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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, 2001.
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)
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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 -
22,382,968 shares as of August 7, 2001.
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INDEX
INTRANET SOLUTIONS, INC.
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - June 30, 2001 and March 31, 2001 ..............................3
Condensed Consolidated Statements of Earnings - Three months ended
June 30, 2001 and 2000.................................................................................4
Condensed Consolidated Statements of Cash Flows - Three months ended
June 30, 2001 and 2000.................................................................................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............................................19
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................................................................20
SIGNATURES......................................................................................................22
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
JUNE 30, MARCH 31,
2001 2001
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ASSETS
CURRENT ASSETS:
Cash and equivalents................................................................ $ 4,906 $ 14,355
Short-term marketable securities.................................................... 81,537 81,262
Accounts receivable, net............................................................ 24,866 21,403
Prepaid expenses and other current assets........................................... 6,550 4,071
Prepaid royalties................................................................... 1,583 2,231
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Total current assets........................................................... 119,442 123,322
Long-term marketable securities, net of current....................................... 15,239 10,893
Property and equipment, net........................................................... 5,644 4,051
Prepaid royalties, net of current..................................................... 1,893 2,074
Other intangible assets, net ......................................................... 28,321 31,118
Deferred income taxes................................................................. 5,717 4,894
Investments in other companies........................................................ 5,361 3,968
Other................................................................................. 2,519 1,266
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Total assets................................................................... $184,136 $181,586
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................................................... $ 2,634 $ 1,380
Deferred revenues................................................................... 6,299 5,942
Commissions payable................................................................. 1,656 2,226
Accrued expenses.................................................................... 2,770 3,951
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Total current liabilities...................................................... 13,359 13,499
Deferred revenues, net of current portion............................................. 503 606
Other long-term obligations........................................................... 37 37
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Total liabilities.............................................................. 13,899 14,142
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SHAREHOLDERS' EQUITY:
Common stock.......................................................................... 222 220
Additional paid-in capital............................................................ 189,946 187,512
Accumulated deficit .................................................................. (19,643) (20,204)
Accumulated other comprehensive income (loss)......................................... (288) (84)
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Total shareholders' equity..................................................... 170,237 167,444
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Total liabilities and shareholders' equity $184,136 $181,586
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See accompanying notes.
Note: The balance sheet at March 31, 2001 has been derived from audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.
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INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands, except per share data)
THREE MONTHS ENDED JUNE 30,
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2001 2000
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REVENUES:
Software.......................................................................... $ 19,072 $ 7,447
Services.......................................................................... 5,527 2,015
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Total revenues................................................................ 24,599 9,462
COST OF REVENUES:
Software.......................................................................... 1,071 665
Services.......................................................................... 2,984 1,158
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Total cost of revenues........................................................ 4,055 1,823
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Gross profit.................................................................. 20,544 7,639
OPERATING EXPENSES:
Sales and marketing............................................................... 11,277 4,256
General and administrative........................................................ 2,432 1,427
Research and development.......................................................... 4,151 1,054
Amortization of intangible assets and other....................................... 3,381 163
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Total operating expenses...................................................... 21,241 6,900
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Income (loss) from operations........................................................ (697) 739
OTHER INCOME:
Interest income, net.............................................................. 1,258 2,250
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NET INCOME............................................................................ $ 561 $ 2,989
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BASIC NET INCOME PER COMMON SHARE..................................................... $ 0.03 $ 0.14
DILUTED NET INCOME PER COMMON SHARE................................................... $ 0.02 $ 0.13
WEIGHTED AVERAGE SHARES - BASIC....................................................... 22,081 21,195
WEIGHTED AVERAGE SHARES - DILUTED..................................................... 23,753 23,092
See accompanying notes.
