** **

###### **U.S.Securities and Exchange Commission**

 

**Washington, D.C. 20549**

 

### **FORM 10-QSB**

 

**ý        QUARTERLYREPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE  ACT OF 1934**

** **

# **For the quarterly period ended September 30, 2001**

** **

**OR**

 

**o        TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT**

 

**For thetransition period from _________to _________.**

 

**Commission File No. 000-29299**

 

**CorVu Corporation**

(Exact name of registrantas specified in its charter)

 

| **Minnesota**                                          |   | **41-1457090**      |
|--------------------------------------------------------|--------|---------------------|
| (State of  Incorporation)                              |   | (IRS Employer ID #) |
|                                                   |   |                |
| **3400 West 66th Street Edina,  Minnesota**            |   | **55435**           |
| (Address of Principal  Executive Offices)              |   | (zip code)          |
|                                                   |   |                |
| **952-944-7777**                                       |
| (Issuer’s Telephone  Number, Including Area Code) |

 

Check whether the issuer(1) filed all reports required to be filed by Sections 13 or 15(d) of theExchange Act during the past 12 months (or such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

Yes ý           No o

 

State the number ofshares outstanding of each of the issuer’s classes of common equity as of thelatest practicable date.

 

**Class:  Common Stock,par value $.01 per share**

**Outstanding shares as of November 14, 2001:  20,362,657**

 

** **

**CorVu Corporation**

# **Index to Form10-QSB**

 
| PART  I.   | FINANCIAL INFORMATION |
|------------|-----------------------|
|       |                  |   |
|       | Item  1.              | Consolidated Balance Sheets  at September 30, 2001(unaudited) and June 30,  2001 |
|       |                  |   |
|       |                  | Consolidated  Statements of Cash Flows (unaudited) for the three month periods ended  September 30, 2001 and 2000 |
|       |                  |   |
|       |                  | Consolidated  Statements of Operations (unaudited) for the three month periods ended  September 30, 2001 and 2000 |
|       |                  |   |
|       |                  | Notes  to Unaudited Consolidated Financial Statements |
|       |                  |   |
|       | Item  2.              | Management’s  Discussion and Analysis of Financial Condition  and Results of Operations |
|       |                  |   |
| PART  II.  | OTHER INFORMATION     |
|       |                  |   |
|       | Item 1.               | Legal Proceedings |
|       |                  |   |
|       | Item  2.              | Changes  in Securities and Use of Proceeds |
|       |                  |   |
|       | Item 3.               | Default 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 |
|       |                  |   |
| SIGNATURES |
|            |                       |  |  |  |  |  |

 

PART I

FINANCIAL INFORMATION

 

