UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: June 30, 2000
OR
[ ] 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 0-21511
V-ONE CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Delaware 52-1953278
----------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
20250 Century Blvd., Suite 300, Germantown, Maryland 20874
----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(301) 515-5200
--------------
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 7, 2000
----- -----------------------------
Common Stock, $0.001 par value per share 22,118,871
<PAGE>
V-ONE Corporation
Quarterly Report on Form 10-Q
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Condensed Balance Sheets as of June 30, 2000 3
(unaudited) and December 31, 1999
Condensed Statements of Operations (unaudited) 4
for the Three and Six Months Ended June 30,
2000 and June 30, 1999
Condensed Statements of Cash Flows (unaudited) 5
for the Six Months Ended June 30, 2000 and
June 30, 1999
Notes to the Condensed Financial Statements 6
(unaudited)
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About 10
Market Risk
PART II. OTHER INFORMATION 11
Signatures 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
V-ONE CORPORATION
CONDENSED BALANCE SHEETS
<CAPTION>
June 30, December 31,
2000 1999
(unaudited)
------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,393,918 $ 7,136,943
Accounts receivable, net 1,108,149 854,853
Finished goods inventory, net 256,576 46,087
Prepaid expenses and other current assets 171,511 249,339
------------- ---------------
Total current assets 7,930,154 8,287,222
Property and equipment, net 699,093 585,708
Other assets 870,887 902,506
------------- ---------------
Total assets $ 9,500,134 $ 9,775,436
============= ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,167,892 $ 1,157,660
Deferred revenue 718,828 420,922
Capital lease obligations - current 76,035 78,794
------------- ---------------
Total current liabilities 1,962,755 1,657,376
Deferred rent 141,260 156,711
Capital lease obligations - noncurrent 84,240 119,746
------------- ---------------
Total liabilities 2,188,255 1,933,833
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.001 par value, 13,333,333 shares
authorized;
Series B convertible preferred stock, 1,287,554
designated, issued and outstanding
(liquidation preference of $3,000,000) 1,288 1,288
Series C redeemable preferred stock, 500,000
designated; 64,237 and 335,000 shares
issued and outstanding, respectively
(liquidation preference of $1,686,221 and
$8,793,750, respectively) 64 335
Common stock, $0.001 par value; 33,333,333 shares authorized;
22,016,034 and 18,233,780 shares issued and
outstanding, respectively 22,016 18,233
Accrued dividends payable 129,068 272,245
Additional paid-in capital 51,377,137 47,197,893
Deferred stock compensation payable (282,000) -
Subscriptions receivable - (3,785)
Accumulated deficit (43,935,694) (39,644,606)
------------- ---------------
Total shareholders' equity 7,311,879 7,841,603
------------- ---------------
Total liabilities and shareholders' equity $ 9,500,134 $ 9,775,436
============= ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
V-ONE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
(unaudited) (unaudited) (unaudited) (unaudited)
--------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Revenue:
Products $ 713,298 $ 719,168 $ 1,846,751 $ 2,088,417
Consulting and services 362,548 287,500 613,016 614,723
----------------- ----------------- ------------------- -------------------
Total revenue 1,075,846 1,006,668 2,459,767 2,703,140
Cost of revenue:
Products 141,207 217,710 211,234 380,166
Consulting and services 10,251 12,679 23,220 32,612
----------------- ----------------- ------------------- -------------------
Total cost of revenue 151,458 230,389 234,454 412,778
----------------- ----------------- ------------------- -------------------
Gross profit 924,388 776,279 2,225,313 2,290,362
Operating expenses:
Sales and marketing 1,673,818 1,730,675 3,169,718 3,438,273
General and administrative 1,020,654 467,086 1,673,674 1,488,271
Research and development 806,526 579,187 1,519,216 1,474,991
----------------- ----------------- ------------------- -------------------
Total operating expenses 3,500,998 2,776,948 6,362,608 6,401,535
----------------- ----------------- ------------------- -------------------
Operating loss (2,576,610) (2,000,669) (4,137,295) (4,111,173)
Other income (expense):
Interest expense (5,839) (225,869) (12,338) (301,016)
Interest income 70,748 33,869 155,710 40,226
----------------- ------------------ -------------------- --------------------
Total other income (expense) 64,909 (192,000) 143,372 (260,790)
----------------- ------------------ -------------------- --------------------
