þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Delaware
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94-3184303
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
Number)
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1600
Seaport Blvd., Suite 550, North
Bldg,
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94063
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Redwood
City, California
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(Address
of principal executive offices)
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(Zip
code)
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1
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2 | |
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3
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4
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14
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19
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19
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21
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21
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30
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30
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30
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30
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31
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SIGNATURES | 32 |
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(unaudited)
|
*
|
|||||||
ASSETS
|
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
50,735
|
$ |
37,003
|
||||
Accounts
receivable, net of allowance for doubtful accounts of $570 as of
September 30, 2007 and $1,141 as of December 31,
2006
|
7,576
|
10,106
|
||||||
Prepaids
and other
|
1,393
|
1,108
|
||||||
Restricted
cash
|
796
|
997
|
||||||
Total
current assets
|
60,500
|
49,214
|
||||||
Property
and equipment, net
|
794
|
1,144
|
||||||
Restricted
cash, net of current portion
|
1,000
|
1,000
|
||||||
Goodwill
|
25,066
|
25,066
|
||||||
Other
assets
|
531
|
518
|
||||||
Total
assets
|
$ |
87,891
|
$ |
76,942
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
1,316
|
$ |
1,249
|
||||
Accrued
expenses
|
7,596
|
10,538
|
||||||
Warrant
liability
|
5,967
|
1,610
|
||||||
Unearned
revenue
|
3,042
|
6,278
|
||||||
Deferred
maintenance
|
9,130
|
10,584
|
||||||
Total
current liabilities
|
27,051
|
30,259
|
||||||
Other
non-current liabilities
|
2,817
|
3,429
|
||||||
Total
liabilities
|
29,868
|
33,688
|
||||||
Commitments
and contingencies (Note 4)
|
- | - | ||||||
Stockholders'
equity:
|
||||||||
Convertible
preferred stock, $0.0001 par value; 1,000 shares authorized
as of
September 30, 2007 and 10,000 shares authorized as of December
31, 2006;
none issued and outstanding
|
-
|
-
|
||||||
Common
stock, $0.0001 par value; 280,000 shares authorized and 108,360
shares
issued and outstanding as of September 30, 2007; 2,000,000
shares
authorized and 106,523 shares issued and outstanding as of
December 31,
2006
|
10
|
10
|
||||||
Additional
paid-in capital
|
1,256,188
|
1,253,135
|
||||||
Accumulated
other comprehensive income
|
89
|
168
|
||||||
Accumulated
deficit
|
(1,198,264 | ) | (1,210,059 | ) | ||||
Total
stockholders' equity
|
58,023
|
43,254
|
||||||
Total
liabilities and stockholders' equity
|
$ |
87,891
|
$ |
76,942
|
||||
*
Derived from audited consolidated financial statements filed
in the
Company's 2006 Annual Report on Form 10-K.
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Software
licenses
|
$ |
5,280
|
