Filed by Liquid Audio, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 13e-4(c) and Rule 14a-12
under the Securities Act of 1934
September 13, 2002
Subject Company: Alliance Entertainment Corp.
Registration Statement Number 33-96925
PRESS RELEASE
LIQUID AUDIO ACTS ON COMMITMENT TO REDUCE EXPENSES
COMPANY FURTHER DECREASES CASH BURN WITH 33% REDUCTION IN FORCE
REDWOOD CITY, Calif., Sept. 12 - Liquid Audio Inc. (Nasdaq: LQID - News) today
announced the elimination of 23 positions, or approximately 33 percent of its
workforce, a move driven by the company's continued commitment to reduce
operating expenses and cash burn. It is estimated that the reduction in force
will decrease the company's operating expenses by approximately $600,000 per
quarter beginning in the fourth quarter of 2002.
"We regret having to take this action; however, we remain dedicated to
operating in a cost-effective and responsible manner," said Gerry Kearby,
president and CEO of Liquid Audio, Inc. "This reduction in force will help us
streamline operations and further reduce costs in preparation for completion of
the proposed merger with Alliance Entertainment." Liquid Audio, Inc. is a
leading provider of software, infrastructure and services for the secure
digital delivery of media over the Internet. The Liquid Audio solution gives
content owners, Web sites and companies the ability to publish, syndicate and
securely sell digital media online with copy protection and copyright
management. Using the Liquid(TM) Player software, available for free download
at www.liquidaudio.com, consumers can preview and purchase downloadable music
from hundreds of affiliate Web sites in the Liquid Music Network(TM).
NOTE: Liquid, Liquid Audio, Liquid Player, Liquid Music Network and the Liquid
Audio logo are trademarks of Liquid Audio, Inc.
Forward-Looking Statements
All statements made in this release, other than statements of historical fact,
are forward-looking statements. The words "anticipate," "believe," "estimate,"
"expect," "intend," "will," "guidance" and similar expressions typically are
used to identify forward-looking statements. Forward-looking statements are
based on the then-current expectations, beliefs, assumptions, estimates and
forecasts about the businesses of Liquid Audio and Alliance Entertainment Corp.
and the industries and markets in which the companies operate. Those statements
are not guarantees of future performance and involve risks, uncertainties and
assumptions that will be difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or implied by those
forward-looking statements. Factors that may affect Liquid Audio's and Alliance
Entertainment's businesses, financial condition and operating results include
the effects of changes in the economy, consumer spending, the stock market and
the industries in which they operate generally, changes affecting the Internet
and e-commerce, the ability of the companies to maintain relationships with
strategic partners and suppliers, the ability of the companies to timely and
successfully develop, maintain and protect their technology and product
and service offerings and execute operationally and the ability of the
companies to attract and retain qualified personnel. These factors may also
include, but are not limited to,
general market conditions, our ability to develop new products to meet market
demand, our ability to successfully combine two geographically dispersed
businesses, our ability to realize synergies of the merger; our ability to
maintain cost controls; the mix of products and services our customers require
and the effects of natural disasters, international conflicts and other events
beyond our control. More information about potential factors that could affect
Liquid Audio can be found in its most recent Form 10-K, Form 10-Q and other
reports and statements filed by Liquid Audio with the Securities and Exchange
Commission ("SEC"). Each of Liquid Audio and Alliance Entertainment expressly
disclaims any intent or obligation to update those forward-looking statements,
except as otherwise specifically stated by it.
Additional Information and Where to Find It
Liquid Audio has filed a Registration Statement on SEC Form S-4 in connection
with the merger and plans to file a Tender Offer Statement on Schedule TO in
connection with the offer. Investors and stockholders of Liquid Audio and
Alliance Entertainment are urged to read the Registration Statement and the
Tender Offer Statement carefully when it is available. The Registration
Statement contains important information about the companies, the merger and
related matters. Investors and stockholders will be able to obtain free copies
of these documents through the web site maintained by the SEC at
http://www.sec.gov . Free copies of the Registration Statement and these other
documents may also be obtained from Liquid Audio by directing a request through
the Liquid Audio Web site at http://www.liquidaudio.com or by mail to Liquid
Audio, Inc., Attention: Investor Relations.
In addition to the Registration Statement and the Tender Offer Statement,
Liquid Audio files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements
or other information filed by Liquid Audio at the SEC's public reference rooms
at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any of the SEC's other
public reference rooms in New York and Chicago. Please call the SEC at
800-SEC-0330 for further information on the public reference rooms. Liquid
Audio's filings with the SEC are also available to the public from commercial
document-retrieval services and at the Web site maintained by the SEC at
http://www.sec.gov .
Interests of Certain Persons in the Merger
The directors and executive officers of Liquid Audio and Alliance Entertainment
have interests in the merger, some of which may differ from, or may be in
addition to, those of the stockholders of Liquid Audio and Alliance
Entertainment generally. A description of the interests that the directors and
executive officers of the companies have in the merger is available in the
Registration Statement.
Solicitation of Proxies
Liquid Audio and Alliance Entertainment, their respective directors, executive
officers and certain other members of their management and employees may be
soliciting proxies from stockholders of Liquid Audio and Alliance Entertainment
in favor of the merger. Information concerning the participants is set forth in
the Registration Statement filed with the SEC.