Graphix Zone Gets $3.9 Million in Stock Offering : Investment: The Irvine company issues 1.2 million shares to raise working capital for multimedia projects.
The Graphix Zone, a multimedia company best known for making an interactive music compact disc for the singer formerly known as Prince, raised $3.9 million Friday in an initial public offering.
The company issued 1.2 million shares at $3.25 a share on Nasdaq. Cruttenden & Co., an Irvine-based investment bank, managed the underwriting. Some portion of the money raised goes to the underwriters; the rest will be used as working capital.
The Graphix Zone was formed in August, 1989, by Chuck Cortright and Angela Aber, a husband-and-wife team who worked as marketing managers in the early years of AST Research Inc., which has become multibillion-dollar computer manufacturer.
Cortright, Graphix Zone chief executive, and Aber, executive vice president, said they wanted to take advantage of opportunities in multimedia, or the blending of video, sound, animation and text in a single computer program. The founders did not sell any of their stock.
Their company started out as a desktop publishing software retailer in the original Computer City Super Center store in Garden Grove. Computer City went on to become a nationwide computer sales chain.
After a year, the Graphix Zone moved to the Irvine Spectrum and focused on marketing high-tech equipment and offering computer production services such as desktop publishing and laser printing.
The company dabbled in various projects, such as creating a three-dimensional computer program that helped train U.S. Olympic wrestlers in 1992, and a service dubbed Creator Center, an editing laboratory that enabled film editors to create their own special effects.
Graphix Zone focused on multimedia publishing in the past year, dedicating more than half of its 30 employees to creating interactive computer programs known as CD-ROMs, for compact disc, read-only memory.
It published a guide to using multimedia for beginners and, in June, began shipping an interactive music CD-ROM for the music star best known as Prince, who changed his name to a hybrid male-female symbol that has no translation in the English language.
The disc blends Prince trivia, four music videos, 52 songs and animation. It was made as part of a deal with media giant Time Warner Inc.
The company hopes much of its future revenue will come from such multimedia projects.
The company reported net income of about $15,000 on revenue of $1.7 million for the 11 months ended June 30, 1993, compared with a loss of $457,765 on revenue of $1 million for the previous 12 months.
The company had a short fiscal year since it changed its year-end from July 31 to June 30. The company has roughly 2.5 million shares outstanding.
