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): January 16, 1997
Commission File Number 0-132-58
BOOLE & BABBAGE, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94- 1651571
-------- -----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
3131 Zanker Road, San Jose, California 95134-1933
-------------------------------------------------
(Address of principal executive offices)
Registrant's Telephone number, including area code: 408-526-3000
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of business acquired.
MAXM Systems Corporation are filed herewith:
Report of Coopers & Lybrand LLP, Independent Auditors
MAXM Systems Corporation Consolidated Balance Sheets as of
September 30, 1996 and 1995
MAXM Systems Corporation Consolidated Statements of Operations
for the years ended September 30, 1996 and 1995
MAXM Systems Corporation Consolidated Statements of
Stockholders' Deficit for the years ended September 30,
1996 and 1995
MAXM Systems Corporation Consolidated Statements of Cash Flows
for the years ended September 30, 1996 and 1995
MAXM Systems Corporation Notes to Consolidated Financial
Statements
Unaudited Consolidated Balance Sheet as of December 31, 1996
Unaudited Consolidated Statement of Operations for the three
months ended December 31, 1996 and 1995
Unaudited Consolidated Statements of Cash Flows for the three
months ended December 31, 1996 and 1995
Notes to Unaudited Consolidated Financial Statements
<PAGE>
MAXM SYSTEMS CORPORATION
--------
CONSOLIDATED FINANCIAL STATEMENTS
for the years ended September 30, 1996 and 1995
AND
REPORT THEREON
--------
<PAGE>
TABLE OF CONTENTS
Page
----
Report of Independent Accountants 1
Consolidated Financial Statements:
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Deficit 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6-15
<PAGE>
Report of Independent Accountants
To the Board of Directors of
MAXM Systems Corporation
We have audited the accompanying consolidated balance sheets of MAXM Systems
Corporation (the Company) as of September 30, 1996 and 1995, and the related
consolidated statements of operations, stockholders' deficit, and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1, the Company has been acquired by Boole & Babbage, Inc.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of MAXM Systems
Corporation as of September 30, 1996 and 1995, and the consolidated results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
\Coopers & Lybrand LLP\
Washington, D.C.
April 10, 1997
1
<PAGE>
<TABLE>
MAXM SYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and 1995
<CAPTION>
ASSETS
1996 1995
---------------- ---------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,661,933 $ 3,615,574
Accounts receivable, net 4,673,744 6,271,951
Installment receivables 2,116,107 --
Prepaid expenses and other current assets 817,204 945,678
Prepaid software licenses 291,372 918,716
Notes receivable from officers 92,000 --
---------------- ---------------
Total current assets 9,652,360 11,751,919
---------------- ---------------
Property and equipment, at cost 9,735,842 7,880,659
Accumulated depreciation and amortization (5,667,984) ( 4,307,229)
---------------- ---------------
4,067,858 3,573,430
Restricted cash 292,700 291,000
Notes receivable from officers -- 133,545
Prepaid software licenses 400,000 --
Other assets 127,885 233,923
---------------- ---------------
Total assets $ 14,540,803 $ 15,983,817
================ ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 962,620 $ 1,666,285
Accrued liabilities 4,257,078 3,643,742
Deferred revenue - current portion 4,015,760 3,230,535
Line of credit 2,160,000 --
Current portion of long-term debt 176,444 167,231
Capital lease obligations - current portion 852,225 495,728
---------------- ----------------
Total current liabilities 12,424,127 9,203,521
Deferred revenue - long-term portion 1,488,583 --
Long-term debt, less current portion 75,000 200,444
Capital lease obligations - long-term 705,350 529,087
Deferred rent 743,709 671,898
Commitments and contingencies -- --
Convertible preferred stock 29,531,698 29,531,698
Stockholders' deficit:
Common stock, par value $.01; 12,000,000 shares authorized;
1,319,772 and 952,372 shares issued and outstanding at
September 30, 1996 and 1995, respectively 13,197 9,523
Additional paid-in capital 13,868,705 13,622,617
Accumulated deficit (44,314,876) (37,732,329)
Foreign currency translation adjustment 5,310 38,272
Less stock subscription receivable -- (90,914)
---------------- ----------------
Total stockholders' deficit (30,427,664) (24,152,831)
---------------- ----------------
Total liabilities and stockholders' deficit $ 14,540,803 $ 15,983,817
================ ================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
MAXM SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended September 30, 1996 and 1995
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Revenues:
Software license fees $ 7,094,956 $ 11,466,469
Services and other 7,684,416 5,202,575
------------ ------------
14,779,372 16,669,044
------------ ------------
Cost of revenues:
Software license fees 1,011,943 859,581
Services and other 4,136,428 3,330,159
------------ ------------
5,148,371 4,189,740
------------ ------------
Gross profit 9,631,001 12,479,304
Operating expenses:
Sales and marketing 10,35,792 9,153,464
Research and development 3,052,481 4,461,602
General and administrative 2,620,917 2,237,340
------------ ------------
Total operating expenses 16,209,190 15,852,406
------------ ------------
Loss from operations (6,578,189) (3,373,102)
Other income and expense:
Interest income 149,139 227,377
Interest expense (448,438) (224,115)
------------ ------------
Loss from continuing operations before income taxes (6,877,488) (3,369,840)
Income tax benefit -- 924,000
------------ ------------
Loss from continuing operations (6,877,488) (2,445,840)
Discontinued operations:
Income from discontinued operations
of hardware sales 294,941 113,566
------------ ------------
Loss before extraordinary item (6,582,547) (3,256,274)
Extraordinary gain on early extinguishment
of debt, net of tax provision of $924,000 -- 1,506,766
------------ ------------
Net loss $ (6,582,547) $ (825,508)
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
MAXM SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
for the years ended September 30, 1996 and 1995
<CAPTION>
Common stock Additional
-------------------- Paid-in Accumulated
