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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 0-19817.
IntraNet Solutions, Inc.
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(Exact name of registrant as specified in its charter)
Minnesota 41-1652566
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7777 Golden Triangle Drive, Eden Prairie, Minnesota 55344-3736
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(Address of principal executive offices) (Zip Code)
(952) 903-2000
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(Registrant's telephone number, including area code)
8091 Wallace Road, Eden Prairie, MN 55344-3775
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(Former name, former address and former fiscal year, if changed since last
report)
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 issuer's classes of
common stock, as of the latest practicable date. Common Stock, $.01 par value -
21,294,874 shares as of August 4, 2000.
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INDEX
INTRANET SOLUTIONS, INC.
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Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - June 30, 2000 and March 31, 2000...........3
Condensed Consolidated Statements of Earnings - Three months ended
June 30, 2000 and 1999.............................................................4
Condensed Consolidated Statements of Cash Flows - Three months ended
June 30, 2000 and 1999.............................................................5
Notes to Condensed Consolidated Financial Statements...............................6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations...................................9
Item 3. Quantitative and Qualitative Disclosures About Market Risk........................18
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................................................19
SIGNATURES..................................................................................21
</TABLE>
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
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<CAPTION>
JUNE 30, MARCH 31,
2000 2000
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ASSETS (UNAUDITED)
CURRENT ASSETS:
Cash and equivalents................................................................ $ 4,629 $ 8,859
Short-term investments.............................................................. 149,826 124,883
Accounts receivable, net............................................................ 9,499 7,446
Notes receivable.................................................................... 126 126
Inventories......................................................................... 55 149
Prepaid expenses and other current assets........................................... 1,722 663
Prepaid royalties................................................................... 1,154 1,231
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Total current assets........................................................... 167,011 143,357
Property and equipment, net........................................................... 1,133 887
Other investments..................................................................... 1,049 832
Prepaid royalties, net of current..................................................... 2,106 1,644
Prepaid expenses and other, net of current............................................ 131 161
Other................................................................................. 401 434
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Total assets $ 171,831 $ 147,315
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Long-term obligations............................................................... $ 46 $ 115
Accounts payable.................................................................... 1,152 2,922
Deferred revenues................................................................... 1,484 1,433
Commissions payable................................................................. 839 811
Accrued expenses.................................................................... 1,083 964
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Total current liabilities...................................................... 4,604 6,245
Long-term obligations, net of current maturities...................................... -- 11
Deferred revenue, net of current portion.............................................. 89 89
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Total liabilities.............................................................. 4,693 6,345
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SHAREHOLDERS' EQUITY:
Common stock.......................................................................... 213 207
Additional paid-in capital............................................................ 176,469 153,296
Accumulated deficit .................................................................. (9,544) (12,533)
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Total shareholders' equity..................................................... 167,138 140,970
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Total liabilities and shareholders' equity $ 171,831 $ 147,315
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</TABLE>
See accompanying notes.
Note: The balance sheet at March 31, 2000 has been derived from audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
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INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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THREE MONTHS ENDED JUNE 30,
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2000 1999
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(unaudited)
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REVENUES:
Software.......................................................................... $ 7,447 $ 3,475
Technical services and support.................................................... 2,015 972
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Total revenues................................................................ 9,462 4,447
COST OF REVENUES:
Software.......................................................................... 665 324
Technical services and support.................................................... 1,158 412
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Total cost of revenues........................................................ 1,823 736
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Gross profit.................................................................. 7,639 3,711
OPERATING EXPENSES:
Sales and marketing............................................................... 4,419 1,941
General and administrative........................................................ 1,427 914
Research and development.......................................................... 1,054 572
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Total operating expenses...................................................... 6,900 3,427
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Income from operations........................................................ 739 284
OTHER INCOME:
Interest income, net.............................................................. 2,250 33
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NET INCOME............................................................................ $ 2,989 $ 317
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BASIC NET INCOME PER COMMON SHARE..................................................... $ 0.14 $ 0.02
DILUTED NET INCOME PER COMMON SHARE................................................... $ 0.13 $ 0.02
WEIGHTED AVERAGE SHARES - BASIC....................................................... 21,195 13,463
WEIGHTED AVERAGE SHARES - DILUTED..................................................... 23,092 14,760
</TABLE>
SEE ACCOMPANYING NOTES.
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INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
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THREE MONTHS ENDED JUNE 30,
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2000 1999
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OPERATING ACTIVITIES:
<S> <C> <C>
Net income.............................................................................. $ 2,989 $ 317
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization......................................................... 153 134
Non-cash marketing expense............................................................ 163 --
Changes in operating assets and liabilities........................................... (4,912) (58)
Other................................................................................... -- 35
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Net cash flows provided by (used in) operating activities............................... (1,607) 428
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INVESTING ACTIVITIES:
Purchases of short-term investments..................................................... (2,066,629) --
Maturities and sales of short-term investments ......................................... 2,041,686 --
Purchases of fixed assets............................................................... (399) (554)
Other investments (410) --
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Net cash used in investing activities................................................... (25,752) (554)
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FINANCING ACTIVITIES:
Net advances (repayments) from revolving credit facility................................ -- (322)
Payments on long-term obligations ...................................................... (80) (46)
Issuance of common stock, net of offering expenses...................................... 22,729 23,519
Proceeds from exercise of stock options and warrants.................................... 480 1,525
Other................................................................................... -- (78)
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Net cash flows provided by financing activities......................................... 23,129 24,598
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Net increase (decrease) in cash............................................................ (4,230) 24,472
Cash and cash equivalents, beginning of period............................................. 8,859 2,177
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Cash and cash equivalents, end of period................................................... $ 4,629 $ 26,649
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SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for interest.................................................................. $ 3 $ 19
DETAIL OF CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable..................................................................... $ (2,053) $ (729)
Inventories............................................................................. 94 (227)
Prepaid expenses and other current assets............................................... (1,381) (129)
Accounts payable........................................................................ (1,770) 328
Accrued expenses and other current liabilities.......................................... 198 699
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Net changes in operating assets and liabilities......................................... $ (4,912) $ (58)
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</TABLE>
See accompanying notes.
