-----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, M0iUb2f80l4qRcHd9qSUhMmj2BvEqFEycu2tF0dDN4osbO2SP8D1fmc5wTW3grXk Xghv6ihMq2M1IFARzcZxzw== 0000950144-96-003918.txt : 19960703 0000950144-96-003918.hdr.sgml : 19960703 ACCESSION NUMBER: 0000950144-96-003918 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960702 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960702 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: 96590140 BUSINESS ADDRESS: STREET 1: 1055 LENOX PARK BLVD CITY: ATLANTA STATE: GA ZIP: 30319 BUSINESS PHONE: 4048414334 8-K/A 1 HARBINGER CORP :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 2, 1996 (Date of earliest event reported): April 20, 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 20, 1996, which was filed on or about May 3, 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 Harbinger N.V. are attached hereto as Exhibit 99(a): -Report of the Auditors -Consolidated Balance Sheets as of December 31, 1995, 1994 and 1993 -Consolidated Statements of Operations for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993 -Consolidated Statements of Shareholders' Equity for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993. -Consolidated Statements of Cash Flows for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993 -Notes to Consolidated Financial Statements for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993 (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 20, 1996 (previously filed). 99(a) Audited Financial Statements of Harbinger N.V. for the year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993. 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 2, 1996 4 INDEX TO FINANCIAL STATEMENTS HARBINGER N.V.
PAGE ---- Independent Auditors' Report........................................................................... F-4 Consolidated Balance Sheets as of December 31, 1995, 1994 and 1993..................................... F-5 Consolidated Statements of Operations for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993........................................ F-6 Consolidated Statements of Shareholders' Equity for the Year ended December 31, 1995 1994 and the one-month period ended December 31, 1993........................................ F-7 Consolidated Statements of Cash Flows for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993........................................ F-8 Notes to Consolidated Financial Statements for the Year ended December 31, 1995, 1994 and the one-month period ended December 31, 1993........................................ F-10 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-17 Notes to Unaudited Pro Forma Consolidated Financial Statements......................................................................... F-18
F-1 EX-99.A 2 AUDITED FINANCIAL STATEMENTS 1 EXHIBIT 99(a) HARBINGER N.V. AND SUBSIDIARIES (A DEVELOPMENT STAGE ENTERPRISE) Consolidated accounts for the years ended December 31, 1995 and 1994 and for the one-month period ended December 31, 1993 F-2 2 Harbinger N.V. and subsidiaries CONTENTS Independent Auditor's Report 2 Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Shareholder's Equity 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 8 1 F-3 3 Harbinger N.V. and subsidiaries INDEPENDENT AUDITORS' REPORT The Board of Directors and Shareholders Harbinger N.V. and subsidiaries We have audited the accompanying consolidated balance sheets of Harbinger N.V. and subsidiaries as of December 31, 1995, 1994 and 1993 and the related consolidated statements of operations, shareholders' equity, and cash flows for the two years ended December 31, 1995 and 1994 and the one month ended December 31, 1993. These consolidated financial statements are the responsibility of the Company's managment. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with U.S. 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 audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Harbinger N.V. and subsidiaries as of December 31, 1995, 1994 and 1993 and the results of their operations and their cash flows for the two years ended December 31, 1995 and 1994 and one month ended December 31, 1993 in conformity with U.S. generally accepted accounting principles. The Hague, June 5, 1996 KPMG Accountants N.V. /s/ KPMG Accountants N.V. 2 F-4 4 Harbinger N.V. and subsidiaries CONSOLIDATED BALANCE SHEETS (as of December 31, 1995, 1994 and 1993)
