NEW YORK - November 9, 2015 -
Vringo, Inc. (NASDAQ: VRNG), a company engaged in the innovation,
development and monetization of intellectual property as well as
the commercialization and distribution of wire-free charging and
rugged computing devices, today announced operating results for the
quarter ended September 30, 2015 and filed its Quarterly Report on
Form 10-Q with the Securities and Exchange Commission. In addition,
Vringo provided a business update.
Update on Global
Enforcement and Licensing Activities
Courts in the United Kingdom and
Germany have found that ZTE has infringed Vringo's patents, and
courts in Brazil, India, and Romania have awarded Vringo
preliminary relief after finding ZTE prima
facie liable for patent infringement. Courts around the world
continue to comment on ZTE's bad faith behavior and litigation
tactics. The United States District Court for the Southern District
of New York has found that ZTE has breached a non-disclosure
agreement with Vringo by submitting confidential settlement
discussion materials to the Chinese government, and Vringo has
since alleged additional breaches. Vringo remains willing to
license ZTE and all parties to its standard-essential patent
portfolio on fair, reasonable, and non-discriminatory terms.
Vringo recently commenced
litigation on its Quantum Stream portfolio, which relates to
content distribution, including the insertion of advertisements
into video content.
In addition, Vringo recently
entered into another licensing agreement relating to its remote
monitoring portfolio, and continues its licensing efforts with
regard to this portfolio.
Vringo
anticipates several significant litigation events to occur in the
first quarter of 2016
In the United States, Vringo
awaits the resolution of its motion for sanctions against ZTE for
its conduct in the litigation pending before the United States
District Court for the Southern District of New York.
In Brazil, Vringo awaits the
Court's confirmation that ZTE violated the preliminary injunction,
as previously concluded by court-appointed experts. Following the
adjudication of a finding of violation of the injunction, the
remedies may include monetary penalties, payable by ZTE to
Vringo.
In India, Vringo's motion to hold
ZTE in contempt for underreporting sales in violation of a court
order has been fully argued and is expected to be decided before
the end of 2015.
In the United Kingdom, beginning
on January 18, 2016, the High Court of Justice is expected to hold
a hearing to determine the remedy for ZTE's infringement of the UK
part of European Patent 1,212,919 ("EP 919"), which was found valid
and infringed on November 28, 2014. The remedy will include
complete license terms including payment for past damages and a
running royalty. Vringo does not believe ZTE can design around this
key patent.
In Germany, on February 25, 2016,
the District Court of Dusseldorf is expected to hold the oral
hearing in Vringo's claim that ZTE has infringed the German part of
EP 919. Previously, the German Patents Court held that EP 919 reads
on handover between radio network controllers, a key part of the 3G
infrastructure technology Vringo claims ZTE has commercialized
without a license.
In Malaysia, on March 28, 2016,
the High Court of Malaysia at Kuala Lumpur is expected to hold the
trial on Vringo's claim that ZTE has infringed Vringo's Malaysian
patent MY 142,706, which is the equivalent of the patent that is
the basis for the preliminary injunction in Romania.
Recent
Developments in Vringo's Enforcement Actions Against ZTE
In Brazil and Romania, courts
continue to reject ZTE's challenges to the preliminary injunctions
in place in those countries. ZTE has unsuccessfully challenged the
preliminary injunctions eleven and twelve times, respectively. In
Romania, ZTE's latest challenge sought to overturn the preliminary
injunction on the basis of the European Court of Justice ruling in
Huawei v. ZTE, which outlined the factors to
consider in determining whether the holder of a standard-essential
patent abuses its dominant position in seeking injunctive relief
against an alleged infringer. ZTE's argument was rejected by the
Romanian Court as ungrounded, with no further chance of appeal.
In China, ZTE has filed petitions
for the re-examination of 33 of Vringo's Chinese patents. To date,
17 of those patents have been maintained valid, 2 have been
maintained valid-in-part, and 13 have been invalidated, and are
pending appeal.
In the Netherlands, on October 28,
2015, the District Court of the Hague found the Dutch part of
European Patent 1,186,119 ("EP 119") invalid. Previously, a German
Court found that ZTE infringes the German part of EP 119, and
issued an injunction against ZTE on the basis of that infringement.
In addition, the German Patents Court previously released a
preliminary opinion holding the German part of EP 119 valid, and
both the Opposition Division and the Technical Board of Appeal of
the European Patent Office have confirmed the validity of EP 119.
Vringo plans to appeal the Dutch Court's ruling.
In France, on October 30, 2015,
the Tribunal de Grande Instance de Paris held that the
claims-in-suit of the French part of EP 119 are not implemented in
the relevant standard, and that the claims-in-suit of the French
part of European Patent 1,221,212 ("EP 212") are invalid. Vringo
plans to appeal the Tribunal's ruling.
Update on Recent Acquisition of
International Development Group (IDG)
On October 15, 2015, Vringo
acquired 100% of International Development Group, a holding company
consisting of two primary businesses: fliCharge, a wire-free
charging technology company, and Group Mobile, a market leading
built-to-order supplier of rugged computers, mobile devices and
accessories.
fliCharge
-
In conjunction with MITO Corporation, a leading
importer and distributor of aftermarket products to the
transportation industry, fliCharge launched ReVive, an innovative
trimmable wire-free conductive charging system for the automotive
and transportation aftermarkets, at SEMA, an international
automotive trade show.