Net loss (2,511,701) (2,192,669) (3,993,923) (4,371,963)
Dividend on preferred stock 90,704 - 297,165 -
----------------- ----------------- ------------------- -------------------
Loss attributable to holders
of common stock $ (2,602,405) $ (2,192,669) $ (4,291,088) $ (4,371,963)
================= ================= =================== ===================
Basic and diluted loss per share
attributable to holders of
common stock $ (0.12) $ (0.13) $ (0.22) $ (0.26)
================== ================= =================== ===================
Weighted average number of
common shares outstanding 20,945,663 16,773,553 19,722,981 16,741,757
================== ================== ==================== ===================
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
<TABLE>
V-ONE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
Six months Six months
ended Ended
June 30, 2000 June 30, 1999
(unaudited) (unaudited)
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (3,993,923) $ (4,371,963)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 177,642 336,449
Stock compensation 94,000 -
Amortization of deferred financing costs - 155,424
Changes in operating assets and liabilities:
Accounts receivable, net (253,296) (77,995)
Inventory, net (210,488) 110,275
Prepaid expenses and other assets 109,447 152,816
Deferred revenue 297,906 (220,965)
Deferred rent (15,450) -
Accounts payable and accrued expenses 10,232 35,985
--------------- ---------------
Net cash used in operating activities (3,783,930) (3,879,974)
Cash flows from investing activities:
Net purchases of property and equipment (291,027) (75,562)
Collection of note receivable 3,785 678
---------------- ---------------
Net cash used in investing activities (287,242) (74,884)
Cash flows from financing activities:
Exercise of options and warrants 157,973 197,174
Payment of debt financing costs - (210,000)
Issuance of common stock 3,375,000 -
Issuance of preferred stock, net of
subscriptions receivable - 995,729
Payments of stock issuance costs (166,547) (17,500)
Payment of preferred stock dividends (14) -
Principal payments on capital lease obligations (38,265) (33,849)
Repayment of notes payable - (5,259)
Issuance of notes payable - 3,000,000
--------------- ---------------
Net cash provided by financing 3,328,147 3,926,295
activities --------------- ---------------
Net decrease in cash and cash equivalents (743,025) (28,563)
Cash and cash equivalents at beginning of period 7,136,943 635,959
--------------- ---------------
Cash and cash equivalents at end of period $ 6,393,918 $ 607,396
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
V-ONE CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
1. Basis of Presentation
The condensed financial statements for the three and six months ended June 30,
2000 and June 30, 1999 are unaudited and reflect all adjustments, consisting of
normal recurring adjustments, which are, in the opinion of management, necessary
to present fairly the results for the interim periods. These financial
statements should be read in conjunction with the audited financial statements
as of December 31, 1998 and 1999 and for the three years in the period ended
December 31, 1999, which are included in the Company's 1999 Annual Report on
Form 10-K ("Form 10-K").
The preparation of financial statements to be in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates and would impact future
results of operations and cash flows.
The results of operations for the three and six month periods ended June 30,
2000 are not necessarily indicative of the results expected for the full year
ending December 31, 2000.
Certain prior year amounts have been reclassified to conform to the 2000
presentation. These changes had no impact on previously reported results of
operations.
2. Common and Preferred Stock
In the six months ended June 30, 2000, several investors exercised the
non-detachable warrants of the Series C Preferred Stock. As a result of these
exercises, 2,707,630 shares of common stock were issued and registered as part
of a Form S-3 deemed effective on April 26, 2000. A second Form S-3 was filed on
July 5, 2000. Included within this registration statement were dividend shares
representing 93,092 shares of common stock which were issued during the quarter
ending June 30, 2000. The Series C Preferred Stock was reduced by 270,763 shares
as a result of the warrant exercise pursuant to the terms of the September 9,
1999 offering. There were no proceeds generated from these exercises.
Restricted common stock amounting to 158,316 shares were issued to certain
selected employees as compensation in the second quarter of 2000, 25% of which
vested immediately, with the remaining shares vesting over the next three
quarters.
