UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

 

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Filed by a Party other than the Registrant  o

 

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

Definitive Proxy Statement

o

Definitive Additional Materials

ý

Soliciting Material Pursuant to §240.14a-12

 

BroadVision, Inc.

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

 

(5)

Total fee paid:

 

 

 

o

Fee paid previously with preliminary materials.

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

 

 

(2)

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(3)

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(4)

Date Filed:

 

 

 

 

 

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 


 

On July 26, 2005, BroadVision, Inc. issued the following press release:

 

BroadVision Announces Second Quarter 2005 Results
Tuesday July 26, 7:45 am ET

 

REDWOOD CITY, Calif.—(BUSINESS WIRE)—July 26, 2005—BroadVision, Inc. (NASDAQ:BVSN - News), a global provider of web self-service solutions, today reported financial results for its second quarter ended June 30, 2005. Revenue for the quarter was $15.5 million, compared with revenue of $16.4 million for the first quarter ended March 31, 2005 and $20.1 million for the second quarter of 2004. The Company’s guidance for the quarter was to generate revenue of $16.0 to $18.0 million. License revenue for the quarter totaled $3.4 million versus $4.4 million in the prior quarter and $7.1 million in the comparable quarter of 2004.

 

In the second quarter, BroadVision posted a net loss on a generally accepted accounting principles (GAAP) basis of $2.9 million, or $0.08 per share, as compared with GAAP net income of $2.9 million, or $0.07 per diluted share, for the first quarter of 2005, and a GAAP net loss of $1.5 million, or $0.04 per share, in the second quarter of 2004. The GAAP loss in the most recent quarter included a restructuring charge of $309,000. The restructuring charge includes $665,000 of severance costs and various facility charges, partially offset by a gain on the revaluation of common stock warrants.

 

Pro forma net loss for the second quarter of 2005 was $3.3 million, or $0.10 per share, compared with a pro forma net loss of $1.5 million, or $0.05 per share, in the first quarter of 2005 and a pro forma net loss of $813,000, or $0.02 per share, in the second quarter of 2004. These pro forma results exclude restructuring charges and credits, gains and losses from the revaluation of common stock warrants, and credits from the reversal of income tax accruals. A reconciliation of pro forma results to GAAP results is provided in the financial information attached to this press release. The Company believes its pro forma results provide useful information because they reflect the Company’s financial performance excluding certain charges, credits, gains and losses that the Company believes are not indicative of its ongoing operations.

 

“While we were disappointed in our license transaction execution, several existing customers recommitted to our platform in the second quarter,” said Dr. Pehong Chen, BroadVision president and CEO. “As previously announced, we recently implemented a headcount reduction of over 20%. Although we believe this was an aggressive step towards costs controls, we cannot be certain that it will be sufficient to meet the Company’s near-term liquidity challenges. We are also announcing today a definitive agreement for the acquisition of all of the Company’s outstanding shares by Vector Capital, and we look forward to working closely with our shareholders through the approval and close of the transaction.”

 

Definitive Agreement Announcement

 

As also announced today, the Company has entered into a definitive agreement to be acquired by a newly-formed portfolio company of Vector Capital, a San Francisco-based private equity firm. Additional information about the proposed acquisition, as well as further information about the Company’s financial performance and condition, is included in a separate press release issued by the Company today. A vote on the proposed transaction will be taken at an upcoming special meeting of stockholders on a date to be announced.

 

Conference Call

 

BroadVision will hold a conference call to discuss this press release and the acquisition press release at 12:30 p.m. Eastern time today, July 26, 2005. The call, hosted by Dr. Pehong Chen, can be accessed live by dialing (US) 800-591-6942 or (international) 617-614-4909 (pass code 39034411) or by visiting the investor relations section of the Company’s website at www.broadvision.com/ir.

