<PAGE> 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 earliest event reported): December 16, 1999
DALEEN TECHNOLOGIES, INC.
(Exact name of Company specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 0-27491 65-0944514
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
1750 CLINT MOORE ROAD
BOCA RATON, FLORIDA 33487
(Address of principal executive offices) (Zip Code)
(561) 999-8000
(Company's telephone number, including area code)
PAGE 1 OF 32
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
The following consolidated financial statements of Inlogic Software,
Inc. and its subsidiary are filed herewith:
Auditors' Report to the Shareholders
Consolidated Balance Sheets at December 31, 1997 and 1998 and
(unaudited) at September 30, 1999
Consolidated Statements of Operations for the period from
inception (February 20, 1997) to December 31, 1997, the
year ended December 31, 1998 and (unaudited) for the nine
months ended September 30, 1998 and 1999
Consolidated Statements of Stockholders' Equity (Deficit) from
inception (February 20, 1997) to December 31, 1997, for the
year ended December 31, 1998, and (unaudited) for the nine
months ended September 30, 1999
Consolidated Statements of Cash Flows for the period from
inception (February 20, 1997) to December 31, 1997, the
year ended December 31, 1998 and (unaudited) for the nine
months ended September 30, 1998 and 1999
Notes to Consolidated Financial Statements
(b) Unaudited Pro Forma Financial Information.
The following unaudited pro forma condensed consolidated financial
information is filed herewith:
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1999
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the nine months ended September 30, 1999
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1998
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(c) Exhibits
The following Exhibit is filed herewith:
23 Consent of KPMG LLP, chartered accountants.
<PAGE> 3
(a) Consolidated Financial Statements
(Expressed in U.S. dollars)
INLOGIC SOFTWARE INC.
AND SUBSIDIARY
Period from inception on February 20, 1997 to December 31,
1997 and year ended December 31, 1998 (information as of
September 30, 1999 and for the nine months ended September
30, 1998 and 1999 is unaudited)
<PAGE> 4
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the consolidated balance sheets of Inlogic Software Inc. and
subsidiary as at December 31, 1997 and 1998 and the consolidated statements of
operations, stockholders' equity (deficiency) and cash flows for the period from
inception on February 20, 1997 to December 31, 1997 and the year ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of Inlogic Software Inc. and
subsidiary as at December 31, 1997 and 1998 and the results of their operations
and their cash flows for the period from inception on February 20, 1997 to
December 31, 1997 and the year ended December 31, 1998 in accordance with
accounting principles generally accepted in the United States.
/s/ KPMG LLP
Chartered Accountants
Toronto, Canada
November 29, 1999
F-1
<PAGE> 5
INLOGIC SOFTWARE INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Expressed in U.S. dollars)
<TABLE>
<CAPTION>
================================================================================================================
December 31, September 30,
- ----------------------------------------------------------------------------------------------------------------
1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 14,943 $ -- $ 7,038,817
Accounts receivable 9,488 171,620 262,440
Deposits and advances to employees 7,012 38,542 11,210
Costs in excess of billings -- 276,974 11,482
-----------------------------------------------------------------------------------------------------------
Total current assets 31,443 487,136 7,323,949
Fixed assets, net (note 2) 62,456 167,344 358,879
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 93,899 $ 654,480 $ 7,682,828
================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 4,421 $ 113,438 $ 287,266
Accrued liabilities 37,704 8,523 113,384
Management bonus payable -- 97,828 --
Note payable (note 3) -- 65,219 --
Advances from shareholder (note 4) 120,619 87,614 1,298
Billings in excess of costs 43,984 283,286 384,656
-----------------------------------------------------------------------------------------------------------
Total current liabilities 206,728 655,908 786,604
Convertible debenture (note 6) -- -- 3,287,976
Stockholders' equity (deficiency):
Capital stock (note 7):
Common shares 7 37,832 2,087,409
Class A shares -- 4,467 4,467
Class C shares -- 4,838
Class D preferred shares -- 3,719,312
Additional paid-in capital (note 8) -- 152,345 501,121
Deferred stock-based
compensation (note 8) -- (85,188) (352,353)
Subscription notes receivable (note 9) -- -- (584,401)
Accumulated deficiency (112,836) (110,884) (1,772,145)
-----------------------------------------------------------------------------------------------------------
Total stockholders' equity (deficiency) (112,829) (1,428) 3,608,248
Commitments (note 10)
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficiency) $ 93,899 $ 654,480 $ 7,682,828
================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE> 6
INLOGIC SOFTWARE INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Expressed in U.S. dollars)
<TABLE>
<CAPTION>
==========================================================================================================================
Period from
inception on
February 20, Nine months Nine months
1997 to Year ended ended ended
December 31, December 31, September 30, September 30,
1997 1998 1998 1999
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenue $ -- $1,668,125 $1,346,671 $ 1,572,354
Cost of revenue -- 152,806 123,360 569,477
