Critical Path (CPTH) 8-K Entry into a Material Definitive Agreement

Exhibit 99.1

Critical Path, Inc.

Pro Forma Consolidated Balance Sheet

As of September 30, 2007

	Actual as of September 30, 2007			Pro Forma Adjustments			Pro Forma as of September 30, 2007
ASSETS
Current assets
Cash and cash equivalents	$	11,341		$	2,525	a	$	13,866
Accounts receivable, net		10,794						10,794
Other current assets		2,680						2,680
Total current assets		24,815			2,525			27,340
Property and equipment, net		2,325			(564	)b		1,761
Goodwill		7,766						7,766
Restricted Cash		212						212
Other assets		167						167
Total assets	$	35,285		$	1,961		$	37,246
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	4,292					$	4,292
Accrued compensation and benefits		3,565		$	27	c		3,592
Income and other tax liabilities		1,308						1,308
Other accrued liabilities		8,121		$	459	d		8,580
Deferred revenue		8,066			(220	)e		7,846
Notes payable, short-term		25,638						25,638
Capital lease and other obligations, current		8						8
Total current liabilities		50,998			266			51,264
Deferred revenue long-term		660						660
Notes payable, long-term		—						—
Income and other tax liabilities, long-term		3,600						3,600
Embedded derivative liability		430						430
Total liabilities		55,688			266			55,954
Redeemable preferred stock		144,821						144,821
Shareholders’ deficit
Common stock and additional paid-in-capital		2,170,874						2,170,874
Accumulated deficit		(2,335,495	)		1,695			(2,333,800	)
Accumulated other comprehensive loss		(603	)					(603	)
Total shareholders’ deficit		(165,224	)		1,695			(163,629	)
Total liabilities, redeemable preferred stock and shareholders’ deficit	$	35,285		$	1,961		$	37,246

(a) Critical Path received consideration of $2.525 million in connection with the sale. The Buyer will also pay an additional $0.675 million if certain post-closing conditions related to achievement of revenue milestones are satisfied. However, such contingent consideration is not included as a pro forma adjustment to the Pro Forma Consolidated Balance Sheet as of September 30, 2007.

(b) This adjustment represents the value of certain Supernews assets which will no longer be utilized by the Company following the transition of the Supernews business to the Buyer.

(c) This adjustment represents estimated employee severance and benefits costs associated with the transaction.

(d) This adjustment represents the estimated cost of Supernews vendor terminations and costs directly attributable to the transaction, including investment advisory, legal and accounting fees.

(e) This adjustment represents the value of certain Supernews liabilities which are being transferred to the Buyer as part of the sale.

Critical Path, Inc.

Pro Forma Statements of Operations

Nine Months ended September 30, 2007

		Actual Nine Months Ended September 30, 2007			Pro Forma Adjustments			Pro Forma Nine Months Ended September 30, 2007
NET REVENUE
Software licensing		$	11,158		$	—		$	11,158
Hosted messaging			3,441			(3,441	)a		—
Professional services			7,176			—			7,176
Maintenance and support			13,811			—			13,811
Total net revenue			35,586			(3,441	)		32,145
COST OF NET REVENUE
Software licensing			3,672			—			3,672
Hosted messaging			2,236			(2,236	)a		—
Professional services			5,798			—			5,798
Maintenance and support			4,193			—			4,193
Total cost of net revenue			15,899			(2,236	)		13,663
GROSS PROFIT			19,687			(1,205	)		18,482
OPERATING EXPENSES
Selling and marketing			9,257			(92	)b		9,165
Research and development			7,075			—			7,075
General and administrative			8,316			—			8,316
Restructuring expense			194			—			194
Gain on sale of assets			(129	)		—			(129	)
Total operating expenses			24,713			(92	)		24,621
OPERATING LOSS	��		(5,026	)		(1,113	)		(6,139	)
Other expense net			(974	)		—			(974	)
Interest expense, net			(3,120	)		—			(3,120	)
Loss before provision for income taxes			(9,120	)		(1,113	)		(10,233	)
Provision for income taxes			(320	)		—			(320	)
NET LOSS			(9,440	)		(1,113	)		(10,553	)
Accretion on redeemable preferred stock			(11,157	)		—			(11,157	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(20,597	)	$	(1,113	)	$	(21,710	)
Net loss per share attributable to common		$	(0.56	)				$	(0.59	)
Shares used in the per share calculations			36,957						36,957

(a) This adjustment represents the revenues and cost of revenues attributable to Supernews for the nine months ended September 30, 2007.

(b) This adjustment represents the direct operating expenses attributable to Supernews for the nine months ended September 30, 2007.

Critical Path, Inc.

Pro Forma Statements of Operations

Year ended December 31, 2006

	Actual Year Ended December 31, 2006			Pro Forma Adjustments			Pro Forma Year Ended December 31, 2006
NET REVENUE
Software licensing	$	12,876		$	—		$	12,876
Hosted messaging		4,775			(4,775	)a		—
Professional services		10,539			—			10,539
Maintenance and support		18,240			—			18,240
Total net revenue		46,430			(4,775	)		41,655
COST OF NET REVENUE
Software licensing		4,447			—			4,447
Hosted messaging		3,142			(3,142	)a		—
Professional services		8,156			—			8,156
Maintenance and support		5,216			—			5,216
Total cost of net revenue		20,961			(3,142	)		17,819
GROSS PROFIT		25,469			(1,633	)		23,836
OPERATING EXPENSES
Selling and marketing		12,515			(130	)b		12,385
Research and development		9,815			—			9,815
General and administrative		11,914			—			11,914
Restructuring expense		1,278			—			1,278
Gain on sale of assets		(3,187	)		—			(3,187	)
Total operating expenses		32,335			(130	)		32,205
OPERATING LOSS		(6,866	)		(1,503	)		(8,369	)
Other income, net		421			—			421
Interest expense, net		(3,654	)		—			(3,654	)
Loss before provision for income taxes		(10,099	)		(1,503	)		(11,602	)
Provision for income taxes		(867	)		—			(867	)
NET LOSS		(10,966	)		(1,503	)		(12,469	)
Accretion on redeemable preferred stock		(14,117	)		—			(14,117	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(25,083	)	$	(1,503	)	$	(26,586	)
Net loss per share attributable to common	$	(0.69	)				$	(0.73	)
Shares used in the per share calculations		36,174						36,174

(a) This adjustment represents the revenues and cost of revenues attributable to Supernews for the year ended December 31, 2006.

(b) This adjustment represents the direct operating expenses attributable to Supernews for the year ended December 31, 2006.