<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest event reported) OCTOBER 9, 2000
-------------------------------
EMBARCADERO TECHNOLOGIES, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in Charter)
DELAWARE 000-30293 68-0310015
---------------------------- ---------------------- -----------------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
425 MARKET STREET, SUITE 425, SAN FRANCISCO, CALIFORNIA 94105
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (415) 834-3131
--------------------------
NONE
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
(b) PRO FORMA FINANCIAL INFORMATION.
(1) Unaudited Pro Forma Consolidated Condensed Balance Sheet as
of June 30, 2000.
(2) Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the six-month period ended June 30, 2000.
(3) Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the year ended December 31, 1999.
<PAGE>
EMBARCADERO EUROPE LIMITED
(REGISTERED NUMBER: 3228491)
FINANCIAL STATEMENTS
FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998 AND
30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED)
<PAGE>
EMBARCADERO EUROPE LIMITED
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
Company Information 1
Directors' Responsibilities 2
Auditors' Report 3
Profit And Loss Account 4
Balance Sheet 5
Cash Flow Statement 6
Notes To The Financial Statements and Cash Flow 7 - 14
</TABLE>
<PAGE>
EMBARCADERO EUROPE LIMITED
COMPANY INFORMATION
<TABLE>
<S> <C>
DIRECTORS S Wong
J Louth
SECRETARY J Louth
COMPANY NUMBER 3228491
REGISTERED OFFICE Broadway House
Maidenhead
Berks
SL6 1NJ
AUDITORS PricewaterhouseCoopers
Harman House
1 George Street
Uxbridge
Middlesex UB8 1QQ
BUSINESS ADDRESS Braywick House West
Windsor Road
Maidenhead
Berkshire
Sl6 1DN
</TABLE>
1
<PAGE>
EMBARCADERO EUROPE LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the
financial statements; and
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
2
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
AUDITORS' REPORT TO THE MEMBERS OF
EMBARCADERO EUROPE LIMITED
We have audited the financial statements for the periods ended 31 December 1999
and 31 December 1998 on pages 4 to 14 which have been prepared under the
historical cost convention and the accounting policies set out on page 8. The
interim results included in this report for the periods ended 30 June 2000 and
1999 have not been audited.
These financial statements have not been prepared under section 226 of the
United Kingdom Companies Act and were prepared solely for the purposes of
management.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The directors are responsible for preparing the financial statements and
accompanying information. As described on page 2, this includes responsibility
for preparing the financial statements and accompanying information, in
accordance with applicable United Kingdom accounting standards. Our
responsibilities, as independent auditors, are established in the United Kingdom
by the Auditing Practices Board and our profession's ethical guidance.
We report to you our opinion as to whether the financial statements give a true
and fair view. We also report to you if, in our opinion, the company has not
kept proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law
regarding director's remuneration and transactions is not disclosed.
BASIS OF OPINION
We conducted our audit in accordance with auditing standards generally accepted
in the United States and auditing standards generally accepted in the United
Kingdom. An audit includes examination, on a test basis, of evidence relevant to
the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the directors in
the preparation of the financial statements, and of whether the accounting
policies are appropriate to the company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of affairs of the company at 31 December 1999 and 1998 and of its loss and cash
flow for the periods then ended and have been properly prepared in accordance
with generally accepted accounting principles.
We have not performed an audit on the interim results ended 30 June 2000 and 30
June 1999 and do not give any opinion or assurance on these results included in
the financial statements.
PRICEWATERHOUSECOOPERS
Chartered Accountants
and Registered Auditors 15 December 2000
PricewaterhouseCoopers is the successor partnership to the UK firms of Price
Waterhouse and Coopers & Lybrand. The principal place of business of
PricewaterhouseCoopers and its associate partnerships, and of Coopers & Lybrand,
is 1 Embankment Place, London WC2N 6NN. The principal place of business of Price
Waterhouse is Southwark Towers, 32 London Bridge Street, London SE1 9SY. Lists
of the partners' names are available for inspection at those places.
All partners in the associate partnerships are authorised to conduct business as
agents of, and all contracts for services to clients are with,
PricewaterhouseCoopers. PricewaterhouseCoopers is authorised by the Institute of
Chartered Accountants in England and Wales to carry on investment business.
