##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarter ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 0-28252
(Commission File Number)
 BROADVISION, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    94-3184303
(I.R.S. Employer
Identification Number)585 Broadway,Redwood City, California
    
    94063(Address of principal executive offices)
    
    (Zip code)
 (650) 542-5100
 þ o
 o o þ
 o þ




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##### Table of Contents



BROADVISION, INC. AND SUBSIDIARIES
FORM 10-Q
Quarter Ended June 30, 2006
  
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Condensed Consolidated Balance Sheets at June 30, 2006 (unaudited) and December 31, 2005
    
    
    3Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - Three and six months ended June 30, 2006 and 2005 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2006 and 2005 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4.
    
    Controls and Procedures
    
    
    31PART II. OTHER INFORMATION
    
    
    33Item 1.
    
    Legal Proceedings
    
    
    33Item 1A.
    
    Risk Factors
    
    
    33Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    41Item 3.
    
    Defaults In Senior Securities
    
    
    41Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    41Item 5.
    
    Other Information
    
    
    41Item 6.
    
    Exhibits
    
    
    41SIGNATURES
    
    
    42EXHIBIT 31.1EXHIBIT 32.1
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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 BROADVISION, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,255
    
    
    $
    4,849Accounts receivable, less allowance for doubtful accounts of $1,064 as of
June 30, 2006 and $731 as of December 31, 2005
    
    
    10,043
    
    
    
    12,640Prepaids and other
    
    
    1,767
    
    
    
    1,914Restricted cash, current portion
    
    
    201
    
    
    
    Total current assets
    
    
    25,266
    
    
    
    19,403Property and equipment, net
    
    
    1,884
    
    
    
    2,334Restricted cash and investments, net of current portion
    
    
    1,796
    
    
    
    1,997Goodwill
    
    
    25,066
    
    
    
    25,066Other assets
    
    
    1,008
    
    
    
    1,142Total assets
    
    
    55,020
    
    
    
    49,942LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Current portion of bank borrowings
    
    
    162
    
    
    
    389Current portion of convertible notes due to a related party
    
    
    
    
    
    
    20,535Accounts payable
    
    
    2,507
    
    
    
    4,396Accrued expenses
    
    
    15,886
    
    
    
    16,090Warrant liability
    
    
    663
    
    
    
    277Unearned revenue
    
    
    4,479
    
    
    
    2,678Deferred maintenance
    
    
    12,546
    
    
    
    10,910Total current liabilities
    
    
    36,243
    
    
    
    55,275Other non-current liabilities
    
    
    4,535
    
    
    
    4,390Total liabilities
    
    
    40,778
    
    
    
    59,665Commitments and contingenciesStockholders equity (deficit):Convertible preferred stock, $0.0001 par value; 10,000 shares authorized; none issued
and outstanding
    
    
    
    
    
    
    Common stock, $0.0001 par value; 2,000,000 shares authorized; 69,383 shares issued
outstanding as of June 30, 2006 and 34,522 shares issued and outstanding as of
December 31, 2005
    
    
    7
    
    
    
    3Additional paid-in capital
    
    
    1,236,389
    
    
    
    1,215,256Accumulated other comprehensive income
    
    
    289
    
    
    
    93Accumulated deficit
    
    
    (1,222,443
    )
    
    
    (1,225,075
    )Total stockholders equity (deficit)
    
    
    14,242
    
    
    
    (9,723
    )Total liabilities and stockholders equity (deficit)
    
    $
    55,020
    
    
    $
    49,942
 See Accompanying Notes to Condensed Consolidated Financial Statements
 Page 3




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BROADVISION, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 AND COMPREHENSIVE INCOME (LOSS)
 (In thousands, except per share data)
 (unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(restated)
    
    
    
    
    
    
    (restated)Revenues:Software licenses
    
    $
    3,627
    
    
    $
    3,391
    
    
    $
    6,509
    
    
    $
    7,807Services
    
    
    9,102
    
    
    
    12,123
    
    
    
    18,844
    
    
    
    24,074Total revenues
    
    
    12,729
    
    
    
    15,514
    
    
    
    25,353
    
    
    
    31,881Cost of revenues:Cost of software licenses
    
    
    142
    
    
    
    (186
    )
    
    
    204
    
    
    
    (243
    )Cost of services
    
    
    3,496
    
    
    
    5,614
    
    
    
    7,554
    
    
    
    11,594Total cost of revenues
    
    
    3,638
    
    
    
    5,428
    
    
    
    7,758
    
    
    
    11,351Gross profit
    
    
    9,091
    
    
    
    10,086
    
    
    
    17,595
    
    
    
    20,530Operating expenses:Research and development
    
    
    2,405
    
    
    
    3,955
    
    
    
    5,036
    
    
    
    8,242Sales and marketing
    
    
    1,982
    
    
    
    5,060
    
    
    
    4,363
    
    
    
    10,871General and administrative
    
    
    3,239
    
    
    
    2,829
    
    
    
    4,977
    
    
    
    5,364Restructuring charge (credit)
    
    
    (15
    )
    
    
    309
    
    
    
    475
    
    
    
    (395
    )Total operating expenses
    
    
    7,611
    
    
    
    12,153
    
    
    
    14,851
    
    
    
    24,082Operating income (loss)
    
    
    1,480
    
    
    
    (2,067
    )
    
