In a statement announcing the acquisition of 40 percent of non-voting Penthouse Media Group stock by prospective iBill purchaser Care Concepts I Inc., the magazine revealed a little bit more of the direction that new managers Marc Bell and Daniel Staton intend to take the company, including attracting a broader audience by softening content and enhancing licensing deals.
As a significant shareholder in the newly restructured Penthouse Media Group, Care Concepts will be allowed the first chance to use the Penthouse name for auction websites, lifestyle resorts, travel agencies and travel related websites. Care Concepts will also be able to designate one member of the Penthouse Media Group’s board of directors.
“Our equity interest in Penthouse Media Group provides the company with an opportunity for financial appreciation and, subject to our negotiation of mutually satisfactory licenses with Penthouse Media Group, should enhance our existing businesses by providing global branded travel offerings and levering on the Penthouse bran name,” said Gary Spaniak Jr., president of Care Concepts.
Care Concepts financed the acquisition by issuing more than $16.4 million in notes and new preferred stock, convertible to roughly 70 million shares of common stock sometime within the new five years.
As part of the financing, Care Concepts created a glut of Series G Preferred Stock that influenced Mexican doctor Luis Enrique Fernando Molina, who had been involved in a bitter legal battle with the new Penthouse owners, to drop all pending litigation against Penthouse Media Group.
“In the course of our prior litigation, a number of inflammatory allegations were made which we believe were the product of our intense competition with the Bell/Station Group for control of Penthouse Media Group,” said Molina. “These comments were an unfortunate part of litigation ‘gamesmanship.’”
In a separate announcement made Thursday, Care Concepts confirmed speculation that it had terminated a letter of intent to purchase Arizona-based Best Candy and Tobacco Company.
Speculation about the letter’s termination had been raging since Flamemaster Corporation, a company that produces flame-retardant coatings, announced it was buying the candy distributor almost two weeks ago.
The announcements come following several stormy months for the company, which was forced to delay its acquisition of payment processor iBill. The company also had its stock delisted from the American Stock Exchange for a variety of public-interest concerns.
Care Concepts stock also dropped markedly during the past few months, falling from roughly $6 two months ago to an all-time low of $.54 before bouncing back up to $.72 in the last two weeks.