Company Quick10K Filing
BroadVision
Price1.40 EPS0
Shares5 P/E4
MCap7 P/FCF-4
Net Debt-2 EBIT2
TEV5 TEV/EBIT2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-09-30 Filed 2019-11-19
10-Q 2019-06-30 Filed 2019-08-15
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-01
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-04-02
10-Q 2017-09-30 Filed 2017-11-13
10-Q 2017-06-30 Filed 2017-08-14
10-Q 2017-03-31 Filed 2017-05-12
10-K 2016-12-31 Filed 2017-03-30
10-Q 2016-09-30 Filed 2016-11-10
10-Q 2016-06-30 Filed 2016-08-12
10-Q 2016-03-31 Filed 2016-05-16
10-K 2015-12-31 Filed 2016-04-14
10-Q 2015-09-30 Filed 2015-11-16
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-14
10-K 2013-12-31 Filed 2014-03-14
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-15
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-10
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-08
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-11
10-Q 2011-03-31 Filed 2011-05-09
10-K 2010-12-31 Filed 2011-03-04
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-03-05
8-K 2020-05-15
8-K 2020-04-02
8-K 2020-03-30
8-K 2020-03-27
8-K 2020-01-07
8-K 2019-12-20
8-K 2019-11-15
8-K 2019-08-15
8-K 2019-05-28
8-K 2019-05-15
8-K 2019-04-11
8-K 2019-04-01
8-K 2019-01-03
8-K 2018-12-28
8-K 2018-11-05
8-K 2018-09-30
8-K 2018-08-13
8-K 2018-03-31
8-K 2018-03-09
8-K 2017-12-31

BVSN 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies
Note 2. Revenues
Note 3. Selected Condensed Consolidated Balance Sheet Detail
Note 4. Fair Value of Financial Instruments
Note 5. Commitments and Contingencies
Note 6. Geographic, Segment and Significant Customer Information
Note 7. Related Party Transactions
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 bvsn-20190930xex10_1.htm
EX-31.1 bvsn-20190930xex31_1.htm
EX-32.1 bvsn-20190930xex32_1.htm

BroadVision Earnings 2019-09-30

Balance SheetIncome StatementCash Flow
604836241202012201420172020
Assets, Equity
4.42.81.2-0.4-2.0-3.62012201420172020
Rev, G Profit, Net Income
20151050-42012201420172020
Ops, Inv, Fin

10-Q 1 bvsn-20190930x10q.htm 10-Q BVSN-20190930 Q3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

 

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR



 

 

 

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transaction period from _________ to __________

Commission File Number 001-34205

BROADVISION, INC.

(Exact name of registrant as specified in its charter)



 

 

 

 

 

Delaware

 

94-3184303

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

460 Seaport Ct., Suite 102

 

94063

Redwood City, California

 

 

(Address of principal executive offices)

 

(Zip code)

(650) 331-1000

(Registrant's telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:





 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

BVSN

Nasdaq Capital Market



Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 



Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 





 

Large accelerated filer          

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 



Emerging growth company 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No 



As of October 25, 2019, the registrant had 5,061,018 shares of common stock outstanding.


 

BROADVISION, INC. AND SUBSIDIARIES

 

FORM 10-Q

 

Quarter Ended September 30, 2019

 

TABLE OF CONTENTS





 



 

PART I. FINANCIAL INFORMATION

 



 

Item 1.   Financial Statements

 

Condensed Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018

1

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 and 2018 (unaudited)

2

Condensed Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2019 and 2018 (unaudited)

3

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

4

Notes to Condensed Consolidated Financial Statements (unaudited)

5

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.   Controls and Procedures

24



 

PART II.  OTHER INFORMATION

 



 

Item 1.   Legal Proceedings

25

Item 1A.Risk Factors

26

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

38

Item 3.   Defaults Upon Senior Securities

38

Item 4.   Mine Safety Disclosures

38

Item 5.   Other Information

38

Item 6.   Exhibits

39



 

SIGNATURES

40



 

EXHIBIT 31.1

 

EXHIBIT 32.1

 





 

 

 


 

 



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)







 

 

 

 

 

 



 

 

 

 

 

 



 

