

      Convertible Notes

      On January 18, 2000,  the Company  entered into a note purchase  agreement
      with an investor for $3,000,000,  with an interest rate of 12 percent. The
      principal and interest were due July 17, 2000.  The principal and interest
      are  convertible  at the option of the holder  upon or after a $10 million
      financing. The conversion rate is 85 percent of the price per share in the
      financing. In connection with this note, 200,000 warrants were issued with
      an exercise price of $4.50 per share for the Company's common stock. These
      warrants  may be  exercised  at  anytime  following  the  closing of a $10
      million  financing and expire January 17, 2005. The Company  allocated the
      proceeds from the issuance of the note between the note and warrants based
      on the relative fair value method.  The difference between the face amount
      of the note and the amount allocated to it was recorded as a discount, and
      amortized to interest expense over the life of the note.

      On August 1, 2000, the Company extended this note to November 17, 2000. As
      additional  consideration  for the  extension  of the  note,  the  Company
      reduced  the  exercise  price  of  the  200,000  warrants  to  $1.00.  The
      additional  expense of  $63,180  that  resulted  from the  re-pricing  was
      charged to interest  expense.  As of December 31,  2000,  the note had not
      been repaid.

                                      F-12
During  2000,  the  Company  entered  into  four  separate  note  purchase
      agreements  with  investors  totaling  $400,000 with interest  rates of 12
      percent. The principal and interest on three of the notes were due October
      9, 2000 through  November 4, 2000, and principal and interest on the other
      note is due January 6, 2001. The principal and interest are convertible at
      the  option  of the  holder  upon or  after a $7  million  financing.  The
      conversion rate is 85 percent of the price per share in the financing.  In
      connection with these notes,  26,666 warrants were issued with an exercise
      price of $2.00 per share for the Company's  common stock.  These  warrants
      may  be  exercised  at  anytime  following  the  closing  of a $7  million
      financing. The proceeds from the issuance of these notes and warrants were
      allocated  between  the two using the  relative  fair  value  method.  The
      resulting discount on the notes was amortized to interest expense over the
      life of the notes.

      OTHER NOTE PAYABLE

      During March 2000, the Company entered into a note agreement in the amount
      of $42,500, bearing interest at a rate of 11 percent per year and expiring
      on March 15,  2002,  to finance its phone  system.  The note is secured by
      telephone equipment.

      On November  28,  2000 and  December  14,  2000,  the  Company  signed two
      promissory notes in the amounts of $20,000 and $200,000,  bearing interest
      at a rate of 6.09  percent and 15 percent  per year,  with  principal  and
      accrued   interest  payable  February  26,  2001  and  January  28,  2001,
      respectively.  In  connection  with the  December  14, 2000 note,  100,000
      warrants  were  issued  with an  exercise  price of $.50 per share for the
      Company's  common  stock.  These  warrants  may be  exercised  at  anytime
      following  the  closing of the Next  Financing,  as defined in the warrant
      agreement.  The proceeds  from the issuance of this note and warrants were
      allocated  between  the two using the  relative  fair  value  method.  The
      resulting discount on the note is being amortized to interest expense over
      the life of the note.

      Notes payable consists of the following:

                                                                        Amount
                                                                        ------

Convertible notes, interest bearing at 12% per annum                 $3,400,000
Note payable, interest bearing at 11% per annum, due in monthly
  installments through March 2002                                        27,679
Note payable, unsecured interest bearing at 6.09% per annum, due
       February 2001                                                     20,000
Note payable, unsecured interest bearing at 15% per annum, due
       January 2001                                                     200,000
                                                                     ----------

                      Total notes payable                             3,647,679
Less discount                                                           (24,499)
Less- Current portion                                                (3,617,323)
                                                                     -----------

                      Notes payable, net of current portion              $5,857
                                                                         ======

      As of December 31, 2000 there was $197,740 of accrued interest.

6     INCOME TAXES

For the years ended December 31, 2000, the components of income tax expense were
as follows:

                                                                      2000
                                                                      ----
Current                                                                $-
Deferred                                                                -
                                                                        -
                                                                      ----
Income tax expense                                                     $-

                                      F-13
The net amounts of deferred tax assets recorded in the balance sheet at December
31, 2000, are as follows:

                                                                        2000
                                                                        ----
Deferred tax asset:
      Depreciation of property and equipment                          $17,901
      Start-up costs                                                  199,566
      Net operating loss carryforward                               3,443,643
      Less- Valuation allowance                                    (3,661,110)

                Total deferred tax asset                                 $--
                                                                   ===========
Deferred tax liabilities:                                                $--
                                                                   -----------
                Total net deferred taxes                                 $--
                                                                   ===========

      SFAS No. 109  requires a valuation  allowance  to reduce the  deferred tax
      assets reported if, based on the weight of the evidence, it is more likely
      than not,  that some portion or all of the deferred tax assets will not be
      realized.  After  consideration  of all the  evidence,  both  positive and
      negative,  management has determined that a $3,661,110 valuation allowance
      at December 31, 2000 is necessary to reduce the deferred tax assets to the
      amount  that will more  likely  than not be  realized.  The  change in the
      valuation  allowance for the current year is  $3,194,880.  At December 31,
      2000,  the Company has  available  net  operating  loss  carryforwards  of
      $9,151,323, which expire in the year 2020 and 2019.

      A reconciliation  of income taxes computed at the U.S.  federal  statutory
      tax rate to income tax expense for the year ended December 31, 2000, is as
      follows:

                                                                       2000
                                                                       ----
      Taxes at the U.S. statutory rate                            $(2,895,430)
      State taxes, net of federal benefit                            (309,129)
      Nondeductible items                                               9,679
      Change in valuation allowance                                 3,194,880
                                                                  ------------

                         Total income tax expense                        $-
                                                                  ============

7     COMMITMENTS AND CONTINGENCIES

      LEGAL PROCEEDINGS

      The Company is not presently a party to any significant  litigation.  From
      time to time,  however,  the Company is involved in various  legal actions
      arising in the normal course of business,  which the Company believes will
      not materially affect the financial position or results of operations.

      EMPLOYMENT CONTRACTS

      The Company has employment  contracts with William Carpenter,  Greg Miller
      and Michael Miller beginning November 1, 2000.

