UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 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) March 18, 2009
On2
Technologies, Inc.
(Exact
name of Registrant as specified in its charter)
Delaware
(State of
incorporation or organization)
1-15117
(Commission
File Number)
84-1280679
(IRS
Employer Identification No.)
3
Corporate Drive, Suite 100, Clifton Park, NY 12065
(518)
348-0099
(Address,
including zip code, and telephone number, including area code, of
Registrant’s
principal executive offices)
Not
applicable
(Former
name, former address and former fiscal year, if applicable)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.05 Costs Associated with Exit or Disposal Activities
On March
18, 2009, On2 Technologies, Inc. (the “Company”) began implementing a number of
cost reduction initiatives at its Finnish subsidiary, On2 Finland. These
initiatives include a reduction in workforce that is expected to reduce
headcount by approximately 40 On2 Finland employees. The Company has
implemented these cost reduction initiatives in order to align spending with
demand that has weakened as a result of the current global economic conditions
and uncertainties, particularly in the semiconductor industry in which On2
Finland operates. In accordance with Finnish law, the Company has
negotiated with the representative of the On2 Finland employees and On2
Finland’s management team in order to obtain consensus on the reduction in
workforce plan. The Company will implement the plan primarily through
a furlough process that will take effect in April 2009 and is expected to be
fully implemented over the course of the next four months.
The
Company anticipates incurring cash and non-cash restructuring and impairment
charges in the aggregate of $1.1 million to $1.5 million during 2009. These
estimated charges consist primarily of one-time employee reduction costs, the
majority of which are related to post-termination employee payments required by
Finnish law and the collective bargaining agreement covering most On2 Finland
employees, and other related restructuring costs. The
post-termination payments are triggered if the Company terminates some or all of
the furloughed employees or if employees who are furloughed for longer than 200
days elect to terminate their own employment. The total costs
incurred will depend on a number of factors, including the duration of the
furloughs, the number of employees, if any, that are recalled from furlough or
terminated and, for employees that are furloughed for longer than 200 days, the
number of such employees that have not obtained other employment.
Safe
Harbor Statement
This
Current Report on Form 8-K contains “forward-looking statements” that are
subject to risks and uncertainties, including statements regarding the Company’s
estimate of the expected charges and costs related to the workforce
reduction. Factors that will determine the actual charges or costs or
that could cause charges or costs to differ materially from the Company’s
estimates include variations in the costs of implementing the workforce
reduction, renegotiation of leases and other contacts, the duration of the
furloughs, the number of employees, if any, that are recalled from furlough and
the number of furloughed employees who obtain other employment and the timing of
such employment. The Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
SIGNATURE
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.
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Date:
March 24, 2009
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On2
Technologies, Inc.
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By:
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/s/ Matthew Frost
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Name:
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Matthew Frost
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Title:
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Interim
Chief Executive Officer and
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Chief
Operating Officer
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