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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 2, 1999
MODACAD, INC.
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(Exact name of registrant as specified in its charter)
California 33-31166 95-4145930
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
3861 Sepulveda Blvd., Culver City 90230
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 751-2100
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
Modacad, Inc. ("Modacad") has signed a two-year interactive marketing agreement
with America Online. Under the two-year agreement, Modacad will provide payments
to AOL totaling up to $7.5 million plus warrants to purchase 100,000 shares of
Modacad's common stock at an exercise price equal to 125% of the closing sale
price of Modacad common stock on the date of issuance. In exchange, Modacad's
styleclick.com web site will be promoted in several areas of the AOL service
including the Shopping Channel, Entertainment and Teen Channels. Styleclick.com
will also be promoted on AOL.COM's Home & Garden WebCenter, and on AOL's popular
Instant Messenger service as well as through Keyword: styleclick. AOL will also
be eligible for additional payments if certain thresholds specified in the
agreement have been met and may sell advertising on behalf of styleclick.com in
exchange for revenue sharing with Modacad. See attached press release issued on
June 30, 1999, which by this reference, is incorporated herein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ModaCAD, INC.
Date: July 2, 1999 By: /s/ LEE FREEDMAN
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Lee Freedman
Vice President, Finance and
Chief Financial Officer
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PRESS RELEASE
MODACAD ANNOUNCES E-COMMERCE MARKETING AGREEMENT
WITH AMERICA ONLINE
LOS ANGELES, Calif., June 30, 1999 -- Modacad, Inc., (NASDAQ: MODA) creator of
styleclick.com, a leading fashion and style related e-commerce site, announced
today that it has signed a two-year interactive marketing agreement with America
Online (NYSE: AOL), the world's leading interactive services company.
Under the two-year agreement, Modacad will provide payments to AOL totaling $7.5
million plus warrants to purchase 100,000 shares in Modacad stock. In exchange,
Modacad's styleclick.com web site will be promoted in several areas of the AOL
service including the Shopping Channel, Entertainment and Teen Channels.
Styleclick.com will also be promoted on AOL.COM's Home & Garden WebCenter, and
on AOL's popular Instant Messenger service as well as through Keyword:
styleclick. AOL will also be eligible for additional payments once certain
thresholds specified in the agreement have been met and may sell advertising on
behalf of styleclick.com in exchange for revenue share with Modacad.
Under the agreement, a styleclick.com shopping area specifically designed for
AOL members will offer a wide range of apparel, accessories and cosmetics from
such popular retailers as Adidas, Crabtree & Evelyn, Danskin, Easy Spirit,
Nicole Miller, Nine West, Patagonia, Timberland and many others.
Modacad's styleclick.com will also have an advertising presence on Oxygen Media,
a leader in the online women's market. Oxygen Media specializes in providing
branded content for women on the Internet, cable television, and other media.
Joyce Freedman, chairman and co-chief executive officer of Modacad stated,
"Women are the fastest growing segment of consumers on the Internet today and
account for 52% of AOL's subscribers, or over 8.3 million users. Our strategy
provides AOL and Modacad with a very effective vehicle to deliver highly
qualified consumers to the affiliate shopping site." Ms. Freedman went on to
add, "We are gratified to receive such featured placement on AOL. Our goal is to
provide their member community with the ability to benefit from our fashion
content."
Maurizio Vecchione, Modacad's president and co-chief executive officer stated,
"This agreement has enabled Modacad to become a key provider of style content
for AOL and supports our business strategy which provides major sites the
ability to populate their special shopping areas with styleclick.com's special
merchandise mix. We are pleased that AOL is the first to take part in defining
what we believe will be a significant growth opportunity for fashion on the
Internet."
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"This agreement with Modacad will provide AOL members with an even greater
selection of shopping choices," said Greg Shove, Vice President of Interactive
Marketing at AOL. "Our members are making shopping more and more a part of their
everyday online experience and Styleclick.com brings together in one convenient
area many popular brand names, providing our members with a wider variety of
shopping options on the service."
Styleclick.com is Modacad's premier e-commerce site for the most popular names
in fashion, footwear, gifts, cosmetics, and style related merchandise.
Styleclick.com offers many products in high resolution with the ability to pan
and zoom in to inspect fabric texture, stitching, buttons, and beading. Featured
products can be viewed in high resolution, 3 dimensional rotation, providing
visually rich images that allow consumers to see products from all angles in
order to make informed purchasing decisions. Styleclick.com is the first
e-commerce site to provide image-by-image comparisons by category where
consumers can compare related products from different manufacturers and visually
compare the look of items, not just the price. These features create a more
realistic shopping experience.
Founded in 1988, Modacad is an enabler of e-commerce for manufacturers and
consumers. With more than 11 years of experience, the Company is a recognized
leader in 3D rendering and digital content management. Modacad recently launched
www.styleclick.com, its new e-commerce apparel site that features fashion,
footwear, gift, and beauty products while allowing users to comparison shop
among leading brands.
For further information, or a complete investor kit, contact Sanjay Sabnani at
310-399-4059 or visit Modacad's web site at www.modacad.com.
This press release contains forward-looking statements including statements
regarding the timing and composition of revenues, future operating results and
the timing of product introductions, among others. Except for historical
information, the matters discussed in this report are forward-looking a
statements that are subject to certain risks and uncertainties that could cause
the actual results to differ materially from those projected. Factors that could
cause actual results to differ materially include the following: (i) unforeseen
technical or other obstacles in the development or production of the Company's
software and Internet products; (ii) customer acceptance of the new, updated or
revised versions of the Company's software and Internet products; (iii) the
Company's ability to produce its products on a cost-effective and timely basis,
and (iv) factors not directly related to the Company, such as the plans and
success of the Company's vendors, competitive pressures on pricing, market
conditions in general, competition, technological progression, product
obsolescence and the changing needs of potential customers and the Style
Industries in general.
