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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission file number 000-25249

INTRAWARE, INC.
(Exact name of registrant as specified in its charter)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o    No ý

        The aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter, is $44,022,508. For purposes of this disclosure, shares of common stock held by persons who hold more than 5% of the outstanding shares of common stock and shares held by officers and directors of the registrant, have been excluded in that such persons may be deemed to be affiliates. This determination is not necessarily conclusive.

        As of April 4, 2003, the registrant had outstanding 52,107,150 shares of common stock.

TABLE OF CONTENTS

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EXPLANATORY NOTE

        This annual report on Form 10-K contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties. We use words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. Actual results and the timing of events could differ materially from those projected in the forward-looking statements as a result of known and unknown factors, including the risk factors beginning on page    of this annual report and other factors discussed elsewhere in this annual report. We have identified many of these forward-looking statements for your convenient reference.

        "Intraware," "SubscribeNet," and "Control Your Technology" are registered trademarks or service marks of Intraware. This annual report also refers to other trademarks of Intraware and trademarks of other companies.

        Intraware, Inc., incorporated in August 1996 under the laws of the State of Delaware, is hereinafter sometimes referred to as "the Registrant," "the Company," "Intraware," "we," "our" and "us." The mailing address for our headquarters is 25 Orinda Way, Orinda, California 94563, and our telephone number at that location is (925) 253-4500. Intraware can also be reached at our web site http://www.intraware.com.

PART I

ITEM 1. BUSINESS

Introduction

        We are a leading provider of global electronic software delivery and management (ESDM) solutions. Our ESDM solutions help software publishers reduce operational and support costs, increase customer satisfaction and retention, accelerate and strengthen software revenue recognition processes, and comply with U.S. export regulations. We also offer complementary products and services, including enterprise software sales and marketing, and global web-based content caching and delivery. Over the next several months, we plan to add products and services complementary to our current offerings in order to address the needs of our current customers as well as potential customers in the market for electronic delivery and management of digital goods.

        In May 2002, as part of our strategy to focus on our core ESDM business, we sold our Asset Management software business to Computer Associates International, Inc.

Services

SubscribeNet ESDM Service

        We market our ESDM services under the brand name "SubscribeNet." First offered in 1996, the SubscribeNet service is an integrated web-based delivery and support solution that enables companies to easily deliver, track, and manage the software they distribute to their end-users worldwide. Customers of our SubscribeNet service include companies whose main business is software publishing, companies that distribute software as a secondary business, and companies that resell software (for simplicity we refer to them all as "software companies"). Software companies purchase the SubscribeNet service to help them save costs by replacing physical distribution of CD-ROMs with web-based electronic delivery, as well as increase customer satisfaction and retention, generate higher maintenance renewal rates, monitor customer usage and demand for their software, and strengthen export and revenue recognition compliance.

        The SubscribeNet solution provides a comprehensive set of features benefiting software companies as well as their end-users and partners. For software companies, the SubscribeNet service automates

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and secures critical software delivery processes, enables comprehensive and real-time reporting of end-user account activity, employs multi-layered screening to help enforce compliance with U.S. export regulations, and provides a user interface that integrates seamlessly with each software company's website. In addition, the SubscribeNet service integrates easily with the software company's existing business systems to tighten and simplify the links between software delivery, product release management, customer support and other business systems. For end-users and partners of those software companies, the SubscribeNet solution offers an aggregated online software archive, proactive email notifications of software updates, an array of account management tools, authenticated delivery, global multi-location deployment, flexible user administration, high availability, and a means for taking tax-free delivery of software in many states, all in a manner that is personalized for each end-user or partner.

        Key features of the SubscribeNet service include:

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Seamless integration with the software company's existing website.



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An account-specific software management portal that provides end-users with self-service account administration.



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Archive of all entitled software, updates, and documentation.



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Data tools.



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Download tracking.



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Transaction and license information.



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Authenticated file transfer methods.




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Fast, secure, on-demand downloads.



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Proactive notification of new software and updates.



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Leveraging of existing investments in customer relationship management, financial and order processing systems; and



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24x7 download call center support.

We typically sell the SubscribeNet service on a subscription basis, charging a periodic service fee that is usually tied to the number of accounts or customers that a software company has authorized to use the service.