In June 2000, the Company issued, pursuant to Rule 506 of Regulation D, 274,967
shares of Common Stock at a purchase price of $3.64 per share to Citrix Systems,
Inc. in exchange for $1,000,000. These shares were included in the Form S-3
filed on July 5, 2000. A licensing agreement was also signed with Citrix
Systems, Inc. in the second quarter.
3. Supplemental Cash Flow Disclosure
Selected noncash activities were as follows:
Six months ended June 30,
2000 1999
(unaudited) (unaudited)
------------- -------------
Noncash investing and financing activities:
Redemption of preferred stock (7,107,529) -
Payment of preferred stock dividends (440,342) -
6
<PAGE>
4. Net Loss Per Share
The following table sets forth the computation of basic and diluted
net loss per share:
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
ended ended ended ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Numerator:
Net loss $(2,511,701) $(2,192,669) $(3,993,923) $(4,371,963)
Less: Dividend on preferred stock (90,704) - (297,165) -
---------------------------------------------------------------------
Net loss attributable to holders of
common stock $(2,602,405) $(2,192,669) $(4,291,088) $(4,371,963)
=====================================================================
Denominator:
Denominator for basic and diluted
net loss per share - weighted
average shares 20,945,663 16,773,553 19,722,981 16,741,757
=====================================================================
Basic and diluted loss per share
Net loss attributable to holders of
common stock $ (0.12) $ (0.13) $ (0.22) $ (0.26)
=====================================================================
</TABLE>
Due to their anti-dilutive effect, outstanding shares of preferred
stock, stock options and warrants to purchase shares of common stock
were excluded from the computation of diluted earnings per share for
all periods presented.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934. These statements may differ in a
material way from actual future events. For instance, factors that could cause
results to differ from future events include rapid rates of technological change
and intense competition, among others. The Company's total revenue and operating
results have varied substantially from quarter to quarter and should not be
relied upon as an indication of future results. Several factors may affect the
ability to forecast the Company's quarterly operating results, including the
size and timing of individual software and hardware sales; the length of the
Company's sales cycle; the level of sales and marketing, research and
development and administrative expenses; and general economic conditions.
Operating results for a given period could be disproportionately affected by any
shortfall in expected revenue. In addition, fluctuation in revenue from quarter
to quarter will likely have an increasingly significant impact on the Company's
results of operations. The Company's growth in recent periods may not be an
accurate indication of future results of operations in light of the Company's
short operating history, the evolving nature of the network security market and
the uncertainty of the demand for Internet and intranet products in general and
the Company's products in particular. Because the Company's operating expenses
are based on anticipated revenue levels, a small variation in the timing of
recognition of revenue can cause significant variations in operating results
from quarter to quarter.
Readers are also referred to the documents filed by the Company with the SEC,
specifically the Company's latest Annual Report on Form 10-K that identifies
important risk factors for the Company.
RESULTS OF OPERATIONS
REVENUE
Total revenue increased 7% from approximately $1,007,000 for the three months
ended June 30, 1999 to approximately $1,076,000 for the three months ended June
30, 2000. This increase was primarily due to higher maintenance and consulting
revenue. For the six months ended June 30, 2000, total revenue decreased 9% to
approximately $2,460,000 from approximately $2,703,000 for the same period in
1999. The decline was caused mainly by a drop in the sales of firewall products,
off approximately $519,000, or (74%). Sales of seat licenses for the first six
months of 2000 increased by $221,000, or 17% compared to the same period of
1999. Product revenue is derived principally from software licenses and the sale
of hardware products. Product revenue was essentially unchanged from
approximately $719,000 for the three months ended June 30, 1999 to approximately
$714,000 for the three months ended June 30, 2000. For the six months ended June
30, 2000, total product revenue decreased 12% to approximately $1,847,000 from
approximately $2,088,000 for the same period in 1999. Consulting and services
revenue is derived principally from fees for services complementary to the
Company's products, including consulting, maintenance and training. Consulting
and services revenue increased from approximately $288,000 for the three months
ended June 30, 1999 to approximately $363,000 for the three months ended June
30, 2000 due principally to retroactive maintenance contracts. Consulting and
services revenue for the six months ending June 30, 2000 was approximately
$613,000, down $2,000 from approximately $615,000 for the same period in 1999.
