ModaCAD Unveils New E-Commerce Technology and Business Strategy.

LOS ANGELES--(BUSINESS WIRE)--Oct. 31, 1997--

ModaCAD Leverages Acclaimed Photo-Realistic Visualization 

Technology Into Mass Market Consumer Space For Electronic

Commerce

ModaCAD Inc. (Nasdaq:MODA) Friday announced the unveiling of a newly licensable technology and the introduction of a new business strategy that will catapult the company, as a recognized leader, into the rapidly emerging electronic commerce ("e-commerce") market.

As with all ModaCAD products, this new e-commerce technology includes ModaCAD's proprietary and patented core visualization technology, but also features the creation of newly designed content management technology for mass market consumption that is applicable to all areas of e-commerce.

In several recent publications, sources such as Business Week have targeted e-commerce as the fastest growing segment of the computer visualization and graphics industry (e-commerce currently represents a small 10% slice of an estimated $20 billion-plus industry). It is estimated that e-commerce alone will evolve into a $327 billion market by 2002 according to a report published by Forrester Research in the Los Angeles Times.

Joyce Freedman, president of ModaCAD said, "Not only are we bringing an exciting and revolutionary new software technology to personal computing via the Internet, but the growth potential for visualization companies within the e-commerce sector is staggering. The enhanced combination of our visualization technology and e-commerce content managers will not only represent the backbone of ModaCAD's future business strategy, but introduces significant new short and long term revenue generation components which will have the ability to increase revenues from a variety of sources including fees associated with licensing, on-line subscriptions and advertising."

ModaCAD's e-commerce content managers' interactive shopping capabilities offer value to consumers far beyond traditional printed catalogs. This technology combines powerful visualization tools with the ability to organize, filter and manage digital product information in an advanced technological environment that showcases merchandise and services in a way that is informative, practical and useful to consumers. Having the ability to shop, research product information and visualize potential purchases in a photo-realistic scene environment creates an incentive for consumers to purchase goods and services on-line in that it enables consumers to circumvent time and travel issues which can be key problems associated with unenjoyable shopping experiences.

Freedman continued, "A key strategy for ModaCAD is to enable many industry specific content managers from this common technology. The concept is to offer specialized applications that offer value to consumers in each specific area of commerce, while maintaining a common content format and delivery mechanism."

According to Maurizio Vecchione, ModaCAD's executive vice president, "ModaCAD's new technology in this area allows for the creation of content managers that are not simply cataloging tools, but by utilizing the 3D aspects of this technology, we are showcasing a new set of features such as virtual reality shopping and interactivity among users which enable a dramatically more compelling user experience."

A key element of this interactive shopping technology features the ability to automatically update products, content and news over the Internet utilizing ModaCAD's proprietary "push" technology. ModaCAD's e-commerce technology has been developed to easily and seamlessly deliver content and information to consumers as soon as it is available. This enables consumers to always have access to the latest merchandise and specific product information immediately as compared to periodic delivery and time delays associated with traditional printed catalogs.

Vecchione added, "The marriage of our visualization and content management technologies is a dynamic force for e-commerce applications. We have created a unified model for which there are no barriers to entry as we have no direct competitors capable of providing both of these technologies from one source. This fact combined with our expertise in creating digital content and an existing massive digital content archive, makes ModaCAD the ideal as well as the logical partner of choice for any number of large companies interested in entering the e-commerce business.

"We expect this new e-commerce technology to enable a move to the Internet of many of our existing products as well as making this technology the cornerstone of ModaCAD's strategy of providing the leading visualization technology applied to e-commerce in the industry" Vecchione concluded.

ModaCAD's core rendering technology enables computers to create photo-realistic synthetic 3D images on a computer screen from computer generated data, in real-time. ModaCAD develops, markets, and licenses 3D rendering, modeling and virtual reality software for a broad variety of applications to the commercial, consumer and OEM marketplaces. ModaCAD holds two patents on its proprietary rendering technology and distributes its products to more than 33 countries worldwide.

This news 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 release are forward-looking 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) the timely completion of the development of the company's software products, including ModaCAD's e-commerce software products, consumer software and enhanced or updated versions of the company's electronic merchandising and CAD software products; (ii) unforeseen technical or other obstacles in the development or production of such products and software; (iii) acceptance of ModaCAD's products and consumer software by the publisher/distributor of such products and software and the release and marketing plans of the publisher/distributor; (iv) customer acceptance of ModaCAD's e-commerce and consumer software products and updated or revised versions of the company's electronic merchandising and CAD software products; (v) the company's and its publisher/distributor's ability to produce its software products on a cost-effective and timely basis; and (vi) factors not directly related to the company, such as competitive pressures on pricing, market conditions in general, competition, technological progression, product obsolescence and the changing needs of potential customers and the e-commerce, software, textile, apparel, home furnishings and home design industries in general.

CONTACT: ModaCAD Inc., Los Angeles 

Alison Barney, 310/312-9826 Ext. 108

E-mail: [e-mail]

Linda Freedman

E-mail: [e-mail]

Fax: [phone]

http://www.modacad.com