-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QH6SIF+XX76W11UVQIGHFxmByhkTpJ0090wq6s46TlykwqGmHLkhDFKE3VYTSMf7 56N4YXBn4w0jlQ9QI0rCoA== 0000950144-96-003508.txt : 19960619 0000950144-96-003508.hdr.sgml : 19960619 ACCESSION NUMBER: 0000950144-96-003508 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960617 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960618 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARBINGER CORP CENTRAL INDEX KEY: 0000947116 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 581817306 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-93804 FILM NUMBER: 96582422 BUSINESS ADDRESS: STREET 1: 1055 LENOX PARK BLVD CITY: ATLANTA STATE: GA ZIP: 30319 BUSINESS PHONE: 4048414334 8-K/A 1 HARBINGER CORPORATION 8-K/A 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 8-K/A -------------- Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report June 17, 1996 (Date of earliest event reported): April 4, 1996 HARBINGER CORPORATION (Exact name of Company specified in its charter) GEORGIA 0-26298 58-1817306 (State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.) incorporation or organization)
1055 LENOX PARK BOULEVARD, ATLANTA, GEORGIA 30319 (Address of principal executive offices) (Zip Code) (404) 841-4334 (Company's telephone number, including area code) This Form 8-K/A amends Registrant's previously filed Form 8-K dated April 4, 1996, which was filed on or about April 18, 1996. This document includes the financial statements and pro forma financial information which had been omitted from the previously filed document as permitted by Item 7(a)(4) of Form 8-K. ================================================================================ 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired. The following financial statements for NTEX Holding B.V. as of and for December 31, 1995 are attached hereto as Exhibit 99(a): -Report of the Auditors -Consolidated Balance Sheet as of December 31, 1995 -Consolidated Statement of Operations for the Year ended December 31, 1995 -Consolidated Statement of Shareholders' Equity (Deficiency )for the Year ended December 31, 1995 -Consolidated Statement of Cash Flows for the Year ended December 31, 1995 -Notes to Consolidated Financial Statements for the Year ended December 31, 1995 (b) Pro Forma Financial Information. Attached hereto as Exhibit 99(b) are the unaudited pro forma consolidated condensed statement of operations for the year ended December 31, 1995 and the unaudited pro forma consolidated condensed balance sheet as of December 31, 1995. (c) Exhibits. 2(a) Definitive Purchase agreement dated April 4, 1996 (previously filed). 99(a) Audited Financial Statements of NTEX Holding, B.V. for the year ended December 31, 1995. 99(b) Unaudited pro forma consolidated condensed statement of operations for the year ended December 31, 1995 and the unaudited consolidated condensed balance sheet as of December 31, 1995. 1 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HARBINGER CORPORATION /s/ Joel G. Katz -------------------------------- JOEL G. KATZ Vice President, Finance (Principal Financial Officer; Principal Accounting Officer) Date: June 17, 1996 2 4 INDEX TO FINANCIAL STATEMENTS
PAGE ---- NTEX HOLDING, B.V. Report of the Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3 Consolidated Balance Sheet as of December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4 Consolidated Statement of Operations for the Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5 Consolidated Statement of Shareholders' Equity (Deficiency) for the Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 Consolidated Statement of Cash Flows for the Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7 Notes to Consolidated Financial Statements for the Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8 HARBINGER CORPORATION Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . F-14 Unaudited Pro Forma Consolidated Statement of Operations for the Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-15 Notes to Unaudited Pro Forma Consolidated Condensed Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16
