8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2008

BORLAND SOFTWARE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-10824	94-2895440
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

8303 N. Mo-Pac Expressway, Suite A-300
Austin, Texas 78759
(Address of principal executive offices, including zip code)
(512) 340-2200
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.01 Completion of Acquisition or Disposition of Assets

On June 30, 2008, Borland Software Corporation (“Borland”) completed the sale of all of the assets (excluding accounts receivable), operations and certain liabilities of its Integrated Development Environment (“IDE”) tools business, which was operated as Borland’s CodeGear division, to Embarcadero Technologies, Inc. (“Embarcadero”). The closing of the sale was pursuant to the Purchase Agreement entered into by Borland and Embarcadero and certain of Borland’s foreign subsidiaries on May 6, 2008, as described in the Form 8-K filed by Borland with the Securities and Exchange Commission on May 7, 2008.

The total consideration was $29.8 million less the estimated amount of the accounts receivable at closing, which was approximately $5.6 million, and less the estimated working capital adjustment of approximately $3.5 million, which resulted in Borland receiving approximately $20.7 million in cash. The consideration is subject to adjustment for working capital and certain expenses.

Pursuant to the Purchase Agreement, on June 30, 2008, the parties entered into several ancillary agreements, including:

     (i) a patent assignment agreement, whereby Borland assigned 34 of its patents which pertain solely or substantially to the CodeGear business;

     (ii) a patent license, whereby Borland granted to Embarcadero a non-exclusive license restricted to a certain field of use;

     (iii) a technology cross-license agreement, which provides for licenses to and from the parties for software and tools used in both the CodeGear and Borland’s retained business;

     (iv) a services agreement which obligates Embarcadero to provide software license management application services to Borland following the closing, which will be necessary because Borland will transfer to Embarcadero the software license management application it uses for certain of its products;

     (v) copyright, trademark and domain name assignment agreements, which provided for the assignment of copyrights, trademarks and domain names used primarily in the CodeGear business;

     (vi) an occupancy agreement, which will provide for the sublease by Borland of facilities used in the CodeGear business; and

     (vii) a transition services agreement, which will obligate Borland to provide services to Embarcadero for a limited time to assist with the transition of the CodeGear business from Borland to Embarcadero.

Item 2.05 Costs Associated with Exit or Disposal Activities.

As a result of the closing of the sale of the CodeGear assets from Borland to Embarcadero, as described in Item 2.01 described above, which is incorporated herein by reference, Borland expects to incur restructuring costs consisting of facilities costs and transaction costs, including attorneys and investment advisor fees, in the ranges set forth below:

Range of expected facilities costs: $2,100,000 to $2,700,000
Range of expected transaction costs: $1,100,000 to $1,700,000

     Total Range of Expected Costs: $3,200,000 to $4,400,000

Item 9.01. Financial Statements and Exhibits.

The attached unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2007 and the three months ended March 31, 2008 have been prepared to present our results of operations as if the sale of the CodeGear division had occurred on January 1, 2007. The unaudited pro forma condensed balance sheet as of March 31, 2008 has been prepared to present our financial position as if the sale of the CodeGear assets had occurred on March 31, 2008.

These unaudited pro forma condensed consolidated financial statements do not purport to be indicative of the financial position or results of operations of Borland as of such dates or for such periods, nor are they necessarily indicative of future results. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with Borland’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2007, and Management’s Discussion and Analysis included in Borland’s Annual Report on Form 10-K for the year ended December 31, 2007.

EXHIBIT
NO.		DESCRIPTION
	99.1	Unaudited pro forma condensed consolidated financial statements, including:
		(i) Unaudited pro forma historical revenue for the three months ended March 31, 2008 and the years ended December 31, 2007, 2006 and 2005;
		(ii) Unaudited pro forma condensed statement of operations for the three months ended March 31, 2008 and the year ended December 31, 2007;
		(iii) Unaudited pro forma condensed consolidated balance sheet as of March 31, 2008;
		(iv) Notes to the unaudited pro forma condensed consolidated financial statements.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BORLAND SOFTWARE CORPORATION
By:	/s/ Erik Prusch
	Erik Prusch
	Chief Financial Officer

Date: July 7, 2008

EXHIBIT INDEX

EXHIBIT
NO.		DESCRIPTION
	99.1	Unaudited pro forma condensed consolidated financial statements, including:
		(i) Unaudited pro forma historical revenue for the three months ended March 31, 2008 and the years ended December 31, 2007, 2006 and 2005;
		(ii) Unaudited pro forma condensed statement of operations for the three months ended March 31, 2008 and the year ended December 31, 2007;
		(iii) Unaudited pro forma condensed consolidated balance sheet as of March 31, 2008;
		(iv) Notes to the unaudited pro forma condensed consolidated financial statements.

