<PAGE>
Exhibit 99.1
PRO FORMA FINANCIAL INFORMATION
INDEX
PAGE
----
Description of Pro Forma Financial Information P-2
Unaudited Pro Forma Consolidated Condensed Balance
Sheet as of September 30, 2000 P-3
Unaudited Pro Forma Consolidated Condensed Statement of P-4
Operations for the Nine Months ended September 30, 2000
Unaudited Pro Forma Consolidated Condensed Statement of P-5
Operations for the Year ended December 31, 1999
Notes to Unaudited Pro Forma Financial Information P-6
P-1
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The accompanying pro forma financial information gives effect to the sale
of the the broadband subscriber management software business of the Company's
CAISSoft subsbidiary to Cisco Systems, Inc. as if such transaction had been
consummated on September 30, 2000 in the case of the Unaudited Pro Forma
Consolidated Condensed Balance Sheet of CAIS Internet, Inc., and on January 1,
1999 in the case of the Unaudited Pro Forma Consolidated Condensed Statements of
Operations of CAIS Internet, Inc. The pro forma consolidated condensed financial
information is presented for illustrative purposes only and is not necessarily
indicative of what CAIS Internet, Inc.'s actual financial position and results
of operations would have been had the above-referenced transaction been
consummated as of the above-referenced dates or of the financial position or
results of operations that may be reported by CAIS Internet, Inc. in the future.
The following data should be read in conjunction with CAIS Internet, Inc.'s
Consolidated Financial Statements and related notes included in CAIS Internet,
Inc.'s Form 10-K, Form 10-Q's and related notes included elsewhere herein.
P-2
<PAGE>
CAIS INTERNET, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
As of September 30, 2000
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------------
CAISSoft Gain Pro Forma
CAIS Internet CAISSoft (1) Retained (2) Adjustments (3) CAIS Internet
-------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $ 10,078 $ 396 $ 396 $ 101,784 $ 111,862
Accounts receivable, net of allowance for
doubtful accounts 11,003 2,020 2,020 - 11,003
Prepaid expenses and other current assets 7,407 1,196 1,196 - 7,407
--------- --------- -------- --------- ----------
Total current assets 28,488 3,612 3,612 101,784 130,272
Property and equipment, net 238,649 4,542 1,136 - 235,243
Deferred debt financing costs, net 1,130 - - - 1,130
Intangible assets and goodwill, net 51,836 26,990 (4) 2,699 (5) - 27,545
Receivable from officers 450 - - - 450
Other assets 10,017 599 599 - 10,017
--------- --------- -------- --------- ----------
Total assets $ 330,570 $ 35,743 $ 8,046 $ 101,784 $ 404,657
========= ========= ======== ========= ==========
Current liabilities
Accounts payable and accrued expenses $ 111,807 $ 14,822 $ 14,322 $ 1,750 $ 113,057
Obligations under capital lease - - - - -
Current portion of long-term debt 39,927 - - - 39,927
Unearned revenues 1,450 103 103 - 1,450
--------- --------- --------- --------- ----------
Total current liabilities 153,184 14,925 14,425 1,750 154,434
Other long-term liabilities 648 40 40 - 648
--------- --------- --------- --------- ----------
Total liabilities 153,832 14,965 14,465 1,750 155,082
--------- --------- --------- --------- ----------
Series C cumulative mandatory redeemable
convertible preferred stock 15,000 - - - 15,000
--------- --------- --------- --------- ----------
Series D cumulative mandatory redeemable
convertible preferred stock 103,394 - - - 103,394
--------- --------- --------- --------- ----------
Series F cumulative mandatory redeemable
convertible preferred stock 40,467 - - - 40,467
--------- --------- --------- --------- ----------
Series G cumulative mandatory redeemable
convertible preferred stock 20,350 - - - 20,350
--------- --------- --------- --------- ----------
Put warrants 1,267 - - - 1,267
--------- --------- --------- --------- ----------
Commitments and contingencies
Stockholders' (deficit) equity
Common stock 242 - - - 242
Additional paid-in capital 223,580 - - - 223,580
Warrants outstanding 54,702 - - 260 54,692
Deferred compensation (1,431) - - - (1,431)
Treasury stock (17,073) - - - (17,073)
Accumulated deficit (263,760) 20,778 (6,419) 99,774 (191,183)
--------- --------- --------- --------- ----------
Total stockholders' (deficit) equity (3,740) 20,778 (6,419) 100,034 69,097
--------- --------- --------- --------- ----------
Total liabilities and stockholders'
(deficit) equity $ 330,570 $ 35,743 $ 8,046 $ 101,784 $ 404,657
========= ========= ========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
condensed statements.