    
    2,744
    
    
    
    (3,552
    )Interest (expense) income, net
    
    
    125
    
    
    
    (167
    )
    
    
    232
    
    
    
    (276
    )Amortization of discount on convertible notes
    
    
    
    
    
    
    (2,365
    )
    
    
    
    
    
    
    (3,978
    )(Loss) gain on revaluation of warrants and
change in value of derivatives
    
    
    (16
    )
    
    
    2,257
    
    
    
    (386
    )
    
    
    10,248Other (expense) income, net
    
    
    226
    
    
    
    (684
    )
    
    
    262
    
    
    
    (86
    )Income (loss) before provision for income taxes
    
    
    1,815
    
    
    
    (3,026
    )
    
    
    2,852
    
    
    
    2,356Benefit (provision) for income taxes
    
    
    (65
    )
    
    
    (70
    )
    
    
    (221
    )
    
    
    1,961Net income (loss)
    
    $
    1,750
    
    
    $
    (3,096
    )
    
    $
    2,631
    
    
    $
    4,317Basic income (loss) per share
    
    $
    0.03
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.13Diluted income (loss) per share
    
    $
    0.03
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.13Shares used in computing:Weighted average shares-basic
    
    
    69,151
    
    
    
    34,181
    
    
    
    56,055
    
    
    
    34,077Weighted average shares-diluted
    
    
    69,151
    
    
    
    34,181
    
    
    
    56,055
    
    
    
    34,163Comprehensive income:Net income (loss)
    
    $
    1,750
    
    
    $
    (3,096
    )
    
    $
    2,631
    
    
    $
    4,317Other comprehensive gain, net of tax:Foreign currency translation adjustment
    
    
    (180
    )
    
    
    (22
    )
    
    
    (196
    )
    
    
    23Total comprehensive income (loss)
    
    $
    1,570
    
    
    $
    (3,118
    )
    
    $
    2,435
    
    
    $
    4,340
 See Accompanying Notes to Condensed Consolidated Financial Statements
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BROADVISION, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Six Months Ended June 30,2006
    
    
    2005(restated)Cash flows from operating activities:Net income
    
    $
    2,631
    
    
    $
    4,317Adjustments to reconcile net income to net cash provided by (used for)
operating activities:Depreciation and amortization
    
    
    549
    
    
    
    638Allowance for doubtful accounts and reserves
    
    
    333
    
    
    
    (101
    )Stock based compensation
    
    
    308
    
    
    
    (Gain) on cost method investments
    
    
    
    
    
    
    (1,117
    )Loss on sale or abandonment of fixed assets
    
    
    
    
    
    
    66Provision (benefits) for income tax
    
    
    221
    
    
    
    (1,961
    )Loss (gain) on revaluation of warrants and change in value of derivatives
    
    
    386
    
    
    
    (10,248
    )Amortization of discount on convertible notes
    
    
    
    
    
    
    3,978Changes in operating assets and liabilities:Accounts receivable
    
    
    2,264
    
    
    
    1,656Prepaids and other
    
    
    147
    
    
    
    306Other non-current assets
    
    
    134
    
    
    
    91Accounts payable and accrued expenses
    
    
    (2,000
    )
    
    
    (22,147
    )Restructuring accrual
    
    
    (494
    )
    
    
    (3,420
    )Unearned revenue and deferred maintenance
    
    
    3,437
    
    
    
    (2,142
    )Other noncurrent liabilities
    
    
    491
    
    
    
    4Net cash provided by (used for) operating activities
    
    
    8,407
    
    
    
    (30,080
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (98
    )
    
    
    (108
    )Transfer from restricted cash
    
    
    
    
    
    
    19,702Proceeds from sale of cost method investments
    
    
    
    
    
    
    350Proceeds from dividends
    
    
    
    
    
    
    1,101Net cash (used for) provided by investing activities
    
    
    (98
    )
    
    
    21,045Cash flows from financing activities:Proceeds from bank line of credit, term debt, and convertible notes
    
    
    
    
    
    
    35,000Repayments of bank line of credit, term debt, and convertible notes
    
    
    (227
    )
    
    
    (41,476
    )Proceeds from issuance of common stock, net
    
    
    128
    
    
    
    522Net cash used for financing activities
    
    
    (99
    )
    
    
    (5,954
    )Effect of exchange rates on cash and cash equivalents
    
    
    196
    
    
    
    (23
    )Net increase (decrease) in cash and cash equivalents
    
    
    8,406
    
    
    
    (15,012
    )Cash and cash equivalents at beginning of period
    
    
    4,849
    
    
    
    41,851Cash and cash equivalents at end of period
    
    $
    13,255
    
    
    $
    26,839Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    194
    
    
    $
    415Cash paid (refunds received) for income taxes
    
    $
    96
    
    
    $
    (259
    )Supplemental information of noncash financing and investing activities:Exchange of convertible debt to common stock
    
    $
    20,535
    
    
    $
    Conversion of accrued interest to equity
    
    $
    167
    
    
    $
    
 See Accompanying Notes to Condensed Consolidated Financial Statements
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BROADVISION, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (All quarterly data herein is unaudited)
 Note 1. Organization and Summary of Significant Accounting Policies
 Nature of Business
    Accounting for Derivative Financial Instruments Indexed
to, and Potentially Settled in, a Companys Own Stock
 Basis of Presentation
  Basis of consolidations
  Page 6