      Future payments under the above employment contracts are:

                                      F-14
2001                                                           $450,000
      2002                                                            450,000
      2003                                                            375,000
                                                                      -------

                   Total                                           $1,275,000
                                                                   ==========

      CAPITAL LEASE OBLIGATIONS

      During April 2000, the Company  acquired  computer  equipment for $662,362
      under  a  capital   lease,   expiring  on  April  26,  2002.   Accumulated
      depreciation  on this  equipment  was  approximately  $166,000 at December
      31,2001

      Future minimum lease payments on capital lease  obligations as of December
      31,2000, are as follows:

      Year                                                            Amount
                                                                      ------
      2001                                                           $415,358
      2002                                                            173,519
                                                                     --------

                                                                      588,877
      Less - Amount representing interest on
             obligations under capital leases (15%)                   (52,127)
        Current portion of capital lease obligations                 (368,574)
                                                                     ---------

        Capital lease obligations, net of current portion            $168,176
                                                                     ========

      OPERATING LEASE OBLIGATIONS

      The Company leases its office  facility under a  non-cancelable  operating
      lease expiring in March 2005. Rental expense, net of sub-lease income, was
      $73,036 for the year ended December 31, 2000.

      Lease  commitments  under  this  non-cancelable  operating  leases  as  of
      December 31, 2000, are as follows:

           Year Ending                                         Amount
                                                               ------

              2001                                            $391,399
              2002                                             233,876
              2003                                             154,905
              2004                                             117,768
              2005                                               5,103
                                                                 -----

                                                               $903,051
                                                               ========

8     PREFERRED STOCK

      SERIES A 15% CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK

      The Board of Directors  (the Board) has  authorized  the issuance of up to
      3,000,000  shares  of  Series  A 15  percent  $.0001  par  value,  voting,
      cumulative, redeemable, convertible

                                      F-15
preferred stock (the Series A Preferred  Stock).  Series A Preferred Stock
      is  convertible  at any  time at the  option  of the  holder  prior to the
      closing of a Public  Offering,  as defined in the agreement,  or within 20
      days  following  receipt  of a Notice of  Redemption,  as  defined  in the
      agreement,  into the Company's common stock for each share of the Series A
      Preferred  Stock held plus  accrued and unpaid  dividends  on the Series A
      Preferred  Shares.   The  Series  A  Preferred  Stock  has  a  liquidation
      preference  of $1 per share  and is  mandatorily  redeemable  on April 15,
      2004.

      In June 2000,  the Company  issued 19,560 shares of the Series A Preferred
      Stock at $2.50 per share for services rendered.

      Dividends  on the  Series A  Preferred  Stock  accrue,  on a daily  basis,
      commencing  on the date of issuance at an interest  rate of 15 percent per
      annum and are payable on a semi-annual basis. The Company,  at its option,
      may pay dividends  either in cash or by the issuance of additional  shares
      of Series A Preferred Stock.  Aggregate cumulative dividends in arrears at
      December  31, 2000  totaled  $458,081,  and are  included in Series A 15 %
      cumulative  convertible  redeemable  preferred  stock on the  accompanying
      balance sheet.

      SERIES U CONVERTIBLE PREFERRED STOCK

      The Board has authorized the issuance of up to 1,500,000  shares of Series
      U, 8 percent $.0001 par value, voting,  cumulative,  convertible preferred
      stock  (the  Series  U  Preferred  Stock).  Series  U  Preferred  Stock is
      convertible  at any time at the option of the holder  prior to the closing
      of a Public Offering into the Company's common stock for each share of the
      Series U Preferred  Stock held plus  accrued and unpaid  dividends  on the
      Series U  Preferred  Shares.  Between May and  October  2000,  the Company
      issued  1,500,000  at $2  per  share,  with  proceeds  to the  Company  of
      $3,000,000.

      Dividends  on the  Series U  Preferred  Stock  accrue,  on a daily  basis,
      commencing  on the date of issuance  at an interest  rate of 8 percent per
      annum and are payable on a semi-annual basis. The Company,  at its option,
      may pay dividends  either in cash or by the issuance of additional  shares
      of Series U Preferred Stock.  Aggregate cumulative dividends in arrears at
      December 31, 2000, totaled $94,119.

9     COMMON STOCK

      The Company is authorized  to issue up to 25,000,000  shares of its $.0001
      par value  common  stock.  During  2000,  no shares of common  stock  were
      issued.  As of  December  31,  2000,  8,023,000  shares  were  issued  and
      outstanding.

10    STOCK BASED COMPENSATION

      STOCK WARRANTS GRANTED IN EXCHANGE FOR SERVICES

      During 2000, the Company  granted 372,780  warrants,  with exercise prices
      ranging from $1.00 to $4.50 per share, to consultants for certain advisory
      and consulting  services.  The warrants vest immediately upon issuance and
      can be exercised over a five-year period. In August 2000, 250,000 warrants
      granted at $4.50 were  re-priced to $1.00 per share.  In  September  2000,
      100,000  warrants  granted at $1.50 were re-priced to $0.01 per share. The
      Company  valued these  warrants,  and their  re-pricing,  at $1,126,790 in
      accordance  with SFAS 123,  and  recognized  the entire  amount in 2000 as
      general and  administrative  expenses  in the  accompanying  statement  of
      operations.

      STOCK WARRANTS GRANTED ATTACHED TO DEBT AGREEMENTS

      During 2000, the Company  granted 326,666  warrants,  with exercise prices
      ranging  from $.50 to $4.50,  attached  to various  debt  agreements.  The
      warrants  vest  immediately  upon  issuance  and can be  exercised  over a
      five-year period.  The Company applied APB Opinion No. 14, "Accounting for
      Convertible  Debt and Debt  Issued  with  Stock  Purchase  Warrants",  and
      accounted  for  the  portion  of the  proceeds  of the  debt  issued  with
      warrants,  which was  allocable to the  warrants,  as  additional  paid-in
      capital based on the relative fair values of the securities at the time of
      issuance, and also recognized a discount on the debt as a result.

