UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
As previously reported, on March 8, 2023, the Company entered into a Stock Purchase Agreement (the “Mimosa Purchase Agreement”) with Airspan Networks Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Seller”), Mimosa Networks, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Seller (“Mimosa”), and Radisys Corporation, an Oregon corporation (“Buyer”), pursuant to which Seller will sell all of the issued and outstanding shares of common stock of Mimosa to Buyer for an aggregate purchase price of approximately $60 million in cash (subject to customary adjustments as set forth in the Purchase Agreement) on the terms and subject to the conditions set forth in the Purchase Agreement (the “Mimosa Sale”).
The unaudited pro forma financial information assumes the sale transaction described above was consummated at March 31, 2023, for the unaudited consolidated condensed balance sheet as of March 2023. The unaudited consolidated condensed statements of operations for the three months ended March 31, 2023 and the year ended December 31, 2022, assume the transaction was consummated at the beginning of the earliest period presented (i.e., January 1, 2022), giving full effect to the transaction for the periods presented and $45 million of the cash proceeds used to prepay outstanding debt. The accompanying unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical financial statements and risk factors included in its filings with the Securities and Exchange Commission.
The accompanying unaudited pro forma financial information was prepared utilizing our historical financial data derived from the interim consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended March 31, 2023, which was filed with the Securities and Exchange Commission on May 10, 2023 and from the audited consolidated financial statements included in our Annual Report on Form 10-K for the period ended December 31, 2022, which was filed with the Securities and Exchange Commission on March 16, 2023. The pro forma adjustments are described in the notes to the unaudited pro forma financial information and are based upon available information and assumptions that we believe are reasonable.
The unaudited pro forma financial information was derived by adjusting the Company’s historical consolidated financial statements and is based on estimates, available information and certain assumptions that the Company’s management believes are reasonable. The Company’s management believes that the adjustments provide a reasonable basis for presenting the significant effects of the transaction described above. The unaudited pro forma financial information are for illustrative purposes only. The financial results may have been different had the sale actually taken place at the time indicated. You should not rely upon the unaudited consolidated pro forma financial information as being indicative of the historical results that would have been achieved had the transaction occurred at the times indicated or of the future financial position or results the Company will experience.
F-1
AIRSPAN NETWORK HOLDINGS INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(In thousands, except for share data)
| Twelve Months Ended December 31, 2022 | ||||||||||||||||
| Pro Forma | ||||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||||
| Revenues: | ||||||||||||||||
| Products and software licenses | $ | 148,922 | (26,586 | ) | (a) | 122,336 | ||||||||||
| Maintenance, warranty and services | 18,337 | - | 18,337 | |||||||||||||
| Total revenues | 167,259 | (26,586 | ) | 140,673 | ||||||||||||
| Cost of revenues: | ||||||||||||||||
| Products and software licenses | 95,335 | (17,260 | ) | (a) | 78,075 | |||||||||||
| Maintenance, warranty and services | 5,484 | - | 5,484 | |||||||||||||
