<PAGE> 1
EXHIBIT 99.03
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial
statements give effect to Broadbase's acquisitions of Rubric, Inc. in February
2000 and Panopticon, Inc. in September 2000. The acquisitions of both Rubric and
Panopticon were recorded using the purchase method of accounting for business
combinations. The following pro forma statements reflect these acquisitions
using the purchase method of accounting for business combinations and include
the pro forma adjustments described in the accompanying notes.
The pro forma combined condensed balance sheet as of June 30, 2000
combines Broadbase's and Panopticon's consolidated balance sheets as of June 30,
2000 as if the acquisitions had been consummated on that date. Because
Broadbase's acquisition of Rubric was completed on February 1, 2000, the effect
of this transaction is already reflected in Broadbase's consolidated balance
sheet at June 30, 2000.
The pro forma combined condensed statement of operations of Broadbase
for the year ended December 31, 1999 and the six months ended June 30, 2000
assume that the acquisitions of Rubric and Panopticon took place on January 1,
1999.
Broadbase's, Rubric's and Panopticon's results included in the pro
forma combined condensed statements of operations for the year ended December
31, 1999 are derived from their respective December 31, 1999 audited financial
statements. Broadbase's and Panopticon's results included in the pro forma
combined condensed balance sheet as of June 30, 2000 and pro forma combined
condensed statements of operations for the six months ended June 30, 2000 are
derived from their respective June 30, 2000 unaudited consolidated financial
statements.
The unaudited condensed consolidated financial information of Broadbase,
Rubric and Panopticon has been prepared in accordance with generally accepted
accounting principles applicable to interim financial information and, in the
opinion of management, includes all adjustments necessary for a fair
presentation of the financial information for such interim periods.
The unaudited pro forma combined condensed information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have actually occurred if the
acquisitions had been consummated as of the date indicated, nor is it
necessarily indicative of future operating results or financial position. The
pro forma adjustments are based on the information available at the date of this
document and are subject to change based upon completion of the transactions and
final purchase price allocations, including completion of third party
appraisals.
<PAGE> 2
BROADBASE SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
BROADBASE
PRO FORMA AND
BROADBASE PANOPTICON ADJUSTMENTS PANOPTICON
--------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............. $ 165,244 $ 73 $ -- $ 165,317
Short-term investments ................. 56,181 -- -- 56,181
Restricted cash ........................ 633 -- -- 633
Accounts receivable, net ............... 13,822 -- -- 13,822
Prepaid expenses and other assets ...... 4,346 1 -- 4,347
--------- --------- --------- ---------
Total current assets ............. 240,226 74 -- 240,300
Property and equipment, net ............ 8,426 189 -- 8,615
Goodwill and purchased
intangibles and other assets ......... 360,934 40 88,387(A) 449,361
--------- --------- --------- ---------
$ 609,586 $ 303 $ 88,387 $ 698,276
========= ========= ========= =========
LIABILITIES & STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable ....................... $ 1,414 $ 363 $ -- $ 1,777
Accrued liabilities .................... 18,048 268 900(B) 19,216
Notes payable to stockholders .......... -- 250 -- 250
Current portion of capital
lease obligations .................... 351 -- -- 351
Deferred revenue ....................... 8,768 -- -- 8,768
--------- --------- --------- ---------
Total current liabilities ........ 28,581 881 900 30,362
Capital lease obligations, net
of current portion ................... 221 -- -- 221
Other liabilities ...................... -- -- -- --
Redeemable convertible
preferred stock ...................... -- -- -- --
STOCKHOLDERS EQUITY (DEFICIT):
Preferred stock ........................ -- 1,477 (1,477)(C) --
Common stock ........................... 47 311 (308)(D) 50
