<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
JUNE 30, 2000
Date of Report (Date of earliest event reported)
TIMELINE, INC.
Name of Registrant as Specified in its Charter
<TABLE>
<CAPTION>
<S> <C> <C>
STATE OF WASHINGTON 1-13524 91-1590734
State or Other Jurisdiction Commission File Number IRS Employer
of Incorporation Identification Number
</TABLE>
3055 112TH AVENUE N.E., SUITE 106
BELLEVUE, WASHINGTON 98004
Address of Principal Executive Offices
(425) 822-3140
Telephone Number
<PAGE> 2
ITEM 2. ACQUISITION OF ASSETS
On July 19, 2000, Timeline, Inc. announced it completed the purchase of the
outstanding shares in Analyst Financials Limited, the European distributor for
Timeline's products. The acquisition was effective as of June 30, 2000. Timeline
previously owned 12.5% of the outstanding shares in Analyst Financials and
through this transaction, acquired the remaining 87.5%, and Analyst Financials
became a wholly-owned subsidiary of Timeline.
The purchase price for the equity of Analyst Financials was approximately (Pound
Sterling)781,250, which Timeline paid by issuance of 303,814 shares of Timeline
common stock to Analyst Financials' shareholders (excluding Timeline, which
previously owned 12.5% of the shares). Dilution was within the 10% cap
originally disclosed. The purchase price is subject to adjustment following
closing based on the results of operations through the closing of the
transaction. Pursuant to the share purchase agreement, Timeline has agreed to
register for resale all of the 303,814 shares of Timeline common stock issued in
the transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of business acquired.
(b) Pro Forma Financial Information.
(c) Exhibits.
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C> <C>
99.1* Share Purchase Agreement, dated as of June 29,
2000, by and among Timeline, Inc. and each of the
other shareholders of Analyst Financials Limited.
99.2* Company press release dated July 19, 2000:
"Timeline Completes Purchase of Analyst Financials,
its European Distributor"
* Incorporated by reference from the Company's Form
8-K filed August 2, 2000.
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, dated as of September
11, 2000.
TIMELINE, INC.
By: /s/ Charles R. Osenbaugh
----------------------------------
Charles R. Osenbaugh
Chief Executive Officer
<PAGE> 4
COMPANY REGISTRATION NO. 3081037 (ENGLAND AND WALES)
ANALYST FINANCIALS LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
<PAGE> 5
ANALYST FINANCIALS LIMITED
COMPANY INFORMATION
--------------------------------------------------------------------------------
DIRECTORS M N Gray
E J Walder
T Harvey (Appointed 7 March 2000)
SECRETARY D M Bourget
COMPANY NUMBER 3081037
REGISTERED OFFICE 10 Charterhouse Square
London
EC1M 6LQ
AUDITORS F W Stephens & Co
10 Charterhouse Square
London
EC1M 6LQ
BANKERS National Westminster Bank plc
PO Box 12258
1 Princes Street
London
EC2R 8PA
<PAGE> 6
ANALYST FINANCIALS LIMITED
CONTENTS
----------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Directors' report 1 - 2
Auditors' report 3
Profit and loss account 4
Balance sheet 5
Statement of Cash flows 6
Notes to the financial statements 7 - 11
</TABLE>
<PAGE> 7
ANALYST FINANCIALS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
The directors present their report and financial statements for the year ended
30 June 2000.
PRINCIPAL ACTIVITIES
The principal activity of the company continued to be that of software
development, licensing and maintenance.