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INTRANET SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1. NATURE OF THE BUSINESS
IntraNet Solutions, Inc., (the "Company") is a leading provider of
Web-based content management solutions for intranet, extranet and Internet
applications that offer customers the ability to rapidly access, manage and
publish business data to the Web. IntraNet Solutions' Xpedio Content Management
System is the industry's first single source, end-to-end content management
solution. The Company's customers are primarily located throughout the United
States and in Europe. In September 1999, the Company acquired InfoAccess, Inc.
("InfoAccess"), a Web-based software company in a transaction accounted for
using the pooling-of-interests method. Accordingly, the financial information
for periods prior to September 30, 1999 has been restated to include the results
of operations of InfoAccess. All share and per share amounts are also restated.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with Regulation S-X pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although management believes
that the disclosures are adequate to make the information presented not
misleading.
In the opinion of management, the unaudited condensed consolidated
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position as of
June 30, 2000 and March 31, 2000 and the results of operations for the three
months ended June 30, 2000 and 1999 and cash flows for the three months ended
June 30, 2000 and 1999. The results of operations for the three months ended
June 30, 2000 are not necessarily indicative of the results for the full year.
Principles of Consolidation: The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated.
Revenue Recognition: The Company currently derives all of its revenues from
licenses of its suite of products and related services. Product license revenue
is recognized when evidence of a purchase arrangement exists, the product has
been shipped, the fee is determinable and collectible, and no significant
obligations remain related to implementation. Technical services and support
revenue consists of fees from consulting and maintenance. Consulting services
include needs assessment, software integration, security analysis, application
development and training. The Company bills consulting fees either on a time and
materials basis or on a fixed-price schedule. The Company's clients typically
purchase maintenance agreements annually, and the Company prices maintenance
agreements based on a percentage of the product license fee. Clients purchasing
maintenance agreements receive product upgrades, Web-based technical support and
telephone hot-line support. The Company recognizes revenue from maintenance
agreements ratably over the term of the agreement, typically one year. Customer
advances and billed amounts due from customers in excess of revenue recognized
are recorded as deferred revenue.
Cash and Equivalents: The Company considers all short-term, highly liquid
investments that are readily convertible into known amounts of cash and have
original maturities of three months or less to be cash equivalents.
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Short-term Investments: Investments in debt securities with a remaining
maturity of three months or less at the date of purchase are classified as
short-term investments. Management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such designation as of
each balance sheet date. The book value of the investments approximates their
estimated market value. As of June 30, 2000 the Company's investments were in
commercial paper and U.S. Government Agency securities. All investments have a
contractual maturity of three months or less and are held to maturity.
Reclassifications: Certain reclassifications have been made to the three
month periods ending June 30, 1999 to conform with the presentation used in the
June 30, 2000 financial statements. The reclassifications did not effect net
income or shareholders' equity as previously reported.
Net Income per Common Share: The Company's basic net income per share
amounts have been computed by dividing net income by the weighted average number
of outstanding common shares. The Company's diluted net income per share is
computed by dividing net income by the weighted average number of outstanding
common shares and common share equivalents relating to stock options and
warrants, when dilutive. Common stock equivalent shares consist of stock options
and warrants (using the treasury stock method).
3. SHAREHOLDERS' EQUITY
Common stock offering: The Company consummated a common stock offering on
June 3, 1999, consisting of 3,230 shares of common stock at an $8.00 per share
price to the public. The net proceeds of the Offering, after underwriting
discounts, commissions and offering costs of approximately $2,300, was
approximately $23,500. In July 1999, the underwriters' exercised their 15%
over-allotment, resulting in the sale of an additional 485 shares of common
stock. The net proceeds from the exercise of the over-allotment were
approximately $3,400.
On March 9, 2000, the Company completed a secondary offering of 2,305
shares of its common stock and received net proceeds of approximately $100,000.
The proceeds from both offerings will be used for working capital and general
corporate purposes. On April 10, 2000, 520 shares of the underwriters' over
allotment option from the Company's March 9, 2000 secondary offering were issued
for net proceeds of approximately $22,729.
4. ACQUISITION
On September 29, 1999, the Company completed its acquisition of InfoAccess,
using the pooling-of-interests method of accounting. Accordingly, the condensed
consolidated financial statements, and related notes, have been restated to
include the operations and balance sheet amounts of InfoAccess in all periods
presented. Each share of InfoAccess common stock outstanding at the time of the
merger was converted into the right to receive 0.31230 shares of common stock of
the Company in accordance with the merger agreement. An aggregate of 1,803
shares of common stock of the Company were issued in exchange for the 5,775
shares of common stock of InfoAccess outstanding at the time of the acquisition.
In addition, the Company converted 1,207 outstanding options to purchase
InfoAccess common stock into 377 options to acquire the Company's common stock,
on substantially the same terms as the original option agreement.
5. SUBSEQUENT EVENT
On July 10, 2000, the Company acquired the Information Exchange Division
("IED") of Inso Corporation ("Inso"). IED is the market leader in Web conversion
and mobile device viewing technologies and applications. Its products provide
conversion of over 225 different file types to Web
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formats including XML, HTML or Wireless Markup Language (WML). Additionally, IED
provides viewing technology for the Windows CE and Symbian operating systems
that allows users of these mobile devices to readily view files from desktop
applications. The transaction will be accounted for under the purchase method of
accounting. The Company paid aggregate consideration to Inso in the transaction
of $55,000 in cash, 10% of which is being held in escrow for eighteen months to
satisfy potential indemnification claims. The Company anticipates recording
approximately $50,000 in intangible assets, including approximately $10,400 of
in-process research and development which will be expensed when the acquisition
is recorded. The remaining intangible assets will be amortized over
approximately a three year period.
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PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The information presented in this Item contains forward-looking statements
within the meaning of the safe harbor provisions of Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements are subject to
risks and uncertainties, including those discussed under "Risk Factors" below,
that could cause actual results to differ materially from those projected.
Because actual results may differ, readers are cautioned not to place undue
reliance on these forward-looking statements.
OVERVIEW
IntraNet Solutions is a leading provider of Web content management
solutions for intranets, extranets and the Internet. The company responsible for
developing our current business was founded in 1990. In July 1996, it merged
with and into a publicly traded corporation, which was organized under Minnesota
law in November 1989. The name of the entity surviving this merger was changed
to IntraNet Solutions, Inc. Following the merger, our business included content
management software, on-demand publishing and hardware integration services.