| Total cost of revenues | 100,819 | (17,260 | ) | 83,559 | ||||||||||||
| Gross profit | 66,440 | (9,326 | ) | 57,114 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 61,377 | (6,644 | ) | (a) | 54,733 | |||||||||||
| Sales and marketing | 30,587 | (2,027 | ) | (a) | 28,560 | |||||||||||
| General and administrative | 40,070 | (1,215 | ) | (a) | 38,855 | |||||||||||
| Amortization of intangibles | 1,136 | (1,136 | ) | (a) | - | |||||||||||
| Restructuring costs | 1,279 | (144 | ) | (a) | 1,135 | |||||||||||
| Total operating expenses | 134,449 | (11,166 | ) | 123,283 | ||||||||||||
| Loss from operations | (68,009 | ) | 1,840 | (66,169 | ) | |||||||||||
| Interest (expense) income, net | (20,394 | ) | 786 | (b) | (19,608 | ) | ||||||||||
| Change in fair value of warrant liability and derivatives, net | 7,085 | - | 7,085 | |||||||||||||
| Gain on sale of Mimosa, net | - | 33,955 | (e) | 33,955 | ||||||||||||
| Other expense, net | (4,261 | ) | (33 | ) | (a) | (4,294 | ) | |||||||||
| Loss before income taxes | (85,579 | ) | 36,548 | (49,031 | ) | |||||||||||
| Income tax benefit | 197 | - | 197 | |||||||||||||
| Net loss | $ | (85,382 | ) | 36,548 | $ | (48,834 | ) | |||||||||
| Loss per share - basic and diluted | $ | (1.17 | ) | $ | (0.67 | ) | ||||||||||
| Weighted average shares outstanding - basic and diluted | 72,782,773 | 72,782,773 | ||||||||||||||
F-2
AIRSPAN NETWORK HOLDINGS INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(In thousands, except for share data)
| Three Months Ended March 31, 2023 | ||||||||||||||||
| Pro Forma | ||||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||||
| Revenues: | ||||||||||||||||
| Products and software licenses | $ | 21,210 | (9,536 | ) | (a) | 11,674 | ||||||||||
| Maintenance, warranty and services | 3,563 | - | 3,563 | |||||||||||||
| Total revenues | 24,773 | (9,536 | ) | 15,237 | ||||||||||||
| Cost of revenues: |
| |||||||||||||||
| Products and software licenses | 13,295 | (7,533 | ) | (a) | 5,762 | |||||||||||
| Maintenance, warranty and services | 1,131 | - | 1,131 | |||||||||||||
| Total cost of revenues | 14,426 | (7,533 | ) | 6,893 | ||||||||||||
| Gross profit | 10,347 | (2,003 | ) | 8,344 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 14,191 | (1,851 | ) | (a) | 12,340 | |||||||||||
| Sales and marketing | 5,682 | (375 | ) | (a) | 5,307 | |||||||||||
| General and administrative | 7,665 | (306 | ) | (a) | 7,359 | |||||||||||
| Amortization of intangibles | 189 | (189 | ) | (a) | - | |||||||||||
| Restructuring costs | 260 | - | (a) | 260 | ||||||||||||
| Total operating expenses | 27,987 | (2,721 | ) | 25,266 | ||||||||||||
| Loss from operations | (17,640 | ) | 718 | (16,922 | ) | |||||||||||
| Interest expense, net | (4,534 | ) | 935 | (b) | (3,599 | ) | ||||||||||
| Change in fair value of warrant liability and derivatives, net | 642 | - | 642 | |||||||||||||
| Other income, net | 561 | 5 | (a) | 566 | ||||||||||||
| Loss before income taxes | (20,971 | ) | 1,658 | (19,313 | ) | |||||||||||
| Income tax benefit | 82 | - | 82 | |||||||||||||
| Net loss | $ | (20,889 | ) | 1,658 | (19,231 | ) | ||||||||||
| Loss per share - basic and diluted | $ | (0.28 | ) | (0.26 | ) | |||||||||||
| Weighted average shares outstanding - basic and diluted | 74,473,741 | 74,473,741 | ||||||||||||||
F-3
AIRSPAN NETWORK HOLDINGS INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands, except for share data)
| March 31, 2023 | Pro Forma | March 31, 2023 | ||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 3,282 | 10,000 | (c) | 13,282 | |||||||||||
| Restricted cash | 34 | - | 34 | |||||||||||||
| Accounts receivable, net of allowance of $450 and $647 at March 31, 2023 and December 31, 2022, respectively | 24,753 | - | 24,753 | |||||||||||||
| Inventory | 15,802 | - | 15,802 | |||||||||||||
