<PAGE> 1
EXHIBIT 99.4
THOUGHTSTAR, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED INTERIM FINANCIAL STATEMENTS
MARCH 31, 1999 AND 2000
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THOUGHTSTAR, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNAUDITED
--------------
FOR THE THREE
MONTHS ENDED
MARCH 31, 2000
--------------
<S> <C>
ASSETS
Current assets:
Cash $ 64
-------
Total current assets 64
Property and equipment, net 232
Other assets 3
-------
Total assets $ 299
=======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 339
Accrued liabilities 73
Deferred revenue 75
Note payable, current portion 65
Interest bearing advances from iManage 150
-------
Total current liabilities 702
Note payable, net of current portion 196
Total liabilities 898
-------
Commitments
Stockholders' equity (deficit):
Preferred stock, $0.000001 par value;
authorized: 5,000,000 shares;
no shares issued and outstanding --
Common stock, $0.000001 par value;
authorized: 30,000,000 shares;
issued and outstanding: 9,428,600 --
Additional paid-in capital 2,321
Deferred stock-based compensation (230)
Deficit accumulated during the
development stage (2,690)
-------
Total stockholders' equity (deficit) (599)
-------
Total liabilities and stockholders'
equity (deficit) $ 299
=======
</TABLE>
The accompanying notes are an integral part of
the unaudited interim financial statements
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<PAGE> 3
THOUGHTSTAR, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS)
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<TABLE>
<CAPTION>
(UNAUDITED)
--------------------------------------
PERIOD FROM
FOR THE THREE INCEPTION
MONTHS ENDED (FEBRUARY 5,
MARCH 31, 1997) THROUGH
--------------------- MARCH 31,
1999 2000 2000
------- ------- --------
<S> <C> <C> <C>
Operating expenses:
Sales and marketing $ 19 $ 238 $ 608
Research and development 80 121 664
General and administrative 106 237 1,307
Stock-based compensation 10 15 78
------- ------- --------
Total operating expenses 215 611 2,657
------- ------- --------
Loss from operations (215) (611) (2,657)
Interest income -- --
Interest expense (5) (8) (40)
Other income -- -- 7
------- ------- --------
Net loss $ (220) $ (619) $ (2,690)
======= ======= ========
</TABLE>
The accompanying notes are an integral part of
the unaudited interim financial statements
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<PAGE> 4
THOUGHTSTAR, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
--------------------------------------
PERIOD FROM
FOR THE THREE INCEPTION
MONTHS ENDED (FEBRUARY 5,
MARCH 31, 1997) THROUGH
--------------------- MARCH 31,
1999 2000 2000
------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (220) $ (619) $ (2,690)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 18 22 128
Amortization of deferred stock-based
compensation 10 15 78
Consulting services performed as
payment of related party receivable -- -- 1
Changes in operating assets and liabilities:
Other assets 2 -- --
Accounts payable 3 26 339
Accrued liabilities 9 19 72
Deferred revenue -- 25 75
------- ------- --------
Net cash used in operating activities (178) (512) (1,997)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (23) (55) (238)
Proceeds from related party note receivable -- -- 1
Issuance of related party note receivable -- -- (1)
------- ------- --------
Net cash used in investing activities (23) (55) (238)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock -- 400 930
Proceeds from advances from stockholder 77 -- 1,107
Proceeds from stock subscription receivable -- -- 50
Proceeds from advances from related party -- 150 150
Repayment of advances from stockholder (80) (40) (251)
Capital contributed -- 105 105
Proceeds from notes payable 250 -- 262
Repayment of notes payable -- (29) (50)
Payment of financing costs (4) -- (4)
------- ------- --------
Net cash provided by
financing activities 243 586 2,299
------- ------- --------
Net increase in cash 42 19 64
Cash at beginning of period 9 45 --
------- ------- --------
Cash at end of period $ 51 $ 64 $ 64
======= ======= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 6 $ 7 $ 38
======= ======= ========
SUPPLEMENTAL DISCLOSURES OF NONCASH
FINANCING ACTIVITIES:
Advances from stockholder converted to equity $ -- $ 916 $ 916
======= ======= ========
Equipment acquired under note payable $ -- $ 61 $ 61
======= ======= ========
</TABLE>
The accompanying notes are an integral part of
the unaudited interim financial statements
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<PAGE> 5
THOUGHTSTAR, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
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1. BASIS OF PRESENTATION
The condensed unaudited financial statements have been prepared by
Thoughtstar, Inc., a Delaware company, (the "Company"), pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. However, the
Company believes that the disclosures are adequate to make the information
presented not misleading. These condensed unaudited financial statements should
be read in conjunction with the financial statements and the notes included
hereto as Exhibit 99.2 on Amendment No. 1 to Form 8-K for the years ended
December 31, 1998 and 1999.
The condensed unaudited financial statements reflect all adjustments (which
include only normal, recurring adjustments) that are, in the opinion of
management, necessary to state fairly the results for the periods presented. The
results for such periods are not necessarily indicative of the results to be
expected for the full year.
The preparation of condensed unaudited financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the condensed unaudited financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
2. INTEREST BEARING ADVANCES FROM IMANAGE, INC.
On March 23, 2000, the Company entered into a loan agreement (`the Loan')
with iManage, Inc. under which $150,000 was borrowed in order to meet ongoing
working capital requirements. In conjunction with entering into an Agreement and
Plan of Reorganization (`the Agreement') with iManage, Inc., under which the
Company agreed to be acquired by iManage, Inc., the Loan was amended under the
terms of the Amended Loan agreement (`Amended Loan') enabling the Company to
borrow $400,000 from iManage, Inc. The Amended Loan bore interest at Silicon
Valley Bank prime plus 0.25% and was due on the earlier of 60 days after the
termination of the Agreement or on the date that Thoughtstar, Inc. breached that
agreement. Subsequently the Agreement was further amended to increase the amount
available to be borrowed to $700,000. At March 31, 2000, the Company had
borrowed $150,000 under the Loan and subsequently borrowed $888,000 until the
date of acquisition.
3. EQUITY TRANSACTIONS
During the 3 months ended March 31, 2000, the Company's President and
majority Shareholder advanced the Company $105,000 for the purposes of meeting
ongoing working capital requirements. This was recorded as a capital
contribution.
During the 3 months ended March 31, 2000, the Company issued 400,000 shares
of common stock for $1 per share in order to raise finance to meet ongoing
capital requirements.
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