INTRAWARE INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MAY 31, 2004

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number 000-25249

INTRAWARE, INC.

(Exact name of Registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation or organization)

68-0389976

(I.R.S. Employer Identification Number)

25 ORINDA WAY

ORINDA, CA 94563

(Address of principal executive offices)

(925) 253-4500

(Registrant’s telephone number, including area code)

Indicate by check (X) whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of July 8, 2004 there were 60,233,639 shares of the registrant’s common stock outstanding.

PART I—FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

INTRAWARE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	May 31, 2004			February 29, 2004
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	10,855		$	11,804
Accounts receivable, net	1,195			1,462
Costs of deferred revenue and prepaid licenses and services	246			214
Other current assets	653			317
Total current assets	12,949			13,797
Cost of deferred revenue, less current portion	60			43
Property and equipment, net	907			897
Other assets, less current portion	48			33
Total assets	$	13,964		$	14,770

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	1,071		$	1,034
Accounts payable	710			577
Accrued expenses	758			928
Deferred revenue	2,051			2,035
Related party deferred revenue	14			648
Total current liabilities	4,604			5,222
Deferred revenue, less current portion	226			295
Notes payable, less current portion	489			766
Total liabilities	5,319			6,283
Contingencies (Note 4)
Redeemable convertible preferred stock; $0.0001 par value; 10,000 shares authorized:
Series A; 552 at May 31 and February 29, 2004 (aggregate liquidation preference of $1,000 at May 31 and February 29, 2004)	897			897
Total redeemable convertible preferred stock	897			897
Stockholders’ equity:
Common stock; $0.0001 par value; 250,000 shares authorized; 59,726 and 59,504 shares issued and outstanding at May 31 and February 29, 2004, respectively	6			6
Additional paid-in-capital	162,306			162,043
Accumulated deficit	(154,564		)	(154,459		)
Total stockholders’ equity	7,748			7,590
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	13,964		$	14,770

See notes to unaudited interim consolidated financial information.

INTRAWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	For the three months ended
	May 31, 2004			May 31, 2003

Revenues:
Online services and technology	$	1,695		$	1,720
Alliance and reimbursement	576			862
Related party online services and technology	534			117
Software product sales	42			114
Total revenues	2,847			2,813
Cost of revenues:
Online services and technology	567			623
Alliance and reimbursement	391			490
Software product sales	37			100
Total cost of revenues	995			1,213
Gross profit	1,852			1,600
Operating expenses:
Sales and marketing	752			769
Product development	403			919
General and administrative	789			766
Total operating expenses	1,944			2,454
Loss from operations	(92		)	(854		)
Interest expense	(29		)	(69		)
Interest and other income and expenses, net	16			14
Net loss	$	(105	)	$	(909	)
Basic and diluted net loss per share	$	(0.00	)	$	(0.02	)
Weighted average shares - basic and diluted	59,617			52,202

See notes to unaudited interim consolidated financial information.

INTRAWARE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the three months ended
	May 31, 2004			May 31, 2003
Cash flows from operating activities:
Net loss	$	(105	)	$	(909	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	161			685
Amortization of unearned compensation	—			12
Provision for (recovery of) doubtful accounts	(1		)	2
Gain on sale of fixed assets	(2		)	—
Amortization of discount on note payable	7			—
Changes in assets and liabilities:
Accounts receivable	268			229
Costs of deferred revenue and prepaid licenses and services	(49		)	58
Other assets	(351		)	(256		)
Accounts payable	51			112