Shares Par Value Capital Deficit Other Total
------ --------- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1994 772,028 $ 7,720 $13,577,508 $(36,906,821) $(30,138) $(23,351,731)
Issuance of common
stock 180,344 1,803 45,109 -- -- 46,912
Foreign currency
translation -- -- -- -- (6,005) (6,005)
Stock subscription
receivable -- -- -- -- (16,499) (16,499)
Net loss -- -- -- (825,508) -- (825,508)
----------------------------------------------------------------------------------------------
Balance at September 30, 1995 952,372 9,523 13,622,617 (37,732,329) (52,642) (24,152,831)
Issuance of common
stock 367,400 3,674 246,088 -- -- 249,762
Foreign currency
translation -- -- -- -- (32,962) (32,962)
Stock subscription
payment -- -- -- -- 90,914 90,914
Net loss -- -- -- (6,582,547) -- (6,582,547)
----------------------------------------------------------------------------------------------
Balance at September 30, 1996 1,319,772 $13,197 $13,868,705 $(44,314,876) $ 5,310 $(30,427,664)
==============================================================================================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
MAXM SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended September 30, 1996 and 1995
<CAPTION>
1996 1995
--------------------------------------
<S> <C> <C>
Operating activities:
Net loss $(6,582,547) $ (825,508)
Adjustments to reconcile net loss to net cash
used in operating activities:
Gain on early extinguishment of debt (2,430,766)
Depreciation and amortization 1,525,314 1,099,338
Noncash compensation and severance expense
73,500 --
Changes in operating assets and liabilities:
Accounts receivable 1,598,207 (1,299,327)
Installment receivables (2,116,107) --
Prepaid software licenses 227,344 (918,716)
Restricted cash (1,700) (291,000)
Other assets 106,038 972,050
Prepaid expense and other current assets 128,474 (475,597)
Accounts payable (703,665) (737,670)
Accrued liabilities 613,336 1,859,918
Deferred revenue 2,273,808 963,776
Deferred rent 71,811 --
----------- -----------
Net cash used in operating activities (2,786,187) (2,083,502)
----------- -----------
Investing activities:
Purchases of property and equipment (2,019,742) (2,257,687)
Issuance of notes receivable (25,000) --
Payments on notes receivable 33,545 14,580
----------- -----------
Net cash used in investing activities (2,011,197) (2,243,107)
----------- -----------
Financing activities:
Proceeds from issuance of stock 209,262 4,030,383
Proceeds from line of credit 2,600,000 --
Payments on line of credit (440,000) --
Principal payments on long-term debt (116,231) (2,397,161)
Borrowings on sale-leaseback transactions 1,184,343 854,626
Principal payments on capital lease obligations (651,583) (314,418)
Payments on stock subscription receivable 90,914 --
----------- -----------
Net cash provided by financing activities 2,876,705 2,173,430
----------- -----------
Effect of exchange rate changes on cash (32,962) (6,005)
----------- -----------
Net decrease in cash and cash equivalents (1,953,641) (2,159,184)
Cash and cash equivalents at beginning of year 3,615,574 5,774,758
----------- -----------
Cash and cash equivalents at end of year $ 1,661,933 $ 3,615,574
=========== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
5
<PAGE>
1. Organization
MAXM Systems Corporation (the "Company") offers its customers integrated
operations management solutions that maximize availability of the
computing infrastructure. The Company's focus is the full spectrum of
automated operations for distributed systems management. The Company's
leading software product, MAX/Enterprise, automates the operations
management of systems and networks by filtering and reducing event data
streams and automating actions to recover, restore and correct problems.
MAX/Enterprise was completed and licensed to its first customer during
1991.
The Company has three wholly-owned subsidiaries, MAXM Systems Limited,
located in the United Kingdom, MAXM Systems Corporation of Canada,
located in Toronto, Canada, and MAXM Systems Corporation of Germany,
located in Munich, Germany. These subsidiaries distribute MAX/Enterprise
and perform related professional services.
Effective January 16, 1997, the Company was acquired in a transaction
which was expected to be accounted for as a pooling-of-interests. All of
the Company's preferred and common shareholders received shares of Boole
& Babbage, Inc.'s common stock based on the proportionate fair value of
their equity interest in the Company.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and all wholly-owned subsidiaries. Upon consolidation, all
intercompany accounts and transactions are eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. For these
short-term investments, the carrying amount approximates fair value.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization
are computed using the straight-line method over the estimated useful
lives, generally ranging from 3 to 5 years. Gains and losses upon asset
disposal are taken into income. Assets under capital leases are
amortized on the straight-line method over the shorter of the assets'
useful lives or the relevant lease term, ranging from 2.5 to 4 years.
Deferred Rent
Deferred rent includes the effect of rental incentives and scheduled
rent increases associated with the office lease which commenced February
1995. Rent expense is recognized on a straight-line basis over the lease
term.
Deferred Revenue
The Company records deferred revenue for services billed in advance of
recognition of revenue. Deferred revenue is recognized ratably over the
service period.
6
<PAGE>
Prepaid Software Licenses
The Company purchases software licenses under a prepayment arrangement
from a software vendor. The licenses are subsequently sold as part of
the Company's integrated operations management software product line.
Prepaid software licenses are charged to cost of software license fees
as products are delivered to customers.
Revenue Recognition
The Company recognizes revenues in accordance with the provisions of
AICPA Statement of Position 91-1, Software Revenue Recognition.
Specifically, the Company recognizes software revenue upon delivery and
upon the determination that collectibility is probable. Service revenues
are recognized as they are performed. For license agreements where
maintenance is bundled with the software license, an appropriate portion
of these license fees is deferred and amortized over the initial
maintenance period.