COST OF REVENUE
Total cost of revenue as a percentage of total revenue was approximately 23% and
14% for the three months ended June 30, 1999 and 2000, respectively. For the six
months ended June 30, 2000, total cost of revenue decreased to approximately
$234,000 from approximately $413,000 for the same period in 1999. Total cost of
revenue is comprised of cost of product revenue and cost of consulting and
services revenue, as well as reserves taken for slow moving inventory. In the
second quarter of 1999, reserves were created for $124,000 for slow moving
stocks of card readers and older versions of firewalls.
Cost of product revenue consists principally of the costs of computer hardware,
licensed technology, manuals and labor associated with the distribution and
support of the Company's products. Cost of product revenue decreased from
8
<PAGE>
approximately $218,000 for the three months ended June 30, 1999 to approximately
$141,000 for the three months ended June 30, 2000. Cost of product revenue as a
percentage of product revenue was approximately 30% and 20% for the three months
ended June 30, 1999 and 2000, respectively. For the six months ended June 30,
2000, total cost of product revenue decreased to approximately $211,000 from
approximately $380,000 for the same period in 1999, due in part to inventory
obsolescence reserves created in 1999. Cost of product revenue as a percentage
of product revenue was approximately 11% and 18% for the six months ended June
30, 1999 and 2000, respectively. The dollar and percentage decreases in 2000
were primarily attributable to a higher proportion of software licenses of the
Company's principal product, SmartGate, as compared to turnkey hardware and
third-party firewall sales.
Cost of consulting and services revenue consists principally of personnel and
related costs incurred in providing consulting, support and training services to
customers. Cost of consulting and services revenue decreased from approximately
$13,000 for the three months ended June 30, 1999 to approximately $10,000 for
the three months ended June 30, 2000. Cost of consulting and services revenue as
a percentage of consulting and services revenue was approximately 4% and 3% for
the three months ended June 30, 1999 and 2000, respectively. The dollar and
percentage decreases were principally due to a decrease in the number of
installations of hardware systems requested by customers. Cost of consulting and
services revenue decreased from approximately $33,000 for the six months ended
June 30, 1999 to approximately $23,000 for the six months ended June 30, 2000.
Cost of consulting and services revenue as a percentage of consulting and
services revenue was approximately 5% and 4% for the six months ended June 30,
1999 and 2000, respectively.
OPERATING EXPENSES
Sales and Marketing -- Sales and marketing expenses consist principally of the
costs of sales and marketing personnel, advertising, promotions and trade shows.
Sales and marketing expenses decreased by $57,000 from approximately $1,731,000
for the three months ended June 30, 1999 to approximately $1,674,000 for the
three months ended June 30, 2000. Sales and marketing expenses as a percentage
of total revenue were approximately 172% and 156% for the three months ended
June 30, 1999 and 2000, respectively. The dollar decrease is mainly due to lower
advertising and promotion expenses this year. For the six months ended June 30,
2000, total sales and marketing decreased 8% to approximately $3,170,000 from
approximately $3,438,000 for the same period in 1999, again due to lower
advertising and promotion expenses. Sales and marketing expenses are expected to
increase in the near term as a result of the Company's new product introductions
and trade show expenses. This statement is based on current expectations. It is
forward-looking, and the actual results could differ materially. For information
about factors that could cause the actual results to differ materially, please
refer to Item 1. "Business - Risk Factors That May Affect Future Results and
Market Price of Common Stock" in the Company's Form 10-K.
General and Administrative -- General and administrative expenses consist
principally of the costs of finance, management and administrative personnel and
facilities expenses. General and administrative expenses increased from
approximately $467,000 for the three months ended June 30, 1999 to approximately
$1,020,000 for the three months ended June 30, 2000. The increase was due
principally to higher legal and accounting fees in the quarter just ended.
