<PAGE>

                               SELECTED FINANCIAL DATA

                          PUMA TECHNOLOGY

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------
   STATEMENT OF OPERATIONS DATA                     1998          1997            1996          1995          1994(1)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>             <C>            <C>
   YEARS ENDED JULY 31,
   (IN THOUSANDS, EXCEPT PER SHARE DATA)

   Revenue                                         $22,308       $15,629         $7,716         $ 860          $ 70
   Cost of revenue                                   3,077         1,738            777            77            --
   Gross profit                                     19,231        13,891          6,939           783            70
   Operating expenses                               21,880        13,222          8,916         2,920         1,030
   Operating income (loss)                          (2,649)          669         (1,977)       (2,137)         (960)
   Other income, net                                 1,114           822             85            71             6
   Income (loss) before income taxes                (1,535)        1,491         (1,892)       (2,066)         (954)
   Provision for income taxes                       (1,164)         (831)          (509)          (80)           --
   Net income (loss)                              $ (2,699)        $ 660        $(2,401)      $(2,146)        $(954)
                                                  -------------------------------------------------------------------------
   Basic net income (loss) per share               $ (0.22)       $ 0.07        $ (0.82)      $ (0.75)       $(0.31)
   Diluted net income (loss) per share             $ (0.22)       $ 0.06        $ (0.82)      $ (0.75)       $(0.31)

   (1) Period from August 27, 1993 (inception)
       to July 31, 1994.

<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
   CONSOLIDATED BALANCE SHEET DATA                    1998         1997           1996          1995          1994
---------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>              <C>         <C>             <C>
   JULY 31, (IN THOUSANDS)

   Cash, cash equivalents and
      short-term investments                       $21,083       $21,171          $ 982       $ 2,500         $ 406
   Total assets                                     30,439        29,413          4,004         2,948           561
   Long-term obligations                                41            66            961            16            --
   Total stockholders' equity                       26,224        26,423            653         1,886           287
</TABLE>

<TABLE>
<CAPTION>

SUMMARY QUARTERLY DATA UNAUDITED

---------------------------------------------------------------------------------------------------------------------------
   THREE MONTHS ENDED,         JULY 31,  APRIL 30,    JAN 31,    OCT 31,  July 31,  April 30,    Jan 31,    Oct 31,
   (IN THOUSANDS,                  1998       1998       1998       1997      1997       1997       1997       1996
   EXCEPT PER SHARE DATA)    ----------------------------------------------------------------------------------------------

<S>                            <C>       <C>          <C>        <C>      <C>       <C>          <C>        <C>
   Revenue                       $4,602     $6,742     $5,727     $5,237    $4,478     $4,325     $3,624     $3,202
   Gross profit                   3,751      5,770      5,098      4,612     3,926      3,791      3,329      2,845
   Operating income (loss)       (3,943)       900        312         82      (860)       675        515        339
   Net income (loss)             (4,029)       726        376        228      (649)       628        454        227
   Basic net income (loss)
      per share                  $(0.33)    $ 0.06     $ 0.03     $ 0.02   $ (0.05)    $ 0.05     $ 0.05     $ 0.05
   Diluted net income (loss)
      per share                  $(0.33)    $ 0.06     $ 0.03     $ 0.02   $ (0.05)    $ 0.05     $ 0.04     $ 0.02
---------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                               9

<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS

                          PUMA TECHNOLOGY


OVERVIEW Puma Technology, Inc. (Puma or the Company) develops, markets and
supports Mobile Data Exchange-TM- (MDE) software, including wireless infrared
connectivity and advanced data synchronization software. The Company currently
has three primary families of products -- its TranXit-R- family of products that
supports infrared connectivity, its Intellisync-R- family of products that
performs advanced data synchronization, and its Intellisync for Notebooks family
of products which combines infrared connectivity with advanced data
synchronization. Additionally, the Company began licensing and earning revenue
from its Software Developers Kit ("SDK") in the third fiscal quarter of 1998.
The SDK provides Puma's customers with a suite of developer tools, which enable
them to develop translators for both applications, and devices, which can then
be incorporated into the Company's products.

TranXit and Intellisync for Notebooks software is licensed primarily to original
equipment manufacturer (OEM) customers, which are primarily makers of laptop
computers. These OEM customers license the Company's software for inclusion in
their laptop computers to enable infrared connectivity (IR) from the laptop back
to desktop computers. These OEM customers include the Company's software into
their products at the time of manufacture and for each device shipped, the
Company collects a royalty. Royalties are typically paid to the Company based on
actual usage or forecasted volume, although certain contracts contain fixed
royalties regardless of volume, for a given time period.

Intellisync software is used for advanced data synchronization of data base
information that resides on a computer such as a desktop machine and
increasingly popular handheld devices such as electronic organizers, handheld
computers, smart phones and smart pagers. The Company's software actually runs
on the desktop computer and keeps information in the desktop and the handheld
device synchronized. Intellisync software is currently distributed directly to
the end user and through the Company's retail distribution channel, and is
bundled with their products by some of the handheld device manufacturers.

Software Developers Kits are primarily licensed directly to hardware and
software manufacturers to enable their products to operate with Intellisync
software.

The Company currently is developing new products that will extend its
Intellisync line to include server-based synchronization and data-delivery
solutions directly targeted at corporate enterprises.

THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE NOTES THERETO AND IN CONJUNCTION WITH THE COMPANY'S
FORM 10-K. THIS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, CONTAINS FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS OR THE
FUTURE PERFORMANCE OF THE COMPANY THAT INVOLVE CERTAIN RISKS AND UNCERTAINTIES.
IN THIS REPORT, THE WORDS "ANTICIPATE(S)," "BELIEVE(S)", "EXPECT(S)",
"INTEND(S)", "FUTURE" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING
STATEMENTS. ACTUAL EVENTS OR THE ACTUAL FUTURE RESULTS OF THE COMPANY MAY DIFFER
MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS DUE TO SUCH RISKS AND
UNCERTAINTIES. THE COMPANY ASSUMES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING
STATEMENTS TO REFLECT ACTUAL RESULTS OR CHANGES IN FACTORS OR ASSUMPTIONS
AFFECTING SUCH FORWARD-LOOKING ASSUMPTIONS. READERS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH REFLECT MANAGEMENT'S
ANALYSIS ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO
PUBLICLY RELEASE THE RESULTS OF ANY REVISION TO THESE FORWARD-LOOKING
STATEMENTS, WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

RESULTS OF OPERATIONS - REVENUE - The Company's revenue is earned from two
primary sources; software licenses and fees for service, which include customer
funded engineering services and amortization of maintenance contract programs.
Revenue was $22,308,000 in fiscal 1998 as compared to $15,629,000 in fiscal 1996
and $7,716,000 in fiscal 1995, representing increases of 43% and 103% from
fiscal 1997 to fiscal 1998 and from fiscal 1996 to fiscal 1997, respectively.
Revenue in the first nine months of fiscal 1996 did not include revenue derived
from Intellisync or IntelliLink


                                                                             10
<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS

                          PUMA TECHNOLOGY


products, which resulted from the IntelliLink-R- acquisition, since the
acquisition was not completed until April 30, 1996.

OEM revenue continues to represent a significant portion of the Company's
revenue. OEM revenue represented 68%, 74%, and 89%, of the Company's revenue in
fiscal 1998, fiscal 1997, and fiscal 1996, respectively. In fiscal 1998 and
1997, Toshiba accounted for approximately 18% and 21% of the Company's revenue,
respectively, and no other customer accounted for more than 10% of the Company's
revenue. In fiscal 1996, Toshiba and NEC accounted for approximately 18% and 13%
of the Company's revenue, respectively. Although several OEMs are subject to
certain contractual minimum purchase obligations, there can be no assurance that
any particular OEM will satisfy the obligation. In addition, the Company
believes that the percentage of revenue derived from OEMs may fluctuate in
future periods since the distribution channels used by the Company for its
existing and future products are subject to change.

International revenue continues to represent a significant portion of the
Company's revenue. International revenue represented approximately 48%, 54%, and
67% of the Company's revenue in fiscal 1998, fiscal 1997, and fiscal 1996,
respectively. The Company expects that international revenue will continue to
represent a significant portion of the Company's revenue for the foreseeable
future.

