UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2000March 31, 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 0-22292
ACTIONPOINT, INC.
(Exact name of Registrant as specified in its Charter)
1299 Parkmoor Avenue
San Jose, California 95126
(Address of Principal Executive Offices including Zip Code)
(408) 325-3800
(Registrant's Telephone Number, Including Area Code)
Input Software, Inc.
(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 reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of September 30, 2000: 4,224,834March 31, 2001: 4,274,949
ACTIONPOINT, INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2000MARCH 31, 2001
Index
| PART I. FINANCIAL INFORMATION | Page No. |
| Item 1. Financial Statements | |
| Consolidated Balance Sheets at | |
| Consolidated Statements of Operations for the three | |
| Consolidated Statements of Cash Flows for the | |
| Notes to the Consolidated Financial Statements | |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
| PART II. OTHER INFORMATION | |
| Item 1. Legal Proceedings | |
| Item 2. Changes in Securities | |
| Item 3. Defaults Upon Senior Securities | |
| Item 4. Submission of Matters to a Vote of Security Holders | |
| Item 5. Other Information | |
| Item 6. Exhibits and Reports on Form 8-K | |
| Signature Page |
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
ACTIONPOINT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
September 30,March 31, December 31,
2001 2000 1999
------------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents .................... $2,881 $9,193............... $3,947 $2,242
Accounts receivable........................... 4,551 5,300receivable, net................. 4,714 7,912
Deferred income taxes and
other current assets....................... 5,627 5,170assets.................. 1,315 1,885
------------- -----------
Total current assets........................ 13,059 19,663assets................... 9,976 12,039
Property and equipment, net..................... 1,761 1,479net................ 1,437 1,585
Other assets.................................... 1,540 2,036
Net assets related to the
discontinued display division.............. -- --assets............................... 4,177 4,177
------------- -----------
$16,360 $23,178$15,590 $17,801
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................. $603 $514payable......................... $332 $414
Deferred revenue.............................. 2,608 1,997revenue......................... 3,052 3,202
Accrued liabilities........................... 3,414 3,289liabilities...................... 1,806 3,463
------------- -----------
Total current liabilities................... 6,625 5,800liabilities.............. 5,190 7,079
Long term deferred revenue................. 786 800
------------- -----------
Total liabilities.......................... 5,976 7,879
------------- -----------
Stockholders' equity:
Common stock.................................. 42 41
Paid in capital............................... 9,900 8,681stock............................. 43 43
Paid-in capital.......................... 9,988 9,981
Retained earnings............................. (207) 8,656earnings........................ (417) (102)
------------- -----------
Stockholders' equity........................ 9,735 17,378equity................... 9,614 9,922
------------- -----------
$16,360 $23,178$15,590 $17,801
============= ===========
The accompanying notes are an integral part of these consolidated condensed financial statements
ACTIONPOINT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
September 30, September 30,March 31,
-------------------
-------------------2001 2000 1999 2000 1999
--------- ---------
--------- ---------
Net revenues:
License......................... $4,509 $4,364 $12,742 $13,565
Service......................... 1,458 1,097 3,864 3,012
--------- ---------License............................... $4,935 $3,518
Service............................... 1,660 1,095
--------- ---------
Total revenues.................... 5,967 5,461 16,606 16,577revenues.......................... 6,595 4,613
--------- ---------
Cost of revenues:
License......................... 189 46 355 477License............................... 175 83
Service (exclusive(inclusive of stock
related bonus expense of
$138k$138 in 2000)................ 1,055 723 2,687 1,856
--------- ---------....................... 854 883
--------- ---------
Cost of revenues.................. 1,244 769 3,042 2,333
--------- ---------revenues........................ 1,029 966
--------- ---------
Gross profit 4,723 4,692 13,564 14,244
--------- --------- --------- ---------5,566 3,647
Research and development
(exclusive(inclusive of stock related
bonus expense of $710k$710 in 2000.. 1,854 1,324 5,422 3,8412000......... 1,683 2,457
Sales and marketing
(exclusive(inclusive of stock related
bonus expense of $638k$638 in 2000.. 3,918 2,768 11,352 8,0202000......... 3,293 3,966
General and administrative
(exclusive(inclusive of stock related
bonus expense of $1,090k$1,090 in 2000 876 733 2,664 2,345
Stock related bonus expense..... -- -- 2,576 --
--------- ---------2000....... 940 1,962
--------- ---------
Operating income (loss)........... (1,925) (133) (8,450) 38loss.......................... (350) (4,738)
Interest and other income (expense) (49) 196 87 49535 106
Write-off of minority equity
investment...................... --investment............................ -- (500)
--
--------- ---------
--------- ---------
Income (loss)Loss before provision
for income taxes............... (1,974) 63 (8,863) 533taxes..................... (315) (5,132)
Provision for income taxes........taxes.............. -- 21 -- 179
--------- ---------7
--------- ---------
Net income (loss).................loss................................ ($1,974) $42315) ($8,863) $354
========= =========5,139)
========= =========
Basic and diluted EPS:
Net income (loss)................loss................ ($0.47) $0.010.07) ($2.12) $0.08
========= =========1.24)
========= =========
Shares used in basic and diluted
EPS calculations: Basic ......................... 4,225 4,255 4,179 4,478
Diluted........................ 4,225 4,257 4,179 4,486
The accompanying notes are an integral part of these consolidated condensed financial statements
ACTIONPOINT, INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS(UNAUDITED - IN THOUSANDS)
