<PAGE>
SECURITIES AND EXHANGE 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): November 20, 1998
NETLIVE COMMUNICATIONS, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-28728 13-3848652
- ----------------------- ----------- -------------------
(State of Incorporation (Commission (IRS Identification
or other Jurisdiction) File No.) Number)
330 16th Street
Brooklyn, New York 11215
----------------------------------------
(Address of Principal Executive Offices)
(212) 343-7082
---------------------------------------------------
(Registrant's Telephone Number Including Area Code)
<PAGE>
ITEM 5. OTHER EVENTS
Attached hereto as Exhibit 20 is a copy of a letter, dated November 23rd, 1998,
which NetLive Communications, Inc. is transmitting on the date hereof to its
stockholders and which is incorporated herein by reference and is filed as an
exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
20. Stockholder letter dated November 23rd, 1998.
<PAGE>
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.
NETLIVE COMMUNICATIONS, INC.
By: /s/ Michael Kharitonov
------------------------------
Michael Kharitonov, President
Dated: As of November 24, 1998
<PAGE>
EXHIBIT INDEX
TO FORM 8-K
-----------
Exhibit Page No.
- ------- --------
20 Stockholder letter dated November 23rd, 1998. 4
<PAGE>
November 23, 1998
Dear Stockholder:
We are writing to advise you of the current status of NetLive Communications,
Inc.'s ("NetLive" or the "Company") potential transaction with Newton Grace Pty
Limited ("Newton Grace") and affiliated parties as well as of other recent
Company matters.
On March 11, 1998, the Company entered into a non-binding letter of intent to
enter into a transaction with an affiliate of Newton Grace Pty. Ltd. ("Newton
Grace"). Newton Grace is an Australian corporation engaged in the consumer
electric goods business. To preserve resources, the Company's Board of
Directors decided that it was necessary to terminate all employees other than
those who would be instrumental in efforts to complete the Newton Grace
transaction or another similar transaction. Accordingly, on March 13, 1998 the
Company terminated the vast majority of its non-executive staff and ceased its
historic business operations. During the next six months and continuing through
the date hereof, the Company concentrated on winding up its operations,
negotiating settlement agreements with departing personnel and others, and
conducting due diligence on, and negotiating with the principals of, Newton
Grace.
NetLive and its newly-formed Australian subsidiary, Linda Industries Pty
Limited, entered into a Stock Purchase and Reorganization Agreement ("Purchase
Agreement"), dated as of June 22, 1998, with Playbyrne Investments Pty Limited,
Budbox Pty Limited, Newton Grace, Intercorp Group Pty Limited, Hallendon Pty
Limited, Geoffrey Russell Player and Vicki Gaye Player (collectively the
"Purchasers"). Pursuant to the Purchase Agreement, the Company agreed, in
general, to sell to the Purchasers, for $10,000,000 Australian Dollars ("AUD"),
newly-issued shares of Company common stock, $0.0001 par value ("Common Stock")
constituting approximately 89% of the total outstanding Common Stock, on a
post-transaction basis, and certain shares of preferred stock, convertible into
a maximum of 10% of the total outstanding Common Stock (on a post-conversion
basis) if certain earnings targets were met. Thus, following conversion of all
of the preferred stock, the Purchasers in aggregate would own 90% of the total
outstanding Common Stock. The Company and its subsidiary would utilize such
funds, a promissory note and additional funds to be obtained by loan to acquire
certain of Newton Grace's operating assets (excluding its cash and certain
receivables), subject to the assumption of certain liabilities, for an
aggregate purchase price of (AUD) $24,000,000, subject to adjustment.
The Purchase Agreement provided that the Company's current management would
prepare proxies to distribute to the Company's stockholders in preparation for
a stockholder meeting. In such proxies and at such meeting, the stockholders
would have been asked, among other things, to ratify the Purchase Agreement, to
approve a reverse stock split and to approve an increase in the number of
authorized shares of common and
1
<PAGE>
preferred stock. If these measures were approved and if certain other
conditions were satisfied, the transaction would have then proceeded to
closing.