- --------------------------------------------------------------------------------------------------------------------------
Gross profit -- 1,515,319 1,223,311 1,002,877
Operating expenses:
Software development costs 81,338 822,567 204,003 1,193,965
Sales and marketing 19,164 203,261 164,090 649,350
General and administrative 946 344,572 231,741 642,490
Amortization of deferred stock-based
compensation -- 67,157 45,153 81,611
Depreciation and amortization 11,388 75,810 57,603 96,722
- --------------------------------------------------------------------------------------------------------------------------
Total operating expenses 112,836 1,513,367 702,590 2,664,138
- --------------------------------------------------------------------------------------------------------------------------
Net income (loss) $(112,836) $ 1,952 $ 520,721 $(1,661,261)
==========================================================================================================================
Net income (loss) per share - basic
and diluted $ (127.07) $ 0.00 $ 0.09 $ (0.23)
Weighted average number of common
shares outstanding 888 5,800,000 5,800,000 7,344,011
==========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 7
INLOGIC SOFTWARE INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficiency)
(Expressed in U.S. dollars)
<TABLE>
<CAPTION>
===================================================================================================================================
Capital stock
----------------------------------------------------------------------------------------------------
Common shares Class A shares Class C shares Class D preferred shares
Number Number Number Number
of shares Amount of shares Amount of shares Amount of shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, February 20,
1997 -- $ -- -- $ -- -- $ -- -- $ --
Issuance of common shares 1,000 7 -- -- -- -- -- --
Loss for the year -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 1,000 7 -- -- -- -- -- --
Issuance of common shares 6,474,000 42,227 -- -- -- -- -- --
Issuance of Class A shares -- -- 10,000 65 -- -- -- --
Conversion of common
shares to Class A shares (675,000) (4,402) 675,000 4,402 -- -- -- --
Deferred stock-based
compensation -- -- -- -- -- -- -- --
Amortization of deferred
stock-based compensation -- -- -- -- -- -- -- --
Net income -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1998 5,800,000 37,832 685,000 4,467 -- -- -- --
Issuance of common shares
for subscription notes
receivable 2,755,000 2,049,577 -- -- -- -- -- --
Issuance of Class C shares -- -- -- -- 710,000 4,838 -- --
Issuance of Class D
preferred shares -- -- -- -- -- -- 1,877,416 3,719,312
Deferred stock-based
compensation -- -- -- -- -- -- -- --
Amortization of deferred
stock-based compensation -- -- -- -- -- -- -- --
Loss for the year -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, September 30,
1999 (unaudited) 8,555,000 $ 2,087,409 685,000 $4,467 710,000 $4,838 1,877,416 $3,719,312
===================================================================================================================================
<CAPTION>
============================================================================================================================
Stockholders' equity (deficiency)
---------------------------------------------------------------------------------------------
Additional Deferred Subscription Total
paid-in stock-based notes Accumulated
capital compensation receivable (deficiency)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, February 20,
1997 $ -- $ -- $ -- $ -- $ --
Issuance of common shares -- -- -- -- 7
Loss for the year -- -- -- (112,836) (112,836)
- ----------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 -- -- -- (112,836) (112,829)
Issuance of common shares -- -- -- -- 42,227
Issuance of Class A shares -- -- -- -- 65
Conversion of common
shares to Class A shares -- -- -- -- --
Deferred stock-based
compensation 152,345 (152,345) -- -- --
Amortization of deferred
stock-based compensation -- 67,157 -- -- 67,157
Net income -- -- -- 1,952 1,952
- ----------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1998 152,345 (85,188) -- (110,884) (1,428)
Issuance of common shares
for subscription notes
receivable -- -- (584,401) -- 1,465,176
Issuance of Class C shares -- -- -- -- 4,838
Issuance of Class D
preferred shares -- -- -- -- 3,719,312
Deferred stock-based
compensation 348,776 (348,776) -- -- --
Amortization of deferred
stock-based compensation -- 81,611 -- -- 81,611
Loss for the year -- -- -- (1,661,261) (1,661,261)
- ----------------------------------------------------------------------------------------------------------------------------
Balance, September 30,
1999 (unaudited) $501,121 $(352,353) $(584,401) $(1,772,145) $ 3,608,248
============================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 8
INLOGIC SOFTWARE INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
<TABLE>
<CAPTION>
==================================================================================================================================
Period from
inception on
February 20, Nine months Nine months
1997 to Year ended ended ended
December 31, December 31, September 30, September 30,
1997 1998 1998 1999
- ----------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $(112,836) $ 1,952 $ 520,721 $(1,661,261)
Items not involving cash:
Depreciation and amortization 11,388 75,810 57,603 96,722
Amortization of deferred
stock-based compensation -- 67,157 45,153 81,611
Interest attributed to conversion
option of convertible debenture -- -- -- 7,177
Change in non-cash working capital:
Accounts receivable (9,804) (168,278) (454,405) (81,852)
Deposits and advances to employees (7,246) (33,084) (68,254) 28,356
Costs in excess of billings -- (286,349) (182,905) 273,983