Nine Months Ended September 30 ------------------- 2000 1999 --------- --------- Cash flows from operating activities: Net income (loss)...................................... ($8,863) $354 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization........................ 605 398 Stock compensation charge............................ 81 -- Write-off of minority equity investment.............. 500 -- Shares issued for stock related bonnus............... 346 -- Discontinued operations.............................. -- 511 (Increase) decrease in assets and liabilities: Accounts receivable................................. 749 (841) Other assets........................................ (461) (87) Accounts payable.................................... 89 (261) Deferred revenue.................................... 611 (256) Accrued liabilities................................. 125 52 --------- --------- Net used in operating activities.................... (6,218) (130) --------- --------- Cash flows from investing activities: Property and equipment additions....................... (887) (528) --------- --------- Net cash used in investing activities............... (887) (528) --------- --------- Cash flows from financing activities: Repurchase of common stock............................. -- (4,210) Net proceeds from issuance of common stock............. 793 277 --------- --------- Net cash provided by (used in)financing activities.. 793 (3,933) --------- --------- Net decrease in cash and cash equivalents............... (6,312) (4,591) Cash and cash equivalents at beginning of period........ 9,193 14,447 --------- --------- Cash and cash equivalents at end of period.............. $2,881 $9,856................ 4,275 4,134 ========= =========
The accompanying notes are an integral part of these consolidated condensedfinancial statements
ACTIONPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
Three Months Ended
March 31
-------------------
2001 2000
--------- ---------
Cash flows from operating activities:
Net loss............................................... ($315) ($5,139)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization........................ 218 182
Decrease in allowance for doubtful accounts.......... (40) --
Stock compensation charge............................ -- 59
Write-off of minority equity investment.............. -- 500
Shares issued for stock related bonus................ -- 346
Change in assets and liabilities:
Accounts receivable................................. 3,238 1,616
Other assets and deferred income taxes.............. 570 (460)
Accounts payable.................................... (82) 58
Deferred revenue.................................... (164) (8)
Accrued liabilities................................. (1,657) (169)
--------- ---------
Net cash provided by (used in) operating activities. 1,768 (3,015)
--------- ---------
Cash flows from investing activities:
Property and equipment additions....................... (70) (340)
--------- ---------
Net cash used in investing activities............... (70) (340)
--------- ---------
Cash flows from financing activities:
Net proceeds from issuance of common stock............. 7 556
--------- ---------
Net cash provided by financing activities........... 7 556
--------- ---------
Net increase (decrease) in cash and cash equivalents.... 1,705 (2,799)
Cash and cash equivalents at beginning of period........ 2,242 9,193
--------- ---------
Cash and cash equivalents at end of period.............. $3,947 $6,394
========= =========
The accompanying notes are an integral part of these consolidated financial statements
ACTIONPOINT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Interim Unaudited Financial Information:
The accompanying interim unaudited consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The December 31, 19992000 balance sheet data was derived from audited consolidated financial statements contained in the Company's 19992000 Annual Report on Form 10-k10-K but does not include all disclosures required by accounting principles generally accepted accounting principles.in the United States of America. The unaudited consolidated financial statements as of September 30, 2000 and for the three and nine month periods ended September 30,March 31, 2001 and 2000 and 1999 include, in the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for an entire year and should not be relied on as such.
Liquidity and capital resources:
For the year ended December 31, 2000 the Company incurred a net loss of $8.8M and negative cash flows from operations of $6.9M. At December 31, 2000 the Company had cash and cash equivalents of $2.2M. For the first quarter ended March 31, 2001, the company incurred a net loss of $315,000 and generated positive cash flows from operating activities of $1.8 million. At March 31, 2001, the Company had cash and cash equivalents of $3.9 million.
During the quarter ended March 31, 2001, management reduced the workforce and took other steps to reduce operating expenditures.
In the event that such measures are not sufficient to reduce expenses to levels that can be financed by revenues generated, the Company may need to seek additional financing. There can be no assurance that such additional financing will be available or will be available on terms acceptable to the Company, which, as a result, could have a material adverse effect on the Company's business, operating results and financial condition.
Recent Pronouncements:
In June of 1998, the Financial Accounting Standards Board ("FASB")issued Statement of Financial Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities,Activities." which is effectiveSFAS 133, as amended, establishes accounting and reporting standards for all fiscal quarters of fiscal years beginning after June 15, 1999. Itderivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS 133 requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In July of 1999, the FASB issued Statement of Financial Standards No. 137 ("SFAS 137"), "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," which defers the effective date to all fiscal quarters of fiscal years beginning after June 15, 2000. The Company has not yet evaluated the effects of this change on its operations. The Company will adoptadopted SFAS 133 as required for its first quarterly filing of the fiscal yearJanuary 1, 2001.
In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." In addition, in October 2000, the SEC released interpretative guidance on SAB 101 in the form of frequently asked questions and responses thereto. SAB 101 and the frequently asked questions and responses provide guidance for revenue recognition under certain circumstances. In June 2000, the SEC issued SAB 101B, which delays the implementation of SAB 101 until no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. The Company believes that its current revenue recognition policy is in compliance with SAB 101.
In March 2000, the FASB issued FASB Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB Opinion No. 25." FIN 44 is intended to clarify certain problems that have arisen in practice since the issuance of APB 25 and provide guidance, some of which is a significant departure from current practice. FIN 44 generally provides for prospective application for grants or modifications to existing stock options or awards made after September 30, 2000. However, for certain transactions the guidance is effective after December 15, 1998 and January 12, 2000. The adoption of this pronouncementSFAS 133 did not have a material impacteffect on the Company's financial position andor the results of operations.operations of the Company.
3. INCOME TAXES:
The tax benefit related to the operating loss for the quarter ended September 30, 2000March 31, 2001, has been offset by a valuation reserve placedestablished against the resulting deferred tax assets.
