Room 4561
March 1, 2006
Dr. Pehong Chen
President and Chief Executive Officer
Broadvision, Inc.
585 Broadway
Redwood City, California 94063
Re: Broadvision, Inc.
Registration Statement on Form S-1 filed February 3, 2006
File No. 333-131540
Forms 10-Q for the quarters ended June 30, 2005 and September
30, 2005
File No. 0-28252
Dear Dr. Chen:
This is to advise you that we have limited our review of the
above registration statement and periodic reports to the matters
addressed in the comments below. No further review of the filings
has been or will be made. Where indicated, we think you should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Registration Statement on Form S-1
1. Your attention is directed to Rules 3-01(a) and 3-02(a) of
Regulation S-X and the need for updated financial statements and
related disclosures. Please update your financial information.
2. Please advise us concerning the applicability of NASD
Marketplace
Rule 4350(i) to the planned issuance of the 34.5 million shares in
exchange for the $15.5 million of subordinated convertible notes
that
Honu Holdings LLC had acquired from Vector III on November 18,
2005.
How does the number of shares to be issued to Honu compare to the
number of shares it would have been entitled to receive under the
terms of the notes? Please clarify this in the disclosure on page
ii. We note that the 34.5 million shares appear to be 20% or more
of
the common stock outstanding before the issuance of those shares.
3. We note your disclosure that you issued, pursuant to the
private
placement on August 9, 2005, 6,302,318 shares of common stock and
warrants to purchase an additional 2,079,767 shares of common
stock.
It appears that you had 32,573,744 shares of common stock
outstanding
prior to this issuance. Please provide us an analysis of the
applicability of NASD Marketplace Rule 4350(i) to this issuance of
securities. Consider appropriate disclosure in each of your
registration statements and your proxy statement originally filed
September 8, 2005.
Facing Page
4. It appears that the subscription period will be a minimum of 30
days. Furthermore, as stated on page 18 and elsewhere,
Broadvision
may, in its sole discretion, extend the time for exercising the
subscription rights. As such, the offering of subscription rights
and underlying common stock appears you propose to conduct and
offering within paragraph (a)(ix) of Rule 415. Accordingly,
please
check the appropriate box on the front cover page of the
registration
statement and expand Item 17 to provide the undertakings specified
by
paragraph (a) of Item 512 of Regulation S-K. Please note that
Item
512(a) of Regulation S-K has recently been amended.
Prospectus Cover Page
5. The cover page currently emphases the maximum net proceeds from
the rights offering. As there are no assurances that any proceeds
will be obtained from exercise of the subscription rights, this
presentation on the cover page does not appear to be appropriate.
In
the context of an offering that has no minimum, you should
eliminate
the reference to the maximum potential proceeds. Instead, tell
potential investors that you will retain all subscriptions and
that
there is no minimum amount of proceeds that must be received for
you
to retain proceeds of exercises of subscription rights. Also,
state
that the actual proceeds, if any, will be dependent on the number
of
subscription rights exercised.
6. Please refer to the irrevocability of the exercise of a
subscription right. Also, provide appropriate context to your
reference to the NASDAQ listing by concisely describing the
likelihood of NASDAQ and the most recent status thereof.
7. Please move the text at the bottom of the table of contents
page
to a portion of the prospectus that is not subject to Rule 421(d).
Questions & Answers About the Rights Offering
8. Please discuss how you selected the 167,667,290 share amount
that
is offered pursuant to the subscription rights.
What is the purpose of the rights offering?, page ii
9. Please expand your disclosure regarding Dr. Chen`s holdings of
outstanding common stock upon the Note Conversion to include his
current holdings as well as the percentage range of his holdings
depending upon the possible outcomes of the subscription rights
offering.
If I am a stockholder, how does the Note Conversion affect my
ownership interest..., page ii
10. Please provide a table illustrating the information you convey
in
this question and answer regarding a stockholder`s interest in the
company given various subscription rights exercise scenarios.
Please
also include a range of partial exercises of the subscription
rights
in your table.
How do I exercise my subscription rights if my shares are held...,
page iii
11. Please advise us what other rights offering materials you plan
to
distribute to your stockholders. In addition, it appears that the
beneficial owner election form, the subscription rights
certificate
and the notice of guaranteed delivery should be filed as exhibits
to
your registration statement pursuant to Items 601(b)(4) and/or
(10)
of Regulation S-K.
If the rights offering is not completed, will my subscription
payment
be refunded to me?, page iv
12. Please discuss the reasons or circumstances in which the
rights
offering would not be completed. Why is prominent discussion of
the
possibility of not completing the offering appropriate, in the
context of an offering in which there appears to be no offering
minimum and in which the issuer apparently plans to retain all
proceeds?
Risk Factors, page 4
13. In your response letter, please explain why you believe it is
appropriate to present as your first risk factor a paragraph that
emphasizes the adverse consequences of failing to exercise all an
investors` subscription rights. It appears that a more balanced
presentation of the risks associated with the company and its
proposed offering would be to emphasize the risks of exercising
the
subscription rights, rather than the risk of failing to provide
additional capital. It appears that the dilution associated with
the
issuance of a substantial block of shares to an affiliate should
be
emphasized, not the consequences of electing not to subscribe.
The Rights Offering, page 16
14. On pages 18 and 20, you indicate that funds submitted to
Computershare as over-subscriptions that are not filled will be
returned by mail without interest "as soon as practicable."
Please
provide quantitative context for your use of the phrase "as soon
as
practicable."
Forms 10-Q for the quarters ended June 30, 2005 and September 30,
2005
Item 4. Controls and Procedures
15. You disclose changes in your internal control over financial
reporting for the period from the beginning of your 2005 fiscal
year
to the last date of the period covered by your report. Item
308(c)
of Regulation S-K requires the disclosure of any change in your
internal control over financial reporting during your last fiscal
quarter. Please advise us of the changes in your internal control
over financial reporting for the quarters ended June 30, 2005 and
September 30, 2005. Please confirm that you will note this
comment
with respect to future reports.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
and
Exchange Act and that they have provided all information investors
require for an informed investment decision. Since the company
and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert the staff comments and the
declaration
of effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of your registration statement as a confirmation of
the fact that those requesting acceleration are aware of their
respective responsibilities under the Securities Act and the
Exchange
Act as they relate to the proposed public offering of the
securities
specified in the above registration statement. We will act on the
request and, pursuant to delegated authority, grant acceleration
of
the effective date.
We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
You may contact Daniel Lee at (202) 551-3477 with any
questions. If you need further assistance, you may contact me at
(202) 551-3462.
Sincerely,
Mark P. Shuman
Branch Chief - Legal
cc: Via Facsimile
Peter H. Werner
Cooley Godward LLP
101 California Street, Fifth Floor
San Francisco, California 94111
Telephone: (415) 693-2000
Facsimile: (415) 693-2222