3 EX-99.(A) 2 CONSOLIDATED FINANCIAL STATEMENTS NTEX HOLDING B.V 1 EXHIBIT 99(a) CONSOLIDATED FINANCIAL STATEMENTS NTEX HOLDING B.V. ROTTERDAM, THE NETHERLANDS DECEMBER 31,1995 F-1 2 CONTENTS Report of the auditors / 3 Financial statements - - Consolidated Balance Sheet / 4 - - Consolidated Statement of Operations / 5 - - Consolidated Statement of Shareholders' Equity (Deficiency) / 6 - - Consolidated Statement of Cash Flows / 7 - - Notes to Consolidated Financial Statements / 8 F-2 3 REPORT OF THE AUDITORS We have audited the accompanying consolidated balance sheet of NTEX Holding B.V, as of December 31, 1995, and the related consolidated statement of operations, shareholders equity, and cash flows for the year then ended. 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of NTEX Holding B.V. at December 31, 1995, and the consolidated result of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States. /s/ MORET ERNST & YOUNG ACCOUNTANTS June 12, 1996 MORET ERNST & YOUNG ACCOUNTANTS F-3 4 NTEX HOLDING B.V. CONSOLIDATED BALANCE SHEET DECEMBER 31, 1995 ASSETS
Notes 1995 ------- -------------------------- USD NLG CURRENT ASSETS Trade accounts receivable less allowance for bad debts of USD 99,300 (NLG 159,128) 504,740 808,846 Other accounts receivable 153,492 245,971 Prepayments 81,171 130,076 ---------- ----------- Total current assets 739,403 1,184,893 ---------- ----------- COMPUTER EQUIPMENT, FIXTURES AND FITTINGS 4 1,012,059 1,621,825 Less: accumulated depreciation 4 (920,755) (1,475,510) ---------- ----------- 91,304 146,315 ---------- ----------- TOTAL ASSETS 830,707 1,331,208 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY/ (DEFICIENCY) CURRENT LIABILITIES Bank overdraft 5 352,819 565,392 Trade accounts payable: - - Lifetime Networks B.V. 12 203,834 326,644 - - Other 431,647 691,715 Other accounts payable and accrued expenses 489,898 785,062 Deferred revenue 473,112 758,162 Current portion of long-term debt 7 371,589 595,472 Subordinated debt 8 450,546 722,000 ---------- ----------- Total current liabilities. 2,773,445 4,444,447 ---------- ----------- PROVISIONS Pension provision 1,882 3,015 SHAREHOLDERS' EQUITY/(DEFICIENCY) Common stock, NLG 10 par value: - - Authorized charge - 152,250 Issued and fully paid shares - 52,525 327,769 525,250 Additional paid-in capital 5,325,478 8,534,078 Accumulated deficit (7,597,867) (12,175,582) ---------- ----------- (1,944.620) (3,116,254) ---------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIENCY) 830,707 1,331,208 ========== ===========
See accompanying notes F-4 5 NTEX HOLDING B.V. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
Notes 1995 ------- ---------------------------- USD NLG REVENUES Services 2,245,912 3,590,090 Software 125,944 201,322 Hardware 180,908 289,181 --------- --------- 2,552,764 4,080,593 --------- --------- COST OF SALES Services 487,344 775,949 Software 5,966 9,500 Hardware 246,918 393,143 --------- --------- 740,228 1,178,592 --------- --------- Gross profit 1,812,536 2,902,001 --------- --------- OPERATING COSTS Selling and marketing 484,372 771,217 General and administrative 1,153,945 1,837,311 Depreciation 4 40,041 63,753 Product development 3 435,662 693,661 --------- --------- 2,114,020 3,365,942 --------- --------- OPERATING LOSS (301,484) (463,941) Other income (expense): Interest expenses (99,301) (158,107) --------- --------- LOSS BEFORE INCOME TAXES (400,785) (622,048) Income taxes 2 --------- --------- NET LOSS (400,785) (622.048) ========= =========
See accompanying notes F-5 6 NTEX HOLDING B.V. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY/(DEFICIENCY) YEAR ENDED DECEMBER 31,1995
Additional Common Paid-In Accumulated stock capital deficit Total NLG NLG NLG NLG ------- ---------- ------------ ----------- Balance at December 31, 1994 525,250 8,534,078 (11,553,534) (2,494,206) Net loss - - (622,048) (622,048) ------- --------- ----------- ---------- Balance at December 31, 1995 525,250 8,534,078 (12,175,582) (3,116,254) ======= ========= =========== ========== Additional Currency Common Paid-In Accumulated Translation stock capital deficit adjustment Total -------- ---------- ----------- ----------- ----------- USD USD USD USD USD Balance at December 31, 1994 327,769 5,325,478 (7,209,694) - (1,556,447) Net loss (400,785) (400,785) Currency translation adjustment 12,612 12,612 ------- --------- ----------- ------ ---------- Balance at December 31, 1995 327,769 5,325,478 (7,610,479) 12,612 (1,944,620) ======= ========= =========== ====== ==========
