Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Fell Herdeg
Telephone: 203-846-2274 x 119
Facsimile: 203-846-1776
Fell.Herdeg@soundprints.com
TRUDY ANNOUNCES RESTRUCTURING OF EQUITY OWNERSHIP OF TRUDY AND STUDIO MOUSE LLC
Norwalk, Connecticut, March 4, 2004-Trudy Corporation (OTCBB:TRDY)
announced today that it had executed a Memorandum of Understanding with Chart
Studio Publishing (Pty.) LTD, Gauteng, South Africa, providing for the
restructuring of ownership of Trudy's subsidiary, Studio Mouse, LLC, and for
share ownership by Chart Studio in Trudy. Chart Studio formerly held an option
to reacquire 50% of Studio Mouse. Trudy and Chart Studio have entered into a new
agreement providing for changes in their business relationship as follows:
o Subject to the obtaining of certain approvals, Studio Mouse will be
merged with Trudy.
o Chart Studio will be issued shares of Common Stock of Trudy, restricted
as to transfer, from its authorized but unissued shares, resulting in
Chart Studio's ownership of 30% of Trudy's shares issued and
outstanding after such issuance. Such issuance shall be contingent upon
1) completing the above mentioned merger, 2) obtaining approval from
the Reserve Bank of South Africa, 3) meeting the requirements of all
applicable US state and federal laws and 4) payment of $25,000 by Chart
Studio to Trudy. The shares will be issued in exchange for A) the
forgiveness of the loan from Chart Studio to Studio Mouse in the amount
of $444,852 (the net present value of which is currently $322,178); B)
cancellation of Chart Studio's option to acquire 50% of Studio Mouse;
and C) the contribution by Chart to Trudy of certain formats designated
by Chart Studio, and D) at-cost access to sample-making facilities,
certain logistics facilities and design services of Chart Studio.
o The Reserve Bank of South Africa's application timeline and
approval/disapproval impact on Trudy will be the following:
1. Chart Studio shall submit an application to the Reserve Bank
of South Africa for approval of equity participation in Trudy
no later than April 30, 2004.
2. If the necessary Reserve Bank approval is not received by
December 31, 2004, in termination of all prior agreements with
Chart Studio, Trudy shall pay Chart Studio no later than
August 20, 2007 30% of nine times Trudy's earnings before
interest, tax, depreciation and amortization for the 12 months
ending August 31, 2004, which payment shall not be less than
$444,852.
o Chart Studio may receive an additional 3% equity interest in Trudy, for
a total of 33% of Trudy's then issued and outstanding shares, provided
that Chart Studio, using its own sales personnel, generates incremental
sales for Trudy of $750,000, to be commissionable to Chart Studio,
within 12 months from February 20, 2004. Chart Studio and Trudy have
also agreed upon a sales representation agreement for additional
commissioned sales of Trudy product by Chart Studio beyond this
$750,000.
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o Chart Studio shall be granted pre-emptive rights regarding future sales
by Trudy of shares of its Common Stock.
o Chart Studio shall provide a corporate guarantee for 30% of Trudy's
revolving line of credit and equity line of credit of $750,000 and
$300,000, respectively.
o Trudy has agreed to expand the size of its Board and provide Chart
Studio with Board representation.
William W. Burnham, President and CEO of Trudy remarked, "We welcome Chart
Studio's successful application to the Reserve Bank of South Africa; Chart
Studio's alliance with Trudy will offer significant global sales opportunities
for Trudy's licensed products to be sold to Chart Studio's customers worldwide.
In addition, Trudy's licensed and proprietary content also offers repurposing
opportunities into Chart Studio's novel formats to be packaged and sold on a
non-returnable basis in multiple languages to these same customers worldwide."
Studio Mouse, LLC was established to capitalize on the wealth of content and
creativity of Trudy and Chart Studio, creating innovative new formats for
existing content and new content for use in new and inventive "edutainment"
product formats which are selling into the retail market through such resellers
as Target, Toys R' Us, Wal-Mart, Costco, Sam's, Borders, Barnes & Noble, and
Books-a-Million.
Trudy Corporation was founded in 1947 as a privately owned designer of plush
toys and became a public company in 1987. Trudy currently holds licenses from
the Smithsonian Institution, the African Wildlife Foundation and the American
Veterinary Medical Association, among others, for children's books, audio books
and plush toys. It has active distribution into the toy and book trade, the
warehouse clubs, mass market retailers as well as schools and libraries. Also in
its distribution portfolio is a mail order catalog and e-commerce business to
the education community and at-home consumers.
Except for the historical information contained herein, the matters set forth in
this press release are forward-looking statements within the meaning of "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially. These forward-looking statements
speak only to the date hereof; Trudy Corporation disclaims any intent or
obligation to update these forward-looking statements.
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