<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) : April 12, 1999
-----------------
Allaire Corporation
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 0-25265 41-1830792
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE (IRS EMPLOYER
INCORPORATION NUMBER) IDENTIFICATION NO.)
One Alewife Center, Cambridge, Massachusetts 02140
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE : (617) 761-2000
---------------------
Not Applicable
- --------------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. The financial statements of
Bright Tiger Technologies, Inc. ("Bright Tiger") which are required
pursuant to Rule 3-05 of regulation S-X, attached hereto as Exhibit 99.1,
are hereby incorporated herein by reference.
(b) Pro Forma Financial Information. The unaudited pro forma combined condensed
financial statements, attached hereto as Exhibit 99.2, assume a business
combination between Allaire Corporation ("Allaire") and Bright Tiger
(the "Merger") accounted for on a "pooling of interests" basis and are
based on the respective historical financial statements and the notes
thereto of Allaire and Bright Tiger, and are hereby incorporated herein by
reference. The unaudited pro forma combined condensed balance sheet
combines Allaire's unaudited consolidated balance sheet with Bright
Tiger's as of March 31, 1999. The unaudited pro forma combined condensed
statements of operations combine Allaire's historical operating results
for the three months ended March 31, 1999 and March 31, 1998 and the years
ended December 31, 1998, 1997 and 1996 with the corresponding Bright Tiger
historical operating results.
For the purposes of the preparation of the unaudited pro forma combined
condensed balance sheet, merger-related expenses (which Allaire
anticipates will be approximately $2.2 million on a pre-tax basis) were
excluded.
The unaudited pro forma combined condensed financial statements are
presented for illustrative purposes only and are not necessarily indicative
of the operating results or financial position that would have been
achieved if the merger had been consummated as of the beginning of the
periods presented, nor are they necessarily indicative of the future
operating results or financial position of the combined company. The
unaudited pro forma combined condensed financial statements do not give
effect to cost savings or integration costs, if any, which may result from
the combination of Allaire's and Bright Tiger's operations.
These unaudited pro forma combined condensed financial statements are based
on, and should be read in conjunction with, the historical consolidated
financial statements and the related notes thereto of Allaire, included in
Allaire's 1998 Annual Report on Form 10-K, and Bright Tiger which are
attached hereto as Exhibit 99.1.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ------------- --------------
<S> <C>
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
99.1 Financial Statements of Bright Tiger Technologies, Inc.
99.2 Pro Forma Financial Information
</TABLE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Allaire Corporation
BY: /S/ DAVID A. GERTH
David A. Gerth
Vice President Finance
and Operations, Treasurer and
Chief Financial Officer
<PAGE>
Date: June 15, 1999
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
No. Description
- -------- ------------------------
<S> <C>
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
99.1 Financial Statements of Bright Tiger Technologies, Inc.
99.2 Pro Forma Financial Information
</TABLE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-76855 and 333-78329) of Allaire Corporation
of our report dated April 15, 1999 relating to the financial statements of
Bright Tiger Technologies, Inc., which appears in the Current Report on Form
8-K/A of Allaire Corporation dated June 15, 1999.
/s/ PricewaterhouseCoopers LLP
Boston, MA
June 15, 1999
<PAGE>
EXHIBIT 99.1
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
DECEMBER 31, 1998
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Bright Tiger Technologies, Inc.
In our opinion, the accompanying balance sheet and the related statements of
operations, of changes in redeemable convertible preferred stock and
stockholders' deficit and of cash flows present fairly, in all material
respects, the financial position of Bright Tiger Technologies, Inc. (a
development stage enterprise) (the "Company") at December 31, 1998 and 1997,
and the results of its operations and its cash flows for the years then
ended, and for the period from inception (June 6, 1996) through December 31,
1996 and for the period from inception (June 6, 1996) through December 31,
1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
April 15, 1999
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998 1999
----------- ------------ -------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,666,100 $ 1,313,800 $ 662,100
Short term investments 4,717,400 495,700 --
Accounts receivable, net 17,700 101,400 202,900
Prepaid expenses -- 31,500 38,500
Total current assets 6,401,200 1,942,400 903,500
Fixed assets, net 898,100 701,200 595,800
Other assets 13,400 15,000 15,000
----------- ------------ -------------
Total assets $ 7,312,700 $ 2,658,600 $ 1,514,300
----------- ------------ -------------
----------- ------------ -------------
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND STOCKHOLDERS' DEFICIT
