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Polycom Inc – ‘8-K’ for 1/2/98

As of: Friday, 1/16/98 · For: 1/2/98 · Accession #: 1047469-98-1258 · File #: 0-27978

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 1/16/98  Polycom Inc                       8-K:2,5,7   1/02/98    4:80K                                    Merrill Corp/New/FA

Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                        21    101K 
 2: EX-2.2      A#1 to Plan of Reorg.                                  7     27K 
 3: EX-2.3      Merger Certificate - Venice/Viavideo                   5     17K 
 4: EX-20.1     1/5/98 Press Release                                   3     10K

8-K — Current Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Acquisition or Disposition of Assets Financial Statements, Pro Forma Financial Information and Exhibits Other Events
1	1st Page - Filing Submission
2	Item 2. Acquisition or Disposition of Assets
"	Item 5. Other Events
3	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

8-K 1st Page of 21 TOC ↑Top Previous Next ↓Bottom Just 1st
 
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 2, 1998 

--------------------- 

POLYCOM, INC. 

(Exact name of registrant as specified in charter)

                                                                [Download Table]
                                                                               
          DELAWARE                        0-27978                 94-3128330   
(State or other jurisdiction            (Commission            (I.R.S. Employer
     of incorporation)                  File Number)            Identification 
                                                                   Number)     

2584 JUNCTION AVENUE, SAN JOSE, CALIFORNIA 95134

(Address of principal executive offices) (Zip Code) 

Company's telephone number, including area code: (408) 526-9000 

------------------------

(Former name or former address, if changed since last report.)

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8-K 2nd Page of 21 TOC 1st Previous Next ↓Bottom Just 2nd
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.                                  

(a) On January 2, 1998, the Registrant acquired ViaVideo Communications,
Inc., a Delaware corporation ("ViaVideo"), by the statutory merger (the         
"Merger") of a wholly-owned subsidiary of the Registrant, Venice Acquisition    
Corporation, a Delaware corporation ("Merger Sub"), with and into ViaVideo. The 
Merger was accomplished pursuant to the Agreement and Plan of Reorganization,   
dated as of June 11, 1997, as amended, among the Registrant, ViaVideo and Merger
Sub, and a related Certificate of Merger (collectively, the "Merger             
Agreements"). The Merger of Merger Sub with and into ViaVideo occurred following
the approval of the Merger Agreements by the stockholders of the Registrant at a
stockholders' meeting held on December 10, 1997 and the satisfaction or waiver  
of certain other closing conditions. As a result of the Merger, the Registrant  
became the owner of 100% of the issued and outstanding shares of ViaVideo Common
Stock and each outstanding share of ViaVideo Common Stock was converted into    
1.183684 newly issued shares of the Registrant's Common Stock. The terms of the 
Merger Agreements were the result of arm's-length negotiations among the        
parties.                                                                        

    A total of approximately 9.8 million shares of the Registrant's Common Stock
will be issued to former ViaVideo stockholders and optionholders in exchange for
the acquisition by Merger Sub of all issued and outstanding ViaVideo capital    
stock and the assumption of unexpired and unexercised options to acquire        
ViaVideo capital stock. The securities issued to ViaVideo stockholders and      
optionholders were issued pursuant to the exemption from registration provided  
by Section 4(2) of the Securities Act of 1933, as amended. The shares of Polycom
Common ViaVideo options to purchase ViaVideo Common Stock will be assumed by the
Registrant and will remain outstanding as options to purchase shares of the     
Registrant's Common Stock. Under the terms of the Merger, the Registrant will   
register the shares and options issued to ViaVideo stockholders and             
optionholders with the Securities and Exchange Commission. The terms of the     
Merger Agreements were the result of arm's-length negotiations among the        
parties.                                                                        

    (b) ViaVideo designs and develops high quality, low-cost, easy to use, group
videoconferencing systems that utilize advanced video and audio compression     
technologies along with Internet/Web-based features. ViaVideo believes that     
these technologies and features will permit users to replicate the dynamics and 
effectiveness of face-to-face meetings and presentations from remote locations  
through the transmission of color motion video integrated with full duplex audio
at data rates as low as 56 kilobits per second. The Registrant intends to       
continue such business.                                                         

ITEM 5.  OTHER EVENTS.                                                          

 On October 2, 1997, Datapoint Corporation filed a complaint against Intel
Corporation for infringement of two U.S. patents related to videoconferencing   
network technology in the U.S. District Court in Dallas, Texas. On November 25, 
1997, the complaint was amended to include several additional defendants, and   
Datapoint also filed a motion for certification of the action as a class action.
No ruling has occurred relative to the motion for class action certification.   

   Although Polycom, Inc. or ViaVideo Communications, Inc. has not been served
as a defendant in any Datapoint complaints, both Polycom and ViaVideo were named
as putative class members in the Datapoint motion for class action certification
along with over 500 other companies. Polycom and ViaVideo deny any infringement 
of those Datapoint patents.                                                     

2 

8-K 3rd Page of 21 TOC 1st Previous Next ↓Bottom Just 3rd
ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.    

(a) Financial Statements of Business Acquired.                          

REPORT OF INDEPENDENT ACCOUNTANTS 

To the Board of Directors and Stockholders                                      
ViaVideo Communications, Inc.                                                   

We have audited the accompanying balance sheet of ViaVideo Communications, Inc. 
("ViaVideo") (a Company in the development stage), formerly known as What a View
Software, Inc., as of December 31, 1996 and the related statements of           
operations, changes in stockholders' equity and cash flows for the period from  
September 10, 1996 ("inception") to December 31, 1996. These financial          
statements are the responsibility of ViaVideo's management. Our responsibility  
is to express an opinion on these financial statements based on our audit.      

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable 
assurance about whether the financial statements are free of material           
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for our opinion.          

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of ViaVideo (a Company in the     
development stage) as of December 31, 1996, and the results of its operations   
and its cash flows for the period from inception to December 31, 1996, in       
conformity with generally accepted accounting principles.                       

