Totally Hip Software Inc. intends to proceed with a proposed private placement financing with maximum proceeds of $2,990,000. The private placement will consist of up to 230,000 units (each unit consisting of 10 common shares and seven share purchase warrants) priced at $13.00 per unit subject to final approval and closing on/or before December 12, 1996.
Each share purchase warrant will be priced at $1.50 and will expire one year from t he closing date of the private placement. The proceeds from the private placement will be used to expand marketing and distribution of the company's popular new WebPainter animation products, and will also be used to introduce and market a n umber of new Web design products that are currently in development, slated for release in 1997.
The private placement has received conditional regulatory approval from the ASE. The financing is subject to the final approval and closing of the necessary documents by the private placement groups and the Directors of Totally Hip Software on/or before the closing date.
"In the past seven months, Totally Hip Software has aggressively pursued its goal of becoming a leader in the delivery of next generation, easy-to-use, Internet-based multimedia animation tools," said Randall H. McCallum, chairman and chief executive officer of Totally Hip Software. "Since May, we have accomplished all of our initial stage marketing and product introduction goals for WebPainter. When we were approached by this independent investment group, we knew that the proceeds of this proposed financing would allow us to aggressively expand our present marketing and distribution activities beyond our present growth rate. Final approval will enable us to move our new product introduction dates forward by three months, allowing us to further establish Totally Hip as a premiere provider of Web design tools."
Totally Hip's flagship product WebPainter 1.0 for Macintosh and Windows 95/NT, a 2D Web animation and paint application, provides novice and experienced users with a comprehensive set of tools to create, convert and export a variety of popular animation file formats for use on Web sites and Intranets. Recently receiving "Top Pick" status on C/NET's DOWNLOAD.COM's Multimedia & Design category, WebPainter has received over 2,800 downloads in the last two weeks. WebPainter is rank ed as one of the "Most Popular" applications from over 500 of the best Macintosh products on the DOWNLOAD.COM site.
Recent research from I/PRO's Cyberatlas indicates that "adding animation to (on-line) Web banners boosts customer response rates by 25 percent". These findings indicate that popular Web design tools, such as WebPainter will continue to play a key r ole in a number of areas, including the advertising segment of the rapidly growing Internet market. According to a CyberAtlas consensus forecast, "Internet advertising expenditures are on pace to exceed $300 million this year and the U.S. to tal expenditures are expected to reach $4.5 billion by the year 2000." As companies turn the Web into a direct mail model to promote and advertise their products and services, the market is expected to grow into a $33 billion business. Since WebPainter's release in late September this year, product sales have surpassed the company's initial projections and with over 400,000 beta and 'Try Out' versions of WebPainter downloaded and a estimated 10 million copies of Sizzler media player made available from downloads as well as the recent Microsoft bundling agreement, WebPainter's popularity continues to increase daily. In addition, Totally Hip continues to add new resellers and distributors to their sales channel to make the product available to even more users as the products benefits reach out to a growing installed base of potential customers. Industry press have also taken notice of WebPainter resulting in product mentions in over 70 publications worldwide. The company's WebPainter and Sizzler products have been bundled with over 35 Internet related CD-ROM based books and are included in over 25 CD-ROM based Internet magazines.
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