- LICENSE REVENUE - License revenue is earned from the sale of software products
and royalty agreements with OEMs. License revenue was $18,469,000 in fiscal 1998
as compared to $13,710,000 in fiscal 1997 and $7,418,000 in fiscal 1996,
representing increases of 35% and 85% from fiscal 1997 to fiscal 1998 and from
fiscal 1996 to fiscal 1997, respectively. The increase in license revenue from
fiscal 1998 as compared to fiscal 1997 was primarily due to increased
revenue earned from the Company's Intellisync for handheld devices, and to a
lesser extent, increased license revenue earned from Intellisync for Notebook
products and Software Development Kits. The increase in license revenue in
fiscal 1997 as compared to fiscal 1996 was primarily due to both increased unit
shipments from the continuing acceptance of the Company's TranXit products and
increased unit shipments of the Company's Intellisync products which were
introduced in fiscal 1996.

- SERVICE REVENUE - Service revenue is earned from fees for services including
customer funded engineering services and amortization of maintenance contract
programs. Service revenue was $3,839,000 in fiscal 1998 as compared to
$1,919,000 in fiscal 1997 and $298,000 in fiscal 1996 representing 100% and 544%
increases, respectively. The increases in service revenue for fiscal 1998 as
compared to fiscal 1997 and fiscal 1997 as compared to fiscal 1996 was primarily
due to increased customer funded engineering services for software development
required to support new mobile computing devices.

- COST OF REVENUE - Cost of revenue consists primarily of product media and
duplication, manuals, packing supplies, shipping expenses and personnel related
costs incurred under customer funded software development agreements. The
Company's cost of revenue is affected by the mix between its various
distribution channels and is affected by the mix between its geographies such as
the United States, Japan and Europe. Additionally, the Company's cost of revenue
is affected by the mix between its sources such as royalties, packaged product,
customer funded engineering contracts and sales and fulfillment via its Web
site. A majority of Intellisync revenue is derived by direct sales to
distributors and retailers as well as end-users. The Company anticipates that
gross profit as a percentage of total revenue will decrease, to the extent sales
service revenue as a percentage of total revenue increases in proportion to the
Company's total revenue. This decline in gross profit percentage is anticipated
since the gross profit associated with revenue earned from customer funded
engineering services tend to be lower than the margins associated with revenue
earned from royalties or packaged product. Additionally, the Company anticipates
that gross profit as a percentage of total revenue will decrease, to the extent
sales to distributors and retailers increase in proportion to the Company's
total revenue. This decline in gross profit percentage is anticipated since the
average selling price to distributors and retailers is lower due to distributor
discounts and the cost of revenue is higher due to product


                                                                             11
<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS

                          PUMA TECHNOLOGY


costs. Royalty revenue is derived largely from licensing TranXit to OEM 
customers and cost of sales attributable to TranXit royalties have not been 
significant.

- COST OF LICENSE REVENUE - Cost of license revenue includes product media and
duplication, manuals, packing supplies, shipping expenses and, in certain
transactions, royalties paid to certain vendors. Cost of license revenue as a
percentage of license revenue was 8% for fiscal 1998 and 1997 and 9% for 1996.
The fiscal 1997 decrease in cost of license revenue as percentage of license
revenue as compared to fiscal 1996 was primarily due to reduced product costs
associated with OEM's partially offset by increased costs associated with
increased volumes of packaged product shipments.

- COST OF SERVICE REVENUE - Cost of service revenue primarily represents
personnel related costs incurred for development work under customer funded
software development agreements. Cost of service revenue as a percentage of
service revenue represented 40% in fiscal 1998, 37% in fiscal 1997 and 35% in
fiscal 1996.

- RESEARCH AND DEVELOPMENT - Research and development expenses consist primarily
of salaries and other related expenses for research and development personnel,
quality assurance personnel, product localization, fees to outside contractors
and the cost of facilities and depreciation of capital equipment. The Company
invests in research and development both for new products and to provide
continuing enhancements to existing products. Research and development expenses
increased by 58% to $9,876,000 in fiscal 1998 from $6,236,000 in fiscal 1997. In
fiscal 1997, research and development expenses increased 108% to $6,236,000 from
$3,003,000 in fiscal 1996. Research and development represented approximately
44% of total revenue in fiscal 1998 and represented approximately 40% of total
revenue in both fiscal 1997 and fiscal 1996. The absolute dollar year over year
increase in research and development expenses in fiscal 1998 was primarily due
to increased personnel related costs and spending. This increased spending was
required to develop and support a wider breadth of the Company's existing
Intellisync and TranXit product offerings and, to a lesser extent, increased
personnel related costs and spending required to develop the Company's next
generation of products which will be server based. The absolute dollar year over
year increase in research and development expenses in fiscal 1997 was primarily
due to increased personnel related costs and spending required to develop the
Company's Intellisync product offerings and, to a lesser extent, increased
personnel related costs and spending required to develop enhanced versions of
TranXit and other new products. A significant portion of the Company's research
and development expenses are comprised of fees paid to outside contractors which
are engaged by the Company on a project-by-project basis. The Company believes
research and development expenses may fluctuate from quarter to quarter in
absolute dollars and as a percentage of revenue, depending upon the status of
various development projects.

Research and development expenses have been expensed as incurred. Statement of
Financial Accounting Standards No. 86 requires capitalization of certain
software development costs once technological feasibility is established. The
Company defines establishment of technological feasibility at the point which
product reaches beta. Software development costs incurred subsequent to the
establishment of technological feasibility through the period of general market
availability of the product are capitalized, if material. To date, all of these
software development costs have been insignificant and expensed as incurred.

- SALES AND MARKETING - Sales and marketing expenses consist primarily of
salaries, commissions, promotional expenses and other related expenses of sales
and marketing personnel. Sales and marketing expenses increased by 72% to
$6,855,000 in fiscal 1998 from $3,983,000 in fiscal 1997. In fiscal 1997, sales
and marketing expenses increased 84% to $3,983,000 from $2,169,000 in fiscal
1996. Sales and marketing expenses represented approximately 31%, 25% and 28% of
total revenues in fiscal 1998, fiscal 1997, and fiscal 1996, respectively. Sales
and marketing expenses increased in absolute dollars in both fiscal 1998 and
fiscal 1997 primarily due to the expansion of the Company's sales and marketing
force, related travel and entertainment expenses and increased marketing
activities in an effort to expand its customer base and channel presence. The


                                                                             12
<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS

                          PUMA TECHNOLOGY


Company intends to continue expanding its sales organization to promote new
products and geographies in the upcoming fiscal year.

- GENERAL AND ADMINISTRATIVE - General and administrative expenses consist
primarily of salaries and other related expenses of administrative, executive
and financial personnel and other outside professional fees. General and
administrative expenses increased by 41% to $2,994,000 in fiscal 1998 from
$2,123,000 in fiscal 1997. In fiscal 1997, general and administrative expenses
increased 100% to $2,123,000 in fiscal 1997 from $1,064,000 in fiscal 1996.
General and administrative expenses represented approximately 13% of total
revenues in fiscal 1998, represented 14% of total revenues in both fiscal 1997
and fiscal 1996. The year over year increases in absolute general and
administrative spending in fiscal 1998 was primarily due to increased personnel
and facility related costs, increased legal and accounting fees, increased
provision for doubtful accounts, and increased amortization of intangible assets
related to the acquisition of Real World Solutions. The year over year increases
in absolute general and administrative spending in fiscal 1997 was primarily due
to increased headcount and related spending to support the need for a growing
infrastructure, and to a lesser extent, amortization of intangible assets
related to the acquisition of IntelliLink.

- IN-PROCESS RESEARCH AND DEVELOPMENT - In the fourth quarter of fiscal 1998,
the Company recorded a charge of $2,155,000 for in-process research and
development associated with the purchase of SoftMagic Corp. ("SoftMagic").  In
the fourth quarter of fiscal 1997, the Company recorded a charge of $880,000 for
in-process research and development associated with the asset purchase of Real
World Solutions. In the third quarter of 1996, the Company recorded a charge of
$2,680,000 for in-process research and development associated with the purchase
of IntelliLink Corporation.  See Note 2 of Notes to Consolidated Financial
Statements.

- INTEREST AND OTHER INCOME, NET - Interest and other income, net, represents
interest earned by the Company on its cash and short-term investments, offset by
interest expense on long-term debt and capitalized leases and miscellaneous fees
and charges. Interest and other income, net, increased to $1,114,000 in fiscal
1998 from $822,000 in fiscal 1997 and from $85,000 in fiscal 1996. The increase
in interest and other income, net, in fiscal 1998 as compared to fiscal 1997 was
due to increased interest income on increased cash, cash equivalents and
short-term investment base held throughout the year. The increase in interest
and other income, net, in fiscal 1997 as compared to fiscal 1996 was due to
increased interest income on increased average cash, cash equivalents and
short-term investment base, primarily as a result of proceeds generated from the
Company's initial public offering in December 1996.

