-----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, Jo10aYYLD0Mz4kFdhDNljASOnz+CHOpBWa4SBYyOuYXaab4yU6EZ2C5nkRhk+QYr +R1wnyRjmMrZR7aHW4jEgg== 0000950144-96-003870.txt : 19960702 0000950144-96-003870.hdr.sgml : 19960702 ACCESSION NUMBER: 0000950144-96-003870 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960701 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960701 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: 96589380 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 July 1, 1996 (Date of earliest event reported): April 19, 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 19, 1996, which was filed on or about May 2, 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 INOVIS GmbH & Company are attached hereto as Exhibit 99(a): -Independent Auditors' Report -Balance Sheet as of December 31, 1995 -Statement of Operations for the Year ended December 31, 1995 -Statement of Partners Equity for the Year ended December 31, 1995 -Statement of Cash Flows for the Year ended December 31, 1995 -Notes to 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 19, 1996 (previously filed). 99(a) Audited Financial Statements of INOVIS GmbH & Co. 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. 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: July 1, 1996 4 INDEX TO FINANCIAL STATEMENTS PAGE INOVIS GMBH & COMPANY ---- Independent Auditors' Report........................................................................... F-3 Balance Sheet as of December 31, 1995.................................................................. F-4 Statement of Operations for the Year ended December 31, 1995........................................... F-5 Statement of Partners' Equity for the Year ended December 31, 1995..................................... F-6 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-15 Unaudited Pro Forma Consolidated Statement of Operations for the Year ended December 31, 1995................................................................ F-16 Notes to Unaudited Pro Forma Consolidated Financial Statements........................................................................ F-17
F-1 EX-99.(A) 2 AUDITED FINANCIAL STATEMENTS OF INOVIS GMBH & CO. 1 EXHIBIT 99(a) INOVIS GmbH & Co. computergestutze informationssysteme Financial Statements December 31, 1995 With Independent Auditor's Report Thereon F-2 2 INDEPENDENT AUDITOR'S REPORT The Partners INOVIS GmbH & Co. computergestutzte Informationssysteme We have audited the accompanying balance sheet of INOVIS GmbH & Co. computergestutzte Informationssyteme as of December 31, 1995 and the related statement of earnings and accumulated deficit, statement of partner's 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material aspects, the financial position of INOVIS GmbH & co. computergestutze Informationssyteme as of December 31, 1995 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States. June 11, 1996 /s/ KPMG Deutsche Treuhand-Gesellschaft AG ------------------------------------------ Munchen, Germany KPMG Deutsche Treuhand-Gesellschaft AG F-3 3 INOVIS Gmbh & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME BALANCE SHEET DECEMBER 31, 1995
1995 ----------- ASSETS Current Assets: Cash and cash equivalents $ 1,638 Accounts receivable, less allowance for doubtful accounts of $9,370 566,279 Due from partners (note 5) 31,547 Other current assets (note 4) 60,080 Prepaid expenses 8,934 ----------- Total current assets 668,478 ----------- Property and equipment, net (note 2) 314,212 Investments in subsidiary and related company (note 3) 49,650 ----------- $ 1,032,340 =========== LIABILITIES AND PARTNERS' EQUITY Current liabilities: Short-term borrowings (note 6) $ 185,896 Loan from silent partner (note 7) 139,860 Accounts payable 40,866 Advance payments received 16,213 Due to affiliated companies (note 8) 227 Due to partners (note 9) 138,042 Accrued expenses and other liabilities (note 10) 308,720 ----------- Total current liabilities 829,824 ----------- Partners' equity: Partners' paid-in capital 308,866 Retained earnings (105,611) Foreign currency translation adjustment (739) ----------- Total partners' equity 202,516 Commitments and contingencies (note 11) ----------- $ 1,032,340 ===========
See accompanying notes to financial statements. F-4 4 INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT YEAR ENDED DECEMBER 31,1995