$ |
4,750
|
$ |
16,508
|
$ |
11,259
|
||||||||
Services
|
7,476
|
8,835
|
22,261
|
27,679
|
||||||||||||
Total
revenues
|
12,756
|
13,585
|
38,769
|
38,938
|
||||||||||||
Cost
of revenues:
|
||||||||||||||||
Cost
of software licenses
|
3
|
22
|
37
|
226
|
||||||||||||
Cost
of services
|
2,102
|
2,729
|
6,710
|
10,283
|
||||||||||||
Total
cost of revenues
|
2,105
|
2,751
|
6,747
|
10,509
|
||||||||||||
Gross
profit
|
10,651
|
10,834
|
32,022
|
28,429
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
2,283
|
2,766
|
7,422
|
7,802
|
||||||||||||
Sales
and marketing
|
1,898
|
1,761
|
5,748
|
6,124
|
||||||||||||
General
and administrative
|
1,705
|
2,429
|
4,250
|
7,406
|
||||||||||||
Restructuring
charge (credit)
|
260
|
(1,878 | ) |
845
|
(1,403 | ) | ||||||||||
Total
operating expenses
|
6,146
|
5,078
|
18,265
|
19,929
|
||||||||||||
Operating
income
|
4,505
|
5,756
|
13,757
|
8,500
|
||||||||||||
Interest
income, net
|
456
|
225
|
1,366
|
457
|
||||||||||||
Loss
on revaluation of warrants
|
(680 | ) | (317 | ) | (4,918 | ) | (703 | ) | ||||||||
Other
income (expense), net
|
762
|
(71 | ) |
1,068
|
191
|
|||||||||||
Income
before benefit (provision) for income taxes
|
5,043
|
5,593
|
11,273
|
8,445
|
||||||||||||
Benefit
(provision) for income taxes
|
419
|
(228 | ) |
133
|
(449 | ) | ||||||||||
Net
income
|
$ |
5,462
|
$ |
5,365
|
$ |
11,406
|
$ |
7,996
|
||||||||
Basic
net income per share
|
$ |
0.05
|
$ |
0.08
|
$ |
0.11
|
$ |
0.13
|
||||||||
Diluted
net income per share
|
$ |
0.05
|
$ |
0.08
|
$ |
0.10
|
$ |
0.13
|
||||||||
Shares
used in computing:
|
||||||||||||||||
Weighted
average shares-basic
|
108,253
|
69,489
|
107,454
|
60,630
|
||||||||||||
Weighted
average shares-diluted
|
111,577
|
69,489
|
110,426
|
60,630
|
||||||||||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
$ |
5,462
|
$ |
5,365
|
$ |
11,406
|
$ |
7,996
|
||||||||
Other
comprehensive (loss) gain, net of tax:
|
||||||||||||||||
Foreign
currency translation adjustment
|
(159 | ) |
120
|
(79 | ) |
76
|
||||||||||
Total
comprehensive income
|
$ |
5,303
|
$ |
5,485
|
$ |
11,327
|
$ |
8,072
|
Nine
Months Ended September 30,
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ |
11,406
|
$ |
7,996
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
831
|
1,059
|
||||||
Allowance
for doubtful accounts and reserves
|
(571 | ) |
459
|
|||||
Restructuring
charge (credit)
|
844
|
(1,403 | ) | |||||
Stock-based
compensation
|
909
|
569
|
||||||
Gain
on cost method investments
|
- | (386 | ) | |||||
Loss
on revaluation of warrants
|
4,918
|
703
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
3,101
|
5,299
|
||||||
Prepaids
and other
|
(285 | ) | (100 | ) | ||||
Other
non-current assets
|
(21 | ) |
99
|
|||||
Accounts
payable and accrued expenses
|
(2,144 | ) | (1,986 | ) | ||||
Restructuring
accrual
|
(1,446 | ) | (1,160 | ) | ||||
Unearned
revenue and deferred maintenance
|
(4,690 | ) |
1,294
|
|||||
Other
non-current liabilities
|
(353 | ) | (404 | ) | ||||
Net
cash provided by operating activities
|
12,499
|
12,039
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property and equipment
|
(471 | ) | (115 | ) | ||||
Transfer
from restricted cash
|
201
|
-
|
||||||
Proceeds
from sale of cost method investments
|
- | 386 | ||||||
Net
cash (used for) provided by investing activities
|
(270 | ) | 271 | |||||
Cash
flows from financing activities:
|
||||||||
Repayments
of bank line of credit and term debt
|
-
|
(389 | ) | |||||
Proceeds
from issuance of common stock from warrants exercise
|
505 |
-
|
||||||
Proceeds
