<PAGE>




                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported): June 19, 1998


                                 MODACAD, INC. 
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


          California                    33-31166                 95-4145930
-------------------------------     ----------------    ------------------------
(State or other jurisdiction of        (Commission             (IRS Employer
incorporation or organization)          File Number)         Identification No.)



    3861 Sepulveda Blvd., Culver City                            90230
----------------------------------------                ------------------------
(Address of principal executive offices)                      (Zip Code)


Registrant's telephone number, including area code            (310) 751-2100   
                                                        ------------------------

                               Not Applicable
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)

<PAGE>

Item 5.  Other Events

On June 19, 1998, ModaCAD,  Inc.  ("ModaCAD") has entered into an agreement with
Cendant Software  Corporation,  a subsidiary of Cendant Corporation,  to publish
retail-based fashion software.  This innovative software is based upon ModaCAD's
previously  announced  e-commerce fashion solution,  which is being co-developed
with Intel  Corporation.  The Sierra Home division of Sierra On-Line,  Inc. -- a
Cendant  subsidiary -- will manage the  publication  and  distribution  of these
software  titles.  Additionally,  Sierra  Home has  agreed  to act as  ModaCAD's
product  fulfillment  partner for alternative  distribution  channels.  Specific
program  functionality,  alternative  distribution  details and complete pricing
information have not been disclosed.

ModaCAD  and  Sierra  Home have  agreed  to  jointly  publish  a 3D  interactive
e-commerce  shopping  program.   Through  the  use  of  advanced  Internet  push
technology, multimedia enhancements and peer-to-peer communication capabilities,
fashion  lifestyle titles are designed to deliver a rich  personalized  shopping
experience.   The  first  fashion  lifestyle  solution  that  Sierra  Home  will
distribute is focused on young female consumers between the ages of 15 - 28.

Joyce Freedman,  ModaCAD's chief executive  officer said, "We are thrilled to be
announcing this  relationship  with Sierra Home. This  partnership has strategic
implications  that will add  significant  value to both  companies  for years to
come. This agreement with Cendant, as well as our relationship with Sierra Home,
signifies a major step towards our goal of developing a complete product line of
e-commerce  fashion  titles as well as other  applications  that are intended to
service the broader e-commerce market."

According to Ron Stevens,  Sierra  Home's vice  president  and general  manager,
"ModaCAD  and  Sierra  Home  share  synergistic  goals in  introducing  visually
compelling  software not only into traditional  retail  channels,  but also into
emerging  Internet-based  channels  specifically  related to e-commerce.  We are
strongly  dedicated to expanding our presence within the e-commerce  marketplace
and based upon ModaCAD's unique visualization  technology, we are confident that
our consumers will greatly benefit from this alliance."

As  ModaCAD's  product  fulfillment  arm,  Sierra Home will be  responsible  for
distribution to all users of the fashion  software.  Sierra will also assume the
responsibilities of technical support and customer service.

Maurizio Vecchione,  president and chief operating officer of ModaCAD went on to
say, "The Sierra brand  symbolizes  quality and years of expertise in developing
and distributing home productivity software.  This endorsement will be extremely
valuable as we prepare to release our first  fashion  program this year.  Sierra
has one of the best  reputations  in providing  product  fulfillment,  technical
support and customer  service to consumers  which are essential  ingredients  to
ensuring  customer  satisfaction.  We could not have picked a better partner for
this initiative." Sierra On-Line(R), Inc is part of Cendant Software, one of the
largest PC consumer  software groups in the world, and a leader in entertainment
and   educational   software.   Cendant   Software   consolidates   the   sales,
manufacturing,  finance,  accounting  and  management  of Cendant  Corporation's
software divisions,  including Sierra On-Line(R) Inc.,  Knowledge  Adventure(R),
Davidson & Associates,  Inc. and Blizzard Entertainment(R).  Cendant Corporation
is the result of the  December  1997 merger  between CUC  International  and HFS
Incorporated,  creating a business and consumer services company focused on real
estate, travel and membership.

