(Mark One)
|
||
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended September 30, 2011
|
||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
||
Commission File Number 1-34205
|
Delaware
|
94-3184303
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
1600 Seaport Blvd, Suite 550, North Bldg.
|
||
Redwood City, California
|
94063
|
|
(Address of principal executive offices)
|
(Zip code)
|
|
(650) 331-1000
(Registrant's telephone number, including area code)
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Unaudited)
|
*
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
37,809
|
$
|
32,966
|
||||
Short-term investments
|
18,978
|
27,857
|
||||||
Accounts receivable, net of reserves of $72 as of September 30, 2011 and $78 as of December 31, 2010
|
2,107
|
4,277
|
||||||
Restricted cash
|
1,013
|
-
|
||||||
Prepaids and other
|
1,200
|
1,469
|
||||||
Total current assets
|
61,107
|
66,569
|
||||||
Property and equipment, net
|
172
|
264
|
||||||
Restricted cash, net of current portion
|
-
|
1,000
|
||||||
Other assets
|
141
|
319
|
||||||
Total assets
|
$
|
61,420
|
$
|
68,152
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
642
|
$
|
654
|
||||
Accrued expenses
|
2,814
|
3,194
|
||||||
Unearned revenue
|
2,043
|
2,333
|
||||||
Deferred maintenance
|
3,391
|
5,488
|
||||||
Total current liabilities
|
8,890
|
11,669
|
||||||
Other non-current liabilities
|
1,141
|
2,126
|
||||||
Total liabilities
|
10,031
|
13,795
|
||||||
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; 4,516 and 4,482 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively
|
-
|
-
|
||||||
Additional paid-in capital
|
1,262,521
|
1,261,800
|
||||||
Accumulated other comprehensive loss
|
(1,003
|
)
|
(890
|
)
|
||||
Accumulated deficit
|
(1,210,129
|
)
|
(1,206,553
|
)
|
||||
Total stockholders’ equity
|
51,389
|
54,357
|
||||||
Total liabilities and stockholders’ equity
|
$
|
61,420
|
$
|
68,152
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues:
|
||||||||||||||||
Software licenses
|
$
|
1,338
|
$
|
1,380
|
$
|
3,888
|
$
|
4,943
|
||||||||
Services
|
2,909
|
3,805
|
9,471
|
11,787
|
||||||||||||
Total revenues
|
4,247
|
5,185
|
13,359
|
16,730
|
||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of software licenses
|
1
|
4
|
10
|
16
|
||||||||||||
Cost of services
|
1,472
|
1,569
|
4,724
|
4,787
|
||||||||||||
Total cost of revenues
|
1,473
|
1,573
|
4,734
|
4,803
|
||||||||||||
Gross profit
|
2,774
|
3,612
|
8,625
|
11,927
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
1,523
|
1,738
|
5,046
|
5,779
|
||||||||||||
Sales and marketing
|
1,332
|
1,887
|
4,437
|
5,393
|
||||||||||||
General and administrative
|
965
|
1,160
|
3,062
|
3,692
|
||||||||||||
Restructuring charge
|
49
|
98
|
488
|
744
|
||||||||||||
Total operating expenses
|
3,869
|
4,883
|
13,033
|
15,608
|
||||||||||||
Operating loss
|
(1,095
|
)
|
(1,271
|
)
|
(4,408
|
)
|
(3,681
|
)
|
||||||||
Interest income, net
|
97
|
90
|
312
|
319
|
||||||||||||
Other (loss) income, net
|
(623
|
)
|
2,907
|
615
|
547
|
|||||||||||
(Loss) Income before provision for income taxes
|
(1,621
|
)
|
1,726
|
(3,481
|
)
|
(2,815
|
)
|
|||||||||
Provision for income taxes
|
(20
|
)
|
(244
|
)
|
(95
|
)
|
(349
|
)
|
||||||||
Net (loss) income
|
$
|
(1,641
|
)
|
$
|
1,482
|
$
|
(3,576
|
)
|
$
|
(3,164
|
)
|
|||||
Basic (loss) income per share
|
$
|
(0.36
|
)
|
$
|
0.33
|
$
|
(0.80
|
)
|
$
|
(0.71
|
)
|
|||||
