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Exhibit 99.2
CacheFlow Inc.
Unaudited Pro Forma Condensed Combining Financial Information
The unaudited pro forma condensed combining financial information for CacheFlow,
Inc. ("CacheFlow") set forth below gives effect to the acquisition of SpringBank
Networks, Inc. ("SpringBank"). The historical financial information has been
derived from, and is qualified by reference to, the consolidated financial
statements of CacheFlow included in its Form 10-K for the year ended April 30,
2000, filed with the Securities and Exchange Commission and the financial
statements of SpringBank included elsewhere herein and should be read in
conjunction with those financial statements and the notes thereto. The
unaudited pro forma condensed combining statement of operations data for the
year ended April 30, 2000 set forth below gives effect to the acquisition as if
it occurred on May 1, 1999. The unaudited pro forma condensed combining balance
sheet as of April 30, 2000 set forth below gives effect to the acquisition of
SpringBank as if it occurred on that date. The unaudited pro forma condensed
combining financial information does not purport to represent what the
consolidated results of operations or financial condition of CacheFlow would
actually have been if the SpringBank acquisition had in fact occurred on such
dates or the future consolidated results of operations or financial condition of
CacheFlow.
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CacheFlow, Inc.
Unaudited Pro Forma Condensed Combining Balance Sheet
April 30, 2000
(in thousands)
<TABLE>
<CAPTION>
Historical
------------------------------------- ----------- ------------
SpringBank Pro forma Pro Forma
CacheFlow Networks Business Combined
April 30, June 5, Combination April 30,
2000 2000 Combined Adjustments 2000
--------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 91,532 $ 333 $ 91,865 $ - $ 91,865
Short-term investments 33,788 - 33,788 - 33,788
Accounts receivable, net 3,112 - 3,112 - 3,112
Inventories 4,741 - 4,741 - 4,741
Prepaid expenses and other current assets 1,200 - 1,200 - 1,200
--------- --------- ---------- --------- ---------
Total current assets 134,373 333 134,706 - 134,706
Property and equipment, net 4,721 43 4,764 - 4,764
Goodwill, net - - - (1) 176,988 176,988
Other assets 1,640 20 1,660 - 1,660
--------- --------- ---------- --------- ---------
Total assets $ 140,734 $ 396 $ 141,130 $ 176,988 $ 318,118
========= ========= ========== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 2,465 $ 5 $ 2,470 $ - $ 2,470
Accrued payroll and related benefits 2,611 7,735 10,346 - 10,346
Deferred revenue 1,375 - 1,375 - 1,375
Other accrued liabilities 1,487 159 1,646 (1) 1,700 3,346
--------- --------- ---------- --------- ---------
Total current liabilities 7,938 7,899 15,837 1,700 17,537
Other long-term liabilities 166 - 166 - 166
--------- --------- ---------- --------- ---------
Total liabilities 8,104 7,899 16,003 1,700 17,703
Stockholders' equity (deficit):
Preferred stock - 1 1 (4) (1) -
Common stock 4 12 16 (4) (12) 4
Additional paid-in capital 264,304 73,051 337,355 (1)(4) 95,223 432,578
Notes receivable from stockholders (4,713) (489) (5,202) - (5,202)
Deferred stock compensation (43,489) (69,267) (112,756) (4) 69,267 (43,489)
Accumulated other comprehensive loss (101) - (101) - (101)
Accumulated deficit (82,805) (10,811) (93,616) (1)(4) 10,811 (82,805)
Treasury stock at cost (570) - (570) - (570)
--------- --------- ---------- --------- ---------
Total stockholders' equity (deficit) 132,630 (7,503) 125,127 175,288 300,415
--------- --------- ---------- --------- ---------
Total liabilities and stockholders' equity (deficit) $ 140,734 $ 396 $ 141,130 $ 176,988 $ 318,118
========= ========= ========== ========= =========
</TABLE>
See accompanying notes to unaudited pro forma condensed combining
financial information.
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CacheFlow Inc.
Unaudited Pro Forma Condensed Combining Statements of Operations
Year Ended April 30, 2000
(in thousands except per share data)
<TABLE>
<CAPTION>
Historical
----------------------------------------
SpringBank Pro forma Pro Forma
CacheFlow Networks Business Combined
April 30, June 5, Combination April 30,
2000 2000 Combined Adjustments 2000
------------ ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net sales $ 29,277 $ - $ 29,277 $ - $ 29,277
Cost of goods sold 11,212 - 11,212 - 11,212
------------ ------------ ----------- ----------- ----------
Gross profit 18,065 - 18,065 - 18,065
Operating expenses:
Research and development 9,646 6,534 16,180 - 16,180
Sales and marketing 28,903 277 29,180 - 29,180
General and administrative 4,757 1,422 6,179 - 6,179
Stock compensation 38,405 2,585 40,990 - 40,990
Goodwill amortization - - - (2) 58,996 58,996
------------ ------------ ----------- ----------- ----------
Total operating expenses 81,711 10,818 92,529 58,996 151,525
------------ ------------ ----------- ----------- ----------
Operating loss (63,646) (10,818) (74,464) (58,996) (133,460)
Interest income (expense), net 3,033 7 3,040 - 3,040
------------ ------------ ----------- ----------- ----------
Net loss before income taxes (60,613) (10,811) (71,424) (58,996) (130,420)
Provision for income taxes (73) - (73) - (73)
------------ ------------ ----------- ----------- ----------
Net loss (60,686) (10,811) (71,497) (58,996) (130,493)
Accretion of preferred stock (1,967) - (1,967) - (1,967)
------------ ------------ ----------- ----------- ----------
Net loss available to common
stockholders $ (62,653) $ (10,811) $ (73,464) $ (58,996) $ (132,460)
============ ============ =========== =========== ==========
Basic and diluted net loss per share $ (3.31) (3) $ (6.12)
============ ==========
Shares used in computing basic and
diluted net loss per share 18,933 (3) 21,661
============ ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed combining financial
information.
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CacheFlow, Inc.
Notes to Unaudited Pro Forma Condensed Combining Financial Information
CacheFlow acquired SpringBank on June 5, 2000 in a transaction accounted for as
a purchase. The total purchase cost was approximately $177 million consisting of
approximately 2.7 million shares of CacheFlow common stock and the assumption of
outstanding stock options with a fair value of approximately $4.6 million,
assumed liabilities of approximately $7 million and transaction costs of
approximately $1.7 million.
Pro forma adjustments for the unaudited pro forma condensed combining balance
sheet as of April 30, 2000 and statement of operations for the year ended April
30, 2000 are as follows:
1. To reflect the allocation of the purchase cost. The total estimated
purchase price for the acquisition has been allocated to assets and liabilities
based on their fair value with the excess costs over the net liabilities assumed
allocated to goodwill. The allocation has resulted in goodwill of approximately
$177 million which is being amortized on a straight-line basis over three years.
2. To reflect amortization of goodwill resulting from the acquisition.
3. Basic and diluted net loss per share has been adjusted to reflect the
issuance of approximately 2,728,000 shares of CacheFlow common stock, as if
these shares had been outstanding for the entire period presented. Dilutive
options and warrants are excluded from the computation, as their inclusion would
be antidilutive.
4. To reflect the elimination of the historical stockholders' equity accounts
of SpringBank.