Press Release Source: Wilhelmina International, Inc. On Monday October 18, 2010, 6:58 pm EDT
DALLAS, Oct. 18 /PRNewswire/ -- Wilhelmina International, Inc. (OTC Bulletin Board:WHLM.ob - News) ("Wilhelmina" or the "Company") announced today that an agreement has been reached among the Company, Newcastle Partners, L.P. and Dieter Esch, Brad Krassner and their controlled affiliates, who are the former owners of Wilhelmina International, Ltd. (together with its operating affiliates, the "Wilhelmina Companies"). The principal terms of the agreement include:
* A total of 18,811,686 shares of common stock held in escrow for purposes of a post closing adjustment to the purchase price for the Wilhelmina Companies will be released to Esch, Krassner and their affiliates. All such shares are already reflected in the outstanding share count reported by the Company since the February 2009 closing of the acquisition. * All the Company's future earn-out obligations regarding the Company's Artist Management Division are cancelled. * Approximately 39% of the first $2 million of Company's earn-out obligations (i.e., up to approximately $775,000) regarding its Miami subsidiary are cancelled; and approximately 69% of any such Miami earn-out obligation over $2 million are cancelled. * The parties have entered into an amendment to their existing voting agreement to add 2 independent directors to Wilhelmina's Board of Directors, subject to a pre-determined selection process. * All pending or threatened claims by the parties, including litigation pending in New York concerning the escrowed stock, are dismissed or waived.
Mark Schwarz, Wilhelmina's Chief Executive Officer, stated: "We are pleased to have entered into this win-win agreement, which materially reduces Wilhelmina's future obligations and puts a significant distraction behind the company. It also allows us to fully leverage the experience and insight into our business brought by Messrs. Esch and Krassner, who – with this settlement – we anticipate will be even more heavily invested in our long term success. In addition, we will also be adding two new directors, who we expect will be valuable contributors as we seek to grow the Company."
Mr. Schwarz further added: "Mr. Esch and Mr. Krassner have informed the company that they are satisfied with this settlement and they hope that it will be a positive catalyst in furthering the Company's ability to execute on its strategy, including expanding its future activities."
It eliminates or significantly reduces a liability on the BS. I would have liked to see 18M shares repurchased, but I guess Schwartzy feels their knowledge is worth more. Now that they have turned a profit, and hopefully will continue, can't they start buying back shares? $1M will buy 7M+ shares at the current price. Not too shabby.