<PAGE>
FORM 10-Q/A AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-15935
ALTRIS SOFTWARE, INC.
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(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3634089
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9339 CARROLL PARK DRIVE, SAN DIEGO, CA 92121
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(Address of principal executive offices and zip code)
(619) 625-3000
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(Registrant's telephone number, including area code)
ALPHAREL, INC.
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(Former name of registrant)
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
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Number of shares of Common Stock outstanding at October 25, 1996: 9,507,266
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<PAGE>
In March 1998, Altris Software, Inc. (the "Company") announced that it
was conducting a review of its interim financial information and annual
financial statements for 1996 and the interim information for the first three
quarters of 1997 with a view to determining whether the revenue previously
reported for such periods was recognized in accordance with generally
accepted accounting principles. As a result of this review, the Company has
restated such financial statements. This Amendment to the Company's
Quarterly Report on Form 10-Q sets forth the restated financial statements of
the Company for the three and nine months ended September 30, 1996.
Information in the Quarterly Report on Form 10-Q as originally filed was
presented as of the date of such original filing or earlier, as indicated
therein. Unless otherwise stated, such information has not been updated in
this Amendment. In particular, "Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations" as originally filed discussed
the Company's financial condition and results of operations based on the
financial statements in the Quarterly Report on Form 10-Q as originally filed,
without consideration of the restatement reflected herein, and therefore no
reliance should be placed thereon. Please refer to "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations"
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by the Form 10-K/A filed concurrently herewith,
for a discussion of the financial condition and results of operations of the
Company at and for the year ended December 31, 1996.
1
<PAGE>
ALTRIS SOFTWARE, INC.
PART 1. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(Unaudited)
(Restated)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,423,000 $ 4,656,000
Short term investments 90,000 270,000
Receivables, net 6,815,000 4,207,000
Inventory, net 582,000 469,000
Other current assets 924,000 803,000
------------ ------------
Total current assets 9,834,000 10,405,000
Property and equipment, net 2,021,000 1,645,000
Computer software, net 1,830,000 1,549,000
Goodwill 4,797,000 4,945,000
Deposits and other assets 451,000 458,000
------------ ------------
Total assets $ 18,933,000 $ 19,002,000
------------ ------------
------------ ------------
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 2,190,000 $ 2,192,000
Accrued liabilities 2,075,000 3,211,000
Notes payable 200,000 1,834,000
Convertible note payable - 1,000,000
Deferred revenue 1,092,000 1,229,000
------------ ------------
Total current liabilities 5,557,000 9,466,000
Long term note payable 621,000 475,000
Other long term liabilities 620,000 945,000
------------ ------------
Total liabilities 6,798,000 10,886,000
Commitments
Shareholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized; 650,761 designated;
172,500 shares issued and outstanding - 3,306,000
Common stock, no par value, 20,000,000 shares
authorized; 9,465,444 and 8,475,451 issued and
outstanding, respectively 61,233,000 54,085,000
Foreign currency translation adjustment (2,000) -
Accumulated deficit (49,096,000) (49,275,000)
------------ ------------
Total shareholders' equity 12,135,000 8,116,000
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Total liabilities and shareholders' equity $ 18,933,000 $ 19,002,000
------------ ------------
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</TABLE>
See accompanying notes to the consolidated financial statements
2
<PAGE>
ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
--------------------- ---------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
(Restated) (Restated)
Revenues $ 5,938 $ 3,127 $ 16,070 $ 9,629
Cost of revenues 2,228 1,276 7,003 4,390
-------- -------- -------- --------
Gross profit 3,710 1,851 9,067 5,239
-------- -------- -------- --------
Operating expenses:
Research and development 791 326 2,547 886
Marketing and sales 1,357 942 4,004 2,413
General and administrative 758 357 2,323 1,078
-------- -------- -------- --------
Total operating expenses 2,906 1,625 8,874 4,377
-------- -------- -------- --------
Income from operations 804 226 193 862
Interest and other income 18 31 64 101
Interest and other expense (31) (28) (78) (82)
-------- -------- -------- --------
Income before taxes 791 229 179 881
Provision for taxes - - - -
-------- -------- -------- --------
Net income $ 791 $ 229 $ 179 $ 881
-------- -------- -------- --------
-------- -------- -------- --------
Net income per share $ .08 $ .03 $ .02 $ .12
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares outstanding 9,651 7,497 9,414 7,182
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
---------------------------
1996 1995
---- ----
<S> <C> <C>
(Restated)
Cash flow from operating activities:
Net income $ 179,000 $ 881,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,506,000 508,000
Changes in assets and liabilities:
Receivables (2,608,000) (586,000)
Inventory (113,000) 321,000
Other assets (461,000) (593,000)
Accounts payable (2,000) 73,000
Accrued liabilities (1,136,000) 65,000
Billings in excess of costs - 22,000
Deferred revenue (137,000) (164,000)
Other long term liabilities (325,000) -
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Net cash used in operating activities (3,097,000) 527,000
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Cash flows from investing activities:
Short term investments maturing 180,000 1,354,000
Purchases of property and equipment (857,000) (448,000)
Proceeds from sale of property and equipment - 4,000
Purchases of software (20,000) (67,000)
Computer software capitalized (791,000) (720,000)
Cash paid to former Optigraphics shareholders - (171,000)
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Net cash (used in) provided by investing activities (1,488,000) (48,000)
----------- -----------
Cash flows from financing activities:
Principal payment under cash advanced by a bank related
to former Optigraphics shareholder notes payable (1,634,000) -
Principal payments under note payable (116,000) (59,000)
Proceeds from exercise of stock options 919,000 90,000
Net borrowings under revolving loan agreement 262,000 700,000
Net proceeds from issuance of preferred stock 1,923,000 -
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Net cash provided by financing activities 1,354,000 731,000
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Effects of exchange rate changes on cash (2,000) -
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Net (decrease) increase in cash and cash equivalents (3,233,000) 1,210,000
Cash and cash equivalents at beginning of period 4,656,000 1,036,000
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Cash and cash equivalents at end of period $ 1,423,000 $ 2,246,000
----------- -----------
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Supplemental cash flow information:
Interest paid $ 50,000 $ 83,000
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Schedule of non-cash financing activity:
Conversion of Preferred Stock and note payable to
Common Stock $ 6,230,000 -
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----------- -----------
Indemnification obligations applied against notes
payable to former Optigraphics shareholders - $ 100,000
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</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE>
ALTRIS SOFTWARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated balance sheet of Altris Software, Inc. (the
"Company") as of September 30, 1996 and the consolidated statement of
operations and of cash flows for the three and nine month periods ended
September 30, 1996 and 1995 are unaudited. The consolidated financial
statements and related notes have been prepared in accordance with generally
accepted accounting principles applicable to interim periods. In the opinion
of management, the consolidated financial statements reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the consolidated financial position, operating results and cash
flows for the periods presented.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany accounts and transactions
have been eliminated.