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Use of Estimates
  Employee Stock Option and Purchase Plans
     Page 7




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June 30, 2006Three Months Ended
    
    Six Months EndedWeighted average volatility
    
    
    85
    %
    
    
    85
    %Expected dividends
    
    
    
    
    
    
    Expected term (in years)
    
    
    3
    
    
    
    3Risk free rate
    
    
    5
    %
    
    
    5
    %Forfeiture rate
    
    
    18
    %
    
    
    18
    %
 Accounting for Certain Transactions Involving
Stock Compensationan Interpretation of APB Opinion 25 Accounting for Equity Instruments That Are Issued
to Other Than Employees For Acquiring or in Conjunction with Selling Goods or Services.
  Page 8




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June 30, 2005Three Months Ended
    
    
    Six Months Ended(restated)
    
    
    (restated)Net income (loss), as reported
    
    $
    (3,096
    )
    
    $
    4,317Add: Stock-based employee compensation expense included in reported
net income, net of related tax effects
    
    
    
    
    
    
    Deduct: Total stock-based employee compensation expense determined under
fair value based method for all awards, net of related tax effects
    
    
    7
    
    
    
    1,341Pro forma net income (loss)
    
    $
    (3,103
    )
    
    $
    2,976Weighted average common shares outstanding utilized for:Basic net income
    
    
    34,181
    
    
    
    34,077Diluted net income
    
    
    34,181
    
    
    
    34,163Income (loss) per share:Basicas reported
    
    $
    (0.09
    )
    
    $
    0.13Basicpro forma
    
    $
    (0.09
    )
    
    $
    0.09Dilutedas reported
    
    $
    (0.09
    )
    
    $
    0.13Dilutedpro forma
    
    $
    (0.09
    )
    
    $
    0.09
   Date Granted
    
    Options Granted
    
    Options Price
    
    Vested
    
    Vesting Period (Months)6/23/1999
    
    
    500,000
    
    
    $
    60
    
    
    
    500,000
    
    
    
    605/25/2001
    
    
    500,000
    
    
    
    67
    
    
    
    500,000
    
    
    
    4811/27/2001
    
    
    4,444
    
    
    
    35
    
    
    
    4,444
    
    
    
    242/19/2002
    
    
    55,555
    
    
    
    19
    
    
    
    55,555
    
    
    
    4810/30/2002
    
    
    644,445
    
    
    
    2
    
    
    
    644,445
    
    
    
    48Totals
    
    
    1,704,444
    
    
    
    
    
    
    
    1,704,444
  Six Months Ended,June 30, 2006Weighted
    
    AggregateAverage
    
    Intrinsic
    
    Number ofOptions
    
    Exercise
    
    Value
    
    Nonvested(000)
    
    Price
    
    (000)
    
    OptionsOutstanding at December 31, 2005
    
    
    3,765
    
    
    $
    23.48
    
    
    $
    
    
    
    
    Granted
    
    
    3,924
    
    
    
    0.57
    
    
    
    7
    
    
    
    3,463Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    (183
    )
    
    
    0.57
    
    
    
    
    
    
    
    Forefeited
    
    
    (538
    )
    
    
    8.05
    
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    6,968
    
    
    
    13.36
    
    
    $
    7
    
    
    
    3,463Option exercisable at the end of period
    
    
    3,505
    
    
    $
    23.94
    
    
    
    
    
    
    
    Weighted-average fair value of options granted
during the period
    
    $
    0.32Number of options vested during the period
    
    
    461
    
    
    $
    0.57
 Page 9




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Options OustandingOutstandingWeighted-AverageNumber of
    
    
    Remaining
    
    
    Weighted
    
    
    AggregateRange of Exercise
    
    
    Outstanding
    
    
    Contractual Life
    
    
    Exercise
    
    
    Intrinsic ValuePrices
    
    
    (000s)
    
    
    in Years
    
    
    Price
    
    
    (000s)$0.43 - $1.52
    
    
    
    3,873
    
    
    
    9.70
    
    
    $
    0.56
    
    
    $
    72.10 - 2.94
    
    
    
    1,035
    
    
    
    7.25
    
    
    
    2.32
    
    
    
    3.08  3.80
    
    
    
    406
    
    
    
    6.90
    
    
    
    3.66
    
    
    
    4.25  8.50
    
    
    
    273
    
    
    
    6.56
    
    
    
    6.19
    
    
    
    10.75  30.00
    
    
    
    119
    
    
    
    3.97
    
    
    
    21.47
    
    
    
    30.50  39.63
    
    
    
    163
    
    
    
    5.01
    
    
    
    35.01
    
    
    
    42.75  87.19
    
    
    
    1,093
    
    
    
    3.95
    
    
    
    62.71
    
    
    
    133.06  448.31
    
    
    
    6
    
    
    
    3.88
    
    
    
    184.04
    
    
    
    6,968
    
    
    
    
    
    
    $
    12.30
    
    
    $
    7
 Option ExercisableOutstandingWeighted-AverageNumber of
    
    Remaining
    
    Weighted
    
    AggregateRange of Exercise
    
    
    Exercisable
    
    Contractual Life
    
    Exercise
    
    Intrinsic ValuePrices
    
    
    (000s)
    
    in Years
    
    Price
    
    (000s)$0.43 - $1.52
    
    
    
