m-Wise

Vringo To Acquire Mobile Content Solutions Provider m-Wise

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Vringo, which offers video ringtones and personalization solutions for mobile devices, this morning announced that it has signed a (non-binding) Letter of Intent to acquire substantially all of the assets of m-Wise, a New York-based provider of enabling technologies for the mobile entertainment and marketing industries.

m-Wise provides a SaaS platform used by content owners and service providers to manage, deliver and monetize mobile entertainment, content and apps.

The platform is said to be used for over 300 applications across more than 50 mobile networks by a host of international content and media providers, powering over three million daily mobile service transactions worldwide.

According to the press statement, m-Wise has handled over one billion mobile transactions in the aggregate since it was founded in March 2000.

Its current customers include companies like Jesta Digital (formerly Fox Mobile Group), Thumbplay (just acquired by Clear Channel), Universal Music Group and others.

These m-Wise-enabled applications include content delivery services, ringtones, music, video, games, information services, alerts and advertising and promotions, all of which were developed and delivered from the cloud on a hosted basis.

For the nine months ending September 30, 2010, m-Wise reported sales of $2.1 million, gross profit of $1.2 million and a net loss (including non-cash, stock-based expenses and options accounting) of $0.8 million.

Vringo says it believes that the m-Wise acquisition will be cash-flow accretive with the potential to reduce Vringo’s overall burn rate in the first full year of combined operations.

Here are the terms of the Letter of Intent:

Vringo will issue m-Wise 1.9 million shares of its common stock, provide m-Wise’s management with a retention package comprised of options to purchase 500,000 shares of common stock, and assume and pay over a two year period certain of m-Wise’s expenses and related costs in the amount of $615,000.

Vringo will also issue a five-year promissory note for $320,000 convertible into 200,000 shares of its common stock for certain services provided in connection with the transaction.

Vringo provides a carrier platform currently deployed for international partners in six markets.

The company’s cloud-based distributed application architecture enables the carrier’s subscribers to browse and download mobile videos, set them as video ringtones and share them with friends.