 

Information Concerning Forward-Looking Statements

 

Information in this release that involves expectations, beliefs, hopes, plans, intentions or strategies regarding the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which forward-looking statements involve risk and uncertainties. All forward-looking statements included in this release, including, but not limited to, our ability to finalize revenue transactions in future quarters and our ability to generate revenue growth, earnings and adequate cash flows in 2005, are based upon information available to BroadVision as of the date of this release, and BroadVision assumes no obligation to update or correct any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from BroadVision’s current expectations. Factors which could cause or contribute to such differences include, but are not limited to: lack of market acceptance of BroadVision’s existing and new products or services; BroadVision’s inability to continue to

 

 

2


 

develop competitive new products and services on a timely basis; introduction of new products or services by competitors; general economic conditions and BroadVision’s inability to attract and retain qualified employees. These and other factors and risks associated with BroadVision’s business are discussed in its most recent annual report on Form 10-K and in BroadVision’s quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission.

 

About BroadVision

 

BroadVision is a global provider of web self-service solutions. Our agile commerce and portal applications enable customers to quickly create and adapt online processes to keep pace with changing business requirements. Over 1,000 organizations — including Circuit City, Yankee Candle, Vodafone, Cardinal Health, Hewlett-Packard, Toyota, Japan Airlines and the U.S. Air Force — serving nearly 75 million registered users, rely on BroadVision’s open solutions to power and personalize their mission-critical web initiatives

 

For more information about BroadVision, Inc., call 650-542-5100, email info@broadvision.com or visit www.broadvision.com.

 

Additional Information About the Proposed Transaction and Where You Can Find It

 

In connection with the proposed transaction, BroadVision intends to file a proxy statement and other relevant materials with the SEC. BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, STOCKHOLDERS OF BROADVISION ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials, and any other documents filed by BroadVision with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, stockholders of BroadVision may obtain free copies of the documents filed with the SEC by contacting BroadVision Investor Relations at 650-261-5100 or BroadVision, Inc., 585 Broadway, Redwood City, CA 94063. You may also read and copy any reports, statements and other information filed by BroadVision with the SEC at the SEC public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

 

BroadVision and its executive officers and directors may be deemed to be participants in the solicitation of proxies from BroadVision stockholders in favor of the proposed transaction. Certain executive officers and directors of BroadVision have interests in the transaction that may differ from the interests of stockholders generally, including benefits conferred under retention, severance and change in control arrangements, ownership interests in BroadVision’s parent company after the transaction and continuation of director and officer insurance and indemnification. These interests will be described in the proxy statement when it becomes available.

 

3


 

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

 

 

 

Jun. 30,
2005

 

Dec. 31,
2004

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

26,839

 

$

41,851

 

Accounts receivable, less allowance for doubtful accounts and reserves of $1,308 and $1,409 as of June 30, 2005 and December 31, 2004, respectively

 

12,815

 

14,370

 

Restricted cash and investments, current portion

 

1,911

 

21,933

 

Prepaids and other

 

2,168

 

2,232

 

Total current assets

 

43,733

 

80,386

 

 

 

 

 

 

 

Property and equipment, net

 

2,940

 

3,566

 

Restricted cash and investments, net of current portion

 

1,997

 

2,323

 

Goodwill

 

53,421

 

53,421

 

Other intangibles, net

 

3,013

 

3,013

 

Other assets

 

1,279

 

1,944

 

Total assets

 

$

106,383

 

$

144,653

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of bank borrowings

 

$

15,454

 

$

20,637

 

Current portion of long-term debt

 

12,472

 

4,929

 

Accounts payable

 

5,461

 

7,470

 

Accrued expenses

 

15,793

 

40,745

 

Warrant liability

 

1,385

 

4,899

 

Unearned revenue and deferred maintenance

 

17,701

 

19,842

 

Total current liabilities

 

68,266

 

98,522

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

—

 

7,054

 

Bank borrowings, net of current portion

 

162

 

389

 

Other noncurrent liabilities

 

6,995

 

8,278

 

Total liabilities

 

75,423

 

114,243

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

30,960

 

30,410

 

Total liabilities and stockholders’ equity

 

$

106,383

 

$

144,653

 

 


 

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

Jun.

 

Mar.

 

Jun.

 

Jun.

 

Jun.