September 30,

 

December 31,



 

2019

 

2018

ASSETS

 

 

(unaudited)

 

 

(See Note 1)

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,169 

 

$

2,574 

Accounts receivable, net of reserves of $63 and $193 

 

 

 

 

 

 

as of September 30, 2019 and December 31, 2018, respectively

 

 

235 

 

 

331 

Accounts receivable related party (Note 7)

 

 

979 

 

 

 —

Operating lease right-of-use assets

 

 

60 

 

 

 —

Prepaids and other

 

 

544 

 

 

692 

Current assets of discontinued operations (Note 8)

 

 

 —

 

 

145 

Total current assets

 

 

3,987 

 

 

3,742 

Property and equipment, net

 

 

 

 

15 

Investment in Vmoso, Inc. (Note 4)

 

 

1,497 

 

 

 —

Other assets

 

 

94 

 

 

96 

Total assets

 

$

5,587 

 

$

3,853 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

452 

 

$

215 

Accrued expenses

 

 

530 

 

 

607 

Operating lease liabilities – current

 

 

58 

 

 

 —

Unearned revenues

 

 

670 

 

 

321 

Deferred maintenance

 

 

330 

 

 

337 

Current liabilities of discontinued operations (Note 8)

 

 

 —

 

 

417 

Total current liabilities

 

 

2,040 

 

 

1,897 

Other non-current liabilities

 

 

813 

 

 

555 

Total liabilities

 

 

2,853 

 

 

2,452 



 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Convertible preferred stock, $0.0001 par value; 1,000 shares authorized;

 

 

 

 

 

 

none issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 11,200 shares authorized; 5,061 and 5,057 shares

 

 

 —

 

 

 —

issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

1,272,009 

 

 

1,271,949 

Accumulated other comprehensive loss

 

 

(1,251)

 

 

(1,435)

Accumulated deficit

 

 

(1,268,024)

 

 

(1,269,113)

Total stockholders’ equity

 

 

2,734 

 

 

1,401 

Total liabilities and stockholders’ equity

 

$

5,587 

 

$

3,853 



 

 

 

 

 

 



See Accompanying Notes to Condensed Consolidated Financial Statements.

 

1


 

 

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Software licenses

 

$

284 

 

$

285 

 

$

964 

 

$

1,199 

Services

 

 

424 

 

 

458 

 

 

1,333 

 

 

1,709 

Total revenues

 

 

708 

 

 

743 

 

 

2,297 

 

 

2,908 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software revenues

 

 

12 

 

 

27 

 

 

 —

 

 

102 

Cost of services

 

 

75 

 

 

105 

 

 

235 

 

 

424 

Total cost of revenues

 

 

87 

 

 

132 

 

 

235 

 

 

526 

Gross profit

 

 

621 

 

 

611 

 

 

2,062 

 

 

2,382 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

322 

 

 

235 

 

 

537 

 

 

1,249 

Sales and marketing

 

 

69 

 

 

231 

 

 

140 

 

 

669 

General and administrative

 

 

596 

 

 

535 

 

 

1,941 

 

 

2,072 

Total operating expenses

 

 

987 

 

 

1,001 

 

 

2,618 

 

 

3,990 

Operating loss

 

 

(366)

 

 

(390)

 

 

(556)

 

 

(1,608)

Interest income, net

 

 

 

 

13 

 

 

12 

 

 

49 

Other income (loss), net

 

 

(190)

 

 

(72)

 

 

(174)

 

 

(223)

Loss before income taxes

 

 

(552)

 

 

(449)

 

 

(718)

 

 

(1,782)

Income tax expense

 

 

 

 

(2)

 

 

(15)

 

 

(4)

Net loss from continuing operations

 

 

(550)

 

 

(451)

 

 

(733)

 

 

(1,786)

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

 

(665)

 

 

(1,265)

 

 

(2,234)

 

 

(3,582)

Gain on deconsolidation of Vmoso, Inc.

