Vringo, Inc. (NYSE MKT: VRNG), a company engaged in the innovation, development, and monetization of mobile technologies and intellectual property, today announced operating results for the third quarter of 2012 and subsequent events.
"I am very pleased with the accomplishments of the third quarter and what we have achieved so far in fourth quarter. In the less than five month period since we closed our merger with Innovate/Protect, we have strengthened Vringo's balance sheet, acquired multiple marquee patent portfolios, initiated action against ZTE's UK subsidiary, continued to develop new technology and intellectual property, and received a jury verdict in I/P Engine's against Google, AOL and others. I am excited to continue to build on these accomplishments and expand the company," said Andrew D. Perlman, Chief Executive Officer of Vringo.
Third Quarter Highlights and Subsequent Events
- Completed merger with Innovate/Protect.
- Acquired over five hundred patents and patent applications relating to telecom infrastructure.
- Acquired a portfolio of intellectual property from quantumStream Systems Inc. and Sprout IP LLC relating to the placement of advertisements on web pages via a bidding process.
- Filed nine provisional patent applications created by Ken Lang, President and Chief Technology Officer of Vringo, covering a wide range of technologies.
- Continued to build on our existing patents by filing twelve continuations and a continuation-in-part application in our telecom infrastructure portfolio.
- Filed a patent infringement lawsuit in the United Kingdom against a subsidiary of ZTE Corporation on three patents declared essential to European Telecommunications and Standards Institute (ETSI). The complaint accuses certain ZTE network products and ZTE GSM/UMTS multi-mode wireless handsets of infringing our patents.
- Concluded a three-week jury trial in litigation against Google, AOL and others in U.S. District Court, Eastern District of Virginia, Norfolk Division, where the jury found that the asserted claims of the patents-in-suit were both valid and infringed, and that reasonable royalty damages should be based on a running royalty.
- Signed final agreement with Neomobile, a major mobile entertainment service provider in Italy, for a launch of a jointly developed Android subscription product before the end of 2012.
- Released updated versions of the Facetones product to add support for all Android devices running on OS 4.0, known also as "Ice Cream Sandwich".
- Raised significant additional capital and repaid remaining non-operating debt, thereby strengthening the company's balance sheet.
- As of the close of business on November 14, 2012, we had over $60 million of cash on hand. We expect these funds will be sufficient to support our current operations and allow timely execution of our current business plans.
- Net loss for the third quarter was $3.1 million, mainly attributable to a non-operating income of $7.2 million, recorded in connection with the decrease in fair value of warrants, which are classified as a derivative liability, as well as by the impact of non-cash share based compensation expense of $5.4 million.
- In the third quarter of 2012, following the consummation of the merger, we recorded total revenues of $266 thousand. The recognized revenue consisted of: Vringo mobile-based product revenue of $76 thousand from the date of the merger, through September 30, 2012, and revenue from a development project of $90 thousand and proceeds from partial settlement of a litigation, in the total amount of $100 thousand.
- On a per share basis, our net loss fell by 83% to a net loss of $0.06 per basic share, compared to a loss of $0.36 per basic share, presented by Vringo in the second quarter. The decrease in basic loss per share was mostly due to an increase in the number of shares, and a decrease in the fair value of warrants classified as a long-term derivative liability, partly offset by increased costs reflecting the post-merger operations of the combined company.