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Vringo Reports 2010 Second Quarter Results

(August 16, 2010)

NEW YORK, Aug. 16, 2010 (GLOBE NEWSWIRE) -- Vringo, Inc., (NYSE Amex:VRNG) a provider of video ringtones and personalization solutions for mobile devices, today announced financial results for the second quarter ended June 30, 2010.



Recent Highlights:




  • Second quarter revenues of $44,000, compared to $0 in the second quarter of 2009


  • Successfully completed U.S. initial public offering raising gross proceeds of $11 million


  • Finished quarter with $9.7 million of cash on hand


  • Number of commercial subscribers increased to 66,000, a 61% increase from the previous quarter


  • Receives first U.S. patent


  • Signs partnership with T-Pain for new app


  • Announces intent to offer Vringo on Verizon V Cast App Store



Jon Medved, Chief Executive Officer, commented, "We are pleased with Vringo's 2010 second quarter results and operational accomplishments. First, we are delighted to have successfully completed the Company's initial public offering during the quarter and have smoothly transitioned to public ownership with a public valuation and a public currency. Operationally, we focused on validating our business model in certain test markets primarily in the developing world. We received data from test markets that we believe is favorable and will help us achieve our ultimate goal of penetrating the lucrative North American and Western European markets. We believe our financial performance for the quarter is consistent with the start-up nature of our business with our technology platform in place and our business model proving out in our initial test markets."


Andrew Perlman, President, said, "We are pleased with the subscriber growth that we have seen in our current service and are looking forward to several important milestones planned for the third and fourth quarters that have the potential to accelerate our business momentum. We believe the strong user behavior that we have seen in current markets has validated our model and will translate well to the bigger and higher spending markets where we intend to launch in the coming months."




Perlman continued, "We are excited about our upcoming launch of an exciting new app for Android and the iPhone with T-Pain, the popular music artist and personality. T-Pain's first application for the iPhone was one of the most successful app launches ever, and we have great hopes for this new joint app launch. We are targeting our first 'for pay' release via a carrier in the U.S. in the Verizon V Cast App Store for the fourth quarter. Both of these events are key milestones for our company."



Revenue for the three months ended June 30, 2010, was $44,000 as compared to zero for the three months ended June 30, 2009, and compared to $30,000 for the three months ended March 31, 2010, a 47 percent sequential increase. Our operating loss for the three months ended June 30, 2010, was $1.7 million, as compared to $1.1 million for the three months ended June 30, 2009. The rise in operating loss was primarily due to an increase in general & administrative expenses related to the initial public offering, and to the recording of approximately $0.4 million of expenses related to the granting of the management options. To a lesser extent, our marketing expenses increased as we raised awareness among end-users of the Vringo service and launched our service in new markets. Net loss for the three months ended June 30, 2010, was $4.6 million, or $5.20 per share, compared to a net loss of $1.3 million, or $3.59 per share, for the three months ended June 30, 2009.



Revenue for the six months ended June 30, 2010, was $74,000, as compared to zero in the year-ago six-month period. Operating loss for the six-month period was $3.0 million compared with $2.5 million during the comparable 2009 six-month period. Net loss for the six-month period 2010 was $6.6 million, or $10.54 per share, compared with net loss of $2.9 million, or $7.78 per share, in the year-ago six-month period.



At June 30, 2010, Vringo had cash and cash equivalents of $9.7 million, working capital of $7.5 million and stockholders' equity of $2.6 million.



Conference Call



Vringo will host a conference call today at 4:30 p.m. ET (Monday, August 16, 2010). During the call, Jon Medved, Chief Executive Officer and Andrew Perlman, President, will discuss the Company's quarterly performance and financial results.



The telephone number for the conference call is +1-877-407-9210 (U.S. callers) or +1-201-689-8049 (international callers). A live webcast of the call will also be available on the Company's website at http://ir.vringo.com and at www.InvestorCalendar.com. To listen to the live call online, please visit the site at least 10 minutes early to register, download and install any necessary audio software.



A webcast archive will be available for 90 days on the Company's website, and a telephone replay of the call will be available beginning approximately one hour following the call through 11:59 p.m. Sunday, November 14, 2010, and can be accessed by calling +1-877-660-6853 (U.S. callers) or +1-201-612-7415 (International callers) and entering account number 286 and conference ID number 354893.



Forward-Looking Statements



This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Vringo expressly disclaims any obligation to publicly update any forward-looking statements contained herein, whether as a results of new information, future events or otherwise, except as required by law.



About Vringo



Founded in 2006, Vringo is bringing about the evolution of ringtones. With its award-winning video ringtone application and Web platform, Vringo transforms the basic act of making and receiving mobile phone calls into a highly visual, social experience. By installing Vringo's application, which is compatible with more than 200 handsets, users can create or take video, images and slideshows from virtually anywhere and make it into their personal call signature. For more information, visit http://www.vringo.com.



