EXHIBIT 99.2
Lightscape Technologies, Inc.
Consolidated Balance Sheet
(Unaudited)
September 30,
1997
---------------
Current assets
Cash and cash equivalents $ 19,798
Accounts receivable (less reserves for
doubtful accounts) 449,326
Other current assets 142,221
---------------
611,344
Property and equipment-less accumulated
depreciation and amortization 588,139
Other Assets 29,726
---------------
$ 1,228,759
===============
Current liabilities
Notes payable to related parties $ 2,270,501
Accounts payable 993,952
Accrued liabilities 663,399
Current portion of notes payable 1,144
Deferred revenue 176,950
Accrued interest 177,223
Accrued royalty to related party 734,685
Current portion of capital lease 204,934
---------------
5,222,787
Long-term liabilities
Capital lease 312,711
Other long-term liabilities 3,692
---------------
5,539,189
---------------
Shareholders deficit
Convertible preferred stock, $0.001 par value:
Series A convertible preferred stock:
Authorized shares - 6,000,000
Issued and outstanding shares - 5,494,956 5,495
Common Stock, $0.001 par value:
Authorized shares - 20,000,000
Issued and outstanding shares - 3,076,423 3,076
Additional paid-in capital 6,615,659
Accumulated deficit (10,934,660)
---------------
Total Shareholders' deficit (4,310,430)
---------------
$ 1,228,759
===============
The accompanying notes are an integral part of these consolidated financial
statements.
Lightscape Technologies, Inc.
Consolidated Statements of Operations
(Unaudited)
Nine months ended Nine months ended
September 30, 1997 September 30, 1996
-------------------- --------------------
Revenue $ 2,122,038 $ 793,338
Cost of revenue 1,074,955 308,680
------------- -------------
Gross profit 1,047,083 484,658
------------- -------------
Operating expenses
Marketing & Sales 2,041,627 2,372,429
Research & Development 1,130,517 1,589,467
General & Administrative 608,006 488,588
------------- -------------
Total Expenses 3,780,150 4,450,484
------------- -------------
Operating Loss (2,733,067) (3,965,826)
Other income (expense), net (216,905) (26,948)
------------- -------------
Loss before income taxes (2,949,972) (3,992,774)
Provision for income taxes (4,396) (2,817)
------------- -------------
Net Loss $ (2,954,368) $ (3,995,591)
============= =============
The accompanying notes are an integral part of these consolidated financial
statements.
Lightscape Technologies, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended Nine months ended
September 30, September 30,
1997 1996
---------------- -----------------
Cash flows from operating activities:
Net loss $ (2,954,369) $ (3,995,591)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation & amortization 327,376 207,354
Changes in assets and liabilities:
Accounts receivable (280,288) (28,719)
Other current assets (25,668) (20,028)
Other assets (1,817) (1,205)
Accounts payable 713,097 (252,164)
Accrued interest 159,872 (73,791)
Accrued liabilities 291,327 217,094
Accrued royalty to related party 543,851 158,668
Deferred revenue 40,993 (9,456)
Other long-term liabilities (4,153) (49)
-------------- --------------
Net cash used in operating activities (1,189,779) (3,797,887)
-------------- --------------
Purchase of fixed assets (74,179) (718,838)
-------------- --------------
Net cash used in investing activities (74,179) (718,838)
-------------- --------------
Net proceeds from sale of preferred stock -- 6,177,732
Conversion of promissory notes -- (1,216,000)
Repayment of notes payable (2,336) (187,648)
Repayment of stockholder notes receivable -- 17,280
Exercise of common stock options 2,368 3,198
Proceeds from issuance of notes payable to related parties 400,000 --
Proceeds from new capital leases 51,459 620,678
Payments under capital lease obligations (140,609) (64,967)
-------------- --------------
Net cash provided by financing activities 310,882 5,350,274
-------------- --------------
Increase (decrease) in cash and cash equivalents (953,076) 833,549
Cash and cash equivalents, beginning of period 972,874 3,080
-------------- --------------
Cash and cash equivalents, end of period $ 19,798 $ 836,629
============== ==============
Supplemental disclosure of cash flow information:
Interest paid during period $ 67,478 $ 150,565
Taxes paid during period 3,460 1,374
LIGHTSCAPE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
by Lightscape Technologies Inc. ("Lightscape") pursuant to the rules and
regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1996. The
accompanying consolidated financial statements reflect all adjustments
(consisting solely of normal, recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of results for the interim
periods presented.
(2) Subsequent Event
On December 2, 1997, Lightscape entered into an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement") with Discreet Logic Inc. ("Discreet
Logic"), a Quebec corporation and with Lantern Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Discreet Logic ("Merger Sub"). On
December 30, 1997, pursuant to the Merger Agreement, and upon the satisfaction
of certain closing conditions, Merger Sub merged (the "Merger") with and into
Lightscape with Lightscape as the surviving corporation and a wholly-owned
subsidiary of Discreet Logic. The aggregate purchase price for Lightscape
included the assumption by Discreet Logic of approximately $5,700,000 of net
liabilities (of which approximately $3,400,000 was paid at the closing), and up
to $6,800,000 in contingent consideration to be paid only if certain revenue
objectives are achieved by Lightscape in calendar 1998 and 1999. The terms of
the transaction were the result of arms'-length negotiations between the
representatives of Discreet Logic and Lightscape.
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