eDiets.com, Inc. (OTCBB:EDET) and DietSmart, Inc., the leading online diet centers, today announced they have entered into a definitive agreement to merge organizations in a combined cash and stock transaction. DietSmart shareholders will receive 2 million shares of eDiets common stock and $2.5 million, payable in installments. The closing of the transaction is subject to DietSmart shareholder approval.
“The DietSmart management team has proven their ability to execute against the goal of providing total weight-loss and fitness solutions for dieters in the United States and around the world,” said David R. Humble, chairman and CEO of eDiets. “We see DietSmart’s impressive subscription revenue stream and positive cash flow as evidence of their tenacity, and we were attracted by their ability to make an immediate contribution to both our top and bottom line.”
“The merger of two companies in a popular and growing online sector is an exciting prospect for us all,” said Tamara L. Totah, CEO of DietSmart. “Despite all the talk today about the virtues of the subscription revenue model, surprisingly few companies have ‘figured it out.’ eDiets and DietSmart have done so, and together we will constitute one of the largest subscription-based businesses on the Internet.” Totah continues, “Each company brings to this merger unique strengths and, as one, we will be a substantial online force as well as an appealing option for anyone who wants to lose weight or simply learn to eat more healthy.”
Humble will remain chairman and CEO of the combined Company after the merger, and DietSmart CEO Totah will assume the role of president of the Company. Headquartered in Deerfield Beach, Florida, the Company will retain DietSmart’s New York City office.
In July 2001, eDiets reported its third consecutive quarter of profitable operations with $6.1 million in revenue earned from over 275,000 unique members.
New York-based DietSmart (http://www.dietsmart.com) delivers intelligent, moderate online weight loss solutions to meet the unique needs of both men and women. DietSmart offers six different diet philosophies on the site. Once a client defines his or her personal diet objectives, DietSmart creates a program and provides one-to-one support and expert information to help him or her accomplish their goals. Founded in 1999, DietSmart is the second largest subscription based online diet company, and is the fourth largest health site online.
About eDiets.com, Inc.
eDiets.com (OTCBB:EDET), a business-to-consumer subscription model, is the world’s leading subscription-based online diet center. eDiets.com has been providing consumers with professional diet advice and information exclusively online since 1996, and currently operates an interactive Support Center that is available to its members 24/7/365. Each eDiets.com member receives customized daily meal and fitness plans, grocery shopping lists and recipes, and is encouraged to participate in online meetings, support groups and other available interactive support features. The Company also publishes eDiets Diet & Fitness News, which is distributed online to over 6,500,000 subscribers. Among other honors received, eDiets.com was named a Forbes Magazine “Best of the Web” fitness and nutrition Web site in both 2000 and 2001.
Statements in the release, which are not historical in nature, are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the Company to be materially different from those which may be expressed or implied by such statements. These risks and uncertainties include, among others, changes in general economic and business conditions, changes in product acceptance by consumers, effectiveness of sales and marketing efforts, loss of market share and pressure on prices resulting from competition, and inability to obtain sufficient financing. For additional information regarding these and other risks and uncertainties associated with eDiets.com business, reference is made to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2000, and other reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements are current only as of the date on which such statements are made. The Company does not undertake any obligation to publicly update any forward-looking statements.