1995 ---------- Revenue: Services $2,435,217 Software 524,306 ---------- Total revenues (note 12) 2,959,523 ---------- Direct costs: Services 907,171 Software 34,722 ---------- Total direct costs 941,893 ---------- Gross profit 2,017,630 ---------- Operating costs: Selling and marketing 712,463 General and administrative 587,738 Product development 437,162 Depreciation and amortization 178,358 ---------- Total operating costs 1,915,721 ---------- Operating Income 101,909 Interest expense, net (32,651) ---------- Income before income taxes 69,258 Income taxes (note 13) 89,144 ---------- Net loss 19,886 Accumulated deficit, beginning of the year 84,999 Profit distribution to unlimited partner 726 ---------- Accumulated deficit, end of year $ 105,611
========== See accompanying notes to financial statements. F-5 5 INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME STATEMENT OF PARTNERS' EQUITY
Partner Foreign Fixed Capital Retained Currency Accounts Earnings Adjustment Total ------------- ---------- ---------- ------- As at January 1, 1995 $308,866 (84,999) - 223,867 Capital contributions during the year - - - - Drawings during year - - - - Profit distribution to unlimited partner - (726) - (726) Result for year - (19,866) (739) (20,625) -------- -------- ------ ------- As at December 31, 1995 $308,866 (105,611) (730) 202,516 ======== ======== ====== =======
F-6 6 INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1995
1995 --------- Cash flows from operating activities: Net loss $ (19,886) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 178,358 Changes in operating assets and liabilities Trade receivables, net (205,173) Other current assets (20,926) Prepaid expenses (3,346) Accounts payable (25,265) Advance payments received 16,100 Income taxes payable (90,969) Decrease in net liabilities to affiliated companies (17,048) Accrued expenses and other liabilities 127,590 --------- Net cash used by operating liabilities (60,565) --------- Cash flows from investing activities: Capital expenditures (259,330) --------- Net cash used by investing activitie (259,330) --------- Cash flows from financing activities: Proceeds from net borrowings under line-of-credit agreements 96,455 Profit distributed to unlimited partner (726) Decrease of net liabilities to partners (3,167) --------- Net cash provided by financing activities 92,562 --------- Effect of exchange rate changes on cash 16,260 --------- Decrease in cash (211,073) Cash, beginning of year 212,711 --------- Cash, end of year $ 1,638 =========
See accompanying notes to financial statements. F-7 7 INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS AND PRESENTATION INOVIS GmbH & Co. computergestutze Informationssysteme (the "Company"), a partnership, develops, markets and supports software products especially for the communication between business partners (EDI) and provides services for the administration and distribution of business data (Electronic commercial solutions). The business activities are based in Germany. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabiities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Commpany owns a 100% interest in INOVISmedia Gesellschaft fur Informatik mbH which was not consolidated in view of the immaterial assets and liabilities as well as the immaterial revenues and expenses involved. All amounts are in US-dollars. REVENUE RECOGNITION The Company recognizes revenue in accordance with the American institues of Certified Public Accountants' Statement of Position 91-1 as follows: - - Projects Revenues derived from services rendered to cutomers are recognized over the service period applying the percentage-of-compleetion method for uncompleted projects at year-end. - -EDI business Revenues arising from rendering EDI services are recognized on a contraced monthly basis. - -Software sales Revenues derived from the sale of software products are recognized upon shipment to customer. CASH AND CASH EQUIVALENTS The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. F-8 (Continued) 8 INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME Notes to Financial Statements PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Years Computer and communication equipment 3-4 Software 3 Furniture, fixtures and leasehold improvements 4-8 Automobiles 4 INVESTMENTS IN SUBSIDIARY AND COMPANY RELATED The Company's 100% investment in INOVISmedia Gesellschaft fur Informatik mbH and its 14% investment in RegioService-Gesellschaft fur regionale Netzwerkdlenste mbH are accounted for at acquisitions cost which equal the Company's capital contribution. INCOME TAXES The Company accounts for income taxes under the asset and liability method of accounting for income taxes in accordance with Statement of Financial Accounting Standards, No. 109,"Accounting for Income Taxes". Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year which those temporary differences are expected to be recovered or settled. FOREIGN CURRENCIES The functional currency of the Company is the Deutsche mark. There are no foreign currency transactions. The transactions of the financial statements denominated in Deutsche Mark into US-$ was made in accordance with FAS 52 to facilitate US reporting. (Continued) F-9 9 INOVIS GMBH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME Notes to Financial Statements RELATED PARTIES The Company has business relations with the following companies which are considered as related parties: - - INOVIS Verwaltungs GmbH, - - RegloService-Gesellschaft fur regionale Netzwerkdienste mbH. INOVIS Verwaltungs GmbH, the unlimited liability partner of the Company, holds an interest of 14.4% in the partnership's capital. The Company was charged by INOVIS Verwaltungs GmbH for administration expenses totalling $142,945 in 1995. RegioService-Gesellschaft fur regionale Netzwerkdienste mbH is a joint venture in which the Company has a 14% stake. The purpose of the joint venture is the implementation and maintenance of an on-line information network for the Karlsruhe, Germany, area. The other joint venture partners are software or research companies and individuals. 2. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following at December 31, 1995: Computer and communication equipment $1,182,156 Software 403,929 Furniture, fixtures and leasehold improvements 202,745 Automobiles 70,693 ---------- 1,859,523 less accumulated depreciation and amortization (1,545,311) ---------- $ 314,212 ==========
3. INVESTMENTS IN SUBSIDIARY AND RELATED COMPANY Investments consist of the following as at December 31, 1995: INOVISmedia Gesellschaft fur Informatik mbH (100% subsidiary) $ 34,965 RegioService - Gesellschaft fur regionale Netzwerkdienste mbH (14% owned by the Company) 14,685 ---------- $ 49,650 ==========
F-10 (Continued) 10 INOVIS GMBH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME Notes to Financial Statements The following table sets forth the condensed balance sheet and statement of operations of INOVISmedia Gesellschaft fur Informatik mbH as of and for the year ended December 31, 1995. Balance sheet Property and equipment $18,289 Current assets 11,943 ------- $30,232 ======= Accruals and current liabilities $ 8,825 Shareholder's equity 21,407 ------- $30,232 ======= Statement of operations: Revenue $15,497 General and administrative 16,983 Depreciation and amortization 16,235 ------- Operating loss 17,721 Interest expense, net 949 Other income, net 4,696 Income taxes 1,611 ------- Loss after taxes $15,585 =======
RegioService - Gesellschaft fur regionale Netzwerkdienste mbH was founded in December 1995 and did not have any business activities in 1995. 4. OTHER CURRENT ASSETS Other current assets consist of: Unbilled fees $38,811 Supplies 13,949 Trade tax refund 4,295 Sundry 3,025 ------- $60,080 =======
F-11 (Continued) 11 INOVIS GmbH & Co. computergestutzte Informationssysteme Notes to Financial Statements 5. DUE FROM PARTNERS The amount results from short-term loans granted by some limited liable partners in the past which were netted with prior years losses attributable to those partners. The loans bear interest of 10% p.a. 6. SHORT-TERM BORROWINGS Short-term borrowings comprise: Current account Deutsche Bank, Karlsruhe $143,945 Dresdner Bank, Karlsruhe 29,575 Cash in transit 12,376 -------- $185,896 ========
The current accounts bear interest of 10% p.a. at year-end. Average interes rate during the year was 10.25% (from 9.75% to 11.00%). Interest expense was $7,516 for the year. The borrowings are granted under line-of-credit agreements. According to a blanket assignment agreement between INOVIS and Deutsche Bank dated November 11, 1993 the Company automatically transfers the legal ownership of its accounts receivable to Deutsche Bank as security for all current and future claims of Deutsche Bank. 7. LOAN FROM SILENT PARTNER The silent partner, Mittelstandische Beteiligungsgesellschaft Baden-Wurttemberg GmbH, a state owned venture capitalist firm, granted in 1986 a loan of $139,860 for the development of a data base system. The loan bears an interest of 8,25% p.a. The term silent partner is used to indicate that the entity (Mittelstandische Beteiligungsgesellschaft Baden-Wurttemberg) has no say in the running of the business. The silent partnership was terminated effective January 31, 1996 and a new annuity loan bearing interest of 6% p.a. replaced the agreement. The loan is repayable by monthly installments within 3 years. F-12 12 INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME Notes to Financial Statements 8. DUE TO AFFILIATED COMPANIES The amount is due to INOVISmedia Gesellschaft fur Informatik mbH. 9. DUE TO PARTNERS The amount results from short-term loans granted by some limited liable partners in prior years. The loans were matched with losses attributable to those partners and bear interest of 10% p.a. 10. ACCRUED EXPENSES AND OTHER LIABILITIES The accrued expenses and other liabilities mainly consist of an accrual for untaken vacation as of year end ($115,664), VAT payables ($48,863), a trade tax payable for the year 1994 ($38,728), social security expenses ($32,820) as well as an accrual for outstanding invoices ($31,224). 11. COMMITMENTS AND CONTINGENCIES The Company leases office facilities, furniture and equipment under operating leases with remaining terms of up to seven years. Future minimum lease payments under non-cancellable operating leases are as follows:
