<PAGE>
EXHIBIT 99.2
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
What is reflected in Brokat's unaudited pro forma financial data.
The following unaudited pro forma consolidated balance sheet as of June 30,
2000 reflects the offering of Brokat's 11 1/2% senior notes due 2010 and the
application of the net proceeds of such offering and gives effect to the
acquisitions of Blaze and GemStone as if they had occurred on June 30, 2000.
The following unaudited pro forma consolidated statement of operations give
effect to the acquisitions of MeTechnology AG and Transaction Software
Technologies, Inc., the offering of the senior notes and the application of the
net proceeds of such offering and the acquisitions of Blaze and GemStone as if
they had occurred on July 1, 1998.
Significant intercompany accounts and transactions that were reflected
previously in the historical financial statements before the acquisitions have
been eliminated.
Brokat has adjusted MeTechnology and TST data because its fiscal year differed
from the fiscal years of those companies.
The unaudited pro forma consolidated financial data are derived from
Brokat's historical consolidated financial statements and the historical
consolidated financial statements of MeTechnology and TST. Because Brokat's
fiscal year differed from those of MeTechnology and TST, financial data
presented for those companies reflect adjustments to present financial
information for periods comparable to Brokat's. These adjustments are
quantified in the tables following the pro forma consolidated statements of
operations. Amounts are given in thousands of Deutsche marks unless otherwise
specified.
While the fiscal year end of Blaze differs from Brokat's, this difference is
less than 93 days. Accordingly, the unaudited pro forma consolidated statements
for the years ended June 30, 1999 and for the six months ended December 31,
1999 and June 30, 2000 were developed using the financial statements of Blaze
for the comparable calendar periods.
You should read the unaudited pro forma financial data with Brokat's financial
data.
The pro forma adjustments are described in the accompanying notes to the
unaudited pro forma combined financial data and are based upon available
information and upon assumptions that we considered reasonable. You should read
the unaudited pro forma financial data with Brokat's historical financial
statements and related notes.
Brokat has provided pro forma financial data only for informational purposes.
Brokat has provided the unaudited pro forma financial data for informational
purposes only and you should not consider the data indicative of actual results
that Brokat would have achieved had these transactions been completed on the
date or for the periods indicated. Brokat does not claim to indicate the
balance sheet data or results of operations as of any future date or for any
future period.
1
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2000
(In thousands)
<TABLE>
<CAPTION>
Total
Pro Forma Pro Forma Pro Forma Pro Forma
Brokat(1) Gemstone Adjustments Notes Combined Blaze Adjustments Notes Combined
--------- -------- ----------- ----- --------- -------- ----------- ----- ---------
(DM) (DM) (DM) (DM) (DM) (DM) (DM)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Currents Assets:
Cash and cash
equivalents............. 163,856 324 -- 164,180 92,408 -- 256,588
Short term investments.. -- -- -- -- 46,760 -- 46,760
Accounts receivable
(less pro forma
allowance for doubtful
accounts of DM 3,456 at
June 30, 2000).......... 63,419 9,456 -- 72,875 11,155 -- 84,030
Cost and estimated
earning in excess of
billings on uncompleted
contracts............... 2,965 -- -- 2,965 -- -- 2,965
Prepaid expenses and
other current assets.... 21,781 801 -- 22,582 4,043 -- 26,625
-------- -------- ------- --------- -------- --------- ---------