EX-99.1

Exhibit 99.1

BORLAND SOFTWARE CORPORATION
UNAUDITED PRO FORMA HISTORICAL REVENUE
(In thousands, except per share amounts, unaudited)

See the accompanying endnotes for additional information.

	Three Months Ended March 31, 2008							Year Ended December 31, 2007
	Historical		Pro Forma			Pro Forma		Historical		Pro Forma			Pro Forma
	Financial		Adjustments			Financial		Financial		Adjustments			Financial
	Statement		CodeGear			Statement		Statement		CodeGear			Statement
	(unaudited)		(unaudited)			(unaudited)		(unaudited)		(unaudited)			(unaudited)
			(a)							(a)
Revenues:
License and other revenues	$	27,820	$	(9,283	)	$	18,537	$	137,358	$	(40,672	)	$	96,686
Service revenues		30,454		(2,933	)		27,521		131,423		(16,323	)		115,100
Total revenues		58,274		(12,216	)		46,058		268,781		(56,995	)		211,786

	Year Ended December 31, 2006							Year Ended December 31, 2005
	Historical		Pro Forma			Pro Forma		Historical		Pro Forma			Pro Forma
	Financial		Adjustments			Financial		Financial		Adjustments			Financial
	Statement		CodeGear			Statement		Statement		CodeGear			Statement
	(unaudited)		(unaudited)			(unaudited)		(unaudited)		(unaudited)			(unaudited)
			(a)							(a)
Revenues:
License and other Revenues	$	165,886	$	(51,632	)	$	114,254	$	163,182	$	(60,200	)	$	102,982
Service revenues		138,774		(24,049	)		114,725		113,561		(30,299	)		83,262
Total revenues		304,660		(75,681	)		228,979		276,743		(90,499	)		186,244

BORLAND SOFTWARE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts, unaudited)

See the accompanying endnotes for additional information.

	Three Months Ended March 31, 2008									Year Ended December 31, 2007
	Historical			Pro Forma			Pro Forma			Historical			Pro Forma			Pro Forma
	Financial			Adjustments			Financial			Financial			Adjustments			Financial
	Statement			CodeGear			Statement			Statement			CodeGear			Statement
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
				(a)									(a)
Revenues:
License and other revenues	$	27,820		$	(9,283	)	$	18,537		$	137,358		$	(40,672	)	$	96,686
Service revenues		30,454			(2,933	)		27,521			131,423			(16,323	)		115,100
Total revenues		58,274			(12,216	)		46,058			268,781			(56,995	)		211,786
Costs of revenues:
Cost of license and other revenues		1,296			(619	)		677			6,014			(3,144	)		2,870
Cost of service revenues		9,142			(278	)		8,864			40,918			(2,734	)		38,184
Amortization of acquired intangibles and other charges		2,100			—			2,100			8,445			—			8,445
Cost of revenues		12,538			(897	)		11,641			55,377			(5,878	)		49,499
Gross profit		45,736			(11,319	)		34,417			213,404			(51,117	)		162,287
Selling, general and administrative		36,746			(4,569	)		32,177			176,206			(23,687	)		152,519
Research and development		15,689			(3,902	)		11,787			57,795			(17,048	)		40,747
Restructuring, amortization of other intangibles, acquisition-related expenses and other charges		1,472			(9	)		1,463			13,934			(1,016	)		12,918
Impairment of goodwill		13,300			(13,300	)		—			26,509			(26,509	)		—
Total operating expenses		67,207			(21,780	)		45,427			274,444			(68,260	)		206,184
Operating loss		(21,471	)		10,461			(11,010	)		(61,040	)		17,143			(43,897	)
Interest income		(1,755	)		3			(1,752	)		(8,742	)		19			(8,723	)
Interest expense		1,660			—			1,660			5,449			—			5,449
Other income (expense)		(558	)		72			(486	)		790			1,473			2,263