                         Coopers & Lybrand LLP

Austin, Texas                                                                   
August 21, 1997                                                                 

3 

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS

                                                        [Enlarge/Download Table]

                                                                                     DECEMBER 31,                
                                                                                         1996                    
                                                                                     ------------  SEPTEMBER 30, 
                                                                                                       1997      
                                                                                                   ------------- 
                                                                                                    (UNAUDITED)  
                                                                                                                 
                                                     ASSETS                                                      

Current assets:                                                                                                  
  Cash and cash equivalents......................................................... $ 1,704,936   $  4,589,207  
  Inventory.........................................................................     --             202,222  
  Prepaids and other current assets.................................................      12,065        239,985  
                                                                                     ------------  ------------- 
      Total current assets..........................................................   1,717,001      5,031,414  
Property and equipment:                                                                                          
  Furniture and fixtures............................................................       3,966          8,029  
  Equipment.........................................................................      65,004        584,345  
  Leasehold improvements............................................................     --              22,111  
                                                                                     ------------  ------------- 
                                                                                          68,970        614,485  
  Less accumulated depreciation.....................................................      (4,171 )      (60,306 )
                                                                                     ------------  ------------- 
    Net property and equipment......................................................      64,799        554,179  
Other assets, net...................................................................       7,747        --       
                                                                                     ------------  ------------- 
      Total assets.................................................................. $ 1,789,547   $  5,585,593  
                                                                                     ------------  ------------- 
                                                                                     ------------  ------------- 

                                      LIABILITIES AND STOCKHOLDERS' EQUITY                                       

Current liabilities:                                                                                             
  Line of credit.................................................................... $    50,000   $    400,000  
  Accounts payable..................................................................      34,517      1,124,060  
  Accrued expenses..................................................................      65,291        431,821  
                                                                                     ------------  ------------- 
      Total current liabilities.....................................................     149,808      1,955,881  
                                                                                     ------------  ------------- 
Commitments and contingencies (Notes 4 and 10)                                                                   
Stockholders' equity:                                                                                            
  Convertible preferred stock, $.001 par value, 5,000,000 and 6,000,000 shares                                   
    authorized, respectively                                                                                     
    Series A preferred, 2,019,448 and 2,574,310 shares issued and outstanding,                                   
      respectively, aggregate liquidation preference of $2,019,448 and $2,574,310,                               
      respectively..................................................................       2,019          2,574  
    Series B preferred, 2,333,334 shares issued and outstanding at September 30,                                 
      1997, aggregate liquidation preference of $7,000,002..........................     --               2,333  
  Common stock, $.001 par value, 8,000,000 and 14,000,000 shares authorized,                                     
    respectively, 2,190,554 shares issued and outstanding...........................       2,191          2,191  
  Additional paid-in capital........................................................   1,993,004      9,513,758  
  Deficit accumulated during the development stage..................................    (357,475 )   (5,891,144 )
                                                                                     ------------  ------------- 
    Total stockholders' equity......................................................   1,639,739      3,629,712  
                                                                                     ------------  ------------- 
      Total liabilities and stockholders' equity.................................... $ 1,789,547   $  5,585,593  
                                                                                     ------------  ------------- 
                                                                                     ------------  ------------- 

The accompanying notes are an integral part of these financial statements.

4 

8-K 5th Page of 21 TOC 1st Previous Next ↓Bottom Just 5th
VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS

                                                        [Enlarge/Download Table]

                                                                    FOR THE                                      
                                                                  PERIOD FROM                      CUMULATIVE    
                                                                 SEPTEMBER 10,                      FOR THE      
                                                                     1996          FOR THE        PERIOD FROM    
                                                                  (INCEPTION)    NINE MONTHS     SEPTEMBER 10,   
                                                                      TO            ENDED             1996       
                                                                 DECEMBER 31,   SEPTEMBER 30,    (INCEPTION) TO  
                                                                     1996           1997       SEPTEMBER 30, 1997
                                                                 -------------  -------------  ------------------
                                                                                           (UNAUDITED)           
                                                                                                                 
Operating expenses:                                                                                              
  Research and development......................................  $   307,576    $ 3,357,691     $    3,665,267  
  Sales and marketing...........................................      --           1,044,745          1,044,745  
  Manufacturing start-up........................................      --             212,916            212,916  
  General and administrative....................................       61,751      1,026,061          1,087,812  
                                                                 -------------  -------------  ------------------
        Total operating expenses................................      369,327      5,641,413          6,010,740  
                                                                 -------------  -------------  ------------------

Operating loss..................................................     (369,327)    (5,641,413)        (6,010,740) 

Other income (expense):                                                                                          
  Interest expense..............................................         (650)       (12,239)           (12,889) 
  Interest income...............................................       12,502        119,983            132,485  
                                                                 -------------  -------------  ------------------
        Net loss................................................  $  (357,475)   $(5,533,669)    $   (5,891,144) 
                                                                 -------------  -------------  ------------------
                                                                 -------------  -------------  ------------------

The accompanying notes are an integral part of these financial statements.

5 

8-K 6th Page of 21 TOC 1st Previous Next ↓Bottom Just 6th
VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 
FOR THE PERIOD FROM SEPTEMBER 10, 1996 (INCEPTION) TO DECEMBER 31, 1996 
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997

                                                        [Enlarge/Download Table]

                                              PREFERRED                 COMMON          ADDITIONAL                    TOTAL     
                                        ----------------------  ----------------------    PAID-IN    ACCUMULATED   STOCKHOLDERS'
                                         SHARES      AMOUNT      SHARES      AMOUNT       CAPITAL      DEFICIT        EQUITY    
                                        ---------  -----------  ---------  -----------  -----------  ------------  ------------ 
                                                                                                                                
Issuance of founders stock, September                                                                                           
  10, 1996.............................                         2,160,030   $   2,160    $  (1,160)                 $    1,000  
Issuance of shares of Series A                                                                                                  
  preferred stock at $1 per share, net                                                                                          
  of issuance costs, on October 24,                                                                                             
  1996................................. 1,960,000   $   1,960                            1,931,754                   1,933,714  
Conversion of promissory note into                                                                                              
  common and preferred shares at $0.10                                                                                          
  and $1 per share, respectively, on                                                                                            
  October 24, 1996.....................    59,448          59      30,524          31       62,410                      62,500  
Net loss...............................                                                               $ (357,475)     (357,475) 
                                        ---------  -----------  ---------  -----------  -----------  ------------  ------------ 
Balance, December 31, 1996............. 2,019,448       2,019   2,190,554       2,191    1,993,004      (357,475)    1,639,739  
Issuance of shares of Series A                                                                                                  
  preferred stock at $1 per share, on                                                                                           
  January 29, 1997 (unaudited).........    40,000          40                               39,960                      40,000  
Issuance of shares of Series A                                                                                                  
  preferred stock at $1 per share, net                                                                                          
  of issuance costs, on April 4, 1997                                                                                           
  (unaudited)..........................   514,862         515                              508,588                     509,103  
Issuance of shares of Series B                                                                                                  
  preferred stock at $3 per share, net                                                                                          
  of issuance costs, on May 28, 1997                                                                                            
  (unaudited).......................... 2,333,334       2,333                            6,969,974                   6,972,307  
Issuance of non-qualified options on                                                                                            
  August 27, 1997 (unaudited)..........                                                      2,232                       2,232  
Net loss (unaudited)...................                                                               (5,533,669)   (5,533,669) 
                                        ---------  -----------  ---------  -----------  -----------  ------------  ------------ 
Balance, September 30, 1997                                                                                                     
  (unaudited).......................... 4,907,644   $   4,907   2,190,554   $   2,191    $9,513,758   $(5,891,144)  $3,629,712  
                                        ---------  -----------  ---------  -----------  -----------  ------------  ------------ 
                                        ---------  -----------  ---------  -----------  -----------  ------------  ------------ 

