BurnLounge Reaches Compromise Injunction With FTC.

Order Allows Company to Continue Operation of New Model Unimpeded 

NEW YORK -- BurnLounge, the world's first fan driven digital download community, has come to a cooperative agreement with the Federal Trade Commission based on its recent decision to eliminate the network marketing portion of its business.

"This is the first time in recent history that any company has emerged from such charges by the FTC and survived entirely intact," said D.J. Poyfair, a partner from Shughart Thomson & Kilroy and lead outside counsel for BurnLounge. He added, "The Judge's ruling allows the company to continue to move forward with its new model unabated and unrestricted."

"Network marketing was a unique channel to promote our products, but the strategic decision to voluntarily remove this part of our business was the right decision on all fronts," said Grant D. Johnson, chairman and chief executive officer, BurnLounge. "With this hearing behind us, we are aggressively moving forward and will focus on our new free model to help fuel the next evolution business growth to better benefit our employees, artists, partners and independent retailers."

BurnLounge executives anticipate a formal statement from the Federal Government in the next couple of days regarding the company's former business model. Poyfair noted that, "The interaction with the FTC has been professional and fair and has led BurnLounge to make the decision to simplify its model."

"While we still disagree with the FTC's contention that our previous model violated FTC statutes; agreement to the stipulation was the only way to protect our retailers and artists while we continue to run our business and work towards a final resolution," stated Ryan Dadd, co-founder, president and chief operating officer, BurnLounge. "We can now focus on keeping our retailers businesses viable and enhancing our product offerings so our retailers and artists can generate revenue from the sale of higher margin goods."

Stephen Murray, co-founder, president of entertainment and chief creative officer, called this week's result, "A win for our retailers, partners, artists and the entire BurnLounge community." He added, "Our business continues uninterrupted and we can now focus on what we do best, which is providing a great platform to empower fans to sell the music and entertainment they love."

BurnLounge's new service offering will drive community expansion and provide increased benefits to retailers, artists and partners. The free service is comprised of BL2, the software that enables anyone to open up their own download store and become a digital retailer; and BurnPages, a personal web page with customizable widgets. The new model will deliver increased rewards per sale and retailers will soon be able to expand their businesses beyond music into high-margin entertainment products such as movies, videos, portable devices, and accessories.

BurnLounge continues to afford its customers the opportunity to enjoy sharing their tastes in music and films, while providing an avenue for them to express their entrepreneurial talents.

About BurnLounge

BurnLounge is the first fully functioning network of socialization and sales, combining digital downloading, community building and personal entrepreneurialism in one place. Through this innovative model, BurnLounge provides entrepreneurs, artists, movie moguls and music lovers with a new recommendation-driven promotional channel. For additional information, please visit http://www.BurnLounge.com.