 

 

 

30,

 

31,

 

30,

 

30,

 

30,

 

 

 

2005

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Software licenses

 

$

3,391

 

$

4,416

 

$

7,097

 

$

7,807

 

$

14,937

 

Services

 

12,123

 

11,951

 

13,031

 

24,074

 

26,080

 

Total revenues

 

15,514

 

16,367

 

20,128

 

31,881

 

41,017

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

Cost of software licenses

 

(186

)

(57

)

313

 

(243

)

891

 

Cost of services

 

5,614

 

5,980

 

6,302

 

11,594

 

12,579

 

Total cost of revenues

 

5,428

 

5,923

 

6,615

 

11,351

 

13,470

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

10,086

 

10,444

 

13,513

 

20,530

 

27,547

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

3,954

 

4,287

 

4,509

 

8,241

 

9,397

 

Sales and marketing

 

5,061

 

5,811

 

7,480

 

10,872

 

14,346

 

General and administrative

 

2,829

 

2,535

 

2,400

 

5,364

 

4,817

 

Restructuring (credit) charge

 

309

 

(704

)

679

 

(395

)

1,249

 

Total operating expenses

 

12,153

 

11,929

 

15,068

 

24,082

 

29,809

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(2,067

)

(1,485

)

(1,555

)

(3,552

)

(2,262

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income (expense), net

 

(777

)

2,371

 

57

 

1,594

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before (provision)/benefit for income taxes

 

(2,844

)

886

 

(1,498

)

(1,958

)

(2,229

)

(Provision)/benefit for income taxes

 

(70

)

2,032

 

6

 

1,962

 

(130

)

Net income (loss)

 

$

(2,914

)

$

2,918

 

$

(1,492

)

$

4

 

$

(2,359

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

 

$

(0.08

)

$

0.09

 

$

(0.04

)

$

0.00

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share

 

$

(0.08

)

$

0.07

 

$

(0.04

)

$

0.00

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic income (loss) per share

 

34,320

 

33,971

 

33,476

 

34,077

 

33,392

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted income (loss) per share

 

34,320

 

39,968

 

33,476

 

34,163

 

33,392

 

 

 

 

 

 

 

 

 

 

 

 

 

PRO FORMA FINANCIAL INFORMATION(a) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(3,337

)

$

(1,547

)

$

(813

)

$

(4,884

)

$

(1,110

)

Basic loss per share

 

$

(0.10

)

$

(0.05

)

$

(0.02

)

$

(0.14

)

$

(0.03

)

Diluted loss per share

 

$

(0.10

)

$

(0.05

)

$

(0.02

)

$

(0.14

)

$

(0.03

)

 

(a) Pro forma net loss and the related per share amounts exclude: 1) restructuring charges and credits, 2) gains and losses from the revaluation of common stock warrants and 3) credits from the reversal

 

4


 

of income tax accruals. Pro forma net loss and pro forma cost of revenues and operating expenses reconcile to the comparable amounts under generally accepted accounting principles as follows (unaudited, in thousands):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

Jun.

 

Mar.

 

Jun.

 

Jun.

 

Jun.

 

 

 

30,

 

31,

 

30,

 

30,

 

30,

 

 

 

2005

 

2005

 

2004

 

2005

 

2004

 

Net income (loss), generally accepted accounting principles

 

$

(2,914

)

$

2,918

 

$

(1,492

)

$

4

 

$

(2,359

) 

Pro forma adjustments:

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges (credits)

 

309

 

(704

)

679

 

(395

)

1,249

 

Revaluation of warrant

 

(732

)

(1,764

)

—

 

(2,496

)

—

 

Reversal of income tax accruals

 

—

 

(1,997

)

—

 

(1,997

)

—

 

Pro forma net loss

 

$

(3,337

)

$

(1,547

)

$

(813

)

$

(4,884

)

$

(1,110

)

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues and operating expenses, generally accepted accounting principles

 

$

17,581

 

$

17,852

 

$

21,983

 

$

35,433

 

$

43,279

 

Pro forma adjustments:

 

 

 

 

 

 

 

 

 

 

 

Restructuring (charges) credits

 

(309

)

704

 

(679

)

395

 

(1,249

)

Pro forma cost of revenues and operating expenses

 

$

17,272

 

$

18,556

 

$

21,304

 

$

35,828

 

$

42,030

 

 

Contact:

BroadVision

Bill Meyer, 650-542-5100 (Chief Financial Officer)

ir1@BroadVision.com

 

Source: BroadVision, Inc.