Total Current Assets.... 252,021 10,581 -- 262,602 154,366 -- 416,968
-------- -------- ------- --------- -------- --------- ---------
Property and equipment,
net..................... 14,382 1,914 -- 16,296 6,604 -- 22,900
-------- -------- ------- --------- -------- --------- ---------
Goodwill................ 245,267 -- 524,772 (6d) 770,039 -- 871,637 (6d) 1,641,676
Other intangible
assets.................. 10,130 -- -- 10,130 -- -- 10,130
Less accumulated
amortization............ (36,627) -- -- (36,627) -- -- (36,627)
-------- -------- ------- --------- -------- --------- ---------
218,770 -- 524,772 743,542 -- 871,637 1,615,179
-------- -------- ------- --------- -------- --------- ---------
Other long-term
investments............. 6,631 -- -- 6,631 -- -- 6,631
Deferred income taxes... 4,363 -- -- 4,363 -- -- 4,363
Restricted cash......... -- -- -- 1,467 -- 1,467
Deposits and other
assets.................. -- 535 -- 535 756 -- 1,291
-------- -------- ------- --------- -------- --------- ---------
Total assets............ 496,167 13,030 524,772 1,033,969 163,193 871,637 2,068,799
======== ======== ======= ========= ======== ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term debt to
banks................... 174 -- -- 174 -- -- 174
Current portion of
capital lease
obligations............. -- 375 -- 375 354 -- 729
Notes payable to
affiliated companies.... -- 13,984 (13,984) (6b) -- -- -- --
Notes payable........... -- 2,197 -- 2,197 -- -- 2,197
Accounts payable,
trade................... 8,391 6,356 5,000 (6d) 19,747 1,873 5,000 (6d) 26,620
Payroll-related
accruals................ 8,852 3,336 -- 12,188 -- -- 12,188
Tax-related accruals.... 4,096 -- -- 4,096 -- -- 4,096
Billings in excess of
cost and estimated
earnings on uncompleted
contracts............... 5,546 -- -- 5,546 -- -- 5,546
Other accrued expenses
and current
liabilities............. 17,217 2,319 -- 19,536 12,829 -- 32,365
Deferred income......... 4,853 9,573 -- 14,426 5,092 -- 19,518
Deferred income taxes... 4,025 -- -- 4,025 -- -- 4,025
-------- -------- ------- --------- -------- --------- ---------
Total current
liabilities............. 53,154 38,140 (8,984) 82,310 20,148 5,000 107,458
Long-term debt to
banks................... 2,000 -- -- 2,000 -- -- 2,000
Capital lease
obligations, net of
current portion......... -- 137 -- 137 432 -- 569
Other long-term debt.... 246,596 -- -- 246,596 70 -- 246,666
-------- -------- ------- --------- -------- --------- ---------
Total liabilities....... 301,750 38,277 (8,984) 331,043 20,650 5,000 356,693
-------- -------- ------- --------- -------- --------- ---------
Minority interest....... 326 -- -- 326 -- -- 326
Shareholders' equity
(deficit):
Common Stock............ 53,416 67,236 4,351 (6a) 57,767 4 8,748 (6a) 66,515
(67,236) (6c) (4) (6c)
Convertible preferred
stock................... -- 77,805 (77,805) (6c) -- -- -- --
Additional paid-in
capital................. 449,336 -- 523,303 (6a) 972,639 314,286 1,078,879 (6a) 2,051,518
(314,286) (6c)
Accumulated deficit..... (185,719) (115,180) 115,180 (6c) (185,719) (137,820) 137,820 (6c) (185,719)
Deferred compensation... (118,809) -- (19,145) (7) (137,954) (34,579) (78,447) (7) (216,401)
34,579 (6c)
Employee Stock Trust.... -- (55,028) 55,028 (6c) -- -- -- --
Accumulated other
comprehensive income
(loss).................. (4,133) (80) 80 (6c) (4,133) 652 (652) (6c) (4,133)
-------- -------- ------- --------- -------- --------- ---------
Total shareholders'
equity (deficit)........ 194,091 (25,247) 533,756 702,600 142,543 866,637 1,711,780
-------- -------- ------- --------- -------- --------- ---------
Total liabilities and
shareholders' equity.... 496,167 13,030 524,772 1,033,969 163,193 871,637 2,068,799
======== ======== ======= ========= ======== ========= =========
</TABLE>
The notes to unaudited pro forma financial data are an integral part of this
combined pro forma balance sheet.
