Item 8.01 Other Events.
As previously reported, on March 30, 2020, BroadVision, Inc. (the "Company" or
the "Debtor") filed a voluntary petition (the case commenced thereby, the
"Chapter 11 Case") under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware (the "Court"). The Chapter 11 Case is being administered under the
caption In re BroadVision, Inc. (Case No. 20-10701 (CSS)).
Also as previously reported, on April 3, 2020, the Debtor filed the Amended
Prepackaged Chapter Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code for BroadVision, Inc. (the "Amended Plan") with the Bankruptcy Court.
Capitalized terms used but not otherwise defined in this Current Report on Form
8-K have the meaning ascribed to them in the Amended Plan.
On May 15, 2020, the Bankruptcy Court entered an order (the "Confirmation
Order") confirming the Amended Plan. Nasdaq has indicated to the Company that
it will suspended trading of the Company's common stock, $0.0001 par value per
share ("Debtor Common Stock"), effective as of the close of business on May 18,
2020. Nasdaq will file a Form 25 notifying the SEC of Nasdaq's withdrawal of
the Debtor Common Stock from listing on the Nasdaq Stock Market and the
intention to withdraw the Debtor Common Stock from registration under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company
intends to file with the SEC a Form 15 terminating the registration of the
Debtor Common Stock and suspending the Company's duty to file reports under the
Exchange Act. After filing the Form 15, the Company will not make further
filings or reports with the SEC, such as Form 8-K, Form 10-Q and Form 10-K.
On May 18, 2020 (the "Effective Date"), the Amended Plan will become effective
in accordance with its terms, and the Debtor will emerge from Chapter 11
protection as the Reorganized Debtor. On the Effective Date, by operation of the
Amended Plan, all Allowed Equity Interests in the Debtor (which, for the
avoidance of doubt, include all Outstanding Shares of Debtor Common Stock,
Restricted Stock Awards, Restricted Stock Units, and Permitted Stock Options)
will automatically be deemed canceled, released, and extinguished without
further action by the Debtor or the Reorganized Debtor, and the obligation of
the Debtor and the Reorganized Debtor thereunder shall be discharged.
On account of and in full and complete settlement, release, and discharge of,
and in exchange for its Allowed Equity Interest, shortly after the Effective
Date (or, with respect to Subsequent Distributions, as promptly as practicable
following the Effective Date), each holder of an Allowed Equity Interest traded
through the close of business on May 18, 2020 (the "Record Date"), shall be
entitled to receive its pro rata Equity Interest Recovery. As set forth in the
Amended Plan, "Equity Interest Recovery" means a cash amount of $4.375 per share
of Debtor Common Stock held or deemed to be held by such holder on the Record
Date plus as promptly as practicable following the Effective Date, one or more
Subsequent Distributions, calculated on a per share basis of the Debtor's
Available Cash. "Available Cash" means all of the cash held by the Distribution
Trust from time to time, including any proceeds from the liquidation of the
Debtor's IP Addresses.
The Equity Interest Recovery may be less than $4.375 per share of Debtor Common
Stock in the event that (A) the Debtor has more than 5,142,333 shares of Debtor
Common Stock outstanding (including all Outstanding Shares, Restricted Stock
Awards, Restricted Stock Units and Permitted Stock Options, whether or not
vested) or (B) the Debtor lacks sufficient Cash (including Cash-on-Hand and
proceeds from the liquidation of the IP Addresses) to pay all Case-Related
Claims and Expenses and repayment of amounts, if any, incurred by ESW Capital,
LLC (the "Plan Sponsor" or "ESW") in connection with funding such Case-Related
Claims and Expenses.
In lieu of receiving the cash distributions described above, on the Effective
Date the Plan Sponsor will acquire 100% of the equity interests of the
Reorganized Debtor in exchange for its Allowed Equity Interest, free and clear
of any options, liens, or other claims.
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The descriptions of the Amended Plan and the Confirmation Order do not purport
to be complete and are qualified in their entirety by reference to the full text
of the Confirmation Order and the Amended Plan (annexed to the Confirmation
Order as Exhibit A) set forth in Exhibit 2.1 to this Current Report on Form 8-K.
On May 15, 2020, the Company issued a press release relating to the events
described in this Current Report on Form 8-K. A copy of the press release is
furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated
into this item 8.01 by reference.
* * * * *
Cautionary Note Regarding Forward-Looking Statements.
This Current Report on Form 8-K contains forward-looking statements, which are
based on the Company's current expectations, estimates, and projections about
the businesses and prospects of the Company and its subsidiaries, as well as
management's beliefs, and certain assumptions made by management. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "should," "will" and variations of these words are intended to identify
forward-looking statements. Such statements speak only as of the date hereof and
are subject to change. The Company undertakes no obligation to revise or update
publicly any forward-looking statements for any reason. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties, and assumptions that are difficult to predict.
Forward-looking statements include, among other matters, the Company's strategy
and the expected process and results of the Chapter 11 proceedings. Such
statements are not guarantees of future performance and are subject to certain
risks, uncertainties, and assumptions that are difficult to predict. Risks and
uncertainties associated with forward-looking statements include the negative
impacts on the Company's businesses as a result of filing for and operating
under Chapter 11 protection? the time, terms and ability to confirm a Chapter 11
plan of reorganization for the Company's businesses? the adequacy of the capital
resources of the Company's businesses and the difficulty in forecasting the
liquidity requirements of the operations of its businesses? the unpredictability
of the Company's financial results while in Chapter 11 proceedings? the
Company's ability to discharge claims in Chapter 11 proceedings? negotiations
with its trade creditors and other significant creditors? risks and
uncertainties with performing under the terms of the Restructuring Support
Agreement and any other arrangement with creditors while in Chapter 11
proceedings? the Company's ability to conduct business as usual in the United
States and worldwide? the Company's ability to continue to serve customers,
suppliers and other business partners at the high level of service and
performance they have come to expect from the Company? the Company's ability to
continue to pay suppliers and vendors? the ability to control costs during
Chapter 11 proceedings? the risk that the Company's Chapter 11 Case may be
converted to a case under Chapter 7 of the Bankruptcy Code? the Company's
ability to secure operating capital? the Company's ability to take advantage of
opportunities to acquire assets with upside potential? the Company's ability to
execute on its strategic plan to pursue, evaluate and close a restructuring
pursuant to the Amended Plan or another plan of reorganization? the Company's
long-term outlook? the Company's preparation for future market conditions? and
any statements or assumptions underlying any of the foregoing. Accordingly,
actual results could differ materially and adversely from those expressed in any
forward-looking statements as a result of various other factors.
Important factors that may cause such differences include, but are not limited
to, the decisions of the Court? negotiations with the Company's creditors and
any committee approved by the Court? the Company's ability to meet the
requirements, and compliance with the terms, including restrictive covenants, of
the Restructuring Support Agreement and any other financial arrangement while in
Chapter 11 proceedings? changes in the Company's cash needs as compared to its
historical operations or its planned reductions in operating expense? adverse
litigation? changes in domestic and international demand for the Company's
products? the Company's ability to control operating costs and other expenses?
that general economic conditions may be worse than expected? that competition
may increase significantly? changes in laws or government regulations or
policies affecting the Company's current business operations and, as well as
those risks and uncertainties disclosed under the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Forms 10-Q filed with the Securities and
Exchange Commission ("SEC") on September 23, 2019 and similar disclosures in
subsequent reports filed with the SEC.
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