Current liabilities:
Promissory notes $ $ 1,500,000 1,500,000
Current portion of long-term debt 123,200 1,145,900 1,073,000
Accounts payable 211,600 107,600 117,000
Accrued employee compensation and benefits 80,800 35,400 79,000
Accrued marketing expenses 47,000 17,000 18,000
Other accrued expenses 54,300 84,500 96,600
Deferred revenues 28,900 47,200
Total current liabilities 516,900 2,919,300 2,930,800
Long-term debt 751,800
----------- ------------ -------------
Total liabilities 1,268,700 2,919,300 2,930,800
Redeemable convertible preferred stock:
Series C, $.01 par value; 1,333,334 shares authorized,
issued and outstanding at December 31, 1997 and 1998
and March 31, 1999 (unaudited) (liquidating preference
of $6,000,000) 6,000,000 6,000,000 6,000,000
Series B, $.01 par value; 1,634,500 shares authorized,
issued and outstanding at December 31, 1997 and 1998
and March 31, 1999 (unaudited) (liquidating preference
of $4,086,200) 4,086,200 4,086,200 4,086,200
Series A, $.01 par value; 350,000 shares authorized,
issued and outstanding at December 31, 1997 and 1998
and March 31, 1999 (unaudited) (liquidating preference
of $350,000) 350,000 350,000 350,000
----------- ------------ -------------
Total redeemable convertible preferred stock 10,436,200 10,436,200 10,436,200
----------- ------------ -------------
Stockholders' deficit:
Common stock, $.01 par value; 10,000,000 shares
authorized, 1,782,123 shares issued and 1,748,823 shares
outstanding at December 31, 1997; 1,828,073 shares
issued and 1,397,448 shares outstanding at
December 31, 1998; 1,845,240 shares issued and
1,414,615 shares outstanding at March 31, 1999 (unaudited) 17,800 18,300 18,500
Additional paid-in capital 51,800 57,300 60,100
Deficit accumulated during the development stage (4,461,600) (10,733,600) (11,892,400)
----------- ------------ -------------
(4,392,000) (10,658,000) (11,813,800)
Treasury stock at cost: 33,300, 430,625 and 430,625
shares at December 31, 1997 and 1998 and March 31, 1999
(unaudited), respectively (200) (38,900) (38,900)
Total stockholders' deficit (4,392,200) (10,696,900) (11,852,700)
----------- ------------ -------------
----------- ------------ -------------
Total redeemable convertible preferred stock and
stockholders' deficit 6,044,000 (260,700) (1,416,500)
Commitments (Note 8) -- -- --
----------- ------------ -------------
Total liabilities, redeemable convertible preferred
stock and stockholders' deficit $ 7,312,700 $ 2,658,600 $ 1,514,300
----------- ------------ -------------
----------- ------------ -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
INCEPTION INCEPTION INCEPTION
(JUNE 6, 1996) YEAR ENDED DECEMBER 31, (JUNE 6, 1996) THREE MONTHS ENDED MARCH 31, (JUNE 6, 1996)
THROUGH THROUGH ---------------------------- THROUGH
DECEMBER 31, ------------------------ DECEMBER 31, 1998 1999 MARCH 31,
1996 1997 1998 1998 (UNAUDITED) (UNAUDITED) 1999
-------------- ----------- ----------- -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ -- $ 17,700 $ 492,700 $ 510,400 $ 32,900 $ 207,800 $ 718,200
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Costs and expenses:
Cost of Revenues -- 11,800 22,300 34,100 -- 2,400 36,500
Research and
development 235,700 2,180,800 3,032,700 5,449,200 750,800 659,200 6,108,400
Sales and marketing 42,700 1,546,000 3,000,900 4,589,600 988,900 487,000 5,076,600
General and
administrative 49,700 529,100 755,700 1,334,500 186,200 177,600 1,512,100
-------------- ----------- ----------- -------------- ------------ ------------ --------------
328,100 4,267,700 6,811,600 11,407,400 1,925,900 1,326,200 12,733,600
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Loss from
operations (328,100) (4,250,000) (6,318,900) (10,897,000) (1,893,000) (1,118,400) (12,015,400)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Other income (expense):
Interest income -- 156,100 161,800 317,900 67,000 13,000 330,900
Interest expense (700) (29,000) (114,900) (144,600) (20,500) (53,400) (198,000)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
(700) 127,100 46,900 173,300 46,500 (40,400) 132,900
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Net loss $(328,800) $(4,122,900) $(6,272,000) $(10,723,700) $(1,846,500) $(1,158,800) $(11,882,500)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
-------------- ----------- ----------- -------------- ------------ ------------ --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
DEFICIT
For the Period from Inception (June 6, 1996) through December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REDEEMABLE DEFICIT
CONVERTIBLE ACCUMULATED
PREFERRED STOCK COMMON STOCK ADDITIONAL DURING THE TREASURY STOCK
--------------------- ------------------- PAID-IN DEVELOPMENT ------------------
SHARES AMOUNT SHARES PAR VALUE CAPITAL STAGE SHARES AMOUNT TOTAL
--------- ----------- --------- --------- ---------- ------------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of restricted common
stock to founders -- $ -- 1,000,137 $10,000 $ -- $ (9,900) -- $ -- $ 100
Issuance of Series A
redeemable convertible
preferred stock 350,000 350,000
Net loss (328,800) (328,800)
--------- ----------- --------- --------- ---------- ------------- --------- --------- -----------
Balance at December 31, 1996 350,000 350,000 1,000,137 10,000 -- (338,700) -- -- (328,700)
Issuance of restricted