- ----------------------------------------------------------------------------------------------------- 1995 1994 1993 - ----------------------------------------------------------------------------------------------------- (in US$) ASSETS CURRENT ASSETS Cash and cash equivalents 940,230 1,247,087 2,437,334 Accounts receivable 31,345 - - Prepayments 1,148 2,619 - Other current assets 108,982 15,692 2,135 ----------------------------------------- TOTAL CURRENT ASSETS 1,081,705 1,265,398 2,439,469 Property and equipment, less accumulated depreciation 84,297 84,914 - Software development costs - 14,203 - ----------------------------------------- 1,166,002 1,364,515 2,439,469 ========================================= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable, trade 68,455 44,659 32,206 Accounts payable, related parties 469,000 53,615 197,702 Accrued payroll and related costs 209,294 107,545 - Other current liabilities 15,266 2,835 - ----------------------------------------- TOTAL CURRENT LIABILITIES 762,015 208,654 229,908 ----------------------------------------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock, Dfl. 1.00 par value; 1,000,000 shares authorized, no shares issued and outstanding at December 31, 1995, 1994 and 1993 Common stock, Dfl. 1.00 par value (US$ 0.62, 0.58 and 0.52, respectively); 9,000,000 shares authorized, 3,295,500, 2,540,000 and 2,500,000 shares issued and outstanding at December 31, 1995, 1994 and 1993, respectively 1,796,646 1,325,416 1,302,083 Additional paid-in capital 1,504,528 1,220,084 1,197,917 Deficit accumulated during the development stage (3,164,968) (1,564,896) (269,065) Cumulative effect of foreign currency translation 267,781 175,257 (21,374) ----------------------------------------- TOTAL SHAREHOLDERS' EQUITY 403,987 1,155,861 2,209,561 ----------------------------------------- 1,166,002 1,364,515 2,439,469 =====================================================================================================
See accompanying notes to consolidated financial statements 3 F-5 5 Harbinger N.V. and subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (for the years ended December 31, 1995 and 1994 and the one-month period ended December 31, 1993)
- ----------------------------------------------------------------------------------------------------- Cumulative 1995 1994 1993 since inception - ----------------------------------------------------------------------------------------------------- (in US$) Revenues 49,941 49,941 - - Direct costs 143,094 91,272 51,822 - ------------------------------------------------ Gross margin (93,153) (41,331) (51,822) - Operating costs: Selling and marketing 143,743 47,987 95,756 - General and administrative 2,752,349 1,432,566 1,043,743 276,040 Depreciation and amortization 37,238 25,793 11,445 - Write-off of software development costs 25,119 25,119 - Recharged and other (15,863) (15,863) - - ------------------------------------------------ Total operating costs 2,942,586 1,515,602 1,150,944 276,040 Operating loss (3,035,739) (1,556,933)(1,202,766) (276,040) Interest income (105,550) (29,866) (68,692) (6,992) Foreign currency exchange loss 234,779 73,005 161,757 17 ------------------------------------------------- Net loss (3,164,968) (1,600,072)(1,295,831) (269,065) ======================================================================================================
See accompanying notes to consolidated financial statements 4 F-6 6 Harbinger N.V. and subsidiaries CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (for the years ended December 31, 1995 and 1994 and the one-month period ended December 31, 1993)
- --------------------------------------------------------------------------------------------------------- Common stock Additional Deficit Cumulative Total paid-in accumulated effect of share- capital during the foreign holders' development currency equity ------------------------- stage translation Shares Amount - --------------------------------------------------------------------------------------------------------- (in US$) Balance at inception Sale of common stock 2,500,000 1,302,083 1,197,917 2,500,000 Net loss 1993 (269,065) (269,065) Change in cumulative effect (21,374) (21,374) ----------------------------------------------------------------------------- Balance at December 31, 1993 2,500,000 1,302,083 1,197,917 (269,065) (21,374) 2,209,561 Sale of common stock 40,000 23,333 22,167 45,500 Net loss 1994 (1,295,831) (1,295,831) Change in cumulative effect 196,631 196,631 ----------------------------------------------------------------------------- Balance at December 31, 1994 2,540,000 1,325,416 1,220,084 (1,564,896) 175,257 1,155,861 Sale of common stock 750,000 468,244 281,756 750,000 Exercise of stock options 5,500 2,986 2,688 5,674 Net loss 1995 (1,600,072) (1,600,072) Change in cumulative effect 92,524 92,524 ----------------------------------------------------------------------------- Balance at December 31, 1995 3,295,500 1,796,646 1,504,528 (3,164,968) 267,781 403,987 ========================================================================================================