Diluted (loss) income per share
|
$
|
(0.36
|
)
|
$
|
0.33
|
$
|
(0.80
|
)
|
$
|
(0.71
|
)
|
|||||
Shares used in computing:
|
||||||||||||||||
Weighted average shares-basic
|
4,505
|
4,463
|
4,494
|
4,454
|
||||||||||||
Weighted average shares-diluted
|
4,505
|
4,464
|
4,494
|
4,454
|
||||||||||||
Comprehensive (loss) income
|
||||||||||||||||
Net (loss) income
|
$
|
(1,641
|
)
|
$
|
1,482
|
$
|
(3,576
|
)
|
$
|
(3,164
|
)
|
|||||
Other comprehensive (loss) gain, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment
|
(205
|
)
|
17
|
(113
|
)
|
196
|
||||||||||
Total comprehensive (loss) income
|
$
|
(1,846
|
)
|
$
|
1,499
|
$
|
(3,689
|
)
|
$
|
(2,968
|
)
|
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(3,576
|
)
|
$
|
(3,164
|
)
|
||
Adjustments to reconcile net loss to net cash used for operating activities:
|
||||||||
Depreciation and amortization
|
117
|
124
|
||||||
Restructuring charge
|
488
|
744
|
||||||
Provision of receivable reserves
|
-
|
25
|
||||||
Stock based compensation
|
459
|
857
|
||||||
Gain on sale of cost method investments
|
-
|
(1,322
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
2,170
|
3,849
|
||||||
Prepaids and other
|
256
|
441
|
||||||
Other non-current assets
|
178
|
52
|
||||||
Accounts payable and accrued expenses
|
(475
|
)
|
128
|
|||||
Restructuring accrual
|
(592
|
)
|
(527
|
)
|
||||
Unearned revenue and deferred maintenance
|
(2,387
|
)
|
(3,070
|
)
|
||||
Other noncurrent liabilities
|
(798
|
)
|
121
|
|||||
Net cash used for operating activities
|
(4,160
|
)
|
(1,742
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(25
|
)
|
(4
|
)
|
||||
Proceeds from sale of cost method investments
|
-
|
1,322
|
||||||
Purchase of short term investment
|
(12,076
|
)
|
(32,463
|
)
|
||||
Maturities of short term investment
|
20,955
|
43,540
|
||||||
Net cash provided by investing activities
|
8,854
|
12,395
|
||||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of common stock, net
|
262
|
343
|
||||||
Net cash provided by financing activities
|
262
|
343
|
||||||
Effect of exchange rates on cash and cash equivalents
|
(113
|
)
|
196
|
|||||
Net increase in cash and cash equivalents
|
4,843
|
11,192
|
||||||
Cash and cash equivalents at beginning of period
|
32,966
|
21,580
|
||||||
Cash and cash equivalents at end of period
|
$
|
37,809
|
$
|
32,772
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Cost of services
|
$
|
17,920
|
$
|
35,174
|
$
|
50,502
|
$
|
91,757
|
||||||||
Research and development
|
34,200
|
112,230
|
161,855
|
277,964
|
||||||||||||
Sales and marketing
|
24,504
|
72,689
|
111,388
|
234,890
|
||||||||||||
General and administrative
|
32,367
|
99,142
|
135,263
|
252,400
|
||||||||||||
$
|
108,991
|
$
|
319,235
|
$
|
459,008
|
$
|
857,011
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net (loss) income
|
$
|
(1,641
|
)
|
$
|
1,482
|
$
|
(3,576
|
)
|
$
|
(3,164
|
)
|
|||||
Weighted-average common shares outstanding used to compute basic (loss) income per share
|
4,505
|
4,463
|
4,494
|
4,454
|
||||||||||||
Weighted-average common equivalent shares from outstanding common stock options and warrants
|
-
|
1
|
-
|
-
|
||||||||||||
Total weighted-average common and common equivalent shares outstanding used to compute diluted (loss) income per share
|
4,505
|
4,464
|
4,494
|
4,454
|
||||||||||||
Basic (loss) income per share
|
$
|
(0.36
|
)
|
$
|
0.33
|
$
|
(0.80
|
)
|
$
|
(0.71
|
)
|
|||||
Diluted (loss) income per share