        As of April 4, 2003, 30 companies subscribed to the SubscribeNet service. Two of our customers accounted for greater than 10% of our revenue during our fiscal year 2003, Sun Microsystems, Inc. and Software Spectrum, Inc. (formerly CorpSoft, Inc.). We expect Sun Microsystems, Inc. to account for less than 10% of our revenue during our fiscal year 2004 (see "Risk Factors" beginning on page 31 below, and Note 2 of our "Notes to Consolidated Financial Statements" beginning on page F-17).

Content Delivery Network Services

        We recently introduced a web-based content delivery network (CDN) service as a value-added service alongside our SubscribeNet solution. Our CDN service, offered under a resale arrangement with Cable & Wireless Internet Services, Inc., is an industry-leading web-caching service that enables customers to quickly deliver all types of content worldwide, on a 24x7 basis, through Cable & Wireless' global server network. We may in the future provide CDN services of other providers as well, depending on the needs of our customers and on whether we are able to negotiate acceptable arrangements with those other providers.

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Outsourced Sales and Marketing Services

        We provide contracted sales and marketing services to Software Spectrum, Inc.    Software Spectrum is a global business-to-business software services company that is one of the world's largest business software resellers and a wholly owned subsidiary of Level 3 Communications, Inc. Under our agreement with Software Spectrum, we act as an outsourced sales force assisting Software Spectrum in its resales of Sun Microsystems, Inc. Sun ONE software, in exchange for a portion of the gross margin from those resales and reimbursement of certain costs. We also provide our SubscribeNet service to Software Spectrum to enable them to deliver Sun ONE software to their customers electronically. We describe this relationship between Intraware and Software Spectrum further in Part I, Item 1 "Business," "Sales," "Outsourced Sales and Marketing Services," Part I, Item 1 "Business," "Sales," "Channel Sales of SubscribeNet ESDM Service" below, Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Critical Accounting Policies and Estimates," "Revenue Recognition," "Results of Operations," "Total Revenue," and in Part IV, Item 15 "Exhibits, Financial Statement Schedules and Reports on Form 8-K," Note 2 of our "Notes to Consolidated Financial Statements," "Resale of Sun ONE (formerly iPlanet) software by Intraware and Software Spectrum (formerly Corporate Software)."

        We intend to selectively seek additional opportunities to provide our sales and marketing expertise to software and computer hardware companies, to assist them in sales of enterprise software licenses and maintenance and in securing their customers' renewal of software and hardware maintenance contracts. We are in the early stages of this effort and do not know whether we will succeed in expanding this area of our business.

Planned Future Products and Services

        We are currently planning new products and services complementary to our current offerings, to address the needs of our current customers as well as potential customers in the market for electronic delivery and management of digital goods.

        Potential new products and services include a licensed SubscribeNet software package, new software license management and digital rights management tools, on-demand documentation printing services, and system integration services.

        We currently plan to begin offering these products and services over the next several months. However, many factors could cause us to delay or permanently cancel launch of these products and services, including weakness in customer demand, changing business conditions, or, where the product or service is to be offered with a third party, the third party's unwillingness to support the arrangement at a level and on terms acceptable to us. Any of these factors could also cause the revenues or contract value derived from these planned products or services to be below our expectations. Additional factors that may affect whether we release these planned products and services, the timing of any release, and revenues and contract value derived from these planned products and services, are listed in the "Risk Factors" beginning on page 31 below.

Sales

Direct Sales of SubscribeNet ESDM Service and CDN Service

        We sell our SubscribeNet and CDN services primarily through a direct sales force dedicated to our SubscribeNet and CDN businesses. We have established direct sales offices for our SubscribeNet and CDN sales at our headquarters in Orinda, California, and in Los Angeles, California and Boston, Massachusetts. Each SubscribeNet and CDN sales representative has a territory that he or she covers through telecommunications and in-person sales calls. The sales cycle for these services is lengthy, as

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our sales efforts must target the prospective customer's executive level personnel in marketing, sales, customer satisfaction, operations and management.

Channel Sales of SubscribeNet ESDM Service

        We maintain a number of channel sales arrangements intended to complement our direct sales efforts and broaden sales of our SubscribeNet service.