Our experience in assisting organizations in managing their diverse
business information, such as CAD files, engineering schematics, design
specifications, audio and video clips, graphics and traditional documents, led
us to identify the need for a comprehensive and easily deployed solution for Web
content management. In fiscal 1997, we launched our first Web-based software
product. We incorporated Java server architecture into this product in January
1998 and released an enhanced enterprise-scaleable version in September 1998. In
order to focus our resources exclusively on developing and marketing Web content
management solutions, we have disposed of our other businesses. In mid-1998, we
completed the final sale of substantially all of our on-demand publishing
assets, and we sold our hardware integration operations in late 1998. Since
October 1998, we have focused exclusively on developing and marketing Web
content management solutions. In September 1999, we acquired InfoAccess, Inc. in
a transaction accounted for as a pooling-of-interests. Following the
acquisition, we released the Xpedio Content Management Suite. The Xpedio Content
Management Suite combines proven features of our Web-based content management
solution with technology from InfoAccess that automatically converts content
from a source object to HTML or XML to publish a Web site.
We currently derive all of our revenues from licenses of our software
products and related services. Revenues are recognized on product licenses when
evidence of a purchase arrangement exists, the product has been shipped, the
fee is determinable and collectible, and no significant obligation remain
related to implementation. Revenues for technical services and support consist
of fees from consulting and maintenance. Consulting services include needs
assessment, software integration, security analysis, application development and
training. We bill consulting fees either on a time and materials basis or on a
fixed price schedule. Our clients typically purchase annual maintenance
agreements, and we price maintenance agreements based on a percentage of the
product license fee. Clients purchasing maintenance agreements receive product
upgrades, Web-based technical support and telephone hot-line support. We
recognize revenues from maintenance agreements ratably over the term of the
agreement, typically one year.
Cost of revenues consists of technology royalties, costs to manufacture,
package and distribute our products and related documentation, as well as
personnel and other expenses related to providing services. Sales and marketing
expenses consist primarily of employee salaries, commissions, and costs
associated with marketing programs such as advertising, public relations and
trade shows. Research and development expenses consist primarily of salaries and
related costs associated with the development of new products, the enhancement
of existing products and the performance of quality assurance and
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documentation activities. General and administrative expenses consist primarily
of salaries and other personnel-related costs for executive, financial, human
resources, information services and other administrative personnel, as well as
legal, accounting and insurance costs. Losses from discontinued operations
consist primarily of losses on the operations of our former on-demand publishing
distribution group and losses on the write-down and sale of its assets.
Since our inception, we have incurred substantial costs to develop our
technology and products, to recruit and train personnel for our sales and
marketing, research and development and services departments, and to establish
an administrative organization. As a result, we have an accumulated deficit of
approximately $9.5 million at June 30, 2000. We anticipate that our operating
expenses will increase substantially in future quarters as we increase sales and
marketing operations, develop new distribution channels, fund greater levels of
research and development, broaden services and improve operational and financial
systems. In addition, our limited operating history makes it difficult for us to
predict future operating results. We cannot be certain that we will sustain
revenue growth or profitability.
On July 10, 2000, we acquired the Information Exchange Division ("IED") of
Inso Corporation. IED is the market leader in Web conversion and mobile device
viewing technologies and applications. Its products provide conversion of over
225 different file types to Web formats including XML, HTML or Wireless Markup
Language (WML). Additionally, IED provides viewing technology for the Windows CE
and Symbian operating systems that allows users of these mobile devices to
readily view files from desktop applications. The transaction will be accounted
for under the purchase method of accounting. We paid aggregate consideration to
Inso in the transaction of $55 million in cash. We anticipate recording
approximately $50 million in intangible assets, including approximately $10.4
million of in-process research and development which will be expensed at the
date of acquisition. The remaining intangible assets will be amortized over
approximately a three year period. IntraNet Solutions' consolidated statement of
earnings for the quarter ended June 30, 2000 does not reflect any activity for
this July 2000 acquisition.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE
MONTHS ENDED JUNE 30, 1999
REVENUES
Total revenues increased by $5.0 million, or 113%, to $9.5 million for the
three months ended June 30, 2000 from $4.4 million for the three months ended
June 30, 1999. The increase in revenues was attributable to the expansion of our
customer base and increased sales to existing customers.
Product Licenses. Revenues for product licenses increased by $3.9 million,
or 114%, to $7.4 million for the three months ended June 30, 2000 from $3.5
million for the three months ended June 30, 1999. The increase in revenues for
product licenses was attributable to the expansion of our customer base,
increased sales to existing customers and the continuing launch of our Xpedio
Content Management Suite.
Services. Revenues for services increased by $1.0 million or 107%, to $2.0
million for the three months ended June 30, 2000 from $1.0 million for the three
months ended June 30, 1999. The increase in revenues for services was primarily
attributable to a larger installed base of products.
COST OF REVENUES AND GROSS PROFIT
Total cost of revenues increased by $1.1 million or 148%, to $1.8
million for the three months ended June 30, 2000 from $0.7 million for the three
months ended June 30, 1999. Total cost of revenues as a percentage of total
revenues was 19% for the three months ended June 30, 2000 compared to 17%
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for the three months ended June 30, 1999. Gross profit increased by $3.9
million, or 106%, to $7.6 million for the three months ended June 30, 2000 from
$3.7 million for the three months ended June 30, 1999. Total gross profit as a
percentage of total revenues was 81% for the three months ended June 30, 2000
compared to 83% for the three months ended June 30, 1999. The increase in gross
profit dollars was primarily due to increased revenues for product licenses and
services.
Product Licenses. Cost of revenues for product licenses increased by
$341,000, or 105%, to $665,000 for the three months ended June 30, 2000 from
$324,000 for the three months ended June 30, 1999. Gross profit as a percentage
of revenues for product licenses was 91% for the three months ended June 30,
2000 and 1999.
Services. Cost of revenues for services increased by $746,000, or 181%, to
$1.2 million for the three months ended June 30, 2000 from $412,000 for the
three months ended June 30, 1999. Gross profit as a percentage of revenues for
services was 43% for the three months ended June 30, 2000 compared to 58% for
the three months ended June 30, 1999. The decrease in the gross profit as a
percentage of revenues for services was primarily due to increased recruiting
and staffing costs for consulting services personnel.