- PROVISION FOR INCOME TAXES - Provision for income taxes increased to
$1,164,000 in fiscal 1998 from $831,000 in fiscal 1997 and $509,000 in fiscal
1996. The provision for income taxes primarily represents foreign withholding
taxes. The foreign withholding taxes are primarily a function of royalties
earned by the Company from certain foreign customers.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS The Company expects that its
future operating results could fluctuate significantly as a result of numerous
factors including, but not limited to, the demand for the Company's products,
the Company's success in developing new products, the timing of new product
introductions by the Company and its competitors, market acceptance of the
Company's new and enhanced products, the emergence of new industry standards,
the timing of customer orders, the mix of products sold, competition, the mix of
distribution channels employed, the evolving and unpredictable nature of the
markets for the Company's products and mobile computing devices generally,
the rate of growth of the personal computer market in general and general
economic conditions.

The Company's revenue is difficult to forecast in part because the market for
wireless IR connectivity and data synchronization software is rapidly evolving.
In addition, the Company typically operates with a relatively small order
backlog. As a result, quarterly sales and operating results depend in part on
the volume and timing of orders received within the quarter, which are difficult
to forecast. In addition, a significant portion of the Company's expense levels
is fixed in advance based in large part on the Company's forecasts of future
revenue.


                                                                             13
<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS


                          PUMA TECHNOLOGY


If revenue is below expectations in any given quarter, the adverse impact of the
shortfall on the Company's operating results may be magnified by the Company's
inability to adjust spending to compensate for the shortfall. Therefore, a
shortfall in actual revenue as compared to estimated revenue would have an
immediate adverse effect on the Company's business, financial condition
and operating results that could be material.

The Company historically has derived a substantial portion of its revenue from
OEMs. Due to the Company's ongoing effort to expand into retail and reseller
distribution channels, an increasing percentage of the Company's licensing
activity is expected to result from the sale of products through distributors
and other resellers, which sales are harder to predict and may have lower
margins than other channels. Sales through such channels may contribute to
increased fluctuation of operating results. A significant portion of the
Company's revenue in any quarter is typically derived from sales to a limited
number of customers. The Company has generally recognized a substantial portion
of its revenue in the last month of each quarter, when it typically receives
royalty reports from its OEM customers. Any significant deferral of purchases of
the Company's products by its customers could have a material adverse effect on
the Company's business, operating results and financial condition in any
particular quarter. To the extent that significant sales occur earlier than
expected, operating results for subsequent quarters may be adversely affected.

The Company has expanded its sales channel by fulfilling orders via the World
Wide Web. Given its limited history, there can be no assurance of continued
acceptance or demand for orders placed via the Web. Additionally, there can be
no assurance that Web sales may not adversely affect sales in the Company's
retail and reseller sales channels.

The Company's gross margin on its service revenue is substantially lower than
its gross margin on license revenue. Any increase in service revenue would have
a corresponding increase in cost of revenue and may have an adverse effect on
the Company's gross margins. The Company may also reduce prices or increase
spending in response to competition or to pursue new market opportunities.

The operating results of many software companies reflect seasonal fluctuation.
For example, sales in Europe and certain other countries typically are adversely
affected in the summer months when business activity is reduced. The Company's
revenues and operating results may be adversely affected by diminished demand
for the Company's products on a seasonal basis.

Because of these factors, the Company believes that period-to-period comparisons
of its operating results are not necessarily meaningful and that such
comparisons should not be relied upon as indications of future performance. As a
result of the foregoing and other factors, the Company's operating results and
stock price may be subject to significant volatility, particularly on a
quarterly basis.

LIQUIDITY AND CAPITAL RESOURCES Up until the Company's initial public offering
in December 1996, the Company financed its operations and met its capital
expenditure requirements primarily from proceeds from the private sale of
Preferred Stock and Common Stock. Through October 31, 1996, the Company had
raised approximately $6,800,000 from the sale of Preferred and Common Stock. In
December 1996, the Company generated net proceeds of approximately $21,165,000
from its initial public offering of common stock.

The Company's operating activities provided cash of $2,128,000, provided cash of
$392,000, and used cash of $896,000 in fiscal 1998, fiscal 1997 and fiscal
1996, respectively. Net cash provided in fiscal 1998 was primarily due to net
loss adjusted for non-cash depreciation and amortization, in-process research
and development related to the asset acquisition of SoftMagic and increased
deferred revenue and accrued expenses and decreased accounts receivable and
prepaid expenses. These sources were partially offset by increases in inventory
and decreases in accounts payable. Net cash provided in fiscal 1997 was
primarily due to net income adjusted for non-cash depreciation and amortization,
in-process research and development related to the asset acquisition of Real
World Solutions and increased accounts payable and accrued


                                                                             14
<PAGE>

                                            MANAGEMENT'S DISCUSSION AND ANALYSIS

                          PUMA TECHNOLOGY


expenses. These sources were partially offset by increases in accounts
receivable, inventory, prepaids and other assets and decreases in deferred
revenue.

Cash used in investing activities was $1,046,000, used in investing activities
was $19,444,000, and provided from investing activities $132,000 in fiscal 1998,
fiscal 1997 and fiscal 1996, respectively. Cash used in fiscal 1998 was
primarily due to purchases of short-term investments, and to a lesser extent,
purchases of property and equipment and cash used in the asset purchase of
SoftMagic. Cash used in fiscal 1997 was primarily due to purchases of short-term
investments, and to a lesser extent, purchases of property and equipment and
cash used in the asset purchase of Real World Solutions. Cash provided by
investing activities in fiscal 1996 was primarily related to proceeds from
maturities of short-term investments offset by purchases of property and
equipment. Cash used in fiscal 1995 was primarily related to purchases of
short-term investments, and to a lesser extent, purchases of property and
equipment.

Cash provided by financing activities was $512,000, provided by financing
activities was $23,894,000, and used in financing activities $254,000, in fiscal
1998, fiscal 1997 and fiscal 1996, respectively. Cash provided from financing
activities provided in fiscal 1998 was primarily due to the issuance of Common
Stock and repayments of notes to stockholders. Cash provided from financing
activities provided in fiscal 1997 was primarily due to the issuance of Common
Stock and, to a much lesser extent, the preferred stock and proceeds from
conversion of warrants and exercise of stock options.

At July 31, 1998 the Company's principal source of liquidity represented by
cash, cash equivalents and short-term investments totaled $21,083,000. The
Company currently has no significant capital commitments. The Company currently
has no bank financing arrangements. The Company believes that its current cash,
cash equivalents and short-term investment balances and cash generated from
operations, if any, will be sufficient to meet its working capital and other
cash requirements for at least the next twelve months.

OTHER FACTORS - YEAR 2000 ISSUES - BACKGROUND - Some computers, software, and
other equipment include programming code in which calendar year data is
abbreviated to only two digits. As a result of this design decision, some of
these systems could fail to operate or fail to produce correct results if "00"
is interpreted to mean 1900, rather than 2000. These problems are widely
expected to increase in frequency and severity as the year 2000 approaches, and
are commonly referred to as the "Millennium Bug" or "Year 2000 Problem."

ASSESSMENT - The Year 2000 Problem could affect computers, software, and other
equipment used, operated, or maintained by the Company. The Company believes
that its computer systems are Year 2000 compliant.

SOFTWARE SOLD TO CONSUMERS - The Company believes that it has substantially
identified and resolved all potential Year 2000 Problems with any of the
software products, which it develops and markets. However, management also
believes that it is not possible to determine with complete certainty that all
Year 2000 Problems affecting the Company's software products have been
identified or corrected due to complexity of these products and the fact that
these products interact with other third party vendor products and operate on
computer systems which are not under the Company's control.

SYSTEMS OTHER THAN INFORMATION TECHNOLOGY SYSTEMS - In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, telephone switches, security systems, elevators, and
other common devices may be affected by the Year 2000 Problem. The Company
presently believes that its office and facilities equipment are Year 2000
compliant.

SUPPLIERS - The Company has limited or no control over the actions of third
party suppliers. Thus, while the Company expects that it will be able to resolve
any significant Year 2000 Problems with these systems, there can be no assurance
that these suppliers will resolve any or all Year 2000 Problems with these
systems before the occurrence of a material disruption to the business of the
Company


                                                                             15
<PAGE>

                                           MANAGEMENT'S DISCUSSION AND ANALYSIS


                          PUMA TECHNOLOGY


or any of its customers. Any failure of these third parties to resolve
Year 2000 problems with these systems in a timely manner could have a material
adverse effect on the Company's business, financial condition, and results of
operation.