from issuance of common stock, net
|
1,077
|
58
|
||||||
Net
cash provided by (used for) financing activities
|
1,582
|
(331 | ) | |||||
Effect
of exchange rates on cash and cash equivalents
|
(79 | ) |
76
|
|||||
Net
increase in cash and cash equivalents
|
13,732
|
12,055
|
||||||
Cash
and cash equivalents at beginning of period
|
37,003
|
4,849
|
||||||
Cash
and cash equivalents at end of period
|
$ |
50,735
|
$ |
16,904
|
||||
Supplemental
information of noncash financing and investing
activities:
|
||||||||
Exchange
of convertible debt to common stock
|
$ |
-
|
$ |
20,535
|
||||
Retirement
of fully depreciated property and equipment
|
$ |
5,869
|
$ |
-
|
||||
Reclassification
of tax liability to accumulated deficit
|
$ |
388
|
$ |
-
|
||||
Conversion
of accrued interest to equity
|
$ |
-
|
$ |
167
|
||||
Reclassification
of warrant liability to additional paid-in capital upon exercise
of
warrants
|
$ | 561 | $ | - |
|
|
Nine
Months Ended
|
|
|||||
|
|
September 30,
|
|
|||||
|
|
2007
|
|
|
2006
|
|
||
Expected
term
|
|
|
6 years
|
|
|
|
6 years
|
|
Expected
volatility
|
|
|
99
|
%
|
|
|
83
|
%
|
Risk
free interest rate
|
|
|
4.587
|
%
|
|
|
4.823
|
%
|
Expected
dividend
|
- | - | ||||||
Forfeiture
rate
|
9.00 | % | 11.00 | % |
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Cost
of services
|
$ |
63,228
|
$ |
31,727
|
$ |
172,992
|
$ |
80,392
|
||||||||
Research
and development
|
120,816
|
123,640
|
353,044
|
252,608
|
||||||||||||
Sales
and marketing
|
66,946
|
56,820
|
204,148
|
129,075
|
||||||||||||
General
and administrative
|
64,703
|
48,362
|
178,711
|
106,561
|
||||||||||||
|
$ |
315,693
|
$ |
260,549
|
$ |
908,895
|
$ |
568,636
|
|
|
Nine
Months Ended
|
|
|||||||||||||
|
|
September
30, 2007
|
|
|||||||||||||
|
|
|
|
|
|
|
|
Weighted
-
|
|
|
|
|
||||
|
|
|
|
|
Weighted
-
|
|
|
Average
|
|
|
Aggregate
|
|
||||
|
|
Options
|
|
|
Average
|
|
|
Remaining
|
|
|
Intrinsic
|
|
||||
|
|
Shares
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Value
|
|
||||
|
|
('000)
|
|
|
Price
|
|
|
Term
|
|
|
('000)
|
|
||||
Outstanding
at December 31, 2006
|
|
|
6,239
|
|
|
$
|
13.48
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
449
|
|
|
$
|
1.63
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(498
|
)
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(19
|
)
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
(64
|
)
|
|
$
|
12.98
|
|
|
|
|
|
|
|
|
|
Outstanding
at September 30, 2007
|
|
|
6,107
|
|
|
$
|
13.70
|
|
|
|
6.69
|
|
|
$
|
5,192
|
|
Vested
and expected to vest at September 30, 2007
|
|
|
6,028
|
|
|
$
|
13.86
|
|
|
|
6.65
|
|
|
$
|
5,118
|
|
Exercisable
at September 30, 2007
|
|
|
4,711
|
|
|
$
|
17.49
|
|
|
|
6.03
|
|
|
$
|
3,387
|
|
|
|
Nine
Months Ended
|
|
|||||||||||||
|
|
September
30, 2007
|
|
|||||||||||||
|
|
|
|
|
|
|
|
Weighted
-
|
|
|
|
|
||||
|
|
|
|
|
Weighted
-
|
|
|
Average
|
|
|
Aggregate
|
|
||||
|
|
Options
|
|
|
Average
|
|
|
Remaining
|
|
|
Intrinsic
|
|
||||
|
|
Shares
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Value
|
|
||||
|
|
('000)
|
|
|
Price
|
|
|
Term
|
|
|
('000)
|
|
||||
Outstanding
at December 31, 2006
|
|
|
763
|
|
|
$
|
9.70
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(114
|
)
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(16
|
)
|
|
$
|
5.72
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Outstanding
at September 30, 2007
|
|
|
633
|
|
|
$
|
11.34
|
|
|
|
6.61
|
|
|
$
|
673
|
|
Vested
and expected to vest at September 30, 2007
|
|
|
629
|
|
|
$
|
11.38
|
|
|
|
6.60
|
|
|
$
|
668
|
|