3
<PAGE>
EMBARCADERO EUROPE LIMITED
PROFIT AND LOSS ACCOUNT FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998 AND 30 JUNE
2000 (UNAUDITED) AND 1999 (UNAUDITED)
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 12 MONTHS 3 MONTHS
6 MONTHS 6 MONTHS ENDED 31 ENDED 31
ENDED 30 ENDED 30 DECEMBER DECEMBER
JUNE 2000 JUNE 1999 1999 1998
NOTE (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
TURNOVER 1,168,724 590,067 1,465,483 139,762
Cost of sales (696,366) (332,030) (879,435) (48,757)
------------------------------------------------------------------------------------------------------------
GROSS PROFIT 472,358 258,037 586,048 91,005
Administrative expenses (789,282) (298,533) (876,915) (103,691)
------------------------------------------------------------------------------------------------------------
OPERATING LOSS 2 (316,924) (40,496) (290,867) (12,686)
Other interest receivable and similar
income 3 22 -- 606 --
------------------------------------------------------------------------------------------------------------
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION (316,902) (40,496) (290,261) (12,686)
Tax on loss on ordinary activities 4 -- -- 2,300 (2,300)
------------------------------------------------------------------------------------------------------------
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION 9 (316,902) (40,496) (287,961) (14,986)
------------------------------------------------------------------------------------------------------------
</TABLE>
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
There is no difference between the results stated above and their historical
cost equivalents.
The notes on pages 7 to 14 form part of these financial statements.
4
<PAGE>
EMBARCADERO EUROPE LIMITED
BALANCE SHEET AS AT 31 DECEMBER 1999, 1998, AND 30 JUNE 2000 (UNAUDITED)
<TABLE>
<CAPTION>
UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 1999 1998
NOTE (pound) (pound) (pound)
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 5 62,077 16,086 6,789
-------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Debtors 6 622,679 439,899 226,201
Cash at bank and in hand 80,295 37,874 118,858
-------------------------------------------------------------------------------------------------------------
702,974 477,773 345,059
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE
YEAR 7 (1,269,256) (681,162) (356,134)
-------------------------------------------------------------------------------------------------------------
NET CURRENT LIABILITIES (566,282) (203,389) (11,075)
-------------------------------------------------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES (504,205) (187,303) (4,286)
-------------------------------------------------------------------------------------------------------------
CAPITAL AND RESERVES
Called up share capital 8 11,244 11,244 10,700
Profit and loss account 9 (515,449) (198,547) (14,986)
-------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' DEFICIT - EQUITY INTERESTS 10 (504,205) (187,303) (4,286)
-------------------------------------------------------------------------------------------------------------
</TABLE>
The notes on pages 7 to 14 form part of these financial statements.
5
<PAGE>
EMBARCADERO EUROPE LIMITED
CASH FLOW STATEMENT FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998 AND 30 JUNE
2000 (UNAUDITED) AND 1999 (UNAUDITED)
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 30 JUNE 1999 1999 1998
NOTE (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES 1 96,513 67,460 (65,176) 115,539
-------------------------------------------------------------------------------------------------------------
Interest received 22 -- 606 --
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING 96,535 67,460 (64,570) 115,539
ACTIVITIES
INVESTING ACTIVITIES
Payments to acquire tangible assets (54,114) (17,934) (16,958) (7,381)
-------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (54,114) (17,934) (16,958) (7,381)
-------------------------------------------------------------------------------------------------------------
NET CASH INFLOW/(OUTFLOW) BEFORE
MANAGEMENT OF LIQUID RESOURCES AND
FINANCING 42,421 49,526 (81,528) 108,158
FINANCING
Issue of ordinary share capital -- -- 544 10,700
-------------------------------------------------------------------------------------------------------------
NET CASH INFLOW FROM FINANCING
ACTIVITIES -- -- 544 10,700
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS IN THE PERIODS 2 42,421 49,526 (80,984) 118,858
-------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED)
1 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW)
FROM OPERATING ACTIVITIES
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 30 JUNE 1999 1999 1998
NOTE (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