Year ending December 31 1996 $276,923 1997 226,573 1998 222,378 1999 161,538 2000 18,182 2001 17,483 2002 12,587 thereafter - -------- Total minimum lease payments $935,664 ========
F-13 13 INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME Notes to Financial Statements 12. REVENUES Revenues were all earned in the Federal Republic of Germany. 13. INCOME TAXES Income tax expense for the year ending December 31, 1995:
Current Deferred Total ------- -------- ----- Trade income tax $89,144 0 89,144
The tax effects of temporary differences between German GAAP and US-GAAP (arising from the application of the percentage of completion method and considering accrued expenses for untaken vacation of the partners) result in a deferred tax asset of $29,000 applying a future tax rate of 57%. A full valuation allowance against this deferred tax asset has been made due to the uncertainty surrounding its realization. 14. CASH FLOW INFORMATION The following amounts were paid in 1995: Interest $29,900 Income taxes $91,852
15. SUBSEQUENT EVENTS Effective March 31, 1996 Harbinger Corporation acquired a 100% ownership interest in INOVIS GmbH & Co. Computergestutzte Informationssysteme from the partners by exchanging 140,184 unregistered shares of Harbinger Corporation's common stock for 100% ownership of the partnership. F-14 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 Historical Pro Forma ---------------- Pro Forma Pro Forma ---------- Pro Forma --------- Company NTEX Adjustments Consolidated INOVIS Adjustments Consolidated ------- ---- ----------- ------------ ------ ----------- -------------- (in thousands, except for share and per share data) ASSETS (2) (6) Current Assets: Cash and cash equivalents $11,918 $ 0 (3,195)(1) $ 8,723 $ 2 (1,409)(5) $ 7,316 Accounts receivable, net 5,624 659 6,283 597 6,880 Royalty receivable 1,382 0 1,382 0 1,382 Deferred income taxes 999 0 999 0 999 Due from joint venture 566 0 566 0 566 Other current assets 283 81 364 69 433 ------- ---- ------- ------ ------- Total current assets 20,772 740 18,317 668 17,576 ------- ---- ------- ------ ------- Property and equipment, net 3,772 91 3,863 0 3,863 Investments in joint ventures 7,480 0 7,480 314 7,794 Investment in subsidiary and related co. 0 0 0 50 50 Intangible assets, net 6,298 0 7,094 (1) 8,943 0 4,936 (5) 10,579 (4,449)(1) (3,300)(5) Deferred income taxes 1,938 0 1,938 0 1,938 ------- ---- ------- ------ ------- $40,260 $831 $40,541 $1,032 $41,800 ======= ==== ======= ====== =======
F-15 2 HARBINGER CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1995 ------------------------------------------------------------------------------------ Historical Historical -------------- Pro Forma Pro Forma ---------- Pro Forma Pro Forma Company NTEX Adjustments Consolidated INOVIS Adjustments Consolidated ------- ---- ----------- ------------ ------ ----------- ------------ (in thousands, except per share data) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,335 $ 638 $ 1,973 $ 41 $ 2,014 Accrued expenses 2,759 490 650 (1) 3,899 309 650 (5) 4,858 Deferred revenues 2,358 473 2,831 16 2,847 Payable due to acquisitions 0 0 0 0 557 (5) 557 Line of credit/Debt 0 1,175 1,175 464 1,639 ------- ------- -------- ------ ------- Total current liabilities 6,452 2,776 9,878 830 11,915 ------- ------- -------- ------ ------- Redeemable preferred stock: Zero Coupon, $1.00 redemption value; 4,000,000 issued 0 0 0 0 0 Puttable common stock: $0.0001 par value; 550,000 issued 4,675 0 4,675 0 4,675 Shareholders' equity: Preferred stock; 250,000 issued 2,485 2,485 2,485 Common stock; 9,902,720 issued 1 328 (328)(1) 1 0 0 (5) 1 Additional paid in capital 32,201 5,325 (5,325)(1) 33,505 309 (309)(5) 36,027 1,304 (1) 2,522 (5) Accumulated deficit (5,554) (7,598) 7,598 (1) (10,003) (107) 107 (5) (13,303) (4,449)(1) (3,300)(5) ------- ------- -------- ------ ------- Total shareholders' equity 29,133 (1,945) 25,988 202 25,210 ------- ------- -------- ------ ------- $40,260 $ 831 $ 40,541 $1,032 $41,800 ======= ======= ======== ====== =======
F-16 3 HARBINGER CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Twelve Months Ended December 31, 1995 ----------------------------------------------------------------------------------- Historical Historical -------------- Pro Forma Pro Forma ---------- Pro Forma Pro Forma Company NTEX Adjustments Consolidated INOVIS Adjustments Consolidated ------- ---- ----------- ------------ ------ ----------- ------------ (in thousands, except per share data) (2) (6) Revenues: Services and other $16,418 $2,426 $18,844 $2,435 $21,279 Software 6,699 126 6,825 524 7,349 ------- ------ ------- ------ ------- Total revenues 23,117 2,552 25,669 2,959 28,628 ------- ------ ------- ------ ------- Direct costs: Services and other 4,323 734 5,057 907 5,964 Software 1,349 6 1,355 35 1,390 ------- ------ ------- ------ ------- Total direct costs 5,672 740 6,412 942 7,354 ------- ------ ------- ------ ------- Gross margin 17,445 1,812 19,257 2,017 21,274 ------- ------ ------- ------ ------- Operating costs: Selling and marketing 4,875 484 5,359 712 6,071 General and administrative 4,832 1,154 5,986 588 6,574 Depreciation and amortization 794 40 312 (3) 1,146 437 294 (7) 1,877 Product development 3,809 436 4,245 178 4,423 ------- ------ ------- ------ ------- Total operating costs 14,310 2,114 16,736 1,915 18,945 ------- ------ ------- ------ ------- Operating income (loss) 3,135 (302) 2,521 102 2,329 Interest expense (income), net (65) 0 256 (4) 191 33 157 (8) 381 Equity in losses of joint venture 1,266 0 1,266 0 1,266 ------- ------ ------- ------ ------- Income (loss) before income tax expense 1,934 (302) 1,064 69 682 Income tax expense 687 99 786 89 875 ------- ------ ------- ------ ------- Net income (loss) 1,247 (401) 278 (20) (193) Preferred stock dividends (199) 0 (199) 0 (199) ------- ------ ------- ------ ------- Net income (loss) applicable to common shareholders $ 1,048 $ (401) $ 79 $ (20) $ (392) ======= ====== ======= ====== ======= Net income (loss) per share of common stock $ 0.12 $ 0.01 $ (0.05) ======= ======= ======= Weighted average common and common equivalent shares outstanding 8,932 9,004 8,545 ======= ======= =======
The Company charged $7,849,000 to its historical statement of operations in the period ended March 31, 1996 resulting from a valuation of acquired in-process product development costs associated with the acquisitions. This non-recurring charge was directly attributable to the transactions and is not included in this pro forma statement. F-17 4 HARBINGER CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Effective March 31, 1996, Harbinger ("the Company") acquired all of the shares of INOVIS GmbH & Co. ("INOVIS"), a German partnership based in Karlsruhe, Germany for $1,409,000 in cash, $557,000 note payable, the issuance of 140,184 shares of the Company's common stock at a price of $17.25 per share and warrants to purchase up to 20,000 shares of the Company's stock. The company recorded the acquisition, which was completed on April 19, 1996, using the purchase method of accounting with $3,300,000 of the purchase price allocated to in-process product development and charged to the consolidated statement of operations on March 31, 1996. 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 at a price of $16.75 per share and warrants to purchase up to 12,500 shares of the Company's stock. 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 acquisitions as if they had occurred as of the beginning of and for 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 for the year ended December 31, 1995, and the audited statements of INOVIS and NTEX as of and for December 31, 1995. 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-18 5 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 NTEX acquisition at the prime rate (8%) for the period. 5) Reflects adjustments to record the acquisition of INOVIS including the purchase price allocation. The purchase price of INOVIS includes the payment of $1,409,000 in cash and $557,000 note payable to shareholders of INOVIS and assumes certain other payments in Harbinger common stock and warrants in the amount of $2,522,000. The purchase price allocation reflects: (i) a $1,536,000 increase in goodwill and other intangibles; (ii) a $3,300,000 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 INOVIS. 6) Reflects the balance sheet of INOVIS as of December 31, 1995 and the historical operating results for the year ended December 31, 1995. 7) Reflects an increase in amortization expense as a result of the acquisition of INOVIS. 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. 8) Reflects interest expense on the cash payment of $1,409,000 and the note payable in the amount of $557,000 to fund the INOVIS acquisition at the prime rate (8%) for the period. F-19 -----END PRIVACY-ENHANCED MESSAGE-----