2
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE
30, 1999
(In thousands except share and per share data)
<TABLE>
<CAPTION>
Brokat MeTechnology TST Gemstone
---------- ------------ ------------ ----------
Year Ended July 1, 1998 July 1, 1998 Total Year Ended
June 30, thru May 21, thru May 9, Pro Forma Pro June 30, Pro Forma Pro Forma
1999 1999 1999 Adjustments Notes Forma 1999 Adjustments Notes Combined
---------- ------------ ------------ ----------- ----- -------- ---------- ----------- ----- ----------
(DM) (DM) (DM) (DM) (DM) (DM) (DM) (DM)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue......... 62,487 4,544 8,375 (3,753) (2) 71,653 41,942 -- 113,595
Cost of Sales... (31,325) (2,619) (2,989) -- (36,933) (12,515) -- (49,448)
---------- ------- ------ ------- -------- ------- --------- ----------
Gross profit.... 31,162 1,925 5,386 (3,753) 34,720 29,427 -- 64,147
---------- ------- ------ ------- -------- ------- --------- ----------
Selling
expenses........ (38,848) (4,960) (862) -- (44,670) (17,017) -- (61,687)
General and
administrative
expenses........ (10,639) (5,833) (1,450) -- (17,922) (10,145) -- (28,067)
Research and
development
expenses........ (8,733) (3,180) (3,206) -- (15,119) (10,144) -- (25,263)
Amortization of
goodwill and
other intangible
assets from
acquisitions.... (3,686) -- -- (27,802) (3) (31,488) -- (74,967) (3) (106,455)
Non-cash charges
associated with
stock option
grants.......... (16,340) -- -- -- (16,340) -- (8,368) (7) (24,708)
---------- ------- ------ ------- -------- ------- --------- ----------
Total operating
expenses........ (78,246) (13,973) (5,518) (27,802) (125,539) (37,306) (83,335) (246,180)
---------- ------- ------ ------- -------- ------- --------- ----------
Operating loss.. (47,084) (12,048) (132) (31,555) (90,819) (7,879) (83,335) (182,033)
Interest
expense......... 568 (390) (86) (28,579) (4) (28,487) -- -- (28,487)
Other income,
net............. 2,565 -- -- -- 2,565 (186) -- 2,379
---------- ------- ------ ------- -------- ------- --------- ----------
Loss before
income taxes and
minority
interests....... (43,951) (12,438) (218) (60,134) (116,741) (8,065) (83,335) (208,141)
Income tax
expense......... (113) (17) (80) -- (210) (235) -- (445)
Minority
interest........ 90 -- -- -- 90 -- -- 90
---------- ------- ------ ------- -------- ------- --------- ----------
Net loss before
extraordinary
item............ (43,974) (12,455) (298) (60,134) (116,861) (8,300) (83,335) (208,496)
Extraordinary
loss on early
extinguishment
of debt......... (64) -- -- -- (64) -- -- (64)
---------- ------- ------ ------- -------- ------- --------- ----------
Net loss from
continuing
operations...... (44,038) (12,455) (298) (60,134) (116,925) (8,300) (83,335) (208,560)
========== ======= ====== ======= ======== ======= ========= ==========
Basic and
diluted loss per
share:
Loss before
extraordinary
items........... (2.23) (9.51)
Extraordinary
loss............ (0.01) (0.00)
---------- ----------
Net loss from
continuing
operations...... (2.24) (9.51)
========== ==========
Weighted average
number of common
shares
outstanding..... 19,694,650 2,219,983 (6e) 21,914,633
========== ========= ==========
<CAPTION>
Blaze
----------
Year Ended Total
June 30, Pro Forma Pro Forma
1999 Adjustments Notes Combined
---------- ----------- ----- -----------
(DM) (DM) (DM)
<S> <C> <C> <C> <C>
Revenue......... 19,754 -- 133,349
Cost of Sales... (6,540) -- (55,988)
---------- ----------- -----------
Gross profit.... 13,214 -- 77,361
---------- ----------- -----------
Selling
expenses........ (10,950) -- (72,637)
General and
administrative
expenses........ (4,334) -- (32,401)
Research and
development
expenses........ (7,669) -- (32,932)
Amortization of
goodwill and
other intangible
assets from
acquisitions.... -- (124,520) (3) (230,975)
Non-cash charges
associated with
stock option
grants.......... -- (25,442) (7) (50,150)
---------- ----------- -----------
Total operating
expenses........ (22,953) (149,962) (419,095)
---------- ----------- -----------
Operating loss.. (9,739) (149,962) (341,734)
Interest
expense......... (623) -- (29,110)
Other income,
net............. -- -- 2,379
---------- ----------- -----------
Loss before
income taxes and
minority
interests....... (10,362) (149,962) (368,465)
Income tax
expense......... (169) -- (614)
Minority
interest........ -- -- 90
---------- ----------- -----------
Net loss before
extraordinary
item............ (10,531) (149,962) (368,989)
Extraordinary
loss on early
extinguishment
of debt......... -- -- (64)
---------- ----------- -----------
Net loss from
continuing
operations...... (10,531) (149,962) (369,053)
========== =========== ===========
Basic and
diluted loss per
share:
Loss before
extraordinary
items........... (13.99)
Extraordinary
loss............ (0.00)
-----------
Net loss from
continuing
operations...... (13.99)
===========
Weighted average
number of common
shares
outstanding..... 4,463,246 (6e) 26,377,879
=========== ===========
</TABLE>
The notes to unaudited pro forma data are an integral part of this combined
pro forma statement of operations.