See accompanying notes to consolidated financial statements 5 F-7 7 Harbinger N.V. and subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (for the years ended December 31, 1995 and 1994 and the one-month period ended December 31, 1993)
- ------------------------------------------------------------------------------------------------------------------------- Cumulative 1995 1994 1993 since inception - ------------------------------------------------------------------------------------------------------------------------- (in US$) CASH FLOWS FROM OPERATING ACTIVITIES Net loss (3,164,968) (1,600,072) (1,295,831) (269,065) ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES Depreciation and amortization 37,238 25,793 11,445 - Write-off of software development costs 25,119 25,119 - - CHANGES IN: Accounts receivable (31,267) (31,267) - - Prepayments (814) 1,685 (2,499) - Accounts payable, related parties 450,317 409,938 (159,644) 200,023 Other current assets (106,625) (91,764) (12,701) (2,160) Accounts payable, trade 60,906 20,041 8,280 32,585 Accrued payroll and related costs 195,239 92,597 102,642 - Other current liabilities 14,870 12,164 2,706 - ------------------------------------------------------------- Net cash used in operating activities (2,519,985) (1,135,766) (1,345,602) (38,617) ============================================================= CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (105,611) (13,124) (92,487) - Additions to software development costs (28,354) (14,798) (13,556) - ------------------------------------------------------------- Net cash used in investing activities (133,965) (27,922) (106,043) - ============================================================= CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock 3,295,500 750,000 45,500 2,500,000 Exercise of stock options 5,674 5,674 - - ------------------------------------------------------------- Net cash provided by financing activities 3,301,174 755,674 45,500 2,500,000 ============================================================= To carry forward 647,224 (408,014) (1,406,145) 2,461,383
6 F-8 8 Harbinger N.V. and subsidiaries
- ------------------------------------------------------------------------------------------------------------------------- Cumulative 1995 1994 1993 since inception - ------------------------------------------------------------------------------------------------------------------------- (in US$) BROUGHT FORWARD 647,224 (408,014) (1,406,145) 2,461,383 Effects of exchange rates on cash 293,006 101,157 215,898 (24,049) ------------------------------------------------------------- Net increase (decease) in cash and cash equivalents 940,230 (306,857) (1,190,247) 2,437,334 Cash and cash equivalents at beginning - 1,247,087 2,437,334 - ------------------------------------------------------------- Cash and cash equivalents at end 940,230 940,230 1,247,087 2,437,334 =============================================================
See accompanying notes to consolidated financial statements 7 F-9 9 Harbinger N.V. and subsidiaries Notes to Consolidated Financial Statements (for the years ended December 31, 1995 and 1994 and the one-month period ended December 31, 1993) 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Presentation Harbinger N.V. (the "Company") is a development stage enterprise. The Company's primary business will be to develop, market and support software products and provide computer communications network and consulting services to enable businesses to engage in electronic commerce. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. Principles of consolidation The consolidated financial statements include the financial statements of Harbinger N.V. in the Netherlands and the two wholly-owned subsidiaries, Harbinger GmbH in Germany as of April 12, 1995, and Harbinger Ltd. in the United Kingdom as of December 7, 1994. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. Cash and cash equivalents The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. Property and equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer and communications equipment 3 - 5 years Furniture and fixtures 10 years Machinery and equipment 3 years Software development costs The Company capitalizes certain software development costs in accordance with Statement of Financial Accounting Standards No. 86, "Accounting for the Cost of Computer Software to Be Sold, Leased, or Otherwise Marketed". Costs incurred internally to create a computer software product or to develop an enhancement to an existing product are charged to expense when incurred as research and development until technological feasibility has been established for the product or enhancement. Thereafter, all software production costs are capitalized and reported at the lower of unamortized cost or net realizable value. Capitalization ceases when the product or enhancement is available for general release to customers. 