<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 June 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
-- -- -----
Number of shares of Common Stock outstanding at July 31, 1996: 18,897,012
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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 six months ended June 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
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ALTRIS SOFTWARE, INC.
PART 1. FINANCIAL INFORMATION
All per share information does not reflect the effects of one-for-two
reverse stock split by the Company on October 25, 1996.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
(Unaudited)
(Restated)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 901,000 $ 4,656,000
Short term investments 90,000 270,000
Receivables, net 6,396,000 4,207,000
Inventory, net 460,000 469,000
Other current assets 840,000 803,000
----------- -----------
Total current assets 8,687,000 10,405,000
Property and equipment, net 2,091,000 1,645,000
Computer software, net 1,573,000 1,549,000
Goodwill 4,607,000 4,945,000
Deposits and other assets 494,000 458,000
----------- -----------
Total assets $17,452,000 $19,002,000
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,501,000 $ 2,192,000
Accrued liabilities 2,304,000 3,211,000
Notes payable 200,000 1,834,000
Convertible note payable - 1,000,000
Deferred revenue 1,105,000 1,229,000
----------- -----------
Total current liabilities 5,110,000 9,466,000
Long term note payable 397,000 475,000
Other long term liabilities 774,000 945,000
----------- -----------
Total liabilities 6,281,000 10,886,000
Commitments
Shareholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized;
650,761 designated; 62,500 shares
issued and outstanding 1,229,000 3,306,000
Common stock, no par value, 40,000,000
shares authorized; 18,544,464 and
16,950,902 issued and outstanding,
respectively 59,769,000 54,085,000
Foreign currency translation adjustment 60,000 -
Accumulated deficit (49,887,000) (49,275,000)
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Total shareholders' equity 11,171,000 8,116,000
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Total liabilities and shareholders' equity $17,452,000 $19,002,000
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to the consolidated financial statements
2
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ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Revenues $5,971 $3,351 $10,132 $6,502
Cost of revenues 2,368 1,422 4,775 3,114
------- ------- -------- -------
Gross profit 3,603 1,929 5,357 3,388
------- ------- -------- -------
Operating expenses:
Research and development 849 335 1,756 560
Marketing and sales 1,394 778 2,647 1,471
General and administrative 854 399 1,565 721
------- ------- -------- -------
Total operating expenses 3,097 1,512 5,968 2,752
------- ------- -------- -------
Income (loss) from operations 506 417 (611) 636
Interest and other income 20 36 46 70
Interest and other expense (21) (26) (47) (54)
------- ------- -------- -------
Income (loss) before taxes 505 427 (612) 652
Provision for taxes - - - -
------- ------- -------- -------
Net income (loss) $ 505 $ 427 $ (612) $ 652
------- ------- -------- -------
------- ------- -------- -------
Net income (loss) per share $ .03 $ .03 $ (0.04) $ .05
------- ------- -------- -------
------- ------- -------- -------
Weighted average shares 19,187 14,068 17,696 14,066
outstanding
</TABLE>
See accompanying notes to the consolidated financial statements.