Operating loss (316,924) (40,496) (290,867) (12,686)
Employee share compensation - - 104,400 -
Depreciation of tangible assets 8,123 3,843 7,661 592
(Increase)/decrease in debtors (182,780) (241,348) (213,698) (226,201)
Increase in creditors within one year 588,094 345,461 327,328 353,834
-------------------------------------------------------------------------------------------------------------
Net cash (outflow)/inflow from
operating activities 96,513 67,460 (65,176) 115,539
-------------------------------------------------------------------------------------------------------------
</TABLE>
2 ANALYSIS OF NET FUNDS
<TABLE>
<CAPTION>
31 DECEMBER OTHER NON-CASH 31 DECEMBER
1998 CASHFLOW CHANGERS 1999
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Net cash:
Cash at bank and in hand 118,858 (80,984) -- 37,874
------------------------------------------------------------------------------------------------------------
Debt -- -- -- --
------------------------------------------------------------------------------------------------------------
Net funds 118,585 (80,984) -- 37,874
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
31 DECEMBER OTHER NON-CASH 30 JUNE
1998 CASHFLOW CHANGERS 1999
<S> <C> <C> <C> <C>
Cash at bank and in hand 118,858 49,526 -- 168,384
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
31 DECEMBER OTHER NON-CASH 30 JUNE
1999 CASHFLOW CHANGERS 2000
<S> <C> <C> <C> <C>
Cash at bank and in hand 37,874 42,421 -- 80,295
------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED)
1 ACCOUNTING POLICIES
(a) ACCOUNTING CONVENTION
The financial statements are not prepared under section 226 of the
Companies Act 1985. The financial statements have been prepared under
the historical cost basis, solely for the purposes of management.
(b) TURNOVER
Turnover represents amounts receivable for goods and services net of
VAT and trade discounts. Approximately 28% of turnover relates to
non-UK markets. Software revenue is recognised upon delivery of goods
to customers. Support and maintenance revenue is recognised rateably
over the period of the contract and deferred as appropriate.
(c) TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the cost less
estimated residual value of each asset over its expected useful life,
as follows:
Computer equipment At 33.3% on cost
Fixtures and fittings At 15% on cost
(d) LEASING
Rentals payable under operating leases are charged against income on a
straight line basis over the lease term.
(e) DEFERRED TAXATION
Deferred taxation is provided at appropriate rates on all timing
differences using the liability method only to the extent that, in the
opinion of the directors, there is a reasonable probability that a
liability or asset will crystallise in the foreseeable future.
(f) FOREIGN CURRENCY TRANSLATION
Monetary assets and liabilities denominated in foreign currencies are
translated into sterling at the rates of exchange ruling at the balance
sheet date. Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction. All differences are taken to
profit and loss account.
(g) EMPLOYEE SHARE COMPENSATION
The difference between the price paid for shares or options at date of
issue or grant to employees and the fair value of those shares or
options at that date is charged to the profit and loss account as an
employee share compensation cost.
8
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
2 OPERATING LOSS
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 12 MONTHS
6 MONTHS ENDED 6 MONTHS ENDED ENDED 31 3 MONTHS ENDED
30 JUNE 2000 30 JUNE 1999 DECEMBER 1999 31 DECEMBER 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Operating loss is stated after charging:
Depreciation of tangible assets 8,123 3,843 7,661 592
Rent and rates 24,136 13,150 34,008 3,614
Auditors' remuneration 1,630 -- 3,500 --
------------------------------------------------------------------------------------------------------------
</TABLE>
3 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 12 MONTHS 3 MONTHS
6 MONTHS ENDED 6 MONTHS ENDED ENDED 31 ENDED
30 JUNE 2000 30 JUNE 1999 DECEMBER 1999 31 DECEMBER 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Bank interest 22 -- 606 --
----------------------------------------------------------------------------------------------------------
</TABLE>
4 TAXATION
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 12 MONTHS 3 MONTHS
6 MONTHS ENDED 6 MONTHS ENDED ENDED 31 ENDED
30 JUNE 2000 30 JUNE 1999 DECEMBER 1999 31 DECEMBER 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
UK corporation tax at 20.25%
(1998: 21%) -- -- 2,300 (2,300)
--------------------------------------- ---------------- ---------------- ---------------- -----------------
</TABLE>
Deferred tax is not provided in the accounts (1998: (pound)nil) as a result of
deferred revenue and operating losses giving rise to a deferred tax asset.