4. STOCK REPURCHASE:COMPUTATION OF NET LOSS PER SHARE
Since February 1997The following table presents the Company's Boardcalculation of Directors has authorized the use of up to $25 million to repurchase the Company's common stock. Through Decemberbasic and diluted net loss per share (in thousands, except per share data):
Three Months Ended
March 31,
1999 the Company repurchased 3.8 million shares for a total of $23.6 million. No repurchases were made during the nine months ended September 30, 2000. The repurchased stock is being held by the Company as treasury stock to be-------------------
2001 2000
--------- ---------
Net loss............................ ($315) ($5,139)
Shares used to meet the Company's obligations under its stock plansin basic and for other corporate purposes. Purchases have beendiluted
EPS calculation.................... 4,275 4,134
Basic and may continue to be made from time-to-time on the open market or in privately negotiated transactions. The timing and volume of purchases will be dependent upon market conditions and other factors. The Company intends to use cash on hand to fund its purchases.diluted EPS............... ($0.07) ($1.24)
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW:
On April 24, 2000,
We develop, market and service information capture software. Information capture solutions enable organizations to collect, organize and input paper and fax-based information into their installed computing systems, providing a critical bridge between the Company announced a name changepaper world and the digital world. The result is improved customer satisfaction, increased productivity and cost control. Our customers have traditionally been large global 1000 businesses and governmental agencies. We currently have two main product lines to serve the electronic documentation needs of entities that use computers to facilitate business activities. Our InputAccel family is an information capture product, which means that it automates the conversion of paper and fax documents into electronic format thus allowing improved operating efficiencies. Our customers use InputAccel to convert transaction-related documents, such as order forms, claim forms, or loan applications, into an appropriate electronic format and to transport images of and information from Input Software, Inc.these documents to ActionPoint, Inc. This change was made to more effectively communicate the Company'sstorage on Web sites, compact disks, or internal databases for subsequent search, retrieval or further processing. Our new strategic focus on e-commerce interaction management software.
The Company helps Global 1000 organizations; dot.com companies and B2B net market makers simplify Web-based and paper-based business transactions. ActionPoint products are part of the e-commerce infrastructure required to deliver scaleable, flexible and high performance e-business solutions. ActionPoint Dialog Server™, first shippedServer product, released in September 2000, is an XML-based software product designed to replace static forms on the Web forms with personalized, intelligent interactions. The ActionPoint Enterprise Server™ is a delivery and integration mechanism behind the firewall that integrates all types of information, both paper and web-based, into the enterprise computing systems infrastructure. Our award-winning information capture solution, InputAccel®, has been shipping since late 1995 and intelligently captures mission critical information -provided as email, paper, and faxes- into formats compatible with enterprise computing systems and the Internet.
The Company's also marketsAdditionally, we market software tools which allowunder our Pixel Translations brand to various hardware and software developers to save both time and money by offering stable, supported libraries of software code to drive certain computer peripherals rather than having to develop such software themselves. Most of these tools are based on the Company's Image & Scanner Interface Specification ("ISIS®"), an industry standard interface for scanners. ISIS also provides a key architectural technology component for InputAccel.
providers.
RESULTS OF OPERATIONS:
This Quarterly Report on Form 10-Q may contain forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in any such forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed below in the section captioned RISK FACTORS and in the Company's most recent Annual Report on Form 10-K.
Revenues
The Company's license revenues increased 3%40% in the thirdfirst quarter of 20002001 to $4.5$4.9 million from $4.4 million in the third quarter of 1999. For the nine months ended September 30, 2000, license revenues decreased 6% to $12.7 million from revenues of $13.6$3.5 million in the first nine monthsquarter of 1999.2000. As a percent of revenue, licenses accounted for 76%75% and 80%76% for the thirdfirst quarter of 2001 and 2000, and 1999 respectively and 77% and 82% for the nine months ended September 30, 2000 and 1999, respectively.The moderate decreaserespectively. The increase in year-to-date license revenue is due in large part to a shift in buying patternsprimarily from our Global 1000 customer base as they continue to prioritize projects for e-commerce solutions ahead of those relating to paper-to-digital conversion. The Company made first production shipments of its e-commerce Dialog Serverincreased revenues from InputAccel product in September.line.
The Company's service revenues increased 33%52% in the thirdfirst quarter of 20002001 to $1.5$1.7 million from $1.1 million the third quarter of 1999. For the nine months ended September 30, 1999, service revenues increased 28% to $3.9 million from revenues of $3.0 million in the first nine monthsquarter of 1999.2000. As a percent of revenue, services accounted for 33%25% and 20%24% for the thirdfirst quarter of 20002001 and 1999 respectively and 23% and 18% for the nine months ended September 30, 2000, and 1999, respectively. The increase in service revenues both in absolute and percentage terms was primarily attributable to a larger installed base of customers purchasing annual software maintenance service.
contracts.
Gross Profit
Gross profit increased 53% for the first quarter of $4.72001 to $5.6 million from $3.6 million for the thirdfirst quarter of 2000 was equal2000. The increase in gross profit is due primarily from increased revenues. Gross margin increased to that of84% from 79% for the thirdfirst quarter of 1999. For the nine months ended September 30,2001 and 2000, respectively. The increase in gross profit decreased 5%margin is due to $13.6 millionan increased percentage of revenue derived from $14.2 millionlicense fees in the first nine months of 1999. Gross margin decreased to 79% from 86% for the third quarter of 2000 and 1999, respectively, and to 82% from 86% for the nine months ended September 30, 2000 and 1999, respectively. The decrease in gross margin percent is largely due to the increased percentage of revenues derived from software maintenance and services,2001, which have lowerhigher margins than revenues from product licensing. The Company expects revenuesrevenue from maintenance and services to continue to moderately increase as a percentage of overall revenues.services.
Research and Development
Research and development expenses increased 40%decreased 32% in the first quarter of 2001 to $1.9$1.7 million from $2.5 million in the thirdfirst quarter of 2000 from $1.3 million2000. The decrease is principally due to a one-time charge of $710,000 of stock related bonus expense in the thirdfirst quarter of 19992000. As a percent of revenue, research and for the nine month period ended September 30, 2000, increased 41%development decreased to $5.4 million from $3.8 million26% for the first nine monthsquarter of 1999. The increase2001, from 53% in the first quarter of 2000. Excluding the stock related bonus expense the decrease in percentage is largelyprimarily due to investments made for the Dialog Server product line.Research and development increased as a percentage of revenue to 31% from 24% for the third quarter of 2000 compared to the third quarter of 1999 and to 33% from 23% for the first nine months ended September 30, 2000 and 1999, respectively.levels.
