**UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-KSB/A**

 

**Amendment No. 2**

 
| **x** | ** ** | **ANNUAL REPORT PURSUANT TO  SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------|-----------------------------------------------------------------------------------------------------|

 

**For thefiscal year ended December 31, 2007**

 
| **o** | ** ** | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------|---------------------------------------------------------------------------------------------------------|

 

**Commission file number 000-30063**

 

**ARTISTdirect, Inc.**

(Name of Small Business Issuer in its Charter)

 

| **Delaware**                                                    | ** ** | **95-4760230**                        |
|-----------------------------------------------------------------|------------|---------------------------------------|
| (State or Other Jurisdiction of  Incorporation or Organization) |       | (I.R.S. Employer  Identification No.) |

 

**1601 Cloverfield Boulevard, Suite 400 South,Santa Monica, California 90404-4082**

(Address of Principal Executive Offices, including Zip Code)

 

Issuer’s Telephone Number, Including Area Code): **(310) 526-8700**

 

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Securities registered pursuant to Section 12(b) of theAct:  **None**

 

Securities registered pursuant to Section 12(g) of theAct:  **Commonstock, $0.01 par value**

 

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Checkwhether the issuer is not required to file reports pursuant to Section 13or 15(d) of the Exchange Act o

 

Checkwhether the issuer: (1) filed all reports required to be filed by Section 13or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.    Yes  x    No  o

 

Checkif there is no disclosure of delinquent filers in response to Item 405 ofRegulation S-B contained in this form, and no disclosure will be contained, tothe best of the registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-KSBor any amendment to this Form 10-KSB o

 

Indicate bycheck mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).    Yes  o    No  x

 

Stateissuer’s revenue for its most recent fiscal year: $24,171,000.

 

As of March 24,2008, the aggregate market value of the voting common stock held bynon-affiliates of the registrant was approximately $1,609,402, based on theclosing price per share of $0.41 for the registrant’s common stock as reportedon the Over-the-Counter Bulletin Board on such date.

 

As of March 24,2008, there were 10,344,666 shares of the registrant’s common stock, par value$0.01 per share, issued and outstanding.

 

TransitionalSmall Business Disclosure Format.  Yes   o    No  x

 

Documentsincorporated by reference:  None.

 

 

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**ARTISTDIRECT, INC.**

 

**TABLE OF CONTENTS**

 
| PART II |                    |
|--------------|-------------------------|
|         |                    |   |
| ITEM 8A(T).  | CONTROLS AND PROCEDURES |   |
|              |                         |  |  |

 

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**EXPLANATORY NOTE**

 

ThisAmendment No. 2 to the Company’s Annual Report on Form 10-KSB for thefiscal year ended December 31, 2007 is being filed solely to amend ITEM 8A(T).CONTROLS AND PROCEDURES to indicate that the Company’s disclosure controls andprocedures are effective.  Except withrespect to such change, this Form 10-KSB/A does not attempt to modify orupdate any other disclosures set forth in the original Form 10-KSB filing,as amended by Amendment No. 1. Additionally, this Form 10-KSB/A does not purport to provide ageneral update or discussion of any other developments at the Companysubsequent to the original Form 10-KSB filing.  The filing of this Form 10-KSB/Ashall not be deemed an admission that the original filing, when made, includedany untrue statement of material fact or omitted to state a material factnecessary to make a statement not misleading.