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Agreement with Zomax Incorporated. In August 2002 we entered into a strategic alliance agreement with Zomax Incorporated, a leading international outsource provider of supply chain management services. Zomax provides an integrated suite of outsourcing services that includes e-commerce, customer care programs, multimedia replication, packaging, assembly, warehousing, distribution, fulfillment and returns processing. Zomax' customers include several of the world's premier information technology companies. Under our agreement, Zomax has the right to market and resell the SubscribeNet solution as part of its suite of outsourcing services. Zomax offers the SubscribeNet service through its worldwide sales force, including a sales engineer dedicated to SubscribeNet sales. Our two companies' sales forces collaborate through joint sales calls, lead sharing and joint sales training activities. Customers who purchase the SubscribeNet solution through Zomax contract directly with, and obtain first-level support directly from, Zomax. Under the agreement, Zomax will pay Intraware $15 million in periodic license fees over 10 years, subject to certain conditions, including Zomax' right to cancel the agreement at any time on one year's notice. The agreement also provides for Zomax' payment of periodic royalties for completed SubscribeNet sales, and fees for referrals of new customers who purchase other Zomax services. The agreement also restricts Intraware and Zomax from selling competitive services to one another's existing customers and from entering into a similar relationship with one another's competitors. At the time we signed this agreement, Zomax also invested $5 million in Intraware, acquiring approximately 12% of our common stock through a private placement. Zomax has appointed an observer to our Board of Directors and has the right to change that observer to a director. We describe the relationship between Zomax and Intraware further in Part IV, Item 15 "Exhibits, Financial Statement Schedules and Reports on Form 8-K," Note 2 of our "Notes to Consolidated Financial Statements," and Part IV, Item 15 "Exhibits, Financial Statement Schedules and Reports on Form 8-K," Note 7 of our "Notes to Consolidated Financial Statements." We do not expect Zomax to cancel this agreement, but cannot guarantee that Zomax will not cancel it. (See "Risk Factors" beginning on page 31 below.)



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Agreements with Software Spectrum.



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ESDM Services for Sun ONE Software. Under an agreement that we signed in June 2001 with Software Spectrum's predecessor, CorpSoft, Inc., Software Spectrum uses our SubscribeNet service to manage electronic delivery of Sun ONE enterprise software to end-users who purchase Sun ONE software licenses and maintenance through Software Spectrum. Software Spectrum pays us a periodic SubscribeNet service fee based on Sun ONE software license and maintenance sales generated by Intraware as an outsourced sales force for Software Spectrum (see Part I, Item 1 "Business," "Services," "Outsourced Sales and Marketing Services" above, and Part I, Item 1 "Business," "Sales," "Outsourced Sales and Marketing Services" below). This agreement expires in June 2003 and is renewable for subsequent one-year terms. We expect but cannot guarantee that it will be renewed (see "Risk Factors" beginning on page 31 below).



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ESDM Services for Other Enterprise Software. In October 2002 we entered into another strategic alliance agreement with Software Spectrum. Under this agreement, Software Spectrum is using our SubscribeNet solution to manage electronic delivery of enterprise software that it resells, other than Sun ONE software. Currently the agreement is being

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used to manage delivery to large end-user customers under their enterprise license agreements with Software Spectrum for software published by a leading information technology company. Software Spectrum pays us a one-time SubscribeNet service fee for each end-user customer, based on the software license and maintenance fee charged by Software Spectrum to that customer. The term of this agreement expires in October 2005.

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Referral Arrangements for SubscribeNet Sales. We also maintain various other referral arrangements under which we pay fees to companies that refer new SubscribeNet customers to us.

Outsourced Sales and Marketing Services

        We use an inside sales force to assist Software Spectrum in its resales of Sun ONE enterprise software and related maintenance. Each inside sales representative has a territory that he or she covers using telephone, facsimile and email communications. The length of sales cycles for sales of Sun ONE software tends to correspond to the dollar values of those sales.

        Our relationship with Software Spectrum evolved from an earlier relationship with Netscape Communications Corporation. In 1998 we entered into an agreement with Netscape for our resale and electronic distribution of Netscape software. In early 1999, America Online, Inc. acquired Netscape and formed an alliance with Sun to manage Netscape's business software division. In July 1999 we signed an agreement with Sun for our resale and electronic distribution of Netscape business software and maintenance services. That software was marketed under the brands "Sun/Netscape Alliance" and "iPlanet," and is currently marketed under the brand "Sun ONE." In June 2001, we signed an agreement with CorpSoft, Inc. (Corporate Software) under which we transferred to Corporate Software our Sun ONE software resale business, including our agreement with Sun for resale of Sun ONE software and maintenance. In 2002, Level 3 Communications, Inc. acquired Corporate Software and merged Corporate Software into another Level 3 subsidiary, Software Spectrum. Accordingly, our June 2001 agreement is now with Software Spectrum.

