UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ý QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 2003
OR
o TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-25507
iPARTY CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE |
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76-0547750 |
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(STATE OR OTHER
JURISDICTION OF |
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(I.R.S. EMPLOYER |
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1457 VFW PARKWAY |
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02132 |
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
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(ZIP CODE) |
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(617) 323-0822 |
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(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE) |
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SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: |
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COMMON STOCK, $.001 PAR VALUE |
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AMERICAN STOCK EXCHANGE |
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(TITLE OF EACH CLASS) |
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(NAME OF EACH EXCHANGE ON WHICH REGISTERED) |
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SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT: NONE |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
The number of shares of the Registrant’s common stock outstanding as of November 5, 2003: 18,502,745.
iParty Corp.
Quarterly Report on Form 10-Q
Table of Contents
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Consolidated Balance Sheets – September 27, 2003 and December 28, 2002 |
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Consolidated Statements of Cash Flows – Nine months ended September 27, 2003 and September 28, 2002 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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CERTIFICATIONS |
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Exhibit Index |
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Ex. 31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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Ex. 31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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Ex. 32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Ex. 32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
1
PART I - FINANCIAL INFORMATION
iPARTY CORP.
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Sep 27, 2003 |
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Dec 28, 2002 |
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(Unaudited) |
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Restated |
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(Note 1) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
2,360,428 |
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$ |
2,326,343 |
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Restricted cash |
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653,789 |
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371,952 |
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Accounts receivable |
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546,451 |
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445,988 |
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Inventory, net |
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12,369,018 |
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8,916,664 |
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Prepaid expenses and other assets |
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383,537 |
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294,370 |
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Total current assets |
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16,313,223 |
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12,355,317 |
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Property and equipment, net |
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1,457,167 |
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1,128,897 |
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Other assets |
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236,783 |
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331,669 |
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Total assets |
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$ |
18,007,173 |
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$ |
13,815,883 |
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LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
6,270,231 |
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$ |
2,752,311 |
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Accrued expenses |
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2,051,951 |
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1,867,496 |
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Current portion of capital lease obligations |
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71,456 |
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237,080 |
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Borrowings under line of credit |
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6,223,191 |
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3,476,738 |
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Total current liabilities |
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14,616,829 |
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8,333,625 |
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Long-term liabilities: |
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Capital lease obligations, net of current portion |
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1,025 |
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3,173 |
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Other liabilities |
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434,622 |
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678,932 |
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Total long-term liabilities |
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435,647 |
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682,105 |
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Commitments and contingencies |
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Convertible preferred stock - $.001 par value; 10,000,000 shares authorized, |
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Series A convertible preferred stock - 1,000,000 shares authorized, issued and outstanding (aggregate liquidation value of $1,000,000 at September 27, 2003) |
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1,000,000 |
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1,000,000 |
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Series B convertible preferred stock – 1,150,000 shares authorized; 633,638 and 684,799 shares issued and outstanding in 2003 and 2002, respectively (aggregate liquidation value of $12,672,760 at September 27, 2003) |
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9,428,533 |
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10,189,809 |
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Series C convertible preferred stock – 100,000 shares authorized, issued and outstanding (aggregate liquidation value of $2,000,000 at September 27, 2003) |
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1,492,000 |
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1,492,000 |
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Series D convertible preferred stock – 250,000 shares authorized, issued and outstanding (aggregate liquidation value of $5,000,000 at September 27, 2003) |
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3,652,500 |
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3,652,500 |
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Series E convertible preferred stock - 533,333 shares authorized; 389,439 and 466,667 shares issued and outstanding in 2003 and 2002, respectively (aggregate liquidation value of $1,460,396 at September 27, 2003) |
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1,460,396 |
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1,750,000 |
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Series F convertible preferred stock - 114,286 shares authorized, issued and outstanding (aggregate liquidation value of $500,000 at September 27, 2003) |
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500,000 |
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500,000 |
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Total convertible preferred stock |
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17,533,429 |
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18,584,309 |
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Stockholders’ deficit: |
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Common stock - $.001 par value; 150,000,000 shares authorized; 18,489,876 and 16,996,570 shares issued and outstanding in 2003 and 2002, respectively |
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18,490 |
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16,997 |
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Additional paid-in capital |
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47,219,248 |
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46,168,101 |
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Accumulated deficit |
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(61,816,470 |
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(59,969,254 |
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Total stockholders’ deficit |
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(14,578,732 |
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(13,784,156 |
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Total liabilities, convertible preferred stock and stockholders’ deficit |
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$ |
18,007,173 |
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$ |
13,815,883 |
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The accompanying Notes are an integral part of these Consolidated Financial Statements.
2
iPARTY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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For the three months ended |
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For the nine months ended |
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Sep 27, 2003 |
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Sep 28, 2002 |
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Sep 27, 2003 |
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Sep 28, 2002 |
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Revenues |
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$ |
11,878,460 |
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$ |
10,901,242 |
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$ |
35,971,592 |
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$ |
34,571,758 |
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Operating costs: |
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Cost of products sold |
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7,060,170 |
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6,635,891 |
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21,151,729 |
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20,956,836 |
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Marketing and sales |
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4,435,844 |
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3,865,553 |
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12,461,185 |
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11,026,078 |
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General and administrative |
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1,352,719 |
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1,329,195 |
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