a21 in Talks with Applejack Art Partners

Posted on 7/24/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

a21 has announced that it may soon have a new majority shareholder. The Florida-based publicly traded company has executed a non-binding Letter of Intent with Vermont-based Applejack Art Partners. If the agreement proceeds as outlined, Applejack will own the majority share of a21 stock.

Applejack was established in 1988 by Jack Appleman, who remains its CEO today. Originally focused on publishing, the company has explored other niches in the art world. Currently, Applejack comprises several divisions, many brought in through acquisition. The company embraces fine-art prints and posters, artist representation and art licensing, auctions and fine porcelain. The latter two were added in 2007, when Applejack bought a Holbrook, N.Y.-based AJ Ross Art Auctions and EM Boehm Fine Porcelain of Ewing, New Jersey.

At the beginning of this year, a21 had a total of 87,061,076 outstanding shares. Under the letter of intent, Applejack intends to purchase all of a21's outstanding notes, valued at $18 million, and all of the common stock, some 41 million shares, currently owned by current note holders. Subsequently, a21 would sell 110 million new shares of common stock to Applejack to satisfy $13 million of the notes. The transaction is contingent upon the execution of definitive agreements by all stakeholders, but the intent is to move forward as soon as possible.

Applejack has also extended a credit facility to a21. As of July 16, a21 has access to up to $500,000 under the annual interest of 12%. a21 has already borrowed one-fifth of the total amount.

The two companies believe they have complementary offerings. In addition to its stock-photography businesses - SuperStock and newly launched MediaMagnet - a21Group runs ArtSelect, which sells prints, posters and art-framing services via the Internet. The company has offices in Florida, Iowa and London.

In February, following layoffs, consolidation of operations and re-allocation of cash assets, a21 executives said they had doubts about the company's future. Its financial performance was in a downward spiral. Both divisions, which account for nearly equal shares of total revenue, were in trouble: SuperStock's fourth-quarter 2007 revenues were within $1million of the first quarter of 2006. ArtSelect was fairing even worse, with a 10% drop in revenue in the third quarter of 2007, compared to the previous year. In addition, a21 reported significant recurring losses, which accumulated a deficit of $26.9 million in September 2007. The company desperately needed cash and said it was seeking strategic alternatives, with the help of a local investment bank.

Still, a21's stock offering is fairing reasonably well in troubled economy. MediaMagnet's budget-stock offering is too young to have produced results; however, it could potentially become a growth area. Company CEO John Ferguson said the deal with Applejack would result in a significant reduction of a21 debt and position it for growth. Jack Appleman added that he saw opportunity for incremental sales and improved efficiency for both companies.

Copyright © 2008 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


Be the first to comment below.

Post Comment

Please log in or create an account to post comments.

Stay Connected

Sign up to receive email notification when new stories are posted.

Follow Us

Free Stuff

Stock Photo Pricing: The Future
In the last two years I have written a lot about stock photo pricing and its downward slide. If you have time over the holidays you may want to review some of these stories as you plan your strategy ...
Read More
Future Of Stock Photography
If you’re a photographer that counts on the licensing of stock images to provide a portion of your annual income the following are a few stories you should read. In the past decade stock photography ...
Read More
Blockchain Stories
The opening session at this year’s CEPIC Congress in Berlin on May 30, 2018 is entitled “Can Blockchain be applied to the Photo Industry?” For those who would like to know more about the existing blo...
Read More
2017 Stories Worth Reviewing
The following are links to some 2017 and early 2018 stories that might be worth reviewing as we move into the new year.
Read More
Stories Related To Stock Photo Pricing
The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of ...
Read More
Stock Photo Prices: The Future
This story is FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discuss...
Read More
Important Stock Photo Industry Issues
Here are links to recent stories that deal with three major issues for the stock photo industry – Revenue Growth Potential, Setting Bottom Line On Pricing and Future Production Sources.
Read More
Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More

More from Free Stuff