Item 1.    **Financial Statements**

** **

**CORVU CORPORATIONAND SUBSIDIARIES**

Consolidated Balance Sheets

September 30, 2001 (Unaudited) and June 30, 2001

 
|                                                                                                                            |   | **September 30,** |          | **June 30,** |          |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------------|--------------|---------------|
|                                                                                                                            |   | **2001**          |          | **2001**     | ** **    |
|                                                                                                                            |   | **(Unaudited)**   |          |         | ** **    |
| **Assets**                                                                                                                      |   |              |          |         |          |
| Current assets:                                                                                                                 |   |              |          |         |          |
| Cash and cash equivalents                                                                                                       |   | $                 | 25,956        |         | 77,409        |   |
| Trade accounts receivable, net of  allowance for doubtful accounts of $133,000 and $145,000, respectively                       |   | 1,479,886         |          | 2,668,802    |          |
| Prepaid expenses and other                                                                                                      |   | 137,202           |          | 145,403      |          |
|                                                                                                                            |   |              | ** **    |         | ** **    |
| Total current assets                                                                                                            |   | 1,643,044         |          | 2,891,614    |          |
| Furniture, fixtures and equipment, net                                                                                          |   | 112,404           |          | 105,073      |          |
|                                                                                                                            |   |              |          |         |          |
|                                                                                                                            |   | $                 | 1,755,448     |         | 2,996,687     |   |
| **Liabilities  and Stockholders’ Deficit**                                                                                 |   |              |          |         |          |
|                                                                                                                            |   |              | ** **    |         | ** **    |
| Current liabilities:                                                                                                            |   |              |          |         |          |
| Accounts payable                                                                                                                |   | $                 | 2,671,425     |         | 2,951,684     |   |
| Accrued compensation and related costs                                                                                          |   | 2,254,989         |          | 2,600,675    |          |
| Deferred revenue                                                                                                                |   | 2,064,454         |          | 2,120,172    |          |
| Accrued interest                                                                                                                |   | 25,749            |          | 23,663       |          |
| Other accrued expenses                                                                                                          |   | 543,410           |          | 741,816      |          |
| Note payable                                                                                                                    |   | 58,104            |          | 188,123      |          |
| Director advances                                                                                                               |   | 683,485           |          | 562,345      |          |
|                                                                                                                            |   |              |          |         |          |
| Total current liabilities                                                                                                       |   | 8,301,616         |          | 9,188,478    |          |
|                                                                                                                            |   |              |          |         |          |
| Stockholders’ deficit:                                                                                                     |   |              |          |         |          |
| Undesignated capital stock, 24,000,000  shares                                                                                  |   | —            |          | —       |          |
| Series A convertible preferred stock, par  value $10 per share; 1,000,000 shares authorized; 200 shares issued and  outstanding |   | 2,000             |     | 2,000        |     |
| Common stock, $0.01 par value; 75,000,000  shares authorized; 20,157,781 shares issued and outstanding                          |   | 201,522           |     | 201,522      |     |
| Additional paid-in capital                                                                                                      |   | 16,161,541        |          | 16,159,995   |          |
| Accumulated deficit                                                                                                             |   | (23,322,837       | )             | (22,641,345  | )             |
| Deferred compensation                                                                                                           |   | (10,000           | )             | (318,100     | )             |
| Accumulated other comprehensive income                                                                                          |   | 421,606           |          | 404,137      |          |
|                                                                                                                            |   |              |          |         |          |
| Total stockholders’ deficit                                                                                                |   | (6,546,168        | )             | (6,191,791   | )             |
|                                                                                                                            |   |              |          |         |          |
| Total liabilities and stockholders’  deficit                                                                               |   | $                 | 1,755,448     |         | 2,996,687     |   |

 

See accompanyingnotes to unaudited consolidated financial statements.

 

**CORVUCORPORATION AND SUBSIDIARIES**

 

Consolidated Statements of Cash Flows (unaudited)

 

Three Month Periods Ended September 30, 2001 and 2000

 
|                                                                         |   | **2001**  |     | **2000**  | ** ** |
|------------------------------------------------------------------------------|--------|-----------|----------|-----------|------------|
| Cash flows from operating activities:                                        |   |      |     |      |       |
| Net loss                                                                     |   | $         | (681,427 | )         | (2,281,242 | ) |
| Adjustments to reconcile net loss to net  cash used in operating activities: |   |      |     |      |       |
| Depreciation                                                                 |   | 12,727    |     | 12,210    |       |
| Warrants and stock options vested                                            |   | 309,646   |     | 404,950   |       |
| Changes in operating assets and  liabilities:                                |   |      |     |      |       |
| Trade accounts receivable, net                                               |   | 1,254,885 |     | 1,651,325 |       |
| Other current assets                                                         |   | 8,201     |     | (3,110    | )          |
| Accounts payable                                                             |   | (295,874  | )        | (86,624   | )          |
| Accrued compensation and related costs                                       |   | (364,867  | )        | 231,499   |       |
| Deferred revenue                                                             |   | (58,810   | )        | 152,901   |       |
| Accrued interest                                                             |   | 2,086     |     | 1,660     |       |
| Other accrued expenses                                                       |   | (209,415  | )        | (71,868   | )          |
|                                                                         |   |      |     |      |       |
| Net cash provided by (used in) operating  activities                         |   | (22,848   | )        | 11,701    |       |
|                                                                         |   |      |     |      |       |
| Cash flows from investing activities:                                        |   |      |     |      |       |
| Capital expenditures                                                         |   | (20,058   | )        | —    |       |
|                                                                         |   |      |     |      |       |
| Net cash used in investing activities                                        |   | (20,058   | )        | —    |       |
|                                                                         |   |      |     |      |       |
| Cash flows from financing activities:                                        |   |      |     |      |       |
| Proceeds from sale of common stock, net of  costs                            |   | —    |     | 7,500     |       |
| Repayment of note payable                                                    |   | (130,019  | )        | —    |       |
| Borrowings on director advances                                              |   | 156,800   |     | 54,680    |       |
| Repayment on director advances                                               |   | (35,660   | )        | (50,000   | )          |
|                                                                         |   |      |     |      |       |
| Net cash provided by (used in) financing  activities                         |   | (8,879    | )        | 12,180    |       |
|                                                                         |   |      |     |      |       |
| Effect of exchange rate changes on cash                                      |   | 332       |     | 472       |       |
|                                                                         |   |      |     |      |       |
| Net increase (decrease) in cash and cash  equivalents                        |   | (51,453   | )        | 24,353    |       |
|                                                                         |   |      |     |      |       |
| Cash and cash equivalents at beginning of  period                            |   | 77,409    |     | 46,745    |       |
|                                                                         |   |      |     |      |       |
| Cash and cash equivalents at end of period                                   |   | $         | 25,956   |      | 71,098     |   |

 

See accompanyingnotes to unaudited consolidated financial statements.

 

** **

**CORVUCORPORATION AND SUBSIDIARIES**

 

Consolidated Statements of Operations (unaudited)

 

For the Three Month Periods Ended September 30, 2001 and2000

 
|                                           |   | **2001**   |     | **2000**   | ** ** |
|------------------------------------------------|--------|------------|----------|------------|------------|
| Revenues:                                      |   |       |     |       |       |
| Software and license fees                      |   | $          | 930,124  |       | 909,463    |   |
| Maintenance, consulting, and other             |   | 1,269,116  |     | 1,537,766  |       |
|                                           |   |       |     |       |       |
| Total revenues                                 |   | 2,199,240  |     | 2,447,229  |       |
|                                           |   |       |     |       |       |
| Operating costs and expenses:                  |   |       |     |       |       |
| Cost of maintenance, consulting, and other     |   | 609,416    |     | 898,776    |       |
| Product development                            |   | 269,918    |     | 295,376    |       |
| Sales and marketing                            |   | 906,866    |     | 1,823,687  |       |
| General and administrative                     |   | 1,071,794  |     | 1,681,978  |       |
|                                           |   |       |     |       |       |
| Total operating costs and expenses             |   | 2,857,994  |     | 4,699,817  |       |
|                                           |   |       |     |       |       |
| Operating loss                                 |   | (658,754   | )        | (2,252,588 | )          |
|                                           |   |       |     |       |       |
| Interest expense                               |   | (22,673    | )        | (28,654    | )          |
|                                           |   |       |     |       |       |
| Net loss                                       |   | $          | (681,427 | )          | (2,281,242 | ) |
|                                           |   |       |     |       |       |
| Loss per common share—basic and diluted   |   | $          | (0.03    | )          | (0.12      | ) |
|                                           |   |       |     |       |       |
| Weighted average shares—basic and diluted |   | 20,157,781 |     | 19,515,621 |       |

 

See accompanyingnotes to unaudited consolidated financial statements.

 

**CorVuCorporation and Subsidiaries**

** **

**Notes to UnauditedConsolidated Financial Statements For the Three Month Periods EndedSeptember 30, 2001 and 2000**

** **

**(1)           Unaudited Financial Statements**

** **

**The accompanying unaudited consolidated financialstatements of CorVu Corporation and Subsidiaries have been prepared by theCompany in accordance with accounting principles generally accepted in theUnited States of America for interim financial information, pursuant to therules and regulations of the Securities and Exchange Commission. Pursuant tosuch rules and regulations, certain financial information and footnotedisclosures normally included in the financial statements have been condensedor omitted. The results for the periods indicated are unaudited, but reflectall adjustments (consisting only of normal recurring adjustments) whichmanagement considers necessary for a fair presentation of operating results.**

** **

**(2)           Summary of Significant AccountingPolicies**

** **

***(a)   Revenue Recognition***

 

Software licenserevenue is recognized when all of the following criteria have been met:  there is an executed license agreement,software has been delivered to the customer, the license fee is fixed andpayable within twelve months, collection is deemed probable and product returnsare reasonably estimable. Revenues related to multiple element arrangements areallocated to each element of the arrangement based on the fair values ofelements such as license fees, maintenance, and professional services. Fairvalue is determined based on vendor specific objective evidence. Maintenancerevenues are recognized ratably over the term of the maintenance contract,typically 12 to 36 months. Consulting and other revenues are recognized when servicesare performed.

 

***Deferred revenue represents payment received or amountsbilled in advance of services to be performed. Billing occurs within 30 days ofscheduled performance of services.***

 

***(b)   Net Loss per Common Share***

 

Basic loss percommon share is computed by dividing net loss by the weighted average number ofcommon shares outstanding during the period. Diluted loss per common share iscomputed by dividing net loss by the weighted average number of common sharesoutstanding during the period assuming the exercise of dilutive stock optionsand warrants. The dilutive effect of stock options and warrants is computedusing the average market price of the Company’s stock during each period underthe treasury stock method. In periods where losses have occurred, options andwarrants are considered anti-dilutive and thus have not been included in thediluted loss per common share calculations.

 

**(3)           ComprehensiveLoss**

** **

**Comprehensive loss and its components, including allchanges in equity during a period except those resulting from investments byowners or distributions to owners are as follows:**

** **
|                             |   | **For the Three**      |         | **For the Three**      |       |
|----------------------------------|--------|------------------------|--------------|------------------------|------------|
|                             |   | **Months Ended**       | ** **   | **Months Ended**       | ** ** |
|                             |   | **September 30, 2001** | ** **   | **September 30, 2000** | ** ** |
| **Net Loss**                     |   | **$**                  | **(681,427** | **)**                  | **$**      | **(2,281,242** | **)** |
|                             |   |                   |         |                   |       |   |   |
| **Other comprehensive loss:**    |   |                   | ** **   |                   | ** ** |
|                             |   |                   |         |                   |       |
| **Foreign currency translation** |   |                   | ** **   |                   | ** ** |
|                             |   |                   |         |                   |       |
| **Adjustment**                   |   | **17,469**             | ** **   | **125,289**            | ** ** |
|                             |   |                   |         |                   |       |
| **Total comprehensive loss**     |   | **$**                  | **(663,958** | **)**                  | **$**      | **(2,155,953** | **)** |
|                                  |        |                        |              |                        |            |  |  |  |

** **

**(4)           Liquidity**

** **

The accompanying interim consolidated financial statements are preparedassuming the Company will continue as a going concern. During the year endedJune 30, 2001, the Company incurred an operating loss of $3,168,265.Subsequently, for the three-month period ended September 30, 2001, the Companyincurred an operating loss of $658,754. As of September 30, 2001, the Companyhad an accumulated deficit of $23,322,837, total stockholders’ deficit of$6,546,168, and negative working capital of $6,658,572. In addition, as ofNovember 14, 2001, due to inadequate funds, the Company has not paid theoutstanding principal on director advances discussed in Note 7 and, has notremitted approximately $620,000 of employee and employer payroll taxes.