        Under this agreement with Software Spectrum, Software Spectrum is now the reseller of record for Sun ONE software and maintenance. However, we assist Software Spectrum in its sales and marketing of Sun ONE software and maintenance, and also provide our SubscribeNet service to Software Spectrum to enable it to deliver Sun ONE software to its customers electronically. As part of this arrangement, Software Spectrum pays us a percentage of the gross profit derived from its sales of Sun ONE software licenses and maintenance services, and reimburses us for our cost in maintaining a team dedicated to sales of Sun ONE software licenses and maintenance. Software Spectrum also pays us a periodic SubscribeNet service fee based on Sun ONE software license and maintenance sales generated by Intraware as an outsourced sales force for Software Spectrum. The term of this agreement will expire in June 2003 and is renewable for subsequent one-year terms. We expect but cannot guarantee that it will be renewed (see Part I, Item 1 "Business," "Services," "Outsourced Sales and Marketing Services" above, Part I, Item 1 "Business," "Sales," "Channel Sales of SubscribeNet ESDM Service" above, and the "Risk Factors" beginning on page 31 below).

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Marketing

        Our central marketing goal is to attract and retain customers for our services. We target our marketing efforts to senior information technology, operations, and finance personnel in software companies, mid-to-large corporations and government agencies. We use an integrated approach of interactive web-based seminars, or "webinars," targeted advertising and promotions, and general brand-awareness campaigns, to stimulate demand for our services and generate sales leads.

        We employ a variety of marketing tools to achieve these goals. In our webinars, our senior executives and other panelists who may include independent IT analysts, senior executives of our customers and partners, and other industry experts, educate prospective customers on ESDM, e-commerce, and other topics relevant to our business. We have an active public relations program that helps maintain press coverage of the company and helps secure invitations to present at IT industry events. Our print, online and wireless advertising campaigns are designed to target senior information technology, operations, and finance personnel and educate them on our products and services. Our co-branding with Software Spectrum for sales of Sun ONE software and maintenance helps us penetrate highly qualified market segments. We also use trade shows, direct mail, online promotions, and regional marketing to further our marketing goals of expanding our customer base and heightening awareness of the "Intraware" brand.

Competition

        The electronic software delivery and management market is young, rapidly evolving and intensely competitive, and we expect competition to intensify in the future. Our primary competition comes from our potential customers, including software companies and other companies that distribute software or digital goods, who choose to develop an in house alternative to the Intraware SubscribeNet service. Additionally, we face increasing competition from other providers of outsourced electronic software delivery services. A number of these competitors have historically provided e-commerce services, or replication and distribution of physical media such as CDs, and relatively recently have begun to provide electronic software delivery services. We believe this trend will continue as software and other digital goods companies convert from physical to digital distribution of their products, stimulating additional potential demand for ESDM services.

        We believe we compete effectively as a result of our early deployment of a centralized, high-capacity, web-based, customizable ESDM solution containing valuable administrative and reporting tools. Principal competitive factors include:

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performance, features and functionality of the ESDM technology;



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comprehensiveness of the services offered;



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cost of Intraware's ESDM service versus the cost of a competing ESDM service or the cost of building, deploying and maintaining an alternative service in-house; and



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open architecture which facilitates integration with a software manufacturer's existing customer relations management, order processing and enterprise resource planning systems.

        We believe we compete effectively as to all of these factors. We believe our principal advantages include our relatively senior position as one of the first ESDM service providers; our high-capacity, high-availability network that is able to deliver enterprise-class software applications rapidly and securely; the flexibility of our solution, which is easily customized and personalized; and our suite of administrative and reporting tools that add value for software companies and their end-users.