Software Development Costs
Research and development costs are expensed as incurred. In accordance
with Statement of Financial Accounting Standards No. 86, the Company has
not capitalized software development costs as of September 30, 1996 and
1995 as the costs incurred from the point of technological feasibility
to the point of marketability are deemed immaterial.
Income Taxes
The Company reports its income taxes in compliance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
whereby deferred tax liabilities and assets are recognized for temporary
differences between financial statement reporting and income tax
purposes. If necessary, management records a valuation allowance for
deferred tax assets.
Concentration of Credit Risk
The Company sells its products to various companies across several
industries. The Company performs on-going credit evaluations of its
customers and maintains reserves for potential credit losses. Neither
the reserves established nor the losses incurred have been material. The
Company generally requires no collateral from its customers.
The Company's cash management and investment policies restrict
investments to investment quality, highly liquid securities. Cash and
cash equivalents consist principally of money market investments and
demand deposits with high quality financial institutions. At times such
investments and deposits may be in excess of the FDIC insurance limit;
however, no losses have been experienced.
Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (SFAS No. 123). Management has chosen to adopt
the disclosure-only provisions of the standard in 1997. Therefore, the
adoption of this standard is not expected to have an effect on the
Company's financial position or results of operations.
7
<PAGE>
Transfers of Financial Assets
The FASB also issued Statement of Financial Accounting Standard No. 125
(SFAS No. 125), Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, which requires the entity to
recognize the financial and servicing assets it controls and the
liabilities it has incurred, derecognizes financial assets when control
has been surrendered and derecognizes liabilities when extinguished.
SFAS No. 125 is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after December 31,
1996. Management believes the impact will be immaterial.
Use of Estimates
The preparation of 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
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Reclassification
Certain reclassifications have been made to the 1995 financial
statements to conform with the 1996 presentation.
3. Receivables
<TABLE>
Accounts receivable is comprised of the following at September 30, 1996
and 1995:
<CAPTION>
1996 1995
-------------- ---------------
<S> <C> <C>
Billed receivables $ 4,104,152 $ 3,621,327
Unbilled receivables 958,592 3,019,624
-------------- ---------------
5,062,744 6,640,951
Less allowance for doubtful accounts 389,000 369,000
------------- ---------------
Accounts receivable, net $ 4,673,744 $ 6,271,951
============== ===============
</TABLE>
In April 1994, the Company loaned certain officers a total of $100,000
through promissory notes bearing 7% interest. In February 1996, $33,000
was canceled as part of a severance agreement with an officer. The
remaining principal plus accrued interest is due in a lump sum payment
during 1997. In March 1996, an additional loan was made to an officer
for $25,000 through a non-interest bearing promissory note which was due
December 1996.
During 1996, the Company entered into two sales contracts which resulted
in discounted long-term installment receivables of $2,116,107 as of
September 30, 1996. Subsequent to September 30, 1996, these receivables
were collected through a $843,460 third-party sale with recourse and a
$1,250,000 negotiated prepayment by one of the customers. Total net
proceeds from these transactions amounted to $2,093,460. Accordingly,
the installment receivables are classified as current in the
accompanying balance sheet.
8
<PAGE>
4. Property and Equipment
Property and equipment is comprised of the following at September 30,
1996 and 1995:
1996 1995
----------------------------------
Operating equipment $6,925,092 $5,526,732
Computer software 1,180,318 819,052
Office furniture and fixtures 560,179 480,902
Leasehold improvements 1,070,253 1,053,973
-------------------------------
$9,735,842 $7,880,659
===============================
Depreciation and amortization expense of $1,525,314 and $1,099,338 was
included in operating expenses for the years ended September 30, 1996
and 1995, respectively.
Operating equipment and office furniture and fixtures under capital
leases as of September 30, 1996 and 1995 was $2,739,022 and $1,554,679,
respectively, with accumulated amortization of $1,246,618 and $534,099,
respectively. During the years ended September 30, 1996 and 1995, the
Company entered into sale and leaseback transactions totaling $1,184,343
and $854,626, respectively. During the year ended September 30, 1995,
the Company entered into capital leases totaling $287,421, which were
treated as noncash financing transactions for statement of cash flow
purposes.
5. Long-Term Debt
<TABLE>
Notes payable balances at September 30, 1996 and 1995 are as follows:
<CAPTION>
1996 1995
------------- --------------
<S> <C> <C>
Note payable to financing company, monthly principal and interest
payments of $17,277 through August 1996, bearing interest at 17% per
annum, final twelve additional monthly payments of $9,998 through
August 1997, collateralized by certain fixed assets. $ 101,444 268,675
Noninterest bearing development funding with $75,000 payments
due May 1997 and May 1998. 150,000 99,000
-------------- --------------
251,444 367,675
Less current portion (176,444) (167,231)
-------------- --------------
$ 75,000 200,444
============== ==============
</TABLE>
The annual maturities of the outstanding long-term debt at September
30, 1996 are as follows:
Fiscal year
-----------
1997 $176,444
1998 75,000
---------
$251,444
Interest paid by the Company amounted to $383,946 and $219,117 for the
years ended September 30, 1996 and 1995, respectively.
9
<PAGE>
6. Commitments
On May 22, 1995, the Company entered into a line of credit agreement
which allowed the Company to borrow up to $2,500,000 for working
capital. The line of credit was collateralized by substantially all of
the Company's assets and included certain financial covenants. The
unpaid principal balance, if any, was originally due and payable on
August 5, 1996, the line of credit maturity date. During September
1996, the agreement was modified to extend the maturity date to
November 4, 1996, at which time the unpaid balance was due and payable.
Interest accrued at prime rate plus 1.5% per annum and was payable
monthly in arrears. As of September 30, 1996, the Company was advanced
$2,160,000 under this line of credit. As of September 30, 1996, the
Company was in default of certain financial covenants of this
agreement.
The balance has been subsequently paid in full.
