Vringo, Inc. (NYSE Amex: VRNG) stock traded 2.5 fold of its 10day average volume as of 10:45am on merger news with the Innovate/Protect Inc.
Please note: Innovate/Protect is the owner of patent assets acquired from Lycos, one of the largest search engine websites of its kind in the mid-late 1990s, with technologies that remain critical to current search platforms.
In September 2011, Innovate/Protect through its subsidiary, I/P Engine, initiated a patent infringement lawsuit in the United States District Court for the Eastern District of Virginia against Google, Inc. (GOOG), AOL, Inc., IAC Search & Media, Inc. (IACI), Gannett Company, Inc. (GCI) and Target Corporation (TGT) ( for unlawfully using systems that incorporate features claimed in two patents owned by I/P Engine. The patents relate to relevance search technology that is used in the search engine industry to produce better search results, and has also become the dominant technology used in search advertising to position high-quality advertisements. The Markman claim construction hearing is scheduled for June 4, 2012, and the trial is scheduled to begin on October 16, 2012. I/P Engine is represented by Dickstein Shapiro LLP, a nationally ranked intellectual property law practice headquartered in Washington, DC.
Vringo also announced today that Andrew Perlman, its President, has been named Chief Executive Officer, replacing Jonathan Medved who is stepping down. Mr. Perlman will remain CEO following the closing of the transaction.
The combined company will be led by a premier management team and Board of Directors with substantial and proven experience and expertise in technological innovation, licensing and intellectual property protection. In addition to Mr. Perlman, Mr. Lang will serve as President and Chief Technology Officer of Vringo. David L. Cohen joins the company as Special Counsel after serving at Nokia, where he was senior litigation counsel. Alexander R. Berger, Innovate/Protect’s Chief Operating Officer and Chief Financial Officer, will be Vringo’s Chief Operating Officer and Secretary. Ellen Cohl will continue as Vringo’s Chief Financial Officer and Treasurer. Clifford Weinstein, Vringo’s Vice President of Corporate Development, has been elevated to Chief Communications Officer, and Josh Wolff will become Senior Vice President of Partner Solutions, overseeing partnerships, sales activities and the active engineering subsidiaries.
The Board of Directors of the combined company will be comprised of seven directors, three from Vringo and four from Innovate/Protect.
Andrew Perlman, Chief Executive Officer of Vringo, commented:
The transaction with Innovate/Protect is a significant milestone as we continue to fulfill our stated strategic objectives, and serves as an important catalyst for Vringo’s future growth. Combining with Innovate/Protect significantly enhances our creative and innovative capabilities. We are thrilled to add Andrew Lang, a pioneer and leader whose inventions have changed the way the world experiences digital media, as our new Chief Technology Officer. We believe that the combination of Innovate/Protect’s litigation expertise and patent portfolio combined with our licensing experience and mobile-related patent portfolio will allow the enhanced Vringo to fully realize the potential of our joint intellectual property.
Upon completion of the merger, in exchange for all of the issued and outstanding shares of capital stock of Innovate/Protect, Vringo will issue (i) approximately 16,972,977 shares of Vringo common stock in exchange for all of the issued and outstanding shares of common stock of Innovate/Protect and (ii) 6,968 shares of a newly-created Series A Convertible Preferred Stock (which shall be convertible into approximately 21,026,637 shares of Vringo common stock) in exchange for all of the issued and outstanding shares of preferred stock of Innovate/Protect. In addition, at the effective time of the merger, Vringo will issue to the holders of Innovate/Protect capital stock and the holder of Innovate/Protect’s issued and outstanding warrant (on a pro rata as-converted basis) an aggregate of 15,959,838 warrants to purchase an aggregate of 15,959,838 shares of Vringo Common Stock with an exercise price of $1.76 per share and the currently issued and outstanding warrant to purchase Innovate/Protect common stock shall be exchanged by the holder of such warrant for 250,000 shares of Vringo common stock and 850,000 warrants to purchase 850,000 shares of Vringo common stock with an exercise price of $1.76 per share.
Immediately following the completion of the merger, the former stockholders of Innovate/Protect are expected to own approximately 55.41% of the outstanding common stock of the combined company and the current stockholders of Vringo are expected to own approximately 44.59% of the outstanding common stock of the combined company (without taking into account any shares of Vringo common stock held by Innovate/Protect stockholders prior to the completion of the Merger and without giving effect to shares of Vringo Common Stock issuable upon conversion of the Vringo Preferred Stock or the exercise of warrants and options).
44 W. 28th St., Suite 1414
New York, NY 10001
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’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. Lastly, 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.”