DIRECTORS
The following directors have held office since 1 July 1999:
M N Gray
E J Walder
N Pendse (Resigned 15 April 2000)
I McNaught-Davis (Resigned 15 April 2000)
W M Seddon (Resigned 8 March 2000)
M G Evans (Resigned 8 March 2000)
J M Buckler (Resigned 15 April 2000)
T Harvey (Appointed 7 March 2000)
DIRECTORS' INTERESTS
The directors' beneficial interests in the shares of the company were as stated
below:
<TABLE>
<CAPTION>
ORDINARY OF (Pound Sterling)
1 EACH
30 JUNE 2000 1 JULY 1999
<S> <C> <C>
M N Gray 2,521 2,158
E J Walder 2,521 2,158
T Harvey 1,563 -
</TABLE>
<TABLE>
<CAPTION>
'A' ORDINARY OF (Pound Sterling)
1 EACH
30 JUNE 2000 1 JULY 1999
<S> <C> <C>
M N Gray - -
E J Walder - -
T Harvey 65,000 65,000
</TABLE>
<TABLE>
<CAPTION>
DEFERRED SHARES OF (Pound Sterling)
1 EACH
30 JUNE 2000 1 JULY 1999
<S> <C> <C>
M N Gray - -
E J Walder - -
T Harvey 3 3
</TABLE>
AUDITORS
In accordance with section 385 of the Companies Act 1985, a resolution proposing
that F W Stephens & Co be reappointed as auditors of the company will be put to
the Annual General Meeting.
-1-
<PAGE> 8
ANALYST FINANCIALS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
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;
- 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.
This report has been prepared in accordance with the special provisions of Part
VII of the Companies Act 1985 relating to small companies.
By order of the board
T Harvey
DIRECTOR
4 August 2000
-2-
<PAGE> 9
ANALYST FINANCIALS LIMITED
AUDITORS' REPORT
TO THE SHAREHOLDERS OF ANALYST FINANCIALS LIMITED
--------------------------------------------------------------------------------
We have audited the financial statements on pages 4 to 11 which have been
prepared in accordance with the Financial Reporting Standard for Smaller
Entities (effective March 2000), under the historical cost convention and the
accounting policies set out on page 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 2 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. 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.
GOING CONCERN
The financial statements have been prepared on a going concern basis, the
validity of which depends upon the support of the directors as disclosed in note
1 of the financial statements. The company made a profit of (Pound
Sterling)140,439 for the year but at the balance sheet date its liabilities
exceeded its assets by (Pound Sterling)183,084. Our opinion is not qualified in
this respect.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at 30 June 2000 and of its profit for the year then
ended and have been properly prepared in accordance with the Companies Act 1985.
F W STEPHENS & CO 4 August 2000
Chartered Accountants 10 Charterhouse Square
REGISTERED AUDITOR London
EC1M 6LQ
-3-
<PAGE> 10
ANALYST FINANCIALS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999
NOTES (Pound Sterling) (Pound Sterling)
----- ---------------- ----------------
<S> <C> <C> <C>
TURNOVER 2 2,091,473 1,278,058
Cost of sales (359,381) (222,738)
------------- ------------
GROSS PROFIT 1,732,092 1,055,320
Administrative expenses (1,564,790) (1,676,307)
------------- ------------
OPERATING PROFIT/(LOSS) 3 167,302 (620,987)
Other interest receivable and
similar income 1,287 -
Interest payable and similar charges (28,150) (43,068)
------------- ------------
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 140,439 (664,055)
Tax on profit(loss) on ordinary
activities 4 - -
------------- ------------
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES AFTER TAXATION 12 140,439 (664,055)
============= ============
</TABLE>
-4-
<PAGE> 11
ANALYST FINANCIALS LIMITED
BALANCE SHEET
AS AT 30 JUNE 2000
---------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999
---------------------------------- ---------------------------------
NOTES (Pound Sterling) (Pound Sterling) (Pound Sterling) (Pound Sterling)
-------------- ----- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Fixed assets
Intangible assets 5 102,228 149,469
Tangible assets 6 15,578 28,875
---------- ----------
117,806 178,344
Current assets
Debtors 7 328,224 620,518
Cash at bank and in hand 19,204 200
---------- ----------
347,428 620,718
Creditors: amounts
falling due within one year (648,318) (1,034,028)
---------- ----------
Net current liabilities (300,890) (413,310)
---------- ----------
Total assets less current
liabilities (183,084) (234,966)
Creditors: amounts
falling due after more
than one year 9 - (119,441)
---------- ----------
(183,084) 354,407
========== ==========
Capital and reserves
Called up shares capital 11 100,000 97,385
Share premium account 12 1,024,911 996,642
Profit and loss account 12 (1,307,995) (1,448,434)
---------- ----------
Shareholders' fund (183,084) (354,407)
========== ==========
</TABLE>
These financial statements have been prepared in accordance with the special
provisions of Part VII of the Companies Act 1985 relating to small companies and
with the Financial Reporting Standard for Smaller Entities (effective March
2000).