common stock 781,986 7,800 51,800 59,600
Issuance of Series B
redeemable convertible
preferred stock 1,634,500 4,086,200
Issuance of Series C
redeemable convertible
preferred stock 1,333,334 6,000,000
Repurchase of common stock (33,300) (200) (200)
Net loss (4,122,900) (4,122,900)
--------- ----------- --------- --------- ---------- ------------- --------- --------- -----------
Balance at December 31, 1997 3,317,834 10,436,200 1,782,123 17,800 51,800 (4,461,600) (33,300) (200) (4,392,200)
Issuance of common stock 45,950 500 5,500 6,000
Repurchase of common stock (397,325) (38,700) (38,700)
Net loss (6,272,000) (6,272,000)
--------- ----------- --------- --------- ---------- ------------- --------- --------- ----------
Balance at December 31, 1998 3,317,834 10,436,200 1,828,073 18,300 57,300 (10,733,600) (430,625) (38,900) (10,696,900)
Issuance of common stock
(unaudited) 17,167 200 2,800 3,000
Net loss (unaudited) (1,158,800) (1,158,800)
--------- ----------- --------- --------- ---------- ------------- --------- --------- -----------
Balance at March 31, 1999 3,317,834 $10,436,200 1,845,240 $ 18,500 $ 60,100 $(11,892,400) (430,625) $(38,900) $11,852,700
(unaudited)
--------- ----------- --------- --------- ---------- ------------- --------- --------- -----------
--------- ----------- --------- --------- ---------- ------------- --------- --------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
INCEPTION INCEPTION INCEPTION
(JUNE 6, 1996) YEAR ENDED DECEMBER 31, (JUNE 6, 1996) THREE MONTHS ENDED MARCH 31, (JUNE 6, 1996)
THROUGH THROUGH ---------------------------- THROUGH
DECEMBER 31, ------------------------ DECEMBER 31, 1998 1999 MARCH 31,
1996 1997 1998 1998 (UNAUDITED) (UNAUDITED) 1999
-------------- ----------- ----------- -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
cash and cash
equivalents
Cash flows from operating
activities:
Net loss $(328,800) $(4,122,900) $(6,272,000) $(10,723,700) $(1,846,500) $(1,158,800) $(11,882,500)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Depreciation 7,800 148,200 405,500 561,500 94,800 105,400 666,900
Increase (decrease)
resulting from
operating assets
and liabilities:
Accounts receivable -- (17,700) (83,700) (101,400) (21,600) (101,500) (202,900)
Prepaid expenses -- -- (31,500) (31,500) (6,300) (7,000) (38,500)
Other assets (400) (13,000) (1,600) (15,000) (2,300) -- (15,000)
Accounts payable 16,600 195,000 (104,000) 107,600 277,600 9,400 117,000
Accrued employee
compensation and
benefits 19,000 61,800 (45,400) 35,400 4,600 43,600 79,000
Accrued marketing
expenses -- 47,000 (30,000) 17,000 30,300 1,000 18,000
Other accrued
expenses -- 54,300 30,200 84,500 (47,000) 12,100 96,600
Deferred revenue -- -- 28,900 28,900 -- 18,300 47,200
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Net cash used in
operating
activities (285,800) (3,647,300) (6,103,600) (10,036,700) (1,516,400) (1,077,500) (11,114,200)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Cash flow from investing
activities:
Purchase of short term
investments -- (8,817,400) (6,282,600) (15,100,000) (292,500) -- (15,100,000)
Sale of short term
investments -- 4,100,000 10,504,300 14,604,300 831,600 495,700 15,100,000
Purchases of fixed
assets (61,700) (992,400) (208,600) (1,262,700) (178,800) -- (1,262,700)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Net cash provided
by (used in)
investing
activities (61,700) (5,709,800) 4,013,100 (1,758,400) 360,300 495,700 (1,262,700)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Cash flows from financing
activities:
Proceeds from issuance
of promissory notes -- -- 1,500,000 1,500,000 -- -- 1,500,000
Proceeds from issuance
of long-term debt 66,500 808,500 270,900 1,145,900 -- -- 1,145,900
Proceeds from issuance
of redeemable
convertible preferred
stock 350,000 10,086,200 -- 10,436,200 -- -- 10,436,200
Proceeds from issuance
of common stock 100 59,600 6,000 65,700 -- 3,000 68,700
Repurchase of common
stock -- (200) (38,700) (38,900) -- -- (38,900)
Repayment of long-term
debt -- -- -- -- -- (72,900) (72,900)
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Net cash provided
by (used in)
financing
activities 416,600 10,954,100 1,738,200 13,108,900 -- (69,900) 13,039,000
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Net increase (decrease) in
cash and cash equivalents 69,100 1,597,000 (352,300) 1,313,800 (1,156,100) (651,700) 662,100
Cash and cash
equivalents, beginning
of period -- 69,100 1,666,100 -- 1,666,100 1,313,800 --
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Cash and cash
equivalents, end of
period $ 69,100 $ 1,666,100 $ 1,313,800 $ 1,313,800 $ 510,000 $ 662,100 $ 662,100
-------------- ----------- ----------- -------------- ------------ ------------ --------------
-------------- ----------- ----------- -------------- ------------ ------------ --------------
Supplement disclosure of
cash flow information:
Cash paid for interest $ 700 $ 29,000 $ 95,800 $ 125,500 $ 20,459 $ 23,845 $ 149,345
-------------- ----------- ----------- -------------- ------------ ------------ --------------
-------------- ----------- ----------- -------------- ------------ ------------ --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
Bright Tiger Technologies, Inc. (the "Company") develops and markets
Web site resource management software designed to help organizations
build and manage fast, reliable Web sites.