    410
    
    
    
    5.86
    
    
    $
    0.90
    
    
    
    2.10 - 2.94
    
    
    
    1,035
    
    
    
    7.25
    
    
    
    2.32
    
    
    
    3.08  3.80
    
    
    
    406
    
    
    
    6.90
    
    
    
    3.66
    
    
    
    4.25  8.50
    
    
    
    273
    
    
    
    6.56
    
    
    
    6.19
    
    
    
    10.75  30.00
    
    
    
    119
    
    
    
    3.97
    
    
    
    21.47
    
    
    
    30.50  39.63
    
    
    
    163
    
    
    
    5.01
    
    
    
    35.01
    
    
    
    42.75  87.19
    
    
    
    1,094
    
    
    
    3.95
    
    
    
    62.71
    
    
    
    133.06  448.31
    
    
    
    6
    
    
    
    3.88
    
    
    
    184.04
    
    
    
    3,505
    
    
    
    
    
    
    $
    23.91
    
    
    
    
   Earnings Per Share Information
  Page 10




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(restated)
    
    
    
    
    
    
    (restated)Net income (loss)
    
    $
    1,750
    
    
    $
    (3,096
    )
    
    $
    2,631
    
    
    $
    4,317Weighted average common shares outstanding
utilized for basic net income per share
    
    
    69,151
    
    
    
    34,181
    
    
    
    56,055
    
    
    
    34,077Potential common stock issued for options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86Weighted average common shares outstanding utilized for
diluted net income per share:
    
    
    69,151
    
    
    
    34,181
    
    
    
    56,055
    
    
    
    34,163Basic net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.13Diluted net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.13
 Legal Matters
  Foreign Currency Transactions
  Valuation of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets Business Combinations Goodwill and Other Intangible Assets
 Goodwill and Other
Intangible Assets
 Reclassification
  Page 11




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##### Table of Contents



Comprehensive Income (Loss)
  Foreign
    
    
    Accumulated OtherCurrency
    
    
    ComprehensiveTranslation
    
    
    Income (Loss)Balance, December 31, 2005
    
    $
    93
    
    
    $
    93Net change during period
    
    
    196
    
    
    
    196Balance, June 30, 2006
    
    $
    289
    
    
    $
    289
 New Accounting Pronouncements
     Page 12




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Note 2. Selected Balance Sheet Detail
  June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)Furniture and fixtures
    
    $
    2,614
    
    
    $
    2,791Computers and software
    
    
    32,534
    
    
    
    32,705Leasehold improvements
    
    
    5,896
    
    
    
    6,21941,044
    
    
    
    41,715Less accumulated depreciation and amortization
    
    
    (39,160
    )
    
    
    (39,381
    )$
    1,884
    
    
    $
    2,334
  June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)Employee benefits
    
    $
    1,107
    
    
    $
    1,048Commissions and bonuses
    
    
    689
    
    
    
    533Sales and other taxes
    
    
    3,371
    
    
    
    3,885Restructuring (See Note 6)
    
    
    5,386
    
    
    
    5,533Warrants Liability
    
    
    663
    
    
    
    277Other
    
    
    4,670
    
    
    
    4,814$
    15,886
    
    
    $
    16,090
 Note 3. Bank Borrowings, Convertible Notes and Other Non-Current Liabilities
  June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)Bank borrowings  Term debt
    
    $
    162
    
    
    $
    389162
    
    
    
    389Less: Current portion of bank borrowings
    
    
    (162
    )
    
    
    (389
    )Long-term debt, net of current portion
    
    $
    
    
    
    $
    
  
    
    During the year ended December 31, 2005, the Company maintained a revolving line of
credit in the form of a loan and security agreement with a commercial lender, which expired
in February 2006. No amounts were outstanding under this credit facility.
    
    The Company has entered into term debt in the form of notes payable with the same
lender. The term debt requires monthly payments of approximately $38,000 plus interest
through October 2006, and monthly payments of approximately $2,000 for the five months
ending March 2007. A portion of the term debt was utilized for an equipment line of
credit. Principal and interest are due in monthly payments through maturity based on the
terms of the facilities. As of June 30, 2006 and December 31, 2005, the entire balance of
$162,000 and $389,000, respectively, was classified as currently due.
 Convertible Notes
  Page 13




---



##### Table of Contents



Underlying
    
    Exercise PriceDescription
    
    Shares
    
    Per ShareIssued to landlord in real estate buyout transaction in August 2004
    
    
    700,000
    
    
    $
    5.00Issued to convertible notes investors in November 2004
    
    
    3,082,219
    
    
    
    2.02Other issued in connection with revenue transactions in 1997 and 2000
    
    
    9,628
    
    
    
    variousTotal warrants
    
    
    3,791,847
  Page 14




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(restated)
    
    
    
    
    
    
    (restated)Warrants related to the Notes
    
    $
    (15
    )
    
    $
    732
    
    
    $
    (399
    )
    
    $
    2,496Warrants related to real estate buyout
    
    
    (1
    )
    
    
    264
    
    
    
    13
    
    
    
    1,017Conversion Feature
    
    
    
    
    
    
    1,198
    
    
    
    
    
    
    
    5,868Additional Investment Rights
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    867(Loss) gain on revaluation of warrants and
change in value of derivatives
    