In October 1996, the Company entered into a line of credit agreement
with certain shareholders of the Company which allowed the Company to
borrow up to $3,000,000 for working capital. No amounts have been
borrowed against this line of credit. The line of credit expired on the
effective date of the purchase by Boole & Babbage, Inc. (see Note 1).
On September 26, 1994, the Company entered into a new ten-year
operating lease beginning February 1, 1995 for office space at a new
location. In conjunction with the new lease, the Company issued a
letter of credit for $289,270 to be used in the event of a default in
the payment of rent. The letter of credit agreement expires on January
31, 1998. The letter of credit is collateralized by approximately
$292,700 and $291,000 of cash equivalents at September 30, 1996 and
1995, respectively. The lease agreement included approximately $617,000
of reimbursed build-out allowance which was treated as a noncash
capital addition in 1995 for purposes of the statement of cash flows.
In January 1995, the Company entered into a $2,500,000 equipment lease
line of credit. Under the equipment lease line, the Company can sell
and leaseback equipment or acquire new equipment at fair market values
with lease terms of 18 to 36 months. The ability of the Company to
obtain additional financing under this equipment lease line expired
January 1997. During the years ended September 30, 1996 and 1995,
$2,038,969 and $854,626, respectively, was borrowed in the form of
sale/leaseback transactions under this lease line. No gain or loss was
recognized on these transactions.
<TABLE>
Future minimum lease payments, including fixed escalation increases,
under noncancelable operating and capital leases with remaining terms
in excess of one year as of September 30, 1996 are:
<CAPTION>
Operating Capital
Fiscal Year Leases Leases
----------- --------------------------------
<S> <C> <C>
1997 $ 737,816 $ 966,540
1998 761,495 540,551
1999 775,528 204,556
2000 818,053 14,476
2001 - 4,006
--------------------------------
Total minimum lease payments $3,092,892 1,730,129
===========
Less amounts representing interest (172,554)
-----------
Present value of minimum lease payments 1,557,575
Less current portion of capital lease obligations (852,225)
-----------
Long-term portion of capital lease obligations $ 705,350
===========
</TABLE>
10
<PAGE>
Rent expense for the years ended September 30, 1996 and 1995 was
approximately $1,003,000 and $936,000, respectively.
During fiscal year 1996, the Company entered into various reseller
agreements under which royalty payments are due based on future
product sales. In connection with these agreements, the Company has
committed to purchase software licenses of $3.7 million during the
fiscal year ending September 30, 1997, $2.0 million during fiscal year
ending September 30, 1998, and $2.5 million during fiscal year ending
September 30, 1999. Subsequent to year end, a settlement was
negotiated with various of the resellers that reduced these
commitments by approximately $3.7 million.
7. Equity Transactions
Preferred Stock
The Company has authorized the issuance 38,254,470 shares of Class A
Convertible Preferred Stock, par value $.01, ("Class A Preferred
Stock"), 5,180,000 shares of Class B Convertible Preferred Stock, par
value $.01 ("Class B Preferred Stock") and 4,250,000 shares of Class C
Convertible Preferred Stock, par value $.01 ("Class C Preferred
Stock").
<TABLE>
The following table reflects the activity for the fiscal years ended
September 30, 1996 and 1995:
<CAPTION>
Class A Class B Class C
Preferred Stock Preferred Stock Preferred Stock
-------------------------------------------------------------------------
Shares Stated Value Shares Stated Value Shares Stated Value
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------
Balance at September 30,
1994 38,210,648 $9,759,000 5,000,000 $1,500,000 2,605,303 $11,411,227
Issuance of Stock - - - - 1,566,546 6,861,471
-------------------------------------------------------------------------
Balance at September 30,
1995 and 1996 38,210,648 $9,759,000 5,000,000 $1,500,000 4,171,849 $18,272,698
=========================================================================
</TABLE>
In October 1994 as part of the June 7, 1994 private placement, 399,544
Class C Preferred shares were issued for an additional $1,750,003. The
private placement also included bridge loans, in the form of
subordinated promissory notes. The notes, originally issued for
$961,108, matured January 3, 1995 at a total value of $1,000,000
including accrued interest, and were converted into 228,302 shares of
Class C Preferred Stock.
In December 1994, 425,000 shares of Class C Preferred Stock were
issued as part of the early extinguishment of IBM debt (see Note 11).
On June 7, 1995, 513,700 shares of Class C Preferred Stock were issued
for an additional $2,250,006.
11
<PAGE>
The Class A and Class B Preferred Stock classes accumulated dividends
from the date of issuance at the rates of $.0179 per annum and $.021
per annum, respectively. The Class C Preferred Stock accumulated
dividends quarterly from the date of issuance at a rate of $.3066 per
annum. As of September 30, 1996, the cumulative dividends in arrears
were $2,853,371, $402,164 and $2,586,405 for Class A, Class B and
Class C Preferred Stock classes, respectively. The Class C Preferred
Stock had first preference of payment for all unpaid past and current
dividends before any dividends were to be paid on the Class A and
Class B Preferred Stock or the common stock. No dividends, which were
payable at the discretion and approval of the Board of Directors, had
been declared.
The holders of Class A and Class B Preferred Stock, were entitled to
one vote for every ten shares and could have converted their shares
into common stock at the rate of one share of common stock for every
ten shares of preferred stock at any time. The holders of Class C
Preferred Stock were entitled to one vote per share and could have
converted their shares into common stock on a one-for-one basis at any
time.
In the event of liquidation, the holders of Class A, Class B and Class
C Preferred Stock were entitled to receive up to $.2554 per share,
$.30 per share and $4.38 per share, respectively, as defined, plus
accumulated but unpaid dividends. In addition, subject to certain
restrictions, there existed a programmed redemption on the Class A,
Class B and Class C Preferred Stock whereby the preferred stockholders
had the option to require the Company to redeem the stock at a price
equal to $.2554, $.30 and $4.38 per share, respectively, as defined,
beginning with up to 33-1/3% of each class on December 31, 1999, up to
50% on December 31, 2000, and up to 100% on December 31, 2001.