ModaCAD is rapidly becoming a premier  developer and supplier of digital content
management  technology  enabling  advanced product  visualization for electronic
commerce.  For the past 10 years it has leveraged its core,  patented  rendering
technology  into  a  variety  of  electronic  merchandising  products  primarily
targeted at the home design,  home  furnishings,  apparel and industrial  design
industries.

This news  release  contains  forward-looking  statements  including  statements
regarding the timing and composition of revenues,  future operating  results and
the  timing of  product  introductions,  among  others.  Except  for  historical
information, the matters discussed in this report are forward-looking statements
that are subject to certain risks and uncertainties  that could cause the actual
results to differ  materially  from those  projected.  Factors  that could cause
actual  results  to differ  materially  include  the  following:  (i) the timely
completion of the  development  of the Company's  software  products,  including
ModaCAD's  e-commerce and consumer  software and enhanced or updated versions of
the  Company's  electronic   merchandising  and  CAD  software  products;   (ii)
unforeseen technical or other obstacles in the development or production of such
software;  (iii) acceptance of ModaCAD's e-commerce and consumer software by the
publisher/distributors  of such software and the release and marketing  plans of
the publisher/distributor;  (iv) customer acceptance of ModaCAD's e-commerce and
consumer  software  products  and updated or revised  versions of the  Company's
electronic  merchandising  and CAD  software  products;  (v) the Company and its
publisher/distributor's  ability to produce its products on a cost-effective and
timely  basis;  and (vi)  factors not directly  related to the Company,  such as
competitive  pressures on pricing,  market  conditions in general,  competition,
technological  progression,  product  obsolescence  and the  changing  needs  of
potential customers as well as the software,  textile, apparel, home furnishings
and home design industries in general.

<PAGE>

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                                                ModaCAD, INC.


Date: July 2, 1998                              By:   /s/  LEE FREEDMAN
                                                     ---------------------------
                                                     Lee Freedman
                                                     Vice President, Finance and
                                                     Chief Financial Officer
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{"company-data": {"conformed-name": "MODACAD INC", "cik": "0001008130", "assigned-sic": "7372", "irs-number": "954145930", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-28088", "film-number": "98660280"}, "business-address": {"street1": "1954 COTNER AVE", "city": "LOS ANGELES", "state": "CA", "zip": "90025", "phone": "3103129826"}, "mail-address": {"street1": "1954 COTNER AVE", "city": "LOS ANGELES", "state": "CA", "zip": "90025"}}
U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 19, 1998

                                 MODACAD, INC. 
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          California                    33-31166                 95-4145930
-------------------------------     ----------------    ------------------------
(State or other jurisdiction of        (Commission             (IRS Employer
incorporation or organization)          File Number)         Identification No.)

    3861 Sepulveda Blvd., Culver City                            90230
----------------------------------------                ------------------------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code            (310) 751-2100   
                                                        ------------------------

                               Not Applicable
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)
Item 5.  Other Events

On June 19, 1998, ModaCAD,  Inc.  ("ModaCAD") has entered into an agreement with
Cendant Software  Corporation,  a subsidiary of Cendant Corporation,  to publish
retail-based fashion software.  This innovative software is based upon ModaCAD's
previously  announced  e-commerce fashion solution,  which is being co-developed
with Intel  Corporation.  The Sierra Home division of Sierra On-Line,  Inc. -- a
Cendant  subsidiary -- will manage the  publication  and  distribution  of these
software  titles.  Additionally,  Sierra  Home has  agreed  to act as  ModaCAD's
product  fulfillment  partner for alternative  distribution  channels.  Specific
program  functionality,  alternative  distribution  details and complete pricing
information have not been disclosed.

ModaCAD  and  Sierra  Home have  agreed  to  jointly  publish  a 3D  interactive
e-commerce  shopping  program.   Through  the  use  of  advanced  Internet  push
technology, multimedia enhancements and peer-to-peer communication capabilities,
fashion  lifestyle titles are designed to deliver a rich  personalized  shopping
experience.   The  first  fashion  lifestyle  solution  that  Sierra  Home  will
distribute is focused on young female consumers between the ages of 15 - 28.