MOST LIKELY CONSEQUENCES OF YEAR 2000 PROBLEMS - The Company expects to identify
and resolve all Year 2000 Problems that would materially adversely affect its
business operations. However, management believes that it is not possible to
determine with complete certainty that all Year 2000 Problems affecting the
Company have been identified or corrected. The number of devices that could be
affected and the interactions among these devices are simply too numerous. In
addition, one cannot accurately predict how many Year 2000 Problem-related
failures will occur or the severity, duration, or financial consequences of
these perhaps inevitable failures. As a result, management expects that the
Company could likely suffer the following consequences:

     1.   a significant number of operational inconveniences and inefficiencies
          for the Company and its clients that may divert management's time and
          attention and financial and human resources from its ordinary business
          activities; and

     2.   a lesser number of serious system failures that may require
          significant efforts by the Company or its clients to prevent or
          alleviate material business disruptions.

CONTINGENCY PLANS - The Company has not developed contingency plans.

The Company does not believe that the Year 2000 Problem will have a material
adverse effect on the Company's business or results of operations.

DISCLAIMER - The discussion of the Company's efforts, and management's
expectations, relating to Year 2000 compliance are forward-looking statements.
The Company's ability to achieve Year 2000 compliance and the level of
incremental costs associated therewith, could be adversely impacted by, among
other things, the availability and cost of programming and testing resources,
vendors' ability to modify proprietary software, and unanticipated problems
identified in the ongoing compliance review.

- MARKET RISK DISCLOSURE - At the end of fiscal year 1998, the Company had an
investment portfolio of fixed income securities excluding those classified as
cash and cash equivalents, of $13,665,000 (see Note 3 of Notes to Consolidated
Financial Statements). These securities, like all fixed income instruments, are
subject to interest rate risk and will fall in values if market interest rates
increase. If market interest rates were to increase immediately and uniformly by
10% from levels as of July 31, 1998, the decline of the fair value of the
portfolio (approximately $24,000) would not be material. However, the Company
has the ability to hold its fixed income investments until maturity, and
therefore the Company would not expect to recognize an adverse impact in income
or cash flows.

- SUBSEQUENT EVENT - RESTRUCTURE - In October 1998 the Company internally
announced a plan to consolidate its East and West coast engineering
organizations for its Intellisync family of products. Once completed, the
restructuring plan is expected to create efficiencies by reducing overall
engineering headcount and eliminating redundancies associated with maintaining
two separate product development organizations. The Company currently plans to
complete the restructuring activities by the end of its third fiscal quarter.

As a result of the restructuring plan, the Company expects to incur a one-time
charge in its first fiscal quarter of 1999 for severance and facility related
costs associated with implementing its plan. Additionally, the Company also
expects the restructuring plan to have an adverse impact on its statements of
operations in the second and third fiscal quarters of fiscal 1999.


                                                                              16

<PAGE>

                                                    CONSOLIDATED BALANCE SHEETS

                          PUMA TECHNOLOGY
<TABLE>
<CAPTION>


---------------------------------------------------------------------------------------------------------------------------
   ASSETS                                                                                 1998              1997
---------------------------------------------------------------------------------------------------------------------------
   JULY 31, (IN THOUSANDS, EXCEPT PER SHARE DATA)
   <S>                                                                             <C>                    <C>
   Current assets:
     Cash and cash equivalents                                                           $ 7,418          $ 5,824
     Short-term investments                                                               13,665           15,347
     Accounts receivable, net                                                              3,431            3,615
     Inventories                                                                             244              224
     Prepaid expenses and other current assets                                               392              443
                                                                                   ----------------------------------------
       Total current assets                                                               25,150           25,453
   Property and equipment, net                                                             3,254            2,844
   Other assets                                                                            2,035            1,116
                                                                                   ----------------------------------------
       Total assets                                                                      $30,439          $29,413

<CAPTION>

---------------------------------------------------------------------------------------------------------------------------
   LIABILITIES AND STOCKHOLDERS' EQUITY                                                   1998              1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                    <C>
   Current liabilities:
     Accounts payable                                                                    $ 1,140          $ 1,215
     Accrued expenses and other current liabilities                                        1,517            1,001
     Deferred revenue                                                                      1,489              683
     Current portion of capital lease obligations                                             28               25
                                                                                   ----------------------------------------
       Total current liabilities                                                           4,174            2,924
                                                                                   ----------------------------------------
   Capital lease obligations, net of current portion                                          41               66
                                                                                   ----------------------------------------
       Total liabilities                                                                   4,215            2,990
                                                                                   ----------------------------------------
   Commitments and contingencies (Note 5)
     Common stock, $0.001 par value; 40,000 shares authorized
       12,473, and 12,032 shares issued and outstanding at
       July 31, 1998 and 1997 respectively                                                    12               12
     Additional paid-in capital                                                           33,871           31,525
     Receivable from stockholders                                                            (66)            (192)
     Deferred stock compensation                                                             (53)             (81)
     Accumulated deficit                                                                  (7,540)          (4,841)
                                                                                   ----------------------------------------
       Total stockholders' equity                                                         26,224           26,423
                                                                                   ----------------------------------------
       Total liabilities and stockholders' equity                                        $30,439          $29,413
                                                                                   ----------------------------------------
</TABLE>


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


                                                                              17
<PAGE>

                                          CONSOLIDATED STATEMENTS OF OPERATIONS

                                PUMA TECHNOLOGY

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
   YEARS ENDED JULY 31, (IN THOUSANDS, EXCEPT PER SHARE DATA)            1998             1997              1996
                                                                    ------------------------------------------------
<S>                                                                    <C>               <C>              <C>
   Revenue
     License                                                           $18,469           $13,710          $ 7,418
     Services                                                            3,839             1,919              298
                                                                    ------------------------------------------------
       Total revenue                                                    22,308            15,629            7,716
                                                                    ------------------------------------------------
   Cost of revenue
     License                                                             1,541             1,032              673
     Services                                                            1,536               706              104
                                                                    ------------------------------------------------
       Total cost of revenue                                             3,077             1,738              777
                                                                    ------------------------------------------------
     Gross profit                                                       19,231            13,891            6,939

   Operating expenses:
     Research and development                                            9,876             6,236            3,003
     Sales and marketing                                                 6,855             3,983            2,169
     General and administrative                                          2,994             2,123            1,064
     In-process research and development                                 2,155               880            2,680
                                                                    ------------------------------------------------
       Total operating expenses                                         21,880            13,222            8,916
                                                                    ------------------------------------------------
   Operating income (loss)                                              (2,649)              669           (1,977)
   Other income, net                                                     1,114               822               85
                                                                    ------------------------------------------------
   Income (loss) before income taxes                                    (1,535)            1,491           (1,892)
   Provision for income taxes                                           (1,164)             (831)            (509)
                                                                    ------------------------------------------------
   Net income (loss)                                                   $(2,699)            $ 660          $(2,401)
                                                                    ------------------------------------------------
                                                                    ------------------------------------------------

   Basic net income (loss) per share                                   $ (0.22)           $ 0.07          $ (0.82)

   Diluted net income (loss) per share                                 $ (0.22)           $ 0.06          $ (0.82)

   Shares used in computing basic net income (loss)
     per common share                                                   12,118             9,326            2,926

   Shares used in computing diluted net income (loss)
     per common share                                                   12,118            11,442            2,926
--------------------------------------------------------------------------------------------------------------------
</TABLE>


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


                                                                              18


<PAGE>

                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                 PUMA TECHNOLOGY


