Mobile SaaS Acquisitions and Mergers

Vringo (AMEX:VRNG), a provider of video ringtones and personalization solutions for mobile devices, today announced that it has signed a non-binding Letter of Intent to acquire substantially all of the assets of m-Wise (OTC:MWIS). As I write, shares of Vringo are up 46 percent at $2.88 per share on volume of nearly 270,000 shares, and shares of m-Wise were up 2 cents at $0.03 per share on volume of 3.3 million shares.

m-Wise provides a platform used by content owners and service providers to manage, deliver and monetize mobile entertainment, content and applications. The m-Wise mobile software as a service (SaaS) platform is used to power over three million daily mobile service transactions world-wide, and m-Wise has performed over one billion mobile transactions in the aggregate since it was founded in March 2000.

m-Wise's current customers include leading companies such as Jesta Digital, Thumbplay, Universal Music Group, Digicel and Snackable Media. These m-Wise-enabled applications for content and media partners 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 anticipates cost savings and operational synergies from combining m-Wise's business with Vringo's core business. As a result, Vringo 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.

Under the terms of the LOI, 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.

"This business combination makes tremendous sense for Vringo," said Jon Medved, Vringo's Chief Executive Officer. "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."

Zach Sivan, m-Wise's CEO, commented, "We are excited about the prospects of joining with Vringo to provide a rich end-to-end mobile application service platform to an expanded list of customers and directly to consumers. Mobile services are moving to the cloud, and video is the coming tsunami which will drive the entire mobile market. Together with Vringo's creative and market leading video team, we expect to ride this huge wave to our mutual benefit."

For more information, visit http://www.m-wise.com/.

For more information, visit http://ir.vringo.com.

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