virtualization.info

The application virtualization and streaming startup Endeavors Technologies problems seem never ending.

From May 2006 to October 2007, when it was still called Stream Theory, the company was involved in patent lawsuits with Microsoft (after the Softricity acquisition), Citrix, AppStream and Exent.

In May 2008, it mistakenly announced the advent of a new Microsoft licensing (SPLA) which allows 3rd parties to stream Office.

And last Friday the company suspended its share from the London Stock Exchange detailing a difficult financial situation:

The Company announced on 14th February 2008 that it had anticipated completing a major funding round during the first quarter of 2008 and a Prospectus proposing a placing and open offer was in final draft form. However, financial market conditions at that time were not favourable and the Company had not received commitments from potential placees to the level that the Directors considered necessary to maintain existing operations and finance the planned growth, although the process was still ongoing.

The Company subsequently, having reviewed the alternatives, proposed a new funding initiative based on attracting private and institutional investors using a combination of convertible loan notes and ordinary shares. The first two stages of a three stage process were successfully executed and the Company held a general meeting at which shareholders approved the changes necessary to meet the requirements of the proposed stage 3 investors. In addition the Company received approval from the tax authorities for the proposed treatment of VCT/EIS tax relief of such an investment.

The Company signed a binding heads of terms with a lead institutional investor based on syndication with other institutions.

Regrettably, other potential institutional investors have been unable to agree detailed terms, principally on matters of taxation and security and therefore the Company has been unable to complete the final stage of its fundraising.

The Company had intended to move from the Official List to AIM as part of the proposed corporate strategy and shareholder approval for such a move was obtained at the recent general meeting. A condition of the transfer is that the Directors of the Company must provide a confirmation of at least one year s working capital prior to admission to AIM.

The Directors are not able to make such an undertaking without a significant proportion of the intended stage 3 funding having been committed…

virtualization.info has learned that the amount of money required to immediately recover is over £1.5 million.
Alternatively the company has to wait the profits coming from the current partnerships (like the one with Wallace Systems or the one with Vector Networks), not earlier than Q2 2009.

Of course there’s a third option: the company (and its patents) could be acquired for a cheap price.

Considering the impressive consolidation seen so far in the application virtualization market it’s not a too unlikely scenario:

• VMware acquired Thinstall
• Symantec acquired Altiris and AppStream
• Google acquired Greenborder
• Citrix acquired Ardence
• Microsoft acquired Softricity