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INTRANET SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
THREE MONTHS ENDED JUNE 30,
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2001 2000
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OPERATING ACTIVITIES:
Net income.............................................................................. $ 561 $ 2,989
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization......................................................... 267 153
Amortization of intangible assets, acquisition expense and other...................... 3,381 163
Tax benefit from employee stock option exercises...................................... 823 -
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable..................................................................... (3,463) (2,053)
Prepaid expenses and other current assets............................................... (2,549) (1,287)
Accounts payable........................................................................ 1,254 (1,770)
Accrued expenses and other current liabilities.......................................... (2,280) 198
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Net cash flows used in operating activities............................................. (2,006) (1,607)
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INVESTING ACTIVITIES:
Purchases and maturities of marketable securities, net.................................. (4,621) (24,943)
Purchases of fixed assets............................................................... (1,827) (399)
Purchases of investments................................................................ (1,394) (410)
Other................................................................................... (971) --
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Net cash used in investing activities................................................... (8,813) (25,752)
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FINANCING ACTIVITIES:
Payments on long-term obligations ...................................................... (39) (80)
Issuance of common stock, net of offering expenses...................................... - 22,729
Proceeds from exercise of stock options and warrants.................................... 1,612 480
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Net cash flows provided by financing activities......................................... 1,573 23,129
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Cumulative effect of foreign currency translation adjustment............................... (203) --
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Net decrease in cash....................................................................... (9,449) (4,230)
Cash and equivalents, beginning of period.................................................. 14,355 8,859
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Cash and equivalents, end of period........................................................ $ 4,906 $ 4,629
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See accompanying notes.
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INTRANET SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF THE BUSINESS
IntraNet Solutions, Inc., is a leading provider of business content
management solutions. IntraNet Solutions' products enable customers to rapidly
deploy business Web sites by automating the content contribution, editing,
management, and publishing processes for web sites. Business and Web content
from a wide variety of enterprise sources, including desktop applications,
business applications, and templates, is automatically converted to output
formats. These output formats, which include XML, HTML, WML, cHTML, and PDF,
allow content to be viewed on the Web with just a standard browser or on a
wireless device.
With headquarters in Eden Prairie, MN, the company maintains offices throughout
the United States, Europe, and Australia. The company currently has more than
1,500 customers, primarily located throughout the United States and Europe.
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
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 accounting principles generally accepted in the United States of
America 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, 2001 and March 31, 2001 and the results of operations and cash flows
for the three months ended June 30, 2001 and 2000. The results of operations for
the three months ended June 30, 2001 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 and accepted by the customer, 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
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readily convertible into known amounts of cash and have original maturities of
three months or less to be cash equivalents.
Short-term Marketable Securities: 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, 2001 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, 2000 to conform with the presentation used
in the June 30, 2001 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.
3. ACQUISITION
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 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 was accounted for under the purchase method of accounting. The
Company paid aggregate consideration to Inso in the transaction of $55 million
in cash, 10% of which is being held in escrow for eighteen months to satisfy
potential indemnification claims. The Company recorded approximately $50 million
in intangible assets, including approximately $10.4 million of in-process
research and development which was expensed when the acquisition was recorded.
The amounts allocated to core technology, customer base, workforce,
capitalized software, trademarks and other intangibles are being amortized over
the assets' estimated useful life of three years. Similarly, the excess of cost
over fair value of net assets acquired is being amortized over the assets
estimated useful life of three years. The values assigned to in-process research
and development were expensed at the date of acquisition, since technological
feasibility had not been established. The following unaudited pro forma
statement of operations information for the three months ended June 30, 2000 was
prepared assuming the IED acquisition has occurred on April 1, 1999 and in
process research and development has been expensed as of that date:
THREE MONTHS ENDED
JUNE 30, 2000
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(in thousands except
for per share data)
Total revenues $15,332
Net income 1,230
Net income per share:
Basic $ 0.06
Diluted $ 0.05
Weighted-average shares outstanding:
Basic 21,195
Diluted 23,092
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4. INCOME TAXES
Deferred income taxes reflect the effects of temporary differences
between the carrying amounts of assets and liabilities for fundamental reporting
purposes and amounts used for income tax purposes. A valuation has been
established for a portion of the deferred tax assets to reflect their
anticipated realizability.
For the periods presented, the financial statements reflect an
effective tax rate of zero, due to the utilization of net operating loss carry
forwards and adjustment of the deferred tax valuation allowance.
5. SUBSEQUENT EVENTS
On July 10, 2001, the Company acquired select assets of RESoft, a
wholly-owned subsidiary of Stonehaven Realty Trust and a leading provider of
end-to-end content management solutions for the real estate and legal
industries, for 200,000 shares of IntraNet Solutions common stock valued at
approximately $5.5 million. This acquisition will be accounted for under the
purchase method of accounting, and the company anticipates that approximately
$5.0 million of the purchase price will be allocated to intangible assets and
will be amortized over a three year period.
On August 13, 2001, the Company announced it will change its name to
Stellent, Inc., effective August 29, 2001.