|
$
|
(0.36
|
)
|
$
|
0.33
|
$
|
(0.80
|
)
|
$
|
(0.71
|
)
|
Accumulated Other
|
||||
Comprehensive
|
||||
Loss
|
||||
Balance, December 31, 2010
|
$
|
(890
|
)
|
|
Net change during period
|
(113
|
)
|
||
Balance, September 30, 2011
|
$
|
(1,003
|
)
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Employee benefits
|
$
|
902
|
$
|
903
|
||||
Commissions and bonuses
|
122
|
274
|
||||||
Sales and other taxes
|
213
|
554
|
||||||
Income tax and tax contingency reserves
|
310
|
312
|
||||||
Restructuring
|
430
|
348
|
||||||
Other
|
837
|
803
|
||||||
Total accrued expenses
|
$
|
2,814
|
$
|
3,194
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Restructuring
|
$
|
-
|
$
|
186
|
||||
Deferred maintenance and unearned revenue
|
602
|
1,358
|
||||||
Other
|
539
|
582
|
||||||
Total other non-current liabilities
|
$
|
1,141
|
$
|
2,126
|
·
|
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
·
|
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
·
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value at Reporting Date Using
|
||||||||||||||||
September 30, 2011
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
|||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Cash
|
$
|
36,226
|
$
|
36,226
|
$
|
-
|
$
|
-
|
||||||||
Money market fund
|
1,583
|
1,583
|
-
|
-
|
||||||||||||
Total cash and cash equivalents
|
$
|
37,809
|
$
|
37,809
|
$
|
-
|
$
|
-
|
||||||||
Fixed income securities:
|
||||||||||||||||
Certificates of deposits
|
$
|
10,419
|
$
|
10,419
|
$
|
-
|
$
|
-
|
||||||||
Corporate bonds - financial
|
6,924
|
-
|
6,924
|
-
|
||||||||||||
Corporate bonds - industrial
|
1,635
|
-
|
1,635
|
-
|
||||||||||||
Total fixed income securities
|
$
|
18,978
|
$
|
10,419
|
$
|
8,559
|
$
|
-
|
Fair Value at Reporting Date Using
|
||||||||||||||||
December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
|||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Cash
|
$ | 25,580 | $ | 25,580 | $ | - | $ | - | ||||||||
Money market fund
|
7,386 | 7,386 | - | - | ||||||||||||
Total cash and cash equivalents
|
$ | 32,966 | $ | 32,966 | $ | - | $ | - | ||||||||
Fixed income securities:
|
||||||||||||||||
Certificates of deposit
|
$ | 13,472 | $ | 13,472 | $ | - | $ | - | ||||||||
Corporate bonds - financial
|
8,699 | - | 8,699 | - | ||||||||||||
Corporate bonds - industrial
|
4,666 | - | 4,666 | - | ||||||||||||
Corporate bonds - utility
|
766 | - | 766 | - | ||||||||||||
International bonds - financial
|
254 | - | 254 | - | ||||||||||||
Total fixed income securities
|
$ | 27,857 | $ | 13,472 | $ | 14,385 | $ | - |
Operating
|
||||
Years ending December 31,
|
Leases
|
|||
2011
|
$
|
0.4
|
||
2012
|
0.9
|
|||
2013
|
0.1
|
|||
2014
|
0.1
|
|||
2015 and thereafter
|
0.1
|
|||
Total minimum lease payments
|
$
|
1.6
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Software licenses
|
$
|
1,338
|
$
|
1,380
|
$
|
3,888
|
$
|
4,943
|
||||||||
Consulting services
|
835
|
1,016
|
2,781
|
3,006
|
||||||||||||
Maintenance
|
2,074
|
2,789
|
6,690
|
8,781
|
||||||||||||
Total revenues
|
$
|
4,247
|
$
|
5,185
|
$
|
13,359
|
$
|
16,730
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues:
|
||||||||||||||||
Americas
|
$
|
1,572
|
$
|
2,527
|
$
|
5,245
|
$
|
8,213
|
||||||||
EMEA
|
1,550
|
1,644
|
4,566
|
5,329
|
||||||||||||
APJ
|
1,125
|
1,014
|
3,548
|
3,188
|
||||||||||||
Total revenues
|
$
|
4,247
|
$
|
5,185
|
$
|
13,359
|
$
|
16,730