3
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
(In thousands except share and per share data)
<TABLE>
<CAPTION>
Pro Forma Total Pro Forma Pro Forma Pro Forma
Brokat Adjustments Notes Pro Forma Gemstone Adjustments Notes Combined Blaze Adjustments Notes
---------- ----------- ----- --------- -------- ----------- ----- ---------- ------- ----------- -----
(DM) (DM) (DM) (DM) (DM) (DM) (DM) (DM)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue......... 51,287 -- 51,287 21,251 -- 72,538 14,793 --
Cost of Sales .. (22,937) -- (22,937) (6,492) -- (29,429) (5,591) --
---------- ------- ------- ------- -------- ---------- -------
Gross profit.... 28,350 -- 28,350 14,759 -- 43,109 9,202 --
---------- ------- ------- ------- -------- ---------- ------- ---------
Selling expenses
................ (27,714) -- (27,714) (9,779) -- (37,493) (8,148) --
General and
administrative
expenses ....... (12,643) -- (12,643) (4,272) -- (16,915) (2,754) --
Research and
development
expenses ....... (12,769) -- (12,769) (5,244) -- (18,013) (3,910) --
Amortization of
goodwill and
other intangible
assets from
acquisitions.... (15,797) -- (15,797) -- (37,484) (3) (53,281) -- (62,260) (3)
Non-cash charges
associated with
stock option
grants.......... (12,240) -- (12,240) -- (4,184) (7) (16,424) (21,148) (12,721) (7)
---------- ------- ------- ------- -------- ---------- ------- ---------
Total Operating
expenses........ (81,163) -- (81,163) (19,295) (41,668) (142,126) (35,960) (74,981)
---------- ------- ------- ------- -------- ---------- ------- ---------
Operating loss.. (52,813) -- (52,813) (4,536) (41,668) (99,017) (26,758) (74,981)
Interest
expense......... (832) (13,777) (5) (14,609) -- -- (14,609) (202) --
Other income,
net............. 2,298 -- 2,298 (321) -- 1,977 -- --
---------- ------- ------- ------- -------- ---------- ------- ---------
Loss before
income taxes and
minority
interests....... (51,347) (13,777) (65,124) (4,857) (41,668) (111,649) (26,960) (74,981)
Income tax
expense......... (104) -- (104) (170) -- (274) (168) --
Minority
interest........ (26) -- (26) -- -- (26) -- --
---------- ------- ------- ------- -------- ---------- ------- ---------
Net loss from
continuing
operations...... (51,477) (13,777) (65,254) (5,027) (41,668) (111,649) (27,128) (74,981)
========== ======= ======= ======= ======== ========== ======= =========
Basic and
diluted loss per
share; Net loss
from continuing
operations...... (1.92) (3.84)
========== ==========
Weighted average
number of common
shares
outstanding..... 26,848,773 2,219,985 (6e) 29,068,758 4,463,244 (6e)
========== ======== ========== =========
<CAPTION>
Total
Pro Forma
Combined
-----------
(DM)
<S> <C>
Revenue......... 87,331
Cost of Sales .. (35,020)
-----------
Gross profit.... 52,311
-----------
Selling expenses
................ (45,641)
General and
administrative
expenses ....... (19,669)
Research and
development
expenses ....... (21,923)
Amortization of
goodwill and
other intangible
assets from
acquisitions.... (115,541)
Non-cash charges
associated with
stock option
grants.......... (50,293)
-----------
Total Operating
expenses........ (253,067)
-----------
Operating loss.. (200,756)
Interest
expense......... (14,811)
Other income,
net............. 1,977
-----------
Loss before
income taxes and
minority
interests....... (213,590)
Income tax
expense......... (442)
Minority
interest........ (26)
-----------
Net loss from
continuing
operations...... (214,058)
===========
Basic and
diluted loss per
share; Net loss
from continuing
operations...... (6.38)
===========
Weighted average
number of common
shares
outstanding..... 33,532,002
===========
</TABLE>
The notes to unaudited pro forma data are an integral part of this
consolidated pro forma statement of operations.
