BVSN wants R/S & rights offering at .45
BroadVision, Inc. to Convert All Secured Notes to Equity; Company Also Plans Rights Offering and Possible Reverse Stock Split
via COMTEX
December 20, 2005 5:27:01 PM
REDWOOD CITY, Calif., Dec 20, 2005 (BUSINESS WIRE) --
BroadVision, Inc. (Nasdaq:BVSN), a global provider of web self-service solutions, today announced that it has entered into a definitive agreement for the conversion of approximately $15.5 million of principal and interest on outstanding secured convertible notes into common shares of the Company. The notes are currently held by Dr. Pehong Chen, Chairman and CEO of BroadVision. Under the agreement with Dr. Chen, the Company will issue 34.5 million common shares, representing approximately 50% of the post-conversion shares outstanding, at a price of $0.45 per share in exchange for cancellation of the notes. The conversion is anticipated to take place within the coming two weeks. The closing price of the Company's common stock on the NASDAQ National Market on December 20, 2005 was $0.60 per share.
In conjunction with the conversion, the Company today also announced its intention to effect, as soon as practicable, a rights offering under which all stockholders of record at the close of business on December 20, 2005 will receive nontransferable rights to purchase approximately 5.9 additional common shares at $0.45 per share for each common share then held. Dr. Chen and his affiliates have waived any right to purchase shares in the rights offering. The rights offering will be made only by means of a prospectus anticipated to be filed with the Securities and Exchange Commission as part of a registration statement. A registration statement relating to the rights offering has not yet been filed with the Securities and Exchange Commission. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the rights offering, nor shall there be any sale of any securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
In order to put the Company in a favorable liquidity position promptly while maintaining its NASDAQ listing, the Company has requested a waiver of NASDAQ's stockholder approval requirement with respect to the conversion of the notes. Should this request not be approved within the anticipated timetable for the conversion, the Company may elect to voluntarily delist its shares from the NASDAQ National Market, in which case its shares would begin trading over-the-counter on the OTC Bulletin Board operated by NASDAQ.
As previously announced, the Company has received notice from NASDAQ that its shares are subject to potential delisting as of March 6, 2006, if the bid price of the Company's common stock continues to trade below $1.00 per share through that date. The Company may choose to seek stockholder approval of a reverse stock split of its shares to regain compliance with the minimum bid price rule.
"In follow-up to our announcement in late November, we've been working diligently to restructure the secured notes under terms that we believe are beneficial to our stockholders," said Bill Meyer, BroadVision's Chief Financial Officer. "This restructuring, which relieves the Company of approximately $3.4 million of amortization and debt service costs and $500,000 of interest expense per quarter, is a major step towards our goal of generating consistent profitability and positive cash flows."
About BroadVision
BroadVision (Nasdaq:BVSN) is a global provider of web self-service solutions. Its agile commerce and portal applications enable customers to quickly create and adapt online processes to keep pace with changing business requirements. Over 1,000 organizations, serving nearly 75 million registered users, rely on BroadVision's open solutions to power and personalize their mission-critical web initiatives. Additional information about BroadVision can be obtained at www.broadvision.com.
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