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. |