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                              Convertible                               Receivable  Deferred
                                            Preferred Stock   Common Stock  Additional    from        Stock    Accu-
                                Stock Sub-  ---------------  --------------  Paid-in      Stock-     Compen-  mulated
(IN THOUSANDS)                  scription   Shares  Amount   Shares  Amount  Capital     holders     sation   Deficit    Total
                                ------------------------------------------------------------------------------------------------
<S>                             <C>         <C>     <C>      <C>     <C>    <C>         <C>         <C>       <C>       <C>
Balance at July 31, 1995         $   --      2,620     $ 3    2,722     $ 3    $ 4,982    $  (2)       $ --   $(3,100)  $ 1,886
Issuance of Common Stock
   upon exercise of options          --         --      --      580      --        321      (53)         --        --       268
Issuance of Common Stock
   in connection with
   acquisition of IntelliLink        --         --      --    1,019       1      1,273     (194)         --        --     1,080
Loan to former officer of
   IntelliLink Corp.                 --         --      --       --      --         --     (184)         --        --      (184)
Repurchase of unvested
   Common Stock                      --         --      --      (24)     --         (5)       2          --        --        (3)
Deferred compensation
   related to stock options          --         --      --       --      --        115       --        (108)       --         7
Subscription for Series C
   convertible preferred stock    1,582         --      --       --      --         --   (1,582)         --        --        --
Net loss                             --         --      --       --      --         --       --          --    (2,401)   (2,401)
                                ------------------------------------------------------------------------------------------------
                                ------------------------------------------------------------------------------------------------
Balance at July 31, 1996          1,582      2,620       3    4,297       4      6,686   (2,013)       (108)   (5,501)      653
Issuance of Series C
   convertible preferred stock,
   net of issuance costs         (1,582)       286      --       --      --      1,582    1,582          --        --     1,582
Issuance of Common Stock
   upon exercise of options          --         --      --      189      --        564       --          --        --       564
Issuance of warrants                 --         --      --       --      --        175       --          --        --       175
Exercise of warrants for
   Common Stock                      --         --      --      330      --        405       --          --        --       405
Conversion of debenture to
   Common Stock                      --         --      --      344      --        953       --          --        --       953
Repurchase of unvested
   Common Stock                      --         --      --       (3)     --          --      --          --        --        --
Loan to stockholder                  --         --      --       --      --          --     (71)         --        --       (71)
Repayments by stockholder            --         --      --       --      --          --     310          --        --       310
Amortization of deferred
   compensation                      --         --      --       --      --          --      --          27        --        27
Shares issued in initial
   offering, net of expenses         --         --      --    2,500       4      21,161      --          --        --    21,165
Conversion of preferred stock
   to Common Stock                   --     (2,906)     (3)   4,375       4          (1)     --          --        --        --
Net income                           --         --      --       --      --          --      --          --       660       660
                                ------------------------------------------------------------------------------------------------
Balance at July 31, 1997             --         --      --   12,032      12      31,525    (192)        (81)   (4,841)   26,423
Issuance of Common Stock
   upon exercise of options          --         --      --       91      --         107      --          --        --       107
Issuance of Common Stock
   under Employee Stock
   Purchase Plan                     --         --      --       62      --         273      --          --        --       273
Repurchase of unvested
   Common Stock                      --         --      --      (54)     --         (10)     --          --        --       (10)
Issuance of options and
   warrants                          --         --      --       --      --          38      --          --        --        38
Issuance of Common Stock
   in connection with
   SoftMagic Acquisition             --         --      --      342      --       1,938      --          --        --     1,938
Repayments by stockholder            --         --      --       --      --          --     126          --        --       126
Amortization of deferred
   compensation                      --         --      --       --      --          --      --          28        --        28
Net loss                             --         --      --       --      --          --      --          --    (2,699) . (2,699)
                                ------------------------------------------------------------------------------------------------
Balance at July 31, 1998         $   --         --      $--  12,473     $12     $33,871   $ (66)      $ (53)  $(7,540)  $26,224
--------------------------------------------------------------------------------------------------------------------------------

</TABLE>

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


                                                                             19

<PAGE>

                                                        CONSOLIDATED CASH FLOWS

                                PUMA TECHNOLOGY
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------
YEARS ENDED JULY 31,                                                     1998              1997             1996
<S>                                                                   <C>                  <C>            <C>
Cash flows from operating activities
   Net income (loss)                                                  $ (2,699)          $   660          $(2,401)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                                     1,182               616              217
       In-process research and development                               2,155               880            2,680
       Other                                                                28                20               42
       Changes in assets and liabilities:
         Accounts receivable                                               184            (1,778)          (1,637)
         Inventories                                                       (20)              (59)            (105)
         Prepaid expenses and other current assets                          51              (384)             (82)
         Accounts payable                                                  (75)              512               17
         Accrued expenses and other current liabilities                    516               284              272
         Deferred revenues                                                 806              (359)             101
                                                                     ----------------------------------------------
   Net cash provided by (used in) operating activities                   2,128               392             (896)
                                                                     ----------------------------------------------
Cash flows from investing activities:
   Purchase of property and equipment                                   (1,332)           (2,679)            (317)
   Purchase of short term investments                                  (20,409)          (23,960)              --
   Maturities of short-term investments                                 21,791             8,003              500
   Cash used in acquisitions, net of cash acquired                      (1,096)             (808)             (51)
                                                                     ----------------------------------------------
Net cash (used in) provided by investing activities                     (1,046)          (19,444)             132
                                                                     ----------------------------------------------
Cash flows from financing activities:
   Principal payments under capital lease obligations                      (22)              (26)             (22)
   Principal repayments on notes payable                                    --               (35)            (119)
   Proceeds from exercise of warrants                                       --               405               --
   Note repayments (advances) to stockholder                               126               239             (184)
   Net proceeds from issuance of convertible preferred stock                --             1,582               --
   Net proceeds from issuance of Common Stock                              408            21,729               71
                                                                     ----------------------------------------------
Net cash provided by (used in) financing activities                        512            23,894             (254)
                                                                     ----------------------------------------------
Increase (decrease) in cash and cash equivalents                         1,594             4,842           (1,018)
Cash and cash equivalents at beginning of period                         5,824               982            2,000
                                                                     ----------------------------------------------
Cash and cash equivalents at end of period                             $ 7,418           $ 5,824          $   982
                                                                     ----------------------------------------------
                                                                     ----------------------------------------------
Supplemental disclosure of cash flow information:
   Interest paid                                                       $     3           $    21          $     7
                                                                     ----------------------------------------------
   Income taxes paid                                                   $   370           $   831          $   509
                                                                     ----------------------------------------------
Supplemental disclosure of noncash financing activities:
   Property and equipment acquired under capital leases                     --                --               --
   Common Stock issued in connection with the
     acquisition of SoftMagic and IntelliLink Corp.                      1,938                --            1,274
   Common Stock paid by cancellation of accounts payable                    --                --              197
   Issuance of warrants for technology                                      --               175               --
   Conversion of debenture to Common Stock                                  --               953               --
-------------------------------------------------------------------------------------------------------------------

</TABLE>

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

                                                                              20

<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                PUMA TECHNOLOGY


1    THE COMPANY AND A SUMMARY OF ITS SIGNIFICANT ACCOUNTING POLICIES

- THE COMPANY - Puma Technology, Inc. (the "Company") was incorporated in
California on August 27, 1993 and was subsequently reincorporated in Delaware
on November 27, 1996. The Company develops, markets and supports mobile data
exchange software which allows user to easily access, exchange and
synchronize information stored on a variety of different computing devices.

- BASIS OF PRESENTATION - The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.

- USE OF ESTIMATES AND ASSUMPTIONS - The preparation of the consolidated
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.

- REVENUE RECOGNITION - The Company recognizes revenue in accordance with the
American Institute of Certified Public Accountants' Statement of Position
("SoP") 91-1 on software revenue recognition. In October 1997, the AICPA
issued SoP No. 97-2, "Software Revenue recognition," which provides guidance
on recognizing revenue for software transactions. See Note 10 for discussion
of SoP No. 97-2 and its impact on the Company's revenue recognition practice
for transactions entered into after July 31, 1998.

Revenue is comprised of license revenue and service revenue. License revenue
is derived from the sale of software products and royalty agreements with
original equipment manufacturers (OEMs). Service revenue is derived from
customer funded engineering services and maintenance contract programs.

License revenue is recognized upon shipment of the software if no significant
obligation remains and collection of the resulting receivable is deemed
probable. The Company currently sells its products primarily to OEMs and to a
lesser extent to distributors and resellers in the United States, Africa, Asia,
Australia, Canada and Europe. The Company grants distributors and resellers
certain rights of return and price protection on unsold merchandise held by
those distributors and resellers. Accordingly, reserves for estimated future
returns and credits for price protection are provided for upon revenue
recognition. Such reserves are based on historical rates of returns and
allowances, distributor inventory levels and other factors.

Revenue from OEMs under minimum guaranteed royalty arrangements, which are
not subject to significant future obligations, is recognized when such
royalties are earned and become payable. Royalty revenue that is subject to
significant future obligations is recognized when such obligations are
fulfilled. Royalty revenue that exceeds minimum guarantees is recognized in
the period earned. Payments received for maintenance contract services are
recognized pro-ratably over the term of the service agreement. Payments from
customers received in advance of revenue recognition are recorded as deferred
revenue.

The Company also provides a limited amount of telephone technical support to
customers. These activities are generally considered insignificant
postcontract customer support obligations and related costs are accrued upon
recognition of the license revenue.

- CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt
instruments with a maturity of three months or less at the date of purchase
to be cash equivalents.