The accompanying notes are an integral part of these financial statements.

6 

8-K 7th Page of 21 TOC 1st Previous Next ↓Bottom Just 7th
VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF CASH FLOWS

                                                        [Enlarge/Download Table]

                                                                    FOR THE                                      
                                                                  PERIOD FROM                      CUMULATIVE    
                                                                 SEPTEMBER 10,                      FOR THE      
                                                                     1996                         PERIOD FROM    
                                                                  (INCEPTION)   FOR THE NINE     SEPTEMBER 10,   
                                                                      TO        MONTHS ENDED          1996       
                                                                 DECEMBER 31,   SEPTEMBER 30,    (INCEPTION) TO  
                                                                     1996           1997       SEPTEMBER 30, 1997
                                                                 -------------  -------------  ------------------
                                                                                           (UNAUDITED)           
                                                                                                                 
Cash flows from operating activities:                                                                            
  Net loss......................................................  $  (357,475)   $(5,533,669)    $   (5,891,144) 
  Adjustments to reconcile net loss to net cash used in                                                          
    operating activities:                                                                                        
    Depreciation and amortization...............................        4,735         75,135             79,870  
    Loss on write-off of assets.................................      --             102,693            102,693  
    Issuance of non-qualified options...........................      --               2,232              2,232  
    Changes in assets and liabilities:                                                                           
      Prepaids and other current assets.........................      (12,065)      (227,920)          (239,985) 
      Inventory.................................................      --            (202,222)          (202,222) 
      Accounts payable and accrued expenses.....................       99,808      1,456,073          1,555,881  
                                                                 -------------  -------------  ------------------
        Net cash used in operating activities...................     (264,997)    (4,327,678)        (4,592,675) 
                                                                 -------------  -------------  ------------------
Cash flows from investing activities:                                                                            
  Purchases of property and equipment...........................      (68,970)      (659,461)          (728,431) 
  Other expenditures............................................       (8,311)       --                  (8,311) 
                                                                 -------------  -------------  ------------------
        Net cash used in investing activities...................      (77,281)      (659,461)          (736,742) 
                                                                 -------------  -------------  ------------------
Cash flows from financing activities:                                                                            
  Net borrowings on line of credit..............................       50,000        350,000            400,000  
  Proceeds from issuance of convertible promissory note.........       62,500        --                  62,500  
  Proceeds from issuance of common stock........................        1,000        --                   1,000  
  Proceeds from issuance of preferred stock.....................    1,933,714      7,521,410          9,455,124  
                                                                 -------------  -------------  ------------------
        Net cash provided by financing activities...............    2,047,214      7,871,410          9,918,624  
                                                                 -------------  -------------  ------------------
Net increase in cash and cash equivalents.......................    1,704,936      2,884,271          4,589,207  

Cash and cash equivalents at beginning of period................      --           1,704,936           --        
                                                                 -------------  -------------  ------------------
Cash and cash equivalents at end of period......................  $ 1,704,936    $ 4,589,207     $    4,589,207  
                                                                 -------------  -------------  ------------------
                                                                 -------------  -------------  ------------------
Supplemental cash flow information:                                                                              
  Interest paid.................................................  $       230    $     9,559     $        9,789  
  Non-cash financing activities:                                                                                 
    Conversion of promissory note for common stock..............  $     3,052        --          $        3,052  
    Conversion of promissory note for preferred stock...........  $    59,448        --          $       59,448  

The accompanying notes are an integral part of these financial statements.

7 

8-K 8th Page of 21 TOC 1st Previous Next ↓Bottom Just 8th
VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS 

1. ORGANIZATION AND BASIS OF PRESENTATION:                                      

    ViaVideo Communications, Inc. ("ViaVideo"), a Delaware corporation, formerly
known as What a View Software, Inc., was founded on September 10, 1996. ViaVideo
is developing videoconferencing hardware and software that incorporates patented
technology. ViaVideo's products will allow businesses to conduct face-to-face   
meetings among dispersed groups without the cost and inconvenience of traveling 
to remote locations. ViaVideo intends to market its videoconferencing products  
through various worldwide distribution channels and broadly target businesses   
that have a need for meeting and communicating with employees, other individuals
or organizations in remote locations.                                           

    ViaVideo is devoting substantially all of its present efforts to the design,
testing, production and marketing of its initial product, and to the            
establishment of its business. To date ViaVideo has not recognized any revenue  
from the sale of any products, licenses, services or merchandise. ViaVideo has  
incurred losses from operations since inception. Accordingly, ViaVideo is a     
development stage enterprise as defined in Statement of Financial Accounting    
Standards ("SFAS") No. 7, "Accounting and Reporting by Development Stage        
Enterprises."                                                                   

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                  

USE OF ESTIMATES                                                        

The preparation of financial statements in conformity with generally    
accepted accounting principles requires management to make estimates and        
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenues and expenses during the         
reporting periods. Actual results could differ from those estimates.            

CASH EQUIVALENTS                                                        

For the purpose of the statement of cash flows, ViaVideo's management   
considers all highly liquid investments purchased with an original maturity date
of three months or less to be cash equivalents.                                 

PROPERTY AND EQUIPMENT                                                  

   Property and equipment are stated at cost, net of accumulated depreciation.
Expenditures for normal maintenance of property and equipment are charged       
against income as incurred. Expenditures which significantly extend the useful  
lives of the assets are capitalized. The costs of assets retired or otherwise   
disposed of and the related accumulated depreciation balance are removed from   
the accounts and any resulting gain or loss is included in income. Equipment is 
depreciated over three years using the straight-line method and furniture and   
fixtures are depreciated over five years using the straight-line method.        