Additional paid-in capital ............. 714,750 1,504 99,722(D) 815,976
Other comprehensive loss ............... (92) -- -- (92)
Deferred compensation .................. (23,403) (423) (11,054)(E) (34,880)
Notes receivable from stockholders ..... (722) -- -- (722)
Accumulated deficit .................... (109,796) (3,447) 604(F) (112,639)
--------- --------- --------- ---------
Total stockholders'
equity (deficit) ............... 580,784 (578) 87,487 667,693
--------- --------- --------- ---------
$ 609,586 $ 303 $ 88,387 $ 698,276
========= ========= ========= =========
</TABLE>
<PAGE> 3
BROADBASE SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA
BROADBASE,
PRO FORMA RUBRIC, AND
BROADBASE RUBRIC PANOPTICON ADJUSTMENTS PANOPTICON
--------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Product license ......................... $ 7,689 $ 1,868 $ -- $ -- $ 9,557
Professional services ................... 1,611 1,254 -- -- 2,865
Maintenance ............................. 1,142 308 -- -- 1,450
--------- --------- --------- --------- ---------
Total revenues ...................... 10,442 3,430 -- -- 13,872
--------- --------- --------- --------- ---------
Cost of revenues:
Product license ......................... 1,437 278 -- -- 1,715
Professional services ................... 1,931 1,843 -- -- 3,774
Maintenance ............................. 679 246 -- -- 925
Amortization of core and
developed technology ................... -- -- -- 1,722(G) 1,722
--------- --------- --------- --------- ---------
Total cost of revenues .............. 4,047 2,367 -- 1,722 8,136
--------- --------- --------- --------- ---------
Gross profit ............................ 6,395 1,063 -- (1,722) 5,736
--------- --------- --------- --------- ---------
Operating expenses:
Sales and marketing ..................... 15,092 7,677 141 -- 22,910
Research and development ................ 6,024 5,940 181 -- 12,145
General and administrative .............. 2,011 9,256 328 -- 11,595
Amortization of goodwill and
purchased intangibles .................. -- -- -- 89,187(I) 89,187
Stock-based compensation ................ 6,403 -- -- 5,977(H) 12,380
Merger expenses ......................... 1,000 -- -- -- 1,000
--------- --------- --------- --------- ---------
Total operating expenses ............ 30,530 22,873 650 95,164 149,217
--------- --------- --------- --------- ---------
Operating loss .......................... (24,135) (21,810) (650) (96,886) (143,481)
Other income (loss) net .................. 565 (216) (18) -- 331
--------- --------- --------- --------- ---------
Net loss ............................ (23,570) (22,026) (668) (96,886) (143,150)
Accretion and deemed dividend on
preferred stock ......................... -- -- -- -- --
--------- --------- --------- --------- ---------
Net loss attributable to
common stockholders ................ $ (23,570) $ (22,026) $ (668) $ (96,886) $(143,150)
========= ========= ========= ========= =========
Basic and diluted net loss
per share .......................... $ (1.87) $ (5.75) $ (0.37) $ (6.74)
========= ========= ========= =========
Shares used in computing
basic and diluted net loss per
share .............................. 12,592 3,832 1,819 2,993 21,236
========= ========= ========= ========= =========
</TABLE>
<PAGE> 4
BROADBASE SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA
BROADBASE,
PRO FORMA RUBRIC AND
BROADBASE RUBRIC(1) PANOPTICON ADJUSTMENTS PANOPTICON
--------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenue:
Product license ............... $ 11,760 $ 25 $ -- $ -- $ 11,785
Professional services ......... 3,381 215 -- -- 3,596
Maintenance ................... 1,553 46 -- -- 1,599
--------- --------- --------- --------- ---------
Total revenue ............... 16,694 286 -- 16,980
--------- --------- --------- ---------
Cost of revenues:
Product license ............... 2,041 5 -- -- 2,046
Professional services ......... 4,227 349 -- -- 4,576
Maintenance ................... 778 44 -- -- 822
Amortization of core
and developed technology .... 661 -- -- 59(G) 720
--------- --------- --------- --------- ---------
Total cost of revenue ....... 7,707 398 -- 59 8,164
--------- --------- --------- --------- ---------
Gross profit ................ 8,987 (112) -- (59) 8,954
--------- --------- --------- --------- ---------
Operating expenses:
