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Exhibit 99.2
Active Software, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements
give effect to the acquisition by Active Software, Inc. (Active Software) of all
outstanding shares of Alier, Inc. (Alier) in a transaction accounted for as a
purchase.
The pro forma condensed combined statements of operations of Active
Software, Inc. for the year ended December 31, 1999 assume that the acquisition
of Alier, Inc. took place as of the beginning of the period presented. The
statements combine Active Software and Alier's statements of operations for the
year ended December 31, 1999.
The pro forma condensed combined balance sheet as of December 31, 1999
combines Active Software's December 31, 1999 balance sheet with Alier's December
31, 1999 balance sheet as if the acquisition had been consummated on that date.
The unaudited pro forma condensed combined 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
acquisition had been consummated as of the dates 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
filing and are subject to change based on completion of the final purchase price
allocation, including completion of third-party appraisals.
Active Software's condensed financial information included in these pro
forma financial statements is derived from its December 31, 1999 audited
financial statements included in its Form 10K for the period ended December 31,
1999 filed on March 30, 2000. Alier's condensed financial information included
in these pro forma financial statements is derived from its December 31, 1999
audited financial statements included elsewhere in this filing.
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PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
Active Pro Forma Pro Forma
Software Alier Adjustments Combined
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 17,299 $ 108 $(2,000) (B) $ 15,407
Short-term investments 19,906 - - 19,906
Accounts receivable, net 9,486 135 - 9,621
Prepaid expenses and other current assets 953 37 - 990
-------- ------- ------- -------
Total current assets 47,644 280 (2,000) 45,924
Property and equipment, net 1,951 32 - 1,983
Convertible subordinated promissory note receivable 2,000 - - 2,000
Goodwill and purchased intangibles - - 44,575 (A) 44,575
Other assets 227 - - 227
-------- ------- ------- -------
Total assets $ 51,822 $ 312 $42,575 $ 94,709
======== ======= ======= ========
LIABILITIES AND STOCKHOLDER' EQUITY
Current Liabilities:
Line of credit $ - $ 258 $ - $ 258
Accounts payable 1,424 146 - 1,570
Deferred revenues 4,006 132 - 4,138
Other accrued liabilities 5,056 313 316 (B) 5,685
Lease obligation - current - 11 - 11
Notes payable - shareholders - 53 - 53
Current portion of notes payable 109 100 - 209
-------- ------- ------- -------
Total current liabilities 10,595 1,013 316 11,924
Notes payable, net of current portion - 275 - 275
Notes payable - shareholders - 46 - 46
Lease obligation - 14 - 14
Stockholders' equity
Common stock 71,900 7,550 (7,550) (B) 115,860
43,960 (B)
Deferred stock compensation (3,530) (5,511) 5,511 (B) (3,530)
Notes receivable from stockholders (2) - - (2)
Accumulated other comprehensive loss (32) 3 (3) (B) (32)
Accumulated deficit (27,109) (3,078) 3,078 (B) (29,846)
(2,737) (B)
-------- ------- ------- -------
Total stockholders' equity 41,227 (1,036) 42,259 82,450
-------- ------- ------- -------
Total liabilities and stockholders' equity $ 51,822 $ 312 $42,575 $ 94,709
======== ======= ======= =======
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements
<PAGE>
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Active Pro Forma Pro Forma
Software Alier Adjustments Combined
<S> <C> <C> <C> <C>
Revenues:
License $ 20,491 $ 421 $ - $ 20,912
Service 6,952 1,187 - 8,139
------------- ------------- ------------- -------------
Total revenues 27,443 1,608 - 29,051
Costs of revenues:
License 1,376 196 - 1,572
Service 6,409 1,049 - 7,458
------------- ------------- ------------- -------------
Total cost of revenues 7,785 1,245 - 9,030
------------- ------------- ------------- -------------
Gross profit 19,658 363 - 20,021
Operating expenses:
Research and development 6,780 174 6,954
Sales and marketing 18,821 540 19,361
General and administrative 3,076 794 3,870
Amortization of deferred stock compensation 1,170 1,911 3,081
Amortization of goodwill and intangibles - - 15,449 (C) 15,449
------------- ------------- ------------- -------------
Total operating expenses 29,847 3,419 15,449 48,715
------------- ------------- ------------- -------------
Loss from operations (10,189) (3,056) (15,449) (28,694)
Other income (expense):
Interest income 960 2 962
Interest and other expense, net (138) (85) (223)
------------- ------------- ------------- -------------
Total other income (expense), net 822 (83) - 739
------------- ------------- ------------- -------------
Loss before income taxes (9,367) (3,139) (15,449) (27,955)
Income tax provision - 21 - 21
------------- ------------- ------------- -------------
Net loss $ (9,367) $ (3,160) $ (15,449) $ (27,976)
============= ============= ============= =============
Basic and diluted net loss per share $ (0.79) $ (2.29)
============= =============
Shares used in computing basic and diluted
net loss per share 11,851 12,242
============= ==============
See accompanying notes to unaudited pro forma condensed combined financial statements
</TABLE>
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Active Software, Inc.
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
The total purchase price of Alier reflects a cash payment of $2.0 million
and the issuance of 390,875 shares of Active Software's common stock and the
assumption of options to purchase 158,277 shares of Active Software's common
stock. The total purchase price was determined as follows (in thousands):
<TABLE>
<S> <C>
Value of Active Software common stock and options $43,960
Cash payment 2,000
Other direct acquisition expenses 316
-------
$46,276
=======
</TABLE>
The total purchase price of the Alier acquisition will be allocated to
acquired assets based on estimates of their fair values. The purchase price of
approximately $46.3 million will be assigned to the assets acquired as follows
(in thousands):
<TABLE>
<S> <C>
Tangible net liabilities assumed $(1,036)
Acquired in-process research and development 2,737
Trained and assembled workforce 565
License Agreements 812
Non-compete agreements 1,281
Goodwill 41,917
-------
$46,276
=======
</TABLE>
We expect to allocate approximately $2.7 million of the purchase price to
Alier's in-process research and development, which will be expensed upon
consummation of the merger as it has not reached technological feasibility and,
in the opinion of management, has no alternative future use. The estimated
amount is subject to adjustment based upon completion of third-party appraisals.
This amount has not been reflected in the accompanying pro forma statements of
operations as it is a nonrecurring charge, but has been reflected as an
adjustment to accumulated deficit in the accompanying pro forma balance sheet.
The adjustments to the pro forma combined condensed balance sheet as of
December 31, 1999 are as follows:
(A) To reflect allocation of purchase price to goodwill and other intangible
assets of approximately $44.6 million identified in the purchase price
allocation resulting from the acquisition of Alier.
(B) To reflect the purchase price paid as follows: issuance of our common stock
and options valued at approximately $44.0 million, a cash payment of $2.0
million and acquisition-related expenses of approximately $316,000 and
eliminate Alier's stockholders' equity offset by acquired in-process
research and development of $2.7 million.
<PAGE>
The adjustments to the pro forma condensed combined statements of
operations for the year ended December 31, 1999 assume the acquisition occurred
as of January 1, 1999 and are as follows:
(C) To reflect the amortization of estimated goodwill and other intangibles
resulting from the acquisition. The intangible assets will be amortized
ratably over an estimated useful life by type as follows:
Trained and assembled workforce 3 years
License agreements 1 year
Non-compete agreements 2 years
Goodwill 3 years