4
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(In thousands except share and per share data)
<TABLE>
<CAPTION>
Pro Forma Total Pro Forma Pro Forma Pro Forma
Brokat Adjustments Notes Pro Forma Gemstone Adjustments Notes Combined Blaze Adjustments Notes
---------- ----------- ----- --------- -------- ----------- ----- ---------- ------- ----------- -----
(DM) (DM) (DM) (DM) (DM) (DM) (DM) (DM)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue......... 81,729 -- 81,729 24,639 -- 106,368 27,896 --
Cost of Sales... (32,870) -- (32,870) (9,110) -- (41,980) (11,614) --
---------- ------- -------- ------- --------- ---------- ------- ---------
Gross profit.... 48,859 -- 48,859 15,529 -- 64,388 16,282 --
---------- ------- -------- ------- --------- ---------- ------- ---------
Selling
expenses........ (36,283) -- (36,283) (13,062) -- (49,345) (23,750) --
General and
administrative
expenses........ (15,725) -- (15,725) (6,144) -- (21,869) (6,965) --
Research and
development
expenses ....... (21,437) -- (21,437) (7,612) -- (29,049) (7,122) --
Amortization of
goodwill and
other intangible
assets from
acquisitions.... (15,184) -- (15,184) -- (37,504) (3) (52,688) -- (62,260) (3)
Non-cash charges
associated with
stock option
grants.......... (30,735) -- (30,735) -- (4,184) (7) (34,919) (17,699) (12,721) (7)
---------- ------- -------- ------- --------- ---------- ------- ---------
Total Operating
expenses........ (119,364) -- (119,364) (26,818) (41,688) (187,870) (55,536) (74,981)
---------- ------- -------- ------- --------- ---------- ------- ---------
Operating loss.. (70,505) -- (70,505) (11,289) (41,688) (123,482) (39,254) (74,981)
Interest
expense, net.... (6,410) (13,777) (5) (20,187) (646) -- (20,833) (253) --
Other income,
net............. 460 -- 460 -- -- 460 2,571 --
---------- ------- -------- ------- --------- ---------- ------- ---------
Loss before
income taxes and
minority
interests....... (76,455) (13,777) (90,232) (11,935) (41,688) (143,855) (36,936) (74,981)
Income tax
expense......... (330) -- (330) (259) -- (589) (104) --
Minority
interest........ 99 -- 99 -- -- 99 -- --
---------- ------- -------- ------- --------- ---------- ------- ---------
Net loss from
continuing
operations...... (76,686) (13,777) (90,463) (12,194) (41,688) (144,345) (37,040) (74,981)
========== ======= ======== ======= ========= ========== ======= =========
Basic and
diluted loss per
share; Net loss
from continuing
operations...... (2.84) (4.89)
========== ==========
Weighted average
number of common
shares
outstanding..... 26,966,236 2,219,983 (6e) 29,538,219 4,463,246 (6e)
========== ========= === ========== ========= ===
<CAPTION>
Total
Pro Forma
Combined
-----------
(DM)
<S> <C>
Revenue......... 134,264
Cost of Sales... (53,594)
-----------
Gross profit.... 80,670
-----------
Selling
expenses........ (73,095)
General and
administrative
expenses........ (28,834)
Research and
development
expenses ....... (36,171)
Amortization of
goodwill and
other intangible
assets from
acquisitions.... (114,948)
Non-cash charges
associated with
stock option
grants.......... (65,339)
-----------
Total Operating
expenses........ (318,387)
-----------
Operating loss.. (237,717)
Interest
expense, net.... (21,086)
Other income,
net............. 3,031
-----------
Loss before
income taxes and
minority
interests....... (255,772)
Income tax
expense......... (693)
Minority
interest........ 99
-----------
Net loss from
continuing
operations...... (256,366)
===========
Basic and
diluted loss per
share; Net loss
from continuing
operations...... (7.62)
===========
Weighted average
number of common
shares
outstanding..... 33,649,465
===========
</TABLE>
5
<PAGE>
The unaudited statement of operations of MeTechnology for the period July 1,
1998 to May 21, 1999 is:
<TABLE>
<CAPTION>
MeTechnology
------------------------------------------------
(Less) (Add)
January 1, January 1, January 1, July 1,
1998 thru 1998 thru 1999 thru 1998 thru July 1, 1998
December 31, June 30, May 21, May 21, Reconciliation thru