9
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
5 TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
COMPUTER FIXTURES AND TOTAL FIXED
EQUIPMENT FITTINGS ASSETS
(pound) (pound) (pound)
<S> <C> <C> <C>
COST
At 1 January 1999 6,879 502 7,381
Additions 15,036 1,922 16,958
------------------------------------------------------------------------------------------------------------
AT 31 DECEMBER 1999 21,915 2,424 24,339
------------------------------------------------------------------------------------------------------------
DEPRECIATION
At 1 January 1999 573 19 592
Charge for the year 7,297 364 7,661
------------------------------------------------------------------------------------------------------------
31 DECEMBER 1999 7,870 383 8,253
------------------------------------------------------------------------------------------------------------
NET BOOK VALUE
AT 31 DECEMBER 1999 14,045 2,041 16,086
------------------------------------------------------------------------------------------------------------
At 31 December 1998 6,306 483 6,789
------------------------------------------------------------------------------------------------------------
</TABLE>
5 TANGIBLE FIXED ASSETS - UNAUDITED
<TABLE>
<CAPTION>
COMPUTER FIXTURES AND TOTAL FIXED
EQUIPMENT FITTINGS ASSETS
(pound) (pound) (pound)
<S> <C> <C> <C>
COST
At 1 January 2000 21,915 2,424 24,339
Additions 46,022 8,092 54,114
------------------------------------------------------------------------------------------------------------
AT 30 JUNE 2000 67,937 10,516 78,453
------------------------------------------------------------------------------------------------------------
DEPRECIATION
At 1 January 2000 7,870 383 8,253
Charge for the 6 months to 30 June 2000 7,638 485 8,123
------------------------------------------------------------------------------------------------------------
AT 30 JUNE 2000 15,508 868 16,376
-----------------------------------------------------------------------------------------------------------
NET BOOK VALUE
AT 30 JUNE 2000 52,429 9,648 62,077
------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
6 DEBTORS
<TABLE>
<CAPTION>
UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 1999 1998
(pound) (pound) (pound)
<S> <C> <C> <C>
Trade debtors 614,781 376,764 226,199
Other debtors 126 2,923 2
Prepayments 2,280 44,289 -
VAT 5,492 15,923 -
------------------------------------------------------------------------------------------------------------
622,679 439,899 226,201
------------------------------------------------------------------------------------------------------------
</TABLE>
7 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 1999 1998
(pound) (pound) (pound)
<S> <C> <C> <C>
Trade creditors 944,980 474,139 248,564
Taxation and social security 16,838 8,745 22,236
Other creditors 73,869 34,770 59,229
Deferred revenue 233,569 163,508 26,105
-----------------------------------------------------------------------------------------------------------
1,269,256 681,162 356,134
-----------------------------------------------------------------------------------------------------------
</TABLE>
8 SHARE CAPITAL
<TABLE>
<CAPTION>
UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 1999 1998
(pound) (pound) (pound)
<S> <C> <C> <C>
AUTHORISED
100,000 Ordinary shares of (pound)1 each 100,000 100,000 100,000
------------------------------------------------------------------------------------------------------------
ALLOTTED, CALLED UP AND FULLY PAID
11,244 Ordinary shares of (pound)1 each 11,244 11,244 10,700
------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
9 STATEMENT OF MOVEMENTS ON PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
PROFIT AND PROFIT AND LOSS
LOSS ACCOUNT ACCOUNT
UNAUDITED UNAUDITED AT 31 DECEMBER AT 31 DECEMBER
30 JUNE 2000 30 JUNE 1999 1999 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Balance at beginning of period (198,547) (14,986) (14,986) --
Retained loss for the period (316,902) (40,496) (287,961) (14,986)
Employee share compensation -- -- 104,400 --
------------------------------------------------------------------------------------------------------------
BALANCE AT THE END OF THE PERIOD (515,449) (55,482) (198,547) (14,986)
------------------------------------------------------------------------------------------------------------
</TABLE>
10 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 30 JUNE 1999 1999 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Loss for the financial period (316,902) (40,496) (287,961) (14,986)
Employee share compensation -- -- 104,400 -
Proceeds from issue of shares -- -- 544 10,698
------------------------------------------------------------------------------------------------------------
Net depletion in shareholders' funds (316,902) (40,496) (183,017) (4,288)
Opening shareholders' funds (187,303) (4,286) (4,286) 2
------------------------------------------------------------------------------------------------------------
Closing shareholders' funds (504,205) (44,782) (187,303) (4,286)
------------------------------------------------------------------------------------------------------------
</TABLE>
11 FINANCIAL COMMITMENTS
The company had annual commitments under non-cancellable operating leases as
follows:
<TABLE>
<CAPTION>
UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 1999 1998
(pound) (pound) (pound)
<S> <C> <C> <C>
Expiry date:
Within one year -- 9,285 --
------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
12 TRANSACTIONS WITH DIRECTORS
For the year ended 31 December 1999, (pound)37,000 (1998: (pound)9,000)
consultancy fees were paid to Archway Commercial Investments of which
T R D Rollo is a director. Archway Commercial Investments holds 2,400
(pound)1 Ordinary Shares in Embarcadero Europe Limited. For the 6
months ended 30 June 2000, (pound)2,000 ((pound)11,500: June 1999)
consultancy fees were paid to Archway Commercial Investments.