    $
    (16
    )
    
    $
    2,257
    
    
    $
    (386
    )
    
    $
    10,248
 Other Non-Current Liabilities
  June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)Restructuring (Note 6)
    
    $
    1,375
    
    
    $
    1,722Deferred maintenance and unearned revenue
    
    
    2,791
    
    
    
    2,334Other
    
    
    369
    
    
    
    334Total other non-current liabilities
    
    $
    4,535
    
    
    $
    4,390
 Note 4. Commitments and Contingencies
 Warranties and Indemnification
   Leases
  Page 15




---



##### Table of Contents



OperatingYears Ending December 31,
    
    Leases2006
    
    $
    1.52007
    
    
    3.82008
    
    
    2.12009
    
    
    2.12010
    
    
    1.82011 and thereafter
    
    
    2.3Total minimum lease payments
    
    $
    13.6
  Standby Letter of Credit Commitments
  Note 5. Geographic, Segment and Significant Customer Information
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Software licenses
    
    $
    3,627
    
    
    $
    3,391
    
    
    $
    6,509
    
    
    $
    7,807Consulting services
    
    
    3,153
    
    
    
    5,156
    
    
    
    6,995
    
    
    
    10,303Maintenance
    
    
    5,949
    
    
    
    6,967
    
    
    
    11,849
    
    
    
    13,771Total revenues
    
    $
    12,729
    
    
    $
    15,514
    
    
    $
    25,353
    
    
    $
    31,881
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Americas
    
    $
    10,633
    
    
    $
    9,058
    
    
    $
    20,652
    
    
    $
    17,696Europe
    
    
    1,350
    
    
    
    5,411
    
    
    
    2,621
    
    
    
    11,329Asia/Pacific
    
    
    746
    
    
    
    1,045
    
    
    
    2,080
    
    
    
    2,856Total revenues
    
    $
    12,729
    
    
    $
    15,514
    
    
    $
    25,353
    
    
    $
    31,881
 June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)Long-Lived Assets:Americas
    
    $
    27,276
    
    
    $
    29,039Europe
    
    
    240
    
    
    
    328Asia/Pacific
    
    
    442
    
    
    
    445Total long-lived assets
    
    $
    27,958
    
    
    $
    29,812
 Page 16




---



##### Table of Contents



Note 6. Restructuring Charges
 Restructuring and Impairment
   Severance and Termination Benefits
  Excess Facilities
  Current
    
    
    Non-Current
    
    
    TotalSeverance and Termination
    
    $
    0.4
    
    
    $
    
    
    
    $
    0.4Excess Facilities
    
    
    5.0
    
    
    
    1.4
    
    
    
    6.4Total
    
    $
    5.4
    
    
    $
    1.4
    
    
    $
    6.8
 Page 17




---



##### Table of Contents



Total futureminimumYears Ending December 31,
    
    payments2006
    
    $
    4.72007
    
    
    0.72008
    
    
    0.42009
    
    
    0.42010
    
    
    0.2Total minimum lease payments
    
    $
    6.4
  Accrued
    
    
    charged torestructuring
    
    
    restructuring
    
    
    
    
    
    
    Accruedcosts,
    
    
    costs
    
    
    Amounts paid
    
    
    restructuringbeginning
    
    
    and other
    
    
    or written off
    
    
    costs, endingThree Months Ended June 30, 2006Lease cancellations and commitments
    
    $
    4,296
    
    
    $
    
    
    
    $
    103
    
    
    $
    4,399Termination payments to employees and related costs
    
    
    103
    
    
    
    
    
    
    
    (65
    )
    
    
    38$
    4,399
    
    
    $
    
    
    
    $
    38
    
    
    $
    4,437Three Months Ended June 30, 2005Lease cancellations and commitments
    
    $
    3,846
    
    
    $
    (146
    )
    
    $
    264
    
    
    $
    3,964Termination payments to employees and related costs
    
    
    115
    
    
    
    627
    
    
    
    (87
    )
    
    
    655$
    3,961
    
    
    $
    481
    
    
    $
    177
    
    
    $
    4,619Six Months Ended June 30, 2006Lease cancellations and commitments
    
    $
    4,188
    
    
    $
    108
    
    
    $
    103
    
    
    $
    4,399Termination payments to employees and related costs
    
    
    105
    
    
    
    374
    
    
    
    (441
    )
    
    
    38$
    4,293
    
    
    $
    482
    
    
    $
    (338
    )
    
    $
    4,437Six Months Ended June 30, 2005Lease cancellations and commitments
    
    $
    21,824
    
    
    $
    (777
    )
    
    $
    (17,083
    )
    
    $
    3,964Termination payments to employees and related costs
    
    
    365
    
    
    
    532
    
    
    
    (242
    )
    
    
    655$
    22,189
    
    
    $
    (245
    )
    
    $
    (17,325
    )
    
    $
    4,619
 Page 18




---



##### Table of Contents



Accrued
    
    
    charged torestructuring
    
    
    restructuring
    
    
    
    
    
    
    Accruedcosts,
    
    
    costs
    
    
    Amounts paid
    
    
    restructuringbeginning
    
    
    and other
    
    
    or written off
    
    
    costs, endingThree Months Ended June 30, 2006Lease cancellations and commitments
    
    $
    2,223
    
    
    $
    (15
    )
    
