8-K

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):  July 25, 2005

COSINE COMMUNICATIONS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	000-30715	94-3280301
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
560 S. Winchester Blvd., Suite 500 San Jose, California 95128
(Address of principal executive offices) (Zip Code)
(408) 236-7518
(Registrant’s telephone number, including area code)

(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 obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 25, 2005, CoSine Communications, Inc. (the "Company") issued a press release announcing its preliminary financial results for its second quarter ended June 30, 2005. The full text of the press release is attached hereto as Exhibit 99.1 to this Current Report.

Item 5.02 Departure of Directors or Principal Officers: Election of Directors; Appointment of Principal Officers

On July 25, 2005, R. David Spreng resigned from the Company's board of directors. Mr. Spreng's resignation was not a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices nor was Mr. Spreng removed from or requested to resign from the Company's board of directors. Mr. Spreng's term as a member of the Company's board of directors was set to expire at the Company’s 2007 Annual Meeting of Stockholders.

On July 25, 2005, Jack L. Howard was elected by the Company’s remaining directors to the Company’s board of directors to fill the vacancy left by Mr. Spreng's resignation. Mr. Howard's term as a director will expire at the Company’s 2007 Annual Meeting of Stockholders. The Company has not determined whether Mr. Howard will serve on the Company’s Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee. Mr. Howard is a representative of Steel Partners II, L.P. and Vice President of Steel Partners, L.L.C., the general partner of Steel Partners II, L.P. Mr. Howard holds no voting or dispositive power over the holdings of Steel Partners II, L.P. in the Company. As of July 25, 2005, Steel Partners II, L.P., was a holder of approximately 24% of the Company's outstanding shares of common stock, including those shares purchased from the Crescendo Entities, as discussed in Item 8.01 below.

On July 25, 2005, the Company issued a press release announcing the resignation of Mr. Spreng from and election of Mr. Howard to the Company's board of directors. The full text of the press release is attached hereto as Exhibit 99.1 to this Current Report.

The foregoing information is being disclosed in response to Item 5.02(d) of Form 8-K, not Item 5.02(a).

Item 8.01 Other Events

On July 25, 2005, the Company announced that on July 21, 2005, Steel Partners II, L.P. had purchased in a private transaction the entire holdings of Crescendo World Fund LLC, Crescendo III GbR, Crescendo III, L.P., Crescendo III Executive Fund, L.P., and Eagle Ventures WF, LLC (collectively, the Crescendo Entities"), which consisted of an aggregate of 890,468 shares of the Company's common stock (the "Crescendo Shares"). Mr. Spreng, as an affiliate of the Crescendo Entities, held sole voting and dispositive power over the Crescendo Shares.

On July 25, 2005, the Company also announced that after an extensive review of strategic alternatives, its board of directors has approved a plan to redeploy the Company's existing resources to identify and acquire new business operations, while continuing to provide support to the Company’s existing customers and continuing to offer the Company’s intellectual property for license or sale. The Company’s redeployment strategy will involve the acquisition of one or more operating businesses with existing or prospective taxable earnings which may allow the Company to realize future cash flow benefits from its net operating loss carry forwards.

On July 25, 2005, the Company issued a press release announcing the sale of the Crescendo Shares and the Company's redeployment strategy. The full text of the press release is attached hereto as Exhibit 99.1 to this Current Report.

Item 9.01 Financial Statements and Exhibits.

     (c) Exhibits.

99.1 Press Release, dated July 25, 2005, of CoSine Communications, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

July 25, 2005	By:	/s/ Terry Gibson
		Terry Gibson,
		Chief Executive Officer, Chief Financial Officer and Secretary (Principal Executive, Financial and Accounting Officer and Duly Authorized Officer)

2

INDEX TO EXHIBITS

Exhibit
No.	Description
99.1	Press Release, dated July 25, 2005, of CoSine Communications, Inc.

EX-99.1

EXHIBIT 99.1

COSINE COMMUNICATIONS GIVES AN UPDATE ON STRATEGIC INITIATIVES, ANNOUNCES CHANGES IN ITS BOARD OF DIRECTORS AND ANNOUNCES PRELIMINARY Q2 2005 FINANCIAL RESULTS

SAN JOSE, CALIF., July 25, 2005 -- CoSine Communications, Inc. (COSN.PK), a provider of customer support services for managed, network-based IP and broadband service providers, today announced that after an extensive review of strategic alternatives the board of directors has approved a plan to redeploy CoSine’s existing resources to identify and acquire new business operations, while continuing to provide support to CoSine’s existing customers and continuing to offer CoSine’s intellectual property for license or sale. CoSine’s redeployment strategy will involve the acquisition of one or more operating businesses with existing or prospective taxable earnings. This strategy may allow CoSine to realize future cash flow benefits from its net operating loss carry-forwards (“NOLs”). As of this date, no candidates for acquisition have been identified, and no assurance can be given that the Company will find suitable candidates and, if it does, that the Company will be able to utilize its existing NOLs.

CoSine also announced changes to its board of directors. David Spreng, the managing general partner of Crescendo Ventures and a CoSine board member since December 1998, has resigned from CoSine’s board, and Crescendo Ventures has sold its holdings (approximately 890,000 shares) in CoSine common stock to Steel Partners II, L.P. The board of directors has appointed Jack Howard, a representative of Steel Partners II, LP, to fill David’s board seat. “We wish to thank David for his service and counsel over the past seven years,” said Don Green, CoSine’s Chairman. “And we look forward to Jack Howard’s guidance as we execute our redeployment strategy.”

CoSine also announced preliminary financial results for the three months ended June 30, 2005. The results are preliminary pending completion of the normal quarterly review by CoSine’s auditors. Revenue for the three months ended June 30, 2005 is expected to be approximately $699,000, and the net loss and net loss per share are expected to be $633,000 and $0.06, respectively. Cash and cash equivalents were $23.1 million at June 30, 2005 as compared to $24.9 million at December 31, 2004.

About Cosine Communications

CoSine Communications was founded in 1998 as a global telecommunications equipment supplier to empower service providers to deliver a compelling portfolio of managed, network-based IP and broadband services to consumers and business customers. Currently, CoSine's business consists primarily of a customer service capability operated under contract by a third party.

Safe Harbor Warning

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which include, among others, statements concerning CoSine's expected financial performance, exploration of strategic alternatives, and business outlook, expected performance and developments. The company uses words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.

Factors that might cause such a difference include, but are not limited to, Cosine’s ability to identify and acquire new business operations while continuing to provide support to CoSine’s existing customers and continuing to offer CoSine’s intellectual property for license or sale, the time and costs required to identify and acquire new business operations, management and board interest in and distraction due to identifying and acquiring new business operations, the reactions, either positive or negative, of investors, competitors, customers, employees and others to CoSine's strategic direction and to any specific business opportunity selected by CoSine and the continued downturn in the telecommunications industry and slow development of the market for network-based IP services, all as may be discussed in more detail on pages 30 through 36 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2004. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. CoSine undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.

For additional information contact:

Terry Gibson                         

(408) 236-7518

E-mail: Terry.Gibson@Cosinecom.com