 

Going forward the Company must raise additional cash either throughraising additional capital or through profits from operations.

 

Management anticipates the impact of the actions listed below willgenerate sufficient cash flows to pay past due debts and fund the Company’sfuture operations.

 

1.     Continueto increase the Company’s revenues from software licenses and other revenuesources.

 

2.     Increase the level of indebtedness.

 

3.     Solicit additional equity investment in the Company.

 

4.     Reduce operating costs, as deemed necessary, in the event thesales of product licenses and/or additional equity or debt financing do notgenerate adequate proceeds.

 

**(5)           NotePayable**

** **

In February 1998, the Company entered into a loanagreement in the amount of approximately $927,000 with a third party lender.During fiscal 1999, the Company borrowed an additional $480,000. The note issecured by the assets of the Company. The interest rate on the outstandingprincipal balance is based on an index defined in the loan agreement plus 7%,with interest due monthly. On September 30, 2001 and June 30, 2000 the interestrates were 11.51% and 12.025%, respectively.The outstanding principalbalance became due on December 15, 1999. During fiscal 2001, the Company madeprincipal payments totaling approximately $411,000. As of November 14, 2001,the note has been paid in full.

 

**(6)           Director Advances**

 

The Company hasreceived interest-bearing advances from certain directors of the Company.Interest rates vary from 8.0% to 8.5% as of September 30, 2001. These amountsare classified as current liabilities as the Company anticipates paying theamounts during the year ending June 30, 2002.

 

**(7)           InstallmentAgreement with Internal Revenue Service**

 

On March 29, 2001,the Company entered into an installment agreement with the Internal RevenueService regarding the repayment of past due payroll taxes, penalties andinterest. As of that date, the amount due under this agreement wasapproximately $931,000. The agreement called for monthly payments of $100,000on April 15, 2001, $50,000 on May 15, 2001, $100,000 on June 15, 2001, $200,000on July 15, 2001 and $100,000 on the fifteenth of each month thereafter, withany remaining balance being due on January 15, 2002. In July 2001, the Companyrenegotiated the monthly payment amounts to $50,000 per month. As of September30, 2001, the balance due under this agreement was approximately $680,000,including penalties and accrued interest. In connection with this agreement, the Internal Revenue Service filed afederal tax lien against the Company’s assets. This lien will be removed onceall payments under the agreement are made.

 

**(8)**           **Litigation**

 

In April 2001, the Company and its officers and directors were served alawsuit brought by Calton, Inc. (“Calton”) and Gildea Management Company(“Gildea”) in the Superior Court of New Jersey, Monmouth County. After removalto federal court, the case was transferred to the United States District Court,District of Minnesota.  Calton andGildea purchased securities from the Company in November 1999 and January 2000.The lawsuit claims that Company officials knowingly provided false andmisleading information regarding the historical and future financialperformance of the Company to the shareholders, which induced them to makethese investments, which totaled approximately $1.5 million. Calton and Gildeaare seeking damages in an unspecified amount or, in the alternative, rescissionof the stock purchase agreements. The case is being handled by the Company’sattorney and its insurance carrier. The Company believes it has meritoriousdefenses against these claims.

 

In April 2001, the Company was served a lawsuitbrought by American Express Travel Related Services Company, Inc. in theSupreme Court of the State of New York, County of New York. The plaintiff isseeking payment of the balance due them of approximately $976,000, which hasbeen recorded by the Company as of June 30, 2001 in the accompanying balancesheet. On November 9, 2001 the Company entered into a Stipulation of Settlementagreement with American Express under which the Company agreed to make paymentsas follows: $25,000 on November 15, 2001, $100,000 on November 30, 2001, March31, 2002 and June 30, 2002, $125,000 on September 30, 2002, $150,000 onDecember 31, 2002, March 31, 2003 and June 30, 2003 and $70,000 on September30, 2003. In addition, the Company agreed to make a final payment on December31, 2003 of any remaining principal plus accrued interest on the unpaidprincipal balance from the date of the agreement to December 31, 2003 at a rateof 9% per annum. In the event of default, the obligation is accelerated, theinterest rate is increased to 15% and legal fees in the amount of $100,000would become due. The Company has also granted a security interest in thereceivables of CorVu North America, Inc. to American Express as part of thissettlement.

