BackWeb Reports Progress on Liquidation Plans

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BackWeb Reports Progress on Liquidation Plans

- Initial Shareholder Vote Scheduled for October 8, 2013 -

- Favorable Israeli Tax Ruling Received -

ELLA VALLEY, Israel & SANTA CLARA, Calif.--(BUSINESS WIRE)-- BackWeb Technologies Ltd. (OTC Pink:BWEBF) today provided a progress report on its plans to liquidate the Company and distribute all of its net cash to shareholders on a pro rata basis. The Company also posted its unaudited 2012 financial statements, which reflect a net profit of $581,000, on its website at

Favorable Tax Withholding Ruling

In response to a request filed with the Israeli Tax Authority, BackWeb has received a favorable ruling concerning Israeli tax withholding on the liquidation payments. Under the ruling, payments to a BackWeb shareholder who holds shares outside of Israel and who is not a resident of Israel will generally be exempt from Israeli tax withholding. Withholding will apply to payments to these shareholders only if they hold 5% or more of the Company's outstanding shares, or if they acquired their shares while BackWeb was still a private company (before BackWeb's IPO).

The treatment of a shareholder that holds BackWeb shares in street name through a broker or financial institution in Israel will be somewhat different. In this case, payments by BackWeb to the Israeli broker or financial institution will not be subject to Israeli tax withholding, but the Israeli broker or financial institution may deduct applicable Israeli withholding tax (if any) when it transfers the payment of liquidation proceeds to the shareholder. Again, the withholding exemption on the payment by BackWeb will not apply if the shareholders hold 5% or more of the Company's outstanding shares, or if they acquired their shares while BackWeb was still a private company (before BackWeb's IPO). Shareholders who hold their shares in street name through a broker or financial institution in Israel should contact the broker or financial institution for additional information.

The above is a general summary of the Israeli withholding tax treatment under a ruling that BackWeb has obtained, and further details will be included in a proxy statement to be sent to shareholders in connection with an Extraordinary General Meeting of Shareholders (EGM) described below, and in materials that the liquidator will eventually send to shareholders. Shareholders should consult with their own advisors regarding all of the tax consequences to them of the contemplated liquidation and distribution.

Two Shareholder Meetings Required to Approve Liquidation

To formally begin the liquidation process, the company plans two shareholder meetings. The first, an Annual General Meeting of Shareholders (AGM), will serve to re-elect Directors and consider other proposals. Following the AGM, the board plans to formally approve the company's liquidation plan. Shareholders will then vote on the liquidation plan in the second shareholder meeting, an Extraordinary General Meeting of Shareholders (EGM).

BackWeb has scheduled the Annual General Meeting (AGM) of Shareholders for Tuesday, October 8, 2013 at 6:00 p.m. local time in Tel Aviv, Israel. Shareholders of record on August 29, 2013 will be entitled to vote at the AGM. A proxy statement will be mailed to shareholders of record in about ten business days and will also be posted to BackWeb's website

At the AGM, shareholders will be asked to re-elect members of the Board of Directors, to ensure the Board is properly constituted and able to consider and approve the plan of liquidation. Shareholders will also be asked to ratify special cash bonuses for BackWeb's three independent directors, to be paid at the time of liquidation, in recognition of their service to the Company over the past several years and the work they will do leading up to liquidation. Finally, shareholders will be asked to approve the appointment and compensation of BackWeb's independent registered public accounting firm.

Following the AGM, the Board will formally approve the liquidation plan so it can be put to a vote in an Extraordinary General Meeting of Shareholders (EGM), estimated to take place two or three months following the AGM. BackWeb will publicly announce the EGM date and anticipates distributing proxy materials approximately 4-5 weeks prior to the meeting.

To keep the liquidation process moving, shareholders are urged to vote their shares on the matters being presented at the AGM immediately upon receipt of their proxy materials. Shareholders are also urged to verify their email and address information and their proxy 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 concluded that a voluntary liquidation is the best way to return value to our shareholders, BackWeb's Board and management have worked to move this process forward. We are pleased to have finalized the tax ruling from the Israeli Tax Authorities so our shareholders have as much clarity as possible as we begin the formal liquidation process. Our end goal remains to distribute the largest possible amount of cash per share, and on that front, we remain confident in achieving our earlier cash distribution projection of approximately $0.22 - $0.23 per share."

Liquidation Overview:

Net of all anticipated wind-down and liquidation expenses, estimated to be $0.7 million to $1.2 million (inclusive of the proposed bonuses of $50,000 for each of three independent directors), BackWeb anticipates approximately $9.7 million to $10.2 million in net cash available for distribution among shareholders after the Company's liquidation process is complete.

BackWeb continues to expect a net cash distribution to common shareholders of approximately $0.22 to $0.23 per share, reflecting approximately 41.8 million shares outstanding and approximately 1.7 million in-the-money options anticipated for exercise. BackWeb's advisors indicate that a liquidation in Israel typically takes from 6-12 months following shareholder approval of a liquidation, which is now targeted for shareholder approval around November or December 2013.

BackWeb also reported that it has posted its unaudited 2012 financial statements on its website at

About BackWeb:

BackWeb ® Technologies Ltd. ( ) has suspended its operations and divested its patent portfolio and is now proceeding toward its liquidation, pending shareholder approval. BackWeb retains a limited corporate presence in Santa Clara, CA and Israel.

Statements in this news release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements of beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, but are not limited to, comments concerning BackWeb's future expenses, the amount of cash that will be returned to shareholders, the timing of a liquidation process, the timing of a liquidation distribution, and other matters. Such statements reflect the Company's current estimate with respect to future events, therefore they are not promises or guaranties. BackWeb assumes no obligation to update any of the forward-looking statements in this release.

© 2013 BackWeb Technologies Ltd. All rights reserved. BackWeb is a registered trademark. All other trademarks are property of their respective owners.

BackWeb Media & Investor:
Catalyst Global LLC
David C. Collins, 212-924-9800

KEYWORDS:   United States  North America  California  Middle East  Israel


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