NEW YORK--(BUSINESS WIRE)--May. 15, 2012--
Vringo, Inc. (NYSE Amex: VRNG), a provider of software platforms for
mobile social and video applications, today announced operating results
for the first quarter of 2012 and recent highlights.
"The first quarter of 2012 was an exciting quarter for Vringo. We
announced a transformational definitive merger agreement with
Innovate/Protect, and continued to see strong user data with respect to
our Facetones™ and Video Ringtone products. In the first quarter, we
strategically focused on user engagement and user experience ahead of
monetization in our goal to create a substantial long-term base of
users," said Andrew Perlman, Vringo's Chief Executive Officer and
President.
First Quarter Highlights and Subsequent Events
During the first quarter, Vringo:
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Signed a definitive merger agreement with Innovate/Protect on March
12, 2012.
-
Innovate/Protect seeks to monetize intellectual property assets.
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Innovate/Protect's flagship patent portfolio was acquired from
Lycos, Inc.
-
I/P Engine, Inc., a wholly-owned subsidiary of Innovate/Protect,
is in litigation to protect its patents.
-
The Markman hearing is scheduled for June 4, 2012 and the
trial is scheduled for October 16, 2012.
-
Surpassed one million downloads of its Facetones™ app in first 6
months of marketing.
-
Entered into an agreement with Facebook, Inc., the world's leading
online social network, relating to the use of Vringo's
Facetones™ trademark and domain name.
-
Increased Facetones™ distribution with featured placement on Sprint's
"Sprint Zone".
-
Released beta versions of Facetones™ for Apple's iOS and Facetones™
for LinkedIn.
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Received approximately $3.65 million from the exercise of outstanding
warrants.
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Regained compliance with the NYSE Amex continued listing standards.
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Received notice of allowance for its first international patent.
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Launched its video ringtone service with Tata Docomo in India, and du
in the United Arab Emirates.
Operating Results
-
Total assets increased by 115% compared to the quarter ended December
31, 2011 ($4.1 million in the first quarter of 2012, compared to $1.9
million in the fourth quarter of 2011). The increase is primarily due
to the exercise of warrants in February 2012, offset by the cost of
our operations.
-
Revenues decreased by 35% compared to the quarter ended December 31,
2011 ($106,000 in the first quarter of 2012, compared to $162,000 in
the fourth quarter of 2011). The decrease is primarily due to absence
of one-time set up fees from carriers and development projects during
the quarter as well as the removal of advertisements for the purpose
of increasing downloads and virality.
-
Net cash burn reduced to historical low, a decrease of $71,000 in cash
burn, compared to the quarter ended December 31, 2011 ($1.22 million
in the first quarter of 2012 compared to $1.29 million in the fourth
quarter of 2011). The operational cash burn, excluding expenses
incurred in connection with merger and acquisition activities, totaled
approximately $770,000.
-
Net loss increased by 100% compared to the quarter ended December 31,
2011 ($5.64 million in the first quarter of 2012 compared to $2.82
million in the fourth quarter of 2011). The increase is primarily due
to $1.8 million in non-operating expenses, mainly related to
accounting for the February 2012 exercise of warrants, the issuance of
reload warrants, approximately $600,000 of share-based compensation
expenses related to 2012 option grants, and approximately $400,000 of
merger and acquisition related activity.
Mr. Perlman continued, "We believe that the merger with Innovate/Protect
will continue to create value for our shareholders. We believe that the
interest from consumers that we have seen for our Facetones™ product
shows that our team is capable of continuing to create exciting user
experiences."
Ellen Cohl, Vringo's Chief Financial Officer, said, "During the most
recent quarter, we continued to reduce Vringo's operating expenses while
producing exciting technology. We will use our balance sheet to continue
to develop our products and services, complete the merger with
Innovate/Protect, and engage in other strategic activities."
About Vringo, Inc.
Vringo (NYSE Amex: VRNG) is a provider of software platforms for mobile
social and video applications. With its award-winning video ringtone
application and other mobile software platforms, including Facetones™,
Video Remix and Fan Loyalty, Vringo transforms the basic act of making
and receiving mobile phone calls into a highly visual, social experience.
Vringo recently announced that it had entered into a definitive merger
agreement with Innovate/Protect, Inc.
Vringo's video ringtone service enables users to create or take video,
images and slideshows from virtually anywhere and turn it into their
visual call signature. In a first for the mobile industry, Vringo has
introduced its patented VringForward technology, which allows users to
share video clips with friends with a simple call. Vringo's Facetones™
application creates an automated video slideshow using friends' photos
from social media web sites, which is played each time a user
communicates with a friend using a mobile device. Vringo's Video ReMix
application, in partnership with music artists and brands, allows users
to create their own music video by tapping on a Smartphone or tablet.
Fan Loyalty is a platform that lets users interact, vote and communicate
with contestants in reality TV series with which Vringo partners, as
well as downloading and setting clips from such shows as video
ringtones. Vringo's video ringtone application has been heralded by The
New York Times as "the next big thing in ringtones" and USA
Today said it has "to be seen to be believed." For more information,
visit: www.vringo.com
and www.vringoinc.com.