See accompanying notes F-6 7 NTEX HOLDING B.V. CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1995
1995 ---------------------------- USD NLG OPERATING ACTIVITIES Net loss (400,785) (622,048) Adjustments to reconcile net loss to net cash used by operating activities: - - depreciation 40,041 63,753 Changes in operating assets and liabilities - - accounts receivable and prepayments (381,897) (608,057) - - trade accounts payable 346,691 552,002 - - other accounts payable & accrued expenses 321,204 511,421 - - pension provision 1,894 3,015 -------- -------- Net cash used by operating activities (72,852) (99,914) -------- -------- INVESTING ACTIVITIES Purchases of computer equipment. fixtures and fittings (58,505) (93,152) -------- -------- Net cash used in investing activities (58,505) (93,152) -------- -------- FINANCING ACTIVITIES Proceeds from subordinated debt 170,833 272,000 Repayments of bank loans (48,989) (78,000) -------- -------- Net cash provided by financing activities 121,844 194,000 -------- -------- Effect of exchange rate changes on cash (16,987) - -------- -------- Net decrease in bank overdraft (26,500) 934 Bank overdraft at beginning of year (326,319) (566,326) -------- -------- Bank overdraft at end of year (352,819) (565,392) ======== ======== OTHER INFORMATION Interest paid 74,536 118,676 ======== ========
See accompanying notes F-7 8 NTEX HOLDING B.V. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1995 1 ACCOUNTING POLICIES DESCRIPTION OF BUSINESS The Company is comprised of NTEX Holding B.V. and its two wholly-owned subsidiaries, NTEX Computer Centrum B.V. and NTEX datacommunications B.V. Each company is a Dutch limited liability corporation. The principal business activities of the Company are the development and marketing of computer software, videotex software, computer networks and medical databases, as well as providing related computer software consultancy, support and maintenance. GENERAL The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The financial statements are prepared for the purpose of inclusion in the consolidated financial statements of the Company's new parent company (see note 14) and are not the Company's statutory accounts. As a result, the statements include only the 1995 accounts of the Company. The Company's statutory year ends on December 31. The financial statements are presented in both the Company's functional currency, Dutch Guilders, and in US Dollars, the reporting currency of its new parent company (see note 14). The statements of operations and cash flows have been translated into US dollars at the weighted average exchange rate for the year. The balance sheet has been translated at the year-end exchange rate. The resulting net translation adjustment is included as a separate component of shareholders' equity/(deficiency). PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of NTEX Holding B.V. and its subsidiaries. Significant intercompany accounts, transactions and any unrealized profits on intercompany transactions have been eliminated in consolidation. REVENUE RECOGNITION Software Licenses The Company recognizes revenue from sales of software licenses upon delivery of the software product to a customer, unless the Company has significant related obligations remaining, such as installation services. When significant obligations remain after the software product has been delivered, revenue is not recognized until such obligations have been completed or are no longer significant. The costs of any insignificant obligations are accrued when the related revenue is recognized. F-8 9 Postcontract Customer Support and Software Services Revenue from Postcontract customer support is recognized over the period the customer support services are provided. Software services revenue is recognized as services are performed. Software Contracts For purposes of these statements revenue from customized software contracts has been deferred until client acceptance has taken place, while expenses incurred in relation to such contracts are recognized when incurred. Deferred income involved amounts to USD 130,000 (NLG 209,000) at the beginning of 1995 and USD 60,000 (NLG 