SAN FRANCISCO, Calif. - September 12, 2005 - Zinio Systems, Inc., the recognized leader in digital publishing and marketing services, today announced it has merged with Blue Dolphin Group (BDG), a leading online magazine retailer. As part of the deal, Zinio closed a $7 million growth financing round with two new investors, North Bridge Venture Partners and Commonwealth Capital. The combined company will offer unprecedented choice to consumers with more than 1,300 popular magazine titles and many available in both print and digital formats. Through the merger, Zinio will offer digital as an option to a new audience of print readers who can now sample digital versions of magazines before subscribing. Additionally, subscribers can immediately receive their first issue digitally, eliminating the normal six- to eight-week waiting period for print editions. Hachette Filipacchi Media U.S., publishers of Car and Driver, Road & Track, Woman’s Day, ELLE, and other enthusiast magazines, is currently in the process of rolling out all of their titles in digital format in partnership with Zinio. "We think this merger only strengthens Zinio, and adding the print agenting expertise of Blue Dolphin Group is a powerful combination," said Jack Kliger, president and CEO of Hachette. "We think consumers will respond well to having one source for their print and digital subscriptions." "This merger underscores our market momentum," said Zinio president and CEO, Scott L. Kauffman. "We are leveraging a leadership role in digital magazines and solid financial success in many ways. In July we announced the signing of 62 new digital titles. In the last month, we started selling digital textbooks, saw Playboy commit its flagship title to Zinio, announced a 5-year partnership with MRI, and are now merging with a company that brings us tremendous new direct marketing capabilities and experience with subscriptions." "Magazine readers are going to love the delivery choices resulting from this merger," said Blue Dolphin Group President and CEO Andrew J. Centauro. "We will also be a showcase for publishers and distribution partners interested in using digital to offer greater flexibility to readers." Mr. Centauro will continue with Zinio as president of the Blue Dolphin division, which will remain in Sudbury, Massachusetts, a suburb of Boston. As a venture capitalist with North Bridge Venture Partners and investor in Blue Dolphin Group, Bill Geary will join Zinio’s board of directors. "We're very excited to bring together these two complementary companies. Digital is the way of the future for everything, including magazines," commented Geary. "This merger is an important strategic alliance in the marketplace that will revolutionize the way magazines and other published media are packaged, sold and delivered."