	Three Months Ended March 31, 2008									Year Ended December 31, 2007
	Historical			Pro Forma			Pro Forma			Historical			Pro Forma			Pro Forma
	Financial			Adjustments			Financial			Financial			Adjustments			Financial
	Statement			CodeGear			Statement			Statement			CodeGear			Statement
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
				(a)									(a)
Earnings/(loss) before income taxes		(20,818	)		10,386			(10,432	)		(58,537	)		15,651			(42,886	)
Income tax provision (benefit)		1,516			(95	)		1,421			3,136			(17	)		3,119
Net loss from continuing operations	$	(22,334	)	$	10,481		$	(11,853	)	$	(61,673	)	$	15,668		$	(46,005	)
Net loss per share:
Net loss per share — basic and diluted	$	(0.31	)	$	0.14		$	(0.16	)	$	(0.85	)	$	0.21		$	(0.63	)
Shares used in computing basic and diluted loss per share		72,751			72,751			72,751			72,875			72,875			72,875

BORLAND SOFTWARE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2008
(In thousands, except par value and share amounts, unaudited)

See the accompanying Notes for additional information.

	Historical		Adjustment			Pro Forma
	Financial		for CodeGear			Financial
	Statement		Balance Sheet			Statement
ASSETS
Current assets:
Cash and cash equivalents	$	86,542	$	19,011	(b)	$	105,553
Short-term investments		83,756		—			83,756
Accounts receivable, net of allowances		48,898		—			48,898
Inventories		—		—			—
Deferred Income Taxes		—		—			—
Prepaid expenses		8,728		(870)	(c)		7,858
Other current assets		5,755		—			5,755
Total current assets		233,679		18,141			251,820
Property and equipment, net		9,322		(579	)		8,743
Building held for sale		—		—			—
Goodwill		214,119		(27,531)	(c)		186,588
Intangible assets, net		31,268		—			31,268
Long-term investments		20,783		—			20,783
Other non-current assets		9,615		(11)	(c)		9,604
Restricted Assets		—		—			—
Total assets	$	518,786	$	(9,980	)	$	508,806
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,940	$	(723)	(c)	$	5,217
Accrued expenses		29,863		(4,772)	(c)		25,091
Short-term restructuring		8,558		—			8,558
Income taxes payable		2,958		870	(e)		3,828

	Historical			Adjustment			Pro Forma
	Financial			for CodeGear			Financial
	Statement			Balance Sheet			Statement
Deferred revenue		50,436			(7,037)	(c)		43,399
Other current liabilities		6,173			(394)	(c)		5,779
Total current liabilities		103,928			(12,056	)		91,872
Convertible senior notes		200,000			—			200,000
Long-term restructuring		4,493			—			4,493
Long-term deferred revenue		2,156			—			2,156
Other long-term liabilities		25,134			—			25,134
Total liabilities		335,711			(12,056	)		323,655
Stockholders’ equity:
Preferred stock; $.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding		—			—			—
Common stock, $.01 par value, 200,000,000 shares authorized (2008: 94,119,587 issued and 72,960,607 outstanding; 2007: 94,134,952 issued and 72,975,972 outstanding)		730			—			730
Additional paid-in capital		668,460			30	(c)		668,490
Accumulated deficit		(357,812	)		2,046	(d)		(355,766	)
Cumulative other comprehensive income		12,106			—			12,106
		323,484			2,076			325,560
Treasury stocks at cost, (2008 and 2007: 21,158,980 shares)		(140,409	)		—			(140,409	)
Total stockholders’ equity		183,075			2,076			185,151
Total liabilities and stockholders’ equity	$	518,786		$	(9,980	)	$	508,806

BORLAND SOFTWARE CORPORATION

NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

All references to “CodeGear” in these unaudited pro forma condensed financial statements refer to
the CodeGear division of Borland Software Corporation, the assets of which were sold in the
transaction being reported in this Form 8-K.

(a)	These columns reflect the historical condensed consolidated statement of operations related to CodeGear and the condensed consolidated balance sheet of CodeGear, as appropriate.
(b)	This adjustment reflects the assumed cash proceeds from the sale of CodeGear of $20.7 million less expected direct transaction costs of $1.7 million.
(c)	These adjustments reflect assets and liabilities that were transferred to Embarcadero as part of the divestiture.
(d)	This adjustment reflects the estimated gain on the sale of Codegear as if it was sold on March 31, 2008 including $870,000 in tax expense.
(e)	This adjustment reflects the estimated income taxes payable due to the CodeGear sale transaction calculated based on associated blended statutory rates.