Siti-sites.com, Inc. (SITN.PK) - Notice of Dividend, Following Closing of Patent Settlement Agreement
08 March 2006 - 8:35AM
PR Newswire (US)
NEW YORK, March 7 /PRNewswire-FirstCall/ -- Siti-sites.com, Inc.
(OTC:SITN) (BULLETIN BOARD: SITN) ; (SITN.PK, and by Email to )
(CUSIP 82981 -- formerly named Spectrum Information Technologies,
Inc. and called "Siti" in its report on Form 8-K) announced that it
had declared a $.15 per share liquidating dividend payable to all
holders of its common stock. The dividend will be payable to
holders of record at the close of business on March 28, 2006, and
payable on or after April 12, 2006. Siti further confirmed the
closing of the previously announced Settlement Agreement dated
January 26, 2006 regarding its former patent properties, recently
concluding the final settlement documents with initial net cash
proceeds of $5,152,413. Siti has 30,078,178 shares of common stock
issued and outstanding, and the total dividend amounts to
$4,511,726. All proceeds from the settlement are "non-recurring" in
nature. Siti has remained in liquidation since 2002, and has no
other business. This liquidating dividend distribution to
shareholders on 87% of the settlement proceeds is occurring
promptly. The balance is being used to repay recent shareholder
loans ($220,352), pay litigation expenses and for operating funds.
Speculative Future Proceeds The Settlement Agreement required an
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. The
assignment consists 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, a Limited
Liability Company ("LLC"), from its entire patent portfolio, before
any deduction for the LLC's own counsel fees, costs and expenses of
operations, salaries or other distributions to members of the
Patent Holding Company. Siti is a senior creditor of this LLC, is
filing Uniform Commercial Code documents describing the security
assignment of future Gross Proceeds, and does not have any
membership or ownership interest in the Patent Holding Company or
in the patent portfolio as such. Risk Factors *Siti does not know
how much, if any, in future Gross Proceeds are still obtainable
from this patent portfolio. Ultimate results are very speculative,
including the impact of prior single-payment cash licenses granted
to many international cell phone and wireless companies in the
period 1996-2006, under which no further payment can be expected.
*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 was 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 plan of liquidation continues. **Reference is also made to
the explanation of "Forward Looking Statements within the meaning
of the Private Securities Litigation Reform Act of 1995" in Siti's
previous SEC quarterly reports on Form 10-Q, in annual reports on
Form 10-K and as filed from time to time in the future. Taxation
Siti will have income tax benefits from loss carry-forwards and
current operations of approximately $6 million, resulting from its
prior operations 1999-2005, to utilize against net cash proceeds in
the settlement. Siti anticipates owing nominal income taxes in
connection with the initial net proceeds of the settlement.
However, Speculative Future Proceeds discussed above, if any, may
require a provision for corporate taxes if and when received. The
liquidating dividend distribution to shareholders is expected to be
taxed to each shareholder as, first, a non-taxable return of
capital to the investor up to its cost or other basis for each
share of stock entitling it to a liquidating dividend; thereafter,
it will be taxed as capital gains on any amount in excess of the
investor's cost or other basis in each share of stock receiving a
liquidating dividend. Siti has been advised as to such general tax
treatment on liquidating dividends to shareholders by its outside
accountants. Each shareholder receiving a dividend distribution is
urged to seek professional advice and determine its own tax issues
independently with its accountants and tax advisers. DATASOURCE:
Siti-sites.com, Inc. CONTACT: Toni Ann Tantillo of Siti-sites.com,
Inc., +1-914-779-7155, ext. 17 Web site: http://www.siti-sites.com/
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