Exercisable
at September 30, 2007
|
|
|
534
|
|
|
$
|
13.32
|
|
|
|
6.26
|
|
|
$
|
507
|
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
income
|
$ |
5,462
|
$ |
5,365
|
$ |
11,406
|
$ |
7,996
|
||||||||
Weighted-average
common shares outstanding used to compute basic net income
per
share
|
108,253
|
69,489
|
107,454
|
60,630
|
||||||||||||
Weighted-average
common equivalent shares from outstanding common stock options
and
warrants
|
3,324
|
-
|
2,972
|
-
|
||||||||||||
Total
weighted-average common and common equivalent shares outstanding
used to
compute diluted net income per share
|
111,577
|
69,489
|
110,426
|
60,630
|
||||||||||||
Basic
net income per share
|
$ |
0.05
|
$ |
0.08
|
$ |
0.11
|
$ |
0.13
|
||||||||
Diluted
net income per share
|
$ |
0.05
|
$ |
0.08
|
$ |
0.10
|
$ |
0.13
|
September
30, 2007
|
December
31, 2006
|
|||||||
Fair
value
|
Fair
value
|
|||||||
(unaudited)
|
||||||||
Cash
and certificates of deposits
|
$ |
15,202
|
$ |
15,830
|
||||
Money
market
|
35,533
|
21,173
|
||||||
Total
cash and cash equivalents
|
$ |
50,735
|
$ |
37,003
|
Accumulated
Other
|
||||
Comprehensive
Income
|
||||
Balance,
December 31, 2006
|
$ |
168
|
||
Net
change during period
|
(79 | ) | ||
Balance,
September 30, 2007 (unaudited)
|
$ |
89
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(unaudited)
|
||||||||
Furniture
and fixtures
|
$ |
766
|
$ |
795
|
||||
Computers
and software
|
7,465
|
14,547
|
||||||
Leasehold
improvements
|
5,329
|
5,007
|
||||||
13,560
|
20,349
|
|||||||
Less
accumulated depreciation and amortization
|
(12,766 | ) | (19,205 | ) | ||||
$ |
794
|
$ |
1,144
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(unaudited)
|
||||||||
Employee
benefits
|
$ |
1,072
|
$ |
961
|
||||
Commissions
and bonuses
|
932
|
885
|
||||||
Sales
and other taxes
|
1,212
|
2,000
|
||||||
Income
tax and tax contingency reserves
|
424
|
1,378
|
||||||
Restructuring
charges (See Note 6)
|
929
|
1,272
|
||||||
Customer
advances
|
288
|
654
|
||||||
Royalties
|
1,747
|
1,745
|
||||||
Other
|
992
|
1,643
|
||||||
Total
accrued expenses
|
$ |
7,596
|
$ |
10,538
|
Underlying
|
Exercise
|
|||||||
Shares
|
Price
per Share
|
|||||||
Issued
to landlord in real estate buyout transaction in
August 2004
|
700,000
|
$ |
5.00
|
|||||
Issued
to convertible notes investors in November 2004
|
3,865,811
|
1.48
|
||||||
Other
issued in connection with revenue transactions in 2000
|
620
|
435.98
|
||||||
Total
warrants
|
4,566,431
|
September
30, 2007
|
December
31, 2006
|
|||||||
(unaudited)
|
|
|||||||
Warrants
related to real estate buyout
|
$ |
400
|
$ |
79
|
||||
Warrants
related to convertible notes
|
5,567
|
1,531
|
||||||
|
$ |
5,967
|
$ |
1,610
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Warrants
related to convertible notes
|
$ | (731 | ) | $ | (271 | ) | $ | (4,597 | ) | $ | (670 | ) | ||||
Warrants
related to real estate buyout
|
51
|
(46 | ) | (321 | ) | (33 | ) | |||||||||
Loss
on revaluation of warrants
|
$ | (680 | ) | $ | (317 | ) | $ | (4,918 | ) | $ | (703 | ) |
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Restructuring
charges (Note 6)
|
$ |
1,031
|
$ |
1,290
|
||||
Deferred
maintenance and unearned revenue
|
1,102
|
1,739
|
||||||
Other
|
684
|
400
|
||||||
Total
other non-current liabilities
|
$ |
2,817
|
$ |
3,429
|
Operating
|
||||
Years
Ending December 31,
|
Leases
|
|||
2007
|
$
|
1.5
|
||
2008
|
2.0
|
|||
2009
|
1.8
|
|||
2010
|
1.1
|
|||
2011
and thereafter
|
1.3
|
|||
Total
minimum lease payments
|
$
|
7.7
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
