7TH Level Says to Merge With Street Technologies
7th Level, Inc. and Street Technologies, Inc. Merge to Form 7th Street.com
RICHARDSON, Texas, Feb. 17 /PRNewswire/ -- 7th Level, Inc. (Nasdaq: SEVL - news) and privately held STREET Technologies, Inc. today announced a merger of the two companies to form a powerful organization in the online enhanced-learning and communications market leveraging their leading Internet interactive streaming and animation technology. The name of the new entity will be 7th Street.com and will trade on Nasdaq under the symbol ''SEVL''.
7th Street.com will provide its customers with essential training and communication products and services. The company's products will feature the most advanced prepackaged and customized learning offerings for Internet and intranet delivery and a suite of high impact communications products targeted toward web community development and website enhancement. 7th Street.com's suite of products are based on the convergence of two highly advanced Internet streaming technologies which allow interactive multimedia and animation to be accessed instantly over networks. The new company brings market and technological leadership that will enhance the existing customer base of both companies.
7th Street.com's learning and communication orientation serves as the ideal vertical market for the company's long-term strategy of providing a critical value-rich service to promote enhanced education for the corporate training and consumer markets, as well as, education and communications for Internet community development. Website navigation, automated help desk and custom tutorials are all products offered by 7th Street.com.
Donald Schupak, former Chairman of 7th Level, and new Chairman of 7th Street.com, commented, ''Our ongoing strategy is to create value for our shareholders by leveraging and vertically integrating our technology, starting with the strong base that Street has developed in the corporate training and consumer markets. By the end of 1998 Street's library consisted of approximately 200 enhanced multimedia titles and its distribution network consisted of more than 50 active resellers of its corporate training offerings and several hundred web sites selling its private labeled training to consumers.''
Effective Feb 16, Stephen P. Gott has been named as President and CEO of 7th Street.com. Mr. Gott was previously the Chief Technology and Operations Officer of Lehman Brothers and the founder, President and CEO of STREET Technologies. Donald Schupak adds ''Stephen Gott has the wealth of experience and knowledge to firmly guide 7th Street.com in this rapidly growing market. He had the vision, confidence and operating experience to leave Lehman Brothers to start STREET Technologies and build it to its current position of prominence.''
Gott, commented, ''We are excited about the new opportunities that will be available to us through 7th Level's advanced animation technology. This technology, coupled with STREET Technologies' multimedia streaming capabilities, will enrich 7th Street.com's service offerings and provide the added dimension to drive our training business to higher and more sophisticated levels.''
7th Street.com is a content aggregator and through its association with world class publishers offers hundreds of learning titles delivered to the desktop, all with interactive fullscreen multimedia. The catalog continues to grow with over 200 interactive multimedia tutorials on popular business applications, such as Microsoft Office 95 & 97, Windows, Microsoft Certified courseware, programming, network training, the Internet, financial applications, soft skills and more.
7th Street.com will focus on the online training market, where STREET Technologies currently provides services to a market estimated to grow to $4.1 billion by the year 2001 according to industry analysts. IDC estimates that the technology-based training category will grow at a compounded 30% per year growth rate as compared to 7% for traditional instructor led training. Ellen Julian, Senior Analyst, IDC, described the boom market for web-based training as ''one of the most dramatic growth industries in existence today, showing clear signs for long term viability.''
In conjunction with today's announcement, the company also announced the launch of its new consumer brand, Tutorials.com, the most dynamic and enriching personal tutorial community available on the Internet. 7th Street.com already provides consumers all over the globe with the opportunity to learn hundreds of subjects over the Internet at a fraction of the cost of traditional methods such as classroom or CD-ROMS.
Tutorials.com is the world's leading provider of immediately accessible multimedia training courses and tutorials. This online library is targeted to both the mass consumer audience who frequently uses the Internet as well as the large and growing segment of professionals and students who can be characterized by self-sufficiency and who demand instant results. Users of Tutorials.com can choose from a variety of courses covering a wide range of subjects. Customers can also access 7th Street.com's products through private branded resellers such as American Online, CompuServe, Prodigy, Gateway, IBM, Beyond.com and Digital River.
In addition to Tutorials.com, LearningUniversity.com provides corporations with a comprehensive source for employee training and enrichment. Companies such as Ciba Specialty Chemical, IBM, Dow Jones and Metamor are among the organizations benefiting from the productivity gains as a result of using LearningUniversity.com.
The new entity is strategically positioned to provide its corporate, government and academic customers and resellers a wide range of relationships with its vertically integrated learning service and community-enhanced animated communications suite of solutions.
7th Street.com's award-winning patented animation technology has evolved from its early roots as an entertainment software engine to create CD-ROM content. Its current capability of providing streamed animation over the Internet has uniquely captured the need for enriched and engaging content.
In consummating the transaction, 7th Level today issued to Street's shareholders 4,948,182 shares of 7th Level Common Stock and shares of 7th Level Series D 8% Preferred Stock with an aggregate liquidation preference of $21,643,970. Upon the receipt of shareholder approval, the Series D shares will convert into the Company's Common Stock at $3.00 of liquidation preference and dividends per share. In addition to the preferred dividends, the Preferred shares are entitled to participate with the Common Stock in dividends and distributions and to vote on most matters on an ''as converted'' basis.
Donald Schupak, Chairman of 7th Level, Inc. will be the Chairman of the new entity. Stephen P. Gott, President and CEO of four year old STREET Technologies and former Chief Technology and Operations Officer of Lehman Brothers from 1986 to 1994 will be President and CEO of the merged Company. Marc E. Landy previously CFO of STREET Technologies will serve as Chief Financial Officer. Kevin C. Riley joins the 7th Street.com senior management team as Executive Vice President, Sales and Marketing. Kevin was the former Vice President of Sales and Marketing at Ziff Davis Education.
The new Board of Directors will include Donald Schupak, Stephen Gott, Merv Adelson, Jim Cannavino, and Robert Ezrin, all of whom serve as directors of the constituent companies.
The financial adviser to 7th Level is Donaldson Lufkin & Jenrette.
7th Street.com is committed to providing its customers with the most advanced learning and high impact communication products available over the Internet and intranets. The 7th Street.com suite of products is based on the convergence of two highly advanced Internet streaming technologies, which allow interactive multimedia and animation to be accessed instantly over the Internet and intranets. For further information contact us at 7thstreet.com.
Forward-Looking Statements: This news release contains forward-looking statements, which involve risks and uncertainties. Accordingly, no assurance can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the Company. These factors include the Company's success in integrating the business and operations of both constituent companies; the activities of new or existing competitors, the ability to attract and retain employees and strategic partners, the ability to leverage intangible assets in its technology, the ability to complete new projects at planned costs and on planned schedules and adoption of the Internet as a medium of commerce, communications and education. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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