Sales and marketing ........... 15,924 1,065 230 -- 17,219
Research and
development ................. 6,224 1,088 1,246 -- 8,558
General and
administrative .............. 2,493 839 270 -- 3,602
In-process research
and development .............. 10,057 -- -- -- 10,057
Amortization of
goodwill and
purchased intangibles ........ 29,740 -- -- 14,853(I) 44,593
Stock-based
compensation ................ 7,903 -- -- 1,554(H) 9,457
Merger expenses ............... 10,280 4,471 -- (4,471)(K) 10,280
--------- --------- --------- --------- ---------
Total operating
expenses .................. 82,621 7,463 1,746 11,936 103,766
--------- --------- --------- --------- ---------
Operating loss ................ (73,634) (7,575) (1,746) (11,995) (94,950)
Other income, net ............... 5,510 (79) (328) -- 5,103
--------- --------- --------- --------- ---------
Net loss .................... (68,124) (7,654) (2,074) (11,995) (89,847)
--------- --------- --------- --------- ---------
Accretion and deemed
dividend on preferred
stock ......................... -- -- (519) 519(J) --
--------- --------- --------- --------- ---------
Net loss attributable
to common stockholders ........ $ (68,124) $ (7,654) $ (2,593) $ (11,476) $ (89,847)
========= ========= ========= ========= =========
Basic and diluted per
share ......................... $ (1.58) $ (1.41) $ (0.55) $ (1.97)
========= ========= ========= =========
Shares used in
computing basic and
diluted net loss per share ..... 43,029 5,410 4,677 (7,427) 45,689
========= ========= ========= ========= =========
</TABLE>
----------
(1) Broadbase's acquisition of Rubric was completed on February 1, 2000;
therefore Rubric's historical operating results included in this pro
forma presentation are for the month ended January 31, 2000 only.
<PAGE> 5
NOTES TO THE
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
PANOPTICON ACQUISITION
Below is a table of the acquisition consideration, purchase price
allocation and annual amortization of the intangible assets and goodwill
acquired in Broadbase's acquisition of Panopticon (in thousands):
<TABLE>
<CAPTION>
ANNUAL
AMORTIZATION AMORTIZATION
LIFE OF INTANGIBLES
------------ --------------
<S> <C> <C> <C>
Acquisition consideration:
Value of securities issued:
Common stock............................................ $ 85,353
Stock options and warrants.............................. 15,876
Acquisition costs.......................................... 900
--------
Total acquisition consideration.................... $102,129
========
Purchase price allocation:
Tangible net assets (liabilities) acquired................. $ (576)
Intangible assets acquired:
In-process research and development..................... 2,843
Core technology......................................... 679 5 years 136
Assembled workforce..................................... 573 3 years 191
Patent applications..................................... 176 3 years 59
Goodwill................................................ 86,959 5 years 17,392
Deferred compensation...................................... 11,475 0-4 years 5,977
--------
Total.............................................. $102,129
========
</TABLE>
Broadbase issued 2,659,808 shares of its common stock, valued at $32.09
per share, the average market price per share of Broadbase common stock in a
range of seven trading days before and after the announcement date (July 7,
2000) of the acquisition. In addition, Broadbase issued 534,824 options and
warrants to purchase shares of its common stock in exchange for all options and
warrants to purchase shares of Panopticon common stock. The value of the options
and warrants to be issued by Broadbase was determined by estimating their fair
value as of July 7, 2000 using the Black-Scholes option pricing model with the
following weighted average assumptions:
- risk free interest rate of 5.90% to 5.97%
- dividend yield of 0.0%
- expected life of 0.5 years for vested options.
- expected life of 2.9 to 3.5 years for unvested options and
warrants.
- volatility factor for the expected market price of Broadbase
common stock of 0.60.
Tangible assets of Panopticon acquired principally included cash and
cash equivalents and other assets. Liabilities of Panopticon assumed principally
included accrued liabilities and short-term debt.