 

 

2,349 

 

 

 —

 

 

2,349 

 

 

 —

Net income (loss) from discontinued operations

 

 

1,684 

 

 

(1,265)

 

 

115 

 

 

(3,582)

Net income (loss)

 

 

1,134 

 

 

(1,716)

 

 

(618)

 

 

(5,368)

Net loss attributed to non-controlling interest

 

 

(529)

 

 

 —

 

 

(1,707)

 

 

 —

Net income (loss) attributed to BroadVision

 

$

1,663 

 

$

(1,716)

 

$

1,089 

 

$

(5,368)

Amounts attributed to controlling interest:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributed to controlling interest from continuing operations

 

$

(467)

 

$

(1,716)

 

$

(519)

 

$

(5,368)

Net income attributed to controlling interest from discontinued operations

 

 

2,130 

 

 

 —

 

 

1,608 

 

 

 —

Net income (loss) attributed to BroadVision

 

$

1,663 

 

$

(1,716)

 

$

1,089 

 

$

(5,368)

Net loss per share attributed to continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11)

 

$

(0.09)

 

$

(0.15)

 

$

(0.36)

Diluted

 

$

(0.11)

 

$

(0.09)

 

$

(0.15)

 

$

(0.36)

Net income (loss) per share attributed to discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33 

 

$

(0.25)

 

$

0.02 

 

$

(0.72)

Diluted

 

$

0.33 

 

$

(0.25)

 

$

0.02 

 

$

(0.72)

Shares used in computing:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

5,034 

 

 

4,998 

 

 

5,018 

 

 

4,997 

Weighted average shares, diluted

 

 

5,044 

 

 

4,998 

 

 

5,037 

 

 

4,997 

Other comprehensive (loss) gain, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

188 

 

 

29 

 

 

184 

 

 

106 

Comprehensive income

 

 

188 

 

 

29 

 

 

184 

 

 

106 

Comprehensive income (loss)

 

$

1,322 

 

$

(1,687)

 

$

(434)

 

$

(5,262)



                                               See Accompanying Notes to Condensed Consolidated Financial Statements. 

 

2


 

 

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, Unaudited)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

Additional

 

Other

 

 

 

 

 

 

 

Noncontrolling

 

Total



 

 

 

 

 

 

Paid-in

 

Comprehensive

 

Accumulated

 

 

 

 

interest as of

 

Stockholders'



 

Shares

 

Amount

 

Capital

 

Loss

 

Deficit

 

Total

 

September 29, 2019

 

Equity

Balances as of December 31, 2018

 

5,057 

 

$

 —

 

$

1,271,949 

 

$

(1,435)

 

$

(1,269,113)

 

$

1,401 

 

$

 —

 

$

1,401 

Contribution from noncontrolling
interest

 

 

 

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

3,000 

 

 

3,000 

Net loss

 

 

 

 

 

 

 

 —

 

 

 —

 

 

(289)

 

 

(289)

 

 

(575)

 

 

(864)

Other comprehensive income

 

 

 

 

 

 

 

 —

 

 

96 

 

 

 —

 

 

96 

 

 

 —

 

 

96 

Stock-based compensation

 

 

 

 

 

 

 

18 

 

 

 —

 

 

 —

 

 

18 

 

 

 —

 

 

18 

Issuance of common stock
under employee stock purchase plan

 

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 

 

 —

 

 

Balances as of March 31, 2019

 

5,059 

 

 

 —

 

 

1,271,969 

 

 

(1,339)

 

 

(1,269,402)

 

 

1,228 

 

 

2,425 

 

 

3,653 

Net loss

 

 

 

 

 

 

 

 —

 

 

 —

 

 

(285)

 

 

(285)

 

 

(602)

 

 

(887)

Other comprehensive loss

 

 

 

 

 

 

 

 —

 

 

(100)

 

 

 —

 

 

(100)

 

 

 —

 

 

(100)

Stock-based compensation

 

 

 

 

 

 

 

19 

 

 

 —

 

 

 —

 

 

19 

 

 

 —

 

 

19 

Issuance of common stock
under employee stock purchase plan

 

 

 

 —

 

 

 

 

 —

 

 

 

 

 

 

 

 —

 

 

Balances as of June 30, 2019

 

5,061 

 

 

 —

 

 

1,271,990 

 

 

(1,439)

 

 

(1,269,687)

 

 

864 

 

 

1,823 

 

 

2,687 

Net income (loss)

 

 

 

 

 

 

 

 —

 

 

 —

 

 

1,663 

 

 

1,663 

 

 

(529)

 

 

1,134 

Other comprehensive income

 

 

 

 

 

 

 

 —

 

 

188 

 

 

 —

 

 

188 

 

 

 

 

 

188 

Stock-based compensation

 

 

 

 

 

 

 

19 

 

 

 —

 

 

 —

 

 

19 

 

 

 —

 

 

19 

Deconsolidation of Vmoso, Inc.

