Clarification: The company now says they are only looking to raise $12 million, with the potential to reach $13.8 million if an over-allotment of shares is exercised. The $64.3 million figure in SEC filing, it says, is “because it’s required under the rules, but there’s really not a scenario to implement that entire equation,” says a spokesperson.
Original post: Vringo, the video ringtone and sharing firm based in New York City, has filed for a $64.312 million IPO, according to its SEC document. About 10 days ago we mentioned in a tweet that the company had raised about $3 million in new debt financing in form a bridge note. Founded in 2006, the last previously reported round for the company was a $12 million round in 2007, led by PE firm Warburg Pincus. It has raised a total of $17.5 million since inception. Warburg owns about 31.9 percent of the company, and judging from the state of the business (see S-1 details below) looks like the PE firm forced its hand in pushing this through.
Vringo’s service is an application that needs to be downloaded onto compatible handsets (says more than 200). Users can create or take video, images and slideshows from library and Web, and make it into their call signature. Also, in a reverse of ringback tones, Vringo also has a more gimmicky tech called VringForward, that lets its users select which video ringtone their friends will see when they call.
Details from the S-1:
—The company will list on Nasdaq under VRNGU. It is proposing the stock and warrants trade under VRNG and VRNGW, respectively.
—Looking to sell at least 2.4 million units, consisting of one share of common stock and 5-year warrants to buy another two shares 10 percent above the IPO price.
—Upon the completion of this offering, founders and Warburg will beneficially own about 7.4 percent and 16.7 percent, respectively, of voting interest. Its officers and directors (excluding our founders) will beneficially own 1.9 percent of voting interest.
—The company has been offering these services for free till now (including its Android app), but in keeping with the times, it will move to a subscription offering working with carriers and directly as well. Users will pay a monthly fee for access to the service and additional fees for premium content (probably taking cues from social gaming and virtual good industry).
—Revenues: It has never had a profit. It didn’t have any revenues until first nine months of 2009(is that an accounting issue?). Even for the first nine month of 2009, it only had revenues of $36K, the filing says. It has lost about $18.04 million since it was launched, likely the full amount of its funding till now.
—It will net about $10.3 million proceeds on this offering, and used for: $750K for capital expenditures, $2.5 million for cost of revenue, $2 million for R&D, $2.2 million for sales and marketing and $2.85 million for general corporate purposes, including working capital and repayment of a portion of our loan facility, it says.
—“We expect our net losses and negative cash flow to continue for the foreseeable future, as we continue to develop our platform, launch our service with new mobile carriers and begin to develop additional products.”
Click on the image below for the full revenue picture:
Yes, good luck with this one. They need it.
Related