The financial statements were approved by the Board on 4 August 2000.
--------------------------------
T. Harvey
Director
-5-
<PAGE> 12
ANALYST FINANCIALS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999
NOTES (Pound Sterling) (Pound Sterling)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net profit/(loss) 140,439 (664,055)
Adjustments to reconcile net
profit/(loss) to net cash flows
provided by/(used in) operating
activities:
Depreciation and amortization 187,635 93,036
Changes in operating assets and
liabilities:
Debtors 292,294 185,542
Trade creditors (85,131) 483
Other creditors (57,516) 241,699
-------- --------
Net cash provided by/(used in)
operating activities 477,721 (143,295)
INVESTING ACTIVITIES
Purchase of fixed assets - (16,817)
Payments for intangible assets (127,097) (155,650)
-------- --------
Net cash used in investing (127,097) (172,467)
activities
FINANCING ACTIVITIES
Repayment of debt, net (108,131) -
Proceeds of debt borrowings, net - 194,624
Proceeds from issue of share
capital 30,884 -
-------- --------
Net cash (used in)/provided by
financing activities (77,247) 194,624
-------- --------
NET CHANGE IN CASH 273,377 (121,138)
CASH AT BEGINNING OF YEAR (254,173) (133,035)
-------- --------
CASH AT END OF YEAR 19,204 (254,173)
======== ========
CONSISTING OF:
Cash at bank and in hand 19,204 200
Bank overdraft - (254,373)
-------- --------
(Pound Sterling)19,204 (Pound Sterling)(254,173)
======== ========
</TABLE>
-6-
<PAGE> 13
ANALYST FINANCIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
1 ACCOUNTING POLICIES
1.1 ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention and in accordance with UK GAAP, as defined under the
Financial Reporting Standard for Smaller Entities (effective March
2000).
These accounts have been prepared on a going concern basis. The company
is dependent on the support of the directors.
1.2 TURNOVER
Turnover represents fees invoiced, net of VAT, subject to the items
listed below:
- Where a contract has been signed, income is accrued so as to be
recognised in the same accounting period as any related expenditure.
- Royalties receivable are recognised in the period in which they
become payable unconditionally.
- Income arising from maintenance contracts is recognised in the
period to which the contract relates.
1.3 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:
Fixtures, fittings & equipment 25% per annum on cost
Computer software 50% per annum on cost
1.4 CAPITALISATION OF SOFTWARE DEVELOPMENT COSTS
Where an eligible development project has a reasonable prospect of
generating a surplus net of all costs, including amortisation, any
directly attributable costs and an apportionment of overheads
immediately related to the development department are eligible to be
capitalised.
Amortisation of these costs starts on the earlier of six months from the
beginning of the development project and the date of the first sale of
the product. Capitalised costs are written off by the straight-line
method over twelve months.
1.5 OPERATING LEASES
Rentals paid under operating leases are charged to the profit and loss
account as they become due.
1.6 PENSION COSTS
The pension costs charged in the financial statements represent the
contributions payable by the company during the year in accordance with
SSAP 24.
2 TURNOVER
In the year to 30 June 2000 8.77% (1999 - 29.00%) of the company's
turnover was to markets outside the United Kingdom.
-7-
<PAGE> 14
ANALYST FINANCIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
3 OPERATING PROFIT/(LOSS) 2000 1999
(Pound Sterling) (Pound Sterling)
Operating profit/(loss) is stated after charging:
Amortisation of intangible assets 174,338 77,405
Depreciation of tangible assets 13,297 15,631
Auditors' remuneration 10,000 10,000
Directors' emoluments 392,606 407,888
======= =======
4 TAXATION
On the basis of these financial statements no provision has been made
for corporation tax.