RESEARCH AND DEVELOPMENT                                                

Research and development costs are charged to operations as incurred.   

8 

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)                      
INCOME TAXES                                                            

ViaVideo accounts for its income taxes in accordance with SFAS No. 109, 
"Accounting for Income Taxes," under which deferred tax assets or liabilities   
are computed based on the difference between the financial statement and income 
tax bases of assets and liabilities using the enacted marginal tax rate.        
Deferred income tax expenses or credits are based on the changes in the assets  
or liabilities from period to period.                                           

NEW ACCOUNTING STANDARDS                                                

In February 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128 "Earnings per Share" and No. 129 "Disclosure of Information about  
Capital Structure." SFAS No. 128 specifies the computation, presentation and    
disclosure requirements for earnings per share and is designed to improve       
earnings per share information by simplifying the existing computational        
guidelines and revising the previous disclosure requirements. SFAS No. 129      
consolidates the existing disclosure requirements to disclose certain           
information about an entity's capital structure. Both statements are effective  
for periods ending after December 15, 1997.                                     

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive    
Income," which establishes standards for reporting and display of comprehensive 
income and its components in a full set of general-purpose financial statements.
SFAS No. 130 is effective for fiscal years beginning after December 15, 1997.   

    Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Restated Information," which establishes standards for the 
way that public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises report       
selected information about operating segments in interim financial reports      
issued to stockholders. It also establishes standards for related disclosures   
about products and services, geographic areas and major customers. SFAS No. 131 
is effective for financial statements for periods beginning after December 15,  
1997.                                                                           

 Management does not believe the implementation of these recent accounting
pronouncements will have a material effect on its financial statements.         

3. CONCENTRATIONS OF CREDIT RISK:                                               

ViaVideo's financial instruments that are exposed to concentrations of  
credit risk consist primarily of cash and cash equivalents and letters of       
credit. ViaVideo's cash and cash equivalents are maintained in demand deposit   
accounts and investment accounts with financial institutions in amounts that may
exceed federally insured limits and are invested in securities of the United    
States government. Management does not believe there is undue risk of loss      
inasmuch as, in management's opinion, the financial institutions in which cash  
is deposited are high credit quality institutions and the securities are        
obligations of the United States government. However, management estimates that 
approximately $144,000 and $4,621,000 of its cash and cash equivalent balances  
at December 31, 1996 and September 30, 1997, respectively, were not covered by  
federal insurance programs or obligations of the United States government, and  
therefore, were subject to potential loss.                                      

9 

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

3. CONCENTRATIONS OF CREDIT RISK: (CONTINUED)                                   
During May 1997, a bank issued a standby letter of credit to one of     
ViaVideo's major suppliers for $335,000. The letter of credit expires in April  
1998 and is collateralized by ViaVideo's certificate of deposit for a similar   
amount deposited with the bank. Also, during August 1997, a bank issued a       
standby letter of credit to one of ViaVideo's major suppliers for $75,000. The  
letter of credit expires in July 1998 and is collateralized by ViaVideo's       
certificate of deposit for a similar amount deposited with the bank. As of      
September 30, 1997, the suppliers had not made any draws against the letters of 
credit.                                                                         

4. COMMITMENTS:                                                                 

ViaVideo leases its facilities and certain other equipment for its      
operations. Rental expense for the period from September 10, 1996 (inception) to
December 31, 1996 and the nine months ended September 30, 1997 was $12,015 and  
$92,284, respectively. Future minimum rental payments under operating leases    
that have initial or remaining noncancelable lease terms in excess of one year  
as of September 30, 1997 are not significant.                                   

5. INCOME TAXES:                                                                

  At December 31, 1996 and September 30, 1997, ViaVideo has net deferred tax
assets of approximately $132,000 and $2,093,000, respectively, arising primarily
from cumulative net operating loss carryforwards and investment tax credits. In 
accordance with the provisions of SFAS No. 109, the net deferred tax assets are 
fully offset by valuation allowances at December 31, 1996 and September 30, 1997
due to uncertainty of realization of the assets, which has resulted in an       
increase to the valuation account at September 30, 1997 of approximately        
$1,961,000. At December 31, 1996 and September 30, 1997, ViaVideo had net       
operating loss carryforwards of approximately $357,000 and $5,881,000,          
respectively, which expire beginning 2011 through 2012. The difference between  
ViaVideo's federal income tax at the statutory rate and the effective tax rate  
is due primarily to the change in the valuation allowance.                      

6. DEBT:                                                                        

   ViaVideo has a bank credit agreement which provides for a revolving line of
credit of up to $400,000 through May 9, 1997 and up to $750,000 through November
9, 1998. The outstanding balance on the line of credit at December 31, 1996 and 
September 30, 1997 was $50,000 and $400,000, respectively, with an interest rate
equal to the bank's prime rate plus 1.5% and 0.75%, respectively (9.75% and     
9.25% at December 31, 1996 and September 30, 1997, respectively). The line of   
credit is collateralized by substantially all of the assets of ViaVideo. The    
line of credit agreement includes a term debt provision which allows ViaVideo to
convert line of credit advances to term financing for approved equipment        
purchases made during the period from May 9, 1997 to November 9, 1997. The      
unpaid principal balance of equipment advances at November 9, 1997 shall be     
repaid over a term of 36 months. Monthly principal and interest payments on     
approved equipment advances commence on December 9, 1997. At September 30, 1997,
there were no term debt balances under this provision.                          

