EXHIBIT 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed combined Statements of
Operations (the "Pro Forma Statements of Operations") for the year ended
December 31, 1999 and six months ended June 30, 2000 gives effect to the
HumanClick acquisition as if it had occurred on June 24, 1999 (HumanClick's date
of incorporation). The Pro Forma Statements of Operations are based on
historical results of operations of LivePerson for the year ended December 31,
1999 and six months ended June 30, 2000 and for HumanClick for the period from
June 24, 1999 (HumanClick's date of incorporation) through December 31, 1999 and
six months ended June 30, 2000.
The Unaudited Pro Forma Condensed Combined Balance Sheet (the "Pro Forma
Balance Sheet") gives effect to the acquisition of HumanClick as if the
acquisition had occurred on June 30, 2000. The Pro Forma Statements of
Operations and Pro Forma Balance Sheet and accompanying notes (the "Pro Forma
Financial Information") should be read in conjunction with, and are qualified
by, the historical financial statements of LivePerson contained in the
LivePerson Quarterly Report on Form 10-Q and Registration Statement on Form S-1
(commission file no. 333-95689) as filed, or to be filed, with the Securities
and Exchange Commission on November 14, 2000, and April 6, 2000, respectively,
and the historical financial statements of HumanClick appearing elsewhere in
this document.
The Pro Forma Financial Information is intended for informational purposes
only and does not purport to represent (i) the future results of operations of
LivePerson or (ii) the actual results of operations or financial position of
LivePerson had the acquisition occurred on the dates assumed. In addition, the
pro forma results are not intended to be a projection of future results.
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LIVEPERSON, INC.
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2000
(In thousands, except for share and per share information)
Human- Pro Forma
LivePerson Click (1) Adjustments Pro Forma
---------- --------- ----------- ---------
Assets
Current assets:
Cash and cash equivalents $ 4,736 $ 728 $ -- $ 5,464
Marketable securities 35,272 -- -- 35,272
Accounts receivable, net 729 63 -- 792
Prepaid expenses and other current
assets 1,064 -- -- 1,064
-------- -------- -------- --------
Total current assets 41,801 791 -- 42,592
Property and equipment, net 13,027 60 -- 13,087
Security deposits 258 -- -- 258
Deferred costs 687 -- -- 687
Goodwill and other intangible assets -- -- 8,751 (a) 8,751
-------- -------- -------- --------
Total assets $ 55,773 $ 851 $ 8,751 $ 65,375
======== ======== ======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 4,481 $ 65 $ -- $ 4,546
Accrued expenses 1,347 79 -- 1,426
Deferred revenue 625 -- -- 625
-------- -------- -------- --------
Total current liabilities 6,453 144 -- 6,597
Deferred rent 254 -- -- 254
Other liabilities -- 69 -- 69
-------- -------- -------- --------
Total liabilities 6,707 213 -- 6,920
9,661 (a)
(272)(a)
Stockholders' equity 49,066 638 (638)(a) 58,455
-------- -------- -------- --------
Total liabilities and
stockholders' equity $ 55,773 $ 851 $ 8,751 $ 65,375
======== ======== ======== ========
(1) The HumanClick financial statements are presented in accordance with
Israeli generally accepted accounting principles ("GAAP"). The differences
between Israeli GAAP and US GAAP were not significant.
See accompanying notes to unaudited pro forma condensed combined financial
information.
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LIVEPERSON, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations
Six Months Ended June 30, 2000
(In thousands, except for share and per share information)
Human- Pro Forma
LivePerson Click (1) Adjustments Pro Forma
------------ ------------ ------------ ------------
Revenues $ 2,100 $ -- $ -- $ 2,100
------------ ------------ ------------ ------------
Operating expenses
Cost of revenues 3,229 -- -- 3,229
Product development 3,918 355 -- 4,273
Sales and marketing 7,217 307 -- 7,524
General and administrative 3,290 58 -- 3,348
Non-cash compensation expenses 10,957 -- 45 (a) 11,002
Amortization of goodwill and intangible
assets -- -- 1,459 (a) 1,459
------------ ------------ ------------ ------------
28,611 720 1,504 30,835
------------ ------------ ------------ ------------
Loss from operations (26,511) (720) (1,504) (28,735)
Total other income (expense), net 873 48 -- 921
------------ ------------ ------------ ------------
Net loss (25,638) $ (672) $ (1,504) (27,814)
============ ============
Non-cash preferred stock dividend (18,000) (18,000)
------------ ------------
Net loss attributable to common
stockholders $ (43,638) $ (45,814)
============ ============
Basic and diluted net loss per common
share $ (2.48) $ (2.10)(b)
============ ============
Weighted-average shares outstanding
used in basic and diluted net loss
per common share calculation 17,597,169 4,238,405 (b) 21,835,574
============ ============ ============
(1) The HumanClick financial statements are presented in accordance with
Israeli generally accepted accounting principles ("GAAP"). The differences
between Israeli GAAP and US GAAP were not significant.
See accompanying notes to unaudited pro forma condensed combined financial
information.
