To: Jim Bishop who wrote (122033 ) 11/8/2003 1:45:13 AM From: Jim Bishop Read Replies (2) | Respond to of 150070 SB-2 NEOM COMMON STOCK OFFERED 308,648,500 shares OFFERING PRICE Market Price COMMON STOCK OUTSTANDING PRIOR TO THIS OFFERING 235,658,873 shares This offering relates to the sale of common stock by certain persons who are, or will become, our stockholders. The selling stockholders consist of: o Cornell Capital Partners, which intends to sell up to 210,000,000 shares of common stock. o William Fritz, a member of our Board of Directors, who intends to sell 53,443,780 shares of common stock o Charles W. Fritz, the Chairman of our Board of Directors, who intends to sell 17,181,912 shares of common stock o Other selling stockholders, who intend to sell up to 19,727,570 shares of common stock This table excludes options and warrants to purchase 39,719,382 and 26,195,000 shares of common stock, respectively, and up to 200,000,000 additional shares of common stock to be issued under the Standby Equity Distribution Agreement. THE INVESTOR UNDER THE STANDBY EQUITY DISTRIBUTION AGREEMENT WILL PAY LESS THAN THE THEN-PREVAILING MARKET PRICE OF OUR COMMON STOCK The common stock to be issued under the Standby Equity Distribution Agreement with Cornell will be issued at a 2% discount to the lowest closing bid price for the 5 trading days immediately following the notice date of an advance. These discounted sales could cause the price of our common stock to decline. THE SALE OF OUR STOCK UNDER OUR STANDBY EQUITY DISTRIBUTION AGREEMENT COULD ENCOURAGE SHORT SALES BY THIRD PARTIES, WHICH COULD CONTRIBUTE TO THE FURTHER DECLINE OF OUR STOCK PRICE The significant downward pressure on the price of our common stock caused by the sale of significant amounts of common stock under the Standby Equity Distribution Agreement could encourage short sales by third parties. Up to 200,000,000 shares of our common stock are being registered in this offering for re-sale under the Standby Equity Distribution Agreement. Such an event could place further downward pressure on the price of our common stock. We previously registered 100,000,000 shares for resale under a separate $10 million Equity Line of Credit. This previous registration was declared effective by the SEC on February 14, 2003. Since that date, we have sold 100,000,000 shares to Cornell Capital Partners under the Equity Line of Credit. THE PRICE YOU PAY IN THIS OFFERING WILL FLUCTUATE AND MAY BE HIGHER OR LOWER THAN THE PRICES PAID BY OTHER PEOPLE PARTICIPATING IN THIS OFFERING The price in this offering will fluctuate based on the prevailing market price of the common stock on the OTC Bulletin Board. Accordingly, the price you pay in this offering may be higher or lower than the prices paid by other people participating in this offering. THE SELLING STOCKHOLDERS INTEND TO SELL THEIR SHARES OF COMMON STOCK IN THE PUBLIC MARKET, WHICH SALES MAY CAUSE OUR STOCK PRICE TO DECLINE The selling stockholders intend to sell the shares of common stock being registered in this offering in the public market. That means that up to 308,648,500 shares of common stock, the number of shares being registered in this offering, may be sold. Such sales may cause our stock price to decline.