Although the Company has commenced planned principal operations,
revenues are not yet significant. Accordingly, the Company is
considered to be in the development stage and the accompanying
financial statements represent those of a development stage enterprise,
as defined in Statement of Financial Accounting Standards ("SFAS") No.
7, "Accounting and Reporting by Development Stage Enterprises."
On April 12, 1999, the Company was acquired by Allaire Corporation
("Allaire"). This transaction was accounted for as a pooling of
interests and was effected through the exchange of shares of Allaire's
common stock for all of the issued and outstanding shares of the
Company. Prior to the transaction, all of the issued and outstanding
shares of the Company's Series A preferred stock converted to common
stock of the Company. Pursuant to the transaction, each outstanding
share of the Company's capital stock was converted into the right to
receive shares of Allaire's common stock as follows:
<TABLE>
<S> <C>
Common stock 0.02824
Series B preferred stock 0.06271
Series C preferred stock 0.09847
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies followed in the preparation of the
financial statements are as follows:
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. The Company
invests excess cash primarily in a money market fund at a major
financial institution and U.S. Treasury bills which are subject to
minimal credit and market risk.
The Company's cash equivalents at December 31, 1997 consisted of
approximately $47,500 in money market funds and $1,595,600 in U.S.
Treasury bills. Short-term investments at December 31, 1997 consisted
of U.S. Treasury bills. The Company's cash equivalents at December 31,
1998 consisted of approximately $296,600 in money market funds and
$1,493,000 in U.S. Treasury bills. All securities are classified as
available-for-sale and are recorded at cost which approximates fair
value. Any unrealized gains or losses are recorded as a separate
component of stockholders' equity. Gross unrealized and realized gains
and losses on sales of securities as of December 31, 1996, 1997 and
1998 and for the period from inception (June 6, 1996) to December 31,
1996 and for the years ended December 31, 1997 and 1998 were not
significant.
FIXED ASSETS
Fixed assets are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets.
Repair and maintenance costs are expensed as incurred.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
REVENUE RECOGNITION
Revenue for software licenses is recognized when an agreement has been
executed, delivery has occurred, no significant vendor obligations
remain and collection of the related receivable is probable. Revenue
from maintenance and post-contract support contracts are recognized
ratably over the contractual periods for which services are performed.
Revenue from consulting and service contracts are recognized over the
term of the contract using the percentage of completion method of
accounting, based upon the proportion that costs incurred bear to total
estimated costs at completion.
RESEARCH AND DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS
Costs incurred in the research and development of the Company's
products are expensed as incurred, except for certain software
development costs. Costs associated with the development of computer
software are expensed prior to the establishment of technological
feasibility (as defined by SFAS No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed") and
capitalized thereafter when material to the Company's financial
position or results of operations. During the period from inception
(June 6, 1996) through December 31, 1998, no software development costs
have been capitalized.
ACCOUNTING FOR STOCK-BASED COMPENSATION
The Company accounts for stock-based awards to its employees using the
intrinsic value based method as prescribed by Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", and related Interpretations and has adopted the provisions
of SFAS No. 123, "Accounting for Stock-Based Compensation", through
disclosure only (Note 6).
ADVERTISING EXPENSE
The Company recognizes advertising expense as incurred. Advertising
expense was $0, $141,400 and $213,200 for the period from inception
(June 6, 1996) through December 31, 1996 and for the years ended
December 31, 1997 and 1998, respectively.
INCOME TAXES
The Company utilizes the liability method of accounting for income
taxes, as set forth in SFAS No. 109, "Accounting for Income Taxes."
Under this method, deferred tax liabilities and assets are recognized
for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of expenses
during the reporting period. Actual results could differ from those
estimates.
UNAUDITED INTERIM FINANCIAL DATA
The interim financial data as of March 31, 1999 and for the three
months ended March 31, 1998 and 1999 and for the period from inception
(June 6, 1996) through March 31, 1999 are unaudited; however, in the
opinion of management, the interim financial data include all
adjustments, consisting only of
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
normal recurring adjustments, necessary for a fair presentation of the
results of operations for these interim periods. The interim financial
data are not necessarily indicative of the results of operations for a
full fiscal year.
3. FIXED ASSETS
Fixed assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
USEFUL LIFE IN --------------------
YEARS 1998 1997
----------------- --------- ---------
<S> <C> <C> <C>
Computer equipment and software 3 $1,018,900 $ 845,300
Furniture and fixtures 3 228,800 193,400
Leasehold improvements 3 15,000 15,400
--------- ---------
1,262,700 1,054,100
Less -- accumulated depreciation 561,500 156,000
--------- ---------
$ 701,200 $ 898,100
--------- ---------
--------- ---------
</TABLE>
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTESW TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. LONG-TERM DEBT AND LINE OF CREDIT
In December 1996, the Company entered into, and in July 1997 amended
and restated, a loan agreement with a bank for a line of credit under
which the Company may borrow up to $875,000 for purchases of equipment,
subject to certain limitations. In June 1998, the Company entered into
a second agreement with the bank for an additional line of credit of
$500,000 for purchases of equipment, subject to the same limitations.