1998 1998 1999 1999 German GAAP to May 21, 1999
German GAAP German GAAP German GAAP German GAAP US GAAP US GAAP
------------ ----------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue................. 4,870 2,922 1,400 3,348 1,196 4,544
Cost of sales........... (1,874) (625) (1,223) (2,472) (147) (2,619)
------ ------ ------ ------- ----- -------
Gross profit (loss)..... 2,996 2,297 177 876 1,049 1,925
------ ------ ------ ------- ----- -------
Selling expenses........ (3,514) (1,171) (2,617) (4,960) -- (4,960)
General and
administrative
expenses............... (4,100) (1,367) (3,100) (5,833) -- (5,833)
Research and development
expenses............... (2,226) (742) (1,696) (3,180) -- (3,180)
------ ------ ------ ------- ----- -------
Total operating
expenses............... (9,840) (3,280) (7,413) (13,973) -- (13,973)
------ ------ ------ ------- ----- -------
Operating loss.......... (6,844) (983) (7,236) (13,097) 1,049 (12,048)
------ ------ ------ ------- ----- -------
Interest expense........ (267) (75) (198) (390) -- (390)
------ ------ ------ ------- ----- -------
Loss before income
taxes.................. (7,111) (1,058) (7,434) (13,487) 1,049 (12,438)
------ ------ ------ ------- ----- -------
Income taxes............ (27) (13) (3) (17) -- (17)
------ ------ ------ ------- ----- -------
Net loss................ (7,138) (1,071) (7,437) (13,504) 1,049 (12,455)
====== ====== ====== ======= ===== =======
</TABLE>
Based on German GAAP, the audited statement of operations for the year ended
December 31, 1998 has been prepared presenting costs by their nature. To comply
with the functional cost format commonly used under U.S. GAAP, the costs
incurred have been reclassified to cost of sales, selling, general and
administrative as well as research and development expenses based on the
character of the underlying costs.
A reconciliation from German GAAP to U.S. GAAP has been performed to account
for differences in revenue recognition on long-term software customization
projects. Under German GAAP, license revenue is realized upon delivery of the
software, while the customization work is accounted for separately under the
completed-contract-method. Under U.S. GAAP, these license and customization
revenues would be recognized using the percentage-of-completion-method.
6
<PAGE>
The statement of operations of TST for the period July 1, 1998 to May 9,
1999 is:
<TABLE>
<CAPTION>
TST
---------------------------------------------------------------
(Less) (Add)
October 1, 1997 October 1, 1998 July 1, 1998
Year ended to to to
September 30, 1998 June 30, 1998 May 9, 1999 May 9, 1999
------------------ --------------- --------------- ------------
<S> <C> <C> <C> <C>
Revenue................. 7,896 5,219 5,698 8,375
Cost of sales........... (2,633) (2,168) (2,524) (2,989)
------ ------ ------ ------
Gross profit............ 5,263 3,051 3,174 5,386
------ ------ ------ ------
Selling expenses........ (1,109) (802) (555) (862)
General and
administrative
expenses............... (735) (470) (1,185) (1,450)
Research and development
expenses............... (3,232) (1,917) (1,891) (3,206)
------ ------ ------ ------
Total operating
expenses............... (5,076) (3,189) (3,631) (5,518)
------ ------ ------ ------
Operating income
(loss)................. 187 (138) (457) (132)
------ ------ ------ ------
Interest income......... 43 33 37 47
Interest expense........ (23) (15) (125) (133)
------ ------ ------ ------
Income before taxes..... 207 (120) (545) (218)
------ ------ ------ ------
Income taxes............ (83) (1) 2 (80)
------ ------ ------ ------
Net income (loss)....... 124 (121) (543) (298)
====== ====== ====== ======
</TABLE>
The statement of operations of TST was translated to Deutsche marks using
the average translation rate for the relevant periods.
Notes to Unaudited Pro Forma Data
(1) Reflects the historical issuance of notes at a rate of 11.5%, with a
face value of DM 244,479 and deferred note issuance costs of DM 8,800.
