Excellent Quarter in my view.
1. The past is the past so all we could hope for is as we move forward we see improvement in revenues, cost containment, and strategy and we did.
2. VRNG now has $30 million in cash.
3. According to the conference call, the $8.9 million was achieved without litigation, so pretty much zero cost. This is EXCELLENT, hopefully similar deals occur going forward The negotiations according to Perlman took approx 6 months, but every negotiation is clearly unique so 6 months should not be viewed as a proxy.
4. The company also said they are in talks with numerous potential licensers for their patents but clearly would not provide guidance on this. That being said, from the research we've seen from VRNG24, DTV appears to have the potential to be material given their related revenues as well as numerous other SEP players still out there. All still a positive.
5. One interesting aspect about the $8.9 is that the company has included this FULL amount in proforma cash of $30 mil. Now if this is truly the case and not an oversight in commentary (ie technically when received the company would have $30 mil), then it is possible that the $8.9 million settlement is not even related to the SEP patents. If it were, proforma cash would be $27 million not $30 million as $3 million would be due to Nokia. We will know the answer to this by Q2 as we can look at the cash flow statement at that point. If $3+ million went out, we know it was an SEP related settlement. It will be VERY interesting if this was not related to the SEP/Nokia portfolio because this would suggest we have some pretty material patents in that 600 that none of us are really aware of. Certainly there are many we are not aware of but the materiality side is key. We do know DTV is still ongoing, so it wasn't the DTV patents. Perlman did mention this settlement validated some patents so perhaps it was a hint? Not sure, but I will certainly be interested in the Q2 cash flow statement!
6. Excellent to hear guidance of approximately $15 million in Group Mobile revenues for 2016. The company hopes to see $50 million within 2 years but this may be a bit of hopium. Regardless, given VRNG's insight into future bookings for Group Mobile this is HIGHLY positive.
7. The fact that the company now has multiple revenue streams building and that are material can only be seen has highly positive. It de-risks the company and allows them to continue to enforce patents at the same time.
8. FliCharge launch in June should add some additional revenue for Q2/Q3. It is a very nice product (I certainly know many people who love the form factor and want to buy one), and while not a huge money maker, it should add another decent revenue stream. Management also stated that they are in talks with a number of large tech companies to partner with, let's hope that leads somewhere!
9. While I am not a fan of this management team on how they have compensated themselves to date, this was still a positive quarter, and the outlook looks to be improving materially, which is good to hear.
10. I think if VRNG can put together another strong quarter for Q2 with Group Mobile, a strong launch on Flicharge / announcement of a strong partnership, and hopefully a couple of singles or doubles on the licensing front, the company will start to see its share price start being a bit more reflective of the IP portfolio and its prospects, which appear to be improving.
None of this makes me feel 'great' given my losses, but it does give me a bit more realistic hope that the company is out of the woods and may slowly recoup a decent amount of what I have lost.
That being said, like any company it all depends on execution, but I was certainly surprised at how much headway the company has made in 'righting the ship' in the last 3 months. Thankfully, everything I have mentioned here came right from the conference call and is therefore FACT, just in case some friends try to twist words tomorrow! ;)
Good Luck to all VRNG Longs!
AI