Revenues:
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Software
licenses
|
$ |
5,280
|
$ |
4,750
|
$ |
16,508
|
$ |
11,259
|
||||||||
Consulting
services
|
1,640
|
2,702
|
4,827
|
9,697
|
||||||||||||
Maintenance
|
5,836
|
6,133
|
17,434
|
17,982
|
||||||||||||
Total
revenues
|
$ |
12,756
|
$ |
13,585
|
$ |
38,769
|
$ |
38,938
|
Three
months ended
|
Nine
months ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Americas
|
$ |
9,788
|
$ |
8,119
|
$ |
25,196
|
$ |
28,771
|
||||||||
Europe
|
1,631
|
3,029
|
8,449
|
5,650
|
||||||||||||
Asia/Pacific
|
1,337
|
2,437
|
5,124
|
4,517
|
||||||||||||
Total
revenues
|
$ |
12,756
|
$ |
13,585
|
$ |
38,769
|
$ |
38,938
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Long-Lived
Assets:
|
|
|
||||||
Americas
|
$ |
25,680
|
$ |
26,025
|
||||
Europe
|
74
|
104
|
||||||
Asia/Pacific
|
106
|
81
|
||||||
Total
long-lived assets
|
$ |
25,860
|
$ |
26,210
|
Current
|
Non-Current
|
Total
|
||||||||||
Severance
and termination
|
$ |
0.4
|
$ |
-
|
$ |
0.4
|
||||||
Excess
facilities
|
0.6
|
1.0
|
1.6
|
|||||||||
Total
|
$ |
1.0
|
$ |
1.0
|
$ |
2.0
|
Total
future
|
||||
minimum
|
||||
Years
ending December 31,
|
payments
|
|||
2007
|
$ |
0.2
|
||
2008
|
0.5
|
|||
2009
|
0.6
|
|||
2010
|
0.2
|
|||
2011
and thereafter
|
0.1
|
|||
Total
minimum facilities payments
|
$ |
1.6
|
Amounts
|
||||||||||||||||
Accrued
|
charged
to
|
|||||||||||||||
restructuring
|
restructuring
|
Amounts
|
Accrued
|
|||||||||||||
costs
|
costs
|
paid
or
|
restructuring
|
|||||||||||||
beginning
|
and
other
|
written
off
|
costs,
ending
|
|||||||||||||
Three
Months Ended September 30, 2007
|
|
|
|
|
||||||||||||
Lease
cancellations and commitments
|
$ |
59
|
$ |
19
|
$ | (5 | ) | $ |
73
|
|||||||
Termination
payments to employees and related costs
|
-
|
-
|
-
|
-
|
||||||||||||
$ |
59
|
$ |
19
|
$ | (5 | ) | $ |
73
|
||||||||
Three
Months Ended September 30, 2006
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
4,399
|
$ | (2,035 | ) | $ | (46 | ) | $ |
2,318
|
||||||
Termination
payments to employees and related costs
|
38
|
(6 | ) | - |
32
|
|||||||||||
$ |
4,437
|
$ | (2,041 | ) | $ | (46 | ) | $ |
2,350
|
|||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
77
|
$ |
132
|
$ | (136 | ) | $ |
73
|
|||||||
Termination
payments to employees and related costs
|
-
|
-
|
-
|
-
|
||||||||||||
$ |
77
|
$ |
132
|
$ | (136 | ) | $ |
73
|
||||||||
Nine
Months Ended September 30, 2006
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
4,188
|
$ | (1,927 | ) | $ |
57
|
$ |
2,318
|
|||||||
Termination
payments to employees and related costs
|
105
|
368
|
(441 | ) |
32
|
|||||||||||
$ |
4,293
|
$ | (1,559 | ) | $ | (384 | ) | $ |
2,350
|
Amounts
|
||||||||||||||||
Accrued
|
charged
to
|
|||||||||||||||
restructuring
|
restructuring
|
Amounts
|
Accrued
|
|||||||||||||
costs,
|
costs
|
paid
or
|
restructuring
|
|||||||||||||
beginning
|
and
other
|
written
off
|
costs,
ending
|
|||||||||||||
Three
Months Ended September 30, 2007
|
|
|
|
|
||||||||||||
Lease
cancellations and commitments
|
$ |
1,741
|
$ |
241
|
$ | (469 | ) | $ |
1,513
|
|||||||
Termination
payments to employees and related costs
|
356
|
-
|
18
|
374
|
||||||||||||
$ |
2,097
|
$ |
241
|
$ | (451 | ) | $ |
1,887
|
||||||||
Three
Months Ended September 30, 2006
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
1,992
|
$ |
163
|
$ | (150 | ) | $ |
2,005
|
|||||||
Termination
payments to employees and related costs
|
332
|
- |
4
|
336
|
||||||||||||
$ |
2,324
|
$ |
163
|
$ | (146 | ) | $ |
2,341
|
