By Ben Fox Rubin
Vringo Inc. (VRNG) said it raised an additional $45 million in a
stock offering, strengthening the company's financial position just
before major plot points in its patent suit against Google Inc.
(GOOG) and others are scheduled to begin.
Vringo, a video-ringtone and intellectual-property firm, is
suing the search giant, AOL Inc. (AOL), IAC/InterActiveCorp. (IACI)
and others, alleging infringement of two of its patents related to
advertising placement in search results. A trial is scheduled to
start Oct. 16.
Vringo said it sold 10.3 million shares to five institutional
investors at $4.35 each, a 17% discount to Thursday's close. The
offering comes soon after the company sold 9.6 million shares at
$3.25 each in early August to buy telecommunications-infrastructure
patents from Nokia Corp. (NOK, NOK1V.HE). Vringo has about 99
million shares outstanding.
Shares fell 12% to $4.62 in premarket trading. As of Thursday's
close, the stock was up more than 400% this year amid investor
interest in the Google litigation.
"Upon closing this financing, we will be financially stronger
then ever before," Chief Executive Andrew Perlman said, noting that
the company will now hold $55 million in cash on its balance sheet.
"Our cash position will enhance our ability to more effectively
monetize our internet search patents as well as our recently
acquired telecom infrastructure portfolio."
A federal judge this week denied Google and other defendants'
motion for summary judgment, which could have prevented a trial,
and Vringo's stock has soared since, jumping about 70% to $5.25 as
of Thursday's close. The judge also ordered Vringo and the
defendants to engage in settlement discussions starting Tuesday
before a state magistrate.
The company had said in a recent Securities and Exchange
Commission filing that it planned to use the funds raised for
general corporate needs.
Vringo in late September sent a letter to ZTE Corp. (ZTCOY,
0763.HK, 000063.SZ), asking the telecommunications company to
review whether it needs to license any of Vringo's recently
acquired Nokia patents, warning that it could take legal
action.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires