Delaware
|
93-1051328
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer
Identification
Number)
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
PART I.
FINANCIAL INFORMATION
|
Page No.
|
|
|
|
|
Item 1.
|
3
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
Item 2.
|
23
|
|
|
|
|
Item 3.
|
39
|
|
|
|
|
Item 4.
|
40
|
|
|
||
PART II.
OTHER INFORMATION
|
||
|
|
|
Item 1.
|
42
|
|
|
|
|
Item 1A.
|
44
|
|
|
|
|
Item 6.
|
53
|
|
|
|
|
|
53
|
|
|
|
|
December
31,
2006
|
September
30,
2006
|
|
|||
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
||||
Current
assets:
|
|
|
|
|||||
Cash
and cash equivalents
|
|
$
|
47,386
|
$
|
45,278
|
|||
Restricted
cash
|
|
|
162
|
|
185
|
|||
Accounts
receivable, net, including $44 and $142 due from related parties
at
December 31, 2006 and September 30, 2006,
respectively
|
|
|
40,835
|
|
19,025
|
|||
Prepaid
expenses and other current assets
|
|
|
8,663
|
|
5,210
|
|||
Total
current assets
|
|
|
97,046
|
|
69,698
|
|||
Restricted
cash—long-term
|
|
|
440
|
|
334
|
|||
Property
and equipment, net
|
|
|
2,885
|
|
2,630
|
|||
Goodwill
|
|
|
32,044
|
|
32,044
|
|||
Intangible
assets, net
|
|
|
3,634
|
|
3,937
|
|||
Other
assets
|
|
|
3,451
|
|
2,860
|
|||
Total
assets
|
|
$
|
139,500
|
$
|
111,503
|
|||
|
|
|
|
|
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|||||
Current
liabilities:
|
|
|
|
|||||
Accounts
payable, including $162 and $132 due to related parties at December
31,
2006 and September 30, 2006, respectively`
|
|
$
|
5,436
|
$
|
7,665
|
|||
Accrued
expenses
|
|
|
20,762
|
|
15,706
|
|||
Deferred
revenue, including related party balances of $50 and $112 at December
31,
2006 and September 30, 2006, respectively
|
|
|
45,131
|
|
23,909
|
|||
Current
portion of capital lease obligations
|
|
|
40
|
|
95
|
|||
Total
current liabilities
|
|
|
71,369
|
|
47,375
|
|||
Deferred
revenue—long-term
|
|
|
16,385
|
|
5,596
|
|||
Restructuring
costs, net of current portion
|
|
|
3,409
|
|
1,239
|
|||
Other
long-term liabilities
|
|
|
289
|
|
68
|
|||
Total
liabilities
|
|
|
91,452
|
|
54,278
|
|||
Commitments
and contingencies (Notes 6, 7 and 8)
|
|
|
|
|
||||
|
|
|
|
|||||
Stockholders’
equity:
|
|
|
|
|
||||
Preferred
stock, $0.001 par value; 51,000 shares authorized; none issued and
outstanding at December 31, 2006 and September 30,
2006
|
|
|
—
|
|
—
|
|||
Common
stock, $0.001 par value; 300,000 shares authorized; 79,842 and 80,075
shares issued and outstanding at December 31, 2006 and September 30,
2006, respectively
|
|
|
80
|
|
80
|
|||
Additional
paid-in capital
|
|
|
287,512
|
|
286,392
|
|||
Accumulated
deficit
|
|
|
(243,692
|
)
|
|
(232,943
|
)
|
|
Accumulated
other comprehensive income
|
|
|
4,148
|
|
3,696
|
|||
Total
stockholders’ equity
|
|
|
48,048
|
57,225
|
||||
Total
liabilities and stockholders’ equity
|
|
$
|
139,500
|
$
|
111,503
|
|
|
Three Months Ended December31,
|
||||||
|
|
|
2006
|
|
2005
|
|||
|
|
|
(restated)
(1)
|
|||||
Revenues:
|
|
|
|
|||||
License
|
|
$
|
7,162
|
$
|
9,126
|
|||
Service,
including related party items aggregating $144 and $65 for the three
months ended December 31, 2006 and 2005, respectively.
|
|
|
15,777
|
|
13,432
|
|||
Total
revenue
|
|
|
22,939
|
|
22,558
|
|||
Cost
of revenues:
|
|
|
|
|||||
License
|
|
|
454
|
|
443
|
|||
Service
including related party items aggregating $177 and nil for the three
months ended December 31, 2006 and 2005, respectively
|
|
|
7,466
|
|
6,385
|
|||
Amortization
of intangible assets
|
|
|
303
|
|
303
|
|||
Total
cost of revenue
|
|
|
8,223
|
|
7,131
|
|||
Gross
profit
|
|
|
14,716
|
|
15,427
|
|||
Operating
expenses:
|
|
|
|
|||||
Sales
and marketing
|
|
|
7,264
|
|
8,140
|
|||
Research
and development
|
|
|
6,296
|
|
4,517
|
|||
General
and administrative
|
5,611
|
4,719
|
||||||
Restructuring
expense
|
|
|
6,472
|
|
—
|
|||
Total
operating expense
|
|
|
25,643
|
|
17,376
|
|||
Loss
from operations
|
|
|
(10,927
|
)
|
|
(1,949
|
)
|
|
Interest
income, net
|
|
|
304
|
|
199
|
|||
Other
income (expense), net
|
|
|
(15
|
)
|
|
118
|
||
Loss
before income taxes
|
|
|
(10,638
|
)
|
|
(1,632
|
)
|
|
Provision
for income taxes
|
|
|
111
|
|
121
|
|||
Net
loss
|
|
$
|
(10,749
|
)
|
$
|
(1,753
|
)
|
|
Other
comprehensive loss:
|
|
|
|
|||||
Foreign
currency translation gain (loss)
|
|
|
452
|
|
(293
|
)
|
||
Comprehensive
loss
|
|
$
|
(10,297
|
)
|
$
|
(2,046
|
)
|
|
Net
loss per share— basic and diluted
|
|
$
|
(0.14
|
)
|
$
|
(0.02
|
)
|
|
Weighted
average shares used in computing basic and diluted loss per
share
|
|
|
79,312
|
|
76,824
|
Three
Months Ended December 31,
|
||||||||
|
|
|
2006
|
|
2005
|
|
||
|
|
|
|
(restated)
(1)
|
|
|||
Cash
flows from operating activities:
|
|
|
|
|
||||
Net
loss
|
|
$
|
(10,749
|
)
|
$
|
(1,753
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|||||
Depreciation
and amortization
|
|
|
350
|
|
281
|
|||
Amortization
of intangibles and capitalized software
|
|
|
528
|
|
528
|
|||
Non-cash
stock-based compensation expense
|
|
|
976
|
|
1,100
|
|||
Provision
(benefit) for doubtful accounts and sales returns
|
|
|
111
|
|
(25
|
)
|
||
Loss
on disposal of assets
|
|
|
489
|
|
—
|
|||
Other
non-cash charges
|
|
|
445
|
|
—
|
|||
Changes
in assets and liabilities:
|
|
|
|
|||||
Accounts
receivable
|
|
|
(22,698
|
)
|
|
(376
|
)
|
|
Prepaid
expenses and other current assets
|
|
|
(3,497
|
)
|
|
(1,255
|
)
|
|
Other
assets
|
|
|
(263
|
)
|
|
(57
|
)
|
|
Accounts
payable
|
|
|
(2,298
|
)
|
|
(963
|
)
|
|
Accrued
expenses
|
|
|
7,273
|
|
2,494
|
|||
Deferred
revenue
|
|
|
31,727
|
|
1,532
|
|||
Net
cash provided by operating activities
|
|
|
2,394
|
|
1,506
|
|||
Cash
flows from investing activities:
|
|
|
|
|||||
Property
and equipment purchases
|
|
|
(1,058
|
)
|
|
(134
|
)
|
|
Proceeds
from release of (increase in) restricted cash
|
|
|
(81
|
)
|
|
1,485
|
||
Net
cash provided by (used for) investing activities
|
|
|
(1,139
|
)
|
|
1,351
|
||
Cash
flows from financing activities:
|
|
|
|
|||||
Proceeds
from exercise of stock options
|
|
|
221
|
|
528
|
|||
Payment
on capital leases
|
|
|
(56
|
)
|
|
(52
|
)
|
|
Net
cash provided by financing activities
|
|
|
165
|
|
476
|
|||
Effect
of exchange rate changes
|
|
|
688
|
|
(413
|
)
|
||
Net
increase in cash and cash equivalents
|
|
|
2,108
|
|
2,920
|
|||
Cash
and cash equivalents at beginning of period
|
|
|
45,278
|
|
38,546
|
|||
Cash
and cash equivalents at end of period
|
|
$
|
47,386
|
$
|
41,466
|
Three
Months Ended December 31,
|
||||||||||
2006
|
2005
|
|||||||||
Citicorp
Credit Services, Inc.
|
|
13
|
%
|
|
*
|
|
||||
International
Business Machines (“IBM”)
|
|
11
|
%
|
|
*
|
|
||||
Lloyds
TSB Bank plc
|
|
10
|
%
|
|
*
|
|||||
ING
Canada, Inc.
|
|
*
|
|
|
10
|
%
|
||||
Three Months Ended December
31,
|
|||||||||
2006
|
2005
|
|
|||||||
|
|
|
(restated)(1)
|
|
|||||
Net
loss available to common stockholders
|
$
|
(10,749
|
)
|
$
|
(1,753
|
)
|
|||
Weighted
average common stock outstanding
|
|
79,705
|
|
78,561
|
|||||
Common
stock subject to repurchase
|
|
(393
|
)
|
|
(1,737
|
)
|
|||
Denominator
for basic and diluted calculation
|
|
79,312
|
|
76,824
|
|||||
Net
loss per share - basic and diluted
|
$
|
(0.14
|
)
|
$
|
(0.02
|
)
|
|
December
31,
2006
|
December
31,
2005
|
|
||||||
Warrants
outstanding
|
|
—
|
|
|
1,662
|
|
|||
Employee
stock options
|
|
8,860
|
|
8,240
|
|
||||
Restricted
stock
|
|
393
|
|
1,737
|
|||||
|
9,253
|
|
11,639
|
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Accounts
receivable, net:
|
|
|
|
|
|||||
Accounts
receivable
|
$
|
41,029
|
|
$
|
19,108
|
|
|||
Less:
allowance for doubtful accounts
|
|
(194
|
)
|
|
(83
|
)
|
|||
|
$
|
40,835
|
|
$
|
19,025
|
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Prepaid
expense and other current assets:
|
|
|
|
|
|||||
Prepaid
commissions and royalties
|
$
|
6,142
|
|
$
|
3,265
|
|
|||
Other
prepaid expenses and current assets
|
|
2,521
|
|
1,945
|
|||||
|
$
|
8,663
|
|
$
|
5,210
|
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Property
and equipment, net:
|
|
|
|
|
|||||
Computer
hardware (useful lives of 3 years)
|
$
|
3,675
|
|
$
|
3,313
|
|
|||
Purchased
internal-use software (useful lives of 3 years)
|
|
2,180
|
|
|
2,254
|
||||
Furniture
and equipment (useful lives of 3 to 7 years)
|
|
841
|
|
|
1,043
|
||||
Computer
equipment and software under capital leases (useful lives of
3 years)
|
|
549
|
|
|
549
|
||||
Leasehold
improvements (shorter of 7 years or the term of the lease)
|
|
2,961
|
|
|
2,729
|
||||
10,206
|
|
|
9,888
|
|
|||||
Accumulated
depreciation and amortization
|
(7,321
|
)
|
|
(7,258
|
)
|
||||
|
$
|
2,885
|
|
$
|
2,630
|
|
December
31, 2006
|
September 30,
2006
|
|||||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|
|||||||||||||||
Intangible
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Developed
technologies
|
|
$
|
6,904
|
|
$
|
(4,197
|
)
|
$
|
2,707
|
|
$
|
6,904
|
|
$
|
(3,972
|
)
|
$
|
2,932
|
|
|||||
Customer
list and trade-names
|
2,732
|
(1,805
|
)
|
927
|
2,732
|
(1,727
|
)
|
1,005
|
||||||||||||||||
|
|
$
|
9,636
|
|
$
|
(6,002
|
)
|
$
|
3,634
|
|
$
|
9,636
|
|
$
|
(5,699
|
)
|
$
|
3,937
|
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Other
assets:
|
|
|
|
|
|||||
Long-term
accounts receivable
|
$
|
985
|
|
$
|
—
|
|
|||
Other
assets
|
|
2,466
|
|
2,860
|
|||||
|
$
|
3,451
|
|
$
|
2,860
|
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Accrued
expenses:
|
|
|
|
|
|||||
Accrued
payroll, payroll taxes and related expenses
|
$
|
10,618
|
|
$
|
7,627
|
||||
Accrued
restructuring expenses, current portion (Note 4)
|
|
2,613
|
|
655
|
|||||
Accrued
third party consulting fees
|
|
1,096
|
|
1,491
|
|||||
Accrued
income, sales and other taxes
|
|
4,143
|
|
2,545
|
|||||
Accrued
professional fees
|
|
1,012
|
|
1,630
|
|||||
Other
accrued liabilities
|
1,280
|
|
1,758
|
||||||
|
$
|
20,762
|
$
|
15,706
|
|
|
Current
|
Non-Current
|
Total
|
|
|||||
Severance
and termination
|
$
|
673
|
|
$
|
—
|
|
$
|
673
|
|
|
Excess
facilities
|
|
1,940
|
|
|
3,409
|
|
|
5,349
|
|
|
Total
|
$
|
2,613
|
|
$
|
3,409
|
|
$
|
6,022
|
|
Fiscal
Year Ended September 30,
|
Total
Future
Minimum
Payments
|
|
|
||||
2007
(remaining nine months)
|
$
|
1,765
|
|
|
|||
2008
|
|
1,101
|
|
|
|||
2009
|
|
922
|
|
|
|||
2010
|
|
1,411
|
|
|
|||
2011
|
|
150
|
|
|
|||
Total
|
$
|
5,349
|
|
|
|
Severance
and Benefits
|
|
Excess
Facilities
|
Total
|
|||||||||
Reserve
balance as of September 30, 2006
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
||||
Total
charges
|
|
1,710
|
|
4,762
|
|
6,472
|
|||||||
Non-cash
|
|
(6
|
)
|
|
(1,096
|
)
|
|
(1,102
|
)
|
||||
Cash
paid
|
|
(1,064
|
)
|
|
—
|
|
(1,064
|
)
|
|||||
Reserve
balance as of December 31, 2006
|
$
|
640
|
|
$
|
3,666
|
|
$
|
4,306
|
|
|
|
Severance
and Benefits
|
|
||
Reserve
balance as of September 30, 2006
|
$
|
32
|
|||
Non-cash
|
|
1
|
|||
Cash
paid
|
|
—
|
|||
Reserve
balance as of December 31, 2006
|
$
|
33
|
|
|
Facilities
|
|
||
Reserve
balance as of September 30, 2006
|
$
|
1,862
|
|
||
Cash
paid
|
|
(179
|
)
|
||
Reserve
balance as of December 31, 2006
|
$
|
1,683
|
|
Capital
Leases
|
Operating
Leases
|
|
|||||||
Fiscal
year ended September 30:
|
|
|
|
|
|||||
2007
(remaining nine months)
|
$
|
40
|
$
|
3,664
|
|||||
2008
|
|
—
|
4,065
|
||||||
2009
|
|
—
|
3,324
|
||||||
2010
|
|
—
|
3,096
|
||||||
2011
|
|
—
|
1,535
|
||||||
Thereafter
|
—
|
1,209
|
|||||||
Total
minimum payments
|
$
|
40
|
$
|
16,893
|
|||||
Less:
amount representing interest
|
|
—
|
|||||||
Present
value of minimum lease payments
|
|
40
|
|||||||
Less:
current portion of capital lease obligations
|
|
(40
|
)
|
||||||
Capital
lease obligations, non-current
|
$
|
—
|
Options
Outstanding
|
||||||||||||
Shares
Available
for Grant
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
|||||||
Balance
at September 30, 2006
|
|
6,553
|
|
|
9,219
|
|
$
|
2.53
|
|
|||
Authorized
|
|
413
|
|
|
—
|
|
|
—
|
|
|||
Options
granted
|
|
(237
|
)
|
|
237
|
|
|
2.98
|
|
|||
Options
exercised
|
|
—
|
|
|
(109
|
)
|
|
1.13
|
|
|||
Cancellation
of unvested restricted stock
|
|
332
|
|
|
—
|
|
|
—
|
|
|||
Options
cancelled
|
|
487
|
|
|
(487
|
)
|
|
3.27
|
|
|||
Balance
at December 31, 2006
|
|
7,548
|
|
|
8,860
|
|
$
|
2.52
|
|
Options
Outstanding and Exercisable
|
Options
Vested
|
|||||||||||||||||||||
Range
of
Exercise
Prices
|
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
Closing
Price
at
12/31/2006
of
$3.31
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
Closing
Price
at
12/31/2006
of
$3.31
|
|
|||||||||||||
$0.14-0.88
|
|
|
970
|
|
|
3.13
|
|
$
|
0.66
|
|
$
|
2,569
|
|
|
967
|
|
$
|
0.66
|
|
$
|
2,564
|
|
0.90-1.00
|
|
|
944
|
|
|
6.29
|
|
|
0.99
|
|
|
2,191
|
|
|
895
|
|
|
0.99
|
|
|
2,078
|
|
1.19-1.70
|
|
|
1,111
|
|
|
7.00
|
|
|
1.59
|
|
|
1,916
|
|
|
842
|
|
|
1.57
|
|
|
1,481
|
|
1.80-2.59
|
|
|
888
|
|
|
6.46
|
|
|
2.14
|
|
|
1,038
|
|
|
643
|
|
|
2.06
|
|
|
802
|
|
2.60-2.96
|
|
|
976
|
|
|
7.74
|
|
|
2.73
|
|
|
566
|
|
|
529
|
|
|
2.70
|
|
|
321
|
|
2.97-3.01
|
|
|
1,032
|
|
|
8.35
|
|
|
2.99
|
|
|
328
|
|
|
389
|
|
|
2.99
|
|
|
126
|
|
3.03-3.19
|
1,226
|
9.00
|
3.17
|
170
|
270
|
3.17
|
37
|
|||||||||||||||
3.22-4.17
|
1,281
|
7.91
|
3.81
|
6
|
723
|
4.08
|
2
|
|||||||||||||||
4.21-18.00
|
|
|
432
|
|
|
5.82
|
|
|
5.91
|
|
|
—
|
|
|
396
|
|
|
6.02
|
|
|
—
|
|
$0.14-18.00
|
|
|
8,860
|
|
|
7.04
|
|
$
|
2.52
|
|
$
|
8,784
|
|
|
5,654
|
|
$
|
2.29
|
|
$
|
7,411
|
|
Three Months Ended December
31,
|
|||||||||
2006
(under SFAS
123(R))
|
2005
(under SFAS
123(R))
|
|
|||||||
|
|
|
(restated)(1)
|
|
|||||
Stock-based
compensation expense:
|
|
||||||||
Cost
of revenues
|
$
|
107
|
$
|
26
|
|||||
Sales
and marketing
|
|
329
|
|
722
|
|||||
Research
and development
|
|
93
|
|
59
|
|||||
General
and administrative
|
|
447
|
|
293
|
|||||
|
Total
stock-based compensation expense
|
$
|
976
|
$
|
1,100
|
Three Months
Ended December
31,
|
|||||||||
|
|
2006
|
2005
|
||||||
Expected
lives in years
|
|
3.6
|
|
|
3.9
|
|
|||
Risk
free interest rates
|
|
4.6
|
%
|
|
4.3
|
%
|
|||
Volatility
|
|
71
|
%
|
|
87
|
%
|
|||
Dividend
yield
|
|
0
|
%
|
|
0
|
%
|
Three Months Ended December
31,
|
|||||||
|
2006
|
2005
|
|||||
License
revenue:
|
|
|
|
|
|||
Enterprise
solutions
|
$
|
3,545
|
|
$
|
4,357
|
|
|
Marketing
solutions
|
|
989
|
|
|
3,519
|
|
|
Decision
management solutions
|
|
2,628
|
|
|
1,250
|
|
|
Total
|
$
|
7,162
|
|
$
|
9,126
|
|
Three Months Ended December
31,
|
|||||||
|
2006
|
2005
|
|||||
Service
revenue:
|
|
|
|
|
|||
Enterprise
solutions
|
$
|
12,199
|
|
$
|
9,823
|
|
|
Marketing
solutions
|
|
2,605
|
|
|
3,093
|
|
|
Decision
management solutions
|
|
973
|
|
|
516
|
|
|
Total
|
$
|
15,777
|
|
$
|
13,432
|
|
Three Months Ended December
31,
|
|||||||
|
2006
|
2005
|
|||||
North
America
|
$
|
13,221
|
|
$
|
12,849
|
|
|
Europe
|
|
9,718
|
|
|
9,709
|
|
|
Total
|
$
|
22,939
|
|
$
|
22,558
|
|
December
31,
2006
|
September
30,
2006
|
||||||
North
America
|
$
|
1,790
|
|
$
|
1,844
|
|
|
Europe
|
|
1,095
|
|
|
786
|
|
|
|
Total
|
$
|
2,885
|
|
$
|
2,630
|
|
Three
Months Ended December 31,
|
|||||||||||||||||
2006
|
2005
|
||||||||||||||||
(restated)(1)
|
|||||||||||||||||
Statements
of Operations Data:
|
|||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||
License
|
|
$
|
7,162
|
31
|
%
|
$
|
9,126
|
40
|
%
|
||||||||
Service