96,000) at year-end. Revenue from software contracts is recognized on the percentage-of-completion method with progress-to-completion measured based upon labor costs incurred or achievement of contract milestones. COMPUTER SOFTWARE DEVELOPMENT COSTS Costs incurred in creating computer software products are expensed when incurred until the technological feasibility of the product has been established. Upon technological feasibility being established, software production costs are capitalized. Capitalized costs are amortized in proportion to current and expected revenues with an annual minimum amortization equal to the straight-line amortization over the remaining estimated economic life of the product. At December 31, 1995, no costs had been capitalized. COMPUTER EQUIPMENT, FIXTURES AND FITTINGS Computer equipment, fixtures and fittings are stated at cost. Depreciation is computed using the straight-line method at rates based on the useful lives of the various classes of assets, as follows: computer software - 16 2/3% to 33 1/3%; computer hardware - 33 1/3%; fixtures & fittings - 20%. PENSIONS The Company has established a defined benefit pension plan covering certain employees. Obligations for prior and future services are provided for on the basis of actuarial calculations. CASH AND CASH EQUIVALENTS The Company considers all highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. 2 INCOME TAXES The Company's operating loss carryforwards as at December 31, 1995, totaled approximately USD 2,600,000 (NLG 4,100,000). The tax asset arising from these net operating loss carryforwards has been fully offset by an allowance due to the uncertainty of their realization. These amounts may be carried forward indefinitely. NTEX Holding B.V. does not form a fiscal entity with its subsidiaries. Total loss carry forwards of the subsidiaries amount to USD 4,200,000 (NLG 6,700,000) F-9 10 3 PRODUCT DEVELOPMENT COSTS During the period 1992 through 1995 the Company incurred and expensed USD 1,945,882 (NLG 3,098,234) in the development of its 'PhoTeX' software product. These amounts were expensed because the project had not yet met the capitalization criteria regarding technical feasibility. In 1993 the Netherlands Ministry of Economic Affairs agreed to assist in the development of the 'PhoTeX' software product. This assistance was made by providing development funding in the form of TOK credits. The cumulative amount of credits received as at December 31, 1995, was USD 806,026 (NLG 1,291,657) on which interest is charged at the rate of 8%. The credits are recognized in line with expenses incurred and are netted against the product development costs being written off. Over the period 1996 to 2005, 32% of revenue realized on the sale of the PhoTeX software product will be applied towards the repayment of TOK credits and accrued interest. Any balance which remains outstanding as at 2006 will be waived. Sales of this product are expected to commence in 1996. 4 COMPUTER EQUIPMENT, FIXTURES AND FITTINGS
USD NLG Cost as at January 1, 1995 880,826 1,528,673 Additions 58,505 93,152 -------- ---------- 939,331 1,621,825 -------- ---------- Accumulated depreciation as at January 1, 1995 (813,458) (1,411,757) Depreciation (40,041) (63,753) -------- ---------- Accumulated depreciation as at December 31, 1995 (853,499) (1,475,510) -------- ---------- Effect of exchange rate changes 5,472 - -------- ---------- Net book value as at December 31, 1995 91,304 146,315 ======== ==========
5 BANK OVERDRAFT The Company maintains an overdraft facility with a bank which has a maximum limit of USD 436,817 (NLG, 700,000). The facility is secured by the: - - pledging of certain computer equipment, fixtures and fittings; - - pledging of trade accounts receivable and the rights to credit insurance receipts; and - - joint guarantees offered by NTEX Holding B.V., NTEX Computer Centrum B.V. and NTEX datacommunications B.V. Interest is charged on the overdrawn balance at the rate of 7.5%. F-10 11 6 ACCRUED PENSION COST The Company has established a defined benefit pension plan that covers 17% of employees. Benefits are based on years of service and each employee's compensation during the last five years of employment. The Company's funding policy is to make payments to an assurance company based upon a calculated interest rate of 4%. A discount is granted based upon a 10-year average yieldrate on certain investments as defined by the insurance company. In 1996 the Company established a defined contribution pension plan covering the majority of employees not included in the existing defined benefit pension plan. The following table sets forth the funded status and amount recognized for the Company's defined benefit pension plan in the consolidated balance sheet at December 31, 1995:
