EXHIBIT 99.1
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DIGITAL IMAGING RESOURCES, INC. AND VIANET DIRECT, INC. SIGN MERGER AGREEMENT
MORRISTOWN, NJ/XXXXX, PA - JUNE 6, 2006 - Digital Imaging Resources, Inc.
("DGIR") (OTC-BB: DGIR.OB) and Vianet Direct, Inc. ("Vianet") announced the
signing of an agreement for a proposed merger. The merger will be consummated
through Vianet's merger with Vianet Acquisition, Inc., a wholly-owned subsidiary
of DGIR. Following the merger, Vianet will become a wholly-owned subsidiary of
DGIR.
Under the terms of the merger agreement, each share of common stock of Vianet
outstanding at the time of the merger will be converted to 0.05 shares of DGIR's
newly designated Series A Convertible Preferred Stock ("Preferred Stock").
Additionally, each warrant and option to purchase shares of Vianet common stock
that is outstanding at the time of the merger will become a warrant or option to
purchase 0.05 shares of DGIR Preferred Stock at an exercise price equal to the
exercise price of the warrant or option at the time of the merger divided by
0.05. The Preferred Stock will have no liquidation preference or dividend rights
ahead of DGIR common stock. The Preferred Stock will be entitled to the number
of votes equal to the number of whole shares of DGIR common stock into which the
Preferred Stock can be converted.
Subsequent to the date on which DGIR's stockholders have approved amendments to
its certificate of incorporation to increase its authorized capital stock to at
least 100 million shares, each share of Preferred Stock is convertible into
65.795 shares of DGIR common stock (i) at any time at the option of DGIR and
(ii) at any time after the second anniversary of the closing date of the merger
at the option of the holder of such shares. This conversion ratio will be
adjusted on the closing date of the merger to ensure the Preferred Stock will be
convertible into 84% of DGIR's outstanding common stock on a fully diluted
basis. Accordingly, immediately following the merger, the existing stockholders
of DGIR will retain ownership of 16% of DGIR's outstanding common stock on a
fully diluted basis.
The merger is subject to customary closing conditions, including shareholder
approval by holders of Vianet's common stock. Pursuant to the merger agreement,
DGIR has agreed to have its stockholders place at least 1 million shares of DGIR
common stock into escrow for a period of one year after the closing date of the
merger in order to secure the performance of DGIR's indemnification obligations
under the merger agreement. Additionally, DGIR has agreed to subject certain of
its stockholders to stock transfer restrictions on their shares for a period of
one year after the merger's closing date.
On the closing date of the merger, DGIR's existing directors and officers will
resign and Vianet's existing directors will be appointed to the board of
directors of DGIR and Xxxxx X. Xxxxxx, Xxxxxx's existing chief executive
officer, will be appointed as president and chief executive officer of DGIR.
Digital Imaging Resources, Inc. engages in the development and production of
video capture and analysis system for golfers and other athletes. Its
SwingStation system enables golfers to record a swing, review it, and save it.
DGIR offers the SwingStation system to golf outings, trade shows, driving ranges
and golf courses. DGIR is based in Morristown, NJ and its website is
xxx.xxxxxxxxxxxx.xxx.
Vianet Direct, Inc. is a real time, virtual, interactive and anonymous block
trading system for all types of equity securities. Vianet provides an electronic
platform in which institutions and financial intermediaries are directly linked
to the largest pool of liquidity, the exchanges on which the securities are
traded. A block trading system, Vianet provides for direct access, continuous
order matching, timed crossing sessions, initiation of auctions and the ability
to electronically search for hidden liquidity in the marketplace. Vianet is
headquartered in Xxxxx, PA.
This press release contains "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
typically preceded by words such as "believes," "expects," "anticipates,"
"intends," "will," "may," "should," or similar expressions. These
forward-looking statements are subject to risks and uncertainties that may cause
actual future experience and results to differ materially from those discussed
in these forward-looking statements. Important factors that might cause such a
difference include, but are not limited to, the ability of Vianet to obtain
stockholder approval to close the merger. These and other risks will be
described in greater detail in DGIR's filings with the Securities and Exchange
Commission, including those on a soon-to-be filed Form 8-K. Except for DGIR's
ongoing obligations to disclose material information under the federal
securities laws, DGIR and Vianet disclaim any obligation to update any
forward-looking statements after the date of this press release.