|
|
|
15,777
|
69
|
|
|
13,432
|
60
|
|
||||||||
Total
revenue
|
|
|
22,939
|
100
|
|
|
22,558
|
100
|
|
||||||||
Cost
of revenue:
|
|
|
|
|
|
||||||||||||
License
|
|
|
454
|
2
|
|
|
443
|
2
|
|
||||||||
Service
|
|
|
7,466
|
33
|
|
|
6,385
|
28
|
|
||||||||
Amortization
of intangible assets
|
|
|
303
|
1
|
|
|
303
|
1
|
|
||||||||
Total
cost of revenue
|
|
|
8,223
|
36
|
|
|
7,131
|
31
|
|
||||||||
Gross
profit
|
|
|
14,716
|
64
|
|
|
15,427
|
69
|
|
||||||||
Operating
expenses:
|
|
|
|
|
|
||||||||||||
Sales
and marketing
|
|
|
7,264
|
32
|
|
|
8,140
|
36
|
|
||||||||
Research
and development
|
|
|
6,296
|
27
|
|
|
4,517
|
20
|
|
||||||||
General
and administrative
|
5,611
|
25
|
4,719
|
21
|
|||||||||||||
Restructuring
expense
|
|
|
6,472
|
28
|
|
|
—
|
—
|
|
||||||||
Total
operating expense
|
|
|
25,643
|
112
|
|
|
17,376
|
77
|
|
||||||||
Loss
from operations
|
|
|
(10,927
|
)
|
(48
|
)
|
|
(1,949
|
)
|
(8
|
)
|
||||||
Interest
income, net
|
|
|
304
|
1
|
|
|
199
|
1
|
|
||||||||
Other
income (expense), net
|
|
|
(15
|
)
|
(—
|
)
|
|
118
|
—
|
|
|||||||
Loss
before income taxes
|
|
|
(10,638
|
)
|
(47
|
)
|
|
(1,632
|
)
|
(7
|
)
|
||||||
Provision
for income taxes
|
|
|
111
|
—
|
|
|
121
|
1
|
|
||||||||
Net
loss
|
|
$
|
(10,749
|
)
|
(47
|
)%
|
$
|
(1,753
|
)
|
(8
|
)%
|
Three
Months Ended December 31,
|
|||||||||||||||
License:
|
|
2006
|
2005
|
Change
|
%
|
||||||||||
Enterprise
solutions
|
|
$
|
3,545
|
|
$
|
4,357
|
|
$
|
(812
|
)
|
(19
|
)%
|
|||
Marketing
solutions
|
|
|
989
|
|
|
3,519
|
|
|
(2,530
|
)
|
(72
|
)
|
|||
Decision
management solutions
|
|
|
2,628
|
|
|
1,250
|
|
|
1,378
|
|
110
|
||||
Total
license revenue
|
|
$
|
7,162
|
|
$
|
9,126
|
|
$
|
(1,964
|
)
|
(22
|
)%
|
Three
Months Ended December 31,
|
|||||||||||||||
Service:
|
|
2006
|
2005
|
Change
|
%
|
||||||||||
Enterprise
solutions
|
|
$
|
12,199
|
|
$
|
9,823
|
|
$
|
2,376
|
24
|
%
|
||||
Marketing
solutions
|
|
|
2,605
|
|
|
3,093
|
|
|
(488
|
)
|
16
|
|
|||
Decision
management solutions
|
|
|
973
|
|
|
516
|
|
|
457
|
|
89
|
|
|||
Total
service revenue
|
|
$
|
15,777
|
|
$
|
13,432
|
|
$
|
2,345
|
|
17
|
%
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
Cost
of license revenue
|
|
$
|
454
|
|
$
|
443
|
|
$
|
11
|
|
2
|
%
|
||||
Percentage
of total revenue
|
|
|
2
|
%
|
|
2
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
(restated)(1)
|
||||||||||||||||
Cost
of service revenue
|
|
$
|
7,466
|
|
$
|
6,385
|
|
$
|
1,081
|
|
17
|
%
|
||||
Percentage
of total revenue
|
|
|
33
|
%
|
|
28
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
Amortization
of intangible assets
|
|
$
|
303
|
|
$
|
303
|
|
$
|
—
|
|
—
|
%
|
||||
Percentage
of total revenues
|
|
|
1
|
%
|
|
1
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
(restated)(1)
|
||||||||||||||||
Sales
and marketing expense
|
|
$
|
7,264
|
|
$
|
8,140
|
|
$
|
(876
|
)
|
(11
|
)%
|
||||
Percentage
of total revenues