Current R&D staffing levels exceed those of prior periods. The Company believes that continued investment in research and development is critical to its future growth and will continue to commit substantial resources to this area. As a result, quarterly research and development expenses may continue to increase in future periods.
Sales and Marketingmarketing
Sales and marketing expenses increased 42%decreased 17% in the first quarter of 2001 to $3.9$3.3 million from $4.0 million in the thirdfirst quarter of 2000 from $2.8 million2000. The decrease is principally due to a one-time charge of $638,000 of stock related bonus expense in the thirdfirst quarter of 19992000. As a percent of revenue,sales and for the nine month period ended September 30, 2000, increased 42%marketing decreased to $11.4 million from $8.0 million50% for the first nine months of 1999. Sales and marketing increased as a percentage of revenue to 66% from 51% for the third quarter of 2000 compared to2001, from 86% in the thirdfirst quarter of 1999 and2000. Excluding the stock related bonus expense the decrease in percentage is primarily due to 68% from 48% for the first nine months ended September 30, 2000 and 1999, respectively. The Company expects that sales and marketing expenses will increase in the future, in absolute terms, as the Company continues to expand sales and marketing programs in conjunction with the launch of its Dialog Server product line.
increased revenue levels.
General and Administrativeadministrative
General and administrative expenses decreased 52% for the first quarter of 2001 to $940,000 from $2.0 million in the thirdfirst quarter of 2000. The decrease is largely due to a one-time charge of $1.1 million of stock related bonus expense in the first quarter of 2000 increasedpartially offset by 20%increase in spending due to $876,000 from $733,000professional fees and expenses incurred in the third quarter of 1999 and for the nine month period ended September 30, 2000, increased 14% to $2.7 million from $2.3 million for the first nine months of 1999.conjunction with various strategic initiatives. As a percentage of revenue, general and administrative expenses increaseddecreased to 15% for the third quarter of 2000, from 13% for the third quarter of 1999 and to 16% from 14% for the first nine months ended September 30, 2000 and 1999, respectively. The Company expects general and administrative expenses to increase in succeeding future periods.
Stock Related Bonus Expense
Thequarter of 2001, from 43% for the first quarter of 2000 included a one-time charge of $2.6 million2000. Excluding the stock related bonus expense the decrease in percentage is primarily due to a stock-based incentive plan.
increased revenue levels.
Minority Equity Investment
Based on its assessment of the likelihood to realizeof realizing value, the Company wrote off a $500,000 minority equity interest in the first quarter of 2000, from an investmentthat was made in 1998 in conjunction with the sale of the Company's hardware division.
Provision for Income Taxes
The benefit for the tax loss carry forward in the thirdfirst quarter of 2001 and nine months ended September 30, 2000, respectively, was offset by an increase to the valuation allowance. The tax provision for the three and nine months ended September 30, 1999 utilized a rate of 34%.
Liquidity and Capital Resources
At September 30, 2000,March 31, 2001, the Company had cash and cash equivalents of $2.9$3.9 million, compared to $9.2$2.2 million at December 31, 1999.2000.
Net cash usedprovided by operating activities was $6.2$1.8 million in the first ninethree months of 20002001 compared to net cash used by operating activities of $130,000$3.0 in the first ninethree months of 1999.2000. The net cash provided by operating activities in the first three months of 2001 is primarily due to the collection of accounts receivable partially offset by a decrease in accrued liabilities. In the first three months of 2000, funds were utilized to support increased development and marketing expenses, primarily related to the Dialog Server product family, and for payments made under a stock-based incentive plan.
Net cash used in investing activities, exclusively additions to property and equipment, was $887,000$70,000 for the first ninethree months of 2000,2001, compared to $528,000$340,000 in the first ninethree months of 1999.2000.
Net cash provided by financing activities was $793,000$7,000 for the first ninethree months of 2001 and $556,000 for the first three months of 2000, primarily from the proceeds of exercises of employee stock options. This compares to net cash used of $3.9 million for Company stock repurchased in the first nine months of 1999.
The Company anticipatesbelieves that its cash and cash equivalents, together with cash flows from operations will not be sufficient to meet the Company's liquidity and capital requirements for at least the next 12 months. The Company may, however, seek additional equity or debt financing to fund further expansion. The timing and amount of such capital requirements cannot be precisely determined at this time and will depend on a number of factors, including demand for the Company's products, product mix and competitive factors. Accordingly, the Company has initiated an accounts receivable line of credit with a commercial bankmay require additional funds to support its working capital requirements or for other purposes and has retained an investment bankmay seek to assist in potential capital funding.Thereraise such additional funds through public or private equity or other sources. There can be no assurance that additional financing will be available at all or that it, if available, will be obtainable on terms favorable to the Company and would not be dilutive.
In addition, the Company may need to raise additional funds earlier than presently anticipated if, for example, the Company experiences operating losses that exceed current expectations. If the Company raises additional funds through the issuance of equity, equity-related or debt securities, such securities may have rights, preferences or privileges senior to those of the rights of the Company's common stock. Furthermore, because of the low trading price of the Company's common stock, the number of shares of new equity related securities that we may be required to issue may be greater than it otherwise would be. As a result, the Company's stockholders may experience significant additional dilution. In addition, the issuance of debt securities could increase the risk of the Company. The Company cannot, however, be certain that additional financing will be available to the Company on acceptable terms when required, or at all. If this additional financing is not available, the Company may need to dramatically change its business plan, sell or merge the Company, or face bankruptcy.
RISK FACTORSFACTORS:
In addition to the other information in this Report, the following risk factors should be considered carefully in evaluating the Companyus and itsour business.
Recent Losses; Future Operating
Risks Related to our Financial Results Uncertain
The Company's operating resultsWe have varied significantly in the pastrecently experienced net losses and are likelymay continue to vary significantly in the future due to a variety of factors, such as demandincur net losses for the Company's products,foreseeable future, which may harm the size and timingmarket price of significant orders,our common stock.
