BackWeb Technologies Ltd. (OTC Pink: BWEBF) announced today that its Board of Directors has approved a plan to liquidate the Company and distribute all of its net cash to shareholders on a pro rata basis. The decision expands upon an earlier plan to distribute a substantial portion of the Company’s cash to shareholders and requires approval by shareholders (75% of all shares voted) as well as the satisfaction of legal and regulatory requirements. BackWeb also reported it has sold the remaining rights to its patent portfolio, thus ending its patent licensing activity. The Company also provided an unaudited balance sheet as of February 28, 2013 and posted its audited 2011 annual report on its website at http://www.backweb.com/news. Net of all anticipated wind-down and liquidation expenses, BackWeb anticipates approximately $9.7 million to $10.2 million in net cash available for distribution among all common shareholders after the Company’s liquidation process is complete. BackWeb has approximately 41.8 million shares outstanding plus approximately 1.7 million options expected to be exercised in conjuction with the liquidation, which would result in an anticipated net cash available for distribution among all common shareholders of $0.22 to $0.23 per share. As an Israeli corporation, BackWeb’s cash distributions upon liquidation may be subject to Israeli withholding tax at a rate of up to 30%. The Company intends to promptly file an application with the Israeli Tax Authority to request a ruling that certain types of shareholders be exempt from the withholding tax. There can be no assurance that such ruling will be granted. The Company expects to learn the results of the application within three months. As of February 28, 2013, on an unaudited basis, BackWeb had cash and current assets of $11.6 million and total liabilities of approximately $0.65 million. Cash and current assets include net proceeds of approximately $0.6 million from the sale of the Company’s intellectual property/patent portfolio which closed in February 2013. Future expenses related to the wind-down of operations and liquidation are subject to some uncertainty, however management currently estimates that expenses including legal, accounting and operational costs, as well as proxy, special meeting and other shareholder communications costs, are anticipated to range from $0.7 million to $1.2 million.
A shareholders’ meeting to authorize the Company’s liquidation is tentatively targeted for July or August 2013. BackWeb will publicly announce the shareholders’ meeting date and anticipates distributing proxy materials approximately 4-5 weeks prior to the meeting. Shareholders are urged to verify their email and address information and their proxy receipt and voting preferences with their broker or BackWeb’s transfer agent for those who hold their shares in certificate form.BackWeb’s acting CEO, Bill Heye, commented: “Having successfully monetized our patent portfolio over the past few years, the Board and management concluded it was in the interest of shareholders to sell our remaining patent rights. Furthermore, the Board and management concluded that a voluntary liquidation of the Company is the best way to return value to our shareholders. Because BackWeb is an Israeli company, the liquidation process is subject to various Israeli legal and regulatory requirements, making the timing and ultimate cost of the process difficult to predict. Our advisors indicate that a liquidation in Israel typically takes approximately six to twelve months following shareholder approval of the liquidation.” The following balance sheet reflects the company’s unaudited financial position as of February 28, 2013. It includes proceeds from the sale of the patent portfolio but does not reflect future anticipated expenses including liquidation-related expenses estimated at $0.7 million to $1.2 million.
|BackWeb Technologies Ltd.PRELIMINARY, UNAUDITED Preliminary Consolidated Balance Sheet as ofFebruary 28, 2013(in thousands)|
|Feb 28, 2013Unaudited,preliminary|
|Cash and Cash Equivalents||$||10,942|
|Trade Accounts Receivable and Other Current Assets||665|
|Total Current Assets||$||11,607|
|Non-current Assets, Property and Equipment, net and Other||--|
|Accounts Payable and Accrued Liabilities||$||639|
|Total current liabilities||$||639|
|Total shareholders equity||$||10,968|
|Total liabilities and shareholders equity||$||11,607|
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