The transactions contemplated by the Purchase Agreement, and amendments
thereto, were subject to the parties fulfilling certain conditions by specified
dates. Although active negotiations continued, such conditions were not
satisfied by such dates, and thus the Purchase Agreement expired pursuant to
its terms.
The Company and the Purchasers are continuing active negotiations in efforts to
reach mutually acceptable agreements in light of changed circumstances (the
"Contemplated Agreement;" all transactions contemplated therein, collectively
the "Contemplated Transaction"). Although no assurance can be given concerning
if and when the Contemplated Agreement will be consummated or concerning the
provisions thereof, the Company presently anticipates that the general terms of
the Contemplated Agreement would be similar to the terms of the Purchase
Agreement.
Unlike the Purchase Agreement, however, the Contemplated Agreement contemplates
a two-step transaction with the Purchasers. In the first step, the Purchasers
would pay (AUD) $10,000,000 for approximately 27.2 million (pre-reverse split)
shares of Common Stock; however, they would receive only approximately 13.5
million (pre-reverse split) shares at that stage. Simultaneously, the Company
and its subsidiaries would utilize such funds, a promissory note and additional
funds to be obtained by loan (collectively, the "Asset Purchase Funds") to
acquire certain of Newton Grace's operating assets (excluding its cash and
certain receivables), subject to the assumption of certain liabilities, for an
aggregate purchase price of approximately (AUD) $22,000,000, subject to
adjustment. Simultaneous with the first stage of the Contemplated Transaction,
the Company additionally contemplates a sale of 450,000 newly-issued
(pre-reverse split) shares of Common Stock to a private investor for (U.S.)
$150,000. The Company's current officers and directors, with the exception of
Adam Goldberg, a member of the Company's board of directors, would resign from
their officer and director positions at that point. As such, the Company would
effect a change in business and change in control at closing of the first
stage.
Following the closing of the first stage, the Company's new management would
prepare proxies to distribute to the Company's stockholders in preparation for
a stockholder meeting. In such proxies and at such meeting, the stockholders
would be asked, among other things, to ratify the Contemplated Transaction, to
approve an approximate 3.4 to 1 reverse stock split and to approve an increase
in the number of authorized shares of common and preferred stock. In light of
the issuance of the 13.5 million shares of Common Stock to the Purchasers in
the first stage, the Company believes the ratification of such measures would
be virtually assured.
Assuming such measures were passed, the Purchasers would then be issued,
pursuant to the second step of the Contemplated Agreement, the balance of the
27.2 million shares of Common Stock that they purchased--i.e., the equivalent
of approximately 13.7 million pre-reverse split shares of Common Stock. In the
second stage, the Purchasers would
2
<PAGE>
also receive certain shares of preferred stock that would be convertible,
assuming certain earnings targets are met by the Company, into a maximum of the
equivalent of approximately 3.4 million pre-reverse split shares of Common
Stock. Thus, if all such shares of preferred stock were to be converted, the
Purchasers would in the aggregate own 90% of the total outstanding shares of
Common Stock.
Consummation of the Contemplated Transactions is dependent, among other things,
upon the Company obtaining certain financing (the "Financing"), including a
(AUD) $10,000,000 loan necessary to raise the Asset Purchase Funds. National
Australia Bank Limited (the "Bank") has issued a letter of offer to the
Company's Australian subsidiary, Linda Industries Pty Limited, tentatively
agreeing to provide the Financing. The Bank's approval of the Financing,
however, is subject to the satisfaction of various conditions. No assurance can
be given that the parties will fulfill such conditions or that the Company will
succeed in obtaining the Financing required to complete the Contemplated
Transactions.
