GLOBEtrotter SOFTWARE, INC.
Financial Statements
June 30, 2000 and 1999
(Unaudited)
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GLOBEtrotter SOFTWARE, INC.
Table of Contents
Page
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes to Financial Statements 4
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GLOBEtrotter SOFTWARE, INC.
Balance Sheet
June 30, 2000
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Current assets:
Cash and cash equivalents $ 881
Accounts receivable, net of allowance for doubtful accounts of $75 4,194
Inventories 111
Prepaid expenses and other current assets 114
Deferred acquisition costs 375
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Total current assets 5,675
Property and equipment, net 378
Patents and other intangibles, net of accumulated amortization of $687 667
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$ 6,720
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Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 100
Current portion of long-term debt 67
Accrued expenses 753
Incentive bonus plan 265
Taxes payable 8
Deferred revenue 6,120
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Total current liabilities 7,313
Long-term debt 166
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Total liabilities 7,479
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Shareholders' deficit:
Common stock; no par value; 10,000,000 shares authorized;
8,098,958 shares issued and outstanding 38,981
Deferred stock-based compensation (27,625)
Employee notes receivable (297)
Accumulated deficit (11,818)
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Total shareholders' deficit (759)
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$ 6,720
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</TABLE>
See accompanying notes to financial statements.
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GLOBEtrotter SOFTWARE, INC.
Statements of Operations
Six months ended June 30, 2000 and 1999
(In thousands)
(Unaudited)
2000 1999
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Net revenues $ 8,612 6,770
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Costs and expenses:
Cost of revenues 197 157
Research and development 781 615
Selling and marketing 2,093 1,905
General and administrative 1,821 1,568
Stock-based compensation 10,851 --
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Total costs and expenses 15,743 4,245
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Operating (loss) income (7,131) 2,525
Interest and other income, net 40 34
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(Loss) income before tax expense (7,091) 2,559
Tax expense 48 63
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Net (loss) income $ (7,139) 2,496
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See accompanying notes to financial statements.
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GLOBEtrotter SOFTWARE, INC.
Statements of Cash Flows
Six months ended June 30, 2000 and 1999
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (7,139) 2,496
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 136 123
Deferred compensation expense 10,851 --
Changes in operating assets and liabilities:
Accounts receivable, inventories, and
other current assets (1,823) 29
Accounts payable, accrued expenses,
deferred revenue, and taxes payable 1,886 32
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Net cash provided by operating activities 3,911 2,680
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Cash flows used in investing activities - acquisition
of property and equipment (262) (19)
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Cash flows from financing activities:
Payments on debt (34) --
Repayment of loan to shareholders 555 --
Cash distributions to shareholders (3,683) (2,550)
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Net cash used in financing activities (3,162) (2,550)
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Net increase in cash and cash equivalents 487 111
Cash and cash equivalents at beginning of period 394 1,094
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Cash and cash equivalents at end of period $ 881 1,205
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Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 88 18
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</TABLE>
See accompanying notes to financial statements.
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GLOBEtrotter SOFTWARE, INC.
Notes to Financial Statements
June 30, 2000 and 1999
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared by GLOBEtrotter Software, Inc. (the Company) in accordance with
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America, have been condensed or
omitted in accordance with such rules and regulations. In the opinion of
management, the accompanying unaudited condensed financial statements
reflect all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of the Company, and its
results of operations and cash flows for those periods presented. This
quarterly report should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 1999.
The results of operations for the interim periods presented are not
necessarily indicative of the results expected for the entire year ending
December 31, 2000, or any other future interim period.
(2) Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. As amended by SFAS Nos. 137
and 138, SFAS No. 133 establishes methods of accounting for derivative
financial instruments and hedging activities related to those instruments
as well as other hedging activities. The Company anticipates that the
adoption of SFAS No. 133 will not have a material impact on its financial
position, results of operations, or cash flows. The Company will adopt
SFAS No. 133 in its first fiscal quarter of 2001.
In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
Statements. SAB No. 101 provides guidance on applying generally accepted
accounting principles to revenue recognition issues in the financial
statements. In March 2000, the SEC issued SAB No. 101A, Amendment Revenue.
Recognition in financial statements. SAB No. 101A delays the
implementation date of SAB No. 101 for registrants with fiscal years that
begin between December 16, 1999 and March 15, 2000. The Company will adopt
SAB No. 101 as required in the fourth quarter of 2000 and is evaluating
the effect that such adoption might have on its financial statements.
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GLOBEtrotter SOFTWARE, INC.
Notes to Financial Statements
June 30, 2000 and 1999
(Unaudited)
In March 2000, the FASB Issued Interpretation (FIN) No. 44, Accounting for
Certain Transactions Involving Stock Compensation - an Interpretation of
Accounting Principles Board No. 25. FIN No. 44. clarifies (a) the
definition of an employee for purposes of applying Opinion 25; (b) the
criteria for determining whether a plan qualifies as a non-compensatory
plan; (c) the accounting consequences of various modifications to the
terms of a previously fixed stock option or award; and (d) the accounting
for an exchange of stock compensation awards in a business combination.
FIN No. 44 is effective July 1, 2000, but certain conclusions in this
interpretation cover specific events that occur after either December 15,
1998, or January 12, 2000. The Company is currently evaluating FIN No. 44
and has not yet determined the impact, if any, of adopting this
Interpretation.
(4) Subsequent Events
On August 31, 2000, the shareholders exchanged 100% of the Company's
common stock and options for approximately 8,944,550 in common stock and
options of Macrovision Corporation. The acquisition was recorded by
Macrovision Corporation using the pooling-of-interests method of
accounting under Accounting Principles Board (APB) Opinion No. 16.
As of June 30, 2000, 792,242 options were issued to officers and employees
of the Company, of which 190,279 options were vested and 601,963 options
were unvested. The exercise price of the options granted ranged from $3.00
to $39.00 per share with vesting periods up to four years. Total
compensation charge of $38,475,761 was recorded for the difference between
the exercise prices and the market value of the underlying stock at the
dates of grant. The value attributed to the unvested options was reflected
as deferred stock-based compensation within shareholders' deficit.
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