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Long-Lived Assets:
|
||||||||
Americas
|
$
|
67
|
$
|
147
|
||||
EMEA
|
8
|
9
|
||||||
APJ
|
97
|
108
|
||||||
Total long-lived assets
|
$
|
172
|
$
|
264
|
Current
|
Non-Current
|
Total
|
||||||||||
Excess Facilities
|
$
|
430
|
$
|
-
|
$
|
430
|
Total future
|
||||
minimum
|
||||
Years ending December 31,
|
payments
|
|||
2011
|
$
|
142
|
||
2012
|
288
|
|||
2013
|
-
|
|||
2014
|
-
|
|||
2015 and thereafter
|
-
|
|||
Total minimum facilities payments
|
$
|
430
|
Amounts
|
||||||||||||||||
Accrued
|
charged to
|
|||||||||||||||
restructuring
|
restructuring
|
Accrued
|
||||||||||||||
costs,
|
costs
|
Amounts paid
|
restructuring
|
|||||||||||||
beginning
|
and other
|
or written off
|
costs, ending
|
|||||||||||||
Three Months Ended September 30, 2011
|
||||||||||||||||
Lease cancellations and commitments
|
$
|
566
|
$
|
49
|
$
|
(185
|
)
|
$
|
430
|
|||||||
Three Months Ended September 30, 2010
|
||||||||||||||||
Lease cancellations and commitments
|
$
|
709
|
$
|
98
|
$
|
(191
|
)
|
$
|
616
|
|||||||
Nine Months Ended September 30, 2011
|
||||||||||||||||
Lease cancellations and commitments
|
$
|
534
|
$
|
488
|
$
|
(592
|
)
|
$
|
430
|
|||||||
Nine Months Ended September 30, 2010
|
||||||||||||||||
Lease cancellations and commitments
|
$
|
399
|
$
|
744
|
$
|
(527
|
)
|
$
|
616
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||
Revenues:
|
||||||||||||||||||||
Software licenses
|
32 | % | 27 | % | 29 | % | 30 | % | ||||||||||||
Services
|
68 | 73 | 71 | 70 | ||||||||||||||||
Total revenues
|
100 | 100 | 100 | 100 | ||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||
Cost of software licenses
|
- | - | - | - | ||||||||||||||||
Cost of services
|
35 | 30 | 35 | 29 | ||||||||||||||||
Total cost of revenues
|
35 | 30 | 35 | 29 | ||||||||||||||||
Gross profit
|
65 | 70 | 65 | 71 | ||||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Research and development
|
36 | 34 | 38 | 35 | ||||||||||||||||
Sales and marketing
|
31 | 36 | 33 | 32 | ||||||||||||||||
General and administrative
|
23 | 22 | 23 | 22 | ||||||||||||||||
Restructuring charges, net
|
1 | 2 | 4 | 4 | ||||||||||||||||
Total operating expenses
|
91 | 94 | 98 | 93 | ||||||||||||||||
Operating loss
|
(26 | ) | (24 | ) | (33 | ) | (22 | ) | ||||||||||||
Interest income, net
|
2 | 2 | 2 | 2 | ||||||||||||||||
Other (loss) income, net
|
(15 | ) | 56 | 5 | 3 | |||||||||||||||
Loss income before provision for income taxes
|
(39 | ) | 34 | (26 | ) | (17 | ) | |||||||||||||
Income taxes expense
|
- | (5 | ) | (1 | ) | (2 | ) | |||||||||||||
Net (loss) income
|
(39 | ) | % | 29 | % | (27 | ) | % | (19 | ) | % |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Cash and cash equivalents
|
$
|
37,809
|
$
|
32,966
|
||||
Short-term investments
|
$
|
18,978
|
$
|
27,857
|
||||
Restricted cash, current portion
|
$
|
1,013
|
$
|
-
|
||||
Restricted cash, net of current portion
|
$
|
-
|
$
|
1,000
|
||||
Working capital
|
$
|
52,217
|
$
|
54,900
|
||||
Working capital ratio
|
6.87
|
5.70
|
• |
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.
|
• |
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;
|
||
• |
the timing of receipt, fulfillment and recognition as revenue of significant orders;
|
||
• |
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; and
|
||
• |
costs associated with litigation, regulatory compliance and other corporate events such as operational reorganizations.
