ATLANTA—Liberator Inc. has announced the signing of an agreement to sell Web Merchants, the parents company of EdenFantasys, to an entity controlled by the president of Web Merchants, Fred Petrenko.
Under the agreement, Liberator will receive 25.4 million shares of Liberator common stock held by Petrenko and a cash payment of $700,000 in exchange for 100 percent of the shares of Web Merchants currently owned by Liberator.
Liberator originally acquired Web Merchants on Jan. 27 through the exchange of 28.4 million shares of Liberator common stock and a cash payment of $100,000 for 100 percent of the issued and outstanding stock of Web Merchants.
As part of the sale of Web Merchants, Fred Petrenko will resign as a director and executive vice president of Liberator and Rufina Bulatova will resign as vice president of online marketing of Liberator.
"Our decision to divest Web Merchants was carefully deliberated by our Board of Directors," said Louis Friedman, president and CEO of Liberator Inc. "After operating under the ownership of Liberator for eight months, it became apparent that Web Merchants is not aligned with our long term strategic initiatives. Although we are parting company, we remain on good terms with the management of Web Merchants and we expect to continue to be long-term trading partners."
The transaction, which is subject to customary closing conditions, is expected to close no later than Oct. 21 and will be effective retroactively to Oct. 1.