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PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
IntraNet Solutions, Inc., is a leading provider of business content
management solutions, providing browser-based Web and wireless access to
content-centric business Web sites and content-supported e-business
applications. IntraNet Solutions' products enable customers to rapidly deploy
business Web sites by automating the content contribution, editing, management,
and publishing processes for these sites. Business and Web content from a wide
variety of enterprise sources, including desktop applications, business
applications, and templates, is automatically converted to output formats. These
output formats, which include XML, HTML, WML, cHTML, and PDF, allow content to
be viewed on the Web with just a standard browser or on a wireless device.
Personalization and compatibility with corporate security models ensure that
users access only the information they need. Our customers are primarily located
throughout the United States and Europe.
We derive all of our revenues from licenses of our software products
and related services. Product license revenue is recognized when evidence of a
purchase arrangement exists, the product has been shipped and accepted by the
customer, the fee is determinable and collectible, and no significant
obligations remain related to implementation. Revenues for services 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
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, insurance costs and provisions for doubtful accounts.
Since our inception, we have incurred substantial costs to develop and
acquire 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 had an accumulated
deficit of $19.6 million at June 30, 2001. 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.
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.
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RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE
MONTHS ENDED JUNE 30, 2000
REVENUES
Total revenues increased by $15.1 million, or 160%, to $24.6 million
for the three months ended June 30, 2001 from $9.5 million for the three months
ended June 30, 2000. The increase in revenues was attributable to the
acquisition of IED, internal expansion of our customer base and increased sales
to existing customers.
Product Licenses. Revenues for product licenses increased by $11.6
million, or 156%, to $19.1 million for the three months ended June 30, 2001 from
$7.5 million for the three months ended June 30, 2000. The increase in revenues
for product licenses was attributable to the expansion of our customer base and
increased sales to existing customers.
Services. Revenues for services increased by $3.5 million or 174%, to
$5.5 million for the three months ended June 30, 2001 from $2.0 million for the
three months ended June 30, 2000. 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 $2.3 million or 122%, to $4.1
million for the three months ended June 30, 2001 from $1.8 million for the three
months ended June 30, 2000. Total cost of revenues as a percentage of total
revenues was 16% for the three months ended June 30, 2001 compared to 19% for
the three months ended June 30, 2000. Gross profit increased by $12.9 million,
or 169%, to $20.5 million for the three months ended June 30, 2001 from $7.6
million for the three months ended June 30, 2000. Total gross profit as a
percentage of total revenues was 84% for the three months ended June 30, 2001
compared to 81% for the three months ended June 30, 2000. 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
$0.4 million, or 61%, to $1.1 million for the three months ended June 30, 2001
from $0.7 million for the three months ended June 30, 2000. Gross profit as a
percentage of revenues for product licenses was 94% for the three months ended
June 30, 2001 compared to 91% for the three months ended June 30, 2000. The
increase in the gross profit was primarily attributable to the increase in our
OEM business, which typically has higher product margins, and to certain royalty
amounts remaining constant while revenue has increased.
Services. Cost of revenues for services increased by $1.8 million or
158%, to $3.0 million for the three months ended June 30, 2001 from $1.2 million
for the three months ended June 30, 2000. Gross profit as a percentage of
revenues for services was 46% for the three months ended June 30, 2001 compared
to 43% for the three months ended June 30, 2000. The increase in the gross
profit as a percentage of revenues for services was primarily due to increased
productivity for consulting services personnel.
OPERATING EXPENSES
Sales and Marketing. Sales and marketing expenses increased by $7.0
million, or 165%, to $11.3 million for the three months ended June 30, 2001 from
$4.3 million for the three months ended June 30, 2000. Sales and marketing
expenses as a percentage of total revenues were 46% for the three months ended
June 30, 2001 compared to 45% for the three months ended June 30, 2000. 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 $1.0 million or 70%, to $2.4 million for the three months ended
June 30, 2001 from $1.4 million for the three months ended June 30, 2000.
General and administrative expenses as a percentage of total revenues were 10%
for
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the three months ended June 30, 2001 compared to 15% for the three months
ended June 30, 2000. General and administrative expenses decreased as a
percentage of revenues due primarily to an increase in total revenues and
decreases in our provisions for doubtful accounts.
Research and Development. Research and development expenses increased
by $3.1 million, or 294% to $4.2 million for the three months ended June 30,
2001 from $1.1 million for the three months ended June 30, 2000. Research and
development expenses as a percentage of total revenues were 17% for the three
months ended June 30, 2001 compared to 11% for the three months ended June 30,
2000. The increase in research and development expenses was primarily due to the
acquisition of IED and increases in staffing and related costs to support new
products and product enhancements.
