ARTISTdirect Announces Changes to Capital Structure.Newly Restructured Company Positioned for Significant Growth LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- ARTISTdirect, Inc., (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ARTD), a digital media technology company, today announced significant changes to the Company's capital structure. The announcement was made by Dimitri Villard, Chairman and Chief Executive Officer. On January 30, 2009, the Company paid off its senior debt with a payment of $3.5 million in cash, 9 million shares of restricted common stock and the issuance of new five-year subordinated notes in the aggregate amount of $1 million. Concurrently with the extinguishment of the senior debt, the Company's subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". was converted into approximately 36.7 million shares of common stock. The total principal amount of senior and subordinated debt eliminated from the Company's balance sheet was approximately $13 million of senior debt and approximately $27.6 million of subordinated debt. The Company's stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was increased as a result of these transactions. In connection with the transaction, the Company entered into a new accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying credit facility with Pacific Business Capital Corporation of Costa Mesa, California Costa Mesa is a suburban middle class city in Orange County, California, United States. The population was 108,724 at the 2000 census. Since its incorporation in 1953, the city has grown from a semi-rural farming community of 16,840 to a suburban city with an economy based on to provide working capital going forward. Lawrence Financial Group, a Los Angeles-based investment bank, arranged the facility. In addition, the Board of Directors appointed Dimitri Villard, Chairman of the Board, who had been serving as the Company's Interim Chief Executive Officer, to be Chief Executive Officer pursuant to a three-year employment agreement. Mr. Villard, who was previously an independent director and Chairman of the Company's Audit Committee, became Interim CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. in March, 2008. Commenting on the restructuring, Mr. Villard said, "This favorable resolution of our capital structure is the culmination of a year of hard work which at times seemed impossible to achieve. I am delighted we are able to put our problems behind us and move forward." He added, "We are now positioned for significant growth and will now turn our attention to growing the Company organically in addition to acquiring other strategically related businesses to build the Company into a diversified media technology business." About ARTISTdirect, Inc. ARTISTdirect, Inc. is a holding company with two operating subsidiaries: ARTISTdirect Internet Group, Inc., ("ADIG ADIG Asociación de Informática de Guatemala (Computer Science Association of Guatemala) ADIG AMC (Air Mobility Command) Data Implementation Group (addresses data standardization issues) ") operates one of the largest destination sites on the Internet for music and motion picture news, information and streaming music. ADIG also operates an ad network that is currently ranked 5 in ComScore's ranking of music sites. MediaDefender, Inc. provides Internet IP protection services to major motion picture studios, record labels, television networks, gaming companies and software publishers and Internet marketing services to advertising agencies and other clients. About Dimitri Villard Dimitri Villard has been engaged in various capacities in the entertainment industry for a number of years including motion picture producer, music producer and investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. . Mr. Villard has also been engaged in high technology venture capital activities as a member of the Tech Coast Angels, the nation's largest private venture network, and as a co-founder and Chairman of Pivotal BioSciences, Inc., a biotechnology spinout spin·out n. An instance of spinning out: a motorist who was injured in a spinout. of the University of Southern California The U.S. News & World Report ranked USC 27th among all universities in the United States in its 2008 ranking of "America's Best Colleges", also designating it as one of the "most selective universities" for admitting 8,634 of the almost 34,000 who applied for freshman admission Keck School of Medicine. Forward-Looking Statements Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond the Company's control that could cause actual events and results to differ materially from these statements. These risks include, without limitation, that there can be no assurance that any strategic opportunities will be available to the Company and that any strategic opportunities may only be available on terms not acceptable to the company. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. ARTISTdirect undertakes no obligation to update publicly any forward-looking statements. |
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