OPERATING EXPENSES
Sales and Marketing. Sales and marketing expenses increased by $2.5
million, or 128%, to $4.4 million for the three months ended June 30, 2000 from
$1.9 million for the three months ended June 30, 1999. Sales and marketing
expenses as a percentage of total revenues were 47% for the three months ended
June 30, 2000 compared to 44% for the three months ended June 30, 1999. The
increase in sales and marketing expense was primarily due to increased staffing
and marketing expenses for advertising, branding, public relations and trade
shows.
General and Administrative. General and administrative expenses increased
by $0.5 million, or 56%, to $1.4 million for the three months ended June 30,
2000 from $0.9 million for the three months ended June 30, 1999. General and
administrative expenses as a percentage of total revenues were 15% for the three
months ended June 30, 2000 compared to 21% for the three months ended June 30,
1999. General and administrative expenses decreased as a percentage of revenues
due primarily to an increase in total revenues partially offset by an increase
in personnel expenses.
Research and Development. Research and development expenses increased by
$0.5 million, or 84%, to $1.1 million for the three months ended June 30, 2000
from $0.6 million for the three months ended June 30, 1999. Research and
development expenses as a percentage of total revenues were 11% for the three
months ended June 30, 2000 compared to 13% for the three months ended June 30,
1999. The decrease in research and development expenses as a percentage of total
revenues was primarily due to an increase in total revenues partially offset by
increases in staffing and related costs to support new products and product
enhancements.
OTHER INCOME, NET
Net interest income was $2.3 million for the three months ended June 30,
2000 compared to net interest income of $33,000 for the three months ended June
30, 1999. Net interest income for the three months ended June 30, 2000 and 1999
was primarily related to short-term investments purchased with the proceeds of
our public stock offerings completed in June 1999 and March 2000.
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NET OPERATING LOSS CARRYFORWARDS
As of March 31, 2000, we had net operating loss carryforwards of
approximately $35.7 million. The net operating loss carryforwards will expire at
various dates beginning in 2011, if not utilized. The Tax Reform Act of 1986
imposes substantial restrictions on the utilization of net operating losses and
tax credits in the event of an "ownership change" of a corporation. Our ability
to utilize net operating loss carryforwards on an annual basis will be limited
as a result of "ownership changes" in connection with the sale of equity
securities. We have provided a full valuation allowance on the deferred tax
asset because of the uncertainty regarding its realization. Our accounting for
deferred taxes involves the evaluation of a number of factors concerning the
realizability of our deferred tax assets. In concluding that a full valuation
allowance was required, management considered such factors as our history of
operating losses, potential future losses and the nature of our deferred tax
assets.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations and satisfied our capital expenditure
requirements primarily through operating revenues, revolving working capital and
term loans from banking institutions, private placements and public offerings of
securities and proceeds from the sales of assets related to prior lines of
business. Net cash used by operating activities was $1.6 million for the quarter
ended June 30, 2000, compared to net cash provided by operating activities of
$0.4 million for the quarter ended June 30, 1999.
To date, we have invested our capital expenditures primarily in property
and equipment, consisting largely of computer hardware and software. Capital
expenditures for the three months ended June 30, 2000 and 1999 were $399,000 and
$554,000, respectively. We have also entered into capital and operating leases
for facilities and equipment. We expect that our capital expenditures will
increase as our employee base grows. At June 30, 2000, we had approximately
$600,000 in tenant improvement commitments related to our new headquarter
facilities.
As of June 30, 2000, we had $4.6 million in cash and equivalents, $149.8
million in short-term investments and $162.4 million in working capital. Net
cash provided by financing activities was $23.1 million for the three months
ended June 30, 2000 and $24.6 million for the three months ended June 30, 1999.
In June 1999, we completed a public offering of our common stock that raised
approximately $27.0 million in proceeds for the Company, net of underwriting
discounts and offering costs of approximately $3.0 million. In March 2000, we
completed a public offering of our common stock that raised approximately $100
million in proceeds for the Company, net of underwriting discounts and offering
costs of approximately $5.9 million. In April 2000, the underwriters exercised
their over-allotment option, raising additional net proceeds of approximately
$22.7 million. In July 1999, we closed our revolving line-of-credit facility
with Diversified Business Credit, Inc.
We currently believe that the cash and cash equivalents on hand together
with revenues from operations will be sufficient to meet our working capital
requirements for the foreseeable future. After that time, we may require
additional funds to support our working capital requirements or for other
purposes and may seek to raise such additional funds through public or private
equity financings or from other sources. We cannot be certain that additional
financing will be available on terms favorable to us, or on any terms, or that
any additional financing will not be dilutive.
The Company continues to evaluate potential strategic acquisitions that
could utilize equity and, or, cash resources. Such opportunities could develop
quickly due to market and competitive factors.
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
FASB Interpretation 44, Interpretation of APB Opinion 25 (FIN 44) was
issued in March 2000. FIN 44 provides an interpretation of APB Opinion 25 on
accounting for employee stock compensation and describes its application to
certain transactions. FIN 44 is effective on July 1, 2000. It applies on a
prospective basis to events occurring after that date, except for certain
transactions involving options granted to nonemployees, repriced fixed options,
and modifications to add reload option features, which apply to awards granted
after December 31, 1998. The provisions of FIN 44 are not expected to have a
material effect on transactions entered into through June 30, 2000.
RISK FACTORS
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q for the first quarter ended June 30, 2000 contains certain
forward looking statements within the meaning of Section 21E of the Exchange
Act. Such forward-looking statements are based on the beliefs of the Company's
management as well as on assumptions made by and information currently available
to the Company at the time such statements were made. When used in this Form
10-Q, the words "anticipate", "believe", "estimate", "expect", "intend" and
similar expressions, as they relate to the Company, are intended to identify
such forward-looking statements. Although the Company believes these statements
are reasonable, readers of this Form 10-Q should be aware that actual results
could differ materially from those projected by such forward-looking statements
as a result of the risk factors listed below and set forth in the Company's
Annual Report on Form 10-K for 2000 ("Form 10-K") under the caption "Risk
Factors." Readers of this Form 10-Q should consider carefully the factors listed
below and under the caption "Risk Factors" in the Company's Form 10-K, as well
as the other information and data contained in this Form 10-Q. The Company
cautions the reader, however, that such list of factors under the caption "Risk
Factors" in the Company's Form 10-K may not be exhaustive and that those or
other factors, many of which are outside of the Company's control, could have a
material adverse effect on the Company and its results of operations. All
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the cautionary statements
set forth hereunder and under the caption "Risk Factors" in the Company's Form
10-K. We undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur in the future.
WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR PROSPECTS.
Significant sales of our Xpedio Content Management Suite, which includes
Xpedio Content Server, Xpedio Content Publisher and Xpedio Web Asset Management,
began following our acquisition of InfoAccess, Inc. in September 1999.
Accordingly, we have only a limited operating history in our current product
line on which you can base your evaluation of our business and prospects. In
addition, our prospects must be considered in light of the risks and
uncertainties encountered by companies in an early stage of development in new
and rapidly evolving markets. Many of these risks are discussed under the
subheadings below.
FLUCTUATIONS IN OUR OPERATING RESULTS MAY MAKE IT DIFFICULT TO PREDICT OUR
FUTURE PERFORMANCE.
While our products and services are not seasonal, our revenues and
operating results are difficult to predict and may fluctuate significantly from
quarter to quarter. If our quarterly revenues or operating results fall below
the expectations of investors or securities analysts, the price of our common
stock could fall substantially. A large part of our sales typically occur in the
last month of a quarter. If these
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<PAGE> 14
sales were delayed from one quarter to the next for any reason, our operating
results could fluctuate dramatically. In addition, our sales cycles may vary,
making the timing of sales difficult to predict. Furthermore, our infrastructure
costs are generally fixed. As a result, modest fluctuations in revenues between
quarters may cause large fluctuations in operating results. These factors all
tend to make the timing of revenues unpredictable and may lead to high
period-to-period fluctuations in operating results.
Our quarterly revenues and operating results may fluctuate for several
additional reasons, many of which are outside of our control, including the
following:
- demand for our products and services;
- the timing of new product introductions and sales of our products and
services;
- unexpected delays in introducing new products and services;
- increased expenses, whether related to sales and marketing, research
and development or administration;
- changes in the rapidly evolving market for Web content management
solutions;
- the mix of revenues from product licenses and services, as well as the
mix of products licensed;
- the mix of services provided and whether services are provided by our
staff or third-party contractors;
- the mix of domestic and international sales;
- costs related to possible acquisitions of technology or businesses;
- general economic conditions; and
- public announcements by our competitors.
OUR SUCCESS DEPENDS ON OUR ABILITY TO EXPAND OUR SALES FORCE AND DISTRIBUTION
CHANNELS.
To increase our market share and revenues, we must increase the size of our
sales force and the number of our distribution channel partners. Our failure to
do so may have a material adverse effect on our business, operating results and
financial condition. There is intense competition for sales personnel in our
business, and we cannot be sure that we will be successful in attracting,
integrating, motivating and retaining new sales personnel. Our existing or
future distribution channel partners may choose to devote greater resources to
marketing and supporting the products of other companies. In addition, we will
need to resolve potential conflicts among our sales force and distribution
channel partners.
POTENTIAL ACQUISITIONS MAY BE DIFFICULT TO COMPLETE OR TO INTEGRATE AND MAY
DIVERT MANAGEMENT'S ATTENTION.
We may seek to acquire or invest in businesses, products or
technologies that are complementary to our business. If we identify an
appropriate acquisition opportunity, we may be unable to negotiate favorable
terms for that acquisition, successfully finance the acquisition or integrate
the new business or products into our existing business and operations. In
addition, the negotiation of potential acquisitions and the integration of
acquired businesses or products may divert management time and resources from
our existing business and operations. To finance acquisitions, we may use a
substantial portion of our available cash or we may issue additional securities,
which would cause dilution to our shareholders.
<PAGE> 15
WE MAY NOT BE PROFITABLE IN THE FUTURE.
Our revenues may not grow in future periods, may not grow at past rates and
we may not sustain our quarterly profitability (excluding expenses incurred in
connection with the acquisition of InfoAccess in the quarter ended September 30,
1999). If we do not sustain our quarterly profitability, the market price of our
stock may fall. Our ability to sustain our recent profitable operations depends
upon many factors beyond our direct control. These factors include, but are not
limited to:
- the demand for our products;
- our ability to quickly introduce new products;
- the level of product and price competition;
- our ability to control costs; and
- general economic conditions.
THE INTENSE COMPETITION IN OUR INDUSTRY MAY REDUCE OUR FUTURE SALES AND PROFITS.
The market for our products is highly competitive and is likely to become
more competitive. We may not be able to compete successfully in our chosen
marketplace, which may have a material adverse effect on our business, operating
results and financial condition. Additional competition may cause pricing
pressure, reduced sales and margins, or prevent our products from gaining and
sustaining market acceptance. Many of our current and potential competitors have
greater name recognition, access to larger customer bases, and substantially
more resources than we have. Competitors with greater resources than ours may be
able to respond more quickly than we can to new opportunities, changing
technology, product standards or customer requirements.
WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH.
Any failure to properly manage our growth may have a material adverse
effect on our business, operating results and financial condition. The rapid
growth that we have experienced places significant challenges on our management,
administrative and operational resources. To properly manage this growth, we
must, among other things, implement and improve additional and existing
administrative, financial and operational systems, procedures and controls on a
timely basis. We will also need to expand our finance, administrative and
operations staff. We may not be able to complete the improvements to our
systems, procedures and controls necessary to support our future operations in a
timely manner. Management may not be able to hire, train, integrate, retain,
motivate and manage required personnel and may not be able to successfully
identify, manage and exploit existing and potential market opportunities. In
connection with our expansion, we plan to increase our operating expenses to
expand our sales and marketing operations, develop new distribution channels,
fund greater levels of research and development, broaden services and support
and improve operational and financial systems. Our failure to generate
additional revenue commensurate with an increase in operating expenses during
any fiscal period could have a material adverse effect on our financial results
for that period.
WE DEPEND ON THE INTEGRATION AND CONTINUED SERVICE OF OUR KEY PERSONNEL.