As part of the acquisition by Boole & Babbage, Inc., all outstanding
shares of Class A, Class B and Class C Preferred Stock were exchanged
for shares of Boole & Babbage, Inc. common stock based on their
proportionate fair value.
Common Stock
The Company has reserved 11,488,725 shares of common stock for
issuance upon conversion of preferred stock, exercise of employee
stock options, and the exercise of warrants.
In December 1994, a director of the Company was issued 15,000 shares
of common stock for $1.10 per share in exchange for a promissory note
bearing 7.74% interest. Principal plus accrued interest was due in a
lump sum payment in December 1999; however, this note was released in
February 1996 as part of a severance agreement with the former
director. During 1996, the Company issued 10,500 shares to members of
the Board of Directors for services rendered. The estimated fair value
at issuance was $40,500 or $3.85 per share.
As part of the acquisition by Boole & Babbage, Inc., all outstanding
shares of common stock were exchanged for shares of Boole & Babbage,
Inc. common stock based on their proportionate fair value.
12
<PAGE>
Common Stock Options
<TABLE>
In fiscal years 1996 and 1995, the Company amended the existing stock
option plan ("the Plan") for the purpose of granting to employees
options to purchase up to 2,269,900 shares of the Company's common
stock. The following table summarizes stock option activity for fiscal
years 1995 and 1996:
<CAPTION>
Options Outstanding
Shares ----------------------------
Available Shares Price
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, September 30, 1994 194,461 1,008,023 $.25 - $1.10
Additional options authorized 200,000 -
Options granted (333,439) 333,439 1.10 - 3.00
Options exercised - (180,344) .25
Options terminated 201,144 (201,144) .25 - 3.00
-----------------------
Balance, September 30, 1995 262,166 959,974 .25 - 3.00
Additional options authorized 769,900 - -
Options granted (963,746) 963,746 3.00 - 5.00
Options exercised - (434,674) .25 - 3.00
Options terminated 110,180 (110,180) .25 - 3.00
-----------------------
Balance, September 30, 1996 178,500 1,378,866 $.25 - $3.00
=======================
</TABLE>
As of September 30, 1996, 487,165 shares under option had vested and
were exercisable.
The options were granted by action of the Board of Directors pursuant
to the Plan and were either incentive stock options or non-statutory
options, and were granted under the Plan to key employees to purchase
shares at prices not less than fair market value as determined by the
Board of Directors on the date of grant. Options granted under the
Plan were nonassignable and were exercisable as specified in the
option agreement. Generally, once an option had been granted to an
employee, the option vested at 20% per year for five years and expired
seven years after date of grant.
As part of the acquisition by Boole & Babbage, Inc., all outstanding
options were deemed to have no fair value. Accordingly, the option
holders did not receive any shares of Boole & Babbage, Inc.
13
<PAGE>
8. Income Taxes
<TABLE>
The tax effects of the primary temporary differences giving rise to
the Company's net deferred tax assets were as follows:
<CAPTION>
1996 1995
--------------------------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $14,996,118 $ 13,036,340
Purchased research and development 296,000 296,000
Deferred revenue 550,777 -
Other book/tax differences 242,186 152,105
----------------------------------
Total gross deferred tax asset 16,085,081 13,484,445
Less: valuation allowance (16,078,417) (13,327,800)
----------------------------------
Net deferred tax asset 6,664 156,645
----------------------------------
Deferred tax liability:
Net deferred tax liability (6,664) (156,645)
----------------------------------
Total deferred taxes $ - -
==================================
</TABLE>
The Company has net operating loss carryforwards of approximately
$41,330,000 and $36,033,000 for tax purposes, as of September 30, 1996
and 1995, respectively. The loss carryforwards, which are subject to
limitations for P. 382 of the Internal Revenue Code, are available
through the year 2010.
The Company paid no federal income taxes during the years ended
September 30, 1996 and 1995.
9. Employee Benefits Plan
The Company has a defined contribution and profit sharing plan which is
qualified under Section 401(k) of the Internal Revenue Code. This plan,
which covers substantially all U.S. employees, stipulates that
employees may elect to contribute an amount between 1% and 20% of their
total compensation to the plan. At the end of each plan year, the
Company, at its discretion, may make a profit-sharing contribution to
the plan, which would be allocated to the accounts of all eligible
employees on the basis of their compensation. All employees who are
participants during the plan year and are employed by the Company on
the last day of the plan year would be eligible to share in the
profit-sharing contribution. No contributions have been made by the
Company to the plan for the years ended September 30, 1996 and 1995.
14
<PAGE>
10. Discontinued Operations
Effective September 30, 1995, MAXM discontinued its business segment of
hardware resales. Approximately $450,000 of equipment for resale was
included in other current assets at September 30, 1995. This hardware
related to contracts entered into prior to September 30, 1995 and
subsequently was installed. There were no significant liabilities of
this segment included in the accompanying balance sheet as of September
30, 1995. In addition, there were no proceeds from the disposal. The
Company recognized $294,941 in 1996 as income from discontinued
operations during the phase out period. Due to the Company's tax loss
position, no tax provision has been provided for this gain.
Total consolidated hardware revenues and related costs during the
fiscal years ended September 30, 1996 and 1995 are as follows:
1996 1995
---------- -----------
Hardware revenues $1,371,405 $3,803,706
Hardware cost of goods sold 1,076,464 3,500,306
---------- -----------
Gross profit 294,941 303,400
Other direct expenses - 189,834
---------- -----------
Income from discontinued operations $ 294,941 $ 113,566
========== ===========
11. Extraordinary Item
On December 23, 1994, the Company and IBM entered into an agreement
which resulted in the early extinguishment of a $3,000,000 note payable
and Financial Assistance Agreement. Both obligations, totaling
$6,557,929 including accrued interest, were canceled in exchange for
the payment of $1,750,000 in cash, the issuance of 425,000 shares of
Class C Preferred Stock and a new $500,000 secured promissory note to
IBM which has subsequently been paid. The resulting gain of $2,430,766
is reported as an extraordinary item for the year ended September 30,
1995.