                                      F-16
In September  2000,  200,000  warrants  granted at $4.50 were re-priced to
      $1.00 per share in  connection  with an  extension of the term date of the
      debt.  The Company  valued the  re-pricing at $63,180,  and recognized the
      entire amount in 2000 as interest expense in the accompanying statement of
      operations.

      Warrant activity for the year ended December 31, 2000, is as follows:

       Balance December 31, 1999                           529,700
       Issued                                              699,446
       Exercised                                                 -
       Expired                                                   -

       Balance December 31, 2000                         1,229,146
                                                         =========

      The following table summarizes  information about warrants  outstanding at
December 31, 2000, all of which are exercisable:

                                    Weighted Average
                       Number of        Remaining
Range of Exercise     Outstanding   Contractual Life     Weighted Average
     Prices            Warrants          (Years)          Exercise Price

$0.01 to  $0.50         200,000            3.3                $0.26
$1.00                   527,780            4.2                $1.00
$1.50                   429,700            3.8                $1.50
$2.00                    26,666            4.3                $2.00
$2.50                    45,000            4.2                $2.50
                         ------            ---                -----

                      1,229,146            3.9                $1.13
                      =========            ===                =====

      STOCK OPTIONS

      The Board  approves all  issuances  of stock  options.  All stock  options
      expire five years from the grant date. In general, options vest and become
      exercisable  one third on the one year  anniversary  of the date of grant,
      and the remainder vest evenly over the two years subsequent to that date.

      The following  table  summarizes  stock option activity for the year ended
      December 31, 2000:

                                      F-17
2000
                                                            Wtd Avg
                                                 Options             Exercise
                                                (in 000's)             Price
                                                ----------           --------

      Outstanding at Beginning of Year             881                $1.36
      Granted                                    1,000                 1.10
      Exercised                                     --                 0.00
      Forfeited                                   (340)                1.63
                                                 ------               -----

      Outstanding at end of year                 1,541                $1.15
                                                 ------               -----

      Vested Options                               846                $0.56

      Remaining Options available for
      Grant                                      3,459

In June 2000,  the Company  reduced the  exercise  price on all its  outstanding
stock options.  As a result,  the Company  recognized  $395,682 in  compensation
expense in 2000 for the  vested  portion of these  options,  and will  recognize
$933,568 in subsequent periods as these options vest.

The Company  accounts for issuances to employees under APB 25, and  accordingly,
$545,898 of compensation expense, including the amount discussed above, has been
recognized for the year ended December 31, 2000.

SFAS 123 requires pro forma  information  regarding net income as if the Company
has accounted for its employee stock options under the fair value method of that
statement.  The fair value for these  options was estimated at the date of grant
using the Black-Scholes option pricing model with the following assumptions: (i)
risk-free  interest rate of 6 percent,  which  approximates  the four-year  U.S.
Treasury Bill rate at the date of grant,  (ii) dividend yield of 0 percent (iii)
expected  volatility  of 80  percent  (iv) and an average  expected  life of the
option of four years.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information is as follows:

                                                      Year Ended
                                                      December 31,
                                                         2000
                                                         ----
      Net loss:
         As reported                                  $(8,515,971)
         SFAS 123 pro forma                           $(8,902,427)

The  following  table  summarizes  the  weighted  average  fair value of options
granted to employees during the year ended December 31, 2000:

                                      F-18
2000
                                                          ----
Stock Price Greater than Exercise Price
     Weighted Average Fair Value                         $2.98

Stock Price Equal to Exercise Price
     Weighted Average Fair Value                         $0.84

Stock Price Less than Exercise Price
     Weighted Average Fair Value                         $0.82

The  following  table  summarizes  information  about  Company's  stock  options
outstanding as of December 31, 2000:

                      Options Outstanding                  Options Exercisable

                     Shares       Wtd. Avg    Wtd. Avg     Options     Wtd. Avg.
Range of Exercise  Outstanding    Remaining   Exercise   Exercisable   Exercise
      Prices        (in 000's)       Life       Price     (in 000's)     Price
-----------------  ------------   ---------   --------   ------------  ---------

$.25                   350            3.5       $0.25        239         $0.25
$.50                   371            4.3       $0.50        341         $0.50
$.75                   375            4.2       $0.75        185         $0.75
$1.00 to $1.50         445            4.4       $1.05         81         $1.26
                       ---            ---       -----        ---         -----

                     1,541                                   846         $0.56
                     =====                                   ===         =====

11    RELATED PARTIES

The Company's  primary legal  counsel  holds  3,200,000  shares of the Company's
common  stock in trust for the law firm's  partners.  During  2000,  the Company
recorded expenses of approximately $123,000 related to services performed by its
primary legal counsel. The Company owed its primary legal counsel  approximately
$61,000 at December 31, 2000.

                                      F-19
During 2000, Q Productions,  Inc., whose owners also own 4,800,000 shares of the
Company,  provided various information  technology services to the Company.  The
Company  recorded   approximately  $930,364  in  expenses  related  to  services
performed  by Q  Productions,  Inc. for the year ended  December  31, 2000.  The
Company owed Q Productions,  Inc. approximately $171,000 at December 31, 2000. Q
Productions, Inc. rented space from Qode.com in 2000 for $43,167 in total.

During 2000, the Company granted 20,000 warrants with an exercise price of $1.00
per share to Q Productions, Inc.

The Company has issued several promissory notes to officers (see Note 3).

12    SUBSEQUENT EVENTS

On January 11, 2001, the Company entered into a note purchase  agreement with an
investor for $300,000,  with an interest  rate of 18 percent.  The principal and
interest are due March 1, 2001.

In January  2001,  the Company  entered into a short-term  loan  agreement  with
NeoMedia  Technologies,  Inc. ("NeoMedia") for the amount of $440,000.  The note
was  forgiven in March 2001 upon the  acquisition  of  substantially  all of the
Company's assets by NeoMedia.

On March 1, 2001, NeoMedia purchased all of the assets of the Company other than
cash  including  but not limited to,  contracts,  customer  lists,  licenses and
intellectual  property.  In consideration for these assets, the Company received
1,676,500  shares of  NeoMedia's  Common  Stock.  In addition,  NeoMedia  issued
274,699  of its  Common  Stock to  certain  creditors  of the  Company,  for the
repayment of $1,561,037 of debt,  forgave the $440,000  short-term note due from
the Company (see above paragraph),  and assumed approximately  $1,407,000 of the
Company's  liabilities.  The 1,676,500 shares paid to the Company are to be held
in escrow for one year, and are subject to downward  adjustment,  based upon the
achievement of certain  performance  targets over the period of March 1, 2001 to
February 28, 2002.