 

Item 2.**  Management’s Discussion and Analysis ofFinancial Condition and Results of Operations**

# **For the Three Month Periods Ended September30, 2001 and 2000**

# ** **

# **REVENUES:**

 

Total revenue for the three-month period ended September 30, 2001 decreased$247,989 (10%) compared to the same period a year ago.

 

Software and license fee revenues increased $20,661 (2%) from $909,463 for the three-month periodended September 30, 2000 to $930,124 for the three-month period ended September30, 2001. This increase was accomplished in spite of the current economicclimate and a 49% reduction in sales staff since the same period last year (seediscussion of Sales and Marketing expenses below).

 

Maintenance,consulting and other revenues decreased $268,650 (17%), from $1,537,766 for thethree-month period ended September 30, 2000 to $1,269,116 for the three-monthperiod ended September 30, 2001. This was caused by a reduction in revenueattributable to consulting and training services of $378,375 (39%). Several factorswhich contributed to this reduction included (1) a 10% reduction inprofessional services personnel, (2) an overall reduction in billable hours dueto decreased demand for the services and (3) an increase in services deliveredat discounted hourly rates. In addition, the terrorist events that occurred inthe U.S. caused the postponement of scheduled consulting engagements and publictraining classes.  This reduction waspartially offset by an increase in annual maintenance revenues of $109,725(22%), which continue to increase in line with the increased customer base.

 

OPERATING EXPENSES:

 

Operating expenses decreased $1,841,823 (39%) for the three-monthperiod ended September 30, 2001, from the same period last year.

 

Cost ofmaintenance, consulting and other expenses decreased $289,360 (32%) for thethree-month period ended September 30, 2001, from the same period lastyear.  As explained above, this wasprimarily caused by a 10% reduction in professional service personnel.

 

Productdevelopment costs decreased $25,458 (9%) for the three-month period endedSeptember 30, 2001, from the same period last year. A temporary reduction ofone product development employee caused this reduction in expense. Managementcontinues to invest in product development to further improve and enhance itsproduct offerings.

 

Sales andmarketing expenses decreased $916,821 (50%) for the three-month period endedSeptember 30, 2001, from the same period last year.  A 49% reduction in sales and marketing personnel from 57 peopleat September 30, 2000 to 29 people at September 30, 2001 led to a reduction incosts such as salaries, wages and employee benefits, sales commissions, remotesales office expenses and travel costs.

 

General andadministrative expenses decreased $610,184 (36%) for the three-month periodended September 30, 2001, from the same period last year. Many factorscontributed to this including a reduction in salaries due to the amendment ofthe chief executive officer’s employment contract, a reduction in financingcosts which were incurred last year due to capital raising activities, areduction in accounting and audit fees due to a change in the Company’s publicauditing firm and reductions in all travel and general overhead costs.

 

INTEREST EXPENSE:

 

Interest expense decreased $5,981 (21%) for the three-month periodended September 30, 2001, compared to the same period last year. This was dueto a decrease in the balance on the note payable from $546,000 as of September30, 2000 to $58,000 as of September 30, 2001.

 

NET LOSSES:

 

CorVu incurred net losses of $681,427 and $2,281,242 for thethree-month periods ended September 30, 2001 and 2000, respectively.