A further (pound)39,500 (1998: (pound)6,000) consultancy fees were paid
to J Louth, a director of the company. For the 6 months ended 30 June
2000 (pound)29,337 ((pound)15,500: June 1999) were paid to J Louth as
consultancy fees and remuneration.
13 RELATED PARTY TRANSACTIONS
On 1 October 1998, the Company entered into a licensing and
distribution agreement with Embarcadero Technologies Incorporated in
terms of which royalty payments are made. For the year ended 31
December 1999, (pound)851,418 (1998: (pound)46,691) was payable to
Embarcadero Technologies Incorporated as royalties on sales,
(pound)461,772 is included in creditors at the year-end. For the
6 months ended 30 June 2000 these costs amounted to (pound)892,319
((pound)332,030: June 1999).
Embarcadero Technologies Inc owns 5,044 (1998: 4,800) (pound)1 Ordinary
Shares in Embarcadero Europe Limited and S Wong is a director of
both companies. This represents an ownership of 44,86% of the Company.
14 EVENTS SUBSEQUENT TO YEAR END
On 9 October 2000 Embarcadero Technologies Inc exercised its call
option to acquire the remaining 56% of the Company from its former
owners, and is now the full owner and ultimate parent of the Company.
15 SUMMARY OF PRINCIPAL DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED
STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the
United Kingdom (UK GAAP). No material adjustments to the loss on
ordinary activities after taxation or shareholder's deficit are
required as a result of applying accounting principles generally
accepted in the United States (US GAAP).
CASH FLOW INFORMATION
Under UK GAAP, the Cash Flow Statements are presented in accordance
with FRS 1(revised), Cash Flow Statements. The statements prepared
under FRS 1 present substantially the same information as that
required under US GAAP as interpreted by SFAS 95 Statement of Cash
Flows.
A summary of the company's operating, investing and financing
activities, classified in accordance with US GAAP, are as follows:
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED 31 DECEMBER 31 DECEMBER
30 JUNE 2000 30 JUNE 1999 1999 1998
(pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities 96,535 67,460 (64,570) 115,539
Net cash used in investing activities (54,114) (17,934) (16,958) (7,381)
Net cash provided by financing activities -- -- 544 10,700
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 42,421 49,526 (80,984) 118,858
Cash and cash equivalents at the beginning of the period 37,874 118,858 118,858 --
-----------------------------------------------------------------------------------------------------------------
13
<PAGE>
EMBARCADERO EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED 31 DECEMBER 1999, 1998
AND 30 JUNE 2000 (UNAUDITED) AND 1999 (UNAUDITED) (CONTINUED)
Cash and cash equivalents at the end of the period 80,295 168,384 37,874 118,858
-----------------------------------------------------------------------------------------------------------------
</TABLE>
16 COMPARATIVE RESULTS
The Company was incorporated and commenced trading on 1 October 1998
and the comparative results ended 31 December 1998 therefor
represent a 3-month period.
