SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 24, 2003
Liquid Audio, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25977 77-0421089
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(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
800 Chesapeake Drive
Redwood City, California 94063
(650) 549-2000
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(Address of Principal Executive Offices) (Zip Code)
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
(A) On January 24, 2003 the Registrant and BeMusic, Inc. dismissed their
claims against each other with prejudice in connection with the litigation
captioned BeMusic, Inc. v. Liquid Audio, Inc., et al, C.A. No. 20083-NC pursuant
to a Settlement Agreement (the "Settlement Agreement"). The Settlement Agreement
also provides that Liquid Audio shall set aside (x) a cash reserve of $2,000,000
to pay 50% of CDNow Online, Inc.'s ("CDNow") reasonable attorneys' fees and
costs in defending a patent action brought by SightSound, Inc. against CDNow,
which is presently pending in the United States District Court for the Western
District of Pennsylvania (the "SightSound Litigation") and (y) and maintain a
cash reserve of $5,000,000 until the earlier of (A) the final resolution of the
SightSound Litigation or (B) the entry by a court of a final order determining
that the Registrant does not have an obligation to indemnify CDNow with regard
to an adverse judgment rendered against CDNow in the SightSound Litigation. A
copy of the Settlement Agreement is attached to this filing as Exhibit 10.1 and
is incorporated herein by reference.
On January 24, 2003, the Registrant issued a press release in connection
with the Settlement Agreement. A copy of the press release is attached to this
filing as Exhibit 99.1 and is incorporated herein by reference.
(B) On January 24, 2003, the Registrant announced that it had sold its
digital music fulfillment business to Geneva Media, LLC, an affiliate of
Anderson Merchandisers, LP, for $3,200,000. The Registrant also transferred
ownership of "Liquid Audio" related trademarks to Geneva.
On January 24, 2003, the Registrant issued a press release in connection
with the sale of its digital music fulfillment business. A copy of the press
release is attached to this filing as Exhibit 99.2 and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits
Exhibit No. Description
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10.1 Settlement Agreement between Liquid Audio, Inc.
and BeMusic, Inc.
99.1 Press Release issued by Liquid Audio, Inc. dated
January 24, 2003
99.2 Press Release issued by Liquid Audio, Inc. dated
January 24, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LIQUID AUDIO, INC.
/s/ Raymond Doig
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By: Raymond Doig
Name: Raymond Doig
Title: Chief Executive Officer
January 27, 2003
EXHIBIT INDEX
Exhibit No. Description
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10.1 Settlement Agreement between Liquid Audio, Inc. and BeMusic, Inc.
99.1 Press Release issued by Liquid Audio, Inc. dated January 24, 2003
99.2 Press Release issued by Liquid Audio, Inc. dated January 24, 2003