EXHIBIT 99.3
DATAWATCH CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
YEAR ENDED SEPTEMBER 30, 1996
COMBINED COMPANY
COMPANY AS GUILDSOFT GUILDSOFT GUILDSOFT GUILDSOFT BEFORE PRO FORMA
REPORTED HOLDINGS LIMITED ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTMENTS COMBINED
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Cash and equivalents $ 1,696,349 $ 3,682 $ 138,772 $ 142,454 $ 1,838,803 ($75,547) 2 $ 1,763,256
Short-term investments 792,665 4,692 (4,692) 792,665 792,665
Accounts receivable-net 7,767,748 394,380 394,380 8,162,128 (128,808) 1 8,033,320
Due from subsidiary 180,945 (180,945)
Inventories 480,758 223,459 223,459 704,217 704,217
Prepaid advertising & other 1,264,798 117,560 117,560 1,382,358 (17,437) 2 1,364,921
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Total current assets 12,002,318 189,319 874,171 (185,637) 877,853 12,880,171 (221,792) 12,658,379
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Property & equipment 3,534,759 532,214 208,857 741,071 4,275,830 4,275,830
Less: accumulated depreciation (1,737,733) (32,119) (123,360) (155,479) (1,893,212) (1,893,212)
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Property & equipment, net 1,797,026 500,095 85,497 585,592 2,382,618 2,382,618
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Other assets 400,062 400,062 400,062
Excess if cost over net assets 1,041,165 1,041,165 865,889 2 1,907,054
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Total assets $ 15,240,571 $689,414 $ 959,668 ($185,637) $1,463,445 $16,704,016 $ 644,097 $ 17,348,113
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Accounts payable 2,914,952 301,685 496,889 798,574 3,713,526 3,713,526
Accrued expenses 1,063,129 156,896 156,896 1,220,025 (128,808) 1 1,091,217
Due to holding 180,945 (180,945)
Deferred revenue 1,946,473 1,946,473 1,946,473
Current portion of long-term
debt 867,307 8,138 8,138 875,445 875,445
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Total current liabilities 6,791,861 309,823 834,730 (180,945) 963,608 7,755,469 (128,808) 7,626,661
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Long-term obligations 209,824 366,492 366,492 576,316 576,316
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Common stock 89,659 47 47 (47) 47 89,706 1,203 2 90,909
Additional paid-in capital 18,665,402 4,648 4,648 (4,648) 4,648 18,670,050 900,352 2 19,570,402
Accumulated earnings (deficit) (10,538,117) 10,013 119,747 129,760 (10,408,357) (129,760) 2 (10,538,117)
Cumulative translation
adjustment 21,942 (1,609) 496 3 (1,110) 20,832 1,110 2 21,942
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Total equity 8,238,886 13,099 124,938 (4,692) 133,345 8,372,231 772,905 9,145,136
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Total liabilities & shareholders
equity $15,240,571 $689,414 $959,668 ($185,637) $1,463,445 $ 16,704,016 $ 644,097 $17,348,113
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DATAWATCH CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1996
COMBINED COMPANY
COMPANY AS GUILDSOFT GUILDSOFT GUILDSOFT GUILDSOFT BEFORE PRO FORMA
REPORTED HOLDING LIMITED ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTMENTS COMBINED
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Net sales $30,022,122 $ 326,419 $ 1,930,594 ($ 43,377)$ 2,213,636 $ 32,235,758 ($ 327,984) 1 $31,907,774
Cost of sales 4,516,456 999,114 999,114 5,515,570 5,515,570
Engineering & product
development 2,338,724 2,338,724 2,338,724
Selling, general & administrative 22,039,420 20,707 999,076 (43,377) 976,406 23,015,826 (204,286) 1,2 22,811,540
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Income (loss) from operations 1,127,522 305,712 (67,596) 238,116 1,365,638 (123,698) 1,241,940
Interest expense (96,184) (47,620) (33) (47,653) (143,837) (143,837)
Other income-primarily interest 49,162 3,874 3,874 53,036 53,036
Foreign currency transaction
gain (loss) 11,860 11,860 11,860
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Net income (loss) before tax 1,092,360 258,092 (63,755) 194,337 1,286,697 (123,698) 1,162,999
Income tax (benefit) provision (33,000) 52,947 (599) 52,348 19,348 19,348
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Net income (loss) $ 1,125,360 $ 205,145 ($ 63,156) $ 141,989 $ 1,267,349 ($ 123,698) $ 1,143,651
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Net income (loss) per share $ .13 $ 1.14 $ .14 $ .13
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Weighted average shares 8,943,862 125,000 9,068,862 9,068,862
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DATAWATCH CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
1. To eliminate accounts receivable and accounts payable between Datawatch and
Guildsoft Limited.
2. To record the disbursement of cash and issuance of common stock to Guildsoft
Holdings Limited, had the purchase taken place on September 30, 1996.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
1. To eliminate commissions and management fee expense and revenue between
Datawatch and Guildsoft Limited.
2. To include the amortization, over a period of seven years, of the excess of
cost over fair value of net assets of Guildsoft Holdings Limited.