(2) To eliminate license sales of DM 3,000 from Brokat to MeTechnology and
DM 753 from Brokat to TST. No material direct costs were related to these
licenses.
(3) To record additional amortization expense resulting from the increase in
goodwill and intangible assets from acquisitions. These amounts are expected to
be amortized over the following useful lives:
<TABLE>
<CAPTION>
Amortization Included in
already June 30,
Six Months Annual included in 1999 report Estimated
Amortization amortization June 30, pro forma Useful
Intangible Asset Total total 1999 figures Adjustments Life
---------------- ------------ ------------ ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
MeTechnology
Customer list..... 131 261 29 232 5 years
Goodwill.......... 12,927 25,854 2,905 22,949 7 years
------- ------- ----- -------
13,058 26,115 2,934 23,181
------- ------- ----- -------
TST
Customer list..... 402 803 112 691 5 years
Goodwill.......... 2,284 4,567 637 3,930 7 years
------- ------- ----- -------
2,686 5,370 749 4,621
------- ------- ----- -------
Blaze
Goodwill.......... 62,260 124,520 -- 124,520 7 years
------- ------- ----- -------
GemStone
Goodwill.......... 37,484 74,967 -- 74,967 7 years
------- ------- ----- -------
TOTAL............. 115,488 230,972 3,683 227,289
======= ======= ===== =======
</TABLE>
7
<PAGE>
The allocations of purchase price related to the acquisitions of
MeTechnology and TST, and acquisitions of Blaze and GemStone are:
<TABLE>
<CAPTION>
MeTechnology TST Blaze GemStone
------------ ------ --------- --------
<S> <C> <C> <C> <C>
Current assets and other tangible
assets.............................. 8,876 5,345 163,193 13,030
Liabilities assumed.................. (30,324) (6,703) (20,650) (38,277)
Customer list........................ 1,307 4,015 -- --
Goodwill (see Note 6)................ 180,980 31,969 871,637 524,772
------- ------ --------- -------
Purchase Price..................... 160,839 34,626 1,014,180 499,525
======= ====== ========= =======
</TABLE>
The purchase price allocations related to Brokat's acquisitions of Blaze and
GemStone, which are based on Brokat's management's best estimates at this time,
are preliminary and subject to change. At present, Brokat has not been able to
perform a formal review of the net assets that it acquired of these entities
and, accordingly, for purposes of these pro forma financial statements, has
allocated the excess of purchase price over the fair value of net assets
acquired to goodwill. It is possible that a portion of this excess will be
allocated to other acquired intangible assets, such as employee base, customer
lists, or technology. These intangible assets generally have shorter useful
lives than that of goodwill. Had Brokat assigned the entire purchase price to
an intangible asset such as software, which typically has a useful life of
three years, Brokat's pro forma net loss and loss per share would have been as
follows:
<TABLE>
<CAPTION>
Six Months
Year Ended Ended Six Months
June 30, December 31, Ended June
20000 1999 30, 2000
---------- ------------ ----------
<S> <C> <C> <C>
Net loss.................................... (635,036) (347,049) (322,861)
Basic and diluted net loss per share........ (24.07) (10.35) (9.59)
</TABLE>
(4) To account for:
<TABLE>
<CAPTION>
Six Months
Year Ended Ended
June 30, December 31,
1999 1999
---------- ------------
<S> <C> <C>
Financing the acquisition of TST....................... 52 --
Interest expense on the notes.......................... 28,115 14,058
Amortization of deferred note issuance costs........... 880 440
Decrease in interest expense through the repayment of
indebtedness with the proceeds from the offering...... (468) (721)
------ ------
Total................................................ 28,579 13,777
====== ======
</TABLE>
As described in the notes to Brokat's consolidated financial statements,
interest on the financing related to the TST acquisition has been calculated by
discounting the non-interest bearing notes of DM 1,665 using an imputed rate of
interest of 5%. The DM 52 shown above does not include interest expense of DM
20 which already was reflected in Brokat's historical financial statements of
Brokat from the date of acquisition to June 30, 1999.
Interest expense on the notes has been calculated by applying the rate of
interest, 11.5%, to their face value. Deferred note issuance costs are being
recognized using the effective interest method over the 10-year term of the
notes.