 

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**ITEM 8A(T).  CONTROLS AND PROCEDURES**

 

***Disclosure Controlsand Procedures***

 

As of December 31,2007, our management, including the Interim Chief Executive Officer and theInterim Chief Financial Officer, evaluated our disclosure controls andprocedures.   Disclosure controls andprocedures are controls and other procedures that are designed to ensure thatinformation required to be disclosed in our reports filed or submitted underthe Exchange Act is recorded, processed, summarized and reported, within thetime periods specified in the Securities and Exchange Commission’s rules andforms. Disclosure controls and procedures include, without limitation, controlsand procedures designed to ensure that information required to be disclosed inour reports filed under the Exchange Act is accumulated and communicated tomanagement, including the Chief Executive Officer and Chief Financial Officer,as appropriate, to allow timely decisions regarding required disclosure.Management recognizes that any controls and procedures, no matter how welldesigned and operated, can provide only reasonable assurance of achieving theirobjectives, and management necessarily applies its judgment in evaluating thecost-benefit relationship of possible controls and procedures.  Management, including the Interim ChiefExecutive Officer and Interim Chief Financial Officer, concluded that ourdisclosure controls and procedures were effective as of December 31, 2007.

 

***Changes in Internal Control Over FinancialReporting***

*** ***

Therewere no changes to our internal control over financial reporting (as defined inRules 13a-15(f) and 15d-15(f) under the Exchange Act) during ourmost recently completed fiscal quarter that materially affected, or arereasonably likely to materially affect, our internal control over financialreporting.

 

***Management’s Annual Report on Internal Control Over Financial Reporting***

** **

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting as defined in Rules 13a-15(f) underthe Exchange Act.  Our internal controlover financial reporting is designed to ensure that material informationregarding our operations is made available to management and the board ofdirectors to provide them reasonable assurance that the published financialstatements are fairly presented.  Thereare limitations inherent in any internal control, such as the possibility ofhuman error and the circumvention or overriding of controls.  As a result, even effective internal controlscan provide only reasonable assurance with respect to financial statementpreparation.  As conditions change overtime so too may the effectiveness of internal controls.

 

Ourmanagement, with the participation of our Interim Chief Executive Officer and InterimChief Financial Officer, has evaluated our internal controls over financialreporting as of December 31, 2007 based on the framework in InternalControl – Integrated Framework issued by the Committee of SponsoringOrganizations (“COSO”) of the Treadway Commission.  Based on this assessment, our managementconcluded that our internal control over financial reporting was effective asof December 31, 2007.

 

Itshould be noted that during the weekend of September 15 and 16, 2007,MediaDefender experienced an unlawful online security breach by hackers, whichresulted in approximately 6,000 e-mails, as well as access to other confidentialinformation and data, for the period from mid-December 2006 through September 10,2007 being stolen and posted at numerous web sites on the Internet.  These e-mails contained confidentialinformation and communications covering a wide variety of internal issues,including personal data, customer data and pricing information, and othersensitive information.  This matter hasbeen referred to the appropriate federal, state and local law enforcementorganizations and an investigation is ongoing. An internal investigation of this matter is continuing and as a resultof this review, the Company has revised various procedures and policies andenhanced its online and Internet security protocols.  This breach of MediaDefender’s email systemdid not cross over to the Company’s systems and financial records due to theinternal controls and procedures the Company had in place at that time.

 

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This AnnualReport on Form 10-KSB/A does not include an attestation report of theCompany’s independent registered public accounting firm regarding internalcontrol over financial reporting. Management’s report was not subject to attestation by the Company’s independentregistered public accounting firm pursuant to temporary rules of theSecurities and Exchange Commission that permit the Company to provide onlymanagement’s report in this Annual Report on Form 10-KSB/A.

 

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**SIGNATURES**

** **

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.

 
| Date:     May 21, 2008 | **ARTISTdirect, Inc.** |
|------------------------------------------------------|-----------------------------|
|                                                 |                        | ** ** |
|                                                 | By:                         |  /s/ Dimitri Villard |
|                                                 |                        |  Dimitri Villard |
|                                                 |                        |  Interim Chief Executive Officer (Principal   Executive Officer) |
|                                                 |                        | ** ** |
| Date:     May 21, 2008 | By:                         |  /s/ Rene Rousselet |
|                                                 |                        |  Rene Rousselet |
|                                                 |                        |  Corporate Controller (Principal Financial   Officer) |

 

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