Message: Vivitar is a subsidiary of Syntax-Brillian
No financials available for Vivitar,
Merger Agreement On October 30, 2006, we announced that we entered into an agreement to acquire Vivitar Corporation (“Vivitar”) in a stock-for-stock transaction. Pursuant to and subject to the terms and conditions of the Agreement and Plan of Reorganization dated as of October 27, 2006 among us, SBV — AC Corporation, a wholly owned subsidiary of our company, Vivitar, and Great Step Co., Ltd., the sole shareholder of Vivitar (the “Merger Agreement”), SBV-AC Corporation will merge with and into Vivitar Corporation, with Vivitar surviving as a wholly owned subsidiary of Syntax-Brillian Corporation (the “Merger”). At the effective time of the Merger, each outstanding share of Vivitar common stock will be exchanged for that number of shares of our common stock equal to (i) the number of shares of Vivitar common stock outstanding on the effective date of the Merger divided by $26,000,000, divided by (ii) $5.70, which was the average closing price of our common stock for the 15-trading day period ended on October 26, 2006. A portion of our shares of common stock issued in the Merger will be held in escrow for one year as security for representations and warranties as specified in the Merger Agreement. We expect the transactions covered by the Merger Agreement to close as soon as practicable following the receipt of any required approvals and the satisfaction of customary closing conditions. The Merger Agreement also contains other provisions, covenants, representations, and warranties made by Vivitar, its shareholder, and our company that are typical in transactions of this size, type, and complexity. The representations and warranties are qualified by information in confidential disclosure schedules that were exchanged in connection with signing the Merger Agreement. While we do not believe that the disclosure schedules contain information securities laws require us to publicly disclose other than information that has already been so disclosed, the disclosure schedules do contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Merger Agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts because they are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Merger Agreement, which subsequent information may or may not be fully reflected in our public disclosures. In addition, the Merger Agreement includes registration rights pursuant to which the shares of our common stock to be issued in consideration for the Merger will be registered for resale by the sole shareholder of Vivitar on a registration statement under the Securities Act of 1933, as amended, to be filed by us within 30 days following the effective date of the Merger. We will pay all expenses incurred in connection with the registration. The sole shareholder agreed that it will not resell any of our common stock in excess of the volume limitations set forth in Rule 144(e) under the Securities Act of 1933 for a period of one year following the effective date of the Merger. A copy of the Merger Agreement is filed herewith as Exhibit 2.2 and is incorporated by reference into this Item 1.01. The foregoing description of the Merger SYNTAX-BRILLIAN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Organization: We are a leading designer, developer, and distributor of high-definition televisions, or HDTVs, in liquid crystal display, or LCD, and liquid crystal on silicon, or LCoS, formats. Our LCD HDTVs and our LCoS HDTVs are sold under our Olevia brand name. Our price-conscious Olevia product line includes flat panel LCD models in diagonal sizes from 23 inches to 42 inches and our 65-inch Gen II LCoS rear projection HDTV designed for the high-volume home entertainment market; our price-performance, full feature Olevia product line includes 42-inch and 47-inch high-end HDTVs for the home entertainment and home theater markets; and our Gen II LCoS rear projection 65-inch HDTVs address the premium audio/video market. We have established a virtual manufacturing model utilizing Asian sourced components and third-party contract manufacturers and assemblers located in close proximity to our customers to assemble our HDTVs. We also offer a broad line of LCoS microdisplay products and subsystems, including LCoS imagers that original equipment manufacturers, or OEMs, can integrate into proprietary HDTV products, home theater projectors, and near-to-eye applications, such as head-mounted monocular or binocular headsets and viewers, for industrial, medical, military, commercial, and consumer applications. On November 30, 2005, we completed our Merger with Syntax Groups Corporation, a privately held California corporation (“Syntax”), whereby a wholly owned subsidiary of our company was merged with and into Syntax and Syntax became a wholly owned subsidiary of our company (the “Merger”). As consideration for the Merger, Syntax shareholders received 1.5379 shares of our common stock for each share of Syntax common stock held by them on November 30, 2005 (the “Exchange Rate”). In the aggregate, shareholders of Syntax received approximately 34.3 million shares of our common stock. The Exchange Rate was calculated so that former shareholders of Syntax owned approximately 70% of the fully diluted shares of the combined company at the closing of the Merger. Therefore, the Merger has been accounted for as a reverse Merger wherein Syntax is deemed to be the acquiring entity from an accounting perspective. As such, the historical financial statements of Syntax became the historical financial statements of the combined company upon completion of the Merger. On November 21, 2006 we purchased Vivitar Corporation, an Oxnard, California-based company, a leading designer, developer, and distributor of photographic, optical, electronic and digital imaging products, for 4,565,141 shares of our common stock. Vivitar is operated as a wholly owned subsidiary of Syntax-Brillian.
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