 In September 1996, ViaVideo issued a promissory note for $62,500, bearing
interest at a rate of 6% per annum and convertible into ViaVideo's capital stock
upon completion of an equity financing. The note was converted into 30,524      
shares of common stock at a conversion rate of $0.10 per share and 59,448 shares
of Series A preferred stock at a conversion rate of $1.00 per share in October  
1996.                                                                           

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

7. STOCKHOLDERS' EQUITY:                                                        

PREFERRED STOCK                                                         

   ViaVideo's preferred stock consists of Series A and B, which were initially
issued in 1996 and 1997, respectively. Of the 6,000,000 shares of preferred     
stock authorized at September 30, 1997, 2,574,310 shares are designated as      
Series A and 2,500,000 shares are designated as Series B. The Series A and B    
preferred stocks have no mandatory dividend requirement and have a liquidation  
preference to any payment on the common stock of $1 and $3, respectively, per   
share plus any accrued but unpaid dividends. In the event of the liquidation of 
ViaVideo prior to May 31, 1998, and after all other liquidation preferences have
been paid to the Series A and B preferred stockholders, the Series A preferred  
stockholders will share ratably, on an as converted basis, in the remaining     
assets of ViaVideo with the common stockholders, with the Series A preferred    
stockholders receiving up to an aggregate amount of $3.50 per share and         
thereafter at a reduced rate equivalent to 50 percent of their ratable share up 
to an aggregate amount of $4.75 per share. In the event of the liquidation of   
ViaVideo after May 31, 1998, and after all other liquidation preferences have   
been paid to the Series A and B preferred stockholders, the Series A and B      
preferred stockholders will share ratably, on an as converted basis, in the     
remaining assets of ViaVideo with the common stockholders, with the Series A    
preferred stockholders receiving up to an aggregate amount of $3.50 per share   
and thereafter at a reduced rate equivalent to 50 percent of their ratable share
up to an aggregate amount of $4.75 per share, and with the Series B preferred   
stockholders receiving up to an aggregate amount of $9 per share. The Series A  
and B preferred stocks are not redeemable but may be converted at the option of 
the holder into common stock at the ratio of one share of preferred stock for   
one share of common stock, subject to adjustment for dilutive events, with such 
conversion occurring automatically upon the occurrence of a public offering of  
ViaVideo's common stock, subject to certain requirements. In effecting such     
conversion, ViaVideo shall pay any accrued but unpaid dividends on the shares   
being converted. The Series A and B preferred stocks have voting rights equal to
common stock voting rights.                                                     

COMMON STOCK SPLIT                                                      

On October 23, 1996, ViaVideo's Board of Directors approved a 2.16 for 1
stock split of ViaVideo's common stock. Accordingly, all share and share amounts
of common stock for all periods presented have been retroactively adjusted to   
reflect the stock split.                                                        

STOCK OPTION PLAN                                                       

 ViaVideo sponsors the 1996 Stock Option/Stock Issuance Plan (the "Plan"),
which is a stock-based incentive compensation plan as described below. ViaVideo 
applies Accounting Principles Board ("APB") Opinion No. 25 and related          
Interpretations in accounting for the Plan. In 1995, the Financial Accounting   
Standards Board issued SFAS No. 123 "Accounting for Stock-Based Compensation"   
which, if fully adopted by ViaVideo, would change the method ViaVideo applies in
recognizing the cost of the Plan. Adoption of the cost recognition provisions of
SFAS No. 123 is optional and ViaVideo has decided not to elect these provisions 
of SFAS No. 123. However, pro forma disclosures as if ViaVideo adopted the cost 
recognition provisions of SFAS No. 123 are required, if material.               

   The Plan provides for the grant of stock options to officers, key employees
and consultants of ViaVideo to purchase shares of ViaVideo's common stock, to   
receive restricted stock, and to receive stock bonuses. As of December 31, 1996 
and September 30, 1997, ViaVideo has reserved 750,000 and 1,350,000             

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

7. STOCKHOLDERS' EQUITY: (CONTINUED)                                            
shares, respectively, of common stock for grant under the Plan. Options granted 
may be either incentive stock options or nonqualified stock options, as defined 
by the Internal Revenue Code. Incentive stock options cannot be granted with an 
exercise price of less than 100% of the fair market value of the stock or 110%  
of the fair market value of the stock in the case of a 10% or more stockholder  
of ViaVideo. The options granted under the Plan are exercisable at anytime on or
after the grant date, vest as determined by the Board of Directors of ViaVideo  
on the grant date and expire 10 years from the grant date. In the event the     
optionee ceases to provide services to ViaVideo while holding unvested shares,  
ViaVideo has the right to repurchase the unvested shares at the exercise price. 
In the event the options granted are forfeited or expire, the shares of common  
stock subject to those rights will again be available for issuance under the    
Plan.                                                                           

   A summary of the status of ViaVideo's stock options as of December 31, 1996
and September 30, 1997, and the changes during the period from September 10,    
1996 (inception) to December 31, 1996 and the nine months ended September 30,   
1997, is presented below:                                                       

                                                        [Enlarge/Download Table]

                                                                   OPTIONS OUTSTANDING     
                                                              -----------------------------
                                                                          WEIGHTED-AVERAGE 
                                                              NUMBER OF    EXERCISE PRICES 
                                                                SHARES        PER SHARE    
                                                              ----------  -----------------
                                                                                           
Balance, September 10, 1996 (Inception)......................     --                       
                                                              ----------                   
Balance, December 31, 1996...................................     --                       
  Granted....................................................  1,167,250      $    0.46    
                                                              ----------                   
Balance, September 30, 1997..................................  1,167,250      $    0.46    
                                                              ----------          -----    
                                                              ----------          -----    
Exercisable at December 31, 1996.............................     --                       
Exercisable at September 30, 1997............................  1,167,250      $    0.46    

The weighted-average fair value of options granted during the nine months ended 
September 30, 1997 was $0.12. The fair value of each stock option granted during
the nine months ended September 30, 1997 is estimated on the date of grant using
the minimum value method with the following weighted-average assumptions: no    
dividend yield; risk-free interest rate of 6.35%; the expected lives of options 
are five years.                                                                 

                                                        [Enlarge/Download Table]

                      OPTIONS OUTSTANDING                                 OPTIONS EXERCISABLE        
----------------------------------------------------------------  -----------------------------------
                       NUMBER                                            NUMBER                      
   RANGE OF         OUTSTANDING       WTGD. AVG.    WTGD/ AVG.        EXERCISABLE        WTGD. AVG.  
   EXERCISE       AT SEPTEMBER 30,     REMAINING     EXERCISE       AT SEPTEMBER 30,      EXERCISE   
    PRICES              1997          CONTR. LIFE      PRICE              1997              PRICE    
--------------  --------------------  -----------  -------------  --------------------  -------------
                                                                                                     
 $.10 - $1.00         1,047,750        10 years      $    0.20          1,047,750         $    0.20  
$2.03 - $3.03           119,500        10 years      $    2.78            119,500         $    2.78  
    Total             1,167,250        10 years      $    0.46          1,167,250         $    0.46  

   During the nine months ended September 30, 1997, ViaVideo did not incur any
compensation costs for the Plan under APB Opinion No. 25 and, if ViaVideo had   
fully adopted SFAS No. 123, the compensation costs that would have been incurred
would not have been significant. This may not be                                

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VIAVIDEO COMMUNICATIONS, INC. 
(FORMERLY KNOWN AS WHAT A VIEW SOFTWARE, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

7. STOCKHOLDERS' EQUITY: (CONTINUED)                                            
indicative of the effect in future periods. ViaVideo anticipates making awards  
in the future under its stock-based compensation plan.                          