5 INTANGIBLE FIXED ASSETS
</TABLE>
<TABLE>
<CAPTION>
DEVELOPMENT
COSTS
(Pound Sterling)
<S> <C>
COST
At 1 July 1999 242,841
Additions 127,097
Disposals (242,841)
--------
At 30 June 2000 127,097
-------
AMORTISATION
At 1 July 1999 93,372
Amortisation on disposals (242,841)
Charge for year 174,338
-------
At 30 June 2000 24,869
-------
NET BOOK VALUE
At 30 June 2000 102,228
=======
At 30 June 1999 149,469
=======
</TABLE>
-8-
<PAGE> 15
ANALYST FINANCIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
6 TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
(Pound Sterling)
<S> <C> <C> <C>
COST
At 1 July 1999 103,428
Disposals (18,710)
--------
At 30 June 2000 84,718
-------
DEPRECIATION
At 1 July 1999 74,553
On disposals (18,710)
Charge for the year 13,297
-------
At 30 June 2000 69,140
-------
NET BOOK VALUE
At 30 June 2000 15,578
=======
At 30 June 1999 28,875
=======
7 DEBTORS 2000 1999
(Pound Sterling) (Pound Sterling)
Trade debtors 185,623 242,897
Other debtors 42,601 377,621
------- -------
328,224 620,518
------- -------
8 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2000 1999
(Pound Sterling) (Pound Sterling)
Bank loans and overdrafts - 254,373
Trade creditors 64,021 149,152
Taxation and social security 84,961 232,895
Other creditors 499,336 397,608
------- ---------
648,318 1,034,028
======= =========
</TABLE>
The bank overdraft is secured by a fixed and floating charge over the
undertaking and all property and assets in existence.
-9-
<PAGE> 16
ANALYST FINANCIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
9 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2000 1999
(Pound Sterling) (Pound Sterling)
Other creditors - 119,441
======== =======
ANALYSIS OF LOANS
Wholly repayable within five years - 119,441
======== =======
10 PENSION COSTS
The company operates a defined contribution pension scheme.
The assets of the scheme are held separately from those of the
company in an independently administered fund. The pension
cost charge represents contributions payable by the company to
the fund and amounted to (Pound Sterling)49,563
(1999- (Pound Sterling)54,353).
11 SHARE CAPITAL 2000 1999
(Pound Sterling) (Pound Sterling)
AUTHORISED
34,500 Ordinary of (Pound Sterling) 1 each 34,500 34,500
66,500 'A' Ordinary of (Pound Sterling) 1 each 6,500 65,500
3 Deferred shares of (Pound Sterling) 1 each 3 3
-------- -------
101,003 100,003
======== =======
ALLOTTED, CALLED UP AND FULLY PAID
34,497 Ordinary of (Pound Sterling) 1 each 34,497 31,882
65,500 'A' Ordinary of (Pound Sterling) 1 each 65,500 65,500
3 Deferred shares of (Pound Sterling) 1 each 3 3
-------- -------
100,000 97,385
======== =======
On 24th November 1999, a further 2,615 ordinary shares of
(Pound Sterling) 1 each were issued for a consideration of (Pound
Sterling)30,884.
12 STATEMENT OF MOVEMENTS ON RESERVES
SHARE PROFIT
PREMIUM AND LOSS
ACCOUNT ACCOUNT
(Pound Sterling) (Pound Sterling)
Balance at 1 July 1999 996,642 (1,448,434)
Retained profit for the year - 140,439
Premium on shares issued during the year 28,269 -
-------- ----------
Balance at 30 June 2000 1,024,911 (1,307,995)
========= ==========
</TABLE>
-10-
<PAGE> 17
ANALYST FINANCIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2000
--------------------------------------------------------------------------------
13 FINANCIAL COMMITMENTS
At 30 June 2000 the company had annual commitments under non-cancellable
operating leases as follows:
<TABLE>
<CAPTION>
2000 1999
(Pound Sterling) (Pound Sterling)
<S> <C> <C>
Expiry date:
Within one year 21,626 4,399
Between two and five years 16,831 15,479
------ ------
38,457 19,878
====== ======
</TABLE>
14 CONTROL
The company is owned by Mrs Jean Harvey who owns 66.57% (1999: 67.26%)
of the equity shares to which voting rights are attached.