    $
    (216
    )
    
    $
    1,992Termination payments to employees and related costs
    
    
    319
    
    
    
    
    
    
    
    13
    
    
    
    332$
    2,542
    
    
    $
    (15
    )
    
    $
    (203
    )
    
    $
    2,324Three Months Ended June 30, 2005Lease cancellations and commitments
    
    $
    8,871
    
    
    $
    (172
    )
    
    $
    (2,373
    )
    
    $
    6,326Termination payments to employees and related costs
    
    
    445
    
    
    
    
    
    
    
    (23
    )
    
    
    422$
    9,316
    
    
    $
    (172
    )
    
    $
    (2,396
    )
    
    $
    6,748Six Months Ended June 30, 2006Lease cancellations and commitments
    
    $
    2,651
    
    
    $
    (7
    )
    
    $
    (652
    )
    
    $
    1,992Termination payments to employees and related costs
    
    
    311
    
    
    
    
    
    
    
    21
    
    
    
    332$
    2,962
    
    
    $
    (7
    )
    
    $
    (631
    )
    
    $
    2,324Six Months Ended June 30, 2005Lease cancellations and commitments
    
    $
    11,515
    
    
    $
    (150
    )
    
    $
    (5,039
    )
    
    $
    6,326Termination payments to employees and related costs
    
    
    459
    
    
    
    
    
    
    
    (37
    )
    
    
    422$
    11,974
    
    
    $
    (150
    )
    
    $
    (5,076
    )
    
    $
    6,748
  Note 7. Warrants
  Underlying
    
    Exercise PriceDescription
    
    Shares
    
    Per ShareIssued to landlord in real estate buyout transaction in August 2004
    
    
    700,000
    
    
    $
    5.00Issued to convertible notes investors in November 2004
    
    
    3,082,219
    
    
    
    2.02Other issued in connection with revenue transactions in 1997 and 2000
    
    
    9,628
    
    
    
    variousTotal warrants
    
    
    3,791,847
  ,
 Page 19




---



##### Table of Contents



Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock,
 Note 8. Stockholders Equity
  Note 9. Subsequent Event
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, which are subject to the safe harbor created by those sections.
These forward-looking statements are generally identified by words such as expect, anticipate,
intend, believe, hope, assume, estimate, plan, will and other similar words and
expressions. These forward-looking statements involve risks and uncertainties that could cause our
actual results to differ materially from those expressed or implied in the forward-looking
statements as a result of certain factors, including those described herein and in the Companys
most recently filed Annual Report on Form 10-K and other documents filed with the SEC. We undertake
no obligation to publicly release any revisions to the forward-looking statements or to reflect
events and circumstances after the date of this document.
 Overview
    Page 20




---



##### Table of Contents



Recent Events
     Page 21




---



##### Table of Contents



Critical Accounting Policies, Estimates and Judgments
   Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
 Revenue Recognition
 Overview Software Revenue Recognition Software Revenue
Recognition, With Respect to Certain Transactions Revenue Recognition .
 Software License Revenue
  Page 22




---



##### Table of Contents



Services Revenue
   Allowances and Reserves
  Impairment Assessments
  Deferred Tax Assets
  Page 23




---



##### Table of Contents



Accounting for Stock-Based Compensation
   Aggregate Number of Common Shares
    
    Weighted AverageIssuable Under Accelerated Stock Options
    
    Exercise Price Per ShareTotal Non-Employee Directors
    
    
    122,181
    
    
    $
    2.98Total Named Executive Officers
    
    
    391,886
    
    
    
    2.87Total Directors and Named Executive
    
    
    514,067
    
    
    
    2.89Total All Other Employees
    
    
    610,707
    
    
    
    2.97Total
    
    
    1,124,774
    
    
    
    2.94
     
    
    The expected volatility of our common stock price, which we determine based on
historical volatility of our common stock over the expected term of the option;
    
    Expected dividends, which are nil, as we do not currently anticipate issuing dividends;
    
    Expected life of the stock option, which is estimated based on the historical stock
option exercise behavior of our employees; and
    
    Expected forfeitures of stock options, which is estimated based on the historical
turnover of our employees. Prior to adoption of FAS 123R, we recognized forfeitures under
FAS 123 as they occurred.
  Page 24




---



##### Table of Contents



Restructuring Charges
 .
 Severance and Termination Costs
 
 
 Excess Facilities Costs
  Costs
Associated with Lease Modification or Termination
 
   Research and Development and Software Development Costs
 Accounting for the Cost of Computer Software to be
Sold, Leased or Otherwise Marketed
 Page 25




---



##### Table of Contents



Cash and Cash Equivalents
   June 30,
    
    
    December 31,2006
    
    
    2005(unaudited)(Fair value)
    
    
    (Fair value)Cash and certificates of deposits
    
    $
    12,103
    
    
    $
    4,030Money market
    
    
    1,152
    
    
    
    819Total cash and equivalents
    
    $
    13,255
    
    
    $
    4,849
 Concentrations of Credit Risk
  Fair Value of Financial Instruments
  Foreign Currency
  Legal Matters
  Page 26




---



##### Table of Contents



Results of Operations
 Revenues
 Total revenues
 SoftwareLicenses
    
    
    %
    
    
    Services
    
    
    %
    
    
    Total
    
    
    %Three Months Ended:June 30, 2006Americas
    
    $
    3,131
    
    
    