        Nevertheless, we face a number of competitive challenges. Our greatest challenge is resistance from software companies that determine, for perceived strategic reasons or based on their cost assessments, that they do not wish to outsource electronic software delivery. One of the purposes of

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our planned customer-hosted SubscribeNet software product is to help us overcome this challenge; however, we do not know whether it will succeed in this regard. In addition, many of our competitors have longer and more profitable operating histories than we have, even if they have only recently begun offering electronic software delivery services. They may also have significantly greater financial and other resources, wider name recognition, and a larger installed base of customers (including non-ESDM customers) than we have. In addition, our limited financial resources may be perceived as a viability concern for current and prospective customers. As a result, competitors may have greater credibility with our existing and potential customers. They also may be able to devote greater resources to the development, promotion and sale of their products than we can, which would allow them to respond more quickly to new or emerging technologies and changes in customer requirements. Changes in customer requirements may include an increased desire to seek business and technical solutions from a small number of providers. Existing and potential competitors may be able to provide a wider range of solutions to address a broader set of customer needs than we can currently provide. In addition, many of our competitors have existing relationships with divisions of our current or potential customers, and may be able to leverage their existing relationships to discourage these customers from purchasing additional services or products from us, or may be able to persuade these customers to replace our services or products with their own.

Intellectual Property, Proprietary Rights and Licenses

        Our future success depends in part on our proprietary rights and technology. We rely on a combination of patent, copyright, trademark and trade secret laws, employee and third-party nondisclosure agreements and other methods to protect our proprietary rights. Although we seek to take advantage of available intellectual property protections, we believe that factors such as the technological and creative skills of our personnel, new product developments, frequent product enhancements and reliable product maintenance are more essential to establishing and maintaining a technology leadership position. There can be no assurance that others will not develop technologies that are similar or superior to our technology.

        To date, we own three U.S. patents on electronic commerce technologies, expiring in July 2016, September 2017 and February 2018, respectively. In addition, we have one patent application pending in the United States on our SubscribeNet ESDM technology. We plan to file additional patent applications on our SubscribeNet ESDM technology.

        We have 10 trademark registrations in the United States. Our key registered and unregistered trademarks and service marks include Intraware, SubscribeNet, The Way Digital Goods Move, Control Your Technology and NetInsights. We also hold registrations and pending applications for a number of trademarks and service marks outside the United States. We are aware that certain other companies are using the name "Intraware" as a company name or as a trademark or service mark outside the United States. While we do not believe we have infringed any rights and we have received no notice of any claims of infringement from any of those companies, and we own registrations for the "Intraware" trademark in the United States and in other countries, we can make no assurance that these or other companies will not claim superior rights to "Intraware" or other marks used in our business.

        We generally enter into confidentiality or license agreements with our employees, consultants and corporate partners, and generally control access to and distribution of our software, documentation and other proprietary information. Despite our efforts to protect our proprietary rights, it may be possible for unauthorized parties to copy certain portions of our products or services, or reverse-engineer or obtain and use information we regard as proprietary. If we begin selling licenses for our SubscribeNet software for installation on our customers' servers, it will become more difficult for us to control unauthorized use of that software, even if we include protections in our license agreements. There can be no assurance that the steps we take will prevent misappropriation of our technology, particularly in

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foreign countries where the laws may not protect our proprietary rights as fully as do the laws of the United States.

        We purchase licenses and will continue to purchase licenses for certain products integral to our services and products, including products which are integrated with our software code and used with our products to provide key functionality. We cannot be assured that these third party product licenses will continue to be available to us on commercially reasonable terms or that we will be able to successfully integrate such third party products into our solutions. Such product licenses may expose us to increased risks, including risks associated with the assimilation of new products, claims of infringement resulting from the use of such third party products, the diversion of resources from the development of our products, the inability to generate revenues from new products sufficient to offset associated acquisition costs, and the maintenance of uniform, appealing products. The inability to maintain any of these licenses could result in delays in development or services until equivalent products can be identified, licensed and integrated. Any such delays could harm our business, operating results and financial condition.

        Litigation over intellectual property rights is an important factor in the web-services and software industries, and we expect that solutions may be increasingly subject to third-party infringement claims as the number of competitors in our industry grows and the functionality of products in different industry segments overlaps. Any such claims could be time-consuming to defend, result in costly litigation, divert management's attention and resources, cause product and service delays or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us, if at all. A successful infringement claim against us and our failure or inability to license the infringed technology or a similar technology could have a material adverse effect on our business, operating results and financial condition.

        In addition, through our SubscribeNet service we globally distribute software containing high encryption and other features restricted by U.S. laws and regulations from exportation to certain countries, types of recipients, and specific end-users. Our SubscribeNet solution incorporates automated procedures to help ensure that these types of software are not downloaded in violation of U.S. export laws and regulations. However, these procedures may not prevent unauthorized exports of restricted software in every case. If an unauthorized export of restricted software occurs through the SubscribeNet service and the U.S. government determines that we violated the U.S. export laws or regulations, we could be sanctioned under those laws or regulations.