15 RELATED PARTY TRANSACTIONS
The following are amounts which are included in Other Creditors and are
owed to individuals who are directors of the company:
M G Evans (Pound Sterling) 3,284
M N Gray (Pound Sterling) 12,649
W M Seddon (Pound Sterling) 12,728
E J Walder (Pound Sterling) 12,173
I McNaught-Davis (Pound Sterling) 26,990
N Pendse (Pound Sterling) 25,927
M Buckler (Pound Sterling) 29,375
T Harvey (Pound Sterling) 28,431
Included within Other Creditors is an amount of (Pound Sterling)50,000
relating to the professional services of Terry Harvey, a director of the
company.
Also included within Other Creditors is an amount of (Pound
Sterling)87,000 in respect of a loan and 13% interest on this loan of
(Pound Sterling)18,003 owing to the following individuals who are
directors of the company or related parties as stated above:
T Harvey (Pound Sterling) 90,519
I McNaught-Davis (Pound Sterling) 3,621
W M Seddon (Pound Sterling) 3,621
N Pendse (Pound Sterling) 3,621
The above loan is unsecured.
Timeline Inc, a 12.84% shareholder, is owed royalties in respect of
license and maintenance sales for the year amounting to (Pound
Sterling)143,129. The balance outstanding at the year end amounts to
(Pound Sterling)37,128 and is included within Other Creditors.
-11-
<PAGE> 18
TIMELINE, INC.
UNAUDITED PRO-FORMA COMBINED FINANCIAL INFORMATION
The unaudited pro-forma combined balance sheet as of March 31, 2000 gives effect
to the acquisition of Analyst Financials Limited (AFL), as if this transaction
had occurred on March 31, 2000. The unaudited pro forma combined statement of
operations for the year ended March 31, 2000 gives effect to the acquisition of
Analyst Financials Limited as if this transaction had occurred on April 1, 1999.
AFL has a fiscal year-end of June 30. Accordingly, the AFL amounts included in
this pro-forma combined financial information are as of and for the year ended
June 30, 2000. The amounts for Timeline, Inc. are as of and for the year ended
March 31, 2000.
The pro-forma combined financial statements are presented for illustrative
purposes only and should not be construed to be indicative of the actual
combined results of operations as may exist in the future. The pro-forma
adjustments are based on the cash and common stock consideration exchanged by
Timeline, Inc., for the fair value of the assets acquired and liabilities
assumed.
1
<PAGE> 19
\
TIMELINE, INC.
UNAUDITED PRO-FORMA COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
Analyst
Timeline, Financials, Pro Forma
Inc. Ltd. Adjustments Total
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,470,703 $ 29,152 $ 1,499,855
Marketable securities - trading 1,546,256 - 1,546,256
Short-term restricted investments 3,030,000 - 3,030,000
Securities held for others 170,000 - 170,000
Accounts receivable, net 323,387 498,244 $ (56,806)(e) 764,825
Note receivable from affiliate 516 - 516
Prepaid expenses and other 69,856 - 69,856
----------- ----------- ---------- -----------
Total current assets 6,610,718 527,396 (56,806) 7,081,308
PROPERTY AND EQUIPMENT, net 266,073 23,647 289,720
INTANGIBLE ASSETS, net 657,384 155,182 (155,182)(c) 1,759,569
1,102,185 (c)
GOODWILL, net - - 213,190 (c) 213,190
----------- ----------- ---------- -----------
Total assets $ 7,534,175 $ 706,225 $1,103,387 $ 9,343,787
=========== =========== ========== ===========
CURRENT LIABILITIES:
Accounts payable $ 303,885 $ 97,184 $ 401,069
Accrued expenses 487,921 716,490 $ (56,806)(e) 1,231,594
83,989 (c)
Deferred revenues 372,000 170,473 542,473
Current portion of obligations under
capital leases 4,309 - 4,309
----------- ----------- ---------- -----------
Total liabilities 1,168,115 984,147 27,183 2,179,445
----------- ----------- ---------- -----------
STOCKHOLDERS' EQUITY: 6,366,060 (277,922) (909,332)(c) 7,164,342
1,985,536 (c)
----------- ----------- ---------- -----------
Total liabilities and
stockholders' equity $ 7,534,175 $ 706,225 $1,103,387 $ 9,343,787
=========== =========== ========== ===========
</TABLE>
See notes to unaudited pro forma combined financial statements
2
<PAGE> 20
TIMELINE, INC.