-
A group of 35 top automotive journalists from
more than 20 countries selected the ReVive trimmable charging pad
as the winner of two Global Media Awards at SEMA, signifying the
appeal of fliCharge's products to markets worldwide.
-
fliCharge introduced a 36-Watt, 12-Volt
wire-free charging circuit board assembly for the automotive and
transportation markets.
-
fliCharge and Bretford, a leading designer and
manufacturer of furniture products, extended and expanded their
licensing relationship such that Bretford will have an exclusive
license to embed fliCharge's wire-free charging solutions into
furniture in markets including healthcare, commercial office,
retail and educational facilities as well as contract furniture
manufacturing.
Group
Mobile
-
Group Mobile expanded its sales force to
increase the company's geographic footprint across the United
States.
-
As part of Group Mobile's integration into
Vringo, Vringo has commenced the process of overhauling Group
Mobile's website and marketing strategy.
-
Group Mobile has also started pursuing key
partnerships and additional product lines.
Operating Results
for the Quarter Ended September 30, 2015
-
As of September 30, 2015, we had approximately
$16.4 million in cash and court deposits as compared to $18.1
million as of December 31, 2014.
-
Our remaining outstanding balance on the senior
secured convertible notes is $5.4 million as of September 30, 2015.
We raised $12.5 million in May 2015 through the sale of the senior
secured convertible notes.
-
During the nine month period ended September 30,
2015, our average monthly cash used in operating activities was
approximately $1.5 million compared to approximately $2.2 million
in the comparable period in 2014. Included in the year to date
spend are prepaid expenses for annual insurance contract premiums
and deposits with law firms representing us in the UK totaling
approximately $0.9 million as well as deposits with courts made
during 2015 in Romania and Germany of $0.3 million.
-
Our net loss for the quarter ended September 30,
2015 was approximately $11.9 million, including non-cash expenses,
mainly attributable to the following:
-
Operating legal costs of $6.6 million in
connection with ongoing litigations against ZTE Corporation,
ASUSTeK Computer, Inc., and certain of their affiliates and
customers, and other planned enforcements of our intellectual
property;
-
General and administrative expenses excluding
non-cash expenses of $1.2 million;
-
Non-cash expenses of $1.9 million related to
equity-based compensation costs and amortization of our patents;
and
-
Non-cash expenses of $2.2 million related to
re-valuations of warrants and the conversion feature on the senior
secured convertible notes, interest expense and extinguishment of
debt.
-
On a per share basis, our total net loss from
continuing operations was $0.12 per basic and diluted share for the
quarter ended September 30, 2015, compared to a net loss of $0.13
per basic share and $0.16 per diluted share for the quarter ended
September 30, 2014.
About Vringo,
Inc.
Vringo, Inc. is engaged in the
innovation, development and monetization of intellectual property
as well as the commercialization and distribution of wire-free
charging and rugged computing devices. Vringo's intellectual
property portfolio consists of over 600 patents and patent
applications covering telecom infrastructure, internet search,
ad-insertion, mobile and wire-free charging technologies.
Vringo's subsidiary fliCharge is dedicated to the licensing and
commercialization of wire-free charging technologies. Vringo's
subsidiary Group Mobile is dedicated to the marketing and sale of
rugged computing devices. For more information, visit:
www.vringoip.com.
Forward-Looking Statements
This press release includes
forward-looking statements, which may be identified by words such
as "believes," "expects," "anticipates," "estimates," "projects,"
"intends," "should," "seeks," "future," "continue," or the negative
of such terms, or other comparable terminology. 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 materially from the
forward-looking statements contained herein. Factors that
could cause actual results to differ materially include, but are
not limited to: our inability to license and monetize our patents,
including the outcome of the litigation against ZTE and other
companies; our inability to recognize the anticipated benefits of
the acquisition of IDG, which may be affected by, among other
things, competition, our ability to secure advantageous licensing
and sales agreements, market acceptance of IDG's technology,
potential technology obsolescence, protection of intellectual
property rights and potential liability risks that are inherent in
the marketing and sale of products used by consumers; our inability
to monetize and recoup our investment with respect to patent assets
that we acquire; our inability to develop and introduce new
products and/or develop new intellectual property; our inability to
protect our intellectual property rights; new legislation,
regulations or court rulings related to enforcing patents, that
could harm our business and operating results; unexpected trends in
the mobile phone and telecom infrastructure industries; our
inability to raise additional capital to fund our combined
operations and business plan; our inability to maintain the listing
of our securities on a major securities exchange; the potential
lack of market acceptance of our products; potential competition
from other providers and products; our inability to retain key
members of our management team; the future success of Infomedia and
our ability to receive value from its stock; our ability to
continue as a going concern; our liquidity and other risks and
uncertainties and other factors discussed from time to time in our
filings with the Securities and Exchange Commission ("SEC"),
including our annual report on Form 10-K filed with the SEC on
March 16, 2015. Vringo expressly disclaims any obligation to
publicly update any forward-looking statements contained herein,
whether as a result of new information, future events or otherwise,
except as required by law.
Contacts:
Investors and Media:
Cliff Weinstein
Executive Vice
President
Vringo, Inc.
646-532-6777
cweinstein@vringoinc.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Vringo, Inc. via Globenewswire
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