Back to GetFilings.com



Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

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

 

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

 

¨   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 000-27427

 

 

ALTIGEN COMMUNICATIONS, INC.

(Exact name of Registrant as specified in its charter)

 

DELAWARE   94-3204299

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification Number)

47427 Fremont Boulevard

Fremont, CA

   94538
(address of principal executive offices)   (zip code)

 

Registrant’s telephone number, including area code:  (510) 252-9712

 

 

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   x    NO  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     YES  ¨     NO  x

 

The number of shares of registrant’s common stock outstanding as of August 6, 2003 was: 13,803,820 shares.

 

 

Table of Contents

Table of Contents

 

               Page

PART I FINANCIAL INFORMATION

     Item 1.    Unaudited Condensed Consolidated Financial Statements    3
          Unaudited Condensed Consolidated Balance Sheets as of June 30, 2003 and September 30, 2002    3
          Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2003 and 2002    4
          Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2003 and 2002    5
          Notes to Unaudited Condensed Consolidated Financial Statements    6
     Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations    11
     Item 3.    Quantitative and Qualitative Disclosures about Market Risk    24
     Item 4.    Controls and Procedures    24

PART II OTHER INFORMATION

     Item 1.    Legal Proceedings    26
     Item 2.    Changes in Securities and Use of Proceeds    26
     Item 3.    Defaults Upon Senior Securities    26
     Item 4.    Submission of Matters to a Vote of Security Holders    26
     Item 5.    Other Information    26
     Item 6.    Exhibits and Reports on Form 8-K    26

SIGNATURES

    28

 

2

Table of Contents

PART I. FINANCIAL INFORMATION

 

Item 1.   Unaudited Condensed Consolidated Financial Statements

 

ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)

 

     June 30,
2003
     September 30,
2002
  

ASSETS

                 

Current assets:

                 

Cash and cash equivalents

    $ 7,709     $ 7,210  

Short-term investments

      2,163       4,938  

Accounts receivable, net of allowances of $194 and $227 at June 30, 2003 and September 30, 2002, respectively

      1,622       1,656  

Inventories

      868       1,263  

Prepaid expenses and other current assets

      363       213  

Promissory note from officer / stockholder (Note 3)

      —         343  
    
 

Total current assets

      12,725       15,623  
    
 

Property and equipment:

                 

Furniture and equipment

      2,080       2,033  

Computer software

      922       922  
    
 
       3,002       2,955  

Less: Accumulated depreciation and amortization

      (2,660 )     (2,320 )
    
 

Net property and equipment

      342       635  
    
 

Other non-current assets:

                 

Long-term investment

      195       195  

Long-term deposit

      —         53  
    
 

Total other non-current assets

      195       248  
    
 

Total assets

    $ 13,262     $ 16,506  
    
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

                 

Current liabilities:

                 

Accounts payable

    $ 611     $ 538  

Accrued liabilities:

                 

Payroll and related benefits

      316       316  

Warranty (Note 4)

      633       590  

Marketing

      338       436  

Other

      660       850  

Deferred revenue

      215       405  
    
 

Total current liabilities

      2,773       3,135  
    
 

Stockholders’ equity:

                 

Convertible preferred stock, $0.001 par value; Authorized – 5,000,000 shares; None outstanding at June 30, 2003 and September 30, 2002

      —         —    

Common stock, $0.001 par value; Authorized – 50,000,000 shares; Outstanding – 14,784,420 shares at June 30, 2003 and 14,543,606 shares at September 30, 2002

      15       14  

Treasury stock at cost – 1,063,895 shares at March 31, 2003 and September 30, 2002

      (1,014 )     (1,014 )

Additional paid-in capital

      61,883       61,740  

Deferred stock compensation

      (14 )     (55 )

Accumulated other comprehensive gain

      —         —    

Accumulated deficit

      (50,381 )     (47,314 )
    
 

Total stockholders’ equity

      10,489       13,371  
    
 

Total liabilities and stockholders’ equity

    $ 13,262     $ 16,506  
    
 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3

Table of Contents

ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(UNAUDITED)

 

(in thousands, except per share amounts)

 

     Three Months Ended
June 30,
     Nine Months Ended
June 30,
  
     2003
     2002
     2003
     2002
  

Revenues, net

    $ 3,401     $ 2,765     $ 8,646     $ 6,736  

Cost of revenues

      1,397       1,206       3,741       3,207  
    
 
 
 

Gross profit

      2,004       1,559       4,905       3,529  
    
 
 
 

Operating expenses:

                                 

Research and development

      1,003       1,039       3,003       3,090  

Sales and marketing

      1,154       1,491       3,726       4,491  

General and administrative

      507       547       1,420       1,622  

Deferred stock compensation (Note 5)

      14       93       41       278  
    
 
 
 

Total operating expenses

      2,678       3,170       8,190       9,481  
    
 
 
 

Loss from operations

      (674 )     (1,611 )     (3,285 )     (5,952 )

Interest and other income, net

      45       61       218       229  
    
 
 
 

Net loss

    $ (629 )   $ (1,550 )   $ (3,067 )   $ (5,723 )
    
 
 
 

Basic and diluted net loss per share

    $ (0.05 )   $ (0.12 )   $ (0.23 )   $ (0.43 )
    
 
 
 

Shares used in computing basic and diluted net loss per share

      13,655       13,390       13,573       13,335  
    
 
 
 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4

Table of Contents

ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(UNAUDITED)

(in thousands)

 

     Nine Months Ended June 30,
  
     2003
     2002
  

CASH FLOWS FROM OPERATING ACTIVITIES:

                 

Net loss

    $ (3,067 )   $ (5,723 )

Adjustments to reconcile net loss to net cash used in operating activities :

                 

Depreciation and amortization

      340       459  

Amortization of deferred stock compensation

      41       278  

Changes in operating assets and liabilities

                 

Accounts receivable

      34       (168 )

Inventories

      395       954  

Prepaid expenses and other current assets

      (150 )     (76 )

Accounts payable

      73       229  

Accrued liabilities

      (245 )     123  

Deferred revenue

      (190 )     (184 )
    
 

Net cash used in operating activities

      (2,769 )     (4,108 )
    
 

CASH FLOWS FROM INVESTING ACTIVITIES:

                 

Purchases of short-term investments

      (10,164 )     (26,367 )

Proceeds from sale and maturities of short-term investments

      12,939       23,198  

Purchases of property and equipment

      (47 )     (86 )

Increase in other non-current assets

      53       —    
    
 

Net cash provided by (used in) investing activities

      2,781       (3,255 )
    
 

CASH FLOWS FROM FINANCING ACTIVITIES:

                 

Proceeds from issuances of common stock

      144       209  

Purchase of treasury stock

      —         (910 )

Collection of promissory note from officer/stockholder

      343       373  

Unrealized gain on short term investments

      —         5  
    
 

Net cash provided by (used in) financing activities

      487       (323 )