In all the fuss over Stefan Eriksson, several people noticed last month a new MVNO, Xero Mobile, and its ties to Gizmondo. Xero wants to target college students, and plans to give them free service in exchange for listening to ads — and its CEO, Peter Lilley, was head of Gizmondo’s Smart Adds business, which was supposed to lead the company to riches by pushing ads out to Gizmondo users. It’s supposedly already been able to sucker raise $300 million in investment, but has now done a reverse merger with a shell company onto the Over-The-Counter Bulletin Board market. Keep in mind, too, that former Gizmondo CEO Carl Freer, who’s also apparently living in LA along with Lilley and Eriksson, was reportedly helping Xero raise funds.

The reverse merger is basically a back-door way to become a public company, and while it’s certainly not always a shady move, it can often be a red flag. For a company with all the baggage of Xero, it is odd that (assuming they’re legit), they’d go down this path, rather than take more precautions to assure people they’re less shady than Gizmondo. It’s probably also worth pointing out that the company that became Tiger Telematics went public in a reverse merger with an OTC BB company in 2001. That company? Floor Decor LLC, which sold flooring products, and was purchased by Eriksson, Freer and others.

Lilley calls the move “the first step in implementing our ground-breaking business plan”, and, like Engadget Mobile, I’m left wondering what Gizmondo-esque business plan that is: delivering a product that nobody wants, tearing through a half-billion dollars of investment, spending money on hot cars, then skipping the country and the payments, or what?

What’s also unclear is the status of the intellectual property behind Smart Adds (again assuming it’s relevant to Xero and actually worth anything), which Tiger Telematics used to secure debt back in January. That was dependent on Tiger being able to raise $75 million by the end of March, and an SEC filing from mid-March says the company “has been unable to consummate such necessary equity arrangements”.

It goes on to say that Tiger Telematics essentially traded the Smart Adds IPR in exchange for being released from $24 million in debts to a couple of UK-based investors, Simon Davies and David Warnock. So a few questions:

- What is the Smart Adds IP? As far as I can tell, it’s a couple of US patent applications (see here and here) filed by Carl Freer regarding the delivery of content and ads to mobile devices.

- Is the IP relevant to Xero? Not clear. One thing is obvious — these are just applications, and haven’t been approved yet. I don’t want to comment on the chances they’ll be approved, as I’m no expert in reading patent applications, but I can see how they could be construed as being relevant to Xero, though it would appear that if that’s the case, they’d be relevant to all sorts of mobile advertising and content.

- How do Davies and Warnock enter into things? They’ve basically been stiffed for tens of millions, and are left with two patent applications that may or may not be worth anything. It’s hard to imagine they’d look too kindly on a bunch of ex-Gizmondo bigwigs trying to profit from a similar idea.

- Has Xero actually raised $300 million? And if so, who gave it to them? The $300 million figure came from a single blog post based on an unnamed source. I want to make it clear I’m not pointing fingers at Andy Abramson, who wrote the post, but rather just pointing out that it’s not been verified, least of which by Xero itself. The company’s press release regarding its reverse merger is the extent of its investor-relations efforts, and I’ve been unable to find any information at all on this Desi TV Inc. with which it reverse-merged. So we’re left with a public company that’s “pre-revenue” and appears to have made no financial disclosures at all — which, by now, seems like par for the course in this whole sordid tale.

Meanwhile, trouble continues to mount for Eriksson. Sheriff’s officials found a gun and a substance they believe to be cocaine in his house, and now US immigration and customs authorities are also investigating him. Prosecutors, however, have delayed a decision on whether to file grand theft charges against Eriksson. They say they need more time to look through complex paperwork regarding his fancy cars, and after spending the morning trying to dig up more info on Xero and Gizmondo, I don’t find it hard to believe.

[tags]mobile, gizmondo, stefan eriksson, carl freer, xero[/tags]