Note 7. Business Combination As described in Note 2, I/P consummated the Merger with Vringo on July 19, 2012. The consideration consisted of various equity instruments, including: shares of common stock, options, preferred stock and warrants. Upon completion of the Merger, (i) all then outstanding 6,169,661 common stock shares of I/P, par value $ 0.0001 per share, were exchanged for 18,617,569 , shares of the Company s common stock, par value $ 0.01 per share, and (ii) all outstanding shares of Series A Convertible Preferred Stock of I/P, par value $ 0.0001 per share, were exchanged for 6,673 shares of Vringo s Series A Convertible Preferred Stock, par value $ 0.01 per share, which shares were convertible into 20,136,445 shares of common stock of Vringo. In addition, Vringo issued to the holders of I/P capital stock an aggregate of 15,959,838 warrants to purchase an aggregate of 15,959,838 shares of the Company s common stock with an exercise price of $ 1.76 per share. The Company recorded such warrants as long-term derivative liabilities (refer to Note 11). In addition, all outstanding and unexercised options to purchase I/P common stock, whether vested or unvested, were converted into 41,178 options to purchase the Company s common stock. Immediately following the completion of the Merger, the former stockholders of I/P owned approximately 55.04 % of the outstanding common stock of the combined company (or 67.61 % of the outstanding shares of the Company s common stock, calculated on a fully diluted basis), and Vringo s stockholders prior to the Merger owned approximately 44.96 % of the outstanding common stock of the combined company (or 32.39 % of the outstanding shares of its common stock calculated on a fully diluted basis). This transaction was accounted for as a reverse acquisition in accordance with U.S. GAAP and as a result, I/P was deemed to be the acquiring company for accounting purposes. The total purchase price of $ 75,654 was allocated to the assets acquired and liabilities assumed as follows. Reg