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Tuesday August 8, 8:59 am Eastern Time

Press Release

iClips Secures $4.6 Million in First Round Financing -- Opticality Ventures Leads Round, Joined by Schoffstall Ventures

NEW YORK--(BUSINESS WIRE)--August 8, 2000--iClips, the leading provider of free Internet-based streaming video messaging, announced the completion of their first venture funding round totaling $4.6 million, led by Opticality Ventures and joined by Schoffstall Ventures. This brings the total amount raised since the company's October 1999 inception to $5.4 million.

iClips makes it easy for Web users to create, send and share streaming video messages. The company has developed a powerful, easy-to-use service that provides a streaming video alternative to text-only communication. iClips integrates seamlessly with distribution-partner Web sites and consumer electronics products, providing them with a co-branded suite of free streaming video creation, storage and serving tools. Through distribution partners and at www.iclips.com, users are given 20 MB of free space to store streaming video messages, unlimited bandwidth and access to a full account management system. Using a PC Camera or camcorder, iClips users can add their own video messages to personal homepages, auction sites, online resumes, and anywhere else video communication is desired.

iClips generates revenue from streaming advertising within the video message, e-Commerce involving desktop video-related hardware and software, as well as value-added and premium service subscriptions. Streaming video advertising provides the first truly viable mechanism for advertising brands on the Web.

``We will use this financing to rapidly grow our business, specifically enhancing product development, marketing and sales. Most importantly, we will increase our initiatives to provide the most powerful, easy-to-use, free streaming video messaging tools for our partners and users,'' said Michael Diamant, founder and CEO of iClips. ``Over the next few years, video will replace text as the most powerful form of Internet communication. iClips is well-positioned to capitalize on this revolution.''

``iClips has an incomparable early-mover advantage which enables them to secure significant market share as online communications moves from text to video,'' said Hadar Pedhazur, Founder and Principal of Opticality Ventures. ``No other company has been able to provide such an easy-to-use, powerful service offering Internet users a rich media alternative to text-only communication.''

``iClips has done a superb job of simplifying the user interface for video communications,'' said Marty Schoffstall of Schoffstall Ventures. ``They also have a unique model that marries the capture and encoding process with the storage and serving process in a way that makes it seamless to the user, and adds a unique viral growth element to the traditional licensing and ASP business model.''

The Marketplace

A February 2000 Forrester Research report states that by 2002, 30 percent of US online households will actively use rich media to communicate, and personal rich media will spread virally. The report predicts ``by the year 2004, video email will replace text messages as the main online communication mechanism'' and by 2005 text based email will seem as archaic as black-and-white TV. Ninety-two percent of online users will be communicating through rich media.

About iClips

iClips mission is to empower every Web user to create, publish and share streaming video messages. iClips provides distribution partner Web sites and end-users with a limited free license to the company's proprietary tools that provide fast and easy solutions for replacing text with streaming video. Internet veteran Michael Diamant, founder and CEO, started iClips, a privately held corporation headquartered in New York, in October 1999. iClips was selected by Silicon Alley Reporter as one of 12 Companies to Watch in 2000. For more information, visit http://www.iclips.com

About Opticality Ventures

Based in Briarcliff Manor, New York, Opticality Ventures is a venture capital management company focusing on investments in private technology companies, primarily those involved in software development that concentrate on finance, the Internet, programming tools, development environments, distributed object systems and programming languages. Opticality and its partners have a history of successful investments, providing venture funding for a broad range of entrepreneurial companies. For more information, call Hadar Pedhazur at 914-923-0003 or visit the company's Web site at http://www.opticality.com

About Schoffstall Ventures

Schoffstall Ventures is a technology venture capital firm focused on building lasting relationships with visionary entrepreneurs and their companies. Schoffstall Ventures was founded to focus on investment in private placements of early and mid-stage technology companies specifically in the Internet and communications industries. Our goal is to create long-term value by assisting entrepreneurs and their companies through our extensive operational experience and vast network of industry contacts. We align ourselves with the entrepreneur's vision to create and provide a successful and timely service or product in today's competitive marketplace.

     Joe Edelson
     RLM Public Relations
     (212) 741-5106, x 16

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