<PAGE> 1
EXHIBIT 99.2
UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL INFORMATION
The unaudited pro forma combining financial information for Geoworks Corporation
("Geoworks") gives effect to the acquisition of the AirBoss Business Unit of
Telcordia Technologies, Inc. ("AirBoss Business") applying the purchase method
of accounting. The unaudited pro forma consolidated financial information has
been prepared from the historical financial statements of Geoworks and the
AirBoss Business. The Geoworks columns in the following unaudited pro forma
combined financial information reflect the historical consolidated financial
statements of Geoworks.
The unaudited pro forma combining financial information assumes that the
acquisition of AirBoss Business occurred as of April 1, 1999, for the unaudited
pro forma combining statements of operations and as of June 30, 2000, for the
unaudited pro forma combining balance sheet.
The unaudited pro forma combining financial information should be read in
conjunction with Geoworks' historical consolidated financial statements and
related notes to such statements as of March 31, 2000 for the year then ended
included in its Annual Report on Form 10-K, the unaudited condensed consolidated
financial statements as of June 30, 2000 for the three months then ended
included in its Quarterly Report on Form 10-Q, and the notes to unaudited pro
forma combining information included herein.
The unaudited pro forma combined financial information includes adjustments to
reflect the acquisition of AirBoss Business under the terms described in Item 2
of the Current Report on Form 8-K, dated August 8, 2000, previously filed and
incorporated herein by reference.
The pro forma financial information has been prepared by the management of
Geoworks and all calculations have been made based upon assumptions deemed
appropriate by management. In the opinion of management, all adjustments
necessary to present fairly the unaudited pro forma combining financial
statements have been made.
The unaudited pro forma combined information is presented for illustrative
purposes only and is not necessarily indicative of the operating results or
financial position that would have actually been reported if the merger had been
consummated at the beginning of the periods presented, nor is it necessarily
indicative of the future operating results or financial position of the
combining companies.
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GEOWORKS CORPORATION
UNAUDITED PRO FORMA COMBINING BALANCE SHEET AS OF JUNE 30, 2000
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------
GEOWORKS AIRBOSS
JUNE 30, APRIL 30, PRO FORMA PRO FORMA
2000 2000 ADJUSTMENTS COMBINED
------------------------ --------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,301 $ -- $ -- $ 1,301
Marketable securities 13,761 -- -- 13,761
Accounts receivable 755 260 (50) (1) 965
Prepaid expenses and other current assets 433 -- -- 433
------------------------ --------- ---------
Total current assets 16,250 260 (50) 16,460
Property and equipment, net 1,855 307 (13) (1) 2,149
Long-term investments 18,386 -- -- 18,386
Goodwill and other intangibles, net -- -- 38,317 (2) 38,317
------------------------ --------- ---------
Total assets $ 36,491 $ 567 $ 38,254 $ 75,312
======================== ========= =========
LIABILITIES AND STOCKHOLDER'S
EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 657 $ 103 (103) (3) $ 657
Accrued liabilities 1,786 232 18 (3),(4) 2,036
Deferred revenue 1,222 397 (397) (3) 1,222
------------------------ --------- ---------
Total current liabilities 3,665 732 (482) 3,915
Stockholders' equity:
Common stock 106,203 -- 39,949 (5) 146,152
Parent investment -- 5,878 (5,878) (6) --
Accumulated deficit (91,607) (6,043) 4,665 (6),(2) (92,985)
Accumulated other comprehensive income 18,230 -- -- 18,230
------------------------ --------- ---------
Total stockholders' equity 32,826 (165) 38,736 71,397
------------------------ --------- ---------
Total liabilities and stockholders' equity $ 36,491 $ 567 $ 38,254 $ 75,312
======================== ========= =========
</TABLE>
See accompanying notes
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GEOWORKS CORPORATION
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE YEAR ENDED
MARCH 31, 2000 (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
GEOWORKS AIRBOSS
MARCH 31, JANUARY 31, PRO FORMA PRO FORMA
2000 2000 ADJUSTMENTS COMBINED
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Net revenues:
Professional services $ 7,004 $ -- $ -- $ 7,004
Research and development fees 320 -- -- 320
License and other revenues 4,815 4,526 -- 9,341
-------- -------- -------- --------
Total net revenues 12,139 4,526 -- 16,665
Operating expenses: --
Cost of services 4,584 -- -- 4,584
Cost of license revenues 335 8 -- 343
Sales and marketing 5,577 448 -- 6,025
Research and development 4,100 3,688 -- 7,788
General and administrative 3,338 1,954 -- 5,292
Amortization of goodwill and other intangible assets -- -- 8,115 (7) 8,115
Restructuring charges (reversal) (589) -- -- (589)
-------- -------- -------- --------
Total operating expenses 17,345 6,098 8,115 31,558
-------- -------- -------- --------
Operating loss (5,206) (1,572) (8,115) (14,893)
Other income (expense):
Other income 4,049 -- -- 4,049
Interest income 646 -- -- 646