The value allocated to projects identified as in-process research and
development of the Panopticon eMerchandising engine product release version 2.0
was charged to expense during the third quarter of 2000 upon the close of the
merger. This write-off was necessary because the acquired in-process research
and development had not yet reached technological feasibility and had no future
alternative uses, and the related products under development may not have
achieved commercial viability. The nature of the efforts required to develop the
purchased in-process research and development into commercially viable products
principally relate to the completion of all planning, designing, prototyping,
verification and testing activities that are necessary to establish that the
products could be produced to meet their design specifications, including
functions, features and technical performance requirements.
<PAGE> 6
The value of the purchased in-process research and development was
determined by estimating the projected net cash flows related to the products,
including costs to complete the development of the technology and the future
revenues to be earned upon commercialization of the products. These cash flows
were then discounted back to their net present value. The projected net cash
flows from the project were based on management's estimates of revenues and
operating profits related to the projects.
To determine the revenue attributable to the in-process technology,
consideration was also given to the contribution of the existing technology
which will be utilized in the development of the in-process technology, referred
to as "core technology." The value allocated to the core technology was
determined by assigning a "leverage factor" of 15% to the estimated projected
net cash flows related to the products under development after analysis of both
the effort and work completed as well as the expected value of the in-process
technology. The projected net cash flows attributable to core technology using
the leverage factor were then discounted back to their net present value. The
core technology is being amortized over its estimated useful life of five years.
The value allocated to the assembled workforce is attributable to the
Panopticon workforce in place after the acquisition, which eliminated the need
to hire new replacement employees. The value was determined by estimating the
cost involved in assembling a new workforce including costs of salaries,
benefits, training and recruiting. The value of the assembled workforce is being
amortized on a straight-line basis over three years.
The value allocated to the patent application was determined by
considering, among other factors, the assumption that in lieu of ownership of
the patent applications, a third party would be willing to pay a royalty in
order to exploit the related benefits of such patent applications. Estimated
royalties to be received over the next four years were then discounted to their
present value using an appropriate rate of return. This asset is being amortized
on a straight-line basis over three years.
Deferred compensation represents a portion of the estimated intrinsic
value of unvested Panopticon stock options assumed by Broadbase in the merger
agreement to the extent that employee service is required after the closing date
of the acquisition in order to vest. In March 2000, the Financial Accounting
Standards Board issued FASB Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation, an Interpretation of APB No. 25. The
interpretation, which is effective as of July 1, 2000, requires that the
intrinsic value of assumed unvested options be recorded as compensation expense
subsequent to the merger over the remaining term of the option's vesting period,
whereas options assumed from mergers and acquisitions prior to July 2000
resulted in no compensation charges but were included in Broadbase's allocation
of purchase price consideration as a component of goodwill. Broadbase is
amortizing the value assigned to deferred compensation on a graded vesting
method over the remaining vesting period of each option of up to three and
one-half years.
Goodwill was determined based on the residual difference between the
amount of consideration to be paid and the values assigned to identifiable
tangible and intangible assets. The goodwill is being amortized on a
straight-line basis over five years.
A charge for in-process research and development attributable to the
purchase of Panopticon of $2.8 million has been included in accumulated deficit
in the pro forma combined condensed balance sheet, but has been excluded from
the pro forma combined condensed statements of operations because the charge is
non-recurring.
