DXN Digitalfx International, Inc.

LAS VEGAS, Jan. 8 /PRNewswire-FirstCall/ -- DigitalFX International, Inc. (AMEX:DXN), a multi-tier Web 2.0 digital media products distribution company announced today that the Company recently completed several transactions which resulted in an additional cash investment of $2.0 million by its new Chairman of the Board and CEO, Richard Kall, the restructuring of its Amended and Restated Senior Secured Convertible Notes ("the Existing Notes"), and the authorization and issuance of a new class of preferred stock, as part of the Company's strategic plan to strengthen its financial position and capital structure. Mr. Kall commented, "In my 30 years in the network marketing industry, which I believe to be the greatest industry in the world provided you have a great product and the right management and company behind you, I have never been so excited. Excited enough that I just put in another $2.0 million of my own money to show the world how serious I am about this Company. " "DigitalFX has outdistanced itself from the competition. With our upcoming new technology, our second-to-none compensation plan and unparalleled business opportunity, we are positioning ourselves to be a true leader in the network marketing industry. The world economics being what it is today, our opportunity gives the average person a chance to be in big business without the big business headaches. 'To be able to be in business for yourself, but not by yourself'- that is what we are all about." Mr. Kall continued. The $2.0 million investment by Mr. Kall was finalized on December 22, 2008. Mr. Kall agreed to purchase from the Company 2,000,000 shares of Series A Preferred Stock with 50% warrant coverage in exchange for $2.0 million in cash. Mr. Kall paid the aggregate purchase price to the Company through an advance on November 14, 2008 of $500,000, an advance on December 18, 2008 of $200,000, and a cash payment of $1.3 million on December 22, 2008. "Our decision to raise the necessary funding from our existing majority investor instead of the financial markets comes from our confidence that we will be successful in executing on our growth strategy that will position us favorably in the huge and growing global multi-tier marketplace, and such growth should be reflected in our stock pricing," said Abraham Sofer, the recently elected President of the Company. "Improving profitability and our stock value are keys to delivering our long-term growth objective and our compliance with American Stock Exchange rules. We remain committed to generating value to our shareholders," added Sofer. In addition, on December 22, 2008, the Company entered into an Amendment and Exchange Agreement with each of the institutional investors ("Investors") holding Existing Notes, subject to certain listing requirements and conditions as fully described in the Company's Form 8-K filed December 23, 2008. Specifically, the Investors agreed to exchange their Existing Notes for a combination of (1) a cash payment of $650,000 (2) 5,520,000 shares of the Company's common stock of WoozyFly Inc. (3) an aggregate of up to 5,167,046 shares of common stock of the Company (subject to adjustment based on the date of issuance), and (4) a new Amended and Restated Note with an aggregate principal amount of up to $605,750 (subject to adjustment based on the date of issuance), Also, on December 22, 2008, Mr. Kall agreed to exchange his Existing Note for an Amended and Restated Note in the principal amount of up to $362,525 (subject to adjustment based on the date of issuance). Finally, on December 18, 2008, the Company amended its Articles of Incorporation to designate a new series of preferred stock consisting of 3,000,000 shares known as Series A 12% Cumulative Convertible Preferred Stock. Each share of Series A Preferred Stock accrues dividends at the rate of 12% per annum, paid quarterly, on the original purchase price of $1.00 and is convertible into 5 shares of Common Stock. About DigitalFX International, Inc. DigitalFX International, Inc. (AMEX:DXN) markets web-based products such as streaming live and on-demand video, video email and digital storage that because of their extremely low cost for the first time brings the next generation Internet revolution to individuals through its http://www.helloworld.com/ website and small and medium-sized businesses via its http://www.firststream.com/ website. The company also markets proprietary communication and collaboration services, and social networking software applications, including its flagship product, called the Studio. For more information about DigitalFX, please visit us at http://www.digitalfx.com/. To receive public information, including press releases, conference calls, SEC filings, profiles, investor kits, News Alerts and other pertinent information, please click on the following link: http://www.b2i.us/irpass.asp?BzID=1407&to=ea&s=0 FORWARD-LOOKING STATEMENTS The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Examples of forward-looking statements include statements related to the success of our products, the business opportunity offered by our services, the growth of our company and our compliance with the continued listing requirements of the American Stock Exchange. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward looking statements if they comply with the requirements of the Act. Investor Relations: DigitalFX International, Inc. 702-938-9300 DATASOURCE: DigitalFX International, Inc. CONTACT: Investor Relations, , DigitalFX International, Inc., +1-702-938-9300 Web Site: http://www.digitalfx.com/

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