General and administrative expenses as a percentage of total revenue were
approximately 46% and 95% for the three months ended June 30, 1999 and 2000,
respectively. The dollar and percentage increases in 2000 were principally due
to increased spending on professional fees. For the six months ended June 30,
2000, total general and administrative increased 12.5% to approximately
$1,674,000 from approximately $1,488,000 for the same period in 1999. The
Company anticipates that general and administrative expenses, exclusive of costs
associated with financings, will increase modestly in future periods. This
statement is based on current expectations. It is forward-looking, and the
actual results could differ materially. For information about factors that could
cause the actual results to differ materially, please refer to Item 1. "Business
- Risk Factors That May Affect Future Results and Market Price of Common Stock"
in the Company's Form 10-K.
Research and Development -- Research and development expenses consist
principally of the costs of research and development personnel and other
expenses associated with the development of new products and enhancement of
existing products. Research and development expenses increased from
approximately $579,000 for the three months ended June 30, 1999 to approximately
$807,000 for the three months ended June 30, 2000. Research and development
expenses as a percentage of total revenue were approximately 58% and 75% for the
three months ended June 30, 1999 and 2000, respectively. The dollar and
percentage increases were primarily due to higher wage related costs as well as
consulting and recruiting fees. For the six months ended June 30, 2000, total
research and development expenses increased 3.0% to approximately $1,519,000
9
<PAGE>
from approximately $1,475,000 for the same period in 1999. Higher staff costs
and recruiting expenses were offset in part by lower consulting expenses when
comparing the first half of this year to the same period in 1999. The Company
believes that a continuing commitment to research and development is required to
remain competitive. Accordingly, the Company intends to allocate substantial
resources to research and development, but research and development expenses may
vary as a percentage of total revenue. This statement is based on current
expectations. It is forward-looking, and the actual results could differ
materially. For information about factors that could cause the actual results to
differ materially, please refer to Item 1. "Business - Risk Factors That May
Affect Future Results and Market Price of Common Stock" in the Company's Form
10-K.
Interest Income and Expenses -- Interest income represents interest earned on
cash and cash equivalents. Interest income increased from approximately $34,000
for the three months ended June 30, 1999 to approximately $71,000 for the three
months ended June 30, 2000. For the six months ended June 30, 2000, total
interest income increased 287% to approximately $156,000 from approximately
$40,000 for the same period in 1999. The increase was attributable to higher
levels of cash and cash equivalents. Interest expense represents interest paid
or payable on the loans and capital lease obligations. Interest expense
decreased from approximately $226,000 for the three months ended June 30, 1999
to approximately $6,000 for the three months ended June 30, 2000. The decrease
was primarily due to the payoff in the third quarter of 1999 of a loan obtained
in the first quarter of 1999. For the six months ended June 30, 2000, total
interest expense decreased 96% to approximately $12,000 from approximately
$301,000 for the same period in 1999.
Income Taxes -- The Company did not incur income tax expense as a result of the
net loss incurred during the six months ended June 30, 1999 and 2000,
respectively.
Dividend on Preferred Stock -- The Company provided approximately $91,000 for a
dividend on the Series C Preferred Stock during the second quarter of 2000, and
$297,000 for the six months period ending June 30, 2000. Under the terms of the
Series C Preferred Stock Agreement the Company may elect to pay these related
dividends in cash and or stock.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities used cash of approximately $3,880,000 and
$3,784,000 for the six months ended June 30, 1999 and 2000, respectively. Cash
used in operating activities resulted principally from net losses in both
periods. The Company believes that its current cash and cash equivalents and
funds that may be generated from on-going operations will be sufficient to meet
its normal operating requirements over the near term.
The Company's financing activities provided cash of approximately $3,926,000 and
$3,328,000 during the six months ended June 30, 1999 and 2000, respectively. In
the first six months of last year the cash was provided primarily by the
issuance of a $3.0 million note to a lender, which was paid on September 30,
1999. In the first six months of this year the Company issued, pursuant to Rule
506 of Regulation D, 500,000 shares of Common Stock at a purchase price of $4.75
per share to Cranshire Capital, L.P. in exchange for $2,375,000 and 274,967
shares Common Stock at a purchase price of $3.64 per share to Citrix Systems,
Inc. in exchange for $1,000,000.