|
|
|
32
|
%
|
|
36
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
(restated)(1)
|
||||||||||||||||
Research
and development expense
|
|
$
|
6,296
|
|
$
|
4,517
|
|
$
|
1,779
|
|
39
|
%
|
||||
Percentage
of total revenues
|
|
|
27
|
%
|
|
20
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
(restated)(1)
|
||||||||||||||||
General
and administrative expense
|
|
$
|
5,611
|
|
$
|
4,719
|
|
$
|
892
|
|
19
|
%
|
||||
Percentage
of total revenues
|
|
|
25
|
%
|
|
21
|
%
|
|
|
|
|
Three Months Ended December
31,
|
|||||||||
2006
|
2005
|
|
|||||||
|
|
|
(restated)(1)
|
|
|||||
Cost
of revenues - service
|
$
|
107
|
$
|
26
|
|||||
Sales
and marketing
|
|
329
|
|
722
|
|||||
Research
and development
|
|
93
|
|
59
|
|||||
General
and administrative
|
|
447
|
|
293
|
|||||
Total
operating expense
|
|
869
|
1,074
|
||||||
|
Total
stock-based compensation expense
|
$
|
976
|
$
|
1,100
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
Interest
income, net
|
|
$
|
304
|
|
$
|
199
|
|
$
|
105
|
|
53
|
%
|
||||
Percentage
of total revenues
|
|
|
1
|
%
|
|
1
|
%
|
|
|
|
|
Three
Months Ended December 31,
|
||||||||||||||||
|
2006
|
2005
|
Change
|
%
|
||||||||||||
Other
income (expense), net
|
|
$
|
(15
|
)
|
$
|
118
|
|
$
|
(133
|
)
|
(113
|
)%
|
||||
Percentage
of total revenues
|
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
Capital
Leases
|
Operating
Leases
|
|
|||||||
Fiscal
year ended September 30:
|
|
|
|
|
|||||
2007
(remaining nine months)
|
$
|
40
|
$
|
3,664
|
|||||
2008
|
|
—
|
4,065
|
||||||
2009
|
|
—
|
3,324
|
||||||
2010
|
|
—
|
3,096
|
||||||
2011
|
|
—
|
1,535
|
||||||
Thereafter
|
—
|
1,209
|
|||||||
Total
minimum payments
|
$
|
40
|
$
|
16,893
|
December
31,
2006
|
September
30,
2006
|
|
|||||||
Restricted
cash in short-term investments
|
$
|
162
|
|
$
|
162
|
|
|||
Average
interest rates
|
|
2.96
|
%
|
· |
The
Company has hired a dedicated Stock Plan Administrator with nine
years of
experience in managing stock option programs and who is a Certified
Equity
Professional. The Company has given first level responsibility for
option
administration to this Stock Plan Administrator who reports to the
Vice
President and Corporate Treasurer.
|
· |
As
a further safeguard against selective dating or granting of stock
options,
the Board, at its August 2, 2006 meeting, directed that (i) all future
stock option grants to officers had to be granted only on the third
trading day after the quarterly release of earnings and (ii) that
all
options to non-officers had to be granted effective on the first
trading
day of a month where the authorization for the grant took place on
or
before that date.
|
· |
The
Compensation Committee is provided a report on the same date that
the
Chief Executive Officer, pursuant to the delegated authority, grants
to
any employee any equity awards, which report includes the optionee’s name,
size of award and exercise price.