USD NLG Actuarial present value of accumulated benefit obligation, including vested benefits in 1995 61,888 99,175 ======= ======= Actuarial present value of projected benefit obligation for services rendered to date 103,793 166,328 Plan assets at fair value, primarily listed stocks 66,771 107,000 ------- ------- Projected benefit obligation in excess of plan assets 37,022 59,328 Unrecognized net loss from past experience different from that assumed and effects of changes in assumptions 8,139 13,043 Unrecognized net obligation at December 31, 1995 27,001 43,270 ------- ------- Accrued pension cost 1,882 3,015 ======= =======
Net pension cost included the following components:
USD NLG Service cost - benefits earned during the period 15,428 24,564 Interest cost on projected benefit obligation 4,764 7,586 Actual return on plan assets (3,052) (4,860) Net amortization and deferral 1,359 2,164 ------- ------- Net pension cost 18,499 29,454 ======= =======
Following is a summary of significant actuarial assumptions used: Discount rates 6% Rates of increase in compensation levels general increase: 2% specific increase above inflation: - up to 54 years 2% - 55 years and older 0% Expected long-term rate of return on assets 6%
F-11 12 7 LONG-TERM DEBT The long-term debt was repaid on June 5, 1996. Interest was charged on this loan at the rate of 8%. 8 SUBORDINATED DEBT The subordinated debt is payable to the shareholders and was repaid on April 4. 1996 (see note 14). Interest was charged on this loan at the rate of 11.5%. 9 COMMITMENTS Future minimum payments under noncancelable operating leases with initial terms of one year or more consisted of the following as at December 31, 1995:
USD NLG 1996 276,079 442,416 1997 243,179 389,695 1998 130,680 209,415 1999 4,062 6,510 2000 - - Thereafter - - ------- --------- Total minimum lease payments 654,000 1,048,036 ======= =========
Operating lease payments made in 1995 totaled USD 295,190 (NLG 470,000). A bank guarantee has been provided by the Company guaranteeing building operating lease payments to a maximum of USD 81,123 (NLG 130,000). Building operating lease payments are subject to an annual revision on July 1. 10 CONTINGENT LIABILITIES A credit was granted for the development of the 'PhoTeX' software product, (part of) which credit may have to be paid back. Refer to note 3 for further details. A claim for USD 76,131 (NLG 122,000) has been filed against NTEX datacommunications B.V. on the grounds of damages incurred from the perceived malfunctioning of software supplied to the plaintiff. The court is yet to make final ruling on this matter. NTEX datacommunications B.V.'s legal adviser and Directors regard the claim as unfounded. No provision for this claim has been made in the financial statements. F-12 13 11 COOPERATION AGREEMENT In conjunction with the sale of certain business units to a third party, NTEX datacommunications B.V. has entered into an agreement with the purchaser to purchase services totalling a minimum of USD 149,766 (NLG 240,000) between November 1, 1995, and October 31, 1996, and for a minimum of USD 131,045 (NLG 210,000) for the year ended October 31, 1997. During 1995, the Company purchased services totalling USD 178,177 (NLG 283,694) under this agreement which were charged on normal terms and conditions. NTEX datacommunications B.V. will receive USD 56,162 (NLG 90,000) as compensation for the NTEX Holding B.V. group waiving their rights under the cooperation agreement. 