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LIVEPERSON, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations
Year ended December 31, 1999
(In thousands, except for share and per share information)
Human- Pro Forma
LivePerson Click (1) Adjustments Pro Forma
------------ ------------ ------------ ------------
Revenues $ 615 $ -- $ -- $ 615
------------ ------------ ------------ ------------
Operating expenses
Cost of revenues 856 -- -- 856
Product development 1,637 98 -- 1,735
Sales and marketing 3,987 -- -- 3,987
General and administrative 1,706 76 -- 1,782
Non-cash compensation expenses 2,679 -- 44 (a) 2,723
Amortization of goodwill and intangible
assets -- -- 1,415 (a) 1,415
------------ ------------ ------------ ------------
10,865 174 1,459 12,498
------------ ------------ ------------ ------------
Loss from operations (10,250) (174) (1,459) (11,883)
Total other income (expense), net 473 21 -- 494
------------ ------------ ------------ ------------
Net loss $ (9,777) $ (153) $ (1,459) $ (11,389)
============ ============ ============ ============
Basic and diluted net loss per common share $ (0.63) $ (0.65)
============ ============
Weighted-average shares outstanding used in
basic and diluted net loss per common
share calculation 15,465,304 2,055,336 (b) 17,520,640
============ ============ ============
(1) The HumanClick financial statements are presented in accordance with
Israeli generally accepted accounting principles ("GAAP"). The differences
between Israeli GAAP and US GAAP were not significant.
See accompanying notes to unaudited pro forma condensed combined financial
information.
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION
(1) PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
(a) The consideration payable by LivePerson in connection with the
acquisition of all of the outstanding shares of capital stock of
HumanClick consists of the following:
- 4,238,405 shares of LivePerson common stock valued at approximately
$8.9 million based upon the five-day average trading price before
and after October 12, 2000, the date on which the transaction was
consummated and announced, at $2.094 per share. Of these shares,
1,564,298 are subject to a repurchase option by LivePerson if two of
the former shareholders of HumanClick are no longer employed by
HumanClick under certain circumstances prior to October 12, 2003.
The price pursuant to which LivePerson may repurchase such shares
is equal to the lesser of the 30-day average price per share of
LivePerson common stock prior to the termination of employment, and
$7 per share. One-third of the stock subject to the repurchase
option shall be released from LivePerson's purchase option on each
of October 12, 2001, 2002 and 2003;
- The assumption by LivePerson of options to purchase HumanClick's
ordinary shares, to be exchanged for options to purchase
approximately 262,000 shares of LivePerson's common stock. The
options were valued at approximately $537,000 based on a
Black-Scholes option pricing model of which $272,000 represents
unearned stock-based compensation relating to the intrinsic value of
unvested options assumed at the closing date; plus
- Acquisition costs of approximately $250,000 related to the merger.
The following represents the allocation of the purchase price over the
historical net book values of the acquired assets and assumed liabilities
of HumanClick at June 30, 2000, and is for illustrative pro forma purposes
only. Actual fair values will be based on financial information as of the
acquisition date. Assuming the transaction had occurred on June 30, 2000,
the allocation would have been as follows:
(in thousands)
Assets acquired:
Cash ............................... $ 728
Accounts receivable ................ 63
Property and equipment ............. 60
Goodwill and intangibles ........... 8,751
-------
9,602
-------
Liabilities assumed ...................... (213)
Unearned stock based compensation ........ 272
-------
Purchase price ........................... $ 9,661
=======
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- The pro forma adjustments reflect approximately six months of
amortization expense for the year ended December 31, 1999 and six
months of amortization expense for the six months ended June 30,
2000, assuming the transaction had occurred on June 24, 1999
(HumanClick's date of incorporation). Goodwill and other intangible
assets are being amortized over a period of three years, the
expected estimated period of benefit;
- The pro forma adjustments reflect approximately six months of
non-cash compensation expense for the year ended December 31, 1999
and six months of non-cash compensation expense for the six months
ended June 30, 2000, assuming the transaction had occurred on June
24, 1999 (HumanClick's date of incorporation). The intrinsic value
of the unvested options assumed at the closing date will be
amortized over their applicable vesting periods. Options generally
vest over three years; and
- The pro forma adjustment reconciles the historical balance sheet of
HumanClick at June 30, 2000 to the allocated purchase price of
HumanClick of $9.7 million assuming the transaction had occurred on
June 30, 2000.
(b) The pro forma basic and diluted net loss per common share is
computed by dividing the net loss attributable to common
stockholders by the weighted average number of common shares
outstanding. The calculation of the weighted average number of
shares outstanding assumes that 4,238,405 shares of LivePerson
common stock issued in connection with the acquisition were
outstanding since the period of HumanClick's incorporation (June 24,
1999). The common stock issued in connection with the acquisition
was adjusted for the weighted average period such shares were
considered to be outstanding (for the periods from June 24, 1999
through December 31, 1999 and from January 1, 2000 through June 30,
2000).
Diluted net loss per share equals basic net loss per share, as
common stock equivalents are anti-dilutive for all pro forma periods
presented.
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