||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
2,138
|
$ |
712
|
$ | (1,337 | ) | $ |
1,513
|
|||||||
Termination
payments to employees and related costs
|
347
|
-
|
27
|
374
|
||||||||||||
$ |
2,485
|
$ |
712
|
$ | (1,310 | ) | $ |
1,887
|
||||||||
Nine
Months Ended September 30, 2006
|
||||||||||||||||
Lease
cancellations and commitments
|
$ |
2,651
|
$ |
156
|
$ | (802 | ) | $ |
2,005
|
|||||||
Termination
payments to employees and related costs
|
311
|
- |
25
|
336
|
||||||||||||
$ |
2,962
|
$ |
156
|
$ | (777 | ) | $ |
2,341
|
Software
|
||||||||||||||||||||||||
Licenses
|
%
|
Services
|
%
|
Total
|
%
|
|||||||||||||||||||
Three
Months Ended:
|
|
|
|
|
|
|
||||||||||||||||||
September
30, 2007
|
||||||||||||||||||||||||
Americas
|
$ |
4,386
|
83 | % | $ |
5,402
|
72 | % | $ |
9,788
|
77 | % | ||||||||||||
Europe
|
586
|
11
|
1,045
|
14
|
1,631
|
13
|
||||||||||||||||||
Asia
Pacific
|
308
|
6
|
1,029
|
14
|
1,337
|
10
|
||||||||||||||||||
Total
|
$ |
5,280
|
100 | % | $ |
7,476
|
100 | % | $ |
12,756
|
100 | % | ||||||||||||
September
30, 2006
|
||||||||||||||||||||||||
Americas
|
$ |
3,249
|
68 | % | $ |
4,870
|
55 | % | $ |
8,119
|
60 | % | ||||||||||||
Europe
|
462
|
10
|
2,567
|
29
|
3,029
|
22
|
||||||||||||||||||
Asia
Pacific
|
1,039
|
22
|
1,398
|
16
|
2,437
|
18
|
||||||||||||||||||
Total
|
$ |
4,750
|
100 | % | $ |
8,835
|
100 | % | $ |
13,585
|
100 | % | ||||||||||||
Nine
Months Ended:
|
||||||||||||||||||||||||
September
30, 2007
|
||||||||||||||||||||||||
Americas
|
$ |
10,798
|
65 | % | $ |
14,398
|
65 | % | $ |
25,196
|
65 | % | ||||||||||||
Europe
|
3,810
|
23
|
4,639
|
21
|
8,449
|
22
|
||||||||||||||||||
Asia
Pacific
|
1,900
|
12
|
3,224
|
14
|
5,124
|
13
|
||||||||||||||||||
Total
|
$ |
16,508
|
100 | % | $ |
22,261
|
100 | % | $ |
38,769
|
100 | % | ||||||||||||
September
30, 2006
|
||||||||||||||||||||||||
Americas
|
$ |
8,645
|
77 | % | $ |
20,126
|
73 | % | $ |
28,771
|
74 | % | ||||||||||||
Europe
|
1,175
|
10
|
4,475
|
16
|
5,650
|
14
|
||||||||||||||||||
Asia
Pacific
|
1,439
|
13
|
3,078
|
11
|
4,517
|
12
|
||||||||||||||||||
Total
|
$ |
11,259
|
100 | % | $ |
27,679
|
100 | % | $ |
38,938
|
100 | % |
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2007
|
% (1)
|
2006
|
% (1)
|
2007
|
% (1)
|
2006
|
% (1)
|
|||||||||||||||||||||||||
Cost
of software licenses
|
$ |
3
|
- | % | $ |
22
|
- | % | $ |
37
|
- | % | $ |
226
|
1 | % | ||||||||||||||||
Cost
of services
|
2,102
|
17
|
2,729
|
20
|
6,710
|
17
|
10,283
|
26
|
||||||||||||||||||||||||
Total
cost of revenues
|
$ |
2,105
|
17 | % | $ |
2,751
|
20 | % | $ |
6,747
|
17 | % | $ |
10,509
|
27 | % |
(1)
|
Expressed
as a percent of total revenues for the period
indicated.
|
Three
months ended
|
Nine
months ended
|
|||||||||||||||||||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||||||||||||||||||
2007
|
%(1)
|
2006
|
%(1)
|
2007
|
%(1)
|
2006
|
%(1)
|
|||||||||||||||||||||||||
Research
and development
|
$ |
2,283
|
18 | % | $ |
2,766
|
20 | % | $ |
7,422
|
19 | % | $ |
7,802
|
20 | % | ||||||||||||||||
Sales
and marketing
|
1,898
|
15
|
1,761
|
13
|
5,748
|
15
|
6,124
|
16
|
||||||||||||||||||||||||
General
and administrative
|
1,705
|
14
|
2,429
|
18
|
4,250
|
11
|
7,406
|
19
|
||||||||||||||||||||||||
Restructuring
charges
|
260
|
2
|
(1,878 | ) | (14 | ) |
845
|
3
|
(1,403 | ) | (4 | ) | ||||||||||||||||||||
Total
operating expenses
|
$ |
6,146
|
49 | % | $ |
5,078
|
37 | % | $ |
18,265
|
48 | % | $ |
19,929
|
51 | % | ||||||||||||||||
(1)
|
Expressed
as a percent of total revenues for the period
indicated.