Notes  payable as of  December  31,  2000 that were not  acquired as part of the
March 1, 2001 sale totaled 3,000,000 as of December 31, 2000.

13    SUBSEQUENT EVENTS

On May 31, 2001, three creditors of Qode.com,  Inc, filed in the U.S. Bankruptcy
Court an involuntary bankruptcy petition for Qode.com,  Inc. Qode.com,  Inc. has
consulted  with legal counsel and will be opposing the Chapter 7 proceeding  and
plans to proceed under Chapter 11, U.S. Code to reorganize its debts.

                                      F-20
Report of Independent Certified Public Accountants

The Stockholders and Board of Directors Qode.com, Inc.

We have audited the accompanying  balance sheet of Qode.com,  Inc. (the Company)
(a  development  stage  enterprise)  as of  December  31,  1999 and the  related
statement of operations,  and statement of changes in redeemable preferred stock
and stockholders' deficit, and statement of cash flows for the period from March
29, 1999 (inception)  through December 31, 1999. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Qode.com,  Inc. at December 31,
1999,  and the results of its operations and its cash flows for the period March
29, 1999  (inception)  through  December 31, 1999, in conformity with accounting
standards generally accepted in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As more  fully  described  in Note 1,  the
Company, which is in the developmental stages has incurred a net operating loss,
experienced  negative cash flow from  operations and has a net capital  deficit.
These conditions raise substantial doubt about the Company's ability to continue
as a going  concern.  Management's  plans in regards to these  matters  are also
described in Note 1. The financial  statements do not include any adjustments to
reflect the possible future effects on the  recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

                                                           /s/ ERNST & YOUNG LLP
West Palm Beach, Florida

July 21, 2000,
except for the seventh paragraph of Note 8,
as to which the date is June 30, 2001

                                      F-21
QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                                  BALANCE SHEET

                                DECEMBER 31, 1999

Assets
Current assets:
    Cash and cash equivalents                                      $972,487
    Other current assets                                             18,151
                                                                    -------

Total current assets                                                990,638

Property and equipment, net                                         109,269
Deposits                                                             30,229
                                                                    -------

Total assets                                                     $1,130,136
                                                                 ==========

Liabilities, redeemable preferred stock and stockholders' deficit
Current liabilities:
    Accounts payable                                               $151,588
    Accrued expenses                                                 47,246
    Due to officers                                                  73,333
                                                                   --------

Total current liabilities                                           272,167

15% cumulative convertible redeemable preferred stock,
    $.0001 par value, 3,000,000 shares authorized,
    2,025,000 shares issued and outstanding, liquidation
    value of $2,221,000                                           2,154,711

Commitments

Stockholders' deficit:
    Common stock, $.0001 par value, 25,000,000 shares
    authorized, 8,023,000 shares issued and outstanding                 802
    Capital deficiency                                              (49,557)
    Deficit accumulated during the development stage             (1,247,987)
                                                                 -----------
Total stockholders' deficit                                      (1,296,742)
                                                                 -----------

Total liabilities, redeemable preferred stock and
    stockholders' deficit                                        $1,130,136
                                                                 ===========

SEE ACCOMPANYING NOTES.

                                      F-22
QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                             STATEMENT OF OPERATIONS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

Costs and expenses:
     Research and development                                      $396,242
     Sales and marketing                                             41,975
     General and administrative                                     847,412
                                                                  ----------

Total costs and expenses                                          1,285,629
Net interest income                                                 (37,642)
                                                                  ----------

Net loss                                                         (1,247,987)

Preferred dividends and redemption accretion                       (200,711)
                                                                 -----------

Net loss applicable to common stockholders                      $(1,448,698)
                                                                ============

See accompanying notes.

                                      F-23
QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                       STATEMENT OF CHANGES IN REDEEMABLE
                    PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999
Deficit
                                                                                          Accumulated
                                   Redeemable          Common Stock                        During the           Total
                                   Preferred                                 Capital       Development      Stockholders'
                                     Stock          Shares       Amount     Deficiency        Stage            Deficit
                                   -----------      ------       ------     ----------    ------------      -------------
Issuance of common stock
     on March 29, 1999                   $--       8,000,000      $800            $--             $--             $800
     (inception)
   Issuance of redeemable
     preferred stock with
     detachable warrants
     valued at $46,000, net
     of issuance costs of           1,954,000            --         --          46,000             --           46,000
     $25,000
   Issuance of common stock               --          23,000         2          22,998             --           23,000
   Issuance of warrants in
     exchange for services                --             --         --          82,156             --           82,156
   Preferred dividends and
     redemption accretion             200,711            --         --        (200,711)            --         (200,711)

   Net loss                               --             --         --             --       (1,247,987)     (1,247,987)
                                   ----------      ---------     ------      ----------    ------------    ------------

Balance at December 31, 1999       $2,154,711      8,023,000      $802        $(49,557)    $(1,247,987)    $(1,296,742)
                                   ==========      =========     ======      ==========    ============    ============
SEE ACCOMPANYING NOTES.