We incurred net losses of $315,000 for the number,first quarter ended March 31, 2001. In recent periods we have not generally generated cash from operations. Our recent net losses are substantially the delay or deferralresult of customer implementations, timing and significance of product enhancements andexpenses incurred for our new product announcements by the Company and its competitors, changes in pricing policies by the Company or its competitors, customer order deferrals in anticipation of enhancements or new products offered by the Company or its competitors, the ability of the Company to develop, introduce and market new and enhanced versions of its products on a timely basis, product life cycles, software defects and other product quality problems, the Company's ability to attract and retain qualified personnel, success in expanding the direct sales and customer support organizations, changes in the Company's sales incentive plans, changes in the mix of domestic and international revenues, the level of international expansion, foreign currency exchange rate fluctuations, performance of indirect channel partners, changes in the mix of indirect channels through which the Company's products are offered, the impact of acquisitions of competitors and indirect channel partners, the publication of opinions concerning the Company, its products or technology by industry analysts, changes in the Company's level of operating expenses and general domestic and international economic and political conditions.
During any given period, one or more of the foregoing factors may cause revenue to fluctuate significantly or operating expenses to be disproportionately high. For the past several quarters the Company has increased spending and has incurred operating losses. The increased spending has been due in large part to the investment of significant research and development and marketing resources to the yet-to-be-shipped interaction managementDialog Server product family. The Company expectsWe expect to continue to devote substantial resources to these areasour product families and as a result we will need to achieve significantly increased quarterly revenues to achieve profitability. In particular,Even if we achieve profitability, given the Company intendscompetitive and evolving nature of our industry we may not be able to continuesustain or increase profitability on a quarterly or annual basis. As a result, we will need to hire additional sales, marketinggenerate higher revenues while containing costs and engineering personnel in 2000operating expenses to become and beyond, which the Company believes is required if the Company isremain profitable. Our failure to achieve significant revenue growth in the future. While the Company's revenues generally have increased in recent periods, there can be no assurance that revenuesdo so will increase in future periods, that revenues will grow at past rates or that the Company will return to profitability in the future.
The Company has limited ability to forecast future revenues, and it is likely that in some future period the Company's operating results will be below the expectations of public securities analysts and investors. In the event that operating results are below expectations, or in the event that adverse conditions prevail or are perceived to prevail generally or with respect to the Company's business,cause the price of our stock to decline.
Because of the Company's Common Stock would likely be materially adversely affected.unpredictability of operating results from our products, we may not accurately forecast our revenues or match our expenses to our revenues, which could harm our quarterly operating results and cause volatility or declines in our stock price.
Quarterly Operating Results Subject to Fluctuations; Seasonality
The Company'sOur quarterly revenues, expenses and operating results have varied significantly in the past and are likely to vary significantly in the future due to a variety of factors. In addition to those mentioned earlier, these factors, includeincluding:
We operate with virtually no order backlog because itsour software products are shipped shortly after orders are received, whichreceived. That makes product revenues in any quarter substantially dependent on orders booked and shipped throughout that quarter. In addition, the Company achieveswe achieve a significant portion of revenues from indirect sales channels over which the Company haswe have little control. Moreover, the Company'sour expense levels are based to a significant extent on the Company'sour expectations of future revenues and therefore are relatively fixed in the short term. If revenue levels are below expectations, our operating results are likely to be adversely and disproportionately affectedharmed because only a small portion of the Company's expenses vary with its revenues.
The Company's business has experienced and is expected to continue to experience seasonality, largely due to customer buying patterns. In most of the
Also, in recent years, the Company haswe have had relatively stronger demand for itsour products during the quarter ending December 31 and demand has been relatively weaker demand in the quarter ending March 31. The Company believesWe believe that, adjusting for the negative impact in late 1999 impact caused by Year 2000 concerns, this pattern will continue. Based upon allIn addition, we expect that sales may decline during summer months, particularly in European markets. This seasonality makes it more difficult to forecast future revenues. Therefore, it is likely that in some future quarter operating results will fall below expectations and as a result, the price of theour common stock may be harmed.
Our failure to forecast our revenues and future operating expenses accurately could cause quarterly fluctuations in our revenues and may result in volatility, which may cause a decline in our stock price.
As a result of these factors, described above, the Company believeswe believe that its quarterly revenues,quarter-to- quarter comparisons of our revenue, expenses and operating results are likely to vary significantly in the future and that period-to-period comparisons of itsour operating results are not necessarily meaningful and that, inmeaningful. In any event, such comparisons should not be relied upon as indications of our future performance. In addition, our operating results in one or more future quarters may fail to meet the expectations of securities analysts or investors. If this occurs, we could experience an immediate and significant decline in the trading price of our stock.
You may have difficulty evaluating our business and operating results because we have yet to ship any meaningful volume of Dialog Server products, our new e-commerce interaction management product family.
We recently developed and have continued to enhance our new Dialog Server product family to compete in the market for e-commerce interaction management software. Because we have a limited operating history for this new product family, it is impossible to discern trends that may emerge and affect our business. Our limited historical financial performance for this product family will make it difficult for you to evaluate the success of our business to date and to assess its future viability.
Significant CompetitionRisks Related to the Information Capture and Interaction Management
Software Industry
If we are not able to effectively compete against other software providers in the interaction management and data capture software industry, our revenues will not increase and may decrease.
The market for the Company'sour products is intensely competitive and subject to rapid change. In addition, because there are relatively low barriers to entry in the software market, the Companywe may encounter additional competition from othermany established and emerging companies. Many of the Company'sour competitors have longer operating histories, significantly greater financial, technical, marketing and other resources than the Company,us, significantly greater name recognition and a large installed base of customers. As a result, the Company'sour competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the development, promotion and sale of competitive products than can the Company.we can. There is also a substantial risk that announcements of competing products by large competitors could result in the delay or postponement of customer orders in anticipation of the introduction of such new products.