All borrowings under these lines of credit are collateralized by
substantially all of the Company's assets and bear interest at the
bank's prime rate plus 3/4% (8.50% at December 31, 1998). The terms of
the lines of credit include certain covenants requiring the maintenance
of specified financial ratios and restrictions on the Company's ability
to sell or transfer fixed assets and to declare or pay dividends to its
stockholders. As of December 31, 1998, the Company was not in
compliance with the covenants relating to maintenance of certain
financial ratios. Accordingly, the outstanding balance under the lines
of credit was immediately callable by the bank and has been classified
as a current liability in its entirety. At December 31, 1998,
$1,145,900 was outstanding under the aforementioned lines of credit.
In November 1998, the Company issued promissory notes to existing
investors of the Company in exchange for $1,500,000 in cash proceeds.
These notes bear interest at 8% per year, and the principal and accrued
interest of the notes are payable upon demand by their holders. These
notes contain conversion rights whereby the holders of the notes may
apply the unpaid principal and interest under the notes to the purchase
of equity securities of the Company.
The line of credit and promissory notes were paid in full in
April 1999.
5. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
REDEEMABLE CONVERTIBLE PREFERRED STOCK
The Preferred Stock has the following characteristics:
CONVERSION
Each share of the Series A Preferred Stock and Series B
Preferred Stock are convertible at any time at the option of the
holder into one and one-half shares of common stock, subject to
certain anti-dilution adjustments. Each share of the Series C
Preferred Stock is convertible at any time at the option of the
holder into one share of common stock, subject to certain
anti-dilution adjustments. The Preferred Stock automatically
converts into common stock upon the closing of an underwritten
public offering of the Company's common stock involving net
proceeds to the Company of at least $10 million and a price of
not less than $3.67, $6.67 and $13.50 per share, subject to
certain anti-dilution adjustments, for the Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock,
respectively.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Company has reserved 525,000, 2,451,750 and 1,333,334 shares
of its common stock for issuance upon the conversion of the
Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock, respectively.
DIVIDENDS
Holders of the Preferred Stock are only entitled to receive
dividends when, as and if declared by the Board of Directors,
subject to certain limitations. Through December 31, 1998, no
dividends have been declared or paid by the Company.
REDEMPTION
At the request of the holders of a majority of the then
outstanding shares of Preferred Stock, in November 2002, 2003
and 2004, the Company shall redeem up to 33 1/3%, 50% and 100%,
respectively, of the then outstanding shares of Preferred Stock
at a per share price of $1.00, $2.50 and $4.50 for the Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock, respectively, plus any and all declared but unpaid
dividends, subject to certain anti-dilution adjustments. The
redemption value of the Preferred Stock issued and outstanding
at December 31, 1998 is equal to its issuance price.
LIQUIDATION, DISSOLUTION OR WINDING-UP OF THE COMPANY
In the event of any liquidation, dissolution or winding-up of
the affairs of the Company, the holders of the then outstanding
Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock will be entitled to receive, in preference to
the holders of the common stock, a per share payment of $1.00,
$2.50 and $4.50, respectively, plus any declared but unpaid
dividends. If the remaining assets of the Company are
insufficient to pay the Preferred Stockholders the full amount
to which they are entitled, any distribution of the remaining
assets will be in proportion to the respective amounts which
would otherwise be payable if all amounts payable were paid in
full. Any assets remaining following the distribution to the
holders of the Preferred Stock will be distributed ratably among
the common stockholders and the holders of the Series B and
Series C Preferred Stock, subject to certain limitations on the
aggregate amount payable of $7.50 and $13.50 per share,
respectively, as adjusted for certain anti-dilution adjustments.
VOTING RIGHTS
Each holder of the Preferred Stock is entitled to the number of
votes equal to the number of shares of common stock into which
such holder's shares are convertible at the record date for such
vote.
COMMON STOCK SPLITS
In connection with the issuance of the Series A Preferred Stock in
August 1996, the Board of Directors authorized a 666.76-for-1 common
stock split. In April 1997, the Board of Directors authorized a 3-for-2
common stock split effected in the form of a 50% stock dividend. All
common share and per share amounts have been retroactively adjusted to
reflect both of these stock splits.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STOCK RESTRICTION AGREEMENTS
At December 31, 1998, 502,940 of the Company's outstanding shares of
common stock were subject to stock restriction agreements. Under each
of these agreements, the Company has the option to repurchase any or
all unvested shares of common stock in the event of a restricted
stockholder's voluntary resignation or termination of employment by the
Company at a repurchase price between $0.0001 and $0.10 per share. The
number of shares that may be repurchased by the Company is reduced over
a five-year period.
TREASURY STOCK
During 1997 and 1998, in connection with the resignation of founding
stockholders and executives of the Company that were party to stock
restriction agreements, the Company repurchased 33,300 and 397,325
shares of unvested common stock for $200 and $38,700, respectively.
6. 1996 STOCK OPTION PLAN
During 1996, the Company adopted the 1996 Stock Option Plan (the "1996
Plan"). The 1996 Plan provides for the granting of incentive and
non-qualified stock options to management, other key employees,
consultants and directors of the Company. The total number of shares of
common stock that may be issued pursuant to awards granted under the
1996 Plan is 1,293,840. The exercise price under each stock option
shall be specified by the Board of Directors at the time of grant.