Interest expense (10) -- -- (10)
-------- -------- -------- --------
Total other income 4,685 -- -- 4,685
-------- -------- -------- --------
Loss before income taxes (521) (1,572) (8,115) (10,208)
Provision for income taxes 452 -- -- 452
-------- -------- -------- --------
Net loss $ (973) $ (1,572) $ (8,115) $(10,660)
======== ======== ======== ========
Net loss per share - basic and diluted $ (0.05) $ (0.51)
======== ========
Shares used in per share computation 17,866 3,018 20,884
======== ======== ========
</TABLE>
See accompanying notes
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GEOWORKS CORPORATION
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED
JUNE 30, 2000 (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
GEOWORKS AIRBOSS
JUNE 30, APRIL 30, PRO FORMA PRO FORMA
2000 2000 ADJUSTMENTS COMBINED
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
Professional services $ 2,055 $ -- $ -- $ 2,055
Research and development fees -- -- -- --
License and other revenues 1,975 339 -- 2,314
-------- -------- -------- --------
Total net revenues 4,030 339 -- 4,369
Operating expenses:
Cost of services 1,189 -- -- 1,189
Cost of license revenues 18 4 -- 22
Sales and marketing 1,473 98 -- 1,571
Research and development 1,646 901 -- 2,547
General and administrative 1,313 455 -- 1,768
Amortization of goodwill and other intangible assets -- -- 2,029 (7) 2,029
-------- -------- -------- --------
Total operating expenses 5,639 1,458 2,029 9,126
-------- -------- -------- --------
Operating loss (1,609) (1,119) (2,029) (4,757)
Other income (expense):
Interest income 228 -- -- 228
-------- -------- -------- --------
Total other income 228 -- -- 228
-------- -------- -------- --------
Loss before income taxes (1,381) (1,119) (2,029) (4,529)
Provision for income taxes 173 -- -- 173
-------- -------- -------- --------
Net loss $ (1,554) $ (1,119) $ (2,029) $ (4,702)
======== ======== ======== ========
Net loss per share (basic and diluted) $ (0.08) $ (0.22)
======== ========
Shares used in per share computations 18,551 3,018 21,569
======== ======== ========
</TABLE>
See accompanying notes
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GEOWORKS AND AIRBOSS BUSINESS UNIT OF TELCORDIA TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL INFORMATION
NOTE 1. PRO FORMA BASIS OF PRESENTATION
The unaudited pro forma combining financial statements of Geoworks and the
AirBoss Business gives retroactive effect to the acquisition, which is being
accounted for as a purchase of interests and, as a result, the unaudited pro
forma combining balance sheets and statements of operations are presented as if
Geoworks and the AirBoss Business had been combined for all periods presented.
The pro forma combining financial statements reflect the issuance of a total of
approximately 3,018,000 shares of Geoworks common stock to acquire the AirBoss
Business.
NOTE 2. PRO FORMA ADJUSTMENTS
The unaudited pro forma combining balance sheet includes the adjustments
necessary to give effect to the merger as if it had occurred on June 30, 2000,
and to reflect the allocation of the proposed acquisition cost to the fair value
of tangible and intangible assets acquired as noted above.
Adjustments included in the unaudited pro forma balance sheet are summarized as
follows:
(1) Represents adjustments made to the balance sheet to eliminate balance of the
AirBoss Business not acquired.
(2) Represents recognition of the excess purchase cost of approximately $38.3
million over the estimated fair value of net tangible assets which acquired
which have been recorded as goodwill and other intangible assets as follows:
<TABLE>
<S> <C>
Developed Technology 4,732,000
Core Technology 1,605,000
Acquired Workforce 616,000
Patents 1,048,000
Goodwill 30,316,000
-----------
Subtotal $38,317,000
In-Process Technology 1,378,000
-----------
$39,695,000
===========
</TABLE>
The write-off of acquired in-process technology has been reflected in the
accompanying pro forma combining balance sheet, but has not been included in
the pro forma combining statement of operation. The write-off acquired
in-process technology will be recorded by Geoworks as a charge to operations
in the three months ended September 30, 2000.
(3) Represents adjustments made to the balance sheet for liabilities of the
AirBoss Business not assumed.
(4) Represents acquisition-related costs of approximately $250,000 consisting
primarily of fees for attorneys and accountants.
(5) Represents issuance of approximately 3,018,000 shares of Geoworks common
stock with fair value of approximately $39.9 million. The fair value per
share of common stock issued is based on an average of the closing prices
surrounding the May 16, 2000 announcement of the acquisition.
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(6) Represents an elimination of the AirBoss Business net investment accounts.
The unaudited pro forma combining statements of operations include the
adjustments necessary to combine results as if the acquisition had occurred as
of April 1, 1999, as follows:
(7) Represent the amortization of goodwill and other intangible assets over
the following periods:
<TABLE>
<S> <C>
Developed Technology 4 Years
Core Technology 4 Years
Acquired Workforce 3 Years
Patents 4 Years
Goodwill 5 Years
</TABLE>
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