- SHORT TERM INVESTMENTS - The Company accounts for its marketable securities
in accordance with Statement of Financial Accounting Standards No. 115 (FAS
115), "Accounting for Certain Investments in Debt and Equity Securities,"
which requires the

                                                                             21


<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                PUMA TECHNOLOGY


Company to classify debt and equity securities into one of three categories:
held to maturity, trading or available for sale.  The Company has classified
its investments as available for sale.  The cost of securities sold is based
on the specific identification method.

- INVENTORIES - Inventories consist principally of software and related
documentation, which are stated at the lower of cost (first-in, first-out) or
market.

- SOFTWARE DEVELOPMENT COSTS - Software development costs incurred prior to the
establishment of technological feasibility are included in research and
development and are expensed as incurred. The Company defines establishment of
technological feasibility at the point which product reaches beta. Software
development costs incurred subsequent to the establishment of technological
feasibility through the period of general market availability of the product are
capitalized, if material. To date, all software development costs have been
expensed as incurred.

- PROPERTY AND EQUIPMENT - Property and equipment are stated at cost.
Depreciation and amortization is computed using the straight-line method over
the estimated useful lives of the assets, generally three to five years, or
in the case of leased assets, the life of the lease, if shorter.

- OTHER ASSETS - Other assets are primarily comprised of intangibles,
goodwill, and other investments. Amortization on intangibles and goodwill is
computed on the straight-line basis over the expected lives of the assets
ranging from two to five years. Accumulated amortization was $543,000 and
$282,000 at July 31, 1998 and 1997 respectively.

- INCOME TAXES - Income taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax
bases of the assets and liabilities and are measured using the currently enacted
tax rates and laws.

- CONCENTRATION OF CREDIT RISK - Financial instruments that potentially subject
the Company to significant concentrations of credit risk consist principally of
cash, cash equivalents, short-term investments and trade accounts receivable.
The Company places its cash, cash equivalents and short-term investments
primarily in money market accounts and commercial paper. The Company, by policy,
limits the amount of credit exposure for cash and cash equivalents to any one
issuer.

The Company performs ongoing credit evaluations of its customers and maintains
reserves for potential credit losses. At July 31, 1998, three customers
accounted for 21%, 18%, and 15% of accounts receivable, respectively. At July
31, 1997 two customers accounted for 17% and 11% of accounts receivable,
respectively.

The Company's sales are generally denominated in US dollars. The Company does
not undertake any foreign currency hedging activities.

- NET INCOME (LOSS) PER SHARE - Net income (loss) per share is computed in
accordance with Statement of Financial Standards No. 128. Basic net income per
share is computed using the weighted average common shares outstanding during
the period. Diluted net income per share is computed using the weighted average
common shares and, if dilutive, potential common shares (convertible preferred,
stock options and warrants) outstanding during the period.

2    ACQUISITIONS

- SOFTMAGIC CORP. - On July 30, 1998, the Company completed the acquisition of
SoftMagic Corp. ("SoftMagic"), a leader in software tools for the development of
custom applications for handheld devices. Under the terms of the agreement, Puma
paid cash of $1,000,000 and issued 341,742 shares of the Company's Common Stock
in exchange for all outstanding shares of SoftMagic.


                                                                             22


<PAGE>

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY


The SoftMagic acquisition has been accounted for as a purchase. The total
purchase price of approximately $3,076,000 was assigned, based on an independent
appraisal, to the fair value of the assets acquired, including $35,000 to
tangible assets acquired, $2,155,000 to in-process research and development and
$886,000 to identified intangible assets. The in-process research and
development was expensed at the acquisition date.

- REAL WORLD SOLUTIONS, INC. - In July 1997, the Company acquired the assets of
Real World Solutions, Inc., (RWS), a developer of client/server software
solutions, in a transaction accounted for as a purchase. The consolidated
financial statements of the Company include the results of the operations of RWS
since the date of acquisition.

The total purchase price of approximately $1,006,000 (including $751,000 for
liabilities assumed) was assigned, based on an independent appraisal, to the
fair value of the assets acquired, including $70,000 to tangible assets
acquired, $880,000 to in-process research and development and $56,000 to
identified intangible assets. The in-process research and development
was expensed at the acquisition date.

- INTELLILINK CORP. - In April 1996, the Company acquired IntelliLink,  a
developer of advanced  synchronization  software, in a transaction accounted for
as a purchase. The total purchase price of approximately $3,483,000 (including
$1,207,000 for liabilities assumed) was assigned, based on an independent
appraisal, to the fair value of the assets acquired, including $327,000 to
tangible assets acquired, $2,680,000 to in-process research and development,
$120,000 to identified intangible assets and the remaining $356,000 to goodwill.
The in-process research and development was expensed at the acquisition date.
The consolidated financial statements of the Company include IntelliLink since
the date of the acquisition.

Unaudited pro forma information, which reflects the results of operations for
the years ended July 31, 1998, 1997 and 1996 as if the acquisitions of
SoftMagic, IntelliLink, and RWS had occurred as of the beginning of the periods
presented. Pro forma information presented gives effect of certain adjustments,
including amortization of goodwill and other intangibles, and excludes the
effect of in-process research and development of $2,155,000, $880,000 and
$2,680,000 directly attributable to the acquisitions of SoftMagic, IntelliLink,
and RWS, respectively.

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------
  YEARS ENDED JULY 31,              1998           1997            1996
                               ................................................
   <S>                            <C>            <C>             <C>
   Pro forma revenue              $22,638        $15,735         $ 9,003
   Pro forma net
     income (loss)                $  (805)       $   609         $(1,155)
   Pro forma basic earnings
     (loss) per share             $  (.07)       $   .07         $  (.39)
   Pro forma diluted earnings
     (loss) per share             $  (.07)       $   .05         $  (.39)
-------------------------------------------------------------------------------

</TABLE>


3        BALANCE SHEET COMPONENTS

Cash equivalents and short-term investments include available-for-sale
securities as follows (in thousands):


<TABLE>
<CAPTION>

  JULY 31,                                  1998                  1997
                                     ----------------------------------------
 <S>                                       <C>                  <C>
  Cash equivalents
     Commercial paper                      $ 5,412              $ 4,439
     Money market funds                        385                  665
                                     ----------------------------------------
                                           $ 5,797              $ 5,104
                                     ----------------------------------------
                                     ----------------------------------------

  Short term investments
     Commercial paper                      $12,651              $11,284
     US government agencies                  1,014                4,063
                                     ----------------------------------------
                                           $13,665              $15,347
                                     ----------------------------------------
                                     ----------------------------------------

</TABLE>


                                                                             23
<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

Realized gains or losses on sales of available-for-sale securities were
immaterial for the years ended July 31, 1998, 1997 and 1996. There were no
unrealized holding gains or losses on such securities at July 31, 1998 and 1997.
The short-term investments have maturities of less than one year.

Accounts receivable, net consist of the following (in thousands):


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   JULY 31,                                      1998              1997
                                     ----------------------------------------
   <S>                                          <C>               <C>
   Accounts receivable                          $4,374            $4,292
   Less allowance for doubtful
     accounts and sales returns                   (943)             (677)
                                     ----------------------------------------
                                                $3,431            $3,615
--------------------------------------------------------------------------------

</TABLE>

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   JULY 31,                                    1998                 1997
                                     ----------------------------------------
   <S>                                        <C>                  <C>
   Computer equipment and software            $2,267               $1,646
   Furniture and office equipment              1,657                1,252
   Leasehold improvements                        934                  616
                                     ----------------------------------------
                                               4,858                3,514

  Less: accumulated depreciation
   and amortization                           (1,604)                (670)
                                     ----------------------------------------
                                              $3,254               $2,844
--------------------------------------------------------------------------------

</TABLE>

At July 31, 1998 and July 31, 1997 the Company had $126,000 of equipment under
capital leases and related accumulated amortization of $102,000 and $65,000,
respectively.

Accrued liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------

   JULY 31,                               1998                 1997
                                ----------------------------------------
   <S>                                  <C>                  <C>
   Payroll related accruals             $  741               $  451
   Other accrued liabilities               776                  367
                                -----------------------------------------
                                        $1,517               $1,001
--------------------------------------------------------------------------------

</TABLE>

4        STOCKHOLDERS' EQUITY

- CONVERTIBLE PREFERRED STOCK - The preferred stock was converted to Common
Stock on the completion of the common stock offering.

- COMMON STOCK OFFERING - On December 10, 1996, the Company and certain
stockholders of the Company completed an initial public offering of common stock
involving the sale of 2,500,000 shares of the Company's common stock issued by
the Company and 1,985,000 shares of the Company's common stock held by the
existing stockholders. The net proceeds to the company from the sale of the
2,500,000 shares of common stock sold by the Company were approximately
$21,161,000. The Company invested the proceeds from the offering primarily in
money market funds, commercial paper and US Government agency bonds. These funds
are used for general corporate purposes, including working capital of its
operations and to fund capital expenditures and future acquisitions.