8 F-10 10 Harbinger N.V. and subsidiaries 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. The Company evaluates the recoverability of its software development costs at each period end using the undiscounted estimated future cash flows expected to be derived from the software product or enhancement. If such evaluation indicates a potential impairment, the Company uses fair value in determining the amount of software development costs that should be charged to expense. INCOME TAXES The Company accounts for income taxes using the asset and liability method of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). Under SFAS No. 109, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents and accounts receivable, accounts payable and accrued payroll and related costs approximate fair value due to the short-term maturities of these assets and liabilities. FOREIGN CURRENCY TRANSLATION Foreign currency financial statements of the Company's subsidiaries and the consolidated financial statements of the Company are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses and net losses which are translated at average exchange rates during each reporting period. Net exchange gains or losses resulting from the translation of assets and liabilities of the Company's subsidiaries were not significant to the Company's consolidated financial statements. 2 PROPERTY AND EQUIPMENT Property and equipment consists of the following at December 31, 1995 and 1994:
------------------------------------------------------------------- 1995 1994 =================================================================== (in US$) Computer and communications equipment 70,555 54,141 Furniture and fixtures 38,140 34,076 Machinery and equipment 9,409 8,688 ------- ------ 118,104 96,905 Less: Accumulated depreciation (33,807) (11,991) -------- ------ 84,297 84,914 ===================================================================
9 F-11 11 Harbinger N.V. and subsidiaries 3 INCOME TAXES The provision for income taxes includes income taxes deferred because of temporary differences between the consolidated financial statement and tax bases of assets and liabilities and any increase or decrease in the valuation allowance for deferred income tax assets. Income tax benefit is zero for the years ended December 31, 1995, 1994 and 1993. The significant components of the deferred income tax benefit for the years ended December 31, 1995, 1994 and 1993 are summarized as follows:
------------------------------------------------------------------------------- 1995 1994 1993 ------------------------------------------------------------------------------- (in US$) Deferred income tax benefit 560,025 453,541 94,173 Increase in the beginning of the year balance of the valuation allowance for deferred income tax assets 560,025 453,541 94,173 -------------------------------------- - - - ==============================================================================
The income tax effects of the temporary differences that give rise to the Company's deferred income tax assets and liabilities as of December 31, 1995, 1994 and 1993 are not significant. Income tax benefit differs from the amounts computed by applying the statutory income tax rate of 35% to loss before income taxes as a result of the following:
------------------------------------------------------------------------------- 1995 1994 1993 ------------------------------------------------------------------------------- (in US$) Computed "expected" income tax benefit 560,025 453,541 94,173 Increase in the valuation allowance for the deferred income tax assets 560,025 453,541 94,173 -------------------------------------- - - - ==============================================================================
Under SFAS No. 109, deferred income tax assets and liabilities are recognized for differences between the financial statement carrying amounts and the tax bases of assets and liabilities which will result in future deductible or taxable amounts and for net operating loss and tax credit carryforwards. A valuation allowance is then established to reduce the deferred income tax assets to the level at which it is "more likely than not" that the tax benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss and tax credit carryforwards depends on having sufficient taxable income within the carryback and carryforward periods. Sources of taxable income that may allow for the realization of tax benefits include (1) taxable income in the current year or prior years that is available through carryback, (2) future taxable income that will result from the reversal of existing taxable temporary differences and (3) future taxable income generated by future operations. At December 31, 1995, the Company has NOL carryforwards for tax purposes (translated at the December 31, 1995 exchange rate) of approximately $3.2 million which can be used indefinitely. 