 

 

 

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,294)

 

 

(1,294)

Balances as of September 30, 2019

 

5,061 

 

$

 —

 

$

1,272,009 

 

$

(1,251)

 

$

(1,268,024)

 

$

2,734 

 

$

 —

 

$

2,734 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of December 31, 2017

 

4,995 

 

$

 —

 

$

1,271,585 

 

$

(1,558)

 

$

(1,262,718)

 

$

7,309 

 

$

 —

 

$

7,309 

Net loss

 

 

 

 

 

 

 

 —

 

 

 —

 

 

(1,492)

 

 

(1,492)

 

 

 —

 

 

(1,492)

Other comprehensive income

 

 

 

 

 

 

 

 —

 

 

(182)

 

 

 —

 

 

(182)

 

 

 —

 

 

(182)

Stock-based compensation

 

 

 

 

 

 

 

126 

 

 

 —

 

 

 —

 

 

126 

 

 

 —

 

 

126 

Issuance of common stock
under employee stock purchase plan

 

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 

 

 —

 

 

Cumulative effect of adoption

of ASC 606

 

 

 

 

 

 

 

 —

 

 

 —

 

 

605 

 

 

605 

 

 

 —

 

 

605 

Balances as of March 31, 2018

 

4,997 

 

 

 —

 

 

1,271,716 

 

 

(1,740)

 

 

(1,263,605)

 

 

6,371 

 

 

 —

 

 

6,371 

Net loss

 

 

 

 

 

 

 

 —

 

 

 —

 

 

(2,160)

 

 

(2,160)

 

 

 —

 

 

(2,160)

Other comprehensive loss

 

 

 

 

 

 

 

 —

 

 

259 

 

 

 —

 

 

259 

 

 

 —

 

 

259 

Stock-based compensation

 

 

 

 

 

 

 

107 

 

 

 —

 

 

 —

 

 

107 

 

 

 —

 

 

107 

Issuance of common stock
under employee stock purchase plan

 

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 

 

 —

 

 

Balances as of June 30, 2018

 

4,998 

 

 

 —

 

 

1,271,825 

 

 

(1,481)

 

 

(1,265,765)

 

 

4,579 

 

 

 —

 

 

4,579 

Net loss

 

 

 

 

 

 

 

 —

 

 

 —

 

 

(1,714)

 

 

(1,714)

 

 

 —

 

 

(1,714)

Other comprehensive loss

 

 

 

 

 

 

 

 —

 

 

29 

 

 

 —

 

 

29 

 

 

 —

 

 

29 

Stock-based compensation

 

 

 

 

 

 

 

67 

 

 

 —

 

 

 —

 

 

67 

 

 

 —

 

 

67 

Balances as of September 30, 2018

 

4,998 

 

$

 —

 

$

1,271,892 

 

$

(1,452)

 

$

(1,267,479)

 

$

2,961 

 

$

 —

 

$

2,961 



See Accompanying Notes to Condensed Consolidated Financial Statements.

 

3


 

 

BROADVISION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, Unaudited)





 

 

 

 

 

 



 

 

 

 

 

 



 

Nine Months Ended



 

September 30,



 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

 

Net loss from continuing operations

 

$

(733)

 

$

(1,786)

Net income (loss) from discontinued operations

 

 

115 

 

 

(3,582)

Total net loss

 

 

(618)

 

 

(5,368)

Adjustments to reconcile net loss to net cash used for operating activities:

 

 

 

 

 

 

Gain on deconsolidation of Vmoso, Inc.

