Lindows Preps for IPO Despite Setbacks

The developer of a Linux-based OS files registration papers for a public offering that could raise as much as $57.5 million, while battling legal challenges and continued financial losses.

Lindows Inc., fresh from changing the name of its flagship product, is preparing to go public as it struggles to earn a profit.

The San Diego-based company on Tuesday filed an initial public offering registration with the Securities and Exchange Commission. The company did not pinpoint a date for the IPO but announced that it will conduct an auction-based stock offering process that is being co-managed by WR Hambrecht + Co. and Roth Capital Partners LLC.

Lindows IPO plans follows operating losses every year since its founding in July 2001. For the year ended Dec. 31, 2003, Lindows lost $4.08 million on revenues of $2.07 million, according to its S-1 filing with the SEC.

The company is embroiled in legal struggles both in the United States and overseas with Microsoft Corp., which has accused Lindows of infringing on its Windows trademark. Lindows had sold its Linux-based operating system under its company name, but last week changed the product name to Linspire.

/zimages/5/28571.gifClick here to read about a recent court decision that allowed Microsoft to continue its foreign lawsuits against Lindows.

Lindows could raise as much as $57.5 million from the IPO, money it would use to further distribution of its OS and other software, expand sales and marketing, develop more products and repay $10.4 million in outstanding debt to its founder, Michael Robertson, according to the SEC filing.

Lindows is proposing a listing on the Nasdaq stock exchange under the symbol "LINE."

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