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 AUGUST 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 October 11, 2004 there were 60,302,620 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)

	August 31, 2004			February 29, 2004
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	10,944		$	11,804
Accounts receivable, net	1,210			1,462
Costs of deferred revenue and prepaid licenses and services	261			214
Other current assets	409			317
Total current assets	12,824			13,797
Cost of deferred revenue, less current portion	71			43
Property and equipment, net	897			897
Other assets, less current portion	48			33
Total assets	$	13,840		$	14,770

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	1,162		$	1,034
Accounts payable	534			577
Accrued expenses	803			928
Deferred revenue	2,060			2,035
Related party deferred revenue	10			648
Total current liabilities	4,569			5,222
Deferred revenue, less current portion	289			295
Notes payable, less current portion	264			766
Total liabilities	5,122			6,283
Contingencies (Note 4)
Redeemable convertible preferred stock; $0.0001 par value; 10,000 shares authorized:
Series A; 552 at August 31 and February 29, 2004 (aggregate liquidation preference of $1,000 at August 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; 60,302 and 59,504 shares issued and outstanding at August 31 and February 29, 2004, respectively	6			6
Additional paid-in-capital	163,038			162,043
Accumulated deficit	(155,223		)	(154,459		)
Total stockholders’ equity	7,821			7,590
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	13,840		$	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						For the six months ended
	August 31, 2004			August 31, 2003			August 31, 2004			August 31, 2003

Revenues:
Online services and technology	$	1,900		$	1,520		$	3,595		$	3,240
Alliance and reimbursement	690			802			1,266			1,664
Related party online services and technology	4			115			538			232
Software product sales	—			88			42			202
Total revenues	2,594			2,525			5,441			5,338
Cost of revenues:
Online services and technology	699			636			1,266			1,259
Alliance and reimbursement	421			422			812			912
Software product sales	—			67			37			167
Total cost of revenues	1,120			1,125			2,115			2,338
Gross profit	1,474			1,400			3,326			3,000
Operating expenses:
Sales and marketing	822			695			1,574			1,464
Product development	409			757			812			1,676
General and administrative	902			891			1,691			1,657
Total operating expenses	2,133			2,343			4,077			4,797
Loss from operations	(659		)	(943		)	(751		)	(1,797		)
Interest expense	(26		)	(61		)	(55		)	(130		)
Interest and other income and expenses, net	26			12			42			26
Net loss