|
• |
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;
|
||
• |
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;
|
||
• |
announcements of new software or services by us or our competitors;
|
||
• |
changes in financial estimates by securities analysts;
|
||
• |
low trading volume on the NASDAQ Global Market;
|
||
• |
general economic conditions; or
|
||
• |
other events or factors that are beyond our control.
|
Exhibits Number
|
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
|
|
31.1
|
Certification of the Chief Executive Officer of BroadVision.
|
|
31.2
|
Certification of the 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 Form 10-K for the fiscal year ended December 31, 2006 filed on March 27, 2007.
|
|
(3)
|
Incorporated by reference to the Company's Current Report on Form 8-K filed on October 16, 2008.
|
|
(4)
|
Incorporated by reference to the Company’s Form 10-Q for the fiscal quarter ended September 30, 2008 filed on November 6, 2008.
|
BROADVISION, INC.
|
||||||
Date: November 10, 2011
|
By:
|
/s/ Pehong Chen
|
||||
Pehong Chen
|
||||||
Chairman of the Board, President and Chief Executive Officer
|
BROADVISION, INC.
|
||||||
Date: November 10, 2011
|
By:
|
/s/ Shin-Yuan Tzou
|
||||
Shin-Yuan Tzou
|
||||||
Chief Financial Officer
|
Exhibit Number
|
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
|
|||
31.1
|
Certification of the Chief Executive Officer of BroadVision.
|
|||
31.2
|
Certification of the 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 Form 10-K for the fiscal year ended December 31, 2006 filed on March 27, 2007.
|
|||
(3)
|
Incorporated by reference to the Company's Current Report on Form 8-K filed on October 16, 2008.
|
|||
(4)
|
Incorporated by reference to the Company’s Form 10-Q for the fiscal quarter ended September 30, 2008 filed on November 6, 2008.
|
|||
|
/s/ Pehong Chen
|
|
||
|
Pehong Chen
|
|
||
|
Chief Executive Officer
|
|
/s/ Shin-Yuan Tzou
|
||||
Shin-Yuan Tzou
|
||||
Chief Financial Officer
|
|
CERTIFICATION
|
/s/ Pehong Chen
|
|
Pehong Chen
Chief Executive Officer
|
/s/ Shin-Yuan Tzou
|
|
Shin-Yuan Tzou
Chief Financial Officer
|
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Condensed Consolidated Balance Sheets | ||
Allowance for Doubtful Accounts Receivable, Current | $ 72 | $ 78 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 11,200 | 11,200 |
Common Stock, Shares, Issued | 4,516 | 4,482 |
Common Stock, Shares, Outstanding | 4,516 | 4,482 |
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Revenues: | ||||
Software licenses | $ 1,338 | $ 1,380 | $ 3,888 | $ 4,943 |
Services | 2,909 | 3,805 | 9,471 | 11,787 |
Total revenues | 4,247 | 5,185 | 13,359 | 16,730 |
Cost of Revenue: | ||||
Cost of software licenses | 1 | 4 | 10 | 16 |
Cost of services | 1,472 | 1,569 | 4,724 | 4,787 |
Total cost of revenues | 1,473 | 1,573 | 4,734 | 4,803 |
Gross profit | 2,774 | 3,612 | 8,625 | 11,927 |
Operating expenses: | ||||
Research and development | 1,523 | 1,738 | 5,046 | 5,779 |
Sales and marketing | 1,332 | 1,887 | 4,437 | 5,393 |
General and administrative | 965 | 1,160 | 3,062 | 3,692 |
Restructuring charge | 49 | 98 | 488 | 744 |
Total operating expenses | 3,869 | 4,883 | 13,033 | 15,608 |
Operating loss | (1,095) | (1,271) | (4,408) | (3,681) |
Interest income, net | 97 | 90 | 312 | 319 |
Other (loss) income, net | (623) | 2,907 | 615 | 547 |
(Loss) income before provision for income taxes | (1,621) | 1,726 | (3,481) | (2,815) |
Provision for income taxes | (20) | (244) | (95) | (349) |
Net (loss) income | (1,641) | 1,482 | (3,576) | (3,164) |
Basic (loss) income per share | $ (0.36) | $ 0.33 | $ (0.80) | $ (0.71) |
Diluted (loss) income per share | $ (0.36) | $ 0.33 | $ (0.80) | $ (0.71) |
Shares used in computing: | ||||
Weighted average shares-basic | 4,505 | 4,463 | 4,494 | 4,454 |
Weighted average shares-diluted | 4,505 | 4,464 | 4,494 | 4,454 |
Comprehensive (loss) income: | ||||
Net (loss) income | (1,641) | 1,482 | (3,576) | (3,164) |
Other Comprehensive (loss) gain, net of tax: | ||||
Foreign currency translation adjustment | (205) | 17 | (113) | 196 |
Total comprehensive (loss) income | $ (1,846) | $ 1,499 | $ (3,689) | $ (2,968) |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Oct. 31, 2011 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Entity Registrant Name | BROADVISION INC | |
Entity Central Index Key | 0000920448 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2011 | |
Entity Common Stock, Shares Outstanding | 4,515,855 |
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Related Party Transactions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Related Party Transactions | |