 

 

(2,349)

 

 

 —

Depreciation and amortization

 

 

 

 

17 

Stock-based compensation

 

 

56 

 

 

300 

Provision (benefit) of receivable reserves

 

 

(90)

 

 

(77)

Accumulated effect on accounting changes

 

 

 —

 

 

605 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

313 

 

 

950 

Accounts receivable related party

 

 

(979)

 

 

 —

Prepaids and other

 

 

148 

 

 

14 

Operating lease right-of-use assets

 

 

(60)

 

 

 —

Other non-current assets

 

 

 —

 

 

(9)

Accounts payable and accrued expenses

 

 

(98)

 

 

(659)

Operating lease liabilities - current

 

 

58 

 

 

 —

Unearned revenues and deferred maintenance

 

 

391 

 

 

(1,108)

Other noncurrent liabilities

 

 

1,229 

 

 

10 

Net cash used for operating activities

 

 

(1,993)

 

 

(5,325)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

 —

 

 

(1)

Deconsolidation of Vmoso, Inc. cash

 

 

(1,596)

 

 

 —

Maturities of short term investments

 

 

 —

 

 

1,000 

Net cash (used for) provided by investing activities

 

 

(1,596)

 

 

999 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock, net

 

 

3,000 

 

 

Net cash provided by financing activities

 

 

3,000 

 

 

Effect of exchange rates on cash and cash equivalents

 

 

184 

 

 

106 

Net decrease in cash and cash equivalents

 

 

(405)

 

 

(4,211)

Cash and cash equivalents at beginning of period

 

 

2,574 

 

 

8,560 

Cash and cash equivalents at end of period

 

$

2,169 

 

$

4,349 



See Accompanying Notes to Condensed Consolidated Financial Statements.

 

4


 

 



BROADVISION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1. Organization and Summary of Significant Accounting Policies



BroadVision, Inc. was incorporated in the state of Delaware on May 13, 1993, and has been a publicly traded corporation since 1996. We develop, market, and support enterprise portal applications that enable companies to unify their e-business infrastructure and conduct both interactions and transactions with employees, partners, and customers through a personalized self-service model that increases revenues, reduces costs, and improves productivity.



Except where specifically noted or the context otherwise requires, the use of terms such as the “Company”, “BroadVision,” “we” and “our” in these Notes to Condensed Consolidated Financial Statements refers to BroadVision, Inc. and its subsidiaries.



Basis of Presentation and Principles of Consolidation



The condensed consolidated financial results and related information as of and for the three and nine months ended September 30, 2019 and 2018 are unaudited. The Condensed Consolidated Balance Sheet at December 31, 2018 has been derived from the audited consolidated financial statements as of that date but does not necessarily reflect all of the disclosures previously reported in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The unaudited Condensed Consolidated Financial Statements should be reviewed in conjunction with the audited consolidated financial statements and related notes contained in our 2018 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on April 1, 2019, as amended.



The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions in Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of interim financial information have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2019 or any future interim period. The condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation.



On January 2, 2019, we entered into a Series A Preferred Stock Purchase Agreement with Vmoso, Inc., a Delaware corporation (“VMSO”), for the purchase of 745,000 shares of VMSO’s Series A Preferred Stock for a purchase price comprising the contribution of our intellectual property and other net assets. This transaction was considered a common control transaction, and the assets and liabilities were transferred to VMSO at carrying value and resulted in no gain or loss. The contributed assets represent substantially all of the intellectual property and other assets relating to our Clearvale and Vmoso platforms, including our Clearvale and Vmoso products and customer relationships and our My Vmoso Network (“MVN”) development project. VMSO will continue the commercialization of the Clearvale and Vmoso products and the development of MVN.



Following the completion of VMSO’s sale of Class 1 Common Stock described below, the shares of Series A Preferred Stock owned by the Company represent approximately 19.9% of the total number of shares of VMSO’s capital stock outstanding. The rights, preferences and privileges of VMSO’s Series A Preferred Stock include a liquidation preference of $1.00 per share in addition to participating rights proportionate to the number of shares held. The fair value of the VMSO Series A Preferred Stock held by the Company upon completion of VMSO’s sale of Class 1 Common Stock described below was 33.3% of VMSO.