The Company's net tangible asset balance of $7,841,000 and $7,312,000 at
December 31, 1999 and June 30, 2000, respectively, reflects favorably on the
resources of the organization.
As of June 30, 2000, the Company had an accumulated deficit of approximately
$43,936,000. The Company currently expects to achieve profitability by the
fourth quarter of fiscal year 2000. This statement is based on current
expectations. It is forward-looking, and the actual results could differ
materially. For information about factors that could cause the actual results to
differ materially, please refer to Item 1. "Business - Risk Factors That May
Affect Future Results and Market Price of Common Stock" in the Company's Form
10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is not materially exposed to fluctuations in currency exchange rates
as all of its products are invoiced in U.S. dollars. The Company does not hold
any derivatives or marketable securities. However, the Company is exposed to
interest rate risk. The Company believes that the market risk arising from
holdings of its financial instruments is not material.
10
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
On June 1, 2000 in the United States District Court for the District of
Maryland, George McMeen, et al. Plaintiffs vs. V-ONE Corporation, et al.,
Defendants; in accordance with the proceedings held in this matter of May 31,
2000, the status is as follows: Defendants need not respond to the Complaint. By
July 14, Plaintiffs shall file an Amended Complaint. By August 31, Defendants
shall move to dismiss the Amended Complaint. By October 16, Plaintiffs shall
respond. By October 31, Defendant shall file a reply. Argument on pending
motions and a scheduling conference shall be held on Friday, December 1,
commencing at 10:00 a.m.
On June 1, 2000 in the United States District Court for the District of
Maryland, Raj Patel, et al. Plaintiffs vs. V-ONE Corporation, et al.,
Defendants, an order staying and administratively closing case pending related
proceedings was issued as follows: It appears that the issues presented in this
class action law suit are the same as those presented in McMeen v. V-ONE Corp.,
MJG-00-263 (the "related proceedings"). Accordingly, no purpose is served by
keeping this case on the Court's active docket. Accordingly: This case is STAYED
pending the related proceedings. The Clerk of the Court shall ADMINISTRATIVELY
CLOSE this case for possible reopening pursuant to further Order of this Court
upon the application (by December 31, 2002) of any party hereto based upon the
resolution of the related proceedings or other good cause. The administrative
closing of this case shall not affect any rights of the parties in this, or any
other proceeding. If any party can show that the fact that this case is
administratively closed rather than minimally open will have genuine adverse
effect on that party, the Court will consider formally reopening the case to
prevent such adverse effect.
Item 2. Changes in Securities and Use of Proceeds
In June 2000, the Company issued, pursuant to Rule 506 of Regulation D 274,967
shares Common Stock at a purchase price of $3.64 per share to Citrix Systems,
Inc. in exchange for $1,000,000.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On May 11, 2000, the following items were voted on at the Annual Meeting of
stockholders:
<TABLE>
<CAPTION>
Broker
Proposal For Against Abstain Non-Votes
-------- --- ------- ------- ---------
<S> <C> <C> <C> <C>
1. Proposal One:
election of :
A.L. Giannopoulos 16,786,651 577,115 N/A N/A
Margaret E. Grayson 16,786,651 577,115 N/A N/A
as directors for the term ending 2003.
2. Ratification of auditors 18,813,801 33,215 17,820 N/A
3. Amendment of Certificate of Incorporation 18,045,320 759,170 60,346 N/A
4. Amendment of 1998 Incentive Stock Plan 7,532,551 1,218,418 72,676 10,135,257
</TABLE>
Item 5. Other Information
None.
Item 6. Exhibit and Reports on Form 8-K
(a) The following exhibits are filed as part of this quarterly report on
Form 10-Q for the period ended June 30, 2000:
11
<PAGE>
Exhibit Description
------- -----------
27 Financial data schedule for the three months ended June 30, 2000.
(b) There were no reports on Form 8-K filed for the quarter ended June 30,
2000.
12
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
V-ONE CORPORATION
Registrant
Date: August 7, 2000 By: /s/ Margaret E. Grayson
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Name: Margaret E. Grayson
Title: Senior Vice President and Chief
Financial Officer
(Duly authorized officer)