                                      F-24
QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                             STATEMENT OF CASH FLOWS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

Operating activities
Net loss                                                          $(1,247,987)
Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                      17,522
    Issuance of warrants in exchange for services                      82,156
    Changes in assets and liabilities:
       Other current assets                                           (18,151)
       Deposits                                                       (30,229)
       Accounts payable                                               151,588
       Accrued expenses                                                47,246
       Due to officers                                                 73,333
                                                                  ------------

Net cash used in operating activities                                (924,522)
                                                                  ------------

Investing activities
Purchases of property and equipment                                  (126,791)
                                                                  ------------

Net cash used in investing activity                                  (126,791)
                                                                  ------------

Financing activities
Proceeds from the issuance of redeemable
    preferred stock, net of issuance costs
    of $25,000                                                      2,000,000
Proceeds from the issuance of common stock                             23,800
                                                                  ------------

Net cash provided by financing activities                           2,023,800
                                                                  ------------

Net increase in cash and cash equivalents                             972,487
Cash at beginning of period                                                --
                                                                  ------------

Cash at end of period                                                $972,487
                                                                  ============

Supplemental disclosure of cash flow information
Interest paid                                                            $171

Noncash financing and investing activities
Accrued dividends on redeemable preferred stock                      $195,997
Accretion of redeemable preferred stock                                $4,714

SEE ACCOMPANYING NOTES

                                      F-25
QODE.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          NOTES TO FINANCIAL STATEMENTS

           PERIOD FROM MARCH 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

1. NATURE OF BUSINESS

ORGANIZATION

Qode.com,  Inc.  (the  Company)  commenced  operations  on March 29, 1999 and is
incorporated in the state of Florida.  Qode.com is a development  stage company,
as  defined  in  Statement  of  Financial  Accounting  Standards  (SFAS)  No. 7,
Accounting and Reporting By Development Stage  Enterprises.  The Company intends
to provide manufactures, retailers, advertisers, and users a unique tool for Web
site  navigation by the use of imbedded  standard bar codes and Uniform  Product
Codes  (UPC).  It is the  Company's  mission to develop,  operate,  maintain and
promote the use of  Qode.com  technologies  to enable any bar code to  interface
with their technology.

The  Company  has  incurred  losses  since  its  inception  as  it  has  devoted
substantially  all  of  its  efforts  toward  building  network  infrastructure,
internal staffing,  developing systems,  expanding into new markets,  building a
proprietary  database and raising capital.  The Company has generated no revenue
to date  and is  subject  to a  number  of  risks  similar  to  those  of  other
development  stage  companies,  including  dependence  on key  individuals,  the
ability  to  demonstrate  technological  feasibility,  and the  need  to  obtain
adequate additional financing necessary to fund the development and marketing of
its products and services, and customer acceptance.

The Company's financial  statements have been prepared assuming that the Company
will continue as a going concern.  The Company has a limited  operating  history
and intends to  significantly  increase its operational  expenses in fiscal year
2000 to pursue  certain  sales  and  marketing  plans.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and  classification  of  liabilities  that may results  from the outcome of this
uncertainty.  In  fiscal  year  2000,  the  Company  plans to  raise  additional
financing from private equity  financing.  The Company  entered into a financing
agreement  subsequent  to  year  end  that  will  provide  the  Company  with an
additional $3 million, see Note 8.

                                      F-26
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For purposes of reporting  cash flows,  the Company  considers all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line  method over the  estimated  useful  lives of the related  assets.
Computer  hardware and software are being  depreciated  over a three year period
and furniture and fixtures are being depreciated over a five year period.

SOFTWARE DEVELOPMENT COSTS

In  accordance  with the AICPA SOP No.  98-1,  Accounting  for Costs of Computer
Software  Developed  or Obtained  for  Internal  Use,  all costs  related to the
development  or purchase  of internal  use  software  other than those  incurred
during the application  development stage are to be expensed as incurred.  Costs
incurred during the application development stage are required to be capitalized
and  amortized  over the useful life of the  software.  The Company has incurred
$259,480  in  software  development  costs for the period  from  March 29,  1999
(inception)  through  December 31, 1999.  All costs have been expensed since the
Company has not entered the  application  development  stage as of December  31,
1999.

                                      F-27
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company accounts for income taxes under the liability method, which requires
the  establishment  of a deferred tax asset or liability for the  recognition of
future  deductions  or  taxable  amounts,  and  operating  loss  and tax  credit
carryforwards.  Deferred tax expense or benefit is recognized as a result of the
change in the deferred  asset or liability  during the year. If  necessary,  the
Company will establish a valuation allowance to reduce any deferred tax asset to
an amount which will, more likely than not, be realized.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to a concentration of
credit  risk  consist  principally  of cash and cash  equivalents.  The  Company
maintains its cash and cash equivalents with high quality financial institutions
to mitigate this credit risk.

REDEEMABLE PREFERRED STOCK

Redeemable preferred stock is carried at the net consideration to the Company at
time of  issuance  (fair  value),  increased  by accrued  and unpaid  cumulative
dividends and periodic  accretion to redemption value using the interest method.
Accrued and unpaid  dividends and  redemption  accretion are affected by charges
against  retained  earnings,  or, in the absence of retained  earnings,  paid-in
capital (capital deficiency).

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company has adopted Statement of Financial  Accounting  Standards (SFAS) No.
123, Accounting for Stock-Based  Compensation.  The provisions of SFAS 123 allow
companies  to either  expense the  estimated  fair value of stock  options or to
continue to follow the  intrinsic  value method set forth in  Accounting  Public
Bulletin (APB) Opinion 25, Accounting for Stock Issued to Employees but disclose
the pro  forma  effects  on net  income  or loss as if the fair  value  had been
expensed. The Company has elected to apply APB 25 in accounting for its employee
stock  options  and,  accordingly,   recognizes  compensation  expense  for  the
difference  between the fair value of the underlying  common stock and the grant
price of the option at the date of grant.

                                      F-28
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                December 31,
                                                   1999
                                                   ----
      Computer hardware and software             $120,791
      Furniture and fixtures                        6,000
                                                 --------

                                                  126,791
      Less accumulated depreciation               (17,522)
                                                 ---------
                                                 $109,269
                                                 =========

Depreciation and amortization  expense was $17,939 for the period from March 29,
1999 (inception) to December 31, 1999.

4. INCOME TAXES

The net amounts of deferred tax assets recorded in the balance sheet at December
31, 1999 are as follows:

                                                   1999
                                                   ----
      Deferred tax asset:
        Net operating loss carryforward          $469,050
      Less valuation allowance                   (466,230)
                                                 ---------

      Total deferred tax asset                     $2,820

      Deferred tax liabilities:
        Fixed assets                              $(2,820)
                                                 ---------

      Total net deferred taxes                    $-
                                                 =========

FASB 109  requires  a  valuation  allowance  to reduce the  deferred  tax assets
reported  if,  based on the weight of the  evidence,  it is more likely than not
that some portion or all of the deferred tax assets will not be realized.  After
consideration  of all the evidence,  both positive and negative,  management has
determined that a $466,230 valuation allowance at December 31, 1999 is

                                      F-29
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

4. INCOME TAXES (CONTINUED)

necessary  to reduce the deferred tax assets to the amount that will more likely
than not be realized. The change in the valuation allowance for the current year
is $466,230.  At December 31, 1999, the Company has available net operating loss
carryforwards of $1,246,478, which expire in the year 2019.