12. Segment Reporting
Information about the Company's geographic areas for the two years
ended September 30, 1996 and 1995 is as follows:
1996
------------------------------------------------
N. America Europe Total
---------- ------ -----
Revenue 9,573,825 5,205,547 14,779,372
Net loss (5,798,853) (783,694) (6,582,547)
Assets 11,960,972 2,579,829 14,540,801
1995
------------------------------------------------
N. America Europe Total
---------- ------ -----
Revenue 2,255,589 14,413,455 16,669,044
Net income (loss) 114,055 (825,508)
(939,563)
Assets 2,536,545 13,447,272 15,983,817
15
<PAGE>
<TABLE>
MAXM Systems Corporation
Consolidated Balance Sheets
(Amounts in thousands)
(December 31, 1996 unaudited)
December 31, September 30
1996 1996
Assets ------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,510 $1,662
Accounts receivable, net 2,428 4,674
Installment and other receivables, net 125 2,116
Prepaid expenses and other current assets 1,156 1,200
------------- -------------
Total current assets 5,219 9,652
Equipment, furniture and leasehold improvements, net 3,727 4,068
Long-term installment and other receivables 216 -
Restricted cash 293 293
Other assets 24 528
------------- -------------
Total assets $9,479 $14,541
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,049 $962
Other accrued liabilities 3,805 4,257
Short-term borrowings 2,160 2,160
Notes payable due within one year 150 177
Capital lease obligations due within one year 800 852
Deferred maintenance revenue 3,753 4,016
------------- -------------
Total current liabilities 11,717 12,424
Notes payable due after one year 75 75
Capital lease obligations due after one year 565 705
Deferred rent 758 744
Deferred maintenance revenue due after one year 1,490 1,489
Convertible preferred stock 29,532 29,532
Stockholders' deficit
Common stock, par value $.01; 12,000,000 shares authorized;
1,311,280 and 1,319,772 shares issued and outstanding
and December 31, 1996 and September 30, 1996, respectively 13 13
Additional paid-in capital 13,835 13,869
Accumulated deficit (48,444) (44,315)
Foreign currency translation adjustment (62) 5
------------- -------------
Total stockholders' equity (34,658) (30,428)
------------- -------------
Total liabilities and stockholders' equity $9,479 $14,541
============= =============
<FN>
See accompanying notes.
</FN>
</TABLE>
1
<PAGE>
MAXM Systems Corporation
Consolidated Statements of Income
(Amounts in thousands, except net income per share)
(Unaudited)
Three Months Ended
December 31,
--------------------------------
1996 1995
---------- -----------
Revenue:
Product licensing $463 $1,609
Maintenance fees and other 1,602 1,642
---------- -----------
Total revenue 2,065 3,251
---------- -----------
Costs and expenses:
Cost of product licensing 355 290
Cost of maintenance fees and other 1,367 730
Product development 791 929
Sales and marketing 2,520 2,489
General and administrative 937 837
---------- -----------
Total costs and expenses 5,970 5,275
---------- -----------
Operating loss (3,905) (2,024)
Interest and other income, net (224) (50)
---------- -----------
Income before provision for income taxes (4,129) (2,074)
Provision for income taxes - -
---------- -----------
Net loss ($4,129) ($2,074)
========== ===========
See accompanying notes.
2
<PAGE>
<TABLE>
MAXM Systems Corporation
Consolidated Statements of Cash Flows
(Amounts in thousands) (Unaudited)
<CAPTION>
Three Months Ended
December 31,
----------------------------------
1996 1995
-------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($4,129) ($2,047)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 419 308
Stock issued under compensatory stock plans - 27
Changes in operating assets and liabilities excluding the effect of acquisitions:
Accounts receivable and installment and other receivables 3,226 (1,838)
Prepaid expenses and other assets 343 265
Accounts payable, accrued expenses and deferred rent (180) (97)
Deferred maintenance revenue (262) 1,249
-------------- -------------
Net cash used for operating activities (583) (2,133)
-------------- -------------
Cash flows from investing activities:
Purchases of equipment, furniture and leasehold improvements (78) (8)
-------------- -------------
Net cash used for investing activities (78) (8)
-------------- -------------
Cash flows from financing activities:
Proceeds from sale of lease receivables 795 -
Proceeds from line of credit - 800
Payments on notes payable (27) (139)
Payments on capital leases (192) (140)
-------------- -------------
Net cash provided by financing activities 576 521
-------------- -------------
Effect of exchange rate changes on cash (67) (24)
-------------- -------------
Net decrease in cash and cash equivalents (152) (1,644)
Cash and cash equivalents at beginning of period 1,662 3,616
-------------- -------------
Cash and cash equivalents at end of period $1,510 $1,972
============== =============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $104 $69
Income taxes, net $2 $0
Supplemental disclosures of noncash investing and financing activities:
Capital lease obligations of $527,000 were incurred in the quarter
ended December 31, 1995 for the purchase of equipment and autos.
<FN>
See accompanying notes
</FN>
</TABLE>
3
<PAGE>
MAXM SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of
all subsidiaries after the elimination of all significant inter-company
items and transactions.
The unaudited consolidated balance sheet as of December 31, 1996 and the
unaudited consolidated statements of operations and cash flows for the
three months ended December 31, 1996 and 1995 should be read in
conjunction with the MAXM Systems Corporation audited financial statement
and related notes.