In addition, current and potential competitors have established or may establish cooperative relationships among themselves or with third-partiesthird parties to increase the ability of their products to address customer needs and whichneeds. These cooperative relationships may limit the Company'sour ability to sell itsour products through particular reseller partners. Accordingly, new competitors or alliances among current and new competitorscompetitive cooperative relationships may emerge and rapidly gain significant market share. The CompanyWe also expectsexpect that competition will increase as a result of software industry consolidation. Increased competition is likely to result in price reductions, fewer customer orders, reduced margins and loss of market share, any of which could materially adversely affectharm our revenues and business.
If the Company. There canmarket for interaction management and data capture software does not grow, our revenues may not grow.
The markets for interaction management and information capture software are fragmented, rapidly changing and extremely competitive. This interaction management market is still emerging, and it may not continue to grow or organizations may not adopt our products. We have spent, and intend to continue to spend, considerable resources educating potential customers about our software products and the interaction management market generally. Our expenditures may fail to achieve any additional degree of market acceptance for our products. The rate at which organizations have adopted our existing products has varied significantly, and we expect to continue to experience such variations in the future. For instance, the market for e-commerce interaction management products will not grow if customers are reluctant to abandon traditional customer relationship and order management systems. If the markets for our products fail to develop, or develop more slowly than we currently anticipate, our revenues will not grow and our operating results will suffer.
If businesses do not increasingly adopt the Internet as a means to deliver information and conduct commerce, the market for our products will not grow and the market price for our common stock could decline as a result of lower revenues or reduced investor expectations.
The market for e-commerce interaction management products, particularly those using the Internet to deliver information and process commercial transactions, has only recently begun to develop and is evolving rapidly. Because this market is new, we cannot predict its potential size or future growth rate. The use and acceptance of the Internet may not increase for a number of reasons, including:
If Internet infrastructure, products, services or facilities that support and complement our products are not developed, or if use of the Internet does not increase as expected, this could force us to lower the prices of our products or result in fewer sales of our products and our revenues will not grow and could decline.
Potential increases or changes in governmental regulation of Internet communication and commerce could discourage the growth of the Internet, which could decrease the demand for our new family of products.
Due to concerns arising from use of the Internet, a number of domestic and international laws and regulations have been, and may be, no assuranceadopted covering issues including user privacy, taxation, pricing, acceptable content and quality of products and services. Legislative changes could dampen the growth in use of the Internet generally and decrease the acceptance of the Internet as a communications and commercial medium. This could limit the market acceptance of our recently released e-commerce interaction management products. Further, due to the global nature of the Internet, it is possible that multiple federal, state or foreign jurisdictions might attempt to regulate Internet transmissions or levy sales or other taxes relating to Internet-based activities. Moreover, the Companyapplicability to the Internet of existing laws, including laws governing property ownership, libel and personal privacy, is uncertain. We cannot assess the possible negative impact of any future regulation of the Internet on our business.
Risks Related to Our Business
Significantly all of our revenues are currently derived from sales of our InputAccel product and related software tools, and if demand for these products declines or fails to grow as we expect, our revenues will be able to compete successfully against current and future competitors or that the competitive pressures faced by the Company will not materially adversely affect its business, operating results and financial condition.harmed.
Product Concentration
The Company currently expects the sale and licenseWe derived substantially all of its InputAccelproduct and software tools to account for most of the Company's revenues for 2000, asour revenues from the interaction managementInputAccel product family of productsand Pixtools software tools. Revenues from our new Dialog Server product family are not expected to start contributing any significant amount until late in the latter portion of 2000. The Company's2001. Therefore, our future operating results are, therefore,depend heavily dependent upon continued and widespread market acceptance of itsfor our InputAccel products and enhancements to such.those products. A decline in the demand for InputAccel or lack of market acceptance for the interaction management products as a result of competition, technological change or other factors, would have a material adverse effect oncause our revenues to suffer.
If the Company's business,market for our new Dialog Server product family and enhancements for our existing products fails to develop or grow, our revenues may not grow and our operating results will suffer.
If sales of our new products are lower than expected, our revenues and financial condition.
Dependence on Emerging Markets
Theoperating results will suffer. Factors that may affect the market foracceptance of our new products, some of which are beyond our control, include the following:
If we are unable to respond in an effective and timely manner to rapid technological change and new products to achieve any additional degree of market acceptance. The rate at which organizations have adopted the Company's existing products has varied significantlyin our industry, our revenues and the Company expects to continue to experience such variations in the future. If the markets for the Company's products fail to develop, or develop more slowly than the Company currently anticipates, the Company's business, operating results and financial condition would be materially adversely affected.
Rapid Technological Change and New Products
will suffer.
The market for the Company's productsinformation capture and interaction management software is characterized by rapid technological change, frequent new product introductions and enhancements, uncertain product life cycles, changes in customer demands and evolving industry standards. The introduction of products, such as interaction management software,our Dialog Server product family, embodying new technologies and the emergence of new industry standards can render existing products obsolete and unmarketable. The Company'sOur future success will depend upon itsour ability to continue to enhance itsour current products and to develop and introduce new products on a timely basis that keep pace with technological developments and satisfy increasingly sophisticated customer requirements. As a result of the complexities inherent in itsour software, new products and product enhancements can require long development and testing periods. As a result, significant delays in the general availability of such new releases or significant problems in the installation or implementation of such new releases could have a material adverse effect on the Company's business,harm our operating results and financial condition. The Company hasWe have experienced delays in the past in the release of new products and new product enhancements. There can be no assurance that the Company will be successful in developingWe may fail to develop and marketing,market on a timely and cost effective basis new products or new product enhancements that respond to technological change, evolving industry standards or customer requirements, that the Company will notrequirements. We may experience difficulties that could delay or prevent the successful development, introduction or marketing of these products or that the Company'sour new products and product enhancements will achieve market acceptance.
Risk of Software Defectsdefects that are discovered in our products could harm our business by damaging our reputation, causing us to lose customers and resulting in significant costs and liabilities.