Related Party Transactions | On November 14, 2008, BroadVision (Delaware) LLC, a Delaware limited liability company ("BVD"), which was then our wholly owned subsidiary, entered into a Share Purchase Agreement with CHRM LLC, a Delaware limited liability company, that is controlled by Dr. Pehong Chen, our CEO and largest stockholder. We and CHRM LLC then entered into an Amended and Restated Operating Agreement of BroadVision (Delaware) LLC dated as of November 14, 2008 (the "BVD Operating Agreement"). Under these agreements, CHRM LLC received, in exchange for the assignment of certain intellectual property rights, 20 Class B Shares of BVD, representing the right to receive 20% of any "net profit" from a "capital transaction" (as such terms are defined in the BVD Operating Agreement) of BroadVision (Barbados) Limited ("BVB"), an entity wholly owned by BVD. A "capital transaction" under that agreement is any merger or sale of substantially all of the assets of BVB as a result of which the members of BVB will no longer have an interest in BVB or the assets of BVB will be distributed to its members. BVB is the sole owner of BroadVision On Demand, a Chinese entity ("BVOD"). We have invested approximately $4.6 million in BVOD (directly and through BVD and BVB) to date and expect to continue to make additional investments in BVOD of approximately $400,000 per quarter for the foreseeable future.
In April 2011, we executed a renewal contract with a third party of which Dr. Pehong Chen, our CEO and largest stockholder, is a board member. The total renewal license value associated with that contract is $123,000. We recognized $31,000 of license revenue related to this contract for the third quarter of 2011. We received payments of $123,000 for this renewal contract as of June 30, 2011. We incurred $2,000 in direct costs and expenses relating to this contract in the three months ended September 30, 2011.
|
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments |
We measure assets and liabilities at fair value based on an exit price as defined by the FASB guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
We measure the following financial assets at fair value on a recurring basis. The fair value of these financial assets as of September 30, 2011 and December 31, 2010 (in thousands) are as follows:
The fair value of cash and cash equivalents, short-term investments, accounts receivable and accounts payable for all periods presented approximates their respective carrying amounts due to the short-term nature of these balances. |
Proceeds from Sale of Cost Method Investment | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Proceeds from Sale of Cost Method Investment | |
Proceeds from Sale of Cost Method Investment | During the third quarter of fiscal year 2010, we received a total of $1.3 million in cash from the August 2010 sale of a company in which we held a partial ownership interest and which we accounted for under the cost method. We originally invested $2.0 million in 2000 in what was then a startup company, and subsequently wrote down the investment's carrying value to $0 in 2002 due to an other-than-temporary decline in the fair market value of the investment at that time. There have been no proceeds from the sale of cost method investments during fiscal year 2011. |
Organization and Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization And Summary Of Significant Accounting Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Summary of Significant Accounting Policies |
There have been no material changes in our critical accounting policies, estimates and judgments during the nine-month period ended September 30, 2011 compared to the disclosures in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission (the "SEC") on March 4, 2011, other than those disclosed herein.
Basis of Presentation
The condensed consolidated financial results and related information as of and for the three and nine months ended September 30, 2011 and 2010 are unaudited. The Condensed Consolidated Balance Sheet at December 31, 2010 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 2010 Annual Report on Form 10-K filed with the SEC on March 4, 2011.
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 10 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, 2011 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2011 or any future interim period. The condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation.
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, income taxes and restructuring, 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.
