WorldGate Communications, a leading provider of video phone products along with WGI Investor, LLC, a private investment fund, have reached an agreement for the sale of a controlling interest in WorldGate to WGI Investor.

In a deal, which was signed earlier this week, WGI Investor acquired the entire interest in debentures from the company's senior secured creditor, YA Global Investments, LP (f/k/a Cornell Capital Partners, LP).

Other than this, the transaction will result in the elimination of the debentures, valued at $5 million, and provide additional working capital to WorldGate.

The transaction involves a further cash investment in WorldGate, and depends on the completion of certain outlined activities, including shareholder approval, expected to be obtained in early 2009.

WGI Investor is a private investment fund whose ownership includes the owners of ACN, Inc., the world's largest direct selling telecommunications company, which offers a broad range of telecommunications services in 19 countries in North America, Europe and the Asia-Pacific region.