A reconciliation of income taxes computed at the U.S. federal statutory tax rate
to income tax expense for the year ended December 31, 1999 is as follows:

                                                               1999
                                                               ----
      Taxes at the U.S. statutory rate                      $(424,315)
      State taxes, net of federal benefit                     (44,975)
      Nondeductible items                                       3,060
      Change in valuation allowance                           466,230
                                                            ----------

      Total income tax expense                                     $-
                                                            ==========

5. COMMITMENTS

The Company leases its office  facility under a  non-cancelable  operating lease
expiring  March 2005.  Rental  expense was $19,711 for the period from March 29,
1999 (inception) to December 31, 1999.

Lease commitments under these non-cancelable operating leases as of December 31,
1999 are as follows:

          2000                                        $100,656
          2001                                         104,682
          2002                                         108,876
          2003                                         113,238
          2004                                         117,768
                                                      --------

                                                      $545,220
                                                      ========

                                      F-30
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY

15% CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK SERIES A

The Board of Directors has authorized the issuance of up to 3,000,000  shares of
Series A 15% $.0001  par value,  voting,  cumulative,  redeemable,  convertible,
preferred stock (the Preferred Stock) which may be issued in series from time to
time with such designations, rights, preferences and limitations as the Board of
Directors may declare by resolution.  In May 1999, the Company issues  2,025,000
shares of Preferred  Stock at $1.00 per share,  less issuance  costs of $25,000.
One detachable  warrant was attached to each share of the Preferred  Stock.  The
Preferred  Stock was recorded at $1,954,000,  net of the value of the detachable
warrants which was estimated to be $46,000.  The detachable warrants were valued
in  accordance  with SFAS No.  123 at $.23 per share  and are  convertible  into
common stock at $1.50 per share.  The Preferred Stock is convertible at any time
at the  option of the  holder  prior to the  closing  of a Public  Offering,  as
defined in the  agreement,  or within 20 days  following  receipt of a Notice of
Redemption,  as defined in the  agreement,  into the Company's  common stock for
each share of the Preferred Stock held plus accrued and unpaid  dividends on the
Series A Preferred Shares.  The Preferred Stock has a liquidation  preference of
$1 per share and is mandatorily redeemable on April 15, 2004. As of December 31,
1999, all 2,025,000 shares of the Preferred Stock and related 202,500 detachable
warrants remain outstanding.

Dividends on the preferred stock accrue on a daily basis  commencing on the date
of  issuance  at an  interest  rate  of 15%  per  annum  and  are  payable  on a
semi-annual basis. The Company,  at its option, may pay dividends either in cash
or by the issuance of additional  shares of Series A Preferred Stock.  Aggregate
cumulative dividends in arrears at December 31, 1999 totaled $195,997.

COMMON STOCK

The Company is  authorized  to issue up to  20,000,000  shares of its $.0001 par
value common stock. On March 29, 1999  (inception) the Company  received $800 by
issuing 8,000,000 shares of its common stock to its founders.

                                      F-31
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

Additionally,  the Company  issued  13,000  shares of common  stock to a Company
employee in lieu of  relocation  expense  reimbursement  of $13,000,  and 10,000
shares of common stock to an executive recruiter for a corporate staffing fee of
$10,000. These amounts were expensed.

STOCK OPTIONS AND WARRANTS GRANTED IN EXCHANGE FOR SERVICES

During 1999, the Company  granted 327,200 common stock warrants with an exercise
price of $1.50 per share to  consultants  for certain  advisory  and  consulting
services  performed  during the  Company's  start-up  phase.  The warrants  vest
immediately  upon  issuance  and can be exercised  over a five year period.  The
Company  valued the  warrants at $82,156 in  accordance  with SFAS No. 123,  and
recognized  the entire  amount as a general  and  administrative  expense in the
accompanying   statement  of  operations.   The  Company  had  327,200  warrants
outstanding at December 31, 1999.

During 1999,  the Company  granted  400,000 in common stock  options to purchase
shares of common stock at an exercise  price of $.10 per share to an  investment
advisor in exchange for investment  advisory  services.  The options  expired on
June 30,  2000  without  being  exercised  and  accordingly  no expense has been
recorded.

STOCK OPTIONS

In 1999,  the Company's  Board of Directors and  stockholders  approved the 1999
Equity  Compensation  Plan (the Plan).  The Plan  provides  for the  issuance of
incentive  stock options,  nonqualified  stock options and  restricted  stock to
directors,  officers,  and key employees of the Company as well as  non-employee
directors,  advisors,  and  consultants.  The Board  administers  the Plan.  The
Company has  reserved  5,000,000  shares of common  stock to be issued under the
Plan.

The exercise price (as established by the Board) of the stock options granted is
in excess of fair market value of the Company's  Common Stock on the date of the
grant. All stock options expire five years from the grant date in 2004.  Options
granted under the Plan are exercisable as determined by the Board.

                                      F-32
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

The following table  summarizes  stock option activity for the period from March
29, 1999 (inception) to December 31, 1999:

                                                                    Weighted
                                                     Number of       Average
                                                       Shares     Exercise Price
                                                     ---------    --------------

      Outstanding at March 29, 1999 (inception)             -          $-
          Granted                                     880,600           1.36
          Exercised                                         -           -
          Forfeited                                         -           -
                                                     --------        -------

      Outstanding at December 31, 1999                880,600          $1.36
                                                     ========        =======

At December 31, 1999,  142,642 options are  exercisable,  at a weighted  average
exercise price of $1.28 per share. The  weighted-average  remaining  contractual
life of the options is 4.7 years.

During 1999,  all of the stock  options  issued were granted to employees of the
Company.  The Company  accounts  for  issuances  to  employees  under APB 25 and
accordingly,  no compensation cost has been recognized for the period from March
29, 1999 (inception) to December 31, 1999.