However, incentive stock options may not be granted at less than fair
market value of the Company's common stock at the date of grant or for
a term in excess of ten years. For holders of more than 10% of the
Company's total combined voting power of all classes of stock,
incentive stock options may not be granted at less than 110% of the
fair market value of the Company's common stock at the date of grant
and for a term not to exceed five years. At December 31, 1998, there
were 528,463 shares available for future grant under the 1996 Plan.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The following table summarizes stock option activity under the 1996
Plan:
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
(JUNE 6, 1996) THROUGH
DECEMBER 31, YEAR ENDED DECEMBER 31,
1996 1997 1998
---------------------- ----------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- ---------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year -- -- 210,750 0.03 470,325 0.11
Granted 210,750 0.03 462,075 0.11 491,000 0.45
Cancelled -- -- (12,000) 0.10 (386,448) 0.28
Exercised -- -- (190,500) 0.04 (45,950) 0.13
Outstanding at end of year 210,750 0.03 470,325 0.11 528,927 0.30
------- ------- -------
Options exercisable -- 13,906 136,473
------- ------- -------
Weighted average fair value of
option grants .01 .01 .09
------- ------- -------
</TABLE>
The following table summarizes information about stock options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
-------------------------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE NUMBER OF AVERAGE
NUMBER OF CONTRACTUAL EXERCISE OPTIONS EXERCISE
RANGE OF EXERCISE PRICES OPTIONS LIFE (YEARS) PRICE EXERCISABLE PRICE
- ------------------------ --------- ------------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$0.03 10,175 7.9 $0.03 2,157 0.03
$0.10 197,200 8.4 $0.10 72,514 0.10
$0.45 321,552 9.5 $0.45 61,802 0.45
-------- -------
$0.03-$0.45 528,927 9.1 $0.30 136,473 $0.26
-------- -------
</TABLE>
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
There was no compensation expense recorded in the Company's statement
of operations for the period from inception (June 6, 1996) through
December 31, 1996 and for the years ended December 31, 1997 and 1998.
Had compensation cost for awards of stock options been determined based
on the fair value of these options at their date of grant, consistent
with the method prescribed by SFAS No. 123, the Company's net loss
would have been as follows:
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION (JUNE
6, 1996)
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, -------------------------
1996 1997 1998
--------------- ------------ ------------
<S> <C> <C> <C>
Net loss:
As reported $(328,800) $(4,122,900) $(6,272,000)
Pro forma $(328,900) $(4,123,700) $(6,278,000)
</TABLE>
Because additional option grants are expected to be made in future
years and options vest over several years, the above pro forma effects
may not be indicative of pro forma effects in future years.
Under SFAS No. 123, the fair value of each employee option grant is
estimated on the date of grant using the Black-Scholes option pricing
model to apply the minimum value method with the following
weighted-average assumptions used for grants made during the period
from inception (June 6, 1996) through December 31, 1996 and for the
years ended December 31, 1997 and 1998:
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(JUNE 6, 1996)
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, -----------------------
1996 1997 1998
--------------- ---------- ----------
<S> <C> <C> <C>
Expected option term (years) 5 5 5
Risk-free interest rate 6.40% 6.30% 4.56%
Dividend yield 0.00% 0.00% 0.00%
</TABLE>
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
7. INCOME TAXES
Deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
--------- ---------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $1,970,000 $ 4,416,000
Research and development tax credit carryforwards 143,000 335,000
Bad debt write-offs -- 1,000
Accrued expenses 22,000 22,000
---------- ----------
Gross deferred tax assets 2,135,000 4,774,000
Deferred tax liability
Depreciation (29,000) (42,000)
---------- ----------
Net deferred tax assets 2,106,000 4,732,000
Deferred tax asset valuation allowance (2,106,000) (4,732,000)
---------- ----------
$ -- $ --
---------- ----------
---------- ----------
</TABLE>
Realization of total deferred tax assets is contingent upon the
generation of future taxable income. Due to the uncertainty of
realization of these tax benefits, the Company has provided a valuation
allowance for the full amount of its deferred tax assets.
At December 31, 1998, the Company has net operating loss carryforwards
of approximately $10,683,000 and $10,913,000 for federal and state
income tax reporting purposes, respectively. At December 31, 1998, the
Company had research and development credit carryforwards of $231,000
and $160,000 available to offset future federal and state taxes,
respectively. If not used, these carryforwards will expire in 2011
through 2012.
Under the provisions of the Internal Revenue Code, certain substantial
changes in the Company's ownership may limit the amount of net
operating loss and tax credit carryforwards which could be utilized
annually to offset future taxable income and tax liabilities.
<PAGE>
BRIGHT TIGER TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. COMMITMENTS
The Company leases its office space under a noncancellable operating
lease which expires on March 31, 2000. Rent expense for the period from
inception (June 6, 1996) through December 31, 1996 and for the years
ended December 31, 1997 and 1998 was approximately $15,000, $138,800
and $168,000, respectively.