3
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ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the six months
ended June 30,
------------------
1996 1995
---- ----
(Restated)
<S> <C> <C>
Cash flow from operating activities:
Net (loss) income $ (612,000) $ 652,000
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 956,000 335,000
Changes in assets and liabilities:
Receivables (2,189,000) (64,000)
Inventory 9,000 251,000
Other assets 84,000 (292,000)
Accounts payable (691,000) 2,000
Accrued liabilities (907,000) (49,000)
Deferred revenue (124,000) (91,000)
Other long term liabilities (171,000) -
----------- ----------
Net cash (used in) provided by operating activities (3,645,000) 744,000
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Cash flows from investing activities:
Short term investments maturing 180,000 1,129,000
Purchases of property and equipment (764,000) (186,000)
Proceeds from sale of property and equipment - 4,000
Purchases of software (15,000) (11,000)
Computer software capitalized (466,000) (404,000)
Cash paid to former Optigraphics shareholders - (171,000)
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Net cash (used in) provided by investing activities (1,065,000) 361,000
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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 (78,000) (28,000)
Proceeds from exercise of stock options 699,000 39,000
Net proceeds from issuance of preferred stock 1,908,000 -
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Net cash provided by financing activities 895,000 11,000
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Effects of exchange rate changes on cash 60,000 -
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Net (decrease) increase in cash and cash equivalents (3,755,000) 1,116,000
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 $ 901,000 $2,152,000
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Supplemental cash flow information:
Interest paid $ 37,000 $ 73,000
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Schedule of non-cash financing activity:
Conversion of Preferred Stock and note payable to
Common Stock $ 5,003,000 -
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</TABLE>
See accompanying notes to the consolidated financial statements.
4
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ALTRIS SOFTWARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated balance sheet of Altris Software, Inc.
(formerly Alpharel, Inc.) (the "Company") as of June 30, 1996 and the
consolidated statement of operations and of cash flows for the three and six
month periods ended June 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 and six
months ended June 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 six months ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30,1996 ended June 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 $6,106 $(135) $5,971 $12,167 $(2,035) $10,132
Gross profit 3,973 (370) 3,603 7,521 (2,164) 5,357
Net income (loss) 875 (370) 505 1,552 (2,164) (612)
Net income (loss) per share .05 (0.02) .03 .08 (0.12) (0.04)
</TABLE>
NOTE 2 - NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed on the basis of weighted average
shares and common stock equivalent shares outstanding for each period
presented, if dilutive.
5
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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
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6
<PAGE>
EXHIBIT 11
ALTRIS SOFTWARE, INC.
STATEMENT RECOMPUTATION OF NET INCOME (LOSS) PER SHARE
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net income (loss) per consolidated
financial statements $ 505 $ 427 $ (612) $ 652
-------- -------- -------- --------
-------- -------- -------- --------
Primary net income (loss) per share:
Weighted average common shares 18,404 13,913 17,696 13,827
Common stock equivalents:
Common stock options 608 155 - 239
Common stock warrants - - - -
Convertible preferred stock 175 - - -
-------- -------- -------- --------
Weighted average shares outstanding 19,187 14,068 17,696 14,066
-------- -------- -------- --------
-------- -------- -------- --------
Fully diluted net income (loss) per share:
Weighted average common shares 18,404 13,913 17,696 13,827
Common stock equivalents:
Common stock options 608 155 - 239
Common stock warrants - - - -
Convertible preferred stock 175 - - -
-------- -------- -------- --------
Weighted average shares outstanding 19,187 14,068 17,696 14,066
-------- -------- -------- --------
-------- -------- -------- --------
Net income (loss) per share:
Primary $ .03 $ .03 $ (0.04) $ .05
-------- -------- -------- --------
-------- -------- -------- --------
Fully diluted $ .03 $ .03 $ (0.04) $ .05
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
<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 3 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE JUNE 30,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 901
<SECURITIES> 0
<RECEIVABLES> 6,396
<ALLOWANCES> 0
<INVENTORY> 460
<CURRENT-ASSETS> 8,687
<PP&E> 6,819
<DEPRECIATION> 4,728
<TOTAL-ASSETS> 17,452
<CURRENT-LIABILITIES> 5,110
<BONDS> 0
0
0
<COMMON> 59,769
<OTHER-SE> (49,887)
<TOTAL-LIABILITY-AND-EQUITY> 17,452
<SALES> 10,132
<TOTAL-REVENUES> 10,132
<CGS> 4,775
<TOTAL-COSTS> 4,775
<OTHER-EXPENSES> 1,756
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (47)
<INCOME-PRETAX> (612)
<INCOME-TAX> 0
<INCOME-CONTINUING> (612)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (612)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
