Lindows files to go public

Lindows Inc., the developer of Linux-based software best known for its ongoing trademark tussles with Microsoft Corp., has begun the process to become a publicly traded company.

Lindows has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for an initial public offering of its common stock, the company announced Tuesday. Lindows has chosen WR Hambrecht + Co. as the offering's lead manager, while Roth Capital Partners LLP will be co-manager.

The offering's proposed maximum aggregate price as stated in the S-1 filing made with the SEC is US$57 million. Lindows expects to use the money it raises to continue developing products and distribution channels, expand sales and marketing activities, increase staff and repay debt obligations of about US$10.4 million to company founder Michael Robertson. Robertson also serves as the company's chairman and chief executive officer.

Lindows makes Linux-based operating systems and applications. Last week, the company changed the name of its operating system from LindowsOS to Linspire as a result of a global legal assault by Microsoft that began in late 2001. Microsoft has sued Lindows over trademark infringement in several countries over the similarity of the Lindows and Windows names.

The registration statement filed with the SEC hasn't yet become effective.

Several interesting insights into Lindows' operations included in the SEC filing include:

-- Since it began operations in mid-2001, Lindows has racked up net losses totaling US$11.9 million and has generated net revenue of US$2.2 million. About 25 percent of the company's net revenue comes from outside of the U.S. "We expect to continue to incur significant losses over the next several years, and we may never become profitable," the filing reads. In fact, an audit report from the company's independent auditors states that Lindows' historical losses and negative cash flows from operations "raise substantial doubt about our ability to continue as a going concern."

-- Existing cash and expected proceeds from the IPO should be sufficient to fund the company's operations for "at least the next 24 months," after which the company might need to raise additional capital. "We can't be certain that we will be able to obtain financing on commercially reasonable terms or at all," the filing reads.

-- Lindows' distributor in Japan, Livedoor Co. Ltd., recently acquired Turbolinux and may intend to market that competing operating system in Japan while it also peddles the Lindows products. The distribution agreement with Livedoor generated 11 percent of Lindows' net revenue in 2003. The distribution agreement ends in August 2005.

-- Lindows is in court with its insurance carrier St. Paul Fire and Marine Insurance Co. over the insurance carrier's obligations toward Lindows regarding Lindows' Microsoft litigation in the U.S. and abroad.

St. Paul, Lindows' commercial general liability insurer, sued Lindows in February 2002 in a U.S. district court in California seeking a court declaration that it didn't have to defend or indemnify Lindows in connection with its Microsoft litigation in the U.S. The court ruled that St. Paul has to defend Lindows and that it breached its contract by denying coverage. The court still has to decide on several issues, including damages for St. Paul's breach of contract and its obligation to pay any liability Lindows may have to Microsoft. The court stayed its proceedings pending a final outcome of the Lindows-Microsoft litigation in the U.S.

On Jan. 6, 2004, Lindows sued St. Paul in a U.S. district court in California over the insurance carrier's refusal for coverage related to Lindows' litigation with Microsoft in several countries abroad. Lindows alleges St. Paul has an obligation to defend and if necessary indemnify it in connection with Microsoft litigation abroad. This case is ongoing.

Thus, there is a big question mark on how much Lindows would be responsible for paying for its defense and potential damages to Microsoft.

-- The company has had three names: it was founded as Lindoz Inc., got rebaptized as Lindows.com Inc. in September 2001 and became Lindows Inc. in March 2004.

-- As of March 31, the company had 62 employees: 38 were in software engineering, 11 in sales and marketing, six in customer service and technical support and seven in finance and administration.

-- Lindows is proposing "LINE" as its Nasdaq ticker symbol.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

Logitech Ultimate Ears Wonderboom Bluetooth Speaker

Learn more >

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?