KIT digital Adds Shareholder Representation to Board of Directors

"Seth and Peter bring demonstrated records of success in helping companies create value, and we welcome their insights and experience to the Board and to the company," said Bill Russell, non-executive Chairman of the Board of KIT digital.

"These appointments are in keeping with the strategic vision laid out in recent months for reconstituting our Board and realigning our business, and represent another major step forward for KIT digital," said Chief Executive Officer Barak Bar-Cohen.

Seth Hamot, through various entities, owns approximately 7% of the outstanding shares of KIT digital. Mr. Hamot has extensive experience as a public company director, currently serving as Chairman of the boards of SPY Inc. and ISC8, Inc. Mr. Hamot previously served as Chairman of the boards of TechTeam Global, Inc. and Bradley Pharmaceuticals, Inc., and on the board of CCA Industries, Inc.

"I am enthusiastic to join and work with the KIT digital Board at this important time in the company's history," said Mr. Hamot. "I look forward to helping ensure that company and shareholder interests align with one another for the benefit of all KIT digital stakeholders."

Peter Heiland, through various entities, owns approximately 8% of the outstanding shares of KIT digital. Prior to founding JEC Capital Partners, he spent 22 years operating a global technology company. He has also served on boards of public and private technology companies, including GSI Group and Integrated Dynamics Engineering.

"I am excited to join KIT digital's Board and look forward to supporting the conclusion of the company's strategic review process. I believe that the company is underappreciated in the public market and I am resolved to work together with the other members of the Board to change that for the benefit of all stakeholders," said Mr. Heiland.

In connection with Messrs. Hamot and Heiland joining the KIT digital Board, KIT digital, Mr. Hamot, Costa Brava, Mr. Heiland, JEC, and their related parties have entered into a standstill agreement. Under the agreement, the Costa Brava parties and JEC parties will support KIT digital's Board nominees for the 2012 annual meeting of shareholders and they will refrain from taking certain adverse actions against KIT digital's Board. Similarly, the Board will nominate and support each of Mr. Hamot and Mr. Heiland for the 2012 annual meeting of shareholders. The restrictions and nomination provisions will run at least through KIT digital's 2012 annual meeting of shareholders and will potentially apply through the 2013 annual meeting. The standstill agreement itself will terminate following the 2013 annual meeting of shareholders and is subject to various other terms and conditions. The full standstill agreement is being filed by the company with the Securities and Exchange Commission under a Form 8-K.

The company and KIT digital's Board thank Mr. Mullin for his service. Mr. Mullin's resignation did not result from any disagreement relating to the company's operations, policies or practices. The company is continuing its search for additional qualified independent directors to help guide and grow its business.

Strategic Transaction Process

Additionally, the Board of Directors unanimously determined to have the entire Board manage the company's on-going strategic process to a conclusion. The Board, therefore, determined that the Strategic Transaction Committee was no longer necessary and elected to dissolve the Board's Strategic Transaction Committee. The entire Board will determine how to proceed and will address several expressions of interest received from strategic parties and financial sponsors concerning the possible purchase of the company or various parts of its business.

"We believe the on-going strategic review process will benefit from the attention of the entire Board," Mr. Russell added, "and that the best interests of shareholders will be served by moving the process forward swiftly and informing shareholders of its outcome expeditiously."