The consolidated financial information at December 31, 1996 and for the
three-month periods ended December 31, 1996 and 1995 is unaudited. The
statements in this report include all adjustments of a normal recurring
nature. In the opinion of management, these adjustments are necessary for
a fair statement of the interim results for the periods presented. The
interim results are not necessarily indicative of the results for the full
year.
2. Subsequent Events
During December 1996, Boole & Babbage, Inc. agreed to acquire, subject to
certain conditions, all of the outstanding capital stock of MAXM Systems
Corporation in exchange for 1,137,115 shares, 10% of which are held in
escrow with an independent third party escrow agent, of Boole & Babbage
common stock. The transaction was completed on January 16, 1997. The
transaction will be accounted for using the pooling of interest method.
3. Contingencies
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes that such litigation and
claims will be resolved without material adverse effect on the Company's
financial position or results of operations.
<PAGE>
(b) Unaudited Pro Forma Combined Financial Statements
Pro Forma Combined Balance Sheet as of December 31, 1996
Pro Forma Combined Statements of Operations for the years
ended September 30, 1996 and the three months ended
December 31, 1996, 1995 and 1994
Notes to Unaudited Pro Forma Combined Balance Sheets and
Combined Statements of Operations
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial statements give effect to
the combination of Boole & Babbage, Inc. ("Boole & Babbage") and MAXM Systems
Corporation ("MAXM") on a pooling of interests basis. The unaudited pro forma
combined balance sheet presents Boole & Babbage's unaudited consolidated balance
sheet as if the merger took place on December 31,1996. The unaudited pro forma
combined statements of operations present Boole & Babbage's consolidated
statements of operations for the fiscal years ended September 30, 1996, 1995 and
1994 and the three months ended December 31, 1996.
The pro forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the merger had been consummated as presented in the
accompanying unaudited pro forma combined financial information, nor is it
necessarily indicative of future operating results or financial position.
These unaudited pro forma combined financial statements should be read in
conjunction with the historical consolidated financial statements and the notes
of Boole & Babbage and MAXM which are incorporated in or included elsewhere in
the Form 8-K/A.
<PAGE>
Boole & Babbage, Inc. and MAXM Systems Corporation
Proforma Consolidated Balance Sheets
(Amounts in thousands)
(December 31, 1996 unaudited)
<TABLE>
<CAPTION>
Boole & MAXM Proforma
Assets Babbage, Inc Systems Corp Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 28,667 $ 1,510 $ 0 $ 30,177
Short-term investments 27,999 -- -- 27,999
Accounts receivable, net 25,441 2,428 -- 27,869
Deferred tax asset 48,848 -- -- 48,848
Installment and other receivables, net 4,848 125 -- 4,973
Prepaid expenses and other current assets 5,791 1,156 -- 6,947
--------- --------- --------- ---------
Total current assets 141,594 5,219 -- 146,813
Purchases and internally developed software, net 11,478 -- -- 11,478
Equipment, furniture and leasehold improvements, net 8,687 3,727 -- 12,414
Long-term installment and other receivables 47,542 216 -- 47,758
Long-term deferred tax asset 6,572 -- 2,935(6) 9,507
Restricted cash -- 293 -- 293
Costs in excess of net assets of purchased businesses, net 654 -- -- 654
Other assets 5,702 24 -- 5,726
--------- --------- --------- ---------
Total assets $ 222,229 $ 9,479 $ 2,935 $ 234,643
========= ========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,622 $ 1,049 $ 0 $ 7,671
Accrued payroll expense 7,995 -- -- 7,995
Other accrued liabilities 20,572 3,805 10,000(7) 34,377
Short-term borrowings 781 2,160 -- 2,941
Notes payable due within one year 294 150 -- 444
Capital lease obligations due within one year 811 800 -- 1,611
Deferred maintenance revenue 47,416 3,753 -- 51,169
--------- --------- --------- ---------
Total current liabilities 84,491 11,717 10,000 106,208
Notes payable due after one year 354 75 -- 429
Capital lease obligations due after one year 1,949 565 -- 2,514
Deferred rent -- 758 -- 758
Deferred maintenance revenue due after one year 32,203 1,490 -- 33,693
Convertible preferred stock -- 29,532 (29,532)(2) --
Stockholders' equity:
Common stock 18 13 (12)(2) 19
Additional paid-in capital 39,392 13,835 29,544 (2) 82,771
Retained earnings 66,750 (48,444) (7,065) 11,241
Unrealized gain on marketable securities 1,708 -- -- 1,708
Foreign currency translation adjustment 2,369 (62) -- 2,307
Less treasury stock (7,005) -- -- (7,005)
--------- --------- --------- ---------
Total stockholders' equity 103,232 (34,658) 22,467 91,041
--------- --------- --------- ---------
Total liabilities and stockholders' equity $ 222,229 $ 9,479 $ 2,935 $ 234,643
========= ========= ========= =========
<FN>
See accompanying notes.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
Boole & Babbage, Inc. and MAXM Systems Corporation
Proforma Consolidated Statements of Income
(Amounts in thousands, except net income per share)
(Unaudited)
<CAPTION>
Three Months Year Ended September 30,
Ended -------------------------------------------
December 31, 1996 1996 1995 1994
----------------- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Product licensing $27,278 $95,239 $91,692 $72,970
Maintenance fees and other 22,483 85,363 79,458 68,981
---------- ---------- ----------- -----------
Total revenue 49,761 180,602 171,150 141,951
---------- ---------- ----------- -----------
Costs and expenses:
Cost of product licensing 3,978 21,960 19,768 15,158
Cost of maintenance fees and other 6,016 13,199 13,909 13,805
Product development 6,387 22,326 21,056 18,667
Sales and marketing 25,181 91,894 86,492 70,297
General and administrative 5,270 18,392 17,140 16,406
Purchased R&D expense - - - 4,051
---------- ---------- ----------- -----------
Total costs and expenses 46,832 167,771 158,365 138,384
---------- ---------- ----------- -----------
Operating income 2,929 12,831 12,785 3,567
Interest and other income, net 1,589 5,641 3,907 1,306
---------- ---------- ----------- -----------
Income before provision for income taxes 4,518 18,472 16,692 4,873
Provision for income taxes 2,600 7,015 6,000 3,570
---------- ---------- ----------- -----------
Net income before extraordinary item 1,918 11,457 10,692 1,303
Extraordinary gain on early extinguishment of debt - - 2,430 -
---------- ---------- ----------- -----------
Net Income $1,918 $11,457 $13,122 $1,303
========== ========== =========== ===========
Net income per share $0.10 $0.60 $0.71 $0.08
========== ========== =========== ===========
Shares used in per share calculations 20,115 19,205 18,460 17,335
========== ========== =========== ===========
</TABLE>
2
<PAGE>
BOOLE & BABBAGE, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)
1. The unaudited pro forma combined balance sheet presents Boole & Babbage's
unaudited consolidated balance sheet as if the merger took place on
December 31,1996. The unaudited pro forma combined statements of operations
present Boole & Babbage's consolidated statements of operations for the
fiscal years ended September 30, 1996, 1995 and 1994 and the three months
ended December 31, 1996. The audited pro forma combined financial
statements give effect to the combination of Boole & Babbage, Inc. ("Boole
& Babbage") and MAXM Systems Corporation ("MAXM") on a pooling of interest
basis.