<PAGE> 7
RUBRIC ACQUISITION
Below is a table of the acquisition consideration, purchase price
allocation and annual amortization of the intangible assets and goodwill
acquired in Broadbase's acquisition of Rubric (in thousands):
<TABLE>
<CAPTION>
ANNUAL
AMORTIZATION AMORTIZATION
LIFE OF INTANGIBLES
------------ --------------
<S> <C> <C> <C>
Acquisition consideration:
Value of securities issued:
Common stock.................................................... $301,694
Stock options and warrants...................................... 61,260
Acquisition costs.................................................. 9,000
--------
Total acquisition consideration............................ $371,954
========
Purchase price allocation:
Tangible net assets (liabilities) acquired......................... $ (126)
Intangible assets acquired:
Developed technology............................................ 282 1 year $282
In-process research and development............................. 10,058
Core technology................................................. 6,523 5 years 1,305
Assembled workforce............................................. 1,738 3 years 579
Tradename....................................................... 773 5 years 155
OEM distribution contract....................................... 2,027 3 years 676
Goodwill........................................................ 350,679 5 years 70,136
--------
Total...................................................... $371,954
========
</TABLE>
Broadbase issued 5,984,192 shares of its common stock, valued at $50.42
per share, the average market price per share of Broadbase common stock in a
range of seven trading days before and after December 9, 1999, the announcement
date of the acquisition. In addition, Broadbase issued 1,216,000 options and
warrants to purchase shares of its common stock in exchange for all options and
warrants to purchase shares of Rubric common stock. The value of the options and
warrants to be issued by Broadbase was determined by estimating their fair value
as of December 9, 1999 using the Black-Scholes option pricing model with the
following weighted average assumptions:
- risk free interest rate of 5.0%;
- dividend yield of 0.0%;
- expected life of 0.5 years for vested options and warrants;
- expected life of 3.4 years for unvested options and warrants;
and
- volatility factor for the expected market price of Broadbase
common stock of 0.60.
Tangible assets of Rubric acquired principally included cash and cash
equivalents, accounts receivable, fixed assets, and other assets. Liabilities of
Rubric assumed principally included accounts payable, accrued liabilities,
capital lease obligations, and long-term debt.
To determine the value of the developed technology, the expected future
cash flows attributable to all existing technology was discounted, taking into
account risks related to the characteristics and applications of the developed
technology, existing and future markets, and assessments of the stage of the
technology's life cycle. The analysis resulted in a valuation for developed
technology that had reached technological feasibility and therefore was
capitalizable. The developed technology is being amortized on a straight-line
basis over one year.
The value allocated to projects identified as in-process research and
development of the Rubric eMA product release version 3.0 and 4.0 was charged to
expense in February 2000 immediately following the completion of the Rubric
acquisition. This write-off was necessary because the acquired in-process
research and development had not yet reached technological feasibility and had
no future alternative uses, and the related products under development may not
have achieved commercial viability. The nature of the efforts required to
develop the purchased in-process research and development into commercially
viable products principally relate to the
<PAGE> 8
completion of all planning, designing, prototyping, verification and testing
activities that are necessary to establish that the product can be produced to
meet its design specifications, including functions, features and technical
performance requirements.
The value of the purchased in-process research and development was
determined by estimating the projected net cash flows related to the products,
including costs to complete the development of the technology and the future
revenues to be earned upon commercialization of the products. These cash flows
were then discounted back to their net present value. The projected net cash
flows from the project were based on management's estimates of revenues and
operating profits related to the projects.
To determine the revenue attributable to the in-process technology,
consideration was also given to the contribution of the existing technology
which will be utilized in the development of the in-process technology, referred
to as "core technology." The value allocated to the core technology was
determined by assigning a "leverage factor" of 25% to the estimated projected
net cash flows related to the products under development after analysis of both
the effort and work completed as well as the expected value of the in-process
technology. The projected net cash flows attributable to core technology using
the leverage factor were then discounted back to their net present value. The
core technology is being amortized over its estimated useful life of five years.
The value allocated to the assembled workforce is attributable to the
Rubric workforce in place after the acquisition, which eliminated the need to
hire new replacement employees. The value was determined by estimating the cost
involved in assembling a new workforce, including costs of salaries, benefits,
training and recruiting. The value of the assembled workforce is being amortized
on a straight-line basis over three years.
The value of the Rubric tradename was determined by considering, among
other factors, the assumption that in lieu of ownership of the tradename, a
third party would be willing to pay a royalty in order to exploit the related
benefits of such tradename. Estimated royalties to be received over the next
four years were then discounted to their present value using an appropriate rate
of return. The value of tradename is being amortized on a straight-line basis
over five years.
The value of the OEM distribution contract was determined by computing
the present value of the estimated net cash flows to be generated over three
years, the remaining life of the agreement at the time the Rubric acquisition
closed. This asset is being amortized on a straight-line basis over three years.
Goodwill was determined based on the residual difference between the
amount of consideration paid and the values assigned to identifiable tangible
and intangible assets. The goodwill is being amortized on a straight-line basis
over five years.
