UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): March 25, 2005
LIBERATE TECHNOLOGIES
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(Exact name of registrant as specified in its charter)
Delaware 000-26565 94-3245315
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
2655 Campus Drive, Suite 250, San Mateo, California 94403
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(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code (650) 645-4000
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of
the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
On March 25, 2005, the Board of Directors of Liberate Technologies
(the "Registrant") declared a one-time special dividend of $2.10 per common
share. The special dividend is payable to the holders of record on April 4,
2005 upon the closing of the sale of the Registrant's North America business
to Double C Technologies, LLC (the "Double C") pursuant to the Asset Purchase
Agreement with Double C attached as Exhibit 2.6 to the Current Report on
Form 8-K/A filed by the Registrant on January 18, 2005. The Double C
transaction is currently anticipated to close the week of April 4, 2005. As
required by the NASD rules governing special dividends of this magnitude, the
ex-dividend date will be set one business day after the payment date. After
payment of the special dividend, the Registrant expects to have approximately
$60 million in cash and cash equivalents on hand, including approximately $10.7
million of restricted cash.
The special dividend will be treated as a dividend for United States
federal income tax purposes to the extent of the Registrant's accumulated and
current earnings and profits, for United States federal income tax purposes,
which generally must be determined by taking into account the Registrant's
operations for the entire taxable year of the Registrant ending on May 31,
2005. If the distribution exceeds a stockholder's share of the Registrant's
current and accumulated earnings and profits, the excess first will be treated
as a tax-free return of capital to the extent of such stockholder's adjusted
tax basis in his, her, or its shares and thereafter as gain. Following the end
of its taxable year, the tax advisors of the Registrant will make a
determination of the tax treatment of the special dividend to stockholders. The
Registrant expects that a substantial portion, and potentially all, of the
special dividend will not be considered a "dividend" for United States federal
income tax purposes. For purposes of effecting payment of the special dividend
to registered holders that are not United States persons for United States
federal income tax purposes ("Non-U.S. Holders"), with respect to whom
withholding is required, such withholding will be made based on the assumption
that the entire distribution will be a taxable dividend. A Non-U.S. Holder may
be eligible to obtain an exemption from, a reduction of, or a refund of any
federal income withholding taxes or a portion thereof provided that he, she, or
it establishes that no withholding or a reduced amount of withholding is due.
Stockholders are urged to consult their tax advisors regarding the appropriate
tax treatment of the dividend.
The Registrant expects to make equitable adjustments to outstanding
awards under its existing equity based incentive plans in order to take account
of the special dividend.
Duff & Phelps, LLC and Skadden, Arps, Slate, Meagher & Flom LLP
advised the Registrant in connection with the declaration of the special
dividend.
Forward Looking Statements
Those statements herein that involve expectations or intentions (such
as those related to the closing of the transactions contemplated by the asset
purchase agreement) are forward-looking statements within the meaning of the
U.S. securities laws, involving risks and uncertainties, and are not guarantees
of future performance. You are cautioned that these statements are only
predictions and that forward-looking statements are subject to a number of
risks, assumptions and uncertainties that could cause actual results to differ
materially from those projected in such forward-looking statements. These
risks, assumptions and uncertainties include, but are not limited to: future
decisions by the SEC or other governmental or regulatory bodies; the vote of
our stockholders to approve the asset sale and the asset purchase agreement;
the closing of the asset sale to Double C; the tax treatment of the special
dividend and what portion of it may be treated as a dividend for United States
federal income tax purposes; uncertainties related to litigation; economic and
political conditions in the U.S. and abroad; and other risks outlined in our
filings with the SEC, including the annual report on Form 10-K for the year
ended May 31, 2004. All forward-looking statements are effective only as of the
date they are made and we disclaim any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
LIBERATE TECHNOLOGIES
By: /s/ Gregory S. Wood
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Name: Gregory S. Wood
Title: Executive Vice President and
Chief Financial Officer
Date: March 25, 2005