8. MERGER AGREEMENT:                                                            

  On June 11, 1997, ViaVideo entered into a definitive merger agreement with
Polycom, Inc. ("Polycom"), a publicly held company. Once all of the conditions  
for closing have been satisfied by ViaVideo, Polycom will issue 1.183684 shares 
of Polycom common stock or stock options (subject to adjustment if Polycom's    
share price exceeds $9.00 at the time of closing) in exchange for each share of 
ViaVideo's common stock or stock options. In addition, immediately prior to the 
merger, each share of ViaVideo preferred stock will be converted into one (1)   
share of ViaVideo common stock. Among the various conditions for closing that   
must be met by March 31, 1998 are: development and completion of products in    
compliance with agreed upon specifications, at least $75,000 in product sales, a
Polycom share price of at least $3.00 per share, and the ability to account for 
the merger under the pooling of interests method.                               

9. SERVICES AGREEMENTS:                                                         

    During May 1997, ViaVideo entered into a services agreement with Polycom. At
ViaVideo's request, Polycom provides consulting and administrative support      
services to ViaVideo that are primarily related to research and development,    
sales, business development and manufacturing. Polycom charges ViaVideo for its 
actual cost for the services rendered plus 10 percent of its costs. The services
agreement will expire when mutually terminated. From May 1997 through September 
30, 1997, ViaVideo incurred approximately $284,000 in expenses for services     
received pursuant to this agreement.                                            

  During July 1997, Polycom entered into a services agreement with ViaVideo.
At Polycom's request, ViaVideo will provide consulting and administrative       
support services to Polycom that are primarily related to marketing, business   
development, sales engineering, public relations and office space for one of    
Polycom's employees. ViaVideo charges Polycom for its actual costs for the      
services rendered plus 10 percent of its costs. The services agreement can be   
terminated upon 30 days notice from either party. From July 1997 through        
September 1997, ViaVideo billed Polycom approximately $65,000 for services      
provided pursuant to this agreement.                                            

10. SUBSEQUENT EVENT:                                                           

LITIGATION                                                              

  ViaVideo is a defendant in various lawsuits arising in the ordinary course
of business. ViaVideo's management is currently determining what effect the     
outcome of these lawsuits could have on ViaVideo's fourth quarter of 1997       
financial position, results of operations or cash flows, if disposed            
unfavorably.                                                                    

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(b) Pro Forma Financial Information.                                    

UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

  The following unaudited pro forma condensed combined financial statements,
including the notes thereto, are qualified in their entirety by reference to,   
and should be read in conjunction with, the historical consolidated financial   
statements of Polycom and ViaVideo, including the notes thereto, which are      
included herein or are otherwise publicly available.                            

The unaudited pro forma condensed combined financial statements assume a
business combination between Polycom and ViaVideo accounted for on a            
pooling-of-interests basis and are based on each company's respective historical
consolidated financial statements and notes thereto, which are included herein  
or are otherwise publicly available. The unaudited pro forma condensed combined 
balance sheet combines Polycom's consolidated condensed balance sheet as of     
September 30, 1997 with ViaVideo's condensed balance sheet as of September 30,  
1997, giving effect to the Merger as if it had occurred on September 30, 1997.  
The unaudited pro forma condensed combined statements of operations combine     
Polycom's historical results for the nine months ended September 30, 1997 and   
the year ended December 28, 1996, with ViaVideo's historical results for the    
nine months ended September 30, 1997 and the period from September 10, 1996     
(inception) to December 31, 1996, respectively, giving effect to the Merger as  
if it had occurred at September 10, 1996 and January 1, 1997, the earliest      
period presented. The 1994 and 1995 periods are not presented due to the fact   
that ViaVideo began operations on September of 1996 and therefore the 1994 and  
1995 pro forma information for such periods would be the same as the historical 
information of Polycom only.                                                    

    The pro forma information is presented for illustrative purposes only and is
not necessarily indicative of the operating results or financial position that  
would have occurred if the Merger had been consummated at the beginning of the  
earliest period presented, nor is it necessarily indicative of future operating 
results or financial position.                                                  

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                        POLYCOM AT     VIAVIDEO AT                             
                                                                       SEPTEMBER 30,  SEPTEMBER 30,    PRO FORMA     PRO FORMA 
                                                                           1997           1997        ADJUSTMENTS    COMBINED  
                                                                       -------------  -------------  -------------  -----------
                                                                                                                               
                                                            ASSETS                                                             
Current assets:                                                                                                                
  Cash and cash equivalents..........................................    $  16,664      $   4,589                    $  21,253 
  Short-term investments.............................................        1,752                                       1,752 
  Accounts receivable, net...........................................        7,395                          (215)        7,180 
  Inventories........................................................        9,023            203                        9,226 
  Prepaids and other current assets..................................        1,180            240            (65)        1,355 
                                                                       -------------  -------------        -----    -----------
    Total current assets.............................................       36,014          5,032           (280)       40,766 

Property and equipment, net..........................................        3,647            554                        4,201 
Deposits and other assets............................................          359                                         359 
                                                                       -------------  -------------        -----    -----------
    Total assets.....................................................    $  40,020      $   5,586      $    (280)    $  45,326 
                                                                       -------------  -------------        -----    -----------
                                                                       -------------  -------------        -----    -----------
                                             LIABILITIES AND STOCKHOLDERS' EQUITY                                              
Current liabilities:                                                                                                           
  Line of credit.....................................................                         400                          400 
  Accounts payable...................................................    $   6,900      $   1,124           (280)    $   7,744 
  Accrued and other current liabilities..............................        2,657            432                        3,089 
                                                                       -------------  -------------        -----    -----------
    Total current liabilities........................................        9,557          1,956           (280)       11,233 

