FREMONT, Calif., June 2 /PRNewswire/ -- Aureal Semiconductor, Inc. (OTC Bulletin Board: AURL - news), a leader in digital audio imaging, today announced that the record date for its previously announced 1-for-15 reverse stock split will be effective as of the close of business on June 10, 1999. Aureal's stockholders approved the reverse stock split at their annual meeting on May 19, 1999. In addition, the company announced it will change it name to Aureal, Inc. to more accurately reflect the company's transition to a broadly focused company in digital audio imaging hardware and software.

Aureal also indicated that all of its Series B and C Preferred Stock has been converted into common stock as of May 21, 1999. With the previously announced completion of its $20 million subscription rights offering on May 21st, Aureal has approximately 150 million shares of common stock outstanding currently. After the reverse stock split, Aureal will have approximately 10 million common shares outstanding. ChaseMellon Shareholder Services has been named as the exchange agent for this transaction and will be forwarding exchange instructions as soon as possible to stockholders as of June 10th.

``The $20 million infusion of capital provides the necessary funds to expand Aureal's business in response to increasing demand to our products,'' said David Domeier, Aureal's senior vice president of finance. The elimination of our Series B and C Preferred shares has cleaned up the equity section of our balance sheet and essentially removed the preferred stock overhang. The reverse stock split will reduce the number of common shares outstanding. We believe the result will be an improved financial and trading profile for Aureal, which should benefit both existing and prospective investors. The company has filed an application with Nasdaq for listing on the National Market System, and our expectation is that this series of transactions will allow Aureal to qualify for such listing.``

``Shortening our name seems like a minor issue, but it reflects a major broadening of our approach to the marketplace over the last several months,'' stated Kip Kokinakis, President and CEO. ``We are approaching the broad audio market with multiple products today, and we see further product line expansion in the coming months. We're a company striving to improve the level of audio quality across the board for consumers.''

About Aureal

Aureal is a leading provider of advanced audio solutions for the computer, consumer, entertainment, Internet, and professional audio markets. The company designs, builds and distributes advanced audio semiconductor, audio card and software solutions for personal computers and consumer electronics devices through the OEM, integrator/reseller/VAR and direct-to-customer channels. Aureal also licenses technology designed to define and improve advanced audio standards in the marketplace.

Leading industry partners include Compaq Computer Corporation, Dell Computer Corporation, Sony Electronics and Diamond Multimedia Systems. Aureal's award-winning product line includes A3D positional audio technology, Vortex audio processors and Vortex-based sound cards, and A3D Pro sound design software. For more information on Aureal or its products and industry leading audio technologies, please visit our Websites at www.aureal.com and www.a3d.com.

Forward-Looking Statements

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, dependence on the PC and consumer electronics industries and on product lines based on new technologies; foundry capacity, availability and reliability; competition and pricing pressures; and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.

SOURCE: Aureal Semiconductor, Inc.