UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
Liquid Audio, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001
--------------------------------------------------------------------------------
(Title of Class of Securities)
53631T 10 2
--------------------------------------------------------------------------------
(CUSIP Number)
Jonathan Brooks
JMB Capital Partners, L.P.
1999 Avenue of the Stars, Suite 2040
Los Angeles, CA 90067
(310) 286-2929
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 18, 2002
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Page 1 of 9 pages)
_____________________
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
---------------------------------------------------------- --------------------------------------
CUSIP NO. 53631T 10 2 PAGE 2 OF 9 PAGES
---------------------------------------------------------- --------------------------------------
---------- -----------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
JMB Capital Partners, L.P.
---------- -----------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
---------- -----------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
---------- -----------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
---------- -----------------------------------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
---------- -----------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
------------------------ ------ --------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,071,800
OWNED BY EACH
REPORTING
PERSON WITH
------------------------ ------ --------------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
------------------------ ------ --------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,071,800
------------------------ ------ --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
------------------------ ------ --------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,071,800
---------- -----------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
---------- -----------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.70%
---------- -----------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
---------- -----------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
SCHEDULE 13D
---------------------------------------------------------- ---------------------------------------
CUSIP NO. 53631T 10 2 PAGE 3 OF 9 PAGES
---------------------------------------------------------- ---------------------------------------
---------- ------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Smithwood Partners, LLC
---------- ------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
---------- ------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
---------- ------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
---------- ------------------------------------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
---------- ------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
---------- ------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,071,800
OWNED BY EACH
REPORTING
PERSON WITH
------------------------ ------ ---------------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
------------------------ ------ ---------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,071,800
------------------------ ------ ---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
------------------------ ------ ---------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,071,800
---------- ------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
---------- ------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.70%
---------- ------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
---------- ------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
SCHEDULE 13D
---------------------------------------------------------- ---------------------------------------
CUSIP NO. 53631T 10 2 PAGE 4 OF 9 PAGES
---------------------------------------------------------- ---------------------------------------
---------- ------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jonathan Brooks
---------- ------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
---------- ------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
---------- ------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
---------- ------------------------------------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
---------- ------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
---------- ------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,071,800
OWNED BY EACH
REPORTING
PERSON WITH
------------------------ ------ ---------------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
------------------------ ------ ---------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,071,800
------------------------ ------ ---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
------------------------ ------ ---------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,071,800
---------- ------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
---------- ------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.70%
---------- ------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN, HC
---------- ------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
Page 5 of 9 Pages
ITEM 1. SECURITY AND ISSUER
---------------------------
This Amendment No. 2 (this "Amendment") to Schedule 13D (as amended by
Amendment No. 1 to Schedule 13D on July 31, 2002, this "Schedule 13D") relates
to shares of common stock, par value $.001 per share (the "Common Stock"), of
Liquid Audio, Inc., a Delaware corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 800 Chesapeake Drive, Redwood
City, CA 94063. Items 3, 4 and 5 of this Schedule 13D are amended.
The percentages used herein are calculated based on the 22,802,413
shares of Common Stock reflected as being issued and outstanding as of October
31, 2002 in the Issuer's Quarterly Report on Form 10-QSB for the quarterly
period ended September 30, 2002.
ITEM 2. IDENTITY AND BACKGROUND
-------------------------------
(a) This Amendment is being filed by JMB Capital Partners, L.P.,
Smithwood Partners, LLC and Mr. Jonathan Brooks (collectively, the "Reporting
Persons").
JMB Capital Partners, L.P. is a California limited partnership
("JMB Capital").
Smithwood Partners, LLC, a California limited liability
company ("Smithwood"), is the general partner of JMB Capital.
Mr. Brooks is the sole member and manager of Smithwood.
(b) The principal address of each of the Reporting Persons is 1999
Avenue of the Stars, Suite 2040, Los Angeles, California 90067.
(c) The principal business of JMB Capital and Smithwood is investing in
companies. The principal occupation of Mr. Brooks is investment management.