P-3
<PAGE>
CAIS INTERNET, INC.
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Nine Months Ended September 30, 2000
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------
CAISSoft Pro Forma
CAIS Internet CAISSoft (6) Retained (7) CAIS Internet
------------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net revenues:
Services $ 16,604 $ 1,013 $ 742 $ 16,333
Software 3,262 3,262 1,594 1,594
Equipment 6,733 2,287 1,677 6,123
----------- ---------- -------- -------------
Total net revenues 26,599 6,562 4,013 24,050
----------- ---------- -------- -------------
Cost of revenues:
Services
Software 20,160 220 117 20,057
Equipment - - - -
4,346 1,393 1,176 4,129
----------- ---------- -------- -------------
Total cost of revenues 24,506 1,613 1,293 24,186
----------- ---------- -------- -------------
Operating expenses:
Selling, general and administrative 63,550 5,498 2,316 60,368
Research and development 3,984 3,253 - 731
Depreciation and amortization 24,456 10,947 1,146 14,655
Non-cash compensation 1,242 - - 1,242
Treasury stock premium and stock charges 10,348 - - 10,348
Fair value of stock issued to third party for services 190 - - 190
----------- ---------- -------- -------------
Total operating expenses 103,770 19,698 3,462 87,534
----------- ---------- -------- -------------
Loss from operations (101,677) (14,749) (742) (87,670)
Interest income (expense), net:
Interest income 2,039 14 - 2,025
Interest expense (2,355) - - (2,355)
----------- ---------- -------- -------------
Total interest income (expense), net (316) 14 - (330)
----------- ---------- -------- -------------
Net loss 101,993) (14,735) (742) (88,000)
Dividends and accretion on preferred stock (74,591) - - (74,591)
----------- ---------- -------- -------------
Net loss attributable to common stockholders $ 176,584) (14,735) $ (742) $ (162,591)
=========== ========== ======== =============
Basic and diluted loss per share:
Loss attributable to common stockholders $ (7.64) $ (7.03)
=========== =============
Basic and diluted weighted-average shares outstanding 23,117 23,117
=========== =============
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
condensed statements.
<PAGE>
CAIS INTERNET, INC.
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Year Ended December 31, 1999
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------
CAISSoft Pro Forma
CAIS Internet CAISSoft (6) Retained (7) CAIS Internet
------------- ---------- --------- -------------
<S> <C> <C> <C> <C>
Net revenues:
Services $ 8,598 $ 259 $ 100 $ 8,439
Equipment 2,186 2,086 1,953 2,053
------------- --------- --------- -------------
Total net revenues 10,784 2,345 2,053 10,492
------------- --------- --------- -------------
Cost of revenues:
Services 7,856 81 11 7,786
Equipment 1,833 1,618 1,590 1,805
------------- --------- --------- -------------
Total cost of revenues 9,689 1,699 1,601 9,591
------------- --------- --------- -------------
Operating expenses:
Selling, general and administrative 39,693 1,816 392 38,269
Research and development 1,593 829 - 764
Depreciation and amortization 7,666 4,734 485 3,417
Non-cash compensation 4,892 - - 4,892
Fair value of stock issued to third party for services 723 - - 723
------------- --------- --------- -------------
Total operating expenses 54,567 7,379 877 48,065
------------- --------- --------- -------------
Loss from operations (53,472) (6,733) (425) (47,164)
Interest income (expense), net:
Interest income 2,419 - - 2,419
Interest expense (1,384) - - (1,384)
------------- --------- --------- -------------
Total interest income (expense), net 1,035 - - 1,035
------------- --------- --------- -------------
Loss from continuing operations (52,437) (6,733) (425) (46,129)
Loss from discontinued operations (340) - - (340)
------------- --------- --------- -------------
Loss before extraordinary item (52,777) (6,733) (425) (46,469)
Extraordinary item -- early extinguishment of debt (551) - - (551)
------------- --------- --------- -------------
Net loss (53,328) (6,733) (425) (47,020)
Dividends and accretion on preferred stock (4,520) - - (4,520)
------------- --------- --------- -------------
Net loss attributable to common stockholders $ (57,848) $ (6,733) $ (425) $ (51,540)
============= ========= ========= =============
Basic and diluted loss per share:
Loss attributable to common stockholders before
discontinued operations and extraordinary item $ (3.37) $ (2.99)
Discontinued operations (0.02) (0.02)
Extraordinary item (0.03) (0.03)
------------- -------------
Total $ (3.42) $ (3.04)
============= =============
Basic and diluted weighted-average shares outstanding 16,937 16,937
============= =============
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
condensed statements.
