EXHIBIT 99.2
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SPIRE CORPORATION
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined statements of operations of
Spire Corporation (the "Company" or "Spire") for the three-months ended March
31, 2003 and for the year ended December 31, 2002, gives effect to the
acquisition of Bandwidth Semiconductor, LLC ("Bandwidth") as if the transaction
had occurred on January 1, 2002.
The accompanying unaudited pro forma combined financial information
reflects Spire's acquisition of Bandwidth pursuant to a Purchase Agreement,
effective May 23, 2003. In accordance with Statement of Financial Accounting
Standards No. 141, Business Combinations, and Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, Spire used the purchase
method of accounting for a business combination to account for the acquisition
as well as the related accounting and reporting regulations for goodwill and
other intangibles. Under these methods of accounting, the assets and liabilities
of Bandwidth were recorded at their respective fair values. The financial
position, results of operations and cash flows of Bandwidth are included in
Spire's financial statements prospectively as of the completion of the
acquisition.
The following unaudited pro forma combined financial statements of the
Company have been prepared by management in accordance with generally accepted
accounting principles in the United States and do not reflect any operating
efficiencies and cost savings that Spire believes are achievable.
The unaudited pro forma combined financial information is presented for
illustrative purpose only and is not necessarily indicative of the operating
results that would have occurred if the acquisition had been consummated at the
beginning of the periods presented, nor is it necessarily indicative of future
operating results. The pro forma adjustments are based upon available
information and upon certain assumptions described in the notes to the unaudited
pro forma combined financial statements that Spire management believes are
reasonable in the circumstances. The accompanying condensed combined pro forma
financial information should be read in conjunction with the historical
consolidated financial statements and accompanying notes thereto of Spire
included in its Annual Report on Form 10-KSB for the year ended December 31,
2003 and Bandwidth financial statements included elsewhere herein.
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SPIRE CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
Spire Bandwidth Pro Forma
Corporation Semiconductor Adjustments Note Pro Forma
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(Unaudited)
Sales and revenues $ 14,822,209 $ 2,203,993 $ (52,300) C $ 16,973,902
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Cost of sales 10,624,474 3,820,978 839,447 A,C,D 15,284,899
Research and development 337,034 655,416 143,954 A 1,136,404
Selling, general and administrative 5,775,412 1,906,865 20,565 A 7,702,842
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16,736,920 6,383,259 1,003,966 24,124,145
Total costs and expenses
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Loss from operations (1,914,711) (4,179,266) (7,150,243)
(1,056,266)
Interest income (expense), net 18,433 (426,483) (250,292) A,B (658,342)
Gain on sale of license and fixed assets 4,464,929 50,043 -- 4,514,972
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Net earnings (loss) before tax 2,568,651 (4,555,706) (3,293,613)
(1,306,558)
Income tax expense (332,000) -- 332,000 E --
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Net earnings (loss) $ 2,236,651 $ (4,555,706) $ (974,558) $ (3,293,613)
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SPIRE CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE-MONTHS ENDED MARCH 31, 2003
Spire Bandwidth Pro Forma
Corporation Semiconductor Adjustments Note Pro Forma
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(Unaudited) (Unaudited) (Unaudited)
Sales and revenues $ 2,959,093 $ 434,235 $ (14,080) C $ 3,379,248
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Cost of sales 2,287,068 624,651 207,622 A,C,D 3,119,341
Research and development 96,097 112,059 35,989 A 244,145
Selling, general and administrative 1,357,066 688,520 5,141 A 2,050,727
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Total costs and expenses 3,740,231 1,425,230 248,752 5,414,213
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Loss from operations (781,138) (990,995) (262,832) (2,034,965)
Interest income (expense), net 7,429 (20,129) (62,984) A, B (75,684)
Gain on sale of license and fixed assets -- -- -- --
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Net loss before tax (773,709) (1,011,124) (325,816) (2,110,649)
Income tax expense -- -- -- --
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Net loss $ (773,709) $ (1,011,124) $ (325,816) $ (2,110,649)
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SPIRE CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
FOR THE THREE-MONTHS ENDED MARCH 31, 2003 AND THE YEAR ENDED DECEMBER 31, 2002
Note A: Reflects the elimination of the historical depreciation expense of
$163,957 for the year ended December 31, 2002 and $40,989 for the three
months ended March 31, 2003 on the Hudson New Hampshire building and
improvements and the recording of the revised depreciation expense of
$678,079 for the year ended December 31, 2002 and $169,520 for the
three months ended March 31, 2003 based on the net asset value under
the capital lease over the shorter of the 5-year life of the lease or
the assets expected useful life and the recording of interest expense
of $230,104 for the year ended December 31, 2002 and $53,044 for the
three months ended March 31, 2003 associated with the capital lease.
Note B: Reflects interest expense of $20,188 for the year ended December 31,
2002 and $9,940 for the quarter ended March 31, 2003 associated with
the forgiveness of the Bedford, Massachusetts operating lease by Spire.
Note C: Reflects the elimination of the intercompany sales and cost of sales
activity between Spire and Bandwidth of $52,300 and $16,976,
respectively, for the year ended December 31, 2002 and $14,080 and
$6,484, respectively, for the three months ended March 31, 2003.
Note D: Reflects the elimination of $506,820 for the year ended December 31,
2002 and $126,705 for the three months ended March 31, 2003 of the
sublease income recorded by Spire received from Bandwidth associated
with the Bedford, Massachusetts sublease agreement.
Note E: Reflects the pro forma tax effect of the proposed pro forma adjustments
outlined above.
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