Employees

        As of April 4, 2002, we had approximately 67 employees, including part-time employees. None of our employees is represented by a labor union. We have not experienced any work stoppages and consider our relations with our employees to be good.

ITEM 2. PROPERTIES

        We rent approximately 14,000 square feet of office space located in Orinda, California under a lease expiring in August 2009. We have additional field sales offices in Los Angeles, California, and Boston, Massachusetts.

ITEM 3. LEGAL PROCEEDINGS

        In October 2001, we were served with a summons and complaint in a purported securities class action lawsuit. On or about April 19, 2002, we were served with an amended complaint in this action, which is now titled In re Intraware, Inc. Initial Public Offering Securities Litigation, Civ. No. 01-9349 (SAS) (S.D.N.Y.), related to In re Initial Public Offering Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.). The amended complaint is brought purportedly on behalf of all persons who purchased our

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common stock from February 25, 1999 (the date of our initial public offering) through December 6, 2000. It names as defendants Intraware; three of our present and former officers and directors; and several investment banking firms that served as underwriters of our initial public offering. The complaint alleges liability under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statement for the offerings did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offerings in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The amended complaint also alleges that the underwriters misused their securities analysts to manipulate the price of our stock. No specific damages are claimed.

        Lawsuits containing similar allegations have been filed in the Southern District of New York challenging over 300 other initial public offerings and secondary offerings conducted in 1999 and 2000. All of these lawsuits have been consolidated for pretrial purposes before United States District Court Judge Shira Scheindlin of the Southern District of New York. On July 15, 2002, an omnibus motion to dismiss was filed in the coordinated litigation on behalf of the issuer defendants, of which Intraware and its three named current and former officers and directors are a part, on common pleadings issues. On or about October 9, 2002, the Court entered and ordered a Stipulation of Dismissal, which dismissed the three named current and former officers and directors from the litigation without prejudice. On February 19, 2002, the Court entered an order denying in part the issuer defendants' omnibus motion to dismiss, including those portions of the motion to dismiss relating to Intraware. No discovery has been served on us to date. We believe we have meritorious defenses to these claims and intend to defend against them vigorously. We are not presently able to estimate losses, if any, related to this lawsuit.

        On February 28, 2003 a purported securities class action lawsuit, Liu v. Credit Suisse First Boston et al., was filed in the United States District Court, Southern District of Florida. The defendants are Credit Suisse Group, several of Credit Suisse Group's current and former directors and officers, and several public companies and certain of their current and former directors and officers, including Intraware and its chief executive officer and former chief financial officer. The suit alleges that the defendants engaged in a scheme to under-price initial public offerings and then artificially inflate prices of those stocks in the aftermarket, in violation of Florida blue sky law, Sections 11, 12 and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and the common law of fraud and negligence. The suit seeks unspecified damages, restitution, and injunctive relief. We believe we have meritorious defenses to these claims and intend to defend against them vigorously. We are not presently able to estimate losses, if any, related to this lawsuit.

        We are also subject to legal proceedings, claims and litigation arising in the ordinary course of business. We do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        To date, we have not declared or paid dividends on our common stock. Our Board of Directors presently intends to retain all earnings for use in our business and therefore does not anticipate declaring or paying any cash dividends in the foreseeable future.

        Our common stock was traded on the Nasdaq National Market under the symbol "ITRA" from February 26, 1999 until May 29, 2002. Since May 30, 2002, our common stock has traded on the Nasdaq SmallCap Market under the symbol "ITRA." The following table reflects the range of reported high and low sale prices for our common stock for the periods indicated.

        On April 4, 2003, the last reported sale price for our common stock on the Nasdaq SmallCap Market was $1.04 per share. As of April 4, 2003, Intraware estimates that there were approximately 443 holders of record of Intraware common stock and a substantially greater number of beneficial owners.

Equity Compensation Plan Information

        The following table sets forth information, as of February 28, 2003, about equity awards under our equity compensation plans (in thousands, except weighted average exercise price information):

(1)

Includes our 1996 Stock Option Plan, which provides for an annual increase in the number of shares available for issuance under the plan equal to the lesser of (i) 3,000,000 shares, (ii) 6% of the number of outstanding shares of our common stock on such date, or (iii) a lesser amount determined by the Board of Directors; and our 1998 Director Stock Option Plan.