On September 29, 1998, the Company received a letter from The NASDAQ Stock
Market, Inc. ("NASDAQ") regarding the listing of the Common Stock and the
Company's common stock purchase warrants ("Warrants"). In the letter, NASDAQ
indicated, as previously announced and notwithstanding the Company's efforts,
that such securities would be de-listed from The NASDAQ SmallCap Market
effective at the close of business on September 29, 1998. The Common Stock and
Warrants are currently listed on the OTC-Bulletin Board under the symbols NETL
and NETLW, respectively.
If the Contemplated Transaction is consummated, the new business of the Company
and its subsidiaries will have no need for the Internet Call Center software,
source code and related documentation developed and assembled by the Company
prior to the cessation of its historic business (collectively, the "Software").
As such, during the 100 days following the closing of the first stage of the
Contemplated Transaction, the Company has agreed to conduct an auction and will
invite bids for the purpose of selling the Software. The Company has agreed to
advertise the Software in one or more industry trade publications and to allow
potential purchasers to copy, at their own expense, the Software demonstration
CD. Pursuant to an agreement with Company Chairman, CEO and President, Michael
Kharitonov, which is conditional, among other matters, upon the closing of the
first step of the Contemplated Transaction, the Company has an obligation to
inform Kharitonov of any bids that it receives for the Software and before
accepting any bid the Company would give Kharitonov an opportunity to make a
higher bid. The Company intends to maximize its financial return on the
Software, taking into consideration all bids and the particular terms of each
offer and taking into account all relevant factors including, but not limited
to, the Company's obligations under Kharitonov's existing employment contract,
which include, among other items, provisions for payment of salary, severance,
medical insurance, and other forms of compensation. At the end of the 100-day
period, if the Company has not accepted any bids for the Software, the Company
has agreed to transfer the Software to Kharitonov in return for his agreement
to cancel his employment contract. Any persons interested in purchasing the
Software should telephone the Company at 212-343-7082.
3
<PAGE>
Also, the Company's current directors (the "Directors") have entered into a
settlement agreement (the "Settlement") with the former CEO and President of
the Company and a former member of the Company's Board of Directors, Laurence
Rosen, to resolve an action brought in the Supreme Court of the State of New
York, captioned "Rosen, on behalf of Shareholders of NetLive Communications,
Inc. v. Kharitonov, et al" (Index No. 98-602056) (the "Action"). Prior to the
Settlement, the Directors filed Answers in the Action denying all allegations
of wrongdoing. The Settlement is conditional upon the closing of the first step
of the Contemplated Transaction, among other matters. As part of the
Settlement, a private investor agreed to purchase all shares of Company common
stock owned by Rosen. Dismissal of the Action will require court approval. By
the terms of the Settlement, the Directors did not admit to any wrongdoing nor
were they required to make any monetary payments to Rosen. Accordingly, in the
event that the Settlement is approved, the Company will not be required to make
any additional payments, other than outstanding attorneys' fees of the
Directors, to the Directors under certain indemnification agreements between
the Company and each of the Directors (the "Indemnification Agreements"). In
accordance with the opinion of an independent counsel, obtained pursuant to the
Indemnification Agreements, the Company has reimbursed the Directors for
attorneys' fees incurred in defending the Action.
The Company's board of directors and management continue to believe, as the
Company's options and resources are rapidly dwindling, that the Company has
negotiated acceptable terms under difficult circumstances and that, in their
judgment, consummating the Contemplated Transaction will be in the best
interest of the Company's stockholders. As such, the Company's board of
directors and management are continuing to attempt to consummate the
Contemplated Transaction on acceptable terms.
Very truly yours,
The Board of Directors of
NetLive Communications, Inc.
MICHAEL KHARITONOV
- -------------------------
4
<PAGE>
JEFFREY WOLF
- -------------------------
ANDREW SCHWARTZ
- -------------------------
ADAM GOLDBERG
- -------------------------
MARCEL YUNG
- -------------------------
5