| Prepaid expenses and other current assets | 17,907 | - | 17,907 | |||||||||||||
| Assets held for sale - current | 12,592 | (12,592 | ) | (d) | - | |||||||||||
| Total current assets | 74,370 | (2,592 | ) | 71,778 | ||||||||||||
| Property, plant and equipment, net | 5,972 | - | 5,972 | |||||||||||||
| Right-of-use assets, net | 4,230 | - | 4,230 | |||||||||||||
| Other non-current assets | 20,160 | (16,919 | ) | (d) | 3,241 | |||||||||||
| Assets held for sale - non-current | 20,791 | (20,791 | ) | (d) | - | |||||||||||
| Total assets | $ | 125,523 | (40,302 | ) | 85,221 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 16,957 | - | 16,957 | ||||||||||||
| Accrued expenses and other current liabilities | 30,401 | - | 30,401 | |||||||||||||
| Deferred revenue | 1,957 | - | 1,957 | |||||||||||||
| Senior term loan, current portion | 40,993 | (19,905 | ) | (c) | 21,088 | |||||||||||
| Subordinated debt | 11,256 | - | 11,256 | |||||||||||||
| Subordinated term loan - related party | 42,449 | - | 42,449 | |||||||||||||
| Convertible debt | 45,492 | (22,141 | ) | (c) | 23,351 | |||||||||||
| Current portion of long-term debt | 263 | - | 263 | |||||||||||||
| Liabilities held for sale - current | 11,963 | (11,963 | ) | (d) | - | |||||||||||
| Total current liabilities | 201,731 | (54,009 | ) | 147,722 | ||||||||||||
| Other long-term liabilities | 6,408 | - | 6,408 | |||||||||||||
| Liabilities held for sale - non-current | 17,294 | (17,294 | ) | (d) | - | |||||||||||
| Total liabilities | 225,433 | (71,303 | ) | 154,130 | ||||||||||||
| Commitments and contingencies | ||||||||||||||||
| Stockholders’ deficit: | ||||||||||||||||
| Common stock, $0.0001 par value; 250,000,000 shares authorized; 74,582,992 and 74,283,026 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 7 | - | 7 | |||||||||||||
| Additional paid-in capital | 772,205 | (23,085 | ) | (d) | 749,120 | |||||||||||
| Accumulated deficit | (872,122 | ) | 54,086 | (c)(d)(e) | (818,036 | ) | ||||||||||
| Total stockholders’ deficit | (99,910 | ) | 31,001 | (68,909 | ) | |||||||||||
| Total liabilities and stockholders’ deficit | $ | 125,523 | (40,302 | ) | 85,221 | |||||||||||
F-4
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
The pro forma consolidated condensed balance sheet and statements of operations have been derived from the historical consolidated condensed balance sheet and statements of operations of Airspan Networks Holdings Inc. as adjusted to give effect to the Mimosa Sale. The pro forma consolidated condensed balance sheet gives effect to the sale as if it occurred on March 31, 2023, which is the last day of the Company’s fiscal year 2023 first quarter. The pro forma consolidated condensed statement of operations for three months ended March 31, 2023 and the year ended December 31, 2022 give effect to the sale as if it occurred at the beginning of the earliest period presented (i.e. January 1, 2022).
| (a) | These adjustments represent the elimination of the revenues and operating expenses associated with the Mimosa Sale. | |
| (b) | This adjustment relates to the expected make whole payment of approximately $3 million due to the prepayment of debt, offset by the reduction of interest expense related to the assumed $42 million prepayment of debt. |
| (c) | This adjustment relates to the gross proceeds to be received at closing for the Mimosa Sale of $60 million, less the estimated payment of transaction-related costs of approximately $5 million, and the estimated repayment of $42 million in borrowings under the Company’s existing borrowings under the Fortress agreements, which are net of $3 million of end of term and make whole provision fees. |
| (d) | These adjustments represent the elimination of the assets and liabilities associated with the Mimosa Sale. |
| (e) | Adjustment relates to the approximate gain on the Mimosa Sale. |
F-5