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(2)

Includes shares of common stock issuable upon exercise of options granted under our 1996 Stock Option Plan and 1998 Director Stock Option Plan.

(3)

Number of securities available for future issuance includes approximately 2,116,000 shares of common stock available for issuance under our 1996 Stock Option Plan and 260,000 shares available for issuance under our 1998 Director Stock Option Plan and approximately 732,000 shares of common stock available for issuance under our Employee Stock Purchase Plan. (See Note 9 of our "Notes to Consolidated Financial Statements" for a description of our equity compensation plans.)

(4)

Includes shares of common stock to be issued upon exercise of options granted under our 1999 Non-Qualified Acquisition Stock Option Plan, our Janus Technologies, Inc. 1997 Stock Option Plan (which we assumed when we acquired Janus Technologies, Inc. in 2000), and our BitSource, Inc. 1996 Stock Option Plan (which we assumed when we acquired BitSource, Inc. in 1999).

        Below is a brief description of the material features of each of our equity compensation plans that have not been approved by our shareholders.

BitSource, Inc. 1996 Stock Option Plan

        We assumed the BitSource 1996 Stock Option Plan (the "BitSource Plan") upon the closing of our acquisition of all the outstanding shares of BitSource, Inc. in October 1999. Since our assumption of the BitSource Plan, we have not granted any options under the plan, and have kept the plan in effect solely to the extent of options granted before we assumed the plan that remain outstanding. The shares issuable upon exercise of those options were exchanged from BitSource common stock to Intraware common stock using the same exchange ratio as was used to calculate the number of Intraware shares received by the BitSource shareholders in the merger. As of February 28, 2003, 118 shares of our common stock were reserved for issuance under the BitSource Plan, and the same number of shares were issuable pursuant to options outstanding under the plan as of that date.

        The BitSource Plan provided for the granting of stock options to BitSource employees, directors and consultants. Options granted under the BitSource Plan could be either incentive stock options (that is, options intended to qualify as incentive stock options under the Internal Revenue Code, or "ISOs") or nonqualified stock options (that is, options not intended to qualify as incentive stock options under the Internal Revenue Code, or "NSOs"). The BitSource Plan provided that the options be exercisable over a period not to exceed ten years from the date of the grant; however, in the case of an option granted to a person owning more than 10% of the combined voting power of all classes of BitSource stock, the term of the option would be five years from the date of the grant. Under the BitSource Plan, the stated exercise price could not be less than 85% of the fair market value of the shares on the date of grant as determined by the Board of Directors, provided, however, that (a) the exercise price of an ISO could not be less than 100% of the fair market value of the shares on the date of grant, and (b) the exercise price of an ISO or NSO granted to a 10% shareholder could not be less than 110% of the fair market value of the shares on the date of grant. Vesting terms for stock options were to be determined by the Board of Directors at the time of the respective grants.

Internet Image, Inc. 1997 Stock Plan

        We assumed the Internet Image, Inc. 1997 Stock Option Plan (the "Internet Image Plan") upon the closing of our acquisition of all the outstanding shares of Internet Image, Inc. in December 1999. Since our assumption of the Internet Image Plan, we have not granted any options under the plan, and have kept the plan in effect solely to the extent of options granted before we assumed the plan that remain outstanding. The shares issuable upon exercise of those options were exchanged from Internet Image common stock to Intraware common stock using the same exchange ratio as was used to calculate the number of Intraware shares received by the Internet Image shareholders in the merger.

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As of February 28, 2003, 1,485 shares of our common stock were available for issuance under the Internet Image Plan. There are currently no options outstanding under this plan.

        The Internet Image Plan provided for the granting of stock options to Internet Image employees, directors and consultants. Options granted under the Internet Image Plan could be either incentive stock options or nonqualified stock options. The Internet Image Plan provided that the options be exercisable over a period not to exceed ten years from the date of the grant; however, in the case of an option granted to a person owning more than 10% of the combined voting power of all classes of Internet Image stock, the term of the option would be five years from the date of the grant. Under the Internet Image Plan, the stated exercise price could not be less than 85% of the fair market value of the shares on the date of grant as determined by the Board of Directors, provided, however, that (a) the exercise price of an ISO could not be less than 100% of the fair market value of the shares on the date of grant, and (b) the exercise price of an ISO or NSO granted to a 10% shareholder could not be less than 110% of the fair market value of the shares on the date of grant. Vesting terms for stock options were to be determined by the Board of Directors at the time of the respective grants. Grants typically vested ratably over a two-year period. Under the Plan, optionees were permitted to exercise their options as to unvested shares, subject to a right of the company to repurchase those unvested shares upon termination of employment. The plan also provided for immediate vesting of all unvested shares upon a change of control of the company.

