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February 15, 2002 — (WEB HOST INDUSTRY REVIEW) — Sensar Corporation (formerly Larson Davis) announced yesterday that it has signed a merger agreement with Irvine, Calif.-based
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VitalStream, Inc. (vitalstream.com), a provider of customized solutions for digital broadcasting.
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Following the merger, VitalStream will be a wholly-owned subsidiary of
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Sensar and will continue to provide products and services that enable the
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digital broadcast of audio and video content and other communications via
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the Internet. The merger is intended to provide capital for VitalStream to
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continue to develop solutions for the Webcasting and streaming media
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marketplace, which continues to grow at a rapid pace. According to Wainhouse
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Research, an industry analyst firm, the market for audio, video, and Web
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conferencing services is expected to reach $9.8 billion by 2006, up from
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$2.8 billion in 2000.
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“We strongly believe in the products and services that VitalStream is
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developing and marketing,” said Steven Strasser, Sensar CEO. “The
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opportunity for us to merge with VitalStream provides us with the unique
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opportunity to become an active player in the digital broadcasting
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marketplace – one of the fastest growing segments in the high-tech arena
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today.”
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Sensar has approximately 6.6 million shares of common stock and 1.2 million
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options and other rights to purchase common stock outstanding. Sensar’s
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outstanding shares of common stock are traded on the over-the-counter market
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under the symbol “SCII”.
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Under the merger agreement, it is proposed that a wholly-owned subsidiary of
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Sensar merge with and into VitalStream, and that the shareholders of
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VitalStream receive in the merger, approximately 15.3 million shares of
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Sensar common stock in exchange for their shares of VitalStream capital
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stock. These shares will be offered and sold in a private placement and are
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expected to be restricted securities as defined in Rule 144. VitalStream
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shareholders may also receive additional shares following closing if
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designated performance targets are met. If these performance targets are
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achieved in full, an additional 14.8 million shares would be issued in 2003.
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VitalStream employees are also expected to receive options to purchase up to
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an approximately 2.1 million additional shares of common stock of Sensar in
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exchange for currently outstanding VitalStream stock options. In addition,
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participating brokers and consultants are expected to receive an aggregate
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of 306,250 shares of Sensar common stock and an aggregate of 3,300,000
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options or warrants to purchase Sensar common stock in connection with the
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merger.
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Closing of the proposed merger is conditioned upon certain matters being
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completed, including the affirmative vote of a majority of each class of
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stock of VitalStream. The transaction is anticipated to close in May 2002.