SoftwareOur software products asare complex as those offered by the Companyand may contain errors or defects, particularly when first introduced or when new versions or enhancements are released. The Company has inIn the past, we have discovered software errors in certain of itsour new products after their introduction. There canIn addition, our products are combined with complex products developed by other vendors. As a result, should problems occur, it may be no assurance that, despite testing bydifficult to identify the Company,source of the problem. Defects and errors, or end-user perception of defects and errors, will not be found in current versions, new versions or enhancements of itsour products after commencement of commercial shipments resulting in may result in:
The occurrence of any one or more of these factors could have a material adverse effect on the Company'sharm our revenues and gross margins.
If we cannot manage and expand our international operations, our revenues may not increase and our business operatingand results of operations would be harmed.
In 2000, international sales represented approximately 26% of our revenues, and financial condition.
Risks Associated with International Sales and Operations
The Company anticipateswe anticipate that for the foreseeable future a significant portion of itsour revenues will be derived from sources outside North America and the Company intendsAmerica. In addition, we intend to continue to expand itsour sales and support operations internationally. In order to successfully expand international sales, the Companywe may establish additional foreign operations, expand itsour international sales channel management and support organizations, hire additional personnel, customize itsour products for local markets, recruit additional international resellers and attempt to increase the productivity of existing international resellers. To the extent that the Company isIf we are unable to do these things in a timely and cost-effective manner, the Company'sour sales growth internationally, if any, will be limited, and the Company'sour business, operating results and financial condition couldwould be materially adversely affected.harmed. Even if the Company iswe are able to successfully expand itsour international operations, there can be no assurance that the Company willwe may not be able to maintain or increase international market demand for itsour products.
The Company's
Our international operations are generally subject to a number of risks, including including:
To date, athe majority of the Company'sour revenues and costs have been denominated in U.S. dollars. However, the Company believeswe expect that in the future an increasing portion of the Company'sour revenues and costs will be denominated in foreign currencies. Although the Companywe may from time to time undertake foreign exchange hedging transactions to reduce itsour foreign currency transaction exposure, the Company doeswe do not currently attempt to eliminate all foreign currency transaction exposure.
DependenceOur future success is dependent on Key Personnel
The Company's success depends to a significant extent upon the effortsservices of itsour key management, sales and marketing, technical support and research and development personnel, noneand those persons' knowledge of whomour business and technical expertise would be difficult to replace.
Our products and technologies are bound by an employment contract. The losscomplex, and we are substantially dependent upon the continued service of our existing key management, or technical personnel could adversely affect the Company. The Company believes that its future success will depend in large part upon its continuing ability to attract and retain highly skilled managerial, sales and marketing, technical support and research and development personnel. Like other software companies, the Company faces intense competition for such personnel, and the Company has at times experienced and continues to experience difficulty in recruiting qualified personnel. There can be no assurance that the Company will be successful in attracting, assimilating and retaining additional qualified personnel in the future.We do not have employment agreements with any of our
key employees . The loss of the services of one or more of our key employees could harm our business and slow our product development processes or sales and marketing efforts.
If we fail to recruit and retain a significant number of qualified technical personnel, we may not be able to develop, introduce or enhance our products on a timely basis.
We require the Company's key individuals, or the failureservices of a substantial number of qualified technical support and research and development personnel. The market for these personnel is characterized by intense competition, as well as a high level of employee mobility. These factors make it particularly difficult to attract and retain additionalthe qualified technical personnel we require. We have experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate technical qualifications. If we are unable to recruit and retain a sufficient number of technical personnel, we may not be able to complete development of, or upgrade or enhance, our products in a timely manner. Even if we are able to expand our staff of qualified technical personnel, it may require greater than expected compensation packages that would increase our operating expenses.
We must expand our sales and marketing organization to increase market awareness and sales of our products or our revenues may be adversely affected.
The sale of our products requires long and involved sales efforts targeted at several key departments within our prospective customers' organizations. Sales of our products require the prolonged efforts of executive personnel and specialized systems and applications engineers working together with a small number of dedicated salespersons. We will need to grow our sales force in order to increase market awareness and sales of our products. Competition for these individuals is intense, and we might not be able to hire a sufficient number of qualified sales personnel and applications engineers without incurring higher than expected compensation costs. If we are unable to expand our sales operations, we may not be able to increase market awareness or sales of our products, which could have a material adverse effect on the Company's business,adversely affect our revenues.
If our products fail to perform properly, our customers may assert product liability claims for damages and our reputation and operating results may suffer.
Our products are used in connection with critical business functions and financial condition.may result in significant liability claims if they do not work properly. Limitation of liability provisions we include in our license agreements may not sufficiently protect us from product liability claims because of limitations in existing or future laws or unfavorable judicial decisions. Although we have not experienced any material product liability claims to date, the sale and support of our products may give rise to claims which may be substantial in light of the use of the our products in business-critical applications. Liability claims could require us to spend significant time and money in litigation or to pay significant damages. Any claims for damages, whether or not successful, could seriously damage our reputation and our business.
We may need additional capital, which may not be available, and our ability to grow may be limited as a result.
The development and marketing of new and enhanced products and the associated personnel and capital expenditures will require a significant commitment of resources. As a result, we may need to raise substantial additional capital. If we must raise additional funds, we may not be able to do so on favorable terms, or at all. If we cannot raise funds on acceptable terms, we may not be able to further develop or enhance our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which would harm our business and could require us to terminate operations.
Limited Protection of Proprietary Technology;
Risks of Infringement;Related to Our Product's Dependence on Intellectual Property
and Our Use of Licensed TechnologyOur Brand
Our reliance upon contractual provisions and domestic copyright and trademark laws to protect our proprietary rights may not be sufficient to protect our intellectual property from others who may sell similar products.