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(unaudited)
|
||||||||
Cash
and cash equivalents
|
$ |
50,735
|
$ |
37,003
|
||||
Restricted
cash
|
$ |
796
|
$ |
997
|
||||
Restricted
cash, net of current portion
|
$ |
1,000
|
$ |
1,000
|
||||
Working
capital
|
$ |
33,449
|
$ |
18,955
|
||||
Working
capital ratio
|
2.24
|
1.63
|
|
•
|
introduction
of products and services and enhancements by us and our
competitors;
|
|
•
|
competitive
factors that affect our pricing;
|
|
•
|
market
acceptance of new products;
|
|
•
|
the
mix of products sold by us;
|
|
•
|
changes
in our pricing policies or our competitors;
|
|
•
|
changes
in our sales incentive plans;
|
|
•
|
the
budgeting cycles of our customers;
|
|
•
|
customer
order deferrals in anticipation of new products or enhancements
by our
competitors or us or because of macro-economic
conditions;
|
|
•
|
nonrenewal
of our maintenance agreements, which generally automatically
renew for
one-year terms unless earlier terminated by either party upon
90-days
notice;
|
|
•
|
product
life cycles;
|
|
•
|
changes
in strategy;
|
|
•
|
seasonal
trends;
|
|
•
|
the
mix of distribution channels through which our products are
sold;
|
|
•
|
the
mix of international and domestic sales;
|
|
•
|
the
rate at which new sales people become productive;
|
|
•
|
changes
in the level of operating expenses to support projected
growth;
|
|
•
|
increase
in the amount of third party products and services that we
use in our
products or resell with royalties attached;
|
|
•
|
fluctuations
in the recorded value of outstanding common stock warrants
that will be
based upon changes to the underlying market value of BroadVision
common
stock;
|
|
•
|
the
timing of receipt and fulfillment of significant orders;
and
|
|
•
|
costs
associated with litigation, regulatory compliance and other
corporate
events such as operational
reorganizations.
|
|
•
|
develop
leading technologies;
|
|
•
|
enhance
our existing products and services;
|
|
•
|
develop
new products and services that address the increasingly sophisticated
and
varied needs of our prospective customers; and
|
|
•
|
respond
to technological advances and emerging industry standards and
practices on
a timely and cost-effective basis.
|
|
•
|
Systems
integrators may not view their relationships with us as valuable
to their
own businesses. The related arrangements typically may be terminated
by
either party with limited notice and in some cases are not
covered by a
formal agreement.
|
|
•
|
Under
our business model, we often rely on our system integrators'
employees to
perform implementations. If we fail to work together effectively,
or if
these parties perform poorly, our reputation may be harmed
and deployment
of our products may be delayed or inadequate.
|
|
•
|
Systems
integrators may attempt to market their own products and services
rather
than ours.
|
|
•
|
Our
competitors may have stronger relationships with our systems
integrators
than us and, as a result, these integrators may recommend a
competitor's
products and services over ours.
|
|
•
|
If
we lose our relationships with our systems integrators, we
will not have
the personnel necessary to deploy our products effectively,
and we will
need to commit significant additional sales and marketing resources
in an
effort to reach the markets and customers served by these
parties.
|
|
•
|
difficulties
in staffing and managing foreign operations and safeguarding
foreign
assets;
|
|
•
|
unexpected
changes in regulatory requirements;
|
|
•
|
export
controls relating to encryption technology and other export
restrictions;
|
|
•
|
tariffs
and other trade barriers;
|
|
•
|
difficulties
in staffing and managing foreign operations;
|
|
•
|
political
and economic instability;
|
|
•
|
fluctuations
in currency exchange rates;
|
|
•
|
reduced
protection for intellectual property rights in some
countries;
|
|
•
|
cultural
barriers;
|
|
•
|
seasonal
reductions in business activity during the summer months in
Europe and
certain other parts of the world; and
|
|
•
|
potentially
adverse tax consequences.