P-5
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
The pro forma financial information is based on the following assumptions
and adjustments (amounts in thousands except share and per share amounts):
(1) Reflects the total assets and liabilities of the CAISSoft subsidiary
including the assets being sold and retained, and the intangible assets
from the Company's September 1999 purchase of CAISSoft (formerly Atcom,
Inc.). On December 4, 2000, the Company closed on the sale of CAISSoft's
broadband subscriber management software business to Cisco. The Company
retained the kiosk (public terminal) operations of CAISSoft. Approximately
60 former CAISSoft employees transferred to Cisco while 16 employees
remained with the Company.
(2) Reflects the assets and liabilities of the CAISSoft kiosk operations being
retained by the Company. The Company retained all of the accounts
receivable, accounts payable and accrued expenses of CAISSoft. Property and
equipment was allocated based on the identifiable assets retained by the
Company. The gain on the sale to Cisco will be based on the assets and
liabilities as of December 4, 2000, rather than September 30, 2000.
(3) Reflects the proceeds from the sale of the CAISSoft assets to Cisco and
related gain, estimated as follows:
Proceeds from sale of operations to Cisco $ 106,284
Fees (4,500)
---------
Subtotal 101,784
Net book value of total CAISSoft (20,778)
Negative book value of CAISSoft assets retained (6,419)
---------
Gain on sale $ 74,587
=========
The Company incurred approximately $900 in bonus payments to former
CAISSoft employees who transferred to Cisco. Additionally, the Company
issued 350,000 options at an exercise price of $3.00 per share and an
exercise life of five years to certain former CAISSoft employees who
transferred to Cisco. The options have been valued at approximately $260
based on the Black-Scholes valuation model using the following assumptions:
risk-free rate of 5.64 percent, no dividend yield, expected lives of five
years, and expected volatility of 116 percent. The Company estimates its
tax liability related to alternative minimum tax and state tax obligations
for the gain on the sale to be approximately $850. The gain on the sale
together with the related bonuses and options issued to CAISSoft employees
and tax liability incurred in connection with closing the Cisco transaction
have been excluded from the accompanying unaudited pro forma consolidated
condensed statements of operations as such charges are one-time in nature
and are incurred solely in connection with the Cisco transaction.
(4) Reflects the unamortized intangible assets of $26,990 as of September 30,
2000 from the Company's September 1999 purchase of CAISSoft (formerly
Atcom, Inc.).
(5) Reflects the unamortized intangible assets of $2,699 as of September 30,
2000 of the CAISSoft operations retained by the Company. The value, at time
of acquisition in September 1999, of the operations retained by the Company
is estimated to be $4,257 of the total CAISSoft purchase consideration of
$42,565.
While the CAISSoft subsidiary has derived a majority of its
revenues from the kiosk operations retained by the Company, the Company
acquired CAISSoft to integrate its subscriber management software system
into its hospitality and multi-family technical solutions. The Company may
license the software from Cisco in the future at a cost to be negotiated.
As the software license agreement provides for the Company to receive up
to 1,500 royalty free, fully paid copies of IPORT software, the
accompanying unaudited pro forma consolidated condensed statements of
operations exclude IPORT software licensing costs as the Company has not
exceeded the 1,500 limit.
(6) Reflects the total statement of operations of CAISSoft including the
operations sold to Cisco.
(7) Reflects the statement of operations of the CAISSoft operations retained by
the Company. Net revenues and costs of services are directly based on the
product lines retained by the Company. Selling, general and administrative
expenses have been allocated based on the salaries and related operational
expenses of the CAISSoft employees retained by the Company.
