CDbeat.com and Cakewalk LLC (32 Records) Sign Letter of Intent to Merge; Combination of Music Content and Internet Technology Companies
STAMFORD, Conn., Sept. 29 /PRNewswire/ -- CDbeat.com, Inc. (OTC Bulletin Board: CDBT - news), the developer of proprietary Internet music technology, including CDbeat's Virtual Fan Clubs for popular musicians, and Cakewalk LLC, one of the country's leading independent record companies operating as 32 Records and related labels, today announced the signing of a letter of intent to merge.
Under the proposed merger terms, upon consummation of the transaction there will be a total of 19,547,730 shares outstanding, after cancellation of certain shares held by CDbeat's management and exclusive of certain stock options. All existing shares of CDbeat, exclusive of shares held by CDbeat's management, will remain outstanding following the merger. Robert Miller, Cakewalk's President and CEO, will become President and CEO of the combined company, which shall retain its public company status.
The consummation of the merger is expressly conditioned upon (i) final approval of Cakewalk's Supervisory Board and CDbeat's board of directors, (ii) completion of satisfactory mutual legal and financial due diligence, (iii) obtaining all necessary approvals, (iv) completion of the merger on a tax-free basis to Cakewalk's investors, and (v) execution of definitive documentation, including representations and warranties, covenants, conditions and other customary terms. There can be no assurance that the merger will be completed, whether on the proposed terms or at all.
Concurrent with the execution of the letter of intent, Cakewalk has agreed to loan CDbeat.com $50,000 for working capital purposes. The loan is secured by a first lien and security interest in all of the assets of CDbeat.com, as well as a pledge of all the CDbeat stock owned by Joel Arberman, CDbeat's President and CEO and principal shareholder.
CDbeat also announced that Atlantis Equities, Inc. has obtained the right to invest, directly or indirectly, $1 million in the combined company. Atlantis is a private investment firm that specializes in working with companies under $100 million in sales.
About Cakewalk LLC
Cakewalk specializes in the catalog, or reissue, segment of the record business. Operating as 32 Records and related ``32' labels (e.g., 32 Jazz, 32 Pop, 32 Blues), Cakewalk has acquired over 700 albums worth of master recordings by artists such as Judy Garland, Tom Jones, Jose Feliciano, Ike & Tina Turner, Ella Fitzgerald, Charles Mingus and Louis Armstrong. Cakewalk recompiles, repackages, remarkets and resells its music products into traditional markets such as domestic and foreign music stores, as well as nontraditional markets such as price clubs, catalogs, Internet, and non-music retail stores.
Since issuing its first releases in April 1997, Cakewalk has released in excess of 150 titles from its music library, including the renowned ``Jazz For...' compilation series. This series, currently consisting of six albums, combines a lifestyle/sensual feel with traditional yet easy-listening jazz. The series has topped the Billboard Jazz charts for the past ten months. In June, 32 Jazz was recognized by Billboard as both the Number One jazz label and jazz imprint for the first six months of 1999.
About CDbeat.com, Inc.
CDbeat.com, Inc. is a developer of innovative software and services that delivers music content through the Internet. Music fans can download free software from cdbeat.com and gain instant access to CDbeat's Virtual Fan Clubs which include Bruce Springsteen, Hanson, Backstreet Boys, Garth Brooks, Shania Twain, Rod Stewart, Mariah Carey, TLC, Michael Jackson, Phish, Julio Iglesias, Madonna, Elton John, U2, Chet Atkins, Led Zeppelin, Duran Duran, David Bowie, Korn, The Doors, The Moffatts and The Beatles.
Music listeners access CDbeat's Virtual Fan Clubs by inserting an ordinary music CD into their computer. The listener is then instantly connected to CDbeat's Virtual Fan Club, which provides news, information, reviews, pictures, message boards and live chat rooms related to that artist.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995.
This press release contains forward-looking statements relating to future performance, technology and product development that may impact future results and the future viability of the company. Actual results could be affected or differ materially from those projected in the forward-looking statements as a result of risk factors such as: future products and results; management of potential growth; risk of system interruption; technological shifts; potential technical difficulties that could delay new products; competition; general economic conditions in the markets in which the company operates; the ability of the company, its customers, and suppliers to become Year 2000 compliant; pricing pressures; and the uncertainty of market acceptance of new products by OEM's and end-user customers. More information about factors that potentially could affect CDbeat.com's financial results is included in CDbeat.com's filings with the Securities and Exchange Commission.
CDbeat, CDbeat.com, CDbeat Entertainment Center, Virtual Fan Clubs and VFC are either registered trademarks or trademarks of CDbeat.com, Inc., or its affiliates. All other names mentioned herein may be trademarks of their respective owners. |