Stock-Based Compensation
The following table sets forth the components of the total stock-based compensation expense recognized in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and 2010:
Earnings Per Share Information
Basic net (loss) income per share is computed using the weighted-average number of shares of common stock outstanding less shares subject to repurchase. Diluted net (loss) income 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 warrants using the treasury stock method, and shares subject to repurchase, if any, using the as-if converted method. There were 375,000 and 682,000 potential common shares excluded from the determination of diluted net (loss) income per share for the three months ended September 30, 2011 and 2010, respectively, as the effect of each share was anti-dilutive because the per-share strike price of the options under which these shares may be issued is higher than the current market price. There were 315,000 and 620,000 potential common shares excluded from the determination of diluted net (loss) income per share for the nine months ended September 30, 2011 and 2010, respectively, as the effect of including each share would be anti-dilutive because the per-share strike price of the option under which the share would be issued exceeds the current market price. The following table sets forth the basic and diluted net (loss) income per share computational data for the periods presented (in thousands, except per share amounts):
Legal Proceedings
We are subject from time to time to various legal actions and other claims arising in the ordinary course of business. We are not a party to any legal proceedings that we believe would have a material adverse effect on our consolidated financial position or consolidated results of operation.
Foreign Currency Translations
The functional currencies of all foreign subsidiaries are the local currencies of their respective countries. Assets and liabilities of these subsidiaries are translated into U.S. dollars at the balance sheet date. Income and expense items are translated at average exchange rates for the periods. Foreign exchange gains and losses resulting from the remeasurement of foreign currency assets and liabilities are included as other (loss) income, net in the Condensed Consolidated Statements of Operations. For the nine-month periods ended September 30, 2011, and 2010, translation (loss) gain was $(113,000), and 196,000, respectively. These amounts are included in the accumulated other comprehensive loss account in the Condensed Consolidated Balance Sheets.
Comprehensive (Loss) Income
Comprehensive (loss) income includes net (loss) income and other comprehensive (loss) gain, which primarily consists of foreign currency translation adjustments. Total comprehensive (loss) income is presented in the accompanying Condensed Consolidated Statements of Operations.
Total accumulated other comprehensive loss is displayed as a separate component of stockholders' equity in the accompanying Condensed Consolidated Balance Sheets. The accumulated balances of other comprehensive loss consist of the following, net of taxes (in thousands):
Recent Accounting Pronouncements
In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income" that improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this standard require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, adjustments must be displayed for items that are reclassified from other comprehensive income ("OCI") to net income, in both net income and OCI. The standard does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and are to be applied retrospectively, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In May 2011, the FASB issued ASU 2011-04, which amends U.S. GAAP to conform to the measurement and disclosure requirements in International Financial Reporting Standards ("IFRS"). The amendments in this update change the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments include the following: 1. Those that clarify the Board's intent about the application of existing fair value measurement and disclosure requirements; and 2. Those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. In addition, to improve consistency in application across jurisdictions some changes in wording are necessary to ensure that U.S. GAAP and IFRS fair value measurement and disclosure requirements are described in the same way (for example, using the word "shall" rather than "should" to describe the requirements in U.S. GAAP). The amendments in this update are to be applied prospectively and are effective during interim and annual period beginning after December 15, 2011. The Company does not believe that the adoption of this update will have a material impact on its consolidated financial statements at this time.
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Commitments and Contingencies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies |
Warranties and Indemnification
We provide a warranty to our perpetual license customers that our software will perform substantially in accordance with the documentation we provide with the software, typically for a period of 90 days following receipt of the software. Historically, costs related to these warranties have been immaterial. Accordingly, we have not recorded any warranty liabilities as of September 30, 2011 and 2010, respectively.
Our perpetual software license agreements typically provide for indemnification of customers for intellectual property infringement claims caused by use of a current release of our software consistent with the terms of the license agreement. The term of these indemnification clauses is generally perpetual. The potential future payments we could be required to make under these indemnification clauses is generally limited to the amount the customer paid for the software. Historically, costs related to these indemnification provisions have been immaterial. We also maintain liability insurance that limits our exposure. As a result, we believe the potential liability of these indemnification clauses is minimal. We rarely have litigation initiated against us by customers. However, during the year ended 2010, we entered into a litigation settlement agreement with one customer that resulted in a non-cash credit redeemable for our products worth $300,000. Pursuant to the settlement agreement, any remaining unused credits shall expire after the second anniversary of the agreement. We have recorded this credit as an addition to operating expense and liability in the accompanying 2010 Consolidated Financial Statements. No draws upon the liability have been made by the third party to date, and consequently, the liability remains on our Consolidated Balance Sheets as of the quarter ending September 30, 2011. During the nine months ended September 30, 2011, we did not record any operating expenses or liabilities related to any settlement agreements.