Future minimum payments due under the aforementioned lease as of
December 31, 1998 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- ---------------
<S> <C>
1999 $ 162,800
2000 40,100
---------
$ 202,900
---------
---------
</TABLE>
<PAGE>
Exhibit 99.2
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 53,246 $ 662 $ 53,908
Short-term investments - - -
Accounts receivable, net 2,982 203 (40) 3,145
Prepaid expenses and other current assets 648 39 687
------------------------------------------------------------------------
Total current assets 56,876 904 (40) 57,740
Property and equipment, net 4,092 596 4,688
Other assets, net 405 15 (110) 310
------------------------------------------------------------------------
Total assets $ 61,373 $ 1,515 $ (150) $ 62,738
------------------------------------------------------------------------
------------------------------------------------------------------------
Liabilities, Redeemable Convertible Preferred
Stock and Stockholders' Deficit
Current liabilities:
Current portion of capital lease obligations $ 346 $ - $ 346
Promissory notes 1,500 1,500
Current portion of long term debt 435 1,073 1,508
Accounts payable 2,172 117 (40) 2,249
Accrued expenses 3,605 116 3,721
Accrued employee compensation and benefits 2,403 79 2,482
Deferred revenue 6,487 47 6,534
------------------------------------------------------------------------
Total current liabilities 15,448 2,932 (40) 18,340
Capital lease obligations 70 - 70
Long term debt 919 - 919
------------------------------------------------------------------------
Total liabilities 16,437 2,932 (40) 19,329
------------------------------------------------------------------------
Redeemable convertible preferred stock, Series C - 6,000 (6,000) -
Redeemable convertible preferred stock, Series B - 4,086 (4,086) -
Redeemable convertible preferred stock, Series A - 350 (350) -
------------------------------------------------------------------------
Total redeemable convertible preferred stock - 10,436 (10,436) -
Stockholders' equity (deficit):
Common stock 109 18 (15) 112
Additional paid-in-capital 67,622 61 10,412 78,095
Accumulated deficit (21,889) (11,893) (110) (33,892)
Deferred compensation (906) - (906)
Treasury stock - (39) 39 -
------------------------------------------------------------------------
Total stockholders' equity (deficit) 44,936 (11,853) 10,326 43,409
------------------------------------------------------------------------
Total liabilities, redeemable convertible preferred
stock and stockholders' equity (deficit) $ 61,373 $ 1,515 $ (150) $ 62,738
------------------------------------------------------------------------
------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
-----------------------------------------------------------------------
(in thousands, except for per share data)
<S> <C> <C> <C> <C>
Revenue:
Software license fees $ 6,124 $ 192 $ (40) $ 6,276
Services 1,712 16 1,728
-----------------------------------------------------------------------
Total revenue 7,836 208 (40) 8,004
-----------------------------------------------------------------------
Cost of revenue:
Cost of software license fees 454 2 456
Cost of services 1,505 - 1,505
-----------------------------------------------------------------------
Total cost of revenue 1,959 2 - 1,961
-----------------------------------------------------------------------
Gross profit 5,877 206 (40) 6,043
-----------------------------------------------------------------------
Operating expenses:
Research and development 1,630 660 2,290
Sales and marketing 5,138 487 5,625
General and administrative 1,052 178 1,230
Stock-based compensation 67 - 67
-----------------------------------------------------------------------
Total operating expenses 7,887 1,325 - 9,212
-----------------------------------------------------------------------
Loss from operations (2,010) (1,119) (40) (3,169)
Interest income (expense), net 326 (40) 286
-----------------------------------------------------------------------
Net income (loss) $ (1,684) $ (1,159) $ (40) $ (2,883)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Basic and diluted net loss per share $ (0.19) $ (0.83) $ (0.32)
Shares used in computing basic and diluted
net loss per share 8,819 1,403 9,093
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
------------------------------------------------------------------
(in thousands, except for per share data)
<S> <C> <C> <C> <C>
Revenue:
Software license fees $ 3,568 $ 27 $ 3,595
Services 464 6 470
------------------------------------------------------------------
Total revenue 4,032 33 - 4,065
------------------------------------------------------------------
Cost of revenue:
Cost of software license fees 421 - 421
Cost of services 699 - 699
------------------------------------------------------------------
Total cost of revenue 1,120 - - 1,120
------------------------------------------------------------------
Gross profit 2,912 33 - 2,945
------------------------------------------------------------------
Operating expenses:
Research and development 1,024 751 1,775
Sales and marketing 3,115 989 4,104
General and administrative 868 186 1,054
Stock-based compensation 161 - 161
------------------------------------------------------------------
Total operating expenses 5,168 1,926 - 7,094
------------------------------------------------------------------
Loss from operations (2,256) (1,893) - (4,149)
Interest income (expense), net 45 47 92
------------------------------------------------------------------
Net income (loss) $ (2,211) $ (1,846) $ - $ (4,057)
------------------------------------------------------------------
------------------------------------------------------------------
Basic and diluted net loss per share $ (0.89) $ (1.06) $ (1.48)
Shares used in computing basic and diluted
net loss per share 2,477 1,749 2,742
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
-----------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenue:
Software license fees $ 17,187 $ 450 $ (140) $ 17,497
Services 3,325 42 3,367
-----------------------------------------------------------------------
Total revenue 20,512 492 (140) 20,864
-----------------------------------------------------------------------
Cost of revenue:
Cost of software license fees 1,915 22 1,937
