1
EXHIBIT 99.02
Unaudited balance sheet of Redwood as of July 31, 1994 and the related
unaudited statements of operations and cash flows of Redwood for the six month
periods ended July 31, 1993 and 1994.
2
REDWOOD DESIGN AUTOMATION, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
July 31,
1994
-----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,751
Accounts receivable 392
Prepaid expenses and other current assets 103
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Total current assets 2,246
Property and equipment, net 531
Other assets 50
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Total assets $ 2,827
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current portion of capital lease obligations $ 329
Accounts payable 207
Accrued liabilities 134
Deferred revenue 331
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Total current liabilities 1,001
Long-term obligations 2,817
Stockholders' Deficit:
Convertible preferred stock 10,900
Common stock 80
Notes receivable from stockholders (20)
Accumulated deficit (11,951)
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Total stockholders' deficit (991)
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Total liabilities and stockholders' deficit $ 2,827
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The accompanying notes are an integral part of these statements.
3
REDWOOD DESIGN AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended
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July 31, July 31, Inception to
1994 1993 July 31, 1994
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REVENUE $ 434 $ 100 $ 745
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OPERATING EXPENSES:
Cost of revenue 208 117 495
Market development 1,181 1,114 4,738
Product development 1,225 1,150 5,820
General and administrative 325 305 1,773
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Total operating expenses 2,939 2,686 12,826
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Operating loss (2,505) (2,586) (12,081)
Other income (expense), net (49) - - - 130
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NET LOSS $(2,554) $(2,586) $ (11,951)
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The accompanying notes are an integral part of these statements.
4
REDWOOD DESIGN AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended
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July 31, July 31, Inception to
1994 1993 July 31, 1994
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CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD $ 1,115 $ 1,503 $ - - -
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (2,554) (2,586) (11,951)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization 197 155 802
Deferred rent (5) (4) 1
Net changes in current assets and liabilities:
Increase in accounts receivable (240) - - - (392)
Decrease (increase) in prepaid expenses
and other assets 20 (35) (103)
Increase in accrued liabilities and payables 136 9 341
Increase (decrease) in deferred revenue 314 (50) 331
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Net cash used for operating activities (2,132) (2,511) (10,971)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5) (7) (146)
Increase in other assets (1) (41) (55)
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Net cash used for investing activities (6) (48) (201)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of secured debt 2,500 - - - 2,500
Principal payments on capital leases (149) (112) (537)
Proceeds from sale of convertible preferred stock 423 5,062 10,900
Proceeds from sale of common stock - - - 3 60
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Net cash provided by financing activities 2,774 4,953 12,923
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INCREASE IN CASH AND CASH EQUIVALENTS 636 2,394 1,751
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,751 $ 3,897 $ 1,751
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The accompanying notes are an integral part of these statements.
5
REDWOOD DESIGN AUTOMATION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, the Company believes that the
disclosures are adequate to make the information presented not misleading.
These condensed consolidated financial statements should be read in conjunction
with the financial statements and the notes thereto included elsewhere within
this filing.
2. In June and July, 1994 Cadence Design Systems, Inc. (Cadence) loaned the
Company $2.5 million in the form of a $1.0 million secured note payable due
August 30, 1996 and a $1.5 million secured note payable due September 30, 1996.
Interest on both notes is compounded monthly at a prime rate. In July 1994,
the Company and Cadence entered into a definitive merger agreement which
provides that all of the Company's outstanding stock will be exchanged for
approximately 419,000 shares of common stock of Cadence. In addition, upon
completion of the merger, repayment of the $2.5 million advanced to the Company
will be waived. The acquisition was completed during the third quarter of
1994.
3. Effective February 1, 1994 the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". There was no effect on the Company's prior or current
year's financial statements due to the adoption of this statement.