The Company reliesWe believe that the steps we have taken to safeguard our intellectual property afford only limited protection. We rely primarily on a combination of copyright, trademark and trade secret laws, confidentiality procedures and contractual provisions to protect itsour proprietary rights. The Company licenses itsWe license our software products primarily under license agreements. There can be no assurance that others will notCompetitors may develop technologies that are similar or superior to the Company'sour technology or design around thethat do not infringe our copyrights and trade secrets, owned by the Company.and this could reduce demand for our products. Despite the Company'sour efforts to protect itsour proprietary rights, unauthorized parties may attempt to copy aspects of the Company'sour products or to obtain and use information that the Company regardswe regard as proprietary. Policing unauthorized use of the Company'sour products is difficult, and although the Company iswe are unable to determine the extent to which piracy of itsour software products exists, software piracy can be expected to be a persistent problem.
In addition, the laws of some foreign countries do not protect the Company'sour proprietary rights as fully as do the laws of the U.S. In those countries, reverse engineering, unauthorized copying or other misappropriation of our proprietary technology could enable third parties to benefit from our technology without paying us for it, which would significantly harm our business.
The Company is not aware that it is infringing any proprietary rights
We depend upon software we license from third parties, the loss of third-parties. There can be no assurance, however, that third-parties will not claim infringement by the Company of their intellectual property rights. The Company expects that software product developers increasingly will be subject to infringement claims as the number of products and competitors in the Company's industry segment grows and the functionality of products in different industry segments overlaps. Any such claims, with or without merit,which could be time consuming to defend, result in costly litigation, divert management's attention and resources, cause product shipment delays or require the Company to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to the Company, if at all. In the event of a successful claim of product infringement against the Company and failure or inability of the Company to either license the infringed or similar technology or develop alternative technology on a timely basis, the Company's business, operating results and financial condition could be materially adversely affected.harm our revenues.
The Company reliesWe rely upon certain software that it licenseswe license from third-parties,third parties, including software that is integrated with the Company'sour internally developed software and used in itsour products to perform key functions. There can be no assurance that these third-party software licenses will continue to be available to the Company on commercially reasonable terms, if at all. The loss of or inability to maintain any such software licenses could result in shipment delays or reductions until equivalent software could be developed, identified, licensed and integrated such delays would materially adversely affect the Company'sour business, operating results and financial condition.
We have invested substantial resources in developing our products and our brand, and our operating results would suffer if we were subject to a protracted infringement claim or one with a significant damage award.
Product Liability
AlthoughSubstantial litigation regarding intellectual property rights and brand names exists in our industry. We expect that software product developers increasingly will be subject to infringement claims as the Company's licensenumber of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps. We are not aware that any of our products infringe any proprietary rights of third parties. However, third parties, some with far greater financial resources than us, may claim infringement by our products of their intellectual property rights. Any such claims, with or without merit, could:
If we are required to enter into royalty or licensing agreements with its customers typically contain provisions designed to limit the Company's exposure to potential product liability claims, it is possible that such limitation of liability provisionsresolve an infringement claim, we may not be effective asable to enter into these agreements on terms acceptable to us, if at all. A successful claim of product infringement against us or our failure or inability to either license the infringed or similar technology or develop alternative technology on a resulttimely basis, may harm our operating results, and our financial condition could be harmed because we would not be able to sell the impacted product without redeveloping it or incurring significant additional expenses.
Risks Related to the Market for Our Common Stock and Our Business
We experience volatility in our share price, and investors may not be able to resell shares of existingour common stock at or above the purchase price.
The market price of our common stock has historically varied from time to time. An investor in shares of our common stock may not be able to resell those shares at or above the price paid. Our common stock price may fluctuate significantly in the future lawsdue to:
In addition, The CompanyNasdaq National Market has not experienced any material product liability claimsextreme volatility in recent years that has often been unrelated to date; however, the saleperformance of particular companies. Future market fluctuations may cause our stock price to fall regardless of our performance.
Provisions of our charter documents, Delaware law and support of the Company's productsour rights plan may entail the risks of such claims,have anti-takeover effects that could discourage or prevent a change in control, which may suppress our stock price or cause it to decline.
Provisions of our certificate of incorporation and bylaws and a rights plan adopted by our board of directors may discourage, delay or prevent a merger or acquisition that our common stockholders may consider favorable. Provisions of our Certificate of Incorporation and bylaws:
The rights granted pursuant to the rights agreement entered into as part of our rights plan have anti-takeover effects. The rights may cause substantial dilution to a person or group that attempts to acquire ActionPoint on terms that our board of directors determines are not in lightthe best interests of our stockholders. Certain provisions of Delaware law also may discourage, delay or prevent someone from acquiring or merging with us, which may cause the usemarket price of the Company's products in business-critical applications.our common stock to decline.
Item 3- Quantitative and Qualitative Disclosures About Market Risk.
The Company's exposure to market risk for changes in interest rates relates primarily to its investment portfolio. The Company maintains an investment policy which is intended to ensure the safety and preservation of its invested funds by limiting default risk, market risk and reinvestment risk. The Company does not currently use, nor has it historically used, derivative financial instruments to manage or reduce market risk. The Company mitigates default risk by investing in high credit quality securities such as debt instruments of the United States government and its agencies and high quality corporate issuers, as well as money market funds. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity and maintains a prudent amount of diversification. As of September 30, 2000,March 31, 2001, the Company had $2.9$3.9 million of cash and cash equivalents.
The Company does not currently transact any significant portion of its business in functional currencies other than the United States dollar.
To the extent that it continues to transact its business using the United State dollar as its functional currency, the Company does not believe that the fluctuations in foreign currency exchange rates will have a material adverse effect on the Company's results of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Statement of Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K
Not Applicable
ACTIONPOINT, INC.
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.
| ACTIONPOINT, INC. |
| (Registrant) |
| By: | /s/ KIMRA HAWLEY |
| Kimra Hawley | |
| President, Chief Executive Officer and Director | |
| (Principal Executive Officer) |
| By: | /s/ JOHN FINEGAN |
| John Finegan | |
| Chief Financial Officer and Secretary | |
| (Principal Financial and Accounting Officer) |
ACTIONPOINT, INC.
INDEX TO EXHIBITS