A charge for in-process research and development of $10.1 million
attributable to the completed purchase of Rubric on February 1, 2000, has been
excluded from the pro forma combined condensed statement of operations for the
year ended December 31, 1999 because it is non-recurring, but has been included
in the pro forma combined condensed balance sheet at June 30, 2000 and the pro
forma combined condensed statement of operations for the six months ended June
30, 2000 because Broadbase recorded this amount in its historical financial
statements upon close of the transaction.
Costs of integrating the operations of Broadbase and Rubric and other
merger-related costs of $10.2 million are included in the pro forma combined
condensed statement of operations for the six months ended June 30, 2000 because
these costs were incurred and recorded by Broadbase during the period. However,
these charges have not been included in the pro forma combined condensed
statement of operations for the year ended December 31, 1999 because at the time
of the merger they represented costs which would affect future operations and
did not qualify as liabilities in connection with a purchase business
combination under EITF 95-3, "Recognition of Liabilities in Connection with a
Purchase Business Combination."
<PAGE> 9
PRO FORMA NET LOSS PER SHARE
Pro forma basic and diluted net loss per share are based on the weighted
average number of shares of Broadbase common stock outstanding during the period
and the number of shares of Broadbase common stock issued or to be issued in
connection with the acquisitions of Rubric and Panopticon. The following options
have not been included in the computation of pro forma diluted net loss per
share because their effect would be antidilutive.
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, JUNE 30,
POTENTIAL COMMON SECURITIES 1999 2000
--------------------------- ------------- --------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
Broadbase options outstanding.................................................... 6,390 15,247
Options and warrants issued in connection with the Rubric acquisition............ 1,216 --
Options and warrants issued in connection with the Panopticon acquisition........ 535 --
----- ------
8,141 15,247
</TABLE>
PRO FORMA ADJUSTMENTS
The adjustments to the unaudited pro forma combined condensed balance
sheet as of June 30, 2000 and to the unaudited pro forma combined condensed
statements of operations for the year ended December 31, 1999 and the six months
ended June 30, 2000 are as follows:
(A) To record goodwill and other intangibles resulting from
Broadbase's acquisition of Panopticon.
(B) To record the accrual for Broadbase's direct acquisition
costs incurred in connection with the acquisition of Panopticon.
(C) To eliminate Panopticon's outstanding Series A Convertible
Preferred Stock.
(D) To eliminate the outstanding common stock of Panopticon
($311,000 no par; $1.5 million additional paid-in capital) and to
reflect the issuance of shares of Broadbase's common stock and options
and warrants to purchase Broadbase common stock in connection with the
acquisitions of Panopticon ($3,000 par; $101.2 million additional
paid-in capital).
(E) To eliminate the pre-existing deferred stock compensation
balances of Panopticon ($423,000) and to record deferred stock
compensation equal to the intrinsic value of unvested options to
purchase shares of Broadbase common stock issued to Panopticon option
holders ($11.5 million) in exchange for options to purchase common stock
of Panopticon.
(F) To eliminate Panopticon's accumulated deficit through June
30, 2000 and to record $2.8 million for in-process research and
development charges incurred by Broadbase in connection with the
acquisition of Panopticon.
(G) To record amortization of core and developed technology
acquired from Rubric and Panopticon.
(H) To record stock-based compensation expense for the
amortization of the intrinsic value of unvested options to purchase
Broadbase common stock issued to Panopticon option holders in exchange
for options to purchase Panopticon's common stock ($6.0 million for the
year ended December 31, 1999 and $1.6 million for the six months ended
June 30, 2000).
(I) To reflect amortization of goodwill and other intangible
assets recorded in connection with the acquisitions of Rubric and
Panopticon.
(J) To eliminate accretion on Panopticon's Series A Convertible
Preferred Stock.
(K) To eliminate expense relating to Rubric's investment banking
fees which were paid by Broadbase as direct costs of the merger
transaction and therefore included in the total purchase price
consideration allocated to the fair value of the net tangible and
intangible assets acquired from Rubric.
