sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
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. 3)1
LIQUID AUDIO, INC.
--------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE
--------------------------------------------------------------------------------
(Title of Class of Securities)
53631T 10 2
--------------------------------------------------------------------------------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 22, 2001
--------------------------------------------------------------------------------
(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 8 Pages)
--------
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).
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 2 of 8 Pages
----------------------------------- -----------------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEEL PARTNERS II, 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 IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,866,366
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,866,366
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,866,366
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 3 of 8 Pages
----------------------------------- -----------------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARREN G. LICHTENSTEIN
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,866,366
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,866,366
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,866,366
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 4 of 8 Pages
----------------------------------- -----------------------------
The following constitutes Amendment No. 3 ("Amendment No. 3") to the
Schedule 13D filed by the undersigned. This Amendment No. 3 amends the Schedule
13D as specifically set forth.
Item 4 is hereby amended to add the following:
On October 22, 2001, Steel Partners II delivered a letter to
the Issuer offering to acquire, through an appropriate acquisition entity, the
outstanding capital stock of the Issuer for $3.00 per Share in cash (the
"Offer"). Steel Partners II believes that such a transaction would provide the
Issuer's shareholders with an opportunity to maximize the present value of their
investment. The Offer is subject to certain conditions, including completion of
due diligence, obtaining all necessary financing, obtaining all necessary
consents and approvals, amendment of the Issuer's shareholders rights agreement,
waiver of any other anti-takeover provisions and certain other customary
conditions. A copy of the letter is filed as an exhibit to this Amendment No. 3
and incorporated herein by reference. Steel Partners II is prepared to
immediately enter into negotiations with the Issuer to finalize the terms of the
proposed transaction.
Item 7 is hereby amended to add the following exhibit:
4. Letter from Steel Partners II, L.P. to the Board of
Directors of Liquid Audio, Inc., dated October 22, 2001.
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 5 of 8 Pages
----------------------------------- -----------------------------
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: October 22, 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
/s/ Warren G. Lichtenstein
---------------------------
WARREN G. LICHTENSTEIN
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 6 of 8 Pages
----------------------------------- -----------------------------
EXHIBIT INDEX
Exhibit Page
------- ----
1. Joint Filing Agreement, dated July 26, -
2001 (previously filed).
2. Letter from Steel Partners II, L.P. to -
the Board of Directors of Liquid
Audio, Inc., dated September 10, 2001
(previously filed).
3. Letter from Steel Partners II, L.P. to -
certain officers and directors of
Liquid Audio, Inc., dated October 3,
2001 (previously filed).
4. Letter from Steel Partners II, L.P. to 7 to 8
the Board of Directors of Liquid
Audio, Inc., dated October 22, 2001.
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 7 of 8 Pages
----------------------------------- -----------------------------
STEEL PARTNERS II, L.P.
150 EAST 52ND STREET
21ST FLOOR
NEW YORK, NEW YORK 10022
--------
TEL (212) 813-1500
FAX (212) 813-2198
October 22, 2001
Board of Directors
Liquid Audio, Inc.
800 Chesapeake Drive
Redwood City, CA 94063
Attention: Gerald Kearby, Chairman of the Board of
Directors and Chief Executive Officer
Dear Mr. Kearby:
Steel Partners II, L.P. ("Steel Partners") currently owns an
aggregate of 1,866,366 shares of common stock of Liquid Audio, Inc. ("Liquid
Audio" or the "Company"), representing approximately 8.2% of the shares
outstanding. As an investor that seeks out opportunities in small cap companies,
Steel Partners has sought, with some success, to find investments and assist
companies and all of their shareholders in realizing value. We believe that
there is significant, but rapidly diminishing value inherent in the business and
assets of Liquid Audio despite the Company's poor operating performance and
declining share price.
Consistent with our investment philosophy and in accordance with our
discussions, Steel Partners hereby sets forth its willingness to offer to
acquire the Company, through an appropriate acquisition entity, for $3.00 per
share in cash in a one-step merger of Liquid Audio. This offer represents an
attractive 27.6% premium to the current market price of $2.35 per share. We
believe this all-cash offer will provide the Company's shareholders immediate
liquidity and immediate opportunity to maximize their investment in the Company.
Our proposal, however, would be conditioned upon satisfactory completion of due
diligence, obtaining all necessary consents and approvals, including approval of
the Board of Directors and shareholders, amendment of the shareholders' rights
agreement, waiver of any other anti-takeover provisions and certain other
customary conditions, including no material adverse change in the Company's
business and confirmation that there are appropriate reserves for all contingent
liabilities. We are prepared to commence work immediately in order to satisfy
the due diligence contingencies.
----------------------------------- -----------------------------
CUSIP No. 53631T 10 2 13D Page 8 of 8 Pages
----------------------------------- -----------------------------
Steel Partners stands ready to meet with the Board of Directors and
its representatives as soon as possible. Please contact me at (212) 813-1500 to
discuss any questions you or the Board might have or if you would like further
information. Please be advised that time is of the essence with respect to this
offer as the value of the Company diminishes on a daily basis.
Respectfully,
/s/ Warren G. Lichtenstein
--------------------------
Warren G. Lichtenstein,
Managing Member of Steel Partners,
L.L.C., General Partner