sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )1
LIQUID AUDIO, INC.
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(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE
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(Title of Class of Securities)
53631T 10 2
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(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 20, 2001
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(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 that 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.
(Continued on following pages)
(Page 1 of 13 Pages)
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1 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).
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CUSIP No. 53631T 10 2 13D Page 2 of 13 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEEL PARTNERS II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,751,646
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,751,646
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,751,646
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
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14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 53631T 10 2 13D Page 3 of 13 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEEL PARTNERS SERVICES, LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 183,420
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
183,420
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
183,420
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 53631T 10 2 13D Page 4 of 13 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARREN G. LICHTENSTEIN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,935,066
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,935,066
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,935,066
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6%
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14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 53631T 10 2 13D Page 5 of 13 Pages
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The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
Item 1. Security and Issuer.
-------------------
This statement relates to shares (the "Shares") of the common
stock, $0.001 par value ("Common Stock"), of Liquid Audio, Inc.(the "Issuer").
The principal executive offices of the Issuer are located at 2221 Broadway,
Redwood City, California 94063.
Item 2. Identity and Background.
-----------------------
(a) This Statement is filed by Steel Partners II, L.P., a
Delaware limited partnership ("Steel Partners II"), Steel Partners Services,
Ltd., a New York corporation ("Steel Partners Services"), and Warren G.
Lichtenstein.
Steel Partners, L.L.C., a Delaware limited liability company
("Partners LLC"), is the general partner of Steel Partners II. The sole
executive officer and managing member of Partners LLC is Warren Lichtenstein,
who is Chairman of the Board, Chief Executive Officer and Secretary.
Warren Lichtenstein is the sole executive officer, director and
stockholder of Steel Partners Services.
Each of the foregoing are referred to as a "Reporting Person"
and collectively as the "Reporting Persons". By virtue of his positions with
Steel Partners II and Steel Partners Services, Mr. Lichtenstein has the power to
vote and dispose of the Issuer's Shares owned by Steel Partners II and Steel
Partners Services. Accordingly, the Reporting Persons are hereby filing a joint
Schedule 13D.
(b) The principal business address of each Reporting Person is
150 East 52nd Street, 21st Floor, New York, New York 10022.
(c) The principal business of Steel Partners II is investing in
the securities of small cap companies. The principal business of Steel Partners
Services is providing management and advisory services. The principal occupation
of Mr. Lichtenstein is investing in the securities of small cap companies.
Steel Partners Services acquired the 183,420 Shares reported
herein for the account of a foreign investment company (the "Fund"). Pursuant to
an investment management agreement, the Fund has retained Steel Partners
Services to manage, on a discretionary basis, certain of the Fund's assets
("Services Agreement"). The Shares beneficially owned by Steel Partners Services
were acquired at the discretion of Steel Partners
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CUSIP No. 53631T 10 2 13D Page 6 of 13 Pages
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Services, and the Fund does not exercise voting or investment discretion over
the Shares.
(d) No Reporting Person has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) No Reporting Person has, 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. Lichtenstein is a citizen of the United States of
America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
(a) The aggregate purchase price of the 1,751,646 Shares of
Common Stock owned by Steel Partners II is $4,152,306. The Shares of Common
Stock owned by Steel Partners II were acquired with partnership funds.
(b) The aggregate purchase price of the 183,420 Shares of
Common Stock acquired for the benefit of the Fund is $465,359. Such Shares were
acquired by Steel Partners Services with funds it manages for the Fund. Pursuant
to the Services Agreement with the Fund, Steel Partners Services has been
appointed to manage, on a discretionary basis, certain of the Fund's assets,
which are maintained in a brokerage account in the Fund's name. The Services
Agreement may be terminated by the Fund at any time or by Steel Partners
Services at any time upon thirty days' advance written notice.
Item 4. Purpose of Transaction.
----------------------
The Reporting Persons purchased the Shares based on the
Reporting Persons' belief that the Shares at current market prices are
undervalued and represent an attractive investment opportunity. Depending upon
overall market conditions, other investment opportunities available to the
Reporting Persons, and the availability of Shares of Common Stock at prices that
would make the purchase of additional Shares desirable, the Reporting Persons
may endeavor to increase their position in the Issuer through, among other
things, the purchase of Shares of Common Stock on the open market or in private
transactions or otherwise, on such terms and at such times as the Reporting
Persons may deem advisable.
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CUSIP No. 53631T 10 2 13D Page 7 of 13 Pages
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Each of Steel Partners II and Steel Partners Services intends
to review its investment in the Issuer on a continuing basis and engage in
discussions with management and the Board of Directors of the Issuer concerning
the business, operations and future plans of the Issuer. The Reporting Persons
believe that the Company should begin taking all steps necessary to maximizing
shareholder value including, but not limited to, the declaration of a special
dividend to shareholders or other action to return excess cash to the Company's
shareholders.
