Intertainment Media Inc. announced today that it has executed its arms length agreement to sell its itiBiti and Ad Taffy technology platforms to a Toronto based, private technology company (Itibiti Ventures Inc.) for a total estimated value of CDN $ 3,425,000 million dollars which includes debt conversion, perpetual revenue share payments secured by the transferred assets in the amount of $3 million dollars and a 40% equity stake in the company acquiring the assets. This transaction will also provide additional equity value in the form of system development and product / program enhancements. Intertainment has also included Ad Taffy in the agreement given Ad Taffy’s dependence on the shared technology of itiBiti, allowing both products to potentially flourish under a combined and dedicated independent management team.
The agreement is also projected to provide an expected $1.25 million savings in overall yearly operational cost to Intertainment Media Inc. The agreement provides Intertainment with one (1) board seat as well as a secured perpetual revenue share of 40% for the first 2 years, declining to 20% annually at year 5 and beyond from the independently managed operation. In the event of a future liquidity occurrence, where Itibiti Ventures, or parts thereof are sold privately or transferred to a public vehicle, Intertainment Media will receive the initial 30% of the proceeds, up to $5 Million CDN, and 40% of the balance of the value of the transaction. Although the parties are announcing the execution of the final agreements today, the transfer of day to day management of the Itibiti and Ad Taffy assets began February 1, 2013 in accordance with the initial expected closing date. The new enterprise has seen a significant increase in operational revenues, and is expected to continue to generate results well above those prior to the assets’ sale.
“We believe this transaction puts Intertainment Media, and ultimately its shareholders, in a position to secure even greater long term value, as evidenced by the early revenue results,” said David Lucatch, CEO Intertainment Media Inc. “And we are confident that with the new dedicated infrastructure and development teams in place the platforms will continue to expand and grow at an even greater pace and provide additional cash flow opportunities for Intertainment Media.”