12 TRANSACTIONS WITH RELATED PARTIES During the year the Company purchased services from Lifeline Networks B.V., a former subsidiary of NTEX Holding B.V. and a company in which Mr. Nederlof, a director of NTEX Holding B.V., holds an interest. Fees were charged on normal terms and conditions and accounted in 1995 for 7% of total expenses. On the other hand, Lifeline Networks B.V. purchased technical and consulting services from NTEX Holding B.V. during the year in the amount of NLG 3000,000. Trade accounts payable as at December 31, 1995 includes an amount of USD 203,834 (NLG 326,644) which is payable to Lifeline. 13 FINANCIAL INSTRUMENTS The Company believes there are no material differences between the fair value and carrying amounts of financial instruments. Non-disputed trade accounts receivable are insured with a third party. The Company is not exposed to any concentrations of credit risk. 14 SUBSEQUENT EVENT On April 4, 1996, 100% of the shares in NTEX Holding B.V. were acquired by Harbinger Corporation, a United States company whose shares are publicly traded. F-13 EX-99.(B) 3 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET 1 EXHIBIT 99 (b) HARBINGER CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1995 ------------------------------------------------ Historical ----------------- Pro Forma Pro Forma Company NTEX Adjustments Consolidated ------- ------ ----------- ------------ (in thousands, except for share and per share data) ASSETS (2) Current Assets: Cash and cash equivalents $11,918 $ 0 (3,195)(1) $ 8,723 Accounts receivable, net 5,624 659 6,283 Royalty receivable 1,382 0 1,382 Deferred income taxes 999 0 999 Due from joint venture 566 0 566 Other current assets 283 81 364 ------- ------- ------- Total current assets 20,772 740 18,317 ------- ------- ------- Property and equipment, net 3,772 91 3,863 Investments in joint ventures 7,480 0 7,480 Intangible assets, net 6,298 0 7,094 (1) 8,943 (4,449)(1) Deferred income taxes 1,938 0 1,938 ------- ------- ------- $40,260 $ 831 $40,541 ======= ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,335 $ 638 $ 1,973 Accrued expenses 2,759 490 650 (1) 3,899 Deferred revenues 2,358 473 2,831 Payable due to acquisitions 0 0 0 Line of credit/Debt 0 1,175 1,175 ------- ------- ------- Total current liabilities 6,452 2,776 9,878 ------- ------- ------- Redeemable preferred stock: Zero Coupon, $1.00 redemption value; 4,000,000 issued 0 0 0 Puttable common stock: $0.0001 par value; 550,000 issued 4,675 0 4,675 Shareholders' equity: Preferred stock; 250,000 issued 2,485 0 2,485 Common stock 9,690,684 issued 1 328 (328)(1) 1 Additional paid in capital 32,201 5,325 (5,325)(1) 33,505 1,304 (1) Accumulated deficit (5,554) (7,598) 7,598 (1) (10,003) (4,449)(1) ------- ------- ------- Total shareholders' equity 29,133 (1,945) 25,988 ------- ------- ------- $40,260 $ 831 $40,541 ======= ======= =======
F-14 2 HARBINGER CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Twelve Months Ended December 31, 1995 ------------------------------------------------ Historical ------------------ Pro Forma Pro Forma Company NTEX Adjustments Consolidated -------- ---- ----------- ------------ (in thousands, except for share and per share data) (2) Revenues: Services and other $ 16,418 $2,426 $ 18,844 Software 6,699 126 6,825 ---------- ------ ---------- Total revenues 23,117 2,552 25,669 ---------- ------ ---------- Direct costs: Services and other 4,323 734 5,057 Software 1,349 6 1,355 ---------- ------ ---------- Total direct costs 5,672 740 6,412 ---------- ------ ---------- Gross margin 17,445 1,812 19,257 ---------- ------ ---------- Operating costs: Selling and marketing 4,875 484 5,359 General and administrative 4,832 1,154 5,986 Depreciation and amortization 794 40 312 (3) 1,146 Product development 3,809 436 4,245 ---------- ------ ---------- Total operating costs 14,310 2,114 16,736 ---------- ------ ---------- Operating income (loss) 3,135 (302) 2,521 Interest expense (income), net (65) 0 256 (4) 191 Equity in losses of joint venture 1,266 0 1,266 ---------- ------ ---------- Income (loss) before income tax expense 1,934 (302) 1,064 Income tax expense 687 99 786 ---------- ------ ---------- Net income (loss) 1,247 (401) 278 Preferred stock dividends (199) 0 (199) ---------- ------ ---------- Net income (loss) applicable to common shareholders $ 1,048 ($401) $ 79 ========== ====== ========== Net income (loss) per share of common stock $ 0.12 $ 0.01 ========== ========== Weighted average common and common equivalent shares outstanding 8,932,000 9,004,000 ========== ==========