    86
    %
    
    $
    7,502
    
    
    
    82
    %
    
    $
    10,633
    
    
    
    84
    %Europe
    
    
    367
    
    
    
    10
    
    
    
    983
    
    
    
    11
    
    
    
    1,350
    
    
    
    11Asia Pacific
    
    
    129
    
    
    
    4
    
    
    
    617
    
    
    
    7
    
    
    
    746
    
    
    
    5Total
    
    $
    3,627
    
    
    
    100
    %
    
    $
    9,102
    
    
    
    100
    %
    
    $
    12,729
    
    
    
    100
    %June 30, 2005Americas
    
    $
    1,792
    
    
    
    53
    %
    
    $
    7,266
    
    
    
    60
    %
    
    $
    9,058
    
    
    
    58
    %Europe
    
    
    1,278
    
    
    
    38
    
    
    
    4,133
    
    
    
    34
    
    
    
    5,411
    
    
    
    35Asia Pacific
    
    
    321
    
    
    
    9
    
    
    
    724
    
    
    
    6
    
    
    
    1,045
    
    
    
    7Total
    
    $
    3,391
    
    
    
    100
    %
    
    $
    12,123
    
    
    
    100
    %
    
    $
    15,514
    
    
    
    100
    %Six Months Ended:June 30, 2006Americas
    
    $
    5,396
    
    
    
    83
    %
    
    $
    15,256
    
    
    
    81
    %
    
    $
    20,652
    
    
    
    81
    %Europe
    
    
    713
    
    
    
    11
    
    
    
    1,908
    
    
    
    10
    
    
    
    2,621
    
    
    
    11Asia Pacific
    
    
    400
    
    
    
    6
    
    
    
    1,680
    
    
    
    9
    
    
    
    2,080
    
    
    
    8Total
    
    $
    6,509
    
    
    
    100
    %
    
    $
    18,844
    
    
    
    100
    %
    
    $
    25,353
    
    
    
    100
    %June 30, 2005Americas
    
    $
    3,706
    
    
    
    48
    %
    
    $
    13,990
    
    
    
    58
    %
    
    $
    17,696
    
    
    
    55
    %Europe
    
    
    2,984
    
    
    
    38
    
    
    
    8,345
    
    
    
    35
    
    
    
    11,329
    
    
    
    36Asia Pacific
    
    
    1,117
    
    
    
    14
    
    
    
    1,739
    
    
    
    7
    
    
    
    2,856
    
    
    
    9Total
    
    $
    7,807
    
    
    
    100
    %
    
    $
    24,074
    
    
    
    100
    %
    
    $
    31,881
    
    
    
    100
    %
  Software license revenues
 Services revenues
   Page 27




---



##### Table of Contents



Cost of Revenues
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    % (1)
    
    
    2005
    
    
    %(1)
    
    
    2006
    
    
    %(1)
    
    
    2005
    
    
    %(1)Cost of software
    
    $
    142
    
    
    
    1
    %
    
    $
    (186
    )
    
    
    -1
    %
    
    $
    204
    
    
    
    1
    %
    
    $
    (243
    )
    
    
    -1
    %Cost of services
    
    
    3,496
    
    
    
    28
    %
    
    
    5,614
    
    
    
    36
    %
    
    
    7,554
    
    
    
    30
    %
    
    
    11,594
    
    
    
    36
    %Total cost of revenues
    
    $
    3,638
    
    
    
    29
    %
    
    $
    5,428
    
    
    
    35
    %
    
    $
    7,758
    
    
    
    31
    %
    
    $
    11,351
    
    
    
    35
    %
 Cost of (credit for) software licenses
 Cost of services
 Gross margin
 Operating Expenses and Other Income, net
   Research and development expenses
  Sales and marketing expenses
  General and administrative expenses
  Restructuring charges
 Page 28




---



##### Table of Contents



Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    % (1)
    
    
    2005
    
    
    % (1)
    
    
    2006
    
    
    % (1)
    
    
    2005
    
    
    % (1)Research and development
    
    $
    2,405
    
    
    
    19
    %
    
    $
    3,955
    
    
    
    25
    %
    
    $
    5,036
    
    
    
    20
    %
    
    $
    8,242
    
    
    
    26
    %Sales and marketing
    
    
    1,982
    
    
    
    16
    %
    
    
    5,060
    
    
    
    33
    %
    
    
    4,363
    
    
    
    17
    %
    
    
    10,871
    
    
    
    34
    %General and administrative
    
    
    3,239
    
    
    
    25
    %
    
    
    2,829
    
    
    
    18
    %
    
    
    4,977
    
    
    
    20
    %
    
    
    5,364
    
    
    
    17
    %Restructuring charges
    
    
    (15
    )
    
    
    0
    %
    
    
    309
    
    
    
    2
    %
    
    
    475
    
    
    
    2
    %
    
    
    (395
    )
    
    
    -1
    %Total operating expenses
    
    $
    7,611
    
    
    
    60
    %
    
    $
    12,153
    
    
    
    78
    %
    
    $
    14,851
    
    
    
    59
    %
    
    $
    24,082
    
    
    
    76
    %
 
 (1)
    