These consolidated financial statements should be read in conjunction with
the financial statements included in the Company's Annual Report on Form 10-K,
as amended, for the year ended December 31, 1996, as filed with the Securities
and Exchange Commission.
The financial statements included herein have been restated from those
previously published to reflect corrections of misapplications of the
Company's revenue recognition policies. The results for the three months and
nine months ended September 30, 1996 have been amended to reflect changes in
the timing and amount of revenue recognition for those contracts where
subsequently discovered facts indicate that revenue had initially been
recognized before: (a) there was persuasive evidence of an agreement between
the Company and the customer; (b) the amount of the fee had become fixed; or
(c) there was sufficient evidence of the delivery of the product or services.
The reconciliation of previously reported results to restated results for the
three and nine months ended September 30, 1996 is as follows:
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30,1996 ended September 30, 1996
--------------------------------------- ---------------------------------------
(In thousands except per share data)
Previously As Previously As
Reported Adjustment Restated Reported Adjustment Restated
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 5,806 $ 132 $ 5,938 $ 17,973 $ (1,903) $ 16,070
Gross profit 3,411 299 3,710 10,932 (1,865) 9,067
Net income 492 299 791 2,044 (1,865) 179
Net income per share .05 .03 .08 .22 (.20) .02
</TABLE>
NOTE 2 - NET INCOME PER SHARE
Net income per share is computed on the basis of weighted average shares
and common stock equivalent shares outstanding for each period presented, if
dilutive.
5
<PAGE>
SIGNATURE
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.
ALTRIS SOFTWARE, INC.
By: /s/John W. Low
-----------------------------------
John W. Low
Chief Financial Officer
Dated: May 19, 1998
-----------------------------------
6
<PAGE>
Exhibit 11
ALTRIS SOFTWARE, INC.
STATEMENT RE COMPUTATION OF NET INCOME (LOSS) PER SHARE
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
-------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net income per consolidated
financial statements $ 791 $ 229 $ 179 $ 881
------ ------ ------ ------
------ ------ ------ ------
Primary net income per share:
Weighted average common shares 9,420 7,029 8,967 6,946
Common stock equivalents:
Common stock options 200 398 295 212
Common stock warrants - 70 - 24
Convertible preferred stock and
convertible note 31 - 152 -
------ ------ ------ ------
Weighted average shares outstanding 9,651 7,497 9,414 7,182
------ ------ ------ ------
------ ------ ------ ------
Fully diluted net income per share:
Weighted average common shares 9,420 7,029 8,967 6,946
Common stock equivalents:
Common stock options 200 398 295 212
Common stock warrants - 70 - 24
Convertible preferred stock and
convertible note 31 - 152 -
------ ------ ------ ------
Weighted average shares outstanding 9,651 7,497 9,414 7,182
------ ------ ------ ------
------ ------ ------ ------
Net income per share:
Primary $ .08 $ .03 $ .02 $ .12
------ ------ ------ ------
------ ------ ------ ------
Fully diluted $ .08 $ .03 $ .02 $ .12
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
Note - All share data has been restated to reflect the 1-for-2 reverse stock
split which was adopted by the shareholders on October 24, 1996.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS AS RESTATED,
FOUND ON PAGES 2 AND 5 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE SEPTEMBER
30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,423
<SECURITIES> 0
<RECEIVABLES> 6,815
<ALLOWANCES> 0
<INVENTORY> 582
<CURRENT-ASSETS> 9,834
<PP&E> 6,912
<DEPRECIATION> 4,891
<TOTAL-ASSETS> 18,933
<CURRENT-LIABILITIES> 5,557
<BONDS> 0
0
0
<COMMON> 61,233
<OTHER-SE> (49,096)
<TOTAL-LIABILITY-AND-EQUITY> 18,933
<SALES> 16,070
<TOTAL-REVENUES> 16,070
<CGS> 7,003
<TOTAL-COSTS> 7,003
<OTHER-EXPENSES> 2,547
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (78)
<INCOME-PRETAX> 179
<INCOME-TAX> 0
<INCOME-CONTINUING> 179
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 179
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