Cost of services 4,058 - 4,058
-----------------------------------------------------------------------
Total cost of revenue 5,973 22 - 5,995
-----------------------------------------------------------------------
Gross profit 14,539 470 (140) 14,869
-----------------------------------------------------------------------
Operating expenses:
Research and development 4,772 3,032 (70) 7,734
Sales and marketing 16,099 3,001 19,100
General and administrative 3,992 756 4,748
Stock-based compensation 412 - 412
-----------------------------------------------------------------------
Total operating expenses 25,275 6,789 (70) 31,994
-----------------------------------------------------------------------
Loss from operations (10,736) (6,319) (70) (17,125)
Interest income (expense), net (34) 47 13
-----------------------------------------------------------------------
Net income (loss) $ (10,770) $ (6,272) $ (70) $ (17,112)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Basic and diluted net loss per share $ (3.67) $ (3.86) $ (5.34)
Shares used in computing basic and diluted
net loss per share 2,938 1,626 3,207
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
-----------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenue:
Software license fees $ 7,116 $ 14 $ 7,130
Services 534 4 538
-----------------------------------------------------------------------
Total revenue 7,650 18 - 7,668
-----------------------------------------------------------------------
Cost of revenue:
Cost of software license fees 961 12 973
Cost of services 1,453 - 1,453
-----------------------------------------------------------------------
Total cost of revenue 2,414 12 - 2,426
-----------------------------------------------------------------------
Gross profit 5,236 6 - 5,242
-----------------------------------------------------------------------
Operating expenses:
Research and development 2,702 2,181 4,883
Sales and marketing 7,272 1,546 8,818
General and administrative 2,874 529 3,403
Stock-based compensation - - -
-----------------------------------------------------------------------
Total operating expenses 12,848 4,256 - 17,104
-----------------------------------------------------------------------
Loss from operations (7,612) (4,250) - (11,862)
Interest income (expense), net 187 127 314
-----------------------------------------------------------------------
Net income (loss) $ (7,425) $ (4,123) $ - $ (11,548)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Basic and diluted net loss per share $ (4.40) $ (2.74) $ (6.31)
Shares used in computing basic and diluted
net loss per share 1,687 1,504 1,830
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLAIRE AND BRIGHT TIGER
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Pro Forma
Allaire Bright Tiger Adjustments Combined
-----------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenue:
Software license fees $ 2,358 $ - $ 2,358
Services - - -
-----------------------------------------------------------------------
Total revenue 2,358 - - 2,358
-----------------------------------------------------------------------
Cost of revenue:
Cost of software license fees 234 - 234
Cost of services - - -
-----------------------------------------------------------------------
Total cost of revenue 234 - - 234
-----------------------------------------------------------------------
Gross profit 2,124 - - 2,124
-----------------------------------------------------------------------
Operating expenses:
Research and development 873 236 1,109
Sales and marketing 1,576 42 1,618
General and administrative 1,387 50 1,437
Stock-based compensation - -
-----------------------------------------------------------------------
Total operating expenses 3,836 328 - 4,164
-----------------------------------------------------------------------
Loss from operations (1,712) (328) - (2,040)
Interest income (expense), net 14 (1) 13
-----------------------------------------------------------------------
Net income (loss) $ (1,698) $ (329) $ - $ (2,027)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Basic and diluted net loss per share $ (0.97) $ (0.58) $ (1.15)
Shares used in computing basic and diluted
net loss per share 1,743 570 1,756
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. The unaudited pro forma combined condensed financial statements of Allaire
and Bright Tiger give retroactive effect to the Merger, which is being
accounted for as a "pooling of interests" and, as a result, such statements
are presented as if the combining companies had been combined for all
periods presented. The unaudited pro forma combined condensed financial
statements reflect the issuance of:
(a) .02824 shares of Allaire Common Stock for each share of Bright Tiger
Common Stock;
(b) .06271 shares of Allaire Common Stock for each share of Bright Tiger
Series B Convertible Preferred Stock;
(c) .09847 shares of Allaire Common Stock for each share of Bright Tiger
Series C Convertible Preferred Stock;
in the Merger. The unaudited pro forma combined condensed financial
statements also reflect the conversion of each share of Bright Tiger Series
A Convertible Preferred Stock into Bright Tiger Common Stock prior to the
Merger.
2. The unaudited pro forma combined basic and diluted earnings per share is
based on the combined weighted average number of common shares and common
and dilutive shares, respectively, of Allaire Common Stock and Bright Tiger
Common Stock for each period.
3. The unaudited pro forma combined condensed financial statements combine
Allaire's consolidated financial statements as of March 31, 1999, and for
the three months ended March 31, 1999 and 1998, and the years ended
December 31, 1998, 1997 and 1996 with Bright Tiger's consolidated financial
statements as of March 31, 1999, and for the three months ended March 31,
1999 and 1998, and the years ended December 31, 1998 and 1997, and the
period from inception (June 6, 1996) through December 31, 1996,
respectively.
4. Certain financial statement balances of Bright Tiger have been reclassified
to conform with the Allaire financial statement presentation.
5. The unaudited pro forma combined condensed financial statements include
various adjustments to eliminate intercompany activity between Bright Tiger
and Allaire.