10 F-12 12 Harbinger N.V. and subsidiaries 4 SHAREHOLDERS' EQUITY Stock option plan There is a stock option plan for key employees and for nonemployee directors. The total number of shares for which options may be granted under the key employees shall not exceed 300,000 shares of common stock. Participation in the plan is allowed for persons in a regular employment of Harbinger N.V., a subsidiary or a parent. The total number of shares for which options may be granted under the nonemployee directors shall not exceed 100,000 shares of common stock. Participation in the plan is allowed for each member of the Harbinger N.V. Board of Directors or the Board of Directors of any parent or subsidiary, who is not otherwise an employee or officer of Harbinger N.V. The following table summarizes option activity since inception:
----------------------------------------------------------------------- Stock options ------------------------------------ Number Range ----------------------------------------------------------------------- (in Dutch guilders) January 1, 1994 - - - - Granted 220,500 1.90 - 1.90 Exercised - - - - Forfeited/canceled - - - - ------------------------------------- December 31, 1994 220,500 1.90 - 1.90 Granted 35,000 1.74 - 1.90 Exercised (5,500) 1.90 - 1.90 Forfeited/canceled (43,500) 1.90 - 1.90 ------------------------------------- December 31, 1995 206,500 1.74 - 1.90 ======================================================================
5 RELATED PARTY TRANSACTIONS The Company has a $1.0 million loan commitment from Harbinger Corporation in the United States (a shareholder). Advances on the proposed loan commitment will be funded on a monthly basis as determined by Harbinger Corporation subject to the right of Harbinger Corporation at any time to discontinue advances under the loan agreement (except that in the event of the orderly liquidation of the Company, Harbinger Corporation must fund amounts necessary to enable the Company to satisfy its commitments). The Company has a license to use Harbinger Corporation's network and PC technology and will pay Harbinger Corporation certain royalty fees based on a percentage of software and network revenues, as defined. The Company paid no royalty revenue as of December 31, 1995. Under a management agreement, Harbinger Corporation provides certain consulting and management services to the Company. 11 F-13 13 Harbinger N.V. and subsidiaries Amounts charged to the Company by Harbinger Corporation for services provided during the two years and one month ended December 31, 1995 were $276,000, $285,000 and $95,000, respectively. During the year ended December 31, 1995, Harbinger Corporation reimbursed the Company for the cost of facilities in Hoorn, the Netherlands, which were deployed by benefit Harbinger Corporation. Certain administrative costs were also charged to Harbinger Corporation and are included in Recharged and other in the Consolidated Statements of Operations. 6 COMMITMENTS EMPLOYEE BENEFIT PLANS The Company maintains a benefit plan for the benefit of employees, which is intended to be a tax-qualified defined contribution plan. Under the plan, employees 25 years or older are eligible to participate. The Company contributed $20,732 for the year 1995, and nothing for 1994 and 1993. LEASES The Company leases office space and automobiles under operating leases which extend through 1999. Rent expense under all operating leases was approximately $150,606, $98,191 and zero for 1995, 1994 and 1993, respectively. Future minimum lease payments under operating leases with noncancelable lease terms in excess of one year for the next five years and the aggregate are as follows:
(in US$) 1996 43,953 1997 34,055 1998 14,081 1999 4,755 ------ 96,844 ======
7 SUBSEQUENT EVENTS (UNAUDITED) Effective March 31, 1996, Harbinger Corporation acquired the remaining 78.9% of the common stock of Harbinger N.V. by exchanging 38,709 unregistered shares of Harbinger Corporation's common stock for Harbinger N.V.'s common stock. 12 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 ======= ==== ======= ====== =======
