• CNET News.com, Tuesday, September 11, 2007 10:47 AM

Remember SpiralFrog? It would be entirely understandable if you didn't (in part because of the terrible name), but the New York-based company burst onto the scene last year with the promise of offering consumers free ad-supported music. SpiralFrog may have signed a few deals with big record labels, but the company has failed to get off the ground; the ad-supported music service was supposed to launch many moons ago, but has been weighed down by a management shift and some hefty commitments to its investors.

It also needs to raise money. CNET says the company's top dogs are now turning to an IPO--albeit through a 10SB filing, which is usually reserved for small companies with, um, no other options--to do the trick. However, the report says the move comes at the demand of SpiralFrog's investors, which required that the company eventually trade publicly in the U.S. or Britain as a condition of their initial investment. In an interview, Joe Mohen, the company's founder and chairman, said that through the filing, "we do believe we have fulfilled our commitments."

SpiralFrog is a four-year-old company whose product (which is yet to go live) has made just $3,102 as of June 30, according to SEC documents. It has a contract to license music from Universal Music Group going for it, and a business model that advertisers love the idea of: free ad-supported music as an alternative to illegal file-sharing. However, its executive team walked out in January, leaving the company eight months behind schedule and heavily in debt to its creditors and investors.

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