Wall Street's Oldest Newsletter Covering Internet Stocks
Internet Stock Review, Monday 4/02/2012
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1. Adding VRNGO (VRNG) $2.10 to Internet Stock Review Watch List.
2. Adding Converted Organics (COIN) $0.01 to Daily Trader Watch List.
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1. Adding VRNGO (VRNG) $2.10 to Internet Stock Review Watch List.
Jump Ball !
Vrngo (VRNG), we were told this Friday is in the "patent trolling" business and is going after Google (GOOG), from one very savvy investor. Vrngo is also the "next" VirnetX (VHC) as we've been told by an even more sophisticated investor --and since he told us about VHC when it was under $5 -- it makes our hair stand on end. No one (Morgan, Goldman etc), by the way -- was following the stock when we were told about it and told you about it.
We added VirnetX (VHC) to the Watch List at $6.50 on 6/28/10 and it later traded as high as $40 -- one year and one month later -- making us a lot of new friends !
VHC 2 year chart. http://goo.gl/tKi3L
VHC write-up: http://internetstockreview.ning.com/profiles/blogs/ia-adding-virnet...
Note how savvy we were (kudos to us) to add it at $6.00, just a month before its meteoric rise -- though not so savvy to listen at $3 and $4 when we were first told about it...
Anyway this is a long and convoluted story best told by James Altucher ( http://www.jamesaltucher.com/ )
Seeking Alpha / Tech Crunch story: http://seekingalpha.com/article/470231-why-google-might-be-going-to-0?source=yahoo
Here is an S-3 filing for researcher's, which tells a great deal of the story in a non-opinionated way.
VRNG S-3: http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=8171315
Here's some tid-bits to encourage you to read the story above:
"Google has willfully infringed on Vringo - I/P's patents for sorting ads based on click-throughs. I remember almost 20 years ago when Ken was working on the software. "Useless!" I thought then. Their claim: $67 billion of Google's revenues come from this patent. All of Google's revenues going forward come from this patent. And every search engine which uses Google is allegedly infringing on the Vringo patent and is being sued."
"What does "willfully" mean in legal terms? Triple damages."
"Guess who NTP's lawyer is ? Donald Stout. (sued Research in Motion (RIMM) for $600 million and won) Guess who Vringo's patent lawyer is ? Donald Stout. Why is Donald Stout so good? He was an examiner at the US Patent Office. He knows patents. They announced all of this but nobody reads announcements of a small public company like Vringo."
"Vringo will have an $80 million market capitalization post their merger with I/P. NTP won $600 million from RIM using the same lawyer. RIM's revenues are a drop in the bucket compared to Google."
"Then there's still Microsoft / Yahoo search which, by the way, sorts based on click-throughs and has not been sued yet."
So were does "Jump Ball" come in. The analogy is no one really knows how a jump ball is going to end up. And if both parties believe this is a "jump ball" type of situation -- which our savvy investor believes it is -- lawyers tend to settle.
In the near term, we expect to: Close our proposed merger with Innovate/Protect.
In addition, we plan to file documents with the SEC and announce the date of the shareholder meeting to approve the merger. Please be on a lookout for both.
As we told you last week, this merger could allow Vringo to be a company with even greater technology leadership and potential, combined with an increased portfolio of intellectual property, which could significantly diversify our existing revenue streams.
Innovate/Protect maximizes the economic benefits of intellectual property assets. Innovate/Protect obtained eight patents covering inventions by Andrew Lang and Donald Kosak from Lycos, and brought together an experienced team including Don Stout, President of NTP, Inc.; H. Van Sinclair, the President and CEO of the RLJ Companies and former partner-in-charge of litigation at Arent Fox LLP; David Cohen, former senior litigation counsel at Nokia; and Dickstein Shapiro LLP, a nationally ranked IP litigation law firm.
That's all there is.
2. Adding Converted Organics (COIN) $0.01 to Daily Trader Watch List.
Press release says they bought 452,000 shares of Vringo (VRNG) now worth $904,000 at $2.
"Innovate/Protect announced yesterday that it has entered into a merger agreement with Vringo, Inc. (NYSE Amex:VRNG), a provider of software platforms for mobile social and video applications. If the merger is consummated, subject to the terms of the merger agreement, the shares of Innovate/Protect owned by Converted Organics Inc. will be converted into 452,640 shares of common stock of Vringo, as well as approximately 181,000 warrants to purchase shares of Vringo common stock at an exercise price of $1.76 per share (subject to adjustment)."
"On March 13, 2012, we completed an additional closing pursuant to the purchase agreement we entered into on January 3, 2012, in which we issued convertible notes having an aggregate original principal amount of $550,000 for a purchase price of $500,000, and warrants to purchase an aggregate of 2,619,048 shares of common stock at an exercise price of $0.105 per share. Additional information regarding this transaction is set forth in the Form 8-K we filed yesterday."
Not sure how many shares are truly outstanding. They just did (we think) 500:1 reverse split.
Capital Structure from Pink Sheets.
Absolute shot in the dark...but what the hey.
VRNG: Statements in this press release regarding the proposed transaction between Vringo and Innovate/Protect; the expected timetable for completing the transaction; the potential value created by the proposed merger for Vringo's and Innovate/Protect's stockholders; the potential of the combined companies' technology platform; our respective or combined ability to raise capital to fund our combined operations and business plan; the continued listing of Vringo's or the combined company's securities on the NYSE Amex; market acceptance of Vringo products; our collective ability to protect our intellectual property rights; competition from other providers and products; our ability to license and monetize the patents owned by Innovate/Protect, including the outcome of the litigation against online search firms and other companies; the combined company's management and board of directors; 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, 2010 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011, each as filed with the SEC, 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
COIN: This press release contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. In some cases, you may identify forward-looking statements by words such as "may," "should," "plan," "intend," "potential," "continue," "believe," "expect," "predict," "anticipate" and "estimate," the negative of these words or other comparable words. Forward-looking statements include, without limitation, whether the merger between Vringo and Innovate/Protect will occur on a timely basis, if at all, one should not place undue reliance on these forward-looking statements. The forward-looking statements are qualified by their terms and/or important factors, many of which are outside the Company's control, involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of our future performance, taking into account information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, including those events and factors described in the "Risk Factors" section in the Company's most recently filed annual report on Form 10-K, as updated in the Company's quarterly reports on Form 10-Q filed since the annual report, not all of which are known to the Company. Neither the Company nor any other person assumes responsibility for the accuracy or completeness of these statements. The Company will update the information in this press release only to the extent required under applicable securities laws. If a change occurs, the Company's business, financial condition, liquidity and results of operations may vary materially from those expressed in the aforementioned forward-looking statements.
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