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Synchronica Signs Letter Of Intent With Intertainment Media
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Thursday, February 09, 2012:
Synchronica plc (AIM: SYNC) (TSX Venture: SYN), the international provider of next-generation mobile messaging services announces that it has signed a Letter of Intent with Intertainment Media Inc. ("Intertainment Media") (TSX Venture: INT / OTCQX: ITMFT / FRA: IT4), a Toronto-based technology incubator and developer of Rich Media Applications, including the global leading real time experiential language platform, Ortsbo.com.
Synchronica and Intertainment Media intend to integrate Synchronica's flagship messaging platform, Mobile Gateway, with Intertainment Media's Ortsbo experiential language technology. This will enable Mobile Gateway to provide its users with seamless and real-time translation between more than 50 languages potentially across Synchronica's growing client base of over 100 mobile operators and device manufacturers around the world.
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In addition, Synchronica will enter a joint venture agreement with Intertainment Media and its subsidiary Ortsbo Inc., in which the parties will license their respective Intellectual Properties to a new subsidiary. The subsidiary, which will be jointly-owned by both parties, will allow Synchronica and Intertainment Media to further develop each other's products, share R&D efforts, enlarge each other's business development activities and drive revenue and profitability for both companies from new projects.
It is envisaged that Synchronica will demonstrate the Ortsbo technology, fully integrated with Mobile Gateway, in time for Mobile World Congress 2012 in late February (www.mobileworldcongress.com). In late 2011, with a view to aligning its costs to its recurring revenue billings, Synchronica informed shareholders that it was implementing several cost reduction initiatives across the entire business. The Board of Directors also committed to manage its cash carefully, while also seeking further funding opportunities which would accelerate the business and drive shareholder value.
This joint venture agreement will represent the first step in this commitment, with Intertainment Media making a strategic investment into Synchronica. As part of the transaction, Intertainment Media will, subject to Synchronica shareholder approval, invest up to CDN $ 10 million in Synchronica, at a minimum price of GBP 0.16 per unit. Each unit will comprise one ordinary Synchronica share, plus one ordinary share warrant, exercisable at CDN $0.40 per share, at any time within two years of issue.
The transaction is subject to the completion of satisfactory due diligence, the execution of legally-binding agreements, as well as necessary board and regulatory approvals.
Synchronica will shortly seek shareholder and necessary approvals for Intertainment Media's first investment of CDN $1m. These additional funds will be used for additional working capital and to integrate the Ortsbo language technology with Synchronica Mobile Gateway. Subject to shareholder and necessary approvals, Intertainment Media will make a further investment in March 2012, of between a minimum of CDN $1m and a maximum of CDN $5m.
"Synchronica Mobile Gateway has strong sector revenue and is already used by more than 100 of the world's most successful mobile operators and device manufacturers," says David Lucatch, CEO of Intertainment Media and Ortsbo. "Several of Synchronica's customers have multinational properties, and by providing on-the-fly translation with Ortsbo, they add even greater value to their service offerings and sector leadership. Intertainment Media is all about investing, nurturing and developing leading edge technologies, digital and social media platforms. Synchronica ticks all of these boxes, and we're excited about the prospects of our cooperation and a strong future together."
"This is a new and exciting partnership for Synchronica," adds Synchronica's CEO, Angus Dent. "It will allow us to immediately enrich Mobile Gateway with real-time conversational translation services, which will really appeal to our new and existing customers. Ortsbo complements Synchronica Mobile Gateway, and together we're able to provide a unique possibility for our customers to position themselves as the hub for social interaction, regardless of geographical or language limitations. Intertainment Media owns and operates several key technologies, and we believe this co-development agreement and investment will create significant value for Synchronica shareholders."
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