- STOCK OPTION PLANS - In October 1993, the Board of Directors and stockholders
adopted the 1993 Stock Option Plan (the Plan) which provides for granting of
incentive stock options (ISOs) and nonqualified stock options (NSOs) to purchase
shares of Common Stock to employees, consultants and advisors of the Company. To
date, the Company has not granted any significant options to consultants or
advisors. In accordance with the Plan, the stated exercise price shall be not
less than 100% and 85% of the estimated fair market value of Common Stock on the
date of grant for ISOs and NSOs, respectively, as determined by the Board of
Directors. The Plan provides that the options shall be exercisable over a period
not to exceed ten years. Options generally vest 25% one year after date of grant
and 1/48th each month thereafter for the next 36 months. The Plan provides that
the options may be exercised prior to the options becoming vested. If the
optionee's employment is terminated for any reason, the Company has the right to
repurchase any


                                                                             24
<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

unvested shares. At July 31, 1998, the options authorized under the Plan
aggregated 4,500,000.

In September of 1997, the Board of Directors approved the repricing of certain
outstanding stock options under the Plan with an exercise price of $7.50 or
more. Each employee, officer or director who elected to participate in the
repricing program received a new option with an exercise price of $6.50 (the
fair market value on the repricing date). Each repriced option retained its
original vesting schedule except that no portion of the option could be
exercised during the six month period following the repricing date.

The Company has assumed certain options granted to former employees of acquired
companies (Acquired Options). The Acquired Options were assumed by the Company
outside the Plan, but all are administered as if assumed under the Plan. All of
the Acquired Options have been adjusted to effectuate the conversion under the
terms of the Agreements between the Company and the companies acquired. The
Acquired Options generally become exercisable over a four-year period and
generally expire ten years from the date of grant. No additional options will be
granted under any of these plans.

Stock option activity, both incentive and nonqualified, under all plans is
presented as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
                                                         Range of        Weighted average exercise
                                    Option shares     price per share          price per share
   <S>                              <C>               <C>                <C>
   Outstanding at July 31,1995            555           $0.025 - $0.20             $ 0.20
     Granted                            1,144            $0.20 - $6.05             $ 2.64
     Exercised                           (580)          $0.025 - $1.25             $ 0.55
     Canceled                             (80)           $0.20 - $2.50             $ 0.50
                                    --------------------------------------------------------------
   Outstanding at July 31,1996          1,039            $0.20 - $6.05             $ 0.35
     Granted                            1,487            $7.50 - $17.25            $10.43
     Exercised                           (188)           $0.20 - $7.50             $ 3.00
     Canceled                            (230)           $0.20 - $17.25            $ 7.10
                                    --------------------------------------------------------------
   Outstanding at July 31,1997          2,108            $0.20 - $16.87            $ 7.26
     Granted                            1,853            $5.18 - $8.38             $ 6.50
     Exercised                            (91)           $0.20 - $7.50             $ 1.17
     Canceled                          (1,424)           $0.20 - $16.87            $ 9.72
                                    --------------------------------------------------------------
   Outstanding at July 31,1998          2,446            $0.20 - $9.75             $ 5.48
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------


</TABLE>


                                                                             25


<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

At July 31, 1998, a total of 58,000 shares were subject to repurchase and
options to purchase approximately 1,118,000 shares were available for future
grants.

Based on an independent appraiser's valuation report, management believes that
the exercise price for certain options granted during fiscal 1996 was below the
estimated fair value of the Company's Common Stock at the dates of grant.
Accordingly,  the Company is recognizing approximately $115,000 of compensation
expense over the options' four-year vesting periods.

The following table summarizes information about stock options under the Option
Plan outstanding at July 31, 1998 (in thousands, except per share amounts):

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
                                        Options outstanding                                   Options Exercisable
                        -------------------------------------------------------------------------------------------------
                            Number         Weighted-Average                            Number
     Range of            Outstanding          Remaining         Weighted-Average       Exercisable      Weighted-Average
  Exercise Prices        at 7/31/98       Contractual Life       Exercise Price        at 7/31/98        Exercise Price
-------------------------------------------------------------------------------------------------------------------------
<S>                      <C>              <C>                   <C>                    <C>              <C>
   $0.20 - $4.01             495                6.7                  $1.83                  469              $1.84
   $4.02 - $6.05             557                8.8                   5.83                  425               5.79
   $6.06 - $6.35              96                9.5                   6.24                   86               6.23
   $6.36 - $6.50           1,056                8.7                   6.50                1,056               6.50
   $6.51 - $9.75             242                9.1                   7.44                  231               7.41
                          ------                                                         ------
   Total                   2,446                8.4                  $5.48                2,267              $5.49
                          ------                                                         ------
                          ------                                                         ------
-------------------------------------------------------------------------------------------------------------------------

</TABLE>


- EMPLOYEE STOCK PURCHASE PLAN - In October 1996, the board of directors adopted
the 1996 Employee Stock Purchase Plan (the "ESPP") which authorizes the issuance
of 250,000 shares of Common Stock. The purpose of the ESPP is to provide
eligible employees of the Company with a means of acquiring common stock of the
Company through payroll deductions. The plan consists of four six-month purchase
periods in each two year offering period. Shares may be purchased under the ESPP
at 85% of the lesser of the fair market value of the common stock on the grant
or purchase date. During fiscal 1998, 62,119 shares were sold through the ESPP.
At July 31, 1998,187,881 shares were available for purchase under the ESPP.

- PRO FORMA INFORMATION - The company applies APB Opinion No. 25 "Accounting for
Stock Issued to Employees" and related interpretations in accounting for the
stock compensation plans (the Plans) described above. Accordingly, no fair value
compensation cost has been recognized for the Plans. If compensation cost for
the Plans


                                                                             26
<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

had been determined consistent with FAS No. 123 "Accounting for Stock-Based
Compensation", the Company's net income (loss) and earnings (loss) per share
would have been adjusted to the pro-forma amounts indicated below (in thousands,
except per share amounts).

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------

   YEARS ENDED JULY 31,                   1998            1997           1996
                                       ----------------------------------------
   <S>                                 <C>               <C>           <C>
   Net income (loss) reported           $(2,699)          $660         $(2,401)
   Pro forma net income (loss)          $(7,404)          $(870)       $(2,464)
   Basic Earnings (loss)
      per share as reported             $  (.22)          $ .07        $ (0.82)
   Diluted earnings (loss)
      per share as reported             $  (.22)          $ .06        $ (0.82)
   Pro forma basic earnings
      (loss) per share                  $ (0.61)          $(.09)       $ (0.84)
   Pro forma diluted earnings
      (loss) per share                  $ (0.61)          $(.09)       $ (0.84)
-------------------------------------------------------------------------------

</TABLE>

Because the method of accounting prescribed by FAS 123 has not been applied to
options granted prior to August 1, 1995, and because the Black-Scholes option
valuation model was developed for traded options and requires the input of
subjective assumptions, the resulting pro forma compensation cost may not be
representative of that to be expected in future years.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions used for 1998, 1997 and 1996: risk-free interest rate 5.70% for
1998, 6.46% for 1997 and 5.98% for 1996, dividend yields of 0%, volatility
factors of the expected market price of the Company's Common Stock of 75% for
1998, 50% for 1997 and 0% for 1996, and a weighted average expected life of an
option of four years. The Company has also estimated the fair value for the
purchase rights issued under the Company's Employee Stock Purchase Plan, under
the Black-Scholes valuation model using the following assumptions for 1998 and
1997: risk free interest rate 5.25% and 5.9%, respectively, dividend yields of
0%, volatility factors of the expected market price of the Company's Common
Stock of 75% and 50%, respectively, and a weighted average expected life of six
months and two years, respectively.

The weighted average fair value of options granted during fiscal 1998 and 1997
was $3.51 and $4.27, respectively.

- COMMON STOCK WARRANTS - In May 1998, the Company issued a warrant to purchase
80,000 shares of its Common Stock at $9.00 per share to Premier Technologies in
exchange for certain market development programs and recorded the warrant at
fair value on the grant date. The warrant is exercisable immediately and expires
in May of 1999. At July 31, 1998, the warrant remained outstanding and had not
been exercised.