About Innovate/Protect, Inc.
Innovate/Protect, Inc. is an intellectual property firm founded in 2011
whose wholly-owned subsidiary, I/P Engine, Inc. holds eight patents that
were acquired from Lycos, Inc.
Cautionary Note Regarding Forward-Looking Statements
Statements in this press release regarding the proposed transaction
between Vringo, Inc. (“Vringo”) and Innovate/Protect, Inc.
(“Innovate/Protect”) and any other statements about Vringo's or
Innovate/Protect's management teams' future expectations, beliefs,
goals, plans or prospects constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Any
statements that are not statements of historical fact (including
statements containing the words "believes," "plans," "could,"
"anticipates," "expects," "estimates," "plans," "should," "target,"
"will," "would" and similar expressions) should also be considered to be
forward-looking statements. There are a number of important factors that
could cause actual results or events to differ materially from those
indicated by such forward-looking statements, including: the risk that
Vringo and Innovate/Protect may not be able to complete the proposed
transaction; the inability to realize the potential value created by the
proposed merger for Vringo's and Innovate/Protect's stockholders; our
respective or combined inability to raise capital to fund our combined
operations and business plan; Vringo's or the combined company's
inability to maintain the listing of our securities on the NYSE Amex;
the potential lack of market acceptance of Vringo's products; our
collective inability to protect our intellectual property rights;
potential competition from other providers and products; our inability
to license and monetize the patents owned by Innovate/Protect, including
the outcome of the litigation against online search firms and other
companies; and other risks and uncertainties more fully described in
Vringo's Annual Report on Form 10-K for the year ended December 31, 2011
filed with the U.S. Securities and Exchange Commission (“SEC”) on March
30, 2012, as well as the other filings that Vringo makes with the SEC.
Investors and stockholders are also urged to read the risk factors set
forth in the proxy statement/prospectus carefully when they are
available.
In addition, the statements in this press release reflect our
expectations and beliefs as of the date of this release. We anticipate
that subsequent events and developments will cause our expectations and
beliefs to change. However, while we may elect to update these
forward-looking statements publicly at some point in the future, we
specifically disclaim any obligation to do so, whether as a result of
new information, future events or otherwise. These forward-looking
statements should not be relied upon as representing our views as of any
date after the date of this release.
Important Additional Information Will Be Filed with the SEC
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities of Vringo, or
Innovate/Protect or the solicitation of any vote or approval. In
connection with the proposed transaction, Vringo filed a Registration
Statement on Form S-4 with the SEC on April 6, 2012, which includes a
preliminary proxy statement/prospectus of Vringo. These materials are
not yet final and will be further amended. The proxy
statement/prospectus contains important information about Vringo,
Innovate/Protect, the transaction and related matters. Vringo will mail
or otherwise deliver the proxy statement/prospectus to its stockholders
and the stockholders of Innovate/Protect once it is final. Investors and
security holders of Vringo and Innovate/Protect are urged to read
carefully the proxy statement/prospectus relating to the merger
(including any amendments or supplements thereto) in its entirety when
it is available, because it will contain important information about
Vringo, Innovate/Protect and the proposed transaction.
Investors and security holders of Vringo will be able to obtain free
copies of the proxy statement/prospectus for the proposed merger (when
it is available) and other documents filed with the SEC by Vringo
through the website maintained by the SEC at www.sec.gov.
In addition, investors and security holders of Vringo and
Innovate/Protect will be able to obtain free copies of the proxy
statement/prospectus for the proposed merger (when it is available) by
contacting Vringo, Inc., Attn.: Cliff Weinstein, VP Corporate
Development, at 44 W. 28th Street, New York, New York 10001, or by
e-mail at cliff@vringo.com.
Investors and security holders of Innovate/Protect will also be able to
obtain free copies of the proxy statement/prospectus for the merger by
contacting Innovate/Protect, Attn.: Chief Operating Officer, 380 Madison
Avenue, 22nd Floor, New York, NY 10017, or by e-mail at info@innovateprotect.com.
Vringo and Innovate/Protect, and their respective directors and certain
of their executive officers, may be deemed to be participants in the
solicitation of proxies in respect of the transactions contemplated by
the agreement between Vringo and Innovate/Protect. Information regarding
Vringo's directors and executive officers is contained in Vringo's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011,
which was filed with the SEC on March 30, 2012, and in the preliminary
proxy statement/prospectus. Information regarding Innovate/Protect's
directors and officers and a more complete description of the interests
of Vringo's directors and officers in the proposed transaction is
available in the preliminary proxy statement/prospectus.
Source: Vringo, Inc.
Investors:
Vringo, Inc.
Cliff
Weinstein
Executive Vice President
646-532-6777 (o)
cliff@vringo.com
or
Media:
The
Hodges Partnership
Caroline L. Platt
804-788-1414 (o)
804-317-9061
(m)
cplatt@hodgespart.com