December 31, 1995 ---------------------------------------- Historical Pro Forma Pro Forma -------------------------------------- HNV Adjustments Consolidated --- ----------- ------------ (in thousands, except for share and per share data) ASSETS (10) Current Assets: Cash and cash equivalents $ 940 $ 8,256 Accounts receivable, net 31 6,911 Royalty receivable 0 1,382 Deferred income taxes 0 999 Due from joint venture 0 566 Other current assets 111 544 ------ ------- Total current assets 1,082 18,658 ------ ------- Property and equipment, net 84 3,947 Investments in joint ventures 0 (69) (9) 7,725 Investment in subsidiary and related co. 0 50 Intangible assets, net 0 595 (9) 10,874 (300) (9) Deferred income taxes 0 1,938 ------ ------- $1,166 $43,192 ====== =======
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; 9,941,430 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 ======= ====== ======= ====== ======= December 31, 1995 -------------------------------------- Historical ---------- Pro Forma Pro Forma HNV Adjustments Consolidated --- ----------- ------------ (in thousands, except per share data) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 537 $ 2,551 Accrued expenses 225 250 (9) 5,333 Deferred revenues 0 2,847 Payable due to acquisitions 0 557 Line of credit/Debt 0 1,639 ------ ------- Total current liabilities 762 12,927 ------ ------- Redeemable preferred stock: Zero Coupon, $1.00 redemption value; 4,000,000 issued 0 0 Puttable common stock: $0.0001 par value; 550,000 issued 0 4,675 Shareholders' equity: Preferred stock; 250,000 issued 2,485 Common stock; 9,941,430 issued 1,797 (1,797) (9) 1 Additional paid in capital 1,504 (1,504) (9) 36,695 668 (9) Accumulated deficit (2,897) 2,897 (9) (13,591) (300) (9) 12 (9) ------ ------- Total shareholders' equity 404 25,590 ------ ------- $1,166 $43,192 ====== =======
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 Foreign Currency exchange loss 0 0 0 0 0 ------- ------ ------- ------ ------- 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 ======= ======= ======= Twelve Months Ended December 31, 1995 --------------------------------------- Historical ---------- Pro Forma Pro Forma HNV Adjustments Consolidated --- ----------- ------------ (in thousands, except per share data) (10) Revenues: Services and other $ 50 $21,329 Software 0 7,349 ------- ------- Total revenues 50 28,678 ------- ------- Direct costs: Services and other 91 6,055 Software 0 1,390 ------- ------- Total direct costs 91 7,445 ------- ------- Gross margin (41) 21,233 ------- ------- Operating costs: Selling and marketing 48 6,119 General and administrative 1,417 7,991 Depreciation and amortization 26 30 (11) 1,933 Product development 25 4,448 ------- ------- Total operating costs 1,516 20,491 ------- ------- Operating income (loss) (1,557) 742 Interest expense (income), net (30) 351 Equity in losses of joint venture 0 (313) (9) 953 Foreign Currency exchange loss 73 73 ------- ------- Income (loss) before income tax expense (1,600) (635) Income tax expense 0 875 ------- ------- Net income (loss) (1,600) (1,510) Preferred stock dividends 0 (199) ------- ------- Net income (loss) applicable to common shareholders $(1,600) $(1,709) ======= ======= Net income (loss) per share of common stock $ (0.20) ======= Weighted average common and common equivalent shares outstanding 8,584 =======
The Company charged $8,149,000 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 the remaining common stock of Harbinger N.V. ("HNV"), a Dutch corporation based in Hoofddorp, The Netherlands for the issuance of 38,710 shares of the Company's common stock at a price of $17.25 per share. The company recorded the acquisition, which was completed on April 20 1996, using the purchase method of accounting with $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 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 it 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 HNV, 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. F-18 5 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. 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. 9) Reflects adjustments to record the acquisition of HNV including the purchase price allocation. The purchase price of HNV includes payment in Harbinger common stock in the amount of $668,000 to the non-Harbinger stockholders. The purchase price allocation reflects: (i) a $295,000 increase in goodwill and other intangibles; (ii) a $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 $250,000 for certain other liabilities; and (iv) the elimination of the Company's equity method investment in HNV and the historical equity accounts of HNV. F-19 6 10) Reflects the balance sheet of HNV as of December 31, 1995 and the historical operating results for the year ended December 31, 1995. 11) Reflects an increase in amortization expense as a result of the acquisition of HNV. 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. F-20 -----END PRIVACY-ENHANCED MESSAGE-----