Management used part of the proceeds from the note offering to repay
indebtedness of Brokat. The annual interest rate on this debt outstanding at
the year ended June 30, 1999 was between 4.08% and 7%. No extraordinary gain or
loss will be recognized in relation to the repayment of the debt mentioned in
the preceding paragraph.
8
<PAGE>
(5) For the six months ended June 30, 2000 to account for:
. DM 14,058, respectively, related to current bond interest expense,
. DM 440, respectively, related to the recognition of deferred note
issuance costs and
. DM 721, respectively, related to a decrease of interest expenses from the
repayment of indebtedness with the proceeds from the sale of the notes.
Interest expense on the notes has been calculated by applying the rate of
interest, 11.5%, to their face value. Deferred note issuance costs are being
recognized over the 10-year term of the notes.
Management used part of the proceeds from the senior notes offering to
repay indebtedness of Brokat. The annual interest rate on this debt
outstanding at the year ended June 30, 1999 was between 4.08% and 7%. No
extraordinary gain or loss will be recognized in relation to the repayment of
this short-term debt.
(6) To account for the acquisitions of Blaze and GemStone (The purchase
price allocation, which is based on management's best estimates at this time,
is preliminary and is subject to change)
(a) Reflects the issuance of Brokat ordinary shares of 4.1 million for
Blaze and 2.1 million for GemStone. According to Financial Accounting
Standards Board, Interpretation No. 44, also reflects the fair market
value, as determined by Black-Scholes, of vested and unvested options of
0.9 million and 0.2 million for Blaze and GemStone. Excluded from this
value and included in deferred compensation is the intrinsic value of
unearned options of 77% for Blaze and 70% for GemStone. See footnote (7)
below.
(b) Reflects the repayment of GemStone debt by Brokat from the issuance
of 66,200 shares of Brokat ordinary shares.
(c) Reflects the elimination of the historical shareholders' equity
accounts of Blaze and GemStone.
(d) The excess of purchase price over fair value of assets acquired plus
acquisition costs of DM 5,000 is reflected as goodwill and is amortized
over an estimated life of 7 years.
(e) Pro forma basic and diluted net loss per share is computed by
dividing the pro forma net loss from continuing operations by the pro forma
weighted average number of common shares outstanding.
(7) In its acquisition of Blaze, Brokat replaced outstanding Blaze stock
options held by employees and directors of Blaze with Brokat stock options,
using the exchange ratio employed to consummate the merger. In compliance with
FASB Interpretation No. 44, the fair value of the Brokat stock options issued
to replace Blaze awards was included as a component of the purchase price for
those Brokat options that are vested as of the date of grant. For those Brokat
options that are not exercisable at the time of grant, the fair value of the
Brokat stock options issued to replace Blaze awards is also included as
component of the purchase price, except that a portion of this amount has been
classified as deferred compensation expense and amortized over the remaining
vesting periods of the options granted. The portion to be classified as
deferred compensation has been initially calculated by taking the difference
between the fair market value of Brokat ordinary shares on the date of grant
compared to the exercise prices of the new awards. However, this amount has
been adjusted to recognize deferred compensation expense only to the extent of
the ratio of the remaining service period on the new awards as a percentage of
total service period under the original award.
9
<PAGE>
(8) Exchange rates used for conversion from US dollars to Deutsche marks:
<TABLE>
<S> <C>
September 30, 1998 (average for 12 months ended)........... $1.00 = DM 1.755
June 30, 1998 (average for 12 months ended)................ $1.00 = DM 1.745
May 29, 1999 (average for 12 months ended)................. $1.00 = DM 1.747
June 30, 1999 (average for 12 months ended)................ $1.00 = DM 1.876
December 31, 1999 (average for 6 months ended)............. $1.00 = DM 1.755
June 30, 2000 (average for six months ended)............... $1.00 = DM 2.039
As of June 30, 2000........................................ $1.00 = DM 2.049
</TABLE>
(9) For the GemStone and Blaze mergers, Brokat has reserved 213,000 Brokat
ordinary shares for issuance of future stock options to the employees of
GemStone and 413,000 Brokat ordinary shares for issuance of future stock
options to the employees of Blaze. These options will be granted through 2001
with exercise prices at the future fair market value at the date of grant.
These options will be issued under a compensatory plan as defined by Accounting
Principles Board Opinion No. 25.
10