(d) None of the Reporting Persons have, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons have, during the last five years,
been party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Mr. Brooks is a citizen of the United State of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
----------------------------------------------------------
The purchase price of the 161,600 shares of Common Stock purchased by
the Reporting Persons since the date of Amendment No. 1 to Schedule 13D,
excluding brokerage fees, is $406,166.11. The purchase price of the 133,500
shares of Common Stock purchased by the Reporting Persons during the past 60
days, excluding brokerage fees, is $333,354.00. The source of funds used by JMB
Capital to purchase the Common Stock was working capital derived from capital
contributions from its limited partners.
Page 6 of 9 Pages
ITEM 4. PURPOSE THE TRANSACTION.
--------------------------------
The Reporting Persons acquired the Common Stock beneficially owned by
them in the ordinary course of their investing activities. The Reporting Persons
may acquire more Common Stock depending on the market price of the Common Stock.
As of the date of the event which required filing of this Schedule 13D,
the Reporting Persons did not have any plans or proposals (other than as set
forth above) which may relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other change in the Issuer's business or corporate structure;
(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any other person;
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g) of the Act; or
(j) any action similar to those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
---------------------------------------------
(a) JMB Capital beneficially owns 1,071,800 shares of Common Stock,
constituting approximately 4.70% of the shares of Common Stock outstanding. As
Page 7 of 9 Pages
general partner of JMB Capital, Smithwood beneficially owns 1,071,800 shares of
Common Stock, constituting approximately 4.70% of the shares outstanding. As the
sole member and manager of Smithwood, Mr. Brooks beneficially owns 1,071,800
shares of Common Stock constituting approximately 4.70% of the shares of Common
Stock outstanding.
(b) JMB Capital has sole voting and dispositive power with respect to
the 1,071,800 shares of Common Stock owned by it. As general partner of JMB
Capital, Smithwood has sole voting and dispositive power with respect to the
1,071,800 shares of Common Stock owned by JMB Capital by virtue of its authority
to vote and dispose of such shares. As the sole member and manager of Smithwood,
Mr. Brooks has sole voting and dispositive power with respect to the 1,1071,800
shares of Common Stock owned by JMB Capital by virtue of his authority to vote
and dispose of such shares.
(c) Set forth below is certain information concerning all transactions
in the Common Stock in which the Reporting Persons have engaged during the past
60 days. All of the following transactions were engaged through a broker.
Transaction Date Number of shares of Price per
---------------- ------------------- ---------
Common Stock Purchased Common Share
---------------------- ------------
October 25, 2002 14,700 $2.60
November 8, 2002 18,800 $2.68
December 18, 2002 100,000 $2.4475
Transaction Date Number of shares of Price per
---------------- ------------------- ---------
Common Stock Sold Common Share
----------------- ------------
November 11, 2002 1,000 $2.76
November 14, 2002 6,600 $2.76
December 9, 2002 25,000 $2.78
December 9, 2002 25,000 $2.78
December 17, 2002 196,000 $2.7539
(d) No person, other than the Reporting Persons, is known to have the
right to receive, or the power to direct the receipt of dividends from or
proceeds from the sale of such shares of the Common Stock.
(e) Not Applicable.
Page 8 of 9 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
--------------------------------------------------------------------------------
SECURITIES OF THE ISSUER.
-------------------------
Not Applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
-----------------------------------------
Exhibit No. 1 Joint Filing Agreement
Page 9 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 20, 2002
JMB CAPITAL PARTNERS, L.P.
By: Smithwood Partners, LLC,
General Partner
By: /s/ Jonathan Brooks
-------------------------------
Jonathan Brooks,
Sole Member and Manager
SMITHWOOD PARTNERS, LLC
By: /s/ Jonathan Brooks
-------------------------------
Jonathan Brooks,
Sole Member and Manager
/s/ Jonathan Brooks
-------------------------------
Jonathan Brooks, individually