Under a new waver agreement, cash payments originally due to noteholders in January and April 2008 will be settled with new notes in the aggregate principal amount equal to the interest due. The company stated that the terms of the new notes are substantially the same.

In addition to re-allocating liquid assets, a21 is exploring other financial and strategic alternatives. To assist, it has engaged the services of Regency Strategic Advisors, a Florida-based investment bank.

The company said these initiatives will drive growth. Last September, a21 cited the same goals when it laid off 20 employees and consolidated ArtSelect operations from Iowa to Florida. This restructuring freed up about $1 million in operating capital and came on the heels of a 7% drop in second-quarter revenues.

The launch of a21's latest stock offering, MediaMagnet, did not reverse the downward slide of the company's stock. The still-in-beta Web site has not improved overall revenues, with a21 posting disappointing third-quarter results. Revenues were down 5.5% from previous quarter and 9% from the same time period of the previous year.

Reports filed by a21 executives in November expressed doubt about the company's ability to continue business as usual, and the probability of needing to raise cash from equity and debt financing. The latest announcement of seeking strategic alternatives makes it clear that such concerns were well-founded.

More importantly, this announcement sends a clear signal on the overall state of the industry. a21 is the second of three publicly traded stock-image companies to seek strategic alternatives this year. Getty Images recently used identical language to gauge interest of potential investors, without success.

However, a21 maintains an optimistic tone, describing cash re-allocation and search for financing as "key initiatives designed to position [it] for future success." In accordance with the new waiver agreement, a21 will resume paying quarterly interest in cash in July.