SFAS No.  123  requires  pro forma  information  regarding  net income as if the
Company has accounted for its employee stock options under the fair value method
of that Statement. The fair value for these options was estimated at the date of
grant  using  the   Black-Scholes   option  pricing  model  with  the  following
assumptions: risk-free interest rates equal to the three-year U.S. Treasury Bill
rate on the grant date,  dividend yield of 0%, expected volatility of 81.1%, and
an average expected life of the option of three years.

                                      F-33
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

6. STOCKHOLDERS' EQUITY (CONTINUED)

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting period.  All employee options
granted to date vest over a one to three year period.  The  Company's  pro forma
information is as follows:

                                          Period from March 29, 1999 (inception)
                                                    to December 31, 1999
                                                    --------------------
      Net loss:
        As reported                                      $(1,247,987)
        SFAS No. 123 pro forma                           $(1,305,831)

The  weighted  average  fair value of options  granted to  employees  during the
period  from March 29, 1999 to December  31, 1999 for which the  estimated  fair
value of the  stock is less than the  exercise  price is $0.29  per  share.  The
weighted  average fair value of options  granted to employees  during the period
from March 29, 1999 to December 31, 1999 for which the  estimated  fair value of
the stock equals the exercise price is $0.47 per share.

SHARES RESERVED FOR FUTURE ISSUANCE

At December 31, 1999, the Company has reserved the following shares of stock for
issuance:

Common stock                                     11,977,000
Convertible preferred stock                         975,000
                                                 ----------
                                                 12,952,000
                                                 ==========

                                      F-34
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

7. RELATED PARTIES

The Company's  primary legal  counsel  holds  3,200,000  shares of the Company's
common stock in trust for the firm's partners. During 1999, the Company recorded
expenses of approximately  $32,000 related to services  performed by its primary
legal counsel.  The Company owed its primary legal counsel  approximately $3,000
at December 31, 1999.

During  1999,  Q  Productions,  Inc.  provided  various  information  technology
services to the Company. Two owners of Q Productions,  Inc. also aggregately own
4,800,000 shares of the Company. The Company recorded  approximately $129,000 in
expenses related to services performed by Q Productions, Inc. The Company owed Q
Productions, Inc. approximately $97,000 at December 31, 1999.

8. SUBSEQUENT EVENTS

On January 18, 2000,  the Company issued a convertible  subordinated  promissory
note  for $3  million  with a  fixed  interest  rate  of  12% to  Novus  Holding
Corporation.  Principal  and accrued  interest on the note are payable  upon the
earlier  of a) the  day  immediately  following  the  closing  of  financing  or
successive financings which cumulatively aggregate proceeds of $10,000,000 or b)
180 days from the date of the note. The debt is convertible into common stock at
a price equal to 85% of the  purchase  price per share paid by  investors in the
next financing or successive financings of $5,000,000 or more.

On February 11, 2000,  the Company  entered into a letter of intent with a major
supplier to produce  portable bar code scanning devices in exchange for payments
ranging from $32,000,000 to $35,000,000 over a 16 month period  commencing April
28, 2000 through August 1, 2001.

On March 15,  2000,  the Company  entered into a two year term note with a major
lender.  The principal amount of the note was $42,500 with a fixed interest rate
of 11%.  Principal  and  interest  payments  of $1,984 are due  monthly  through
maturity on March 15, 2002.

On March 24, 2000, the Company  obtained a letter of credit for $1,400,000  with
the lender of their term note.

                                      F-35
Qode.com, Inc.
                        (A Development Stage Enterprise)

                    Notes to Financial Statements (continued)

8. SUBSEQUENT EVENTS (CONTINUED)

On March 27,  2000,  the Company  entered  into a  consulting  agreement  with a
consultant  for a five month period in return for 250,000  common stock  options
convertible  into the Company's  common  stock.  The options have a term of five
years and an exercise price of $2 per share.  125,000  options vest 45 days from
the   commencement  of  the  agreement  based  on  the  fulfillment  of  certain
contractual  obligations.  The remaining  125,000  options vest 90 days from the
commencement of the agreement  based on the  fulfillment of certain  contractual
obligations.  Additionally,  the Company will pay the consultants  $100,000 over
the period of the contract.

On May 22,  2000,  the Board of Directors  authorized  the issuance of 1,500,000
shares of Series U Convertible  Preferred Stock (the Series U Preferred  Stock).
Dividends on the preferred stock accrue on a daily basis  commencing on the date
of issuance at an interest rate of 8% per annum. The Series U Preferred Stock is
convertible  at any time at the option of the holder  prior to the  closing of a
Public  Offering,  as defined in the agreement,  into one share of the Company's
common stock for each share of the Company's  Series U Preferred Stock held plus
accrued and unpaid dividends on the Series U Preferred  Shares.  In the event of
the closing of the next  financing of $4,000,000 or more within 90 days from the
authorization  of the  Series U  Preferred  Stock,  the  holder of the  Series U
Preferred  Stock shall have the right to convert  all Series U Preferred  Shares
into a number of shares of stock issued in the next financing  which  represents
the  equivalent  amount for the  consideration  paid for the Series U  Preferred
Stock.  The Series U Preferred  Stock has a liquidation  preference of $2.00 per
share.  On May 22, 2000, the Company  entered into an agreement for the issuance
of 1,500,000 shares of Series U Preferred Stock in exchange for $3,000,000.  The
shares will be issued in three separate  financings.  The initial 500,000 shares
are to be issued on the date of the agreement. The next 500,000 shares are to be
issued  upon the  Company  meeting  certain  performance  goals  defined  in the
agreement.  The  remaining  500,000  shares are to be issued,  not earlier  than
August 1, 2000 nor later than October 15, 2000, upon the Company meeting certain
performance goals defined in the agreement.

On May 31, 2001, three creditors of Qode.com,  Inc. filed in the U.S. Bankruptcy
Court an involuntary bankruptcy petition for Qode.com,  Inc. Qode.com,  Inc. has
consulted  with legal counsel and will be opposing the Chapter 7 proceeding  and
plans to proceed under Chapter 11, U.S. Code, to reorganize its debts.

                                      F-36
ITEM 8. EXHIBITS.