Amortization of Intangibles. A portion of the purchase price of IED was
allocated to excess cost over fair value of net assets acquired, core
technology, customer base, software, trademarks and other intangibles, and will
be amortized over the assets' estimated useful lives, of three years. Intangible
amortization and other expense was $3.4 million for the three month period ended
June 30, 2001.
OTHER INCOME, NET
Net interest income was $1.3 million for the three months ended June
30, 2001 compared to net interest income of $2.3 million for the three months
ended June 30, 2000. Net interest income for the three months ended June 30,
2001 and 2000 was primarily related to short-term investments purchased with the
proceeds of our public stock offerings completed in June 1999 and March 2000.
The decrease in net interest income was primarily due to the decrease in funds
invested following the purchase of IED.
NET OPERATING LOSS CARRYFORWARDS
As of March 31, 2001 we had net operating loss carryforwards of
approximately $43.8 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 valuation allowance on a portion of the deferred
tax asset because of the uncertainty regarding its realization. Our accounting
for deferred taxes and the valuation allowance involves the evaluation of a
number of factors such as our history of operating losses, potential future
losses and the nature of assets and liabilities giving rise to deferred taxes.
Although realization of the net deferred tax asset is not assured, the
Company believes based on its projections of future taxable income, that it is
more likely than not that the net deferred tax asset will be realized. The
amount of net deferred tax assets considered realizable however, could be
adjusted in the future based on changes in conditions or assumptions.
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. Net cash used by operating activities was $2.0 million for the
quarter ended June 30, 2001, compared to net cash used by operating activities
of $1.6 million for the quarter ended June 30, 2000.
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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, 2001 and 2000 were $1.8
million and $0.4 million, 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.
As of June 30, 2001, we had $4.9 million in cash and equivalents, $96.8
million in marketable securities and $106.1 million in working capital. Net cash
provided by financing activities was $1.6 million for the three months ended
June 30, 2001 and $23.1 million for the three months ended June 30, 2000. 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.
We currently believe that the cash and equivalents and marketable
securities on hand 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.
PRO FORMA NET INCOME PER COMMON SHARE
The Company's pro forma basic net income per share is computed by
dividing pro forma net income by the weighted average number of outstanding
common shares and the Company's pro forma diluted net income per share is
computed by dividing pro forma 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). The accompanying pro
forma supplemental financial information is presented for informational purposes
only and is not a substitute for the historical financial information presented
in accordance with accounting principles generally accepted in the United
States.
THREE MONTHS ENDED
JUNE 30,
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UNAUDITED SUPPLEMENTAL INFORMATION 2001 2000
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(in thousands except
for per share data)
Net income (loss).................................. $ 561 $ 2,989
Add back charges
Amortization of intangible assets and other...... 3,381 163
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Pro forma net income before pro forma income tax... 3,942 3,152
Pro forma income tax............................... (1,380) (1,103)
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Pro forma net income............................... $ 2,562 $ 2,049
========= ==========
Pro forma net income per share:
Basic ............................................. $ 0.12 $ 0.10
Diluted ........................................... $ 0.11 $ 0.09
Weighted average common shares outstanding:
Basic.............................................. 22,081 21,195
Diluted............................................ 23,753 23,092
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In July 2001, the FASB issued Statement of Financial Accounting
Standards (SFAS) 141 Business Combinations and SFAS 142 Goodwill and Intangible
Assets. These pronouncements, among other things, eliminate the
pooling-of-interest method of accounting for business combinations and eliminate
the amortization of goodwill for financial reporting purposes. However, goodwill
will then be tested for impairment annually or whenever an impairment indicator
arises. SFAS 142 is effective for the Company April 1, 2002. As of April 1,
2002, the amortization of certain of the Company's intangible assets related to
goodwill and workforce with an original cost of approximately $19 million and an
estimated net unamortized value of approximately $8 million as of April 1, 2002
will cease and only future impairments of these assets as they occur will be
recorded. These assets were acquired in July 2000 and are currently being
amortized over their estimated useful life of three years.
RISK FACTORS
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q for the first quarter ended June 30, 2001 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 fiscal year 2001 ("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.
OUR SUCCESS DEPENDS ON OUR ABILITY TO SUCCESSFULLY INTEGRATE IED WITH
OUR OPERATIONS.
