Entertainment, high-tech companies announce plans to merge prior to IPO

Business Wire, Jan 16, 1996

TROY, Mich.--(BUSINESS WIRE)--Jan. 16, 1996--Quatrophonic Music Corp., a new global record and music video company, announced today its intent to acquire a controlling interest in NAMS International Inc., an Internet distributor of interactive music videos and computer software products.

According to Quatrophonic Founder and Chief Executive Officer Michael Quatro, the acquisition will create a "marriage of entertainment and web technology" in a combined organization that owns copyrighted records, artists and video content as well as a high-tech delivery, promotion and sales order system.

Initial backing and the impetus behind the merger is being provided by J.E.A. Enterprises, L.L.C., a newly formed private investment firm specializing in venture capital financing, mergers and divestitures of small- to medium-capital companies. The firm is headed by Joseph Antonini, former chairman, president and chief executive officer of Kmart Corp. Quatrophonic Music Corp. will hold a 76 percent interest in its new subsidiary upon completion of the transaction. Quatrophonic and NAMS currently are reviewing additional funding alternatives, including a proposed initial public offering, to facilitate 1996 marketing, distribution and sales of existing and developing products worldwide.

"NAMS will provide Quatrophonic artists and products with on-line access via the World Wide Web to the marketplace of the future," Quatro said. "Our customers will enjoy direct interactive access to the specific records, artists, music videos and other products they want when and where they want them. Quatrophonic's potential will be further enhanced by the promise of future software inventions and services generated by NAMS. Essentially we will become an on-line record and music video mall that packs the marketing punch of television. A global 800-line fulfillment center completes the distribution picture."

"A few companies are attempting the distribution of LIVE digital video through the Internet today using standard modem connections, which amounts to little more than a slide show," added Greg Loveria, president and founder of NAMS, who will join Quatrophonic's management team when the acquisition has been finalized. "We offer downloadable motion video files as shareware that transfer seven times faster than conventional video files currently found on the Internet. Then, the NAMS video files play back in real time off a PC's hard drive, in an interactive format complete with descriptive text and still images."

Artists, entertainers and labels already are taking advantage of the NAMS web site (http://www.mw3.com/nams/ or ftp.www.mw3.com) and its interactive video delivery technologies, which are currently accessible to 35 million users. Cybertainer Todd Rundgren is posting two music videos on NAMS, one of which is from his new interactive enhanced music CD and CD-ROM, "The Individualist." Rundgren currently hosts and directs CompuServe's On-Line Music In (TR) action Forum (GO IMUSIC).

TVT Records and Wax Trax, an independent music label, is making available its entire music catalog via NAMS videos and the NAMS web site, including musical tracks and videos from New Line Cinema's movie, "Mortal Kombat." Both also have released NAMS videos. Other artists on TVT's movie soundtrack CD, "Seven," starring Brad Pitt and Morgan Freeman, are being promoted, as are NAMS videos on Gill Scott-Heron, Rodgers & Hammerstein and Louis Armstrong.

Current NAMS videos on-line include excerpts from Mobil Visions' live concert film, Queen, Beautiful People featuring Jimi Hendrix samples, Bad Sun, Whirling Dervishes, Spooky Ruben, Jamie Notarthomas and Michael Quatro. NAMS will accept a limited number of bids this year from record labels that want to release their videos on the web.

The NAMS International World Wide Web site is hosted by Boston-based Baudway Communications (Hal Leonard interactive), creators of Music World 3, one of the Internet's most visited music-related web sites. Downloading an entire music video with an average running length of four minutes takes 30-40 minutes using NAMS technology, versus three to four hours to download digitally.

While entertainment-related videos are the mainstay offering on the NAMS web site, upcoming videos include corporate and educational training and repair videos, political commentary from political figures, broadcast television news and financial stories, historical television and film archives, as well as corporate promotional videos ranging from the manufacturing of musical instruments to automobile sales and repair videos.

Quatrophonic Music Corp. produces or acquires audio recordings and video masters that are then sold and distributed in retail outlets throughout the world. Traditional products such as compact discs, cassettes and LPs, as well as new technology including DVD, CD+, CD-ROM, live on-line computer and digital delivery systems, are employed as part of its distribution network. The company has licensed new artists and has established distribution partnerships in 87 countries, focusing primarily on Southeast Asia, Eastern Europe, South America and China. The company also has formed a strategic alliance with the law firm of Harness, Dickey & Pierce, a Troy-based firm specializing in intellectual property law. The alliance covers all software patents, copyrights and trademarks on current and future products in both the entertainment and technology arenas.