Stockholders' equity:                                                                                                          
  Preferred stock, series A..........................................                           3             (3)              
  Preferred stock, series B..........................................                           2             (2)              
  Common stock.......................................................           10              2              5            17 
  Additional paid-in capital.........................................       42,828          9,514                       52,342 
  Notes receivable from stockholders.................................          (22)                                        (22)
  Accumulated deficit................................................      (12,353)        (5,891)                     (18,244)
                                                                       -------------  -------------        -----    -----------
    Total stockholders' equity.......................................       30,463          3,630                       34,093 
                                                                       -------------  -------------        -----    -----------
                                                                         $  40,020      $   5,586      $    (280)    $  45,326 
                                                                       -------------  -------------        -----    -----------
                                                                       -------------  -------------        -----    -----------

See notes to unaudited pro forma condensed combined financial statements. 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS 
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                                      VIAVIDEO                            PRO FORMA  
                                                     POLYCOM       FOR THE PERIOD                          COMBINED  
                                                   FOR THE YEAR  FROM SEPTEMBER 10,                      FOR THE YEAR
                                                      ENDED      1996 (INCEPTION) TO                        ENDED    
                                                   DECEMBER 31,     DECEMBER 31,          PRO FORMA      DECEMBER 31,
                                                       1996             1996             ADJUSTMENTS         1996    
                                                   ------------  -------------------  -----------------  ------------
                                                                                                                     
Net revenues......................................  $   37,032                                            $   37,032 
Cost of net revenues..............................      17,698                                                17,698 
                                                   ------------                                          ------------
    Gross profit..................................      19,334                                                19,334 
                                                   ------------                                          ------------
Operating expenses:                                                                                                  
  Sales and marketing.............................       9,095                                                 9,095 
  Research and development........................       7,574        $     308                                7,882 
  General and administrative......................       2,148               61                                2,209 
                                                   ------------          ------                          ------------
    Total operating expenses......................      18,817              369                               19,186 
                                                   ------------          ------                          ------------
      Operating income (loss).....................         517             (369)                                 148 
                                                   ------------          ------                          ------------
Interest income...................................         784               12                                  796 
Litigation settlement income, net.................         303                                                   303 
Other income (expense)............................         (13)                                                  (13)
                                                   ------------          ------                          ------------
    Income (loss) before provision for income                                                                        
      taxes.......................................       1,591             (357)                               1,234 
Provision for income taxes........................         108                                                   108 
                                                   ------------          ------                          ------------
      Net income (loss)...........................  $    1,483        $    (357)                          $    1,126 
                                                   ------------          ------                          ------------
                                                   ------------          ------                          ------------
Net income (loss) per share.......................  $     0.08        $   (0.16)                          $     0.05 
                                                   ------------          ------                          ------------
                                                   ------------          ------                          ------------
Shares used in per share computation..............      18,898            2,179                               22,936 

See notes to unaudited pro forma condensed combined financial statements. 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS 
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                                                                          PRO FORMA  
                                                          POLYCOM       VIAVIDEO                          COMBINED   
                                                        NINE MONTHS    NINE MONTHS                       NINE MONTHS 
                                                           ENDED          ENDED                             ENDED    
                                                       SEPTEMBER 30,  SEPTEMBER 30,      PRO FORMA      SEPTEMBER 30,
                                                           1997           1997          ADJUSTMENTS         1997     
                                                       -------------  -------------  -----------------  -------------
                                                                                                                     
Net revenues..........................................   $  34,517                                        $  34,517  
Cost of net revenues..................................      18,556                                           18,556  
                                                       -------------                                    -------------
    Gross profit......................................      15,961                                           15,961  
                                                       -------------                                    -------------
Operating expenses:                                                                                                  
  Sales and marketing.................................       8,110      $   1,045                             9,155  
  Research and development............................       6,768          3,358                            10,126  
  General and administrative..........................       2,370          1,026                             3,396  
  Acquisition expenses................................         473                                              473  
  Manufacturing start-up..............................                        213                               213  
                                                       -------------  -------------                     -------------
    Total operating expenses..........................      17,721          5,642                            23,363  
                                                       -------------  -------------                     -------------
      Operating Income (loss).........................      (1,760)        (5,642)                           (7,402) 
                                                       -------------  -------------                     -------------
Interest income, net..................................         688            108                               796  
                                                       -------------  -------------                     -------------
      Net loss........................................   $  (1,072)     $  (5,534)                        $  (6,606) 
                                                       -------------  -------------                     -------------
                                                       -------------  -------------                     -------------
Net loss per share....................................   $   (0.06)     $   (2.53)                        $   (0.26) 
                                                       -------------  -------------                     -------------
                                                       -------------  -------------                     -------------
Shares used in per share computation..................      19,053          2,191                            25,743  

See notes to unaudited pro forma condensed combined financial statements. 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED 
FINANCIAL STATEMENTS

    NOTE A:  The Polycom consolidated statement of operations for the year ended
December 31, 1996 has been combined with ViaVideo consolidated statement of     
operations for the period from September 10, 1996 ("inception") to December 31, 
1996. Additionally, the Polycom statement of operations for the nine months     
ended September 30, 1997 has been combined with ViaVideo's statement of         
operations for the nine months ended September 30, 1997. This method of         
combining the two companies is for the presentation of unaudited pro forma      
condensed combined financial statements only. The unaudited pro forma condensed 
combined financial statements, including the notes thereto, should be read in   
conjunction with the historical consolidated financial statements of Polycom and
ViaVideo which are included elsewhere in this document or are otherwise publicly
available.                                                                      

    NOTE B:  The unaudited pro forma condensed combined statements of operations
for Polycom and ViaVideo has been prepared as if the Merger was completed at the
beginning of the earliest period presented. The unaudited pro forma combined net
income (loss) per share is based on the combined weighted average number of     
common and common equivalent shares of Polycom Common Stock and ViaVideo's      
Common Stock for each period, based upon the Exchange Ratio of 1.183684 shares  
of Polycom Common Stock for each share of ViaVideo's Common Stock. The unaudited
pro forma condensed combined financial statements assume that all of ViaVideo's 
Preferred Stock will convert into shares of ViaVideo Common Stock on a one for  
one basis.                                                                      

NOTE C:                                                                 

1.  PRO FORMA BASIS OF PRESENTATION                                         

 These unaudited pro forma condensed combined financial statements reflect
the issuance of 8,402,023 shares of Polycom Common Stock in exchange for an     
aggregate of 2,190,554 shares of ViaVideo Common Stock and 4,907,644 shares of  
ViaVideo Preferred Stock (outstanding as of September 30, 1997) in connection   
with the Merger based on the Exchange Ratio of 1.183684 share of Polycom Common 
Stock for every 1.0 share of ViaVideo's Common Stock. Prior to the Merger, all  
of ViaVideo's Preferred Stock will convert into shares of ViaVideo Common Stock 
on a one for one basis.                                                         

