Happy days are here again. At least at Media 100, once its acquisition by Optibase takes place in May. Until then, Optibase has executed a definitive $1 million loan agreement with the financially struggling provider of content-creation tools.
"The plan is for Media 100 to operate as a separate business unit within Optibase," says Mike Savello, Media 100 vice president of worldwide sales and marketing. "We'll continue on doing what we've been doing."
Media 100 has filed a voluntary petition for reorganization under Chapter 11. The bankruptcy court is required to approve the acquisition, which includes the purchase of all Media 100 assets for
$2.5 million, less any funding advance. For Savello and Media 100, the deal comes at an important time. During the past year, the company's stock was in fairly constant danger of being delisted by NASDAQ. And net sales in third quarter 2003 were down $2 million from the year-ago period, to $3.4 million.
The difficult financial situation was the result of the company's overextending itself in the development of its 844X system, which includes editing, effects, and graphics tools. That project cost about $40 million to complete and left the company with little capital for marketing. The 844X received critical acclaim from reviewers but gained little traction with customers. The hope is that Optibase can change that.
"Optibase has $55 million in cash," adds Savello, "and can provide us with strong financial backing."