 

##### **Liquidity andCapital Resources**

 

Total cash and cash equivalents decreased by $51,453 during thethree-month period ended September 30, 2001 from $77,409 as of June 30, 2001 to$25,956 as of September 30, 2001. Net cash used in operating activities was$22,848 for the period ended September 30, 2001. This was caused by the netloss discussed above. Net cash used in investing activities was $20,058,reflecting the acquisition of property and equipment during the period. Netcash used in financing activities was $8,879 for the period ended September 30,2001. During the period, the Company repaid $130,019 of a note payable,received borrowings from a director of $156,800 and repaid director loans inthe amount of $35,660.

 

CorVu’s management intends to undertake one or several of the followingactivities: (1) continue to increase CorVu’s revenues from software licensesand other revenue sources; (2) increase the level of indebtedness; (3) solicitadditional equity investment in the Company; (4) reduce operating costs, asdeemed necessary, in the event the sales of product licenses and / oradditional equity or debt financing do not generate adequate proceeds. CorVu’smanagement believes these activities will generate sufficient cash flows tosustain CorVu’s operations for the foreseeable future.

 

**ForwardLooking Statements**

 

This Report contains statements, which constitute forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933 andthe Securities Exchange Act of 1934. These statements appear in a number ofplaces in this Report and include all statements regarding the intent, beliefor current expectations of the Company, its directors or its officers withrespect to, among other things: (i) the Company’s financing plans; (ii) trendsaffecting the Company’s financial condition or results of operations; (iii) theCompany’s growth strategy and operating strategy; and (iv) the declaration andpayment of dividends.  Investors arecautioned that any such forward-looking statements are not guarantees of futureperformance and involve risks and uncertainties, and that actual results maydiffer materially from those projected in the forward-looking statements as aresult of various factors discussed herein.

 

**PARTII**

**OTHER INFORMATION**

 

Item 1.   Legal Proceedings.

 

In April 2001, theCompany was served a lawsuit brought by American Express Travel RelatedServices Company, Inc. in the Supreme Court of the State of New York, County ofNew York. The plaintiff is seeking payment of the balance due it ofapproximately $976,000, which has been recorded by the Company as of June 30,2001 in its balance sheet. On November 9, 2001 the Company entered into aStipulation of Settlement agreement with American Express under which theCompany agreed to make payments as follows: $25,000 on November 15, 2001,$100,000 on November 30, 2001, March 31, 2002 and June 30, 2002, $125,000 onSeptember 30, 2002, $150,000 on December 31, 2002, March 31, 2003 and June 30,2003 and $70,000 on September 30, 2003. In addition, the Company agreed to makea final payment on December 31, 2003 of any remaining principal plus accruedinterest on the unpaid principal balance from the date of the agreement toDecember 31, 2003 at a rate of 9% per annum. In the event of default, theobligation is accelerated, the interest rate increases to 15% and legal fees inthe amount of $100,000 would become due. The Company has also granted asecurity interest in the receivables of CorVu North America, Inc. to AmericanExpress as part of this settlement.

 

A lawsuit against theCompany by Calton, Inc. and Gildae Management Company is contained in theCompany’s Form 10-KSB for the fiscal year ended June 30, 2001.

 

Item 2.  Changes in Securities and Use of Proceeds.

 

None

 

Item 3.  Default Upon Senior Securities.

 

None

 

Item 4.  Submission of Matters to a Vote of Security Holders.

 

None

 

Item 5.   Other Information

 

None

 

Item 6.  Exhibits and Reports on Form 8-K.

 

(a)  Exhibits: None

 

(b)  Reports on Form 8-K: None

 

**SIGNATURES**

 

In accordance with the requirements of the ExchangeAct, the registrant caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|                           | CORVU CORPORATION |
|--------------------------------|-------------------|
|                           |              |   |
|                           |              |   |
| Date:   November 14, 2001 | By                |  /s/ David C.  Carlson |
|                           |              | David C.  Carlson, Chief Financial Officer |