    The following table details the pro forma share issuances in connection with
the Merger:                                                                     

                                                        [Enlarge/Download Table]

                                                   PREFERRED                                  NUMBER OF SHARES 
                                                    SHARES        COMMON SHARES    EXCHANGE      OF POLYCOM    
                                                  OUTSTANDING      OUTSTANDING      RATIO       COMMON STOCK   
                                                ---------------  ---------------  ----------  -----------------
                                                                                                               
ViaVideo.......................................     4,907,644        2,190,554                                 
Polycom........................................                                     1.183684        8,402,023  
Number of Shares of Polycom Common Stock                                                                       
  Outstanding at September 30, 1997............                                                    19,179,387  
                                                                                              -----------------
  Total Number of Shares of Polycom Common                                                                     
    Stock Outstanding After Completion of                                                                      
    Merger.....................................                                                    27,581,410  
                                                                                              -----------------
                                                                                              -----------------

The actual number of shares of Polycom Common Stock to be issued will be
determined at the effective time of the Merger based on the number of shares of 
ViaVideo Common Stock outstanding at such time.                                 

The pro forma adjustments consist of the elimination of intercompany    
accounts and transactions.                                                      

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED 
FINANCIAL STATEMENTS (CONTINUED)

2.  TRANSACTION COSTS                                                       

  Polycom and ViaVideo estimated they will incur direct transaction costs of
approximately $737,000 associated with the Merger consisting of transaction fees
for investment bankers, attorneys, accountants, financial printing and other    
related charges. At September 30, 1997, approximately $610,000 of transaction   
related costs had been incurred. These nonrecurring transaction costs will be   
charged to operations through the quarter ending March 31, 1998.                

The Unaudited Pro Forma Condensed Combined Balance Sheet gives effect to
estimated direct transaction costs and merger related expenses incurred as of   
September 30, 1997. Any additional costs and expenses not incurred through      
September 30, 1997 are not reflected in the Unaudited Pro Forma Condensed       
Combined Statements of Income.                                                  

    NOTE D:  No adjustments have been made to conform the accounting policies of
the combined companies. The nature and extent of such adjustments, if any, will 
be based upon further study and analysis and are not expected to be significant.

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(c) Exhibits:                                                           

                                                        [Enlarge/Download Table]

  EXHIBIT                                                                                                           
  NUMBER                                                                                                            
-----------                                                                                                         
                                                                                                                    
       2.1(1) Agreement and Plan of Reorganization, dated as of June 11, 1997, by and among the Registrant, Venice  
               Acquisition Corporation and ViaVideo Communications, Inc.                                            

       2.2   Amendment No. 1 to the Agreement and Plan of Reorganization, dated as of September 29, 1997, by and    
               among the Registrant, Venice Acquisition Corporation and ViaVideo Communications, Inc.               

       2.3   Certificate of Merger between Venice Acquisition Corporation and ViaVideo Communications, Inc. as filed
               with the Delaware Secretary of State on January 2, 1998.                                             

      20.1   Press Release of the Registrant dated January 5, 1998.                                                 

------------------------                                                        

(1) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by the Registrant
with the Securities and Exchange Commission on August 13, 1997.         

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as 
amended, the Registrant has duly caused this report to be signed on its behalf  
by the undersigned hereunto duly authorized.                                    

                                                                [Download Table]
                                                                              
                                POLYCOM, INC.                                 

Dated: January 16, 1998         By:            /s/ MICHAEL R. KOUREY          
                                     -----------------------------------------
                                                 Michael R. Kourey,           
                                            VICE PRESIDENT, FINANCE AND       
                                      ADMINISTRATION, CHIEF FINANCIAL OFFICER 
                                                   AND SECRETARY              

20

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EXHIBIT INDEX 
DESCRIPTION OF DOCUMENT 

                                                        [Enlarge/Download Table]

  EXHIBIT                                                                                                           
  NUMBER                                                                                                            
-----------                                                                                                         
                                                                                                                    
       2.1(1) Agreement and Plan of Reorganization, dated as of June 11, 1997, by and among the Registrant, Venice  
               Acquisition Corporation and ViaVideo Communications, Inc.                                            

       2.2   Amendment No. 1 to the Agreement and Plan of Reorganization, dated as of September 29, 1997, by and    
               among the Registrant, Venice Acquisition Corporation and ViaVideo Communications, Inc.               

       2.3   Certificate of Merger between Venice Acquisition Corporation and ViaVideo Communications, Inc. as filed
               with the Delaware Secretary of State on January 2, 1998.                                             

      20.1   Press Release of the Registrant dated January 5, 1998.                                                 

------------------------                                                        

(1) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by the Registrant
with the Securities and Exchange Commission on August 13, 1997.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘8-K’ Filing	Date	First	Last	Other Filings

	11/9/98	10
	5/31/98	11
	3/31/98	13	18
Filed on:	1/16/98	20
	1/5/98	19	21
For Period End:	1/2/98	1	21
	12/15/97	9
	12/10/97	2		DEFS14A
	12/9/97	10
	11/25/97	2
	11/9/97	10
	10/2/97	2
	9/30/97	4	18
	9/29/97	19	21
	8/27/97	6
	8/21/97	3
	8/13/97	19	21	10-Q, 8-K
	6/11/97	2	21	8-K, DEF 14A
	5/28/97	6
	5/9/97	10
	4/4/97	6
	1/29/97	6
	1/1/97	14
	12/31/96	3	17	10-K
	12/28/96	14		NT 10-K, NTN 10K
	10/24/96	6
	10/23/96	11
	9/10/96	3	17
				List all Filings

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Filing Submission 0001047469-98-001258 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Polycom Inc – ‘8-K’ for 1/2/98

As of: Friday, 1/16/98 · For: 1/2/98 · Accession #: 1047469-98-1258 · File #: 0-27978

Previous ‘8-K’: ‘8-K’ on 9/9/97 for 9/5/97 · Next: ‘8-K’ on 7/22/98 for 7/15/98 · Latest: ‘8-K’ on / for 9/27/16

Current Report — Form 8-KFiling Table of Contents

8-K — Current ReportDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Current Report — Form 8-K
Filing Table of Contents

8-K — Current Report
Document Table of Contents