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Investors Find Value in SageMetrics Corp. Performance

Investors Find Value in SageMetrics Corp. Performance Media & Technology by Carlos Martinez North Hollywood-based SageMetrics Corp. has received $6 million in its second round of venture capital funding. The company, which makes business software and analyzes online and off-line consumer data, completed its latest round of financing earlier this month, with Ascend Venture Group leading the round with $3 million in capital. Darryl Wash, managing partner for Ascend, said the company was attractive because it has been breaking even in a difficult economy and is poised to return to profitability within a year. Other backers include Bay Star Capital, Innisbrook Partners and GCWF Investment Partners. SageMetrics CEO E. Kenneth Nwabueze said the new funding will go toward marketing efforts and improving sales. Already, SageMetrics has begun a number of new initiatives, including a strategic partnership in February with software maker RedSheriff Inc., based in New York. The agreement allows the firms to offer a combined data analysis platform to serve their combined customers. Wash said SageMetrics’ biggest competition comes from DigiMine Inc., based in Bellevue, Wash. That firm recently announced $20.3 million in venture financing. DVD Piracy Alleged Chatsworth-based adult video producers Anabolic Video Productions Inc. and Diabolic Video Productions Inc. have filed suit against three video distributors for alleged illegal copying and distribution of their DVDs. According to a lawsuit filed in Federal Court in Los Angeles, attorneys for both video companies say VIP Services Inc., Lynton Appelson Inc., Aware Distributors Inc. and other unnamed companies and individuals illegally copied and distributed DVDs produced by Diabolic and Anabolic. Anabolic president Christopher Alexander said the suit seeks to recover the alleged illegal profits made from the sales of the counterfeit DVDs, unspecified punitive damages and attorney’s fees for infringement of copyright. Officials for the three firms contacted by the Business Journal would not comment. “We found out when retailers complained that they had received inferior copies of our DVDs,” said Alexander, who added that at least 25 titles had been pirated. Alexander said the company has been using investigators posing as buyers at a number of video stores to determine whether more DVDs have been illegally copied and distributed to unsuspecting video shop owners. Alexander said both companies will pursue anyone who has illegally copied the companies’ material, whether by downloading from the Internet or by making or selling counterfeit copies of the two companies’ DVDs or videocassettes. The companies said an unspecified number of pirated versions of their DVDs have been circulating for months throughout Southern California, making efforts to catch the culprits difficult. “We don’t know how many have already been sold,” said Alexander, who noted that retailers are also victims of the scam. Bill Lyon, executive director of the Adult Video Association, said DVD piracy has been a growing problem for the industry. “The retailer is going to look for the best deal he can get,” Lyon said. “If you’re going to get a better deal from another supplier instead of some established supplier, you’re going to go there and that’s where the problem lies.” Adult videos and DVDs are generally carried by small retailers rather than large chains, which shun porn, he said. Film Roman Turns to Effects Film Roman Inc. is making its move into the effects business after the company acquired VanHook Studios, formerly of Glendale, and moved the company into its North Hollywood studios. The acquisition, the value of which was not disclosed, marked the company’s push into visual effects as a way to improve its revenue flow, said Film Roman CEO John Hyde. “Our role is to expand Film Roman into graphics and effects as a way to improve and diversify,” Hyde said. “We want to refocus the company back into animation, graphics and visual effects that are all in keeping with what Film Roman is about.” As part of the move, VanHook has been renamed Forum Visual Effects and will continue to be led by its founder, Kevin VanHook. Moving the company into visual effects may well improve the company’s bottom line, said longtime Sun Valley-based effects specialist Sean Taylor. “There’s a lot of business in effects right now, so it’s definitely going to help,” he said. Over the last three years, Film Roman’s revenue has decreased steadily as the animation business declined. According to figures for the quarter ended March 30, the company lost $816,267 on $15.8 million in revenues, compared to the same period last year when it lost $302,193 on revenues of $19.2 million. The company’s dependence on a handful of shows for its revenue flow has been the reason it has struggled over the past few years. “King of the Hill,” “The Simpsons” and “X-Men” accounted for 33 percent, 30 percent and 16 percent, respectively, of the company’s total revenue last year. “We need to broaden our scope and take on areas where we know we can excel,” said Hyde of the move into effects. This month, the company announced plans to develop a series on the comic book character “Deity.” It also signed deals with the SciFi Channel for a new computer-animated series, titled “Tripping the Rift,” and with Showtime Networks for animated programming spots. Terms of both deals were not disclosed. The announcements, coupled with the acquisition of VanHook Studios, helped push the company’s stock up slightly, from 21 cents a share to 25 cents. On May 24, the stock closed at 24 cents a share. Lockheed, Optics 1 Get Contracts Optics 1 Inc. of Westlake Village and Lockheed Martin Corp. in Palmdale received separate U.S. Defense Department contracts this month. Optics 1 received a $12.3 million contract for designing and manufacturing imaging equipment for the U.S. Navy’s AN/AAS-52 Multi-Sensor Targeting System. The work will be conducted at the company’s headquarters and is scheduled to be delivered to the Naval Air Warfare Center Aircraft Division in Lakehurst, N.J. by July 2003. Lockheed Martin has been awarded a $14 million contract to develop and provide sensor technology equipment for U.S. Air Force fighter aircraft. Other details were not available. Work will be done in Palmdale and is scheduled to be delivered to Wright-Patterson Air Force Base in Ohio by September 2009. Business Journal reporter Carlos Martinez may be reached (818) 676-1750 ext. 17 or by e-mail at cmartinez@sfvbj.com.

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