EXHIBIT 99.2 ------------ PREMIER LASER SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION The following tables present summary historical information for Premier and OIS derived from financial statements. Premier's acquisition of OIS will be accounted for using the purchase method of accounting. Premier's fiscal year-end is March 31 and OIS' fiscal year-end is August 31. Following the acquisition, the fiscal year-end of OIS will be changed to March 31. The unaudited pro forma consolidated condensed balance sheet as of September 30, 1999 gives effect to the acquisition as of that date and reflects the proposed issuance of Premier's common stock to the former OIS shareholders. The unaudited pro forma consolidated condensed statement of operations for the fiscal year ended March 31, 1999 presents the results for Premier and OIS as if the acquisition had occurred on April 1, 1998. The unaudited pro forma consolidated condensed statement of operations for the six months ended September 30, 1999 presents the results for Premier and OIS as if the acquisition had occurred on April 1, 1999 and reflects the proposed issuance of Premier's common stock to the former OIS shareholders. Pro forma adjustments to consolidate the financial position and results of operations of OIS with Premier were not necessary due to Premier's 51% ownership of the outstanding common stock of OIS prior to this transaction. This unaudited pro forma financial information presented is based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma statement of operations does not purport to represent what our results of operations actually would have been if the events described above had occurred as of the dates indicated, or what such results would be for any future periods. The unaudited pro forma financial statements are based upon assumptions and adjustments that we believe are reasonable. Assumptions regarding the value of Premier's common stock are based on the last reported sale price of the stock on the Nasdaq National Market on December 29, 1999 and may be materially different from the value of Premier's common stock at the time the merger is completed. The unaudited pro forma financial statements, and the accompanying notes, should be read in conjunction with the historical financial statements and related notes. In addition, the unaudited pro forma consolidated condensed financial information does not reflect certain cost savings that management believes may be realized following the acquisition. These savings are expected to be realized primarily through combining the operations of the companies and implementing Premier's management practices. PREMIER LASER SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET SEPTEMBER 30, 1999 Historical Pro-Forma Pro-Forma Consolidated Adjustments Consolidated ---------------- ---------------- ---------------- ASSETS Current assets: Cash and cash equivalents $ 321,684 $ 321,684 Restricted cash 1,598,706 1,598,706 Accounts receivable 2,704,532 2,704,532 Allowance (1,956,473) (1,956,473) Inventories - gross 16,811,668 16,811,668 Allowance (10,191,838) (10,191,838) Prepaid expenses and other 760,674 760,674 ---------------- ---------------- ---------------- Total current assets 10,048,953 10,048,953 Property and equipment, net 1,278,901 1,278,901 Intangible assets, net 10,607,215 $ 3,246,272(1) 13,853,487 Other assets 263,184 263,184 ---------------- ---------------- ---------------- Total assets $ 22,198,253 $ 3,246,272 $ 25,444,525 ================ ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,846,467 $ 3,846,467 Accrued compensation 999,741 999,741 Accrued acquisition costs 1,074,068 1,074,068 Accrued purchase commitments 1,180,050 1,180,050 Accrued warranty 672,658 672,658 Due to joint venture partner 549,194 549,194 Unearned revenue 747,633 747,633 Other accrued liabilities 2,174,483 2,174,483 ---------------- ---------------- ---------------- Total current liabilities 11,244,294 11,244,294 ---------------- ---------------- ---------------- Convertible debentures, net 2,947,222 2,947,222 ---------------- ---------------- ---------------- Shareholders' equity: Common stock - Class A 90,645,135 3,810,272(1) 94,455,407 Common stock - Class E-1 4,769,878 4,769,878 Common stock - Class E-2 4,769,878 4,769,878 Warrants and options 1,723,842 1,723,842 Additional paid-in capital 400,000 400,000 Accumulated deficit (94,301,996) (564,000)(1) (94,865,996) ---------------- ---------------- ---------------- Total shareholders' equity 8,006,737 3,246,272 11,253,009 ---------------- ---------------- ---------------- Total liabilities and shareholders' equity $ 22,198,253 $ 