On January 2, 2019, Dr. Pehong Chen, our and VMSO’s President and Chief Executive Officer and our largest stockholder, purchased 3,000,000 shares of VMSO’s Class 1 Common Stock, representing approximately 80.1% of the total number of shares of VMSO’s capital stock outstanding after such purchase, for a purchase price of $3,000,000 in cash pursuant to a Class 1 Common Stock Purchase Agreement between Dr. Chen and VMSO. The fair value of Dr. Chen’s non-controlling interest in VMSO upon completion of VMSO’s sale of Class 1 Common Stock was 66.7% of VMSO.



On January 2, 2019, we entered into a Services and Facilities Agreement (“SFA”), with VMSO, the terms of which provide for the payment of certain fees to us by VMSO, in exchange for the contribution of our expertise, resources, services, as well as the limited use of our facilities in VMSO’s business and operations.  The SFA was initially effective as of January 1, 2019 and was amended and restated on September 30, 2019 (“the A&R SFA”). The A&R SFA substantially reduced the nature and number of services that we provide to VMSO,  and instead, committed us to provide VMSO with only certain back-office services relating primarily to finance, human resources, information technology and infrastructure support, as well as a limited right to use and occupy our facilities in Redwood City, California, in exchange for

 

5


 

 

fees generally intended to permit us to recover the cost to us of providing VMSO with such services, facilities and equipment, with a nominal profit margin. The A&R SFA provides both parties with the flexibility to expand the scope of the agreement to cover any additional services by mutual agreement, as well as any services that are ancillary, incidental to, or necessary for the performance of the services contemplated by the A&R SFA. Since the execution of the initial SFA, we have acted as a reseller of VMSO’s Clearvale and Vmoso products, and we expect to continue to do so, with the A&R SFA contemplating our potential future execution of a formal Reseller Margin Arrangement with VMSO. The A&R SFA does not contemplate or result in a change in our ownership share of VMSO. The term of the A&R SFA shall continue until June 30, 2020, unless earlier terminated by either party, at any time, upon 30 days’ written notice and shall be renewable upon written consent from both parties.



The Company consolidates variable interest entities (“VIEs”) in which it holds a variable interest and for which the Company is determined to be the primary beneficiary.



Concurrent with the execution of the A&R SFA on September 30, 2019, the Company also terminated employees whose sole function was to support VMSO and its products and product development efforts: Vmoso, Clearvale, and MVN. As a result of the A&R SFA, the Company no longer controlled the management of VMSO, prompting and permitting the Company to deconsolidate VMSO as a variable interest entity effective as of September 30, 2019. Refer to Note 8. Discontinued Operations, for additional details on the deconsolidation of VMSO. As part of the deconsolidation of VMSO on September 30, 2019, the Company recorded its investment in VMSO at fair value of $1.5 million as of September 30, 2019 on the Condensed Consolidated Balance Sheet under the “Investment in Vmoso, Inc.” caption, removed the assets and liabilities of VMSO from the Condensed Consolidated Balance Sheet at net carrying value of $0.4 million, removed the noncontrolling interest in VMSO of $1.3 million from the Condensed Consolidated Balance Sheet and recorded a $2.3 million gain on deconsolidation of VMSO. The Condensed Consolidated Statements of Comprehensive Income (Loss), Stockholders’ Equity, and Cash Flows include the operating results, changes in stockholders’ equity, and cash flows of VMSO through September 29, 2019 prior to deconsolidation on September 30, 2019.



On October 29, 2019, we entered into an amendment to the A&R SFA with VMSO (the “SFA Amendment”), which further clarified the permitted limited use of our facilities, added certain billable financial services that we would provide to VMSO through at least the end of 2019, and provided us with the ability to incur, pay, and be reimbursed for certain expenses on VMSO’s behalf during the term of the A&R SFA.



The assets and liabilities, operating results, and cash flows related to Vmoso and Clearvale products and MVN product development are presented as discontinued operations, separate from our continuing operations, for all periods presented in these interim Condensed Consolidated Financial Statements and footnotes, unless otherwise indicated. Refer to Note 8. Discontinued Operations, for details on the income and major components of assets and liabilities of our discontinued operations.