We entered into agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer is, or was, serving in such capacity. The term of the indemnification period is for so long as such officer or director is subject to an indemnifiable event by reason of the fact that such person was serving in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements may be unlimited; however, we have a director and officer insurance policy that limits our exposure and enables us to recover a portion of any future amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is insignificant. Accordingly, we have no liabilities recorded for these agreements as of either September 30, 2011 or December 31, 2010. We assess the need for an indemnification reserve on a quarterly basis and there can be no guarantee that an indemnification reserve will not become necessary in the future.
Leases
We lease our headquarters facility and our other facilities under noncancelable operating lease agreements expiring through the year 2016. Under the terms of the agreements, we are required to pay property taxes, insurance and normal maintenance costs.
As discussed in Note 6 Restructuring Charges, we have 22,500 square feet of vacant office space in Redwood City, that we are actively seeking a subtenant for. The lease for this office space will expire in June of 2012.
As of September 30, 2011, we have accrued $0.4 million of estimated future facilities costs as a restructuring accrual.
Standby Letter of Credit Commitments
As of September 30, 2011 and December 31, 2010, we had $1.0 million of outstanding commitments in the form of a standby letter of credit, in favor of our landlord to secure obligations under our facility leases. This standby letter of credit is collateralized by the restricted cash listed in the Condensed Consolidated Balance Sheets. |
Geographic, Segment and Significant Customer Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Geographic, Segment and Significant Customer Information |
The disaggregated revenue information regarding types of revenues is as follows (in thousands):
We currently operate in three primary geographical territories. Our reportable segment includes our facilities in North and South America (Americas), Europe, Middle East and Africa (EMEA); and Asia, Pacific and Japan (APJ).
Disaggregated financial information regarding our geographic revenues and long-lived assets is as follows (in thousands):
For the three-month and nine-month periods ended September 30, 2011 and 2010, none of our customers accounted for more than 10% of our revenues. |
Restructuring Charges | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | The net restructuring charge of $488,000 for the nine-month period ended September 30, 2011 consists of lease payments and operating expenses in the amount of $286,000 for our headquarters in Redwood City and a $202,000 charge for the re-evaluation of future sublease rental income on our vacant office space in Redwood City. The remaining term of the lease for the vacant office space in Redwood City is less than one year, and because of the limited remaining lease term we have re-evaluated the likelihood of subleasing the vacant office space. The net restructuring charge of $744,000 for the nine months ended September 30, 2010 consists of lease payments and operating expenses in the amount of $218,000 and a $702,000 charge for the re-evaluation of sublease rental incomes from our Redwood City vacant facilities, offset by the collection of $176,000 from our former subtenant from our New York City facilities during the quarter ended March 31, 2010.
We have leased approximately 22,500 square feet of office space in Redwood City that we previously subleased to Dexterra Inc. As reported in an 8-K filed in June 2009, Dexterra exercised an early termination option, and we received Dexterra's last sublease payment in January 2010. We are actively seeking a subtenant, while continuing to pay rents and operating expenses, for this vacant office space. We will have a cash outflow of approximately $200,000 per quarter until the lease termination in June 2012.
Our 10-year office lease in New York City expired in March 2010. This space has been subleased since 2004. In connection with the expiration of the sublease, we collected $176,000 more from the subtenant than we had expected, and recorded the excess as a restructuring gain in March 2010.
As of September 30, 2011, the total restructuring accrual of $430,000 consisted of the following (in thousands):
We expect to pay the excess facilities amounts related to restructured or abandoned leased space as follows (in thousands):
The following table summarizes the activity related to the restructuring plans (in thousands):
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Selected Condensed Consolidated Balance Sheet Detail | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Selected Condensed Consolidated Balance Sheet Detail | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Condensed Consolidated Balance Sheet Detail |
Accrued expenses consisted of the following (in thousands):
Other Non-Current Liabilities consisted of the following (in thousands):
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