3,246,272 $ 25,444,525 ================ ================ ================ PREMIER LASER SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET SEPTEMBER 30, 1999 (1) Reflects adjustments to intangible assets and purchased in-process research and development based on their estimated fair values under the purchase method of accounting. The allocation of the aggregate purchase price below is preliminary. The final allocation will be based on a final appraisal that will be completed after the acquisition's completion and management's final evaluation. Purchase price * $ 3,810,272 Less: Intangible assets acquired (2,778,000) Purchased in-process research and development (564,000) ---------------- Goodwill $ 468,272 ================ * The purchase price assumes a $1.59 per share price for Premier's common stock at the time of the acquisition. This assumption is based on the last reported sale price of Premier's common stock on the Nasdaq National Market on December 29, 1999. The actual value of the stock may be materially different at the time the acquisition is completed. The purchase price also assumes the issuance of 2,264,914 shares of Premier's common stock to acquire all remaining outstanding shares of OIS' common stock that it does not already own. Additionally, the purchase price includes estimated direct acquisition costs in the aggregate amount of $200,000. PREMIER LASER SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED MARCH 31, 1999 Historical Pro-Forma Pro-Forma Consolidated Adjustments Consolidated ---------------- ---------------- ---------------- Net sales $ 14,036,951 $ 14,036,951 Cost of sales 13,661,526 13,661,526 ---------------- ---------------- ---------------- Gross profit 375,425 375,425 Selling and marketing expenses 8,229,967 8,229,967 Research and development 4,974,470 4,974,470 General and administration 9,891,899 $ 445,929(2) 10,337,828 Shareholder litigation 8,081,770 8,081,770 Purchased in-process research and development - 564,000(1) 564,000 Asset impairment charges 240,905 240,905 ---------------- ---------------- ---------------- Loss from operations (31,043,586) (1,009,929) (32,053,515) Interest income 202,877 202,877 ---------------- ---------------- ---------------- Net loss $ (30,840,709) $ (1,009,929) $ (31,850,638) ================ ================ ================ Basic and diluted loss per share $ (2.11) $ (1.89) ---------------- ---------------- Weighted average shares 14,601,294 16,866,208 ================ ================ (1) Represents the purchased in-process research and development based on preliminary estimated fair values. The final allocation of the acquisition purchase price will be based upon a final evaluation report that will be completed subsequent to the acquisition's completion and management's final evaluation. (2) Represents one year of amortization expense associated with the purchased intangible assets and goodwill. Such intangible assets are expected to have estimated useful lives ranging from four to 17.5 years. PREMIER LASER SYSTEMS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 1999 Historical Pro-Forma Pro-Forma Consolidated Adjustments Consolidated ---------------- ---------------- ---------------- Net sales $ 6,685,141 $ 6,685,141 Cost of sales 4,172,855 4,172,855 ---------------- ---------------- ---------------- Gross profit 2,512,286 2,512,286 Selling and marketing expenses 2,594,171 2,594,171 Research and development 2,451,266 2,451,266 General and administration 2,393,935 $ 222,965(2) 2,616,900 Purchased in-process research and development - 564,000(1) 564,000 Reduction of previously recorded expenses (350,000) (350,000) ---------------- ---------------- ---------------- Loss from operations (4,577,086) (786,965) (5,364,051) Interest expense 520,595 520,595 Income tax expense (2,488) (2,488) ---------------- ---------------- ---------------- Net loss $ (5,095,193) $ (786,965) $ (5,882,158) ================ ================ ================ Basic and diluted loss per share $ (0.34) $ (0.34) ---------------- ---------------- Weighted average shares 14,878,944 17,143,858 ================ ================ (1) Represents the purchased in-process research and development based on preliminary estimated fair values. The final allocation of the acquisition purchase price will be based upon a final evaluation report that will be completed subsequent to the acquisition's completion and management's final evaluation. (2) Represents six months of amortization expense associated with the purchased intangible assets and goodwill. Such intangible assets are expected to have estimated useful lives ranging from four to 17.5 years.