Joyce Freedman,  ModaCAD's chief executive  officer said, "We are thrilled to be
announcing this  relationship  with Sierra Home. This  partnership has strategic
implications  that will add  significant  value to both  companies  for years to
come. This agreement with Cendant, as well as our relationship with Sierra Home,
signifies a major step towards our goal of developing a complete product line of
e-commerce  fashion  titles as well as other  applications  that are intended to
service the broader e-commerce market."

According to Ron Stevens,  Sierra  Home's vice  president  and general  manager,
"ModaCAD  and  Sierra  Home  share  synergistic  goals in  introducing  visually
compelling  software not only into traditional  retail  channels,  but also into
emerging  Internet-based  channels  specifically  related to e-commerce.  We are
strongly  dedicated to expanding our presence within the e-commerce  marketplace
and based upon ModaCAD's unique visualization  technology, we are confident that
our consumers will greatly benefit from this alliance."

As  ModaCAD's  product  fulfillment  arm,  Sierra Home will be  responsible  for
distribution to all users of the fashion  software.  Sierra will also assume the
responsibilities of technical support and customer service.

Maurizio Vecchione,  president and chief operating officer of ModaCAD went on to
say, "The Sierra brand  symbolizes  quality and years of expertise in developing
and distributing home productivity software.  This endorsement will be extremely
valuable as we prepare to release our first  fashion  program this year.  Sierra
has one of the best  reputations  in providing  product  fulfillment,  technical
support and customer  service to consumers  which are essential  ingredients  to
ensuring  customer  satisfaction.  We could not have picked a better partner for
this initiative." Sierra On-Line(R), Inc is part of Cendant Software, one of the
largest PC consumer  software groups in the world, and a leader in entertainment
and   educational   software.   Cendant   Software   consolidates   the   sales,
manufacturing,  finance,  accounting  and  management  of Cendant  Corporation's
software divisions,  including Sierra On-Line(R) Inc.,  Knowledge  Adventure(R),
Davidson & Associates,  Inc. and Blizzard Entertainment(R).  Cendant Corporation
is the result of the  December  1997 merger  between CUC  International  and HFS
Incorporated,  creating a business and consumer services company focused on real
estate, travel and membership.

ModaCAD is rapidly becoming a premier  developer and supplier of digital content
management  technology  enabling  advanced product  visualization for electronic
commerce.  For the past 10 years it has leveraged its core,  patented  rendering
technology  into  a  variety  of  electronic  merchandising  products  primarily
targeted at the home design,  home  furnishings,  apparel and industrial  design
industries.

This news  release  contains  forward-looking  statements  including  statements
regarding the timing and composition of revenues,  future operating  results and
the  timing of  product  introductions,  among  others.  Except  for  historical
information, the matters discussed in this report are forward-looking statements
that are subject to certain risks and uncertainties  that could cause the actual
results to differ  materially  from those  projected.  Factors  that could cause
actual  results  to differ  materially  include  the  following:  (i) the timely
completion of the  development  of the Company's  software  products,  including
ModaCAD's  e-commerce and consumer  software and enhanced or updated versions of
the  Company's  electronic   merchandising  and  CAD  software  products;   (ii)
unforeseen technical or other obstacles in the development or production of such
software;  (iii) acceptance of ModaCAD's e-commerce and consumer software by the
publisher/distributors  of such software and the release and marketing  plans of
the publisher/distributor;  (iv) customer acceptance of ModaCAD's e-commerce and
consumer  software  products  and updated or revised  versions of the  Company's
electronic  merchandising  and CAD  software  products;  (v) the Company and its
publisher/distributor's  ability to produce its products on a cost-effective and
timely  basis;  and (vi)  factors not directly  related to the Company,  such as
competitive  pressures on pricing,  market  conditions in general,  competition,
technological  progression,  product  obsolescence  and the  changing  needs  of
potential customers as well as the software,  textile, apparel, home furnishings
and home design industries in general.
SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                                ModaCAD, INC.

Date: July 2, 1998                              By:   /s/  LEE FREEDMAN
                                                     ---------------------------
                                                     Lee Freedman
                                                     Vice President, Finance and
                                                     Chief Financial Officer