In July 1996, the Company agreed to issue a warrant to purchase 140,000 shares
of its Common Stock at $5.50 per share to one of its Series C stockholders in
exchange for rights to certain technology. These warrants were subsequently
issued in August 1996. The aggregate value of the warrant was estimated by the
Company at $175,000 and is being accounted for as purchased technology. The
warrant is exercisable immediately and expires at the earlier of August 1999 or
the acquisition of the Company by another entity. The purchased technology will
be amortized over its estimated life.


                                                                             27


<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

5        COMMITMENTS

The Company leases certain computer equipment and office equipment under
long-term lease agreements that are classified as capital leases. The leases
expire over the next four years and include options to purchase the equipment at
the end of the lease terms.

The Company leases its facilities under operating leases that expire at various
dates through April 2006. The leases provide for escalating lease payments.

Future minimum lease payments, at July 31, 1998 were as follows (in thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                              Capital               Operating
                                               Leases                Leases
                                        --------------------------------------
   <S>                                        <C>                   <C>
   Fiscal year ending July 31,
   1999                                         $37                  $1,217
   2000                                          28                   1,285
   2001                                          17                   1,295
   2002                                           3                   1,335
   2003                                           0                   1,152
   Thereafter                                    --                   3,276
                                        --------------------------------------
   Total minimum lease payments                  85                  $9,560
                                        --------------------------------------
   Less amount representing interest            (16)
                                        --------------------------------------
   Present value of future
      minimum lease payments                     69
   Less current portion of
      capital lease payments                    (28)
                                        --------------------------------------
   Long-term capital lease obligations          $41
------------------------------------------------------------------------------


</TABLE>

Total rent expense was approximately, $1,178,000, $434,000 and $293,000 for the
years ended July 31, 1998, 1997 and 1996, respectively. The 1997 rental expense
was offset by sublease income of approximately $97,000.

6        OTHER INCOME (EXPENSE)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   YEARS ENDED JULY 31,                     1998           1997         1996
   (IN THOUSANDS)
                                        --------------------------------------
   <S>                                     <C>             <C>          <C>
   Interest income                         $1,155          $882         $110
   Interest expense                            (3)          (19)         (25)
   Other expense, net                         (38)          (41)          --
                                        --------------------------------------
   Total other income, net                 $1,114          $822         $ 85
--------------------------------------------------------------------------------

</TABLE>

7        INCOME TAXES

The income tax provision for the years ended July 31, 1998, 1997 and 1996 is
summarized as follows (in thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   YEARS ENDED JULY 31,                      1998         1997          1996
                                        --------------------------------------
   <S>                                  <C>             <C>           <C>
   Current
     Federal                              $   13         $ 27           $ --
     State                                    26            7             --
     Foreign withholding tax               1,125          797            509
                                        --------------------------------------
                                          $1,164           $831         $509
--------------------------------------------------------------------------------
</TABLE>

Deferred tax assets are summarized as follows (IN THOUSANDS):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   JULY 31,                                       1998                 1997
                                             ---------------------------------
   <S>                                        <C>                  <C>
   Net operating loss carryforwards              $ 118                $ 230
   Alternative minimum tax credit
     carryforwards                                  78                   65
   Research and development credit
     carryforwards                                 653                  180
   Foreign tax credit carryforwards              1,632                  750
   Reserves and allowances                         406                  520
   Research and development                        182                  755
                                             ---------------------------------
   Total deferred tax assets                     3,069                2,500
   Deferred tax asset valuation allowance       (3,069)              (2,500)
                                             ---------------------------------
                                               $    --               $   --
--------------------------------------------------------------------------------

</TABLE>


                                                                             28
<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

The Company has incurred losses from inception through fiscal 1996. Management
believes that, based on the history of such losses and other factors, the weight
of available evidence indicates that it is more likely than not that the Company
will not be able to realize its deferred tax assets and thus a full valuation
reserve has been recorded at July 31, 1998 and 1997.

A reconciliation of the income tax provision to the amount computed by applying
the statutory federal income tax rate to income (loss) before income tax
provision is summarized as follows (in thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   YEARS ENDED JULY 31,                     1998             1997        1996
                                        --------------------------------------
   <S>                                    <C>                <C>        <C>
   Amounts computed at
     statutory federal rate               $ (522)            $507       $(644)
   Foreign withholding taxes               1,125              797         509
   In-process research and
     development not deductible              288              247         911
   Utilization of foreign tax credits       (190)            (633)         --
   Utilization of tax loss
     carryforwards                          (359)            (448)       (322)
   Future benefits not
     currently recognized                    822              361          55
                                        --------------------------------------
                                          $1,164             $831        $509
--------------------------------------------------------------------------------

</TABLE>

At July 31, 1998, the Company has $653,000 of federal and state research and
development credit carryforwards, $1,632,000 of foreign tax credit carryforwards
and $77,000 of alternative minimum tax credit carryforwards.

8        NET INCOME (LOSS) PER SHARE

In accordance with disclosure requirements of SFAS128, a reconciliation of the
numerator and denominator of basic and diluted net income (loss) per share
calculations is provided as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
                                       1998             1997            1996
   <S>                               <C>               <C>            <C>
   Net income (loss)
     as reported                     $(2,699)          $ 660          $(2,401)
                                     ------------------------------------------
                                     ------------------------------------------
   Weighted average
     shares outstanding
     (denominator) used to
     compute basic earnings
     per common share                 12,118           9,326            2,926
   Shares issuable upon
     exercise of options
     and warrants                         --             582               --
   Weighted average preferred
     shares as if converted               --           1,534               --
                                     ------------------------------------------
   Denominator used to
     compute diluted
     earnings per share               12,118          11,442            2,926
                                     ------------------------------------------
                                     ------------------------------------------
   Basic earnings (loss)
     per share                       $ (0.22)         $ 0.07          $ (0.82)
   Diluted earnings (loss)
     per share                       $ (0.22)         $ 0.06          $ (0.82)
--------------------------------------------------------------------------------

</TABLE>

As a result of the net loss incurred by the Company in 1998 and 1996, potential
common share attributable to stock options, warrants and convertible preferred
stock were antidilutive and were excluded from net loss per share calculations.


                                                                             29

<PAGE>

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   PUMA TECHNOLOGY

9        REVENUE BY REGION

The Company operates in a single industry segment encompassing the development,
marketing and support of mobile data exchange software. The Company markets its
products to customers in North America, Asia and Europe. The Company's customer
base consists primarily of large OEMs in the PC market and selected distributors
in North America, Asia and Europe which primarily market to the retail channel.
The Company's sales are generally denominated in U.S. dollars.

Revenue information by geographic region is as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
   YEARS ENDED JULY 31,                 1998             1997           1996
   <S>                                <C>            <C>               <C>
   North America                      $11,681         $ 7,172          $2,649
   Japan                                9,888           7,304           4,302
   Other International                    739           1,153             765
                                     ------------------------------------------
                                      $22,308         $15,629          $7,716
--------------------------------------------------------------------------------

</TABLE>

10       RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income," and SFAS No. 131, "Disclosure about segments
of an Enterprise and Related Information." Under SFAS No. 130, companies are
required to report in the financial statements, in addition to net income,
comprehensive income including, as applicable, foreign currency items, minimum
pension liability adjustments and unrealized gains and losses on certain
investments in debt and equity securities. Under SFAS No. 131, companies are
required to separately report certain financial and descriptive information
about operating segments. The Company will adopt the provisions of SFAS No. 130
and SFAS No. 131 in connection with its financial statements for the year ending
July 31, 1999, and does not expect the adoption to have a material impact on
such financial statements.


In October 1997, the AICPA issued SoP No. 97-2, Software Revenue recognition,"
which provides guidance on recognizing revenue for software transactions. SOP
97-2 supersedes SoP No. 91-1 and is effective for transactions entered into by
the Company after July 31, 1998. The Company expects SoP No. 97-2 to have an
insignificant impact on the Company's revenue recognition policy. In March 1998,
the AICPA issued SoP No. 98-4, which deferred for one year, certain provisions
of SoP 97-2 relating to the determination of fair value of multiple elements
included in a software arrangement. While the ultimate resolution of the
guidance deferred by SoP 98-4 cannot be determined, the Company currently does
not expect such resolution will have a significant impact on its revenue
recognition policy.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities and is effective for all years beginning after June 15,
1999. The Company does not expect the adoption of SFAS 133 to have a material
impact on its financial position.


                                                                             30
<PAGE>

                                              REPORT OF INDEPENDENT ACCOUNTANTS

                           PUMA TECHNOLOGY

To the Board of Directors and Stockholders of
Puma Technology, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Puma
Technology, Inc. and its subsidiaries at July 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended July 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.


/s/ PricewaterhouseCoopers LLP
San Jose, California
August 24, 1998


                                                                             31