Use of Estimates



The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make certain assumptions and estimates that affect reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to receivable reserves, stock-based compensation, investments, impairment assessments and income taxes, valuation of equity instruments, as well as contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates using different assumptions or conditions.



Liquidity



The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern. During the nine months ended September 30, 2019, the Company had a net loss of $0.7 million from continuing operations and net cash used for operations of $2.0 million, and at September 30, 2019, the Company had working capital of $1.9 million. The Company has implemented cost reduction plans commencing the second half of 2017 to reduce the Company’s cash needs and reduced the cost of its operations by approximately $5 million in 2018, and by an additional approximately $3.3 million in the nine months ended September 30, 2019.  The Company believes its cash and cash equivalents as of September 30, 2019, will be sufficient to fund operations for at least twelve months from the date of issuance of these Condensed Consolidated Financial Statements.



However, further cost reduction may result in voluntary departures of highly skilled technical and managerial personnel, which would have a material adverse effect on our business, internal controls, financial condition and results of operations. We expect to opportunistically seek to raise additional funds through private or public sales of securities, strategic relationships, bank debt, financing under leasing arrangements or otherwise. If additional funds are raised through the issuance of equity securities, the percentage ownership of our current stockholders will be reduced, stockholders may experience additional dilution or any equity securities we sell may have rights, preferences or

 

6


 

 

privileges senior to those of the holders of our common stock. We expect that obtaining additional financing on acceptable terms would be difficult, at best. If adequate funds are not available or are not available on acceptable terms, we may be unable to pay our debts as they become due, develop our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which could have a material adverse effect on our business, financial condition and future operating results. The outcome of these matters cannot be predicted at this time. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish these plans and secure sources of financing and/or reduce costs and ultimately attain profitable operations.



Stock-Based Compensation



The following table sets forth the components of the total stock-based compensation expense recognized in our Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 and 2018 (in thousands):







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,

Total

 

2019

 

2018

 

2019

 

2018

Cost of services

 

$

 —

 

$

13 

 

$

 —

 

$

38 

Research and development

 

 

 —

 

 

 

 

 —

 

 

26 

Sales and marketing

 

 

 

 

10 

 

 

10 

 

 

37 

General and administrative

 

 

17 

 

 

 

 

46 

 

 

73 

Total stock-based compensation attributed to continuing operations

 

 

19 

 

 

34 

 

 

56 

 

 

174 

Total stock-based compensation attributed to discontinued operations

 

 

 —

 

 

33 

 

 

 —

 

 

126 

Total stock-based compensation

 

$

19 

 

$

67 

 

$

56 

 

$

300 



Leases



The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the condensed consolidated balance sheets. As of September 30, 2019 and December 31, 2018, the Company did not have finance leases.

 

ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain to be exercised. Operating leases are recognized on a straight-line basis over the lease term.



Net Income (Loss) Per Share

 

Basic net income (loss) per share is computed using the weighted-average number of shares of common stock outstanding, excluding the effects of any potentially dilutive securities. Diluted net income (loss) per share is computed using the weighted-average number of shares of common stock outstanding and, when dilutive, common equivalent shares from outstanding stock options and awards using the treasury stock method.

 

7


 

 



The following table sets forth the basic and diluted net income (loss) per share computational data for the periods presented (in thousands, except per share amounts):  







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Net loss attributable to continuing operations

 

 

(550)

 

 

(451)

 

 

(733)

 

 

(1,786)

Net income (loss) attributable to discontinued operations

 

 

1,684 

 

 

(1,265)

 

 

115 

 

 

(3,582)

Net income (loss)

 

$

1,134 

 

$

(1,716)

 

$

(618)

 

$

(5,368)

Net loss per share attributed to continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11)

 

$

(0.09)

 

$

(0.15)

 

$

(0.36)

Diluted

 

$

(0.11)

 

$

(0.09)

 

$

(0.15)

 

$

(0.36)

Net income (loss) per share attributed to discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33 

 

$

(0.25)

 

$

0.02 

 

$

(0.72)

Diluted

 

$

0.33 

 

$

(0.25)

 

$

0.02 

 

$

(0.72)

Shares used in computing:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

5,034