On July 10, 2000, we acquired IED from eBT Technologies, Inc. (formerly
INSO Corporation) in a transaction accounted for under the purchase method of
accounting. We are continuing to integrate the business and products of IED. We
may incur unanticipated costs in the course of this integration. In addition,
the integration of IED with our operations involves the following risks:
- failure to develop complementary product offerings and marketing
strategies;
- failure to maintain the customer relationships of IED;
- failure to retain the employees of IED;
- failure to coordinate product development efforts; and
- diversion of management's time and attention from other aspects
of our business.
We cannot be sure that we will be successful in integrating the business and
products of IED with our
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business and products. If we are not, our business, operating results and
financial condition may be materially adversely affected.
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 occurs in
the last month of a quarter, frequently in the last week or even the last days
of the quarter. If these 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.
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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.
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 pro forma profitability. If we do not
sustain our quarterly pro forma profitability, the market price of our stock may
fall. Our ability to sustain our recent pro forma 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.
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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 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
AND VIEWING SOFTWARE PRODUCTS FOR OUR REVENUES.
We currently derive all of our revenues from product licenses and
services associated with our suite of content management and viewing software
products. The market for content management and viewing 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 intend to cease the use of
this mark by September 30, 2001 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
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information, others may gain access to this information. Alternatively, other
companies may independently develop substantially equivalent information.
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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- 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 HAVE SIGNIFICANT INFLUENCE OVER US.
Robert F. Olson, our Chairman, holds approximately 10.5% 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 10.7% 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.
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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
Our interest income on cash and marketable securities is affected by
changes in interest rates in the United States. Through June 30, 2001, changes
in these rates have not had a material effect on the Company, and the Company
does not anticipate that future exposure to interest rate market risk will be
material.
Our investments are held in commercial paper which are affected by
equity price market risk and other factors. The Company does not anticipate that
exposure to these risks will have a material impact on the Company, due to the
nature of its investments.
The Company has no history of, and does not anticipate in the future,
investing in derivative financial instruments. Most transactions with
international customers are entered into in U.S. dollars, precluding the need
for foreign currency hedges. Any transactions that are currently entered into in
foreign currency are not deemed material to the financial statements. Thus, the
exposure to market risk is not material.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a.) EXHIBITS
EXHIBIT INDEX
FILE DESCRIPTION REFERENCE
3.1 Amended and Restated Articles of Incorporated by reference to Exhibit 3.1
Incorporation of the Registrant's Form 10-Q for the
quarter ended September 30, 2000
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
4.7 Warrant to purchase 225,000 shares of Incorporated by reference to Exhibit 4.7
common stock to Merrill, Lynch, Pierce, of the Registrant's Form 10-K for the
Fenner & Smith dated February 22, 2000 year ended March 31, 2001.
10.4 IntraNet Solutions, Inc. 1994-1997 Stock Incorporated by reference to Exhibit A of
Option and Compensation Plan* the Registrant's Definitive Proxy
Statement Schedule 14A, filed with the
Securities and Exchange Commission
July 28, 1998
10.20 Stock Purchase Warrant Agreement dated Incorporated by reference to Exhibit
December 20, 1996, by and between the 10.20 of the Registrant's Form 10-KSB for
Registrant and Rita M. Olson the fiscal year ended March 31, 1997
10.28 InfoAccess, Inc. 1990 Stock Option Plan Incorporated by reference to Exhibit 99.1
as amended September 29, 1999 of the Registrant's statement on
Form S-8, File No. 333-90843
10.29 InfoAccess, Inc. 1995 Stock Option Plan Incorporated by reference to Exhibit 99.2
as amended September 29, 1999 of the Registrant's statement on Form
S-8, File No. 333-90843
10.30 Employment Agreement Dated August 1, Incorporated by reference to Exhibit
1999, by and between the Registrant and 10.30 of the Registrant's Form 10-Q for
Robert F. Olson* the quarter ended September 30, 1999
10.31 IntraNet Solutions, Inc. 1999 Employee Incorporated by reference to Exhibit
Stock Option and compensation plan 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 Exhibit 2 to
IntraNet Solutions, Inc., IntraNet the Registrant's Current Report on
Kansas City Acquisition Corporation, Inso Form 8-K dated July 10, 2000
Chicago Corporation, Inso Kansas City
Corporation and Inso Corporation, dated
as of July 10, 2000
10.33 IntraNet Solutions, Inc. 2000 Stock Incorporated by reference to Exhibit B to
Incentive Plan* 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 Employee Incorporated by reference to Exhibit
Stock Incentive Plan* 10.34 of the Registrant's Form 10-Q for
the three months ended June 30, 2000
10.35 IntraNet Solutions, Inc. 1997 Directors Incorporated by reference to Exhibit B of
Stock Option Plan* the Registrant's Definitive Proxy
Statement Schedule 14A, filed with the
Securities and Exchange Commission
July 28, 1998
10.36 IntraNet Solutions, Inc. Employee Stock Incorporated by reference to Exhibit A of
Purchase Plan* the Registrant's Definitive Proxy
Statement filed with the Securities and
Exchange Commission July 29, 1999
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FILE DESCRIPTION REFERENCE
10.37 Employment Agreement Dated April 1, 2001 Electronic transmission
by and between the Registrant and Gregg
A. Waldon*
11.1 Computation of earnings per share Electronic transmission
----------
* Management contract, compensation plan or arrangement.
