Wave Issue 9036 4/6/99 Article 1-02

***Aureal Announces Capital Restructuring
(April 5)

Aureal Semiconductor announced plans for a multi-step program
designed to provide additional capital for company growth,
restructure Aureal's capital framework to enable it to qualify
for listing on the Nasdaq national market, and provide additional
liquidity for its investors.

The multi-step program, approved by Aureal's board of directors,
is subject to stockholder and regulatory approvals. It includes:

*The sale of $20 million of Aureal common stock to existing
stockholders via a subscription rights offering. The offering for
approximately 33 million new shares of Aureal common stock will
be presented to Aureal's existing stockholders as of a future
record date at a purchase price of $0.60 per share. Aureal's
largest stockholder, Oaktree Capital Management, LLC, has agreed
to purchase any shares not purchased by other stockholders, thus
guaranteeing the full offering proceeds to Aureal.

*Oaktree has also agreed to convert 100% of the outstanding
Series B Preferred Stock (currently $41.8 million face value)
concurrent with the completion of the rights offering. In
consideration for Oaktree's support of the rights offering and
the early conversion of the Series B Preferred Stock, Aureal has
agreed to reduce the conversion price of the Series B Preferred
Stock from $2.50 per share of common stock to $0.90 per share of
common stock.

*Immediately following the transactions, Aureal intends to effect
a one-for-fifteen reverse stock split, reducing the number of
shares of common stock outstanding from approximately 150 million
to approximately 10 million.

"This multi-step capital restructuring is designed to do a number
of things for Aureal and its investors," said David Domeier,
Aureal's Vice President of Finance and CFO. "The $20 million
infusion of capital provides necessary capital to expand Aureal's
business in response to rapidly increasing demand for our
products. The elimination of the Series B Preferred shares will
clean up the equity section of our balance sheet and essentially
remove the current preferred stock overhang. The reverse stock
split, in conjunction with the $20 million subscription rights
offering, 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 Aureal investors. Our expectation is that this series
of transactions will also allow Aureal to qualify for listing on
a national market system. We intend to apply for Nasdaq listing
immediately."