Video ringtone specialist targets content delivery firm to reduce costs and grow customer base.
m-Wise's software as a service (SaaS) platform powers 3m mobile transactions a day across more than 50 networks.
Currently Jesta Digital, Thumbplay (as was), Universal, Digicel, Snackable Media and others use the firm to deliver ringtones, video, games, alerts and more.
You can see the fit with Vringo, whose service lets customers browse and download mobile videos, and then set them as video ringtones to be shared with friends.
Vringo will expect this back-end expertise to streamline its own operation and bring it to the attention of new operator and media brand customers.
"This business combination makes tremendous sense for Vringo," said Jon Medved, Vringo's CEO.
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"By adding m-Wise's rich back-end server technology to Vringo's proven video application ability, we can generate significant product, customer and cost synergies.
"We intend to use the m-Wise platform to release multiple new video and other mobile consumer services to our growing family of content and carrier partners. We also expect to acquire revenue and margin contribution as a result of this transaction, which would bring us that much closer to profitability."
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.
Under the terms of the purchase, Vringo will issue m-Wise 1.9 million shares of its common stock, and assume and pay over a two year period certain of m-Wise's expenses and related costs ($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.
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