Last month we took a look at SpiralFrog, the once-hyped, yet-to-be-launched music service, and declared it would be dead on arrival. Turns out we were overly cautious: The company’s accountants have already started heaping dirt on the grave, via a “going concern” note disclosed in SEC statements filed Friday (the company isn’t public but needed to file after it took out $10 million in loans secured by common stock).
There’s plenty of grim detail in the filing, including a persuasive “risk factors” section which explains why SpiralFrog’s plan to provide a free, ad-supported music offering is going nowhere: It’s difficult to use, the big music labels haven’t signed on, and consumers can already get all the free music they want. But investors who aren’t dissuaded by any of the above may get a chance to lose money this fall, when SpiralFrog says it intends to conduct a $25 million private placement. It has burnt through $12 million in the past two and a half years and says it will need to raise at least $18 million to make it another 12 months. SEC filing via PaidContent.