|
|
•
|
the
composition of our board of directors and, through it, any
determination
with respect to our business direction and policies, including
the
appointment and removal of officers;
|
|
•
|
any
determinations with respect to mergers and other business
combinations;
|
|
•
|
our
acquisition or disposition of assets;
|
|
•
|
our
financing activities; and
|
|
•
|
the
payment of dividends on our capital
stock.
|
|
•
|
quarterly
variations in operating results;
|
|
•
|
announcements
of technological innovations;
|
|
•
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announcements
of new software or services by us or our competitors;
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•
|
changes
in financial estimates by securities analysts;
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|
•
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general
economic conditions; or
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•
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other
events or factors that are beyond our
control.
|
Exhibits
|
|
Description
|
3.1(1)
|
|
Amended
and Restated Certificate of Incorporation.
|
3.2(2)
|
|
Certificate
of Amendment of Certificate of Incorporation.
|
3.3(4)
|
|
Certificate
of Amendment of Certificate of Incorporation.
|
3.4(3)
|
|
Amended
and Restated Bylaws.
|
4.1(1)
|
|
References
are hereby made to Exhibits 3.1 to 3.3.
|
10.1(5) | Employee Stock Purchase Plan Offering (Subsequent Offering) | |
(a) | ||
31.1
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|
Certification
of the Chief Executive Officer and Chief Financial Officer
of
BroadVision.
|
32.1
|
|
Certification
of the Chief Executive Officer and Chief Financial Officer
of BroadVision
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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|
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(1)
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|
Incorporated
by reference to the Company's Registration Statement on Form
S-1 filed on
April 19, 1996 as amended by Amendment No. 1 filed on May 9,
1996, Amendment No. 2 filed on May 29, 1996 and Amendment
No. 3 filed on June 17, 1996.
|
(2)
|
|
Incorporated
by reference to the Company's Proxy Statement filed on May 14,
2002.
|
(3)
|
|
Incorporated
by reference to the Company's Current Report on Form 8-K filed
on December
22, 2005.
|
(4)
|
|
Incorporated
by reference to the Company's Form 10-K for the fiscal year
ended December
31, 2006 filed on March 26, 2007.
|
(5) | Incorporated by reference to the Company's Registration Statement on Form S-8 filed on August 29, 2007. | |
(a) | Represents a management contract or Compensatory plan or arrangement. |
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|
BROADVISION,
INC.
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|
|
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|
||||||
Date:
November 05, 2007
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|
By:
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/s/
Pehong Chen
|
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Pehong
Chen
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Chairman
of the Board, President, Chief Executive Officer and Interim Chief
Financial Officer
|
Exhibits
|
|
Description
|
3.1(1)
|
|
Amended
and Restated Certificate of Incorporation.
|
3.2(2)
|
|
Certificate
of Amendment of Certificate of Incorporation.
|
3.3(4)
|
Certificate
of Amendment of Certificate of Incorporation.
|
|
3.4(3)
|
|
Amended
and Restated Bylaws.
|
4.1(1)
|
|
References
are hereby made to Exhibits 3.1 to 3.3.
|
10.1(5) | Employee Stock Purchase Plan Offering (Subsequent Offering) | |
(a) | ||
31.1
|
|
Certification
of the Chief Executive Officer and Chief Financial Officer of
BroadVision.
|
32.1
|
|
Certification
of the Chief Executive Officer and Chief Financial Officer of
BroadVision
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
|
|
(1)
|
|
Incorporated
by reference to the Company's Registration Statement on Form
S-1 filed on
April 19, 1996 as amended by Amendment No. 1 filed on May 9,
1996, Amendment No. 2 filed on May 29, 1996 and Amendment
No. 3 filed on June 17, 1996.
|
(2)
|
|
Incorporated
by reference to the Company's Proxy Statement filed on May 14,
2002.
|
(3)
|
|
Incorporated
by reference to the Company's Current Report on Form 8-K filed
on December
22, 2005.
|
(4)
|
Incorporated
by reference to the Company's Form 10-K for the fiscal year ended
December
31, 2006 filed on March 26, 2007.
|
|
(5) | Incorporated by reference to the Company's Registration Statement on Form S-8 filed on August 29, 2007. | |
(a) | Represents a management contract or Compensatory plan or arrangement. |