The Company charged $4,449,000 to its histocial statement of opertions in the period ended March 31, 1996 resulting from a valuation of acquired in-process product development costs associated with the acquisition. This non-recurring charge was directly attributable to the transaction and is not included in this pro forma statement. F-15 3 HARBINGER CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Effective March 31, 1996, Harbinger ("the Company") acquired all of the common stock of NTEX Holding, B.V. ("NTEX"), a Dutch corporation based in Rotterdam, The Netherlands for $3,195,000 in cash, the issuance of 71,852 shares of the company's common stock and warrants to purchase up to 12,500 shares of the Company's stock at a price of $16.75 per share. The company recorded the acquisition, which was completed on April 4, 1996, using the purchase method of accounting with $4,449,000 of the purchase price allocated to in-process product development and charged to the consolidated statement of operations on March 31, 1996. The unaudited pro forma consolidated statements of operations for the year ended December 31, 1995 and the unaudited pro forma consolidated balance sheet as of December 31, 1995, illustrate the estimated effects of the NTEX acquisition as if it had occurred as of the beginning of the period presented. The unaudited pro forma consolidated financial statements have been prepared using the purchase method of accounting, whereby the total cost of the acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the effective date of such acquisition. For purposes of the unaudited pro forma consolidated financial statements, such allocations have been made based upon currently available information and management's estimates. The historical financial statements are derived from the audited financial statements of the Company as of and for December 31, 1995 and the audited statements of NTEX as of and for December 31, 1995. The unaudited financial statements reflect all adjustments which in the opinion of management are necessary for a fair presentation of results for the respective periods. The unaudited pro forma consolidated financial statements do not purport to represent what the results of operations or financial position of the company would actually have been if the acquisition had occurred on such dates or to project the results of operations for financial position of the Company for any future date or period. The unaudited pro forma consolidated financial statements should be read together with the Financial Statements and Notes thereto of the Company. 1) Reflects adjustments to record the acquisition of NTEX including the purchase price allocation. The purchase price of NTEX includes the payment of $3,195,000 in cash to the stockholders of NTEX and assumes certain other payments in Harbinger common stock and warrants in the amount of $1,304,000. The purchase price allocation reflects: (i) a $2,648,000 increase in goodwill and other intangibles; (ii) a $4,449,000 increase in the Company's accumulated deficit resulting from a valuation of in-process research and development, which was charged to the consolidated statement of operations on March 31, 1996; (iii) a provision of $650,000 for certain other liabilities; and (iv) the elimination of the historical equity accounts of NTEX. 2) Reflects the balance sheet of NTEX as of December 31, 1995 and the historical operating results for the year ended December 31, 1995. F-16 4 3) Reflects an increase in amortization expense as a result of the acquisition of NTEX. Amortization of goodwill arising from the acquisition is provided using the straight-line method over ten years. Software development costs are amortized on a product-by product basis at the greater of the amounts computed using (a) the ratio of current gross revenues for a product or enhancement to the total current and anticipated future gross revenues for that product or enhancement or (b) the straight-line method over the remaining estimated economic life of the product or enhancement, not to exceed five years. 4) Reflects interest expense on the cash payment of $3,195,000 to fund the acquisition at the prime rate (8%) for the period. F-17 -----END PRIVACY-ENHANCED MESSAGE-----