Siti-sites.com, Inc. (SITN.PK) Describes Patent Settlement Agreement
27 January 2006 - 2:54AM
PR Newswire (US)
NEW YORK, Jan. 26 /PRNewswire-FirstCall/ -- (OTC:SITN) (BULLETIN
BOARD: SITN) -- Siti-sites.com, Inc. (formerly named Spectrum
Information Technologies, Inc., and called "Siti" in its Report on
Form 8-K) has had a civil suit pending since April, 2004 in New
York State Supreme Court in New York County, described in earlier
filings under the Securities Exchange Act of 1934 on Forms 10-K and
10-Q. The case was settled on the eve of trial on January 20, 2006.
A summary of the terms of settlement follows: Siti's 2004 complaint
alleged that certain defendants wrongfully purchased its portfolio
of patents on cell-phone and vehicular wireless technology. In
response, each defendant denied all liability to Siti as to all
claims, and there has been no admission of liability by any
defendant. The settlement is a relinquishment of all claims by Siti
in exchange for cash in the amount of $7,750,000, and an assignment
of a percentage of future gross proceeds, if any, derived from
Siti's former patent portfolio, as enhanced since the purchase.
These amounts will be reduced by one-third to cover the contingent
fees earned by Siti's Special Litigation Counsel, Green, Schaaf and
Jacobson of Clayton, Missouri. Siti's initial net cash recovery
will be approximately $5,150,000. This net sum will be received
upon closing of the settlement agreement expected to occur by late
February 2006. Loan advances by certain shareholders of $225,000
recently made, will be repaid, taking the net sum down to $4.9
million. All proceeds from the settlement are "non-recurring" in
nature. Siti has remained in liquidation since 2002, has no other
business and is planning a liquidating dividend distribution to
shareholders on the initial cash proceeds as soon as practicable.
The net amount available will be about $4.7 million. It will be
allocated pro-rata among shareholders holding approximately 30
million shares, for about $.15 per share distributed in this
continuing liquidation of Siti. Future Proceeds The assignment to
Siti of future Gross Proceeds (if any, and as defined), that are
received by the defendant patent holding company (the "Patent
Holding Company") after January 19, 2006, will consist of 15% of
the first $10 million in Gross Proceeds, 20% of the next $10
million, and 25% of all Gross Proceeds in excess of $20 million.
"Gross Proceeds" means all proceeds received by defendant Patent
Holding Company from the entire patent portfolio, before any
deduction for defendants' own counsel fees, costs and expenses of
operations, salaries or other distributions to members of defendant
Patent Holding Company. Siti is a senior creditor thereof, and
claims no ownership interest in the patent portfolio or such Patent
Holding Company. Risk Factors * Siti does not know how much, if
any, in future Gross Proceeds are still obtainable from this patent
portfolio, and ultimate results are very speculative. *Current or
future changes in technology may affect the patent properties
adversely. *Infringement litigation is costly, involves risk to the
patent portfolio, and such Patent Holding Company must obtain its
own financing. *Siti's share of future Gross Proceeds is subject to
these and other business risks in such Patent Holding Company. *The
settlement has been reached after protracted litigation, and
requires ongoing monitoring under its disclosure terms by Siti as a
creditor. *Under the settlement, Siti cannot exercise any control
over licensing or other decisions that could generate or otherwise
impact Gross Proceeds. *No assurance can be given that anything
more than the initial net cash value in this settlement will be
received by Siti. *Future proceeds to Siti are also subject to
one-third fees payable to Siti's Special Litigation Counsel. *There
will be accounting, legal collection and shareholder distribution
costs in the future. Reserves will be established as Siti's
liquidation continues. DATASOURCE: Siti-sites.com, Inc. CONTACT:
Toni Ann Tantillo, +1-212-925-1181, for Siti-sites.com, Inc.
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