    Expressed as a percent of total revenues for the period indicated
 Research and development expenses
 Sales and marketing expenses
 General and administrative expenses
 Interest income (expense), net
 (Loss) gain on revaluation of warrants and change in value of derivatives
 Other income, net,
 (Provision) benefit for income taxes
 Page 29




---



##### Table of Contents



Liquidity and Capital Resources
 Background and Overview
   June 30,
    
    December 31,2006
    
    2005(unaudited)Cash and cash equivalents
    
    $
    13,255
    
    
    $
    4,849Restricted cash and investments, net of current
    
    $
    1,796
    
    
    $
    1,997Working capital (deficit)
    
    $
    (10,978
    )
    
    $
    (35,872
    )Working capital ratio
    
    
    0.70
    
    
    
    0.35
   Cash Provided By (Used For) Operating Activities
   Page 30




---



##### Table of Contents



Cash Provided By (Used For) Investing Activities
  Cash (Used for) Provided By Financing Activities
  Leases and Other Contractual Obligations
   OperatingYears Ending December 31,
    
    Leases2006
    
    $
    1.52007
    
    
    3.82008
    
    
    2.12009
    
    
    2.12010
    
    
    1.82011 and thereafter
    
    
    2.3Total minimum lease payments
    
    $
    13.6
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4. Controls and Procedures
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Changes in Internal Control over Financial Reporting
     Limitations on the Effectiveness of Controls
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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 The risks and uncertainties described below are not the only ones facing us. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial also may
impair our business operations. If any of the following risks actually occur, our business could be
harmed. In that event, the trading price of our common stock could decline.
 We have a history of losses and our future profitability on a quarterly or annual basis is
uncertain, which could have a harmful effect on our business and the value of BroadVision common
stock.
    We face liquidity challenges and may need additional near-term financing.
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Our management identified a material weakness in the effectiveness of our internal control over
financial reporting as of December 31, 2005 and restated our historical operating results, and we
cannot assure you that additional material weaknesses will not be discovered or additional
restatements will not be made in the future.
    Our business currently depends on revenue related to our BroadVision Self-Service Suite, and if the
market does not increasingly accept this product and related products and services, our revenue may
continue to decline.
  If we are unable to keep pace with the rapid technological changes in online commerce and
communication, our products and services may fail to be competitive.
  
    
    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.
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Our sales and product implementation cycles are lengthy and subject to delay, which make it
difficult to predict our quarterly results.
  Because our quarterly operating results are volatile and difficult to predict, our quarterly
operating results in one or future periods are likely to fluctuate significantly, which could cause
our stock price to decline if we fail to meet the expectations of securities analysts or investors.
   
    
    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 us or our
competitors 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;
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
    
    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.
  Because a significant portion of our sales activity occurs at the end of each fiscal quarter,
delays in a relatively small number of license transactions could adversely affect our quarterly
operating results.
  We have substantially modified our business and operations and will need to manage and support
these changes effectively in order for our business plan to succeed.
  Modifications to our business and operations may not result in a reduced cost structure as
anticipated and may otherwise adversely impact our productivity.
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We are dependent on direct sales personnel and third-party distribution channels to achieve revenue
growth.
  Failure to maintain relationships with third-party systems integrators could harm our ability to
achieve our business plan.
  
    
    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.
 We may be unable to manage or grow our international operations and assets, which could impair our
overall growth or financial position.
   
    
    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;
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
    
    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.
   Current and potential competitors could make it difficult for us to acquire and retain customers
now and in the future.
   Our success and competitive position will depend on our ability to protect our proprietary
technology.
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A breach of the encryption technology that we use could expose us to liability and harm our
reputation, causing a loss of customers.
  The loss or malfunction of technology licensed from third parties could delay the introduction of
our products and services.
  Our executive officers, key employees and highly skilled technical and managerial personnel are
critical to our business, and they may not remain with us in the future.
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Limitations on the online collection of profile information could impair the effectiveness of our
products.
    We may not have adequate back-up systems, and natural or manmade disasters could damage our
operations, reduce our revenue and lead to a loss of customers.
  Risks related to BroadVision common stock
 Our stock price has been highly volatile.
  
    
    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;
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
    
    general economic conditions; or
    
    other events or factors that are beyond our control.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults In Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 (a) Exhibits
 Exhibits
    
    Description3.1 (1)
    
    Amended and Restated Certificate of Incorporation.3.2 (2)
    
    Certificate of Amendment of Certificate of Incorporation.3.3 (3)
    
    Amended and Restated Bylaws.4.1 (1)
    
    References are hereby made to Exhibits 3.1 to 3.210.35 (4)
    
    2006 Equity Incentive Plan31.1
    
    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 Preliminary Proxy Statement filed on July 7, 2006. Page 41




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SIGNATURES
  BROADVISION, INC.Date: September 25, 2006
    By:
    /s/ Pehong ChenPehong ChenChairman of the Board, President, Chief Executive Officer and Chief Financial Officer Page 42




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EXHIBIT INDEX
 Exhibits
    
    Description3.1 (1)
    
    Amended and Restated Certificate of Incorporation.3.2 (2)
    
    Certificate of Amendment of Certificate of Incorporation.3.3 (3)
    
    Amended and Restated Bylaws.4.1 (1)
    
    References are hereby made to Exhibits 3.1 to 3.210.35 (4)
    
    2006 Equity Incentive Plan31.1
    
    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 Preliminary Proxy Statement filed on July 7, 2006.