We are a small company and depend greatly on the knowledge and experience
of our senior management team, many of whom have only recently joined us, and
other key personnel. If we fail to quickly integrate our team, or lose any of
these key personnel, our business, operating results and financial condition
could be materially adversely affected. We must hire additional employees to
meet
15
<PAGE> 16
our business plan and alleviate the negative effect that the loss of a
senior manager could have on us. Our success will depend in part on our ability
to attract and retain additional personnel with the highly specialized expertise
necessary to engineer, design and support our products and services. Like other
software companies, we face intense competition for qualified personnel. We may
not be able to attract or retain such personnel.
WE HAVE RELIED AND EXPECT TO CONTINUE TO RELY ON SALES OF OUR CONTENT MANAGEMENT
SOFTWARE PRODUCTS FOR OUR REVENUES.
We currently derive all of our revenues from product licenses and services
associated with our suite of content management software products. The market
for content management software products is new and rapidly evolving. We cannot
be certain that a viable market for our products will emerge, or if it does
emerge, that it will be sustainable. If we do not continue to increase revenues
related to our existing products or generate revenues from new products and
services, our business, operating results and financial condition may be
materially adversely affected. We will continue to depend on revenues related to
new and enhanced versions of our software products for the foreseeable future.
Our success will largely depend on our ability to increase sales from existing
products and generate sales from product enhancements and new products.
We cannot be certain that we will be successful in upgrading and marketing
our existing products or that we will be successful in developing and marketing
new products and services. The market for our products is highly competitive and
subject to rapid technological change. Technological advances could make our
products less attractive to customers and adversely affect our business. In
addition, complex software product development involves certain inherent risks,
including risks that errors may be found in a product enhancement or new product
after its release, even after extensive testing, and the risk that discovered
errors may not be corrected in a timely manner.
OUR SUCCESS DEPENDS ON OUR ABILITY TO PROTECT OUR PROPRIETARY TECHNOLOGY.
If we are unable to protect our intellectual property, or incur significant
expense in doing so, our business, operating results and financial condition may
be materially adversely affected. Any steps we take to protect our intellectual
property may be inadequate, time consuming and expensive. We currently have no
patents or pending patent applications. Without significant patent or copyright
protection, we may be vulnerable to competitors who develop functionally
equivalent products. We may also be subject to claims that our current products
infringe on the intellectual property rights of others. Any such claim may have
a material adverse effect on our business, operating results and financial
condition.
We anticipate that software product developers will be increasingly subject
to infringement claims due to growth in the number of products and competitors
in our industry, and the overlap in functionality of products in different
industries. Any infringement claim, regardless of its merit, could be
time-consuming, expensive to defend, or require us to enter into royalty or
licensing agreements. Such royalty or licensing agreements may not be available
on commercially favorable terms, or at all. We are not currently involved in any
intellectual property litigation. We have been notified by a third party that it
believes our Xpedio mark infringes its trademark. We will cease the use of this
mark by December 31, 2000 and will develop and adopt a new mark.
We rely on trade secret protection, confidentiality procedures and
contractual provisions to protect our proprietary information. Despite our
attempts to protect our confidential and proprietary information, others may
gain access to this information. Alternatively, other companies may
independently develop substantially equivalent information. We have been issued
trademarks for the Intranet Solutions and Intra.doc! marks.
16
<PAGE> 17
OUR PRODUCTS MAY NOT BE COMPATIBLE WITH COMMERCIAL WEB BROWSERS AND OPERATING
SYSTEMS.
Our products utilize interfaces that are compatible with commercial Web
browsers. In addition, Xpedio is a server-based system written in Java that
functions in both Windows NT and UNIX environments. We must continually modify
our products to conform to commercial Web browsers and operating systems. If our
products were to become incompatible with commercial Web browsers and operating
systems, our business would be harmed. In addition, uncertainty related to the
timing and nature of product introductions or modifications by vendors of Web
browsers and operating systems may have a material adverse effect on our
business, operating results and financial condition.
WE COULD BE SUBJECT TO PRODUCT LIABILITY CLAIMS IF OUR PRODUCTS FAIL TO PERFORM
TO SPECIFICATIONS.
If software errors or design defects in our products cause damage to
customers' data and our agreements do not protect us from related product
liability claims, our business, operating results and financial condition may be
materially adversely affected. In addition, we could be subject to product
liability claims if our security features fail to prevent unauthorized third
parties from entering our customers' intranet, extranet or Internet Web sites.
Our software products are complex and sophisticated and may contain design
defects or software errors that are difficult to detect and correct. Errors,
bugs or viruses spread by third parties may result in the loss of market
acceptance or the loss of customer data. Our agreements with customers that
attempt to limit our exposure to product liability claims may not be enforceable
in certain jurisdictions where we operate.
FUTURE REGULATIONS COULD BE ADOPTED THAT RESTRICT OUR BUSINESS.
Federal, state or foreign agencies may adopt new legislation or regulations
governing the use and quality of Web content. We cannot predict if or how any
future laws or regulations would impact our business and operations. Even though
these laws and regulations may not apply to our business directly, they could
indirectly harm us to the extent that they impact our customers and potential
customers.
SIGNIFICANT FLUCTUATION IN THE MARKET PRICE OF OUR COMMON STOCK COULD RESULT IN
SECURITIES LITIGATION AGAINST US.
In the past, securities class action litigation has been brought against
publicly held companies following periods of volatility in the price of their
securities. If we were subject to such litigation due to volatility in our stock
price, we may incur substantial costs. Such litigation could divert the
attention of our senior management away from our business, which could have a
material adverse effect on our business, operating results and financial
condition.
The market price of our common stock has fluctuated significantly in the
past and may do so in the future. The market price of our common stock may be
affected by each of the following factors, many of which are outside of our
control:
- variations in quarterly operating results;
- changes in estimates by securities analysts;
- changes in market valuations of companies in our industry;
- announcements by us of significant events, such as major sales,
acquisitions of businesses or losses of major customers;
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<PAGE> 18
- additions or departures of key personnel; and
- sales of our equity securities.
OUR PERFORMANCE WILL DEPEND ON THE CONTINUING GROWTH AND ACCEPTANCE OF THE WEB.