17 INTERIM RESULTS INCLUDED IN THE FINANCIAL STATEMENTS
The accompanying interim financial statements as of June 30, 2000
and for the six months ended June 30, 2000 and June 30, 1999 are
unaudited. The unaudited interim financial statements have been
prepared on the same basis as the annual financial statements and,
in the opinion of management, reflect all adjustments, which include
only normal recurring adjustments, necessary to present fairly the
Company's financial position, results of operations, and its cash
flow as of June 30, 2000 and for the six months ended June 30, 2000
and June 30, 1999. The financial data and other information
disclosed in these notes to financial statements related to these
periods are unaudited. The results for the six months ended June 30,
2000 and June 30, 1999 are not necessarily indicative of the results
to be expected for the respective full year.
14
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial
statements give effect to the acquisition by Embarcadero Technologies, Inc. of
the remaining 55.14% of outstanding shares of Embarcadero Europe Limited in a
transaction to be accounted for as a purchase.
The unaudited pro forma combined condensed balance sheet as of June 30,
2000 gives effect to this acquisition as if it has occurred on June 30, 2000.
The unaudited pro forma combined condensed statements of operations for the year
ended December 31, 1999 and for the six months ended June 30, 2000 give effect
to the acquisition as if it had occurred on January 1, 1999.
The unaudited pro forma combined condensed financial 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
indicative of future operating results or financial position. The unaudited pro
forma combined condensed financial information, including the notes thereto, is
qualified in its entirety by reference to, and should be read in conjunction
with, the historical financial statements of Embarcadero Technologies, Inc.
included in its Form S-1 and Form 10-Q filed April 19, 2000 and August 14, 2000,
respectively, with the Securities and Exchange Commission and the historical
financial statements of Embarcadero Europe Limited included in this Form 8-K/A.
EMBARCADERO TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of June 30, 2000
(amounts in thousands)
<TABLE>
<CAPTION>
EMBARCADERO EMBARCADERO PRO FORMA PRO FORMA
TECHNOLOGIES, INC. EUROPE LIMITED ADJUSTMENTS COMBINED
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 50,739 $ 122 $ (3,200) A $ 47,661
Trade accounts receivable, net 3,278 943 -- 4,221
Related party accounts receivable 1,433 -- (1,433) C --
Prepaid and other current assets 487 -- -- 487
Deferred tax assets 244 -- -- 244
-------------------- -------------- -------------- -----------------
Total current assets 56,181 1,065 (4,633) 52,613
Property and equipment, net 1,596 94 -- 1,690
Goodwill -- -- 3,841 A 3,841
Other assets 1,074 -- -- 1,074
-------------------- -------------- -------------- -----------------
$ 58,851 $ 1,159 $ (792) $ 59,218
==================== ============== ============== =================
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable and accrued liabilities $ 2,854 $ 1,568 $ (1,555) B C $ 2,867
-------------------- -------------- -------------- -----------------
Total current liabilities 2,854 1,568 (1,555) 2,867
Deferred revenue 5,892 354 -- 6,246
Deferred tax liabilities 518 -- -- 518
-------------------- -------------- -------------- -----------------
Total liabilities 9,264 1,922 (1,555) 9,631
-------------------- -------------- -------------- -----------------
Stockholders' Equity (Deficit):
Common stock 26 17 (17) D 26
Additional paid-in capital 62,932 -- -- 62,932
Deferred stock-based compensation (10,667) -- -- (10,667)
Cumulative translation adjustment -- 37 (37) D --
Accumulated deficit (2,704) (817) 817 D (2,704)
-------------------- -------------- -------------- -----------------
Total stockholders' equity (deficit) 49,587 (763) 763 49,587
-------------------- -------------- -------------- -----------------
$ 58,851 $ 1,159 $ (792) $ 59,218
==================== ============== ============== =================
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements.