|
· |
Steps
have been taken to ensure that grant authorizations be documented
and
retained.
|
· |
Limitations
have been placed on the use of unanimous written consents for option
grants.
|
· |
Procedures
have been improved to ensure that option grants conform to the
requirements of the applicable equity
plans.
|
· |
Training
will be provided for those involved in the process on accounting
issues.
|
· |
Mandatory
training covering the relevant issues will be provided for the sales
department staff.
|
· |
In
conjunction with the September 30, 2006 financial statements, upon
the
identification of the verbal agreement, updated written representations
were obtained from the sales staff relating to the complete communication
of details to the finance
department.
|
· |
The
professional services organization no longer reports to a sales executive,
but rather directly to the CEO.
|
· |
The
executive responsible for the professional services organization
is now
responsible for approving the terms of any professional services
provided
to customers.
|
•
|
Our
ability to integrate our products with multiple platforms and existing
or
legacy systems; and,
|
•
|
Our
ability to anticipate and support new standards, especially Internet
and
enterprise Java standards.
|
|
CHORDIANT
SOFTWARE, INC
|
|
|
|
|
|
|
|
By:
|
/s/
PETER S. NORMAN
|
|
|
|
Peter
S. Norman
Chief
Financial Officer and
Principal
Accounting Officer
|
|
|
|
|
Exhibit
Number
|
|
Description
of Document
|
3.1
|
Amended
and Restated Certificate of Incorporation of Chordiant Software,
Inc.
(filed as Exhibit 3.1 to Chordiant’s Registration Statement on Form S-1
(No. 333-92187) filed on December 6, 1999 and incorporated herein
by
reference).
|
|
3.2
|
Amended
and Restated Bylaws of Chordiant Software, Inc. (filed as exhibit
3.2 to
Chordiant’s Form 8-K dated February 1, 2006 and incorporated herein by
reference)
|
|
10.1
|
Amendment
Number Two dated October 12, 2006 to the Master Agreement for
Subcontracted Services dated June 14, 2006 by and between Chordiant
Software, Inc. and International Business Machines Corporation (filed
as
exhibit 10.46 to Chordiant’s Annual Report on Form 10-K filed on February
9, 2007 and incorporated herein by reference).
|
|
10.2*
|
Separation
Agreement dated November 30, 2006, by and between Chordiant Software,
Inc.
and Samuel Spadafora (filed as Exhibit 99.2 to Chordiant’s Current Report
on Form 8-K filed on November 30, 2006 and incorporated herein by
reference).
|
|
10.3+
|
License
Schedule #5 dated December 8, 2006 to the Master Software License
and
Support Agreement dated March 21, 2006 by and between Chordiant Software
and Citicorp Credit Services, Inc. (USA) (filed as exhibit 10.51
to
Chordiant’s Annual Report on Form 10-K filed on February 9, 2007 and
incorporated herein by reference).
|
|
10.4
|
Amendment
No. 1 dated December 8, 2006 to the Master Software License and Support
Agreement dated March 21, 2006 by and between Chordiant Software
and
Citicorp Credit Services, Inc. (USA) (filed as exhibit 10.52 to
Chordiant’s Annual Report on Form 10-K filed on February 9, 2007 and
incorporated herein by reference).
|
|
10.5
|
Order
Form Agreement dated December 19, 2006 by and between Chordiant Software
International GmbH and IBM Deustchland GmbH (filed as exhibit 10.53
to
Chordiant’s Annual Report on Form 10-K filed on February 9, 2007 and
incorporated herein by reference).
|
|
10.6
|
Software
License and Services Agreement dated December 19, 2006 by and between
Chordiant Software International GmbH and Deutsche Angestellten
Krankenkasse (filed as exhibit 10.54 to Chordiant’s Annual Report on Form
10-K filed on February 9, 2007 and incorporated herein by
reference).
|
|
|
||
31.1
|
Certification
required by Rule 13a-14(a) or Rule15d-14(a).
|
|
|
||
31.2
|
Certification
required by Rule 13a-14(a) or Rule15d-14(a).
|
|
|
||
32.1
|
Certification
required by Rule 13a-14(a) or Rule15d-14(a) and Section 1350 of Chapter
63
of Title 18 of the United States Code (18 U.S.C. 1350).
|
|