Our products are designed to be used with intranets, extranets and the
Internet. If the use of these methods of electronic communication does not grow,
our business, operating results and financial condition may be materially
adversely affected. Continued growth in the use of the Web will require ongoing
and widespread interest in its capabilities for communication and commerce. Its
growth will also require maintenance and expansion of the infrastructure
supporting its use and the development of performance improvements, such as high
speed modems. The Web infrastructure may not be able to support the demands
placed on it by continued growth. The ongoing development of corporate intranets
depends on continuation of the trend toward network-based computing and on the
willingness of businesses to reengineer the processes used to create, store,
manage and distribute their data. All of these factors are outside of our
control.
OUR EXISTING SHAREHOLDERS WILL HAVE SIGNIFICANT INFLUENCE OVER INTRANET
SOLUTIONS.
Robert F. Olson, our President and Chief Executive Officer, holds
approximately 12.7% of our outstanding common stock. Accordingly, Mr. Olson is
able to exercise significant control over the affairs of IntraNet Solutions.
Additionally, our directors and executive officers beneficially own
approximately 15.9% of our common stock. These persons have significant
influence over IntraNet Solutions' affairs, including approval of the
acquisition or disposition of assets, future issuances of common stock or other
securities and the authorization of dividends on our common stock. Our directors
and executive officers could use their stock ownership to delay, defer or
prevent a change in control of IntraNet Solutions, depriving shareholders of the
opportunity to sell their stock at a price in excess of the prevailing market
price.
WE CAN ISSUE SHARES OF PREFERRED STOCK WITHOUT SHAREHOLDER APPROVAL, WHICH COULD
ADVERSELY AFFECT THE RIGHTS OF COMMON SHAREHOLDERS.
Our Articles of Incorporation permit us to establish the rights,
privileges, preferences and restrictions, including voting rights, of unissued
shares of our capital stock and to issue such shares without approval from our
shareholders. The rights of holders of our common stock may suffer as a result
of the rights granted to holders of preferred stock that may be issued in the
future. In addition, we could issue preferred stock to prevent a change in
control of IntraNet Solutions, depriving shareholders of an opportunity to sell
their stock at a price in excess of the prevailing market price.
CERTAIN PROVISIONS OF MINNESOTA LAW MAY MAKE A TAKEOVER OF INTRANET SOLUTIONS
DIFFICULT, DEPRIVING SHAREHOLDERS OF OPPORTUNITIES TO SELL SHARES AT
ABOVE-MARKET PRICES.
Certain provisions of Minnesota law may have the effect of discouraging
attempts to acquire IntraNet Solutions without the approval of our Board of
Directors. Consequently, our shareholders may lose opportunities to sell their
stock for a price in excess of the prevailing market price.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk is unlikely to have a material adverse effect on
the Company's business, results of operations or financial condition.
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<PAGE> 19
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A.) EXHIBITS
EXHIBIT INDEX
<TABLE>
<CAPTION>
FILE DESCRIPTION REFERENCE
---- ----------- ---------
<S> <C> <C>
3.1 Amended and Restated Articles of Incorporated by reference to
Incorporation Exhibit 3.1 of the Registrant's
Form 10-Q for the quarter ended
December 31, 1999
3.2 Bylaws Incorporated by reference to
Exhibit A of the Registrant's
Definitive Proxy Statement Schedule
14A, filed with the Securities and
Exchange commission July 22, 1997,
File No. 0-19817
10.4 IntraNet Solutions, Inc. 1994-1997 Stock Incorporated by reference to
Option and Compensation Plan Exhibit 10.4 of the Registrant's
registration statement on Form SB-2,
File No. 333-14175.
10.16 Schedule identifying certain material Incorporated by reference to
details of documents substantially Exhibit 10.16 of Registrant's Form
identical to those set forth in Exhibits 10-KSB for the fiscal year ended
10.17, 10.18, 10.19 and 10.20 March 31, 1997.
10.17 Promissory Note dated December 20, Incorporated to Exhibit 10.17 of
1996, made by the Registrant in the Registrant's Form 10KSB for the
favor of Rita M. Olson fiscal year ended March 31, 1997.
10.18 Amendment dated March 4, 1997, to Incorporated by reference to
the Promissory Note made by the Exhibit 10.18 of Registrant's Form
Registrant in favor of Rita M. 10KSB for the fiscal year ended
Olson dated December 20, 1996 March 31, 1997.
10.19 Amendment dated June 5, 1997, by Incorporated by reference to
and between the Registrant and Rita Exhibit 10.19 of the Registrant's
M. Olson dated December 20, 1996 Form 10-KSB for the fiscal year
ended March 31, 1997.
10.20 Stock Purchase Warrant Agreement Incorporated by reference to
dated December 20, 1996, by and Exhibit 10.20 of the Registrant's
between the Registrant and Rita M. Form 10-KSB for the fiscal year
Olson ended March 31, 1997.
10.21 Note Conversion and Subscription Incorporated by reference to
Agreement dated June 6, 1997, by Exhibit 10.21 of Registrant's Form
and the Registrant and Rita M. 10-KSB for the fiscal between the
Olson year ended March 31, 1997.
10.26 Employment Agreement Dated April 1, Incorporated by reference to
1999, by and between the Registrant Exhibit 10.26 of the Registrant's
and Gregg A. Waldon. statement on Form S-1, File No.
333-77389.
10.28 InfoAccess, Inc. 1990 Stock Option Incorporated by reference to
Plan as amended September 29, 1999 Exhibit 99.1 of the Registrant's
statement on Form S-8, File
No. 333-90843
10.29 InfoAccess, Inc. 1995 Stock Option Incorporated by reference to
Plan as amended September 29, 1999 Exhibit 99.2 of the Registrant's
statement on Form S-8, File
No. 333-90843
10.30 Employment Agreement Dated August Incorporated by reference to
1, 1999, by and between the Exhibit 10.30 of the Registrant's
Registrant and Robert F. Olson. Form 10-Q for the quarter ended
September 30, 1999.
10.31 IntraNet Solutions, Inc. 1999 Employee Incorporated by reference to
Stock Option and Compensation Plan. Exhibit 10.31 of the Registrant's
Form 10-Q for the three months
ended September 30, 1999.