EMBARCADERO TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------------------------------------------
EMBARCADERO EMBARCADERO PRO FORMA PRO FORMA
TECHNOLOGIES, INC EUROPE LIMITED ADJUSTMENTS COMBINED
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
License $ 11,922 $ 1,833 $ (1,062) C $ 12,693
Maintenance 5,041 -- -- 5,041
------------------ -------------- --------------- -----------------
Total revenues 16,963 1,833 (1,062) 17,734
------------------ -------------- --------------- -----------------
Cost of revenues:
License 295 1,092 (1,062) C 325
Maintenance 600 -- -- 600
------------------ -------------- --------------- -----------------
Total cost of revenues 895 1,092 (1,062) 925
------------------ -------------- --------------- -----------------
Gross profit 16,068 741 -- 16,809
------------------ -------------- --------------- -----------------
Operating expenses:
Sales and marketing 5,110 -- -- 5,110
Research and development 3,850 -- -- 3,850
General and administrative 1,573 1,238 -- 2,811
Amortization of deferred stock-based
compensation 6,149 -- -- 6,149
Amortization of intangible assets -- -- 480 E 480
------------------ -------------- --------------- -----------------
Total operating expenses 16,682 1,238 480 18,400
------------------ -------------- --------------- -----------------
Income (loss) from operations (614) (497) (480) (1,591)
Interest income 530 -- (119) F 411
------------------ -------------- --------------- -----------------
Income (loss) before income taxes (84) (497) (599) (1,180)
Provision for income taxes (2,455) -- -- (2,455)
------------------ -------------- --------------- -----------------
Income (loss) before share in affiliated
company loss (2,539) (497) (599) (3,635)
Share in loss of affiliated company (165) -- 165 D --
------------------ -------------- --------------- -----------------
Net loss (2,704) (497) (434) (3,635)
Deemed preferred stock dividend (1,218) -- -- (1,218)
------------------ -------------- --------------- -----------------
Net income (loss) available to common
shareholders $ (3,922) $ (497) $ (434) $ (4,853)
================== ============== =============== =================
Pro forma net loss per share:
Basic and diluted $ (0.17) $ (0.21)
================= =================
Shares used to compute pro forma net loss
per share
Basic 23,200 23,200
================= =================
Diluted 23,200 23,200
================= =================
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements.
EMBARCADERO TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------
EMBARCADERO EMBARCADERO PRO FORMA PRO FORMA
TECHNOLOGIES, INC EUROPE LIMITED ADJUSTMENTS COMBINED
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
License $ 13,406 2,400 (1,395) C $ 14,411
Maintenance 5,446 -- -- 5,446
-------------------- ------------- ----------- -----------------
Total revenues 18,852 2,400 (1,395) 19,857
-------------------- ------------- ----------- -----------------
Cost of revenues:
License 460 1,440 (1,395) C 505
Maintenance 621 -- -- 621
-------------------- ------------- ----------- -----------------
Total cost of revenues 1,081 1,440 (1,395) 1,126
-------------------- ------------- ----------- -----------------
Gross profit 17,771 960 -- 18,731
-------------------- ------------- ----------- -----------------
Operating expenses:
Sales and marketing 5,388 -- -- 5,388
Research and development 4,265 -- -- 4,265
General and administrative 1,577 1,436 -- 3,013
Amortization of deferred stock-based
compensation 4,261 -- - 4,261
Amortization of intangible assets -- -- 960 E 960
-------------------- ------------- ----------- -----------------
Total operating expenses 15,491 1,436 960 17,887
-------------------- ------------- ----------- -----------------
Income (loss) from operations 2,280 (476) (960) 844
Interest income (expense) 88 1 (238) F (149)
-------------------- ------------- ----------- -----------------
Income (loss) before income taxes 2,368 (475) (1,198) 695
Provision for income taxes (82) 4 -- (78)
-------------------- ------------- ----------- -----------------
Income (loss) before share in affiliated
company loss 2,286 (471) (1,198) 617
Share in loss of affiliated company (100) -- 100 D --
-------------------- ------------- ----------- -----------------
Net loss 2,186 (471) (1,098) 617
Deemed preferred stock dividend -- -- -- --
-------------------- ------------- ----------- -----------------
Net income (loss) available to common
shareholders $ 2,186 $ (471) $(1,098) $ 617
==================== ============= =========== =================
Pro forma net income per share:
Basic $ 0.11 $ 0.03
================= =================
Diluted $ 0.10 $ 0.03
================= =================
Shares used to compute pro forma net income
per share
Basic 20,070 20,070
================= =================
Diluted 21,877 21,877
================= =================
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements.
NOTE 1 - BASIS OF PRESENTATION
On October 9, 2000, Embarcadero Technologies, Inc ("the Company")
acquired the remaining 55.14 percent interest in its affiliate, Embarcadero
Europe Limited, for approximately $3.4 million in cash. Pursuant to the
transaction, Embarcadero Europe, which is based in Maidenhead, United
Kingdom, will become a wholly-owned subsidiary of the Company.