UNAUDITED PRO-FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Analyst
Timeline, Financials, Pro Forma Combined
Inc. Ltd. Adjustments Total
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
REVENUE $ 7,945,919 $ 3,329,624 $(213,693)(b) $ 11,061,851
COST OF REVENUES (1,156,204) (572,134) 227,861 (b) (1,500,477)
------------ ------------ --------- ------------
Gross profit 6,789,715 2,757,490 14,169 9,561,373
OPERATING EXPENSES: 4,326,183 2,491,145 437,732 (a) 7,255,060
------------ ------------ --------- ------------
Income from operations 2,463,532 266,345 (423,563) 2,306,313
OTHER INCOME (EXPENSE): 503,554 (42,766) -- 460,788
------------ ------------ --------- ------------
Income (loss) before taxes 2,967,085 223,579 (423,563) 2,767,101
Income tax provision (55,507) -- -- (55,507)
------------ ------------ --------- ------------
Net income (loss) $ 2,911,578 $ 223,579 $(423,563) $ 2,711,594
============ ============ ========= ============
BASIC NET INCOME (LOSS) PER
COMMON AND COMMON
EQUIVALENT SHARE $ 0.89 $ 0.76 (d)
============ ============
DILUTED NET INCOME (LOSS) PER
COMMON AND COMMON
EQUIVALENT SHARES $ 0.83 $ 0.71(d)
============ ============
SHARES USED IN CALCULATION OF
BASIC EARNINGS PER SHARE 3,274,673 3,578,487(d)
============ ============
SHARES USED IN CALCULATION OF
DILUTED EARNINGS PER SHARE 3,524,273 3,828,087(d)
============ ============
</TABLE>
See notes to unaudited pro forma combined financial statements
3
<PAGE> 21
TIMELINE, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
The unaudited pro-forma combined balance sheet as of March 31, 2000 gives effect
to the acquisition of Analyst Financials Limited (AFL), as if this transaction
had occurred on March 31, 2000. The unaudited pro forma combined statement of
operations for the year ended March 31, 2000 gives effect to the acquisition of
AFL as if this transaction had occurred on April 1, 1999.
AFL has a fiscal year-end of June 30. Accordingly, the AFL amounts included in
this pro-forma combined financial information are as of and for the year ended
June 30, 2000. The amounts for Timeline, Inc. are as of and for the year ended
March 31, 2000.
The pro-forma combined financial statements are presented for illustrative
purposes only and should not be construed to be indicative of the actual
combined results of operations as may exist in the future. The pro-forma
adjustments are based on the cash and common stock consideration exchanged by
Timeline, Inc., for the fair value of the assets acquired and liabilities
assumed.
2. Conversion of AFL's Historical Financial Statements
The Unaudited Pro Forma Combined Financial Statements are presented in U.S.
Dollars(USD) and in accordance with U.S. GAAP. Thus AFL's statements of
operations was converted from Great Britain Pounds (GBP) to USD using an average
exchange rate of $1.592 USD per GBP. AFL's balance sheet was converted from GBP
to USD using the exchange rate effective on the balance sheet date of $1.518 USD
per GBP for assets and liabilities and the equity accounts were translated at
historical exchange rates.
3. Pro Forma Adjustments
(a) To record amortization of intangible assets based on the excess purchase
price. Amortization is based on the actual purchase price allocation and is
computed for a one year period. Intangible assets are assumed to have a
three year life.
(b) To eliminate royalty revenues recognized by Timeline of $213,693 for the
year ended March 31, 2000 and royalties paid by AFL of $227,861 for the
year ended June 30, 2000 related to sales of Timeline software products. As
the pro forma statement of operations is presented as if the acquisition
had occurred at the beginning of each period, these revenues and the
related cost of sales have been eliminated.
(c) To record the acquisition of AFL by Timeline, Inc. for $1,862,419. The
acquisition included the issuance of 303,814 shares of Timeline, Inc.
common stock with a total fair market value of $797,525, cash of $20,000
and the assumption of certain liabilities.
(d) Pro forma basic and diluted loss per share is computed by dividing net loss
by the weighted average number of shares outstanding during the period
assuming that shares issued for the acquisition of AFL were outstanding for
the entire period.
(e) To eliminate the intercompany receivable recorded by Timeline at March 31,
2000.
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