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Optical/IP

Danger Plots IPO

Device designer Danger Inc. is hoping to capitalize on the explosion in mobile data revenues with an IPO in 2008.

The Palo Alto, Calif. company has filed its S-1 papers with the Securities and Exchange Commission (SEC) but hasn't disclosed the terms of the offering yet. The IPO is being underwritten by UBS Investment Bank , Thomas Weisel Partners , and ThinkEquity LLC .

Danger is styling itself as a "software-as-services" company in its filing. The firm, however, is best known as the designer of the HipTop device. Introduced by T-Mobile US Inc. in 2002 as the "Sidekick", the gadget was one of the first smart devices available in the US with Internet, email, IM, and a full keyboard. The software part comes in because the phone stores almost all its data on a separate Web server.

Danger says that from the introduction of the Hiptop in October 2002 through September 30, 2007, the number of subscribers to the firm's data services has grown to "approximately 923,000."

Total revenues for Danger have grown from $49.3 million in the year ended September 30, 2006, to $56.4 million in the year ended September 30, 2007. Its service revenues are up from $38.9 million in the year ended September 30, 2006 to $50.6 million in the year ended September 30, 2007.

The firm, however, is carrying a heavy debt load. "As of September 30, 2007, we had an accumulated deficit of $188.1 million," Danger says in its filing. The company is planning to use $7.2 million of its IPO money to pay off creditors.

— Dan Jones, Site Editor, Unstrung

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