10.32 Agreement and Plan of Merger among Incorporated by reference to
IntraNet Solutions, Inc., IntraNet Exhibit 2 to the Registrant's
Chicago Acquisition Corporation, Current Report on Form 8-K dated
IntraNet Kansas City Acquisition July 10, 2000
Corporation, Inso Chicago Corporation,
Inso Kansas City Corporation and Inso
Corporation, dated as of July 10, 1999.
10.33 IntraNet Solutions, Inc. 2000 Incorporated by reference to
Stock Incentive Plan Exhibit B to the Registrant's
Definitive Proxy statement on
Schedule 14A, filed with the
Securities and Exchange Commission
on July 25, 2000
</TABLE>
19
<PAGE> 20
<TABLE>
<S> <C> <C>
10.34 IntraNet Solutions, Inc. 2000 Electronic transmission
Employee Stock Incentive Plan
11.1 Computation of earnings per share Electronic transmission
21 Subsidiaries of Registrant Incorporated by reference to
Exhibit 21 of the Registrant's
Annual Report on Form 10-K for the
fiscal year ended March 31, 2000.
27.1 Financial Data Schedule for the Electronic transmission
three months ended June 30, 2000.
27.2 Financial Data Schedule for the Electronic transmission
three months ended June 30, 1999.
</TABLE>
(B) REPORTS ON FORM 8-K
No Reports on Form 8-K were filed for the quarter ended June 30, 2000.
20
<PAGE> 21
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.
IntraNet Solutions, Inc.
------------------------
(Registrant)
Date: August 11, 2000 By: /s/ Robert F. Olson
-------------------
Robert F. Olson,
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
Date: August 11, 2000 By: /s/ Gregg A. Waldon
-------------------
Gregg A. Waldon
Chief Financial Officer, Secretary and Treasurer
(Principal Financial and Accounting Officer)
21
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
FILE DESCRIPTION REFERENCE
---- ----------- ---------
<S> <C> <C>
3.1 Amended and Restated Articles of Incorporated by reference to
Incorporation Exhibit 3.1 of the Registrant's
Form 10-Q for the quarter ended
December 31, 1999
3.2 Bylaws Incorporated by reference to
Exhibit A of the Registrant's
Definitive Proxy Statement Schedule
14A, filed with the Securities and
Exchange commission July 22, 1997,
File No. 0-19817
10.4 IntraNet Solutions, Inc. 1994-1997 Stock Incorporated by reference to
Option and Compensation Plan Exhibit 10.4 of the Registrant's
registration statement on Form SB-2,
File No. 333-14175.
10.16 Schedule identifying certain material Incorporated by reference to
details of documents substantially Exhibit 10.16 of Registrant's Form
identical to those set forth in Exhibits 10-KSB for the fiscal year ended
10.17, 10.18, 10.19 and 10.20 March 31, 1997.
10.17 Promissory Note dated December 20, Incorporated to Exhibit 10.17 of
1996, made by the Registrant in the Registrant's Form 10KSB for the
favor of Rita M. Olson fiscal year ended March 31, 1997.
10.18 Amendment dated March 4, 1997, to Incorporated by reference to
the Promissory Note made by the Exhibit 10.18 of Registrant's Form
Registrant in favor of Rita M. 10KSB for the fiscal year ended
Olson dated December 20, 1996 March 31, 1997.
10.19 Amendment dated June 5, 1997, by Incorporated by reference to
and between the Registrant and Rita Exhibit 10.19 of the Registrant's
M. Olson dated December 20, 1996 Form 10-KSB for the fiscal year
ended March 31, 1997.
10.20 Stock Purchase Warrant Agreement Incorporated by reference to
dated December 20, 1996, by and Exhibit 10.20 of the Registrant's
between the Registrant and Rita M. Form 10-KSB for the fiscal year
Olson ended March 31, 1997.
10.21 Note Conversion and Subscription Incorporated by reference to
Agreement dated June 6, 1997, by Exhibit 10.21 of Registrant's Form
and the Registrant and Rita M. 10-KSB for the fiscal between the
Olson year ended March 31, 1997.
10.26 Employment Agreement Dated April 1, Incorporated by reference to
1999, by and between the Registrant Exhibit 10.26 of the Registrant's
and Gregg A. Waldon. statement on Form S-1, File No.
333-77389.
10.28 InfoAccess, Inc. 1990 Stock Option Incorporated by reference to
Plan as amended September 29, 1999 Exhibit 99.1 of the Registrant's
statement on Form S-8, File
No. 333-90843
10.29 InfoAccess, Inc. 1995 Stock Option Incorporated by reference to
Plan as amended September 29, 1999 Exhibit 99.2 of the Registrant's
statement on Form S-8, File
No. 333-90843
10.30 Employment Agreement Dated August Incorporated by reference to
1, 1999, by and between the Exhibit 10.30 of the Registrant's
Registrant and Robert F. Olson. Form 10-Q for the quarter ended
September 30, 1999.
10.31 IntraNet Solutions, Inc. 1999 Employee Incorporated by reference to
Stock Option and Compensation Plan. Exhibit 10.31 of the Registrant's
Form 10-Q for the three months
ended September 30, 1999.
10.32 Agreement and Plan of Merger among Incorporated by reference to
IntraNet Solutions, Inc., IntraNet Exhibit 2 to the Registrant's
Chicago Acquisition Corporation, Current Report on Form 8-K dated
IntraNet Kansas City Acquisition July 10, 2000
Corporation, Inso Chicago Corporation,
Inso Kansas City Corporation and Inso
Corporation, dated as of July 10, 1999.
10.33 IntraNet Solutions, Inc. 2000 Incorporated by reference to
Stock Incentive Plan Exhibit B to the Registrant's
Definitive Proxy statement on
Schedule 14A, filed with the
Securities and Exchange Commission
on July 25, 2000
10.34 IntraNet Solutions, Inc. 2000 Electronic transmission
Stock Incentive Plan
</TABLE>
22
<PAGE> 23
<TABLE>
<S> <C> <C>
11.1 Computation of earnings per share Electronic transmission
21 Subsidiaries of Registrant Incorporated by reference to
Exhibit 21 of the Registrant's
Annual Report on Form 10-K for the
fiscal year ended March 31, 2000.
27.1 Financial Data Schedule for the Electronic transmission
three months ended June 30, 2000.
27.2 Financial Data Schedule for the Electronic transmission
three months ended June 30, 1999.
</TABLE>
23