(b) REPORTS ON FORM 8-K
No Reports on Form 8-K were filed for the quarter ended June 30, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IntraNet Solutions, Inc.
(Registrant)
Date: August 14, 2001 By: /s/ Vern Hanzlik
----------------
Vern Hanzlik,
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 14, 2001 By: /s/ Gregg A. Waldon
-------------------
Gregg A. Waldon
Chief Financial Officer, Secretary and Treasurer
(Principal Financial and Accounting Officer)
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EXHIBITS
FILE DESCRIPTION REFERENCE
3.1 Amended and Restated Articles of Incorporated by reference to Exhibit 3.1
Incorporation of the Registrant's Form 10-Q for the
quarter ended September 30, 2000
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
4.7 Warrant to purchase 225,000 shares of Incorporated by reference to Exhibit 4.7
common stock to Merrill, Lynch, Pierce, of the Registrant's Form 10-K for the
Fenner & Smith dated February 22, 2000 year ended March 31, 2001
10.4 IntraNet Solutions, Inc. 1994-1997 Stock Incorporated by reference to Exhibit A of
Option and Compensation Plan* the Registrant's Definitive Proxy
Statement Schedule 14A, filed with the
Securities and Exchange Commission
July 28, 1998
10.20 Stock Purchase Warrant Agreement dated Incorporated by reference to Exhibit
December 20, 1996, by and between the 10.20 of the Registrant's Form 10-KSB for
Registrant and Rita M. Olson the fiscal year ended March 31, 1997
10.28 InfoAccess, Inc. 1990 Stock Option Plan Incorporated by reference to Exhibit 99.1
as amended September 29, 1999 of the Registrant's statement on
Form S-8, File No. 333-90843
10.29 InfoAccess, Inc. 1995 Stock Option Plan Incorporated by reference to Exhibit 99.2
as amended September 29, 1999 of the Registrant's statement on
Form S-8, File No. 333-90843
10.30 Employment Agreement Dated August 1, Incorporated by reference to Exhibit
1999, by and between the Registrant and 10.30 of the Registrant's Form 10-Q for
Robert F. Olson* the quarter ended September 30, 1999
10.31 IntraNet Solutions, Inc. 1999 Employee Incorporated by reference to Exhibit
Stock Option and compensation plan 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 Exhibit 2 to
IntraNet Solutions, Inc., IntraNet the Registrant's Current Report on
Kansas City Acquisition Corporation, Inso Form 8-K dated July 10, 2000
Chicago Corporation, Inso Kansas City
Corporation and Inso Corporation, dated
as of July 10, 2000
10.33 IntraNet Solutions, Inc. 2000 Stock Incorporated by reference to Exhibit B to
Incentive Plan* 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 Employee Incorporated by reference to Exhibit
Stock Incentive Plan* 10.34 of the Registrant's Form 10-Q for
the three months ended June 30, 2000
10.35 IntraNet Solutions, Inc. 1997 Directors Incorporated by reference to Exhibit B of
Stock Option Plan* the Registrant's Definitive Proxy
Statement Schedule 14A, filed with the
Securities and Exchange Commission
July 28, 1998
10.36 IntraNet Solutions, Inc. Employee Stock Incorporated by reference to Exhibit A of
Purchase Plan* the Registrant's Definitive Proxy
Statement filed with the Securities and
Exchange Commission July 29, 1999
24
FILE DESCRIPTION REFERENCE
10.37 Employment Agreement Dated April 1, 2001 Electronic transmission
by and between the Registrant and Gregg
A. Waldon*
11.1 Computation of earnings per share Electronic transmission
----------
* Management contract, compensation plan or arrangement.