The acquisition was accounted for (as a step acquisition) under the
purchase method of accounting in accordance with APB Opinion No. 16. Under
the purchase method of accounting, the purchase price is allocated to the
assets acquired and liabilities assumed based on their estimated fair value.
The pro forma financial information has been prepared on the basis of
assumptions described in the following notes and include assumptions relating
to the allocation of consideration paid for the assets and liabilities based
on preliminary estimates of their fair value. The actual allocation of such
consideration may differ from that reflected in the pro forma financial
statements after valuations have been completed. Embarcadero Technologies,
Inc. does not expect that the final allocation of the purchase price will
differ materially from the preliminary allocation.
The unaudited pro forma combined condensed balance sheet as of June 30,
2000 gives effect to the acquisition as if it had occurred on June 30, 2000. The
unaudited pro forma combined condensed statements of operations for the year
ended December 31, 1999 and for the six months ended June 30, 2000 give effect
to the acquisition as if it had occurred on January 1, 1999.
15
<PAGE>
The unaudited condensed balance sheet as of June 30, 2000 and the
unaudited condensed statements of operations for the year ended December 31,
1999 and for the six months ended June 30, 2000 of Embarcadero Europe Limited
have been translated from U.K. sterling pound to U.S. dollar currency. The
unaudited condensed balance sheet as of June 30, 2000 was translated using a
June 30, 2000 spot rate of 1.5139. The unaudited condensed statements of
operations for the year ended December 31 and for the six months ended June
30, 2000 were translated using an average exchange rate of 1.6378 and 1.5688,
respectively.
The unaudited pro forma combined condensed financial 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.
NOTE 2 - PURCHASE PRICE ALLOCATION
The unaudited pro forma combined condensed financial information
reflects a total purchase price of approximately $3.4 million (including
acquisition expenses) to acquire the remaining 55.14 percent interest in its
affiliate, Embarcadero Europe Limited.
The Company's allocation of the aggregate purchase price is based on
management's preliminary analysis and estimates of the fair values of the
tangible assets and intangible assets. The book values of tangible assets and
liabilities acquired are assumed to approximate fair values. The goodwill will
be amortized over an estimated useful life of four years. Assuming that the
acquisition of Embarcadero Europe Limited has occurred on June 30, 2000, the
purchase price allocation would have been as follows:
<TABLE>
<S> <C>
Net (liabilities) assumed $ (421)
Goodwill 3,841
------
Total $3,420
------
</TABLE>
NOTE 3 - UNAUDITED PRO FORMA COMBINED NET INCOME (LOSS) PER SHARE:
The net income (loss) per share and shares used in computing the net
income (loss) per share for the year ended December 31, 1999 and for the six
months ended June 30, 2000 are based upon the Company's historical weighted
average common shares outstanding together with the shares issued in the
transaction as if such shares were issued January 1, 1999. Common stock
issuable upon the exercise of stock options, warrants and unvested restricted
stock has been excluded, as the effect would be anti-dilutive for all periods
presented.
NOTE 4 - PURCHASE ADJUSTMENTS:
The following adjustments were applied to the combined financial
statements:
(A) The excess of purchase price over tangible assets acquired and liabilities
assumed will be recorded as goodwill.
(B) To record the accrual of estimated costs resulting from the Acquisition. It
is anticipated that Embarcadero Technologies, Inc. will incur charges
related to the business combination with Embarcadero Europe Limited,
currently estimated to be $220. Actual amounts ultimately incurred could
differ from estimated amounts.
(C) To eliminate intercompany transactions.
(D) To eliminate the 44.86% investment in Embarcadero Europe Limited
(negative investment account balance).
16
<PAGE>
(E) To record the amortization expense associated with intangible assets over
their estimated useful life of four years as if the acquisition had
occurred on January 1, 1999.
(F) To eliminate the interest income earned as if the acquisition had
occurred on January 1, 1999. The implicit interest rate used was
7 percent.
17
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned herewith duly authorized.
Date: December 21, 2000 EMBARCADERO TECHNOLOGIES, INC.
By: /s/ Raj P. Sabhlok
---------------------------------
Raj P. Sabhlok
Senior Vice President of Finance and
Corporate Development and Chief
Financial Officer
18