2. The pro forma combined financial statements reflect the issuance of
1,137,114 shares of Boole & Babbage common stock for all of the outstanding
preferred classes and common stock of MAXM in connection with the merger.
3. The pro forma information is presented for illustrative purposes only and
is not necessarily indicative of the operating results or financial
position that would have occurred if the merger had been consummated as
presented in the accompanying unaudited pro forma combined financial
information, nor is it necessarily indicative of future operating results
or financial position.
4. These unaudited pro forma combined financial statements should be read in
conjunction with the historical consolidated financial statements and the
notes thereof of Boole & Babbage and MAXM which are incorporated in or
included elsewhere in the Form 8-K/A.
5. On a combined basis, there were no material transactions between Boole &
Babbage and MAXM during any period presented.
6. Pro forma adjustments have been made to reduce valuation allowances
previously provided by MAXM against deferred tax assets attributable to
it's net operating loss carryforwards. Boole and Babbage has concluded that
it is more likely that not that a portion of MAXM's net operating loss
carryovers (approximately $2.9 million of tax benefit at December 31, 1996)
will be realized against future projected combined taxable income of the
two companies.
<PAGE>
7. The Company expects to incur charges to operations currently estimated to
be between $8 million and $12 million before taxes, primarily in the March
1997 quarter in which the merger is to be consummated, to reflect
transaction fees and costs incident to the merger. An estimated charge, at
the midpoint of the above range, of $10 million is reflected in the pro
forma combined balance sheet as a reduction to retained earnings and an
increase in accrued liabilities. The estimated range is not reflected in
pro forma combined statement of operations data. The amount of this charge
is a preliminary estimate and therefore is subject to change.
8. Net income per common share is computed by adding to the weighted average
number of common shares outstanding during the period the number of
dilutive common shares that would be issuable upon the exercise of
outstanding options using the treasury stock method of computation.
<TABLE>
<CAPTION>
Years ended
3 Mo. Ended September 30,
December 31, ----------------------------
1996 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY
Weighted average number of common
shares outstanding during the year 18,551 17,706 17,018 16,187
Incremental common shares attributable
to exercise of outstanding options
(assuming proceeds would be used to
purchase treasury stock) 1,564 1,499 1,442 1,148
----- ----- ----- -----
Total shares 20,115 19,205 18,460 17,335
====== ====== ====== ======
Net income $1,918 $11,457 $13,122 $1,303
====== ======= ======= ======
Net income per share $.10 $.60 $0.71 $0.08
==== ==== ===== =====
FULLY DILUTED
Weighted average number of common
shares outstanding during the year 18,551 17,706 17,018 16,187
Incremental common shares attributable
to exercise of outstanding options
(assuming proceeds would be used to
purchase treasury stock) 1,888 1,554 1,542 1,343
------ ------ ------ ------
Total shares 20,439 19,260 18,560 17.530
====== ====== ====== ======
Net income $1,918 $11,457 $13,122 $1,303
====== ======= ======= ======
Net income per share $.09 $.59 $0.71 $0.07
==== ==== ===== =====
</TABLE>
<PAGE>
Exhibit
Number Description of Exhibit
- -------- ----------------------
*2.1 Agreement and Plan of Merger and Reorganization dated December 10,
1996, among Boole & Babbage, Inc., a Delaware corporation, Merger
Acquisition Sub, Inc., and Delaware corporation, and MAXM Systems
Corporation, a Delaware corporation.
*99.1 Press Release of Boole & Babbage, Inc. dated January 16, 1997
24.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants
* These exhibits were included in the Form 8-K filed on January 31, 1997
Exhibit 24.1
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statements
(Nos. 33-13837, 33-39248, 33-65145, 33-55588, 33-79782 and 333-02723) pertaining
to the 1986 Incentive Stock Option Plan, the 1986 Supplemental Stock Option
Plan, the Employee Stock Purchase Plan, the 1993 Non-employee Directors' Stock
Option Plan, and the 1995 Stock Option Plan of Boole & Babbage, Inc. filed on
Form S-8 by Boole & Babbage, Inc., of our report dated April 10, 1997 on our
audit of the consolidated financial statements of MAXM Systems Corporation as of
and for the years ended September 30, 1996 and 1995. which report is included in
this Form 8-K/A.
\Coopers & Lybrand L.L.P.\
Washington, DC
April 22, 1997