No Reporting Person has any present plan or proposal which
would relate to or result in any of the matters set forth in subparagraphs (a) -
(j) of Item 4 of Schedule 13D except as set forth herein or such as would occur
upon completion of any of the actions discussed above. Depending on various
factors including, without limitation, the Issuer's financial position and
investment strategy, the price levels of the Common Stock, conditions in the
securities market and general economic and industry conditions, each of Steel
Partners II and Steel Partners Services may in the future take such actions with
respect to investment in the Issuer as it deems appropriate including, without
limitation, communicating with other stockholders, seeking Board representation,
making proposals to the Issuer concerning the capitalization and operations of
the Issuer, purchasing additional Shares of Common Stock or selling some or all
of its Shares or changing its intention with respect to any and all matters
referred to in Item 4.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) The aggregate percentage of Shares of Common Stock reported
owned by each person named herein is based upon 22,541,959 Shares outstanding,
which is the total number of Shares of Common Stock outstanding as reported in
the Issuer's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.
As of the close of business on July 26, 2001, Steel Partners II
beneficially owned 1,751,646 Shares of Common Stock, constituting approximately
7.8% of the Shares outstanding, and Steel Partners Services beneficially owned
183,420 Shares of Common Stock, constituting 0.8% of the Shares outstanding. Mr.
Lichtenstein beneficially owned 1,935,066 Shares, representing approximately
8.6% of the Shares outstanding. Mr. Lichtenstein has sole voting and dispositive
power with respect to the 1,751,646 Shares owned by Steel Partners II and the
183,420 Shares owned by Steel Partners Services by virtue of his authority to
vote and dispose of such Shares. All of such Shares were acquired in open-
market transactions.
(b) By virtue of his positions with Steel Partners II and Steel
Partners Services, Mr. Lichtenstein has the sole power to vote and dispose of
the Shares reported in this Schedule 13D.
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CUSIP No. 53631T 10 2 13D Page 8 of 13 Pages
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(c) Schedule A annexed hereto lists all transactions in the
Issuer's Common Stock in the last sixty days by the Reporting Persons.
(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.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
----------------------------------------
Other than as described herein, there are no contracts,
arrangements or understandings among the Reporting Persons, or between the
Reporting Persons and any other Person, with respect to the securities of the
Issuer.
Item 7. Material to be Filed as Exhibits.
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1. Joint Filing Agreement.
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CUSIP No. 53631T 10 2 13D Page 9 of 13 Pages
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SIGNATURES
----------
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: July 26, 2001 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.
General Partner
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein
Chief Executive Officer
STEEL PARTNERS SERVICES, LTD.
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein
Chief Executive Officer
/s/ Warren G. Lichtenstein
--------------------------
WARREN G. LICHTENSTEIN
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CUSIP No. 53631T 10 2 13D Page 10 of 13 Pages
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SCHEDULE A
Transactions in the Shares During the Past 60 Days
--------------------------------------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
----------- ---------- ----------
STEEL PARTNERS II, L.P.
-----------------------
66,100 2.53980 5/21/01
1,540 2.57000 5/22/01
10,041 2.53130 5/25/01
12,500 2.52100 5/30/01
3,000 2.55400 5/31/01
37,000 2.57330 6/01/01
5,000 2.57000 6/04/01
23,750 2.56140 6/05/01
104,880 2.61660 6/06/01
9,500 2.71300 6/07/01
5,700 2.74650 6/18/01
7,000 2.80000 6/22/01
1,100 2.79000 6/25/01
7,100 2.73290 6/27/01
6,600 2.79570 7/05/01
8,350 2.73910 7/06/01
300 2.62000 7/10/01
9,500 2.66000 7/11/01
30,500 2.61760 7/12/01
15,450 2.57560 7/13/01
21,600 2.49790 7/16/01
4,435 2.47120 7/17/01
41,800 2.38740 7/18/01
43,000 2.29430 7/19/01
653,800 2.37350 7/20/01
545,200 2.22500 7/25/01
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CUSIP No. 53631T 10 2 13D Page 11 of 13 Pages
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STEEL PARTNERS SERVICES, LTD.
-----------------------------
1,250 2.56140 6/05/01
5,520 2.61660 6/06/01
500 2.71300 6/07/01
3,200 2.65800 6/08/01
500 2.82000 6/13/01
4,700 2.71150 6/14/01
2,300 2.85000 6/15/01
5,700 2.74650 6/18/01
9,000 2.71000 6/19/01
1,800 2.67000 6/21/01
7,000 2.80000 6/22/01
1,100 2.79000 6/25/01
7,000 2.73290 6/27/01
6,500 2.79570 7/05/01
8,350 2.73910 7/06/01
9,000 2.66000 7/11/01
15,000 2.57560 7/13/01
20,000 2.49790 7/16/01
5,000 2.47120 7/17/01
20,000 2.29430 7/19/01
50,000 2.37350 7/20/01
WARREN LICHTENSTEIN
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None
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CUSIP No. 53631T 10 2 13D Page 12 of 13 Pages
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EXHIBIT INDEX
Exhibit Page
------- ----
1. Joint Filing Agreement. 13
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CUSIP No. 53631T 10 2 13D Page 13 of 13 Pages
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JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1)(iii) under the
Securities Exchange Act of 1934, as amended, the persons named below agree to
the joint filing on behalf of each of them of a Statement on Schedule 13D dated
July 26, 2001 (including amendments thereto) with respect to the Common Stock of
Liquid Audio, Inc. This Joint Filing Agreement shall be filed as an Exhibit to
such Statement.
Dated: July 26, 2001 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.
General Partner
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein
Chief Executive Officer
STEEL PARTNERS SERVICES, LTD.
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein
Chief Executive Officer
/s/ Warren G. Lichtenstein
--------------------------
WARREN G. LICHTENSTEIN