Exhibit

   4    NeoMedia Technologies, Inc. 2002 Stock Option Plan
          (incorporated by reference to Appendix A in NeoMedia
          Technologies 14A Definitive Proxy Statement as filed
          with the SEC on May 7, 2002).

   5    Opinion of Kirkpatrick & Lockhart LLP

  23.1  Consent of Ernst & Young, LLP, former independent certified
          public accountants of Qode.com, Inc.

  23.2  Consent of Stonefield Josephson, Inc., current independent auditors
          of NeoMedia Technologies, Inc.

  23.4  Consent of Kirkpatrick & Lockhart LLP (included in Exhibit
          5 opinion letter).

  24    Power of Attorney (included on signature page).

  25

      In accordance with Securities Act Rule 437a, the consent of Arthur
Andersen LLP has not been included as an exhibit herewith. The Company has been
unable to obtain a consent of Arthur Andersen LLP due to the departure of their
engagement team leaders from such firm. Any recovery by investors posed by the
lack of consent is limited by Securities Act Rule 437a.

ITEM 9. UNDERTAKINGS.

(a)   The undersigned registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made, a
      post-effective amendment to this registration statement to include any
      material information with respect to the plan of distribution not
      previously disclosed in the registration statement or any material change
      to such information in the registration statement;

      (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any
      of the securities being registered which remain unsold at the termination
      of the offering.

(b)   The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c)   Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person connected with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Myers, State of Florida, on June 25, 2002.

                           NEOMEDIA TECHNOLOGIES, INC.

   BY:   /S/ CHARLES T. JENSEN
        ------------------------------------
         CHARLES T. JENSEN, PRESIDENT AND
         CHIEF OPERATING OFFICER

                                    THE PLAN

Pursuant to the requirement of the Securities Act of 1933, the Committee that
administers the 2002 Stock Option Plan has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Myers, State of Florida on June 25, 2002.

                                      PLAN:
                           NEOMEDIA TECHNOLOGIES, INC.
                             2002 STOCK OPTION PLAN

   BY:   /S/ CHARLES T. JENSEN
        ------------------------------------
         CHARLES T. JENSEN, PRESIDENT AND
         CHIEF OPERATING OFFICER
POWER OF ATTORNEY

The undersigned officers and directors of NeoMedia Technologies, Inc. hereby
constitute and appoint Charles W. Fritz with power to act one without the other,
our true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, for us and in our stead, in any and all capacities to sign
any and all amendments (including post-effective amendments) to this
Registration Statement and all documents relating thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
necessary or advisable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or her
substitutes, may lawfully do or cause to be done by virtue hereof.

SIGNATURES                  TITLE                                     DATE
----------                  -----                                     ----

/S/ CHARLES W. FRITZ        CHIEF EXECUTIVE OFFICER,
---------------------       CHAIRMAN OF THE BOARD AND DIRECTOR    JUNE 25, 2002
CHARLES W. FRITZ

/S/ WILLIAM E. FRITZ        SECRETARY AND DIRECTOR                JUNE 25, 2002
---------------------
WILLIAM E. FRITZ

/S/ CHARLES T. JENSEN       PRESIDENT, CHIEF OPERATING OFFICER,
---------------------        AND DIRECTOR                         JUNE 25, 2002
CHARLES T. JENSEN

/S/ DAVID A. DODGE          VICE PRESIDENT, CHIEF FINANCIAL
----------------------      OFFICER, AND CONTROLLER               JUNE 25, 2002
DAVID A. DODGE

/S/ A. HAYES BARCLAY        DIRECTOR                              JUNE 25, 2002
----------------------
A. HAYES BARCLAY

/S/ JAMES J. KEIL           DIRECTOR                              JUNE 25, 2002
----------------------
JAMES J. KEIL
EXHIBIT 5.1
June 25, 2002

Neomedia Technologies, Inc.
2201 Second Street, Suite 600
Fort Meyers, Florida 33901

RE:   NEOMEDIA TECHNOLOGIES, INC. (THE "CORPORATION")
      REGISTRATION STATEMENT ON FORM S-8 (THE "REGISTRATION STATEMENT")

Gentlemen:

We have acted as special counsel to the Corporation in connection with the
preparation of the Registration Statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "1933 Act"),
relating to the proposed public offering of up to 9,440,000 shares of the
Corporation's common stock, par value $0.01 per share (the "Common Stock").

We are furnishing this opinion to you in accordance with Item 601(b)(5) of
Regulation S-K promulgated under the 1933 Act for filing as Exhibit 5.1 to the
Registration Statement.

We are familiar with the Registration Statement, and we have examined the
Corporation's Certificate of Incorporation, as amended to date, the
Corporation's Bylaws, as amended to date, and minutes and resolutions of the
Corporation's Board of Directors and shareholders. We have also examined such
other documents, certificates, instruments and corporate records, and such
statutes, decisions and questions of law as we have deemed necessary or
appropriate for the purpose of this opinion.

Based upon the foregoing, we are of the opinion that the shares of Common Stock
to be sold by the Selling Stockholders (as defined in the Registration
Statement) to the public, when issued and sold in the manner described in the
Registration Statement (as amended), will be validly issued, fully paid and
non-assessable.

We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof in connection with the matters referred to under the caption
"Legal Matters."

Very truly yours,

/s/ KIRKPATRICK & LOCKHART LLP
------------------------------
KIRKPATRICK & LOCKHART LLP
EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our report dated July 21, 2000, except for the seventh
paragraph of Note 8, as to which the date is June 30, 2001, with respect to the
financial statements of Qode.com, Inc. (A Development Stage Enterprise) as of
December 31, 1999 and for the period from March 29, 1999 (inception) through
December 31, 1999 in the Registration Statement (Form S-8) for the Registration
of 9,440,000 shares of Neomedia Technologies, Inc.'s common stock.

                                                           /s/ Ernst & Young LLP

West Palm Beach, Florida

June 25, 2002
EXHIBIT 23.2

               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated March 28, 2002, on our audit of the consolidated
financial statements of Neomedia Technologies, Inc. as of December 31, 2001 and
for the year then ended.

/s/ Stonefield Josephson, Inc.
-----------------------------------
Certified Public Accountants

Irvine, California
June 25, 2002