For more information about how video ringtones work, visit www.vringo.com/p_video_ringtones.html.




































































































































































































































































































































Vringo, Inc. and Subsidiary

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands except share and per share data)

 

 

Three months

ended June 30,

Six months ended

June 30,

Cumulative

from inception

to June 30,

 

2010

2009

2010

2009

2010

 

U.S.$

U.S.$

U.S.$

U.S.$

U.S.$

Revenue

 44 

 -- 

 74 

 -- 

 94 

 

 

 

 

 

 

Costs and Expenses*

 

 

 

 

 

Cost of revenue

 34 

 -- 

 67 

 -- 

 98 

Research and development

 566 

 467 

 1,106 

 1,038 

 9,490 

Marketing

600 

 404 

1,040 

 896 

 7,564 

General and administrative

 573 

 276 

 855 

 574 

 5,285 

 

 

 

 

 

 

Total operating expenses

1,773

 1,147 

3,068

 2,508 

22,437

 

 

 

 

 

 

Operating loss 

1,729

 1,147 

2,994

 2,508 

22,343

 

 

 

 

 

 

Non-operating income

(490)

(8)

(447)

(15)

(912)

Interest and amortization of 

 

 

 

 

 

 debt discount expense

3,355

 155 

4,009

 320 

 4,837 

Non-operating expenses 

--

--

15

 -- 

113 

Loss on extinguishment of debt

--

--

 -- 

 -- 

321 

 

 

 

 

 

 

Loss before taxes on income

4,594

 1,294 

 6,571 

 2,813 

 26,702 

 

 

 

 

 

 

Income tax expense

 18 

 21 

 38 

 40 

 32 

 

 

 

 

 

 

Net loss for the period 

4,612

 1,315 

 6,609 

 2,853 

26,734 

 

 

 

 

 

 

Basic and diluted net loss

 

 

 

 

 

 per common share

(5.20)

(3.59)

(10.54)

(7.78)

(67.56)

 

 

 

 

 

 

Weighted average number

 

 

 

 

 

 of shares used in

 

 

 

 

 

 computing basic and

 

 

 

 

 

 dilutive net loss per

 

 

 

 

 

 common share

887,567

 366,782 

627,174

 366,782 

395,714

 

 

 

 

 

 

* The amount recorded for the three and six months ending June 30, 2010, and 2009, and the cumulative period from inception include $73, $150, $74, $45 and $696, respectively, to related parties.

 

 

 

 

 

 

The notes in the Company's Form 10-Q filed with the U.S. Securities and Exchange Commission form an integral part of these consolidated financial statements.








































































































































































































































































































































































































































 

Vringo, Inc. and Subsidiary

(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands except share and per share data)

 

 

 

 

June 30,

December 31,

 

2010

2009

 

U.S.$

U.S.$

Current assets

 

 

Cash and cash equivalents

 9,692 

 744 

Prepaid expenses and other current assets

 53 

 46 

Accounts receivable 

 51 

 2 

Deferred stock issuance costs

 -- 

 100 

Short-term deposit (restricted)

 20 

 2,602 

Deferred tax assets – short-term

 31 

 24 

 

 

 

Total current assets

 9,847 

 3,518 

 

 

 

Long-term deposit

 12 

 12 

 

 

 

Property and equipment, at cost, net of $351 and 

 

 

 $306 accumulated depreciation as of June 30, 2010,

 

 

 and December 31, 2009, respectively

 168 

 179 

 

 

 

Deferred tax assets – long-term

 78 

 80 

 

 

 

Total assets

 10,105 

 3,789 

 

 

 

Current liabilities

 

 

Accounts payable and accrued expenses*

 805 

 876 

Accrued compensation

 355 

 304 

Current maturities of venture loan

 1,160 

 557 

Bridge notes

 -- 

 1,912 

 

 

 

Total current liabilities

 2,320 

 3,649 

 

 

 

Long-term liabilities

 

 

Accrued severance pay

 325 

 334 

Venture loan

 2,569 

 3,146 

Derivative liabilities on account of warrants

 2,274 

 1,070 

 

 

 

Total long-term liabilities

 5,168 

 4,550 

 

 

 

 

 

 

 Vringo, Inc. and Subsidiary

(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands except share and per share data)

 

 

 

 

June 30,

December 31,

 

2010

2009

 

U.S.$

U.S.$

Commitments and contingencies

 

 

 

 

 

Temporary equity

 

 

Series B convertible and redeemable preferred stock, $0.01 

 

 

 par value per share; 4,900,000 authorized; 765,465 shares 

 

 

 issued and outstanding as of December 31, 2009

 

 

 (liquidation preference of, and redeemable at, the greater of

 

 

 fair value or $15.831 per share, or $12.1 million, plus 

 

 

 declared but unpaid dividends, if any)

 -- 

 11,968 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

 

Common stock, $0.01 par value per share 28,000,000 and 

 

 

 14,000,000 authorized; 5,098,364 and 366,782 issued and

 

 

 outstanding as of June 30, 2010, and December 31, 2009,

 

 

 respectively

 51 

 22 

 

 

 

Series A convertible preferred stock, $0.01 par value per 

 

 

 share; 2,353,887 authorized; 392,314 issued and 

 

 

 outstanding as of December 31, 2009, (liquidation preference

 

 

 of $6.00 per share, or $2.35 million, plus declared but unpaid

 

 

 dividends, if any)

 -- 

 24 

 

 

 

Additional paid-in capital

29,300

 3,701 

 

 

 

Deficit accumulated during development stage

(26,734)

(20,125)

 

 

 

Total stockholders' equity (deficit)

 2,617 

(16,378)

 

 

 

Total liabilities and stockholders' equity

 10,105 

 3,789 

 

 

 

* The amounts recorded as of June 30, 2010, and December 31, 2009, include $38 and $46 to a related party, respectively.

 

 

 

The notes in the Company's Form 10-Q filed with the U.S. Securities and Exchange Commission form an integral part of these consolidated financial statements.

CONTACT: Vringo, Inc.
Jonathan Medved, CEO
+1 646-525-4319 x 2501
jon@vringo.com

Crescendo Communications, LLC
Investor Relations Firm
John J. Quirk
David K. Waldman
+1 212-671-1020
vrng@crescendo-ir.com

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