Janus Technologies, Inc. 1997 Stock Option Plan

        We assumed the Janus Technologies, Inc. 1997 Stock Option Plan (the "Janus Plan") upon the closing of our acquisition of all the outstanding shares of Janus Technologies, Inc. in July 2000. Since our assumption of the Janus Plan, we have not granted any options under the plan, and have kept the plan in effect solely to the extent of options granted before we assumed the plan that remain outstanding. The shares issuable upon exercise of those options were exchanged from Janus Technologies common stock to Intraware common stock using the same exchange ratio as was used to calculate the number of Intraware shares received by the Janus Technologies shareholders in the merger. As of February 28, 2003, 7,608 shares of our common stock were reserved for issuance under the Janus Plan, and the same number of shares were issuable pursuant to options outstanding under the plan as of that date.

        The Janus Plan provided for the granting of stock options to Janus employees and non-employees. Options granted under the Janus Plan could be either incentive stock options or nonqualified stock options. The Janus Plan provided that the options be exercisable over a period not to exceed ten years from the date of the grant; however, in the case of an option granted to a person owning more than 10% of the combined voting power of all classes of Janus Technologies stock, the term of the option would be five years from the date of the grant. Under the Janus Plan, the stated exercise price could not be less than 100% of the fair market value of the shares on the date of grant as determined by the Board of Directors, provided, however, the exercise price of an option granted to a 10% shareholder could not be less than 110% of the fair market value of the shares on the date of grant. Vesting terms for stock options were to be determined by the Board of Directors at the time of the respective grants.

1999 Non-Qualified Acquisition Stock Option Plan

        We adopted the Non-Qualified Acquisition Stock Option Plan (the "1999 Plan") in October 1999. The 1999 Plan provided for the granting of NSOs to our employees and consultants. Officers could only receive grants under the 1999 Plan in connection with their initial service to us, and Board members could not receive any grants under the 1999 Plan. The standard form of Stock Option Agreement used under the 1999 Plan provides that the options are exercisable over a period not to exceed ten years from the date of the grant. Options granted under the 1999 Plan generally vest as to 25% of the shares one year after the date of grant and as to the remaining options in equal monthly

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installments over the next 36 months. The exercise price of all options granted under the 1999 Plan has been the fair market value of our common stock on the grant date, as determined by the closing price of the common stock on the applicable Nasdaq exchange on that date.

        Effective May 30, 2002, the day our common stock began trading on the Nasdaq SmallCap Market, we ceased granting options under the 1999 Plan. However, the 1999 Plan remains in effect solely to the extent of options granted before May 30, 2002, that remain outstanding. As of February 28, 2003, 1,570,634 shares of our common stock were reserved for issuance under the 1999 Plan, and the same number of shares were issuable pursuant to options outstanding under the plan as of that date.

ITEM 6. SELECTED HISTORICAL FINANCIAL INFORMATION

        The following tables present selected historical financial information for Intraware. This information has been derived from our respective consolidated financial statements and notes, some of which are included elsewhere in this annual report. The following selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," and are qualified by reference to the consolidated financial statements and notes thereto and appearing elsewhere in this annual report. The consolidated statement of operations data set forth below for the years ended February 28, 2003, February 28, 2002, and February 28, 2001, and the consolidated balance sheet data at February 28, 2003 and February 28, 2002, are derived from, and are qualified by reference to, the audited consolidated financial statements of Intraware included elsewhere in this annual report. The consolidated statement of operations data for the years ended February 29, 2000 and February 28, 1999, and the balance sheet data at February 28, 2001, February 29, 2000, and February 28, 1999, are derived from audited consolidated financial statements of Intraware which are

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not included or incorporated by reference in this annual report. The historical results are not necessarily indicative of results to be expected for any future period.

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Note: Historical results of operations are not necessarily indicative of future results. Refer to "Risk Factors" under Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" for discussion of factors that may impact future results. In addition, our historical results of operations reflect our acquisition of BitSource, Inc. in October 1999 and Janus Te