Accounts payable 4,569 113,012 203,783 166,176
Accrued liabilities 38,959 (27,554) (36,843) 102,893
Management bonus payable -- 101,140 -- (100,671)
Billings in excess of cost 45,449 250,451 202,473 87,303
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating
activities (29,521) 94,257 287,326 (999,563)
Cash flows from financing activities:
Increase (decrease) in notes payable -- 67,426 68,311 (67,114)
Increase (decrease) in advances
from shareholder 124,636 (25,762) (153,267) (88,883)
Issuance of common shares 7 37,832 42,227 1,465,176
Issuance of Class A shares -- 4,467 -- --
Issuance of Class C shares -- -- -- 4,838
Issuance of Class D preferred shares -- -- -- 3,500,000
Issue of convertible debenture -- -- -- 3,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing
activities 124,643 83,963 (42,729) 8,314,017
Cash flows used in investing activities:
Purchase of fixed assets (75,925) (188,577) (168,713) (277,951)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents 19,197 (10,357) 75,884 7,036,503
Effect of currency translation adjustments
on cash (4,254) (4,586) 13,069 2,314
Cash and cash equivalents, beginning
of period -- 14,943 14,943 --
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 14,943 $ -- $ 103,896 $ 7,038,817
==================================================================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ -- $ -- $ -- $ --
Income taxes paid -- -- -- --
==================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 9
Inlogic Software Inc. (the "Company") is a software company specializing in
business solutions and e-commerce for the global telecommunications industry.
The Company's principal products support telecommunications service providers'
e-commerce, service provisioning and interconnection needs. The Company was
incorporated on February 20, 1997 under the provisions of the Business
Corporations Act of Ontario.
The consolidated financial statements have been prepared in accordance with
United States generally accepted accounting principles. The Company maintains
its accounting records in accordance with Canadian generally accepted accounting
principles. Since the accompanying consolidated financial statements have not
been prepared in accordance with generally accepted accounting principles in
Canada, they may not satisfy the reporting requirements of Canadian statutes and
regulations.
1. SIGNIFICANT ACCOUNTING POLICIES:
These financial statements are reported in U.S. dollars, except where
otherwise noted.
(a) Basis of consolidation:
These consolidated financial statements include the accounts
of the Company and its inactive wholly owned subsidiary,
Inlogic (Delaware) Inc.
(b) Revenue recognition:
The Company recognizes revenue from long-term contracts
involving significant production, modification or
customization of software under Statement of Position 81-1,
using the percentage-of-completion method, based on the ratio
of total labour hours incurred to date to total estimated
labour hours. Changes in job performance, job conditions,
estimated profitability and final contract settlement may
result in revisions to costs and income and are recognized in
the period in which the revisions are determined. Contract
costs include all direct material and labour costs and those
indirect costs related to contract performance, such as
indirect labour and supplies. Provisions for estimated losses
on uncompleted contracts are made in the period in which such
losses are determined. For contracts where the Company cannot
make reasonably dependable estimates relating to the extent of
the progress toward completion, contract revenues and contract
costs, the completed contract method is used, whereby income
is recognized only when the contract is completed.
F-6
<PAGE> 10
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Amounts billed in excess of revenue recognized to date on a
contract-by-contract basis are classified as "Billings in excess of
costs," whereas revenues recognized in excess of amounts billed are
classified as "Costs in excess of billings" in the accompanying
consolidated balance sheets.
The Company follows the provisions of Statement of Position 97-2,
Software Revenue Recognition ("SOP 97-2") for revenue from software
transactions that do not require significant production, modification
or customization. SOP 97-2 generally requires revenue earned on
software arrangements to be recognized when the software has been
delivered and installed, the fee is fixed and determinable and
collectibility is probable.
Revenue related to customer maintenance agreements is deferred and
recognized ratably on a straight-line basis over the maintenance period
of the agreement.
Revenue related to consulting services under time and materials
arrangements is recognized as services are performed.
(c) Fixed assets:
Fixed assets are recorded at cost less accumulated depreciation and
amortization. Depreciation and amortization are provided at rates
intended to amortize the cost of the fixed assets over their estimated
useful lives as follows:
<TABLE>
<CAPTION>
======================================================================
Asset Basis Rate
----------------------------------------------------------------------
<S> <C> <C>
Computer equipment Declining balance 30%
Computer software Straight line Over two years
Furniture and fixtures Straight line Over five years
Leasehold improvements Straight line Over term of lease
======================================================================
</TABLE>
F-7
<PAGE> 11
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(d) Software development costs:
The Company accounts for software development costs under
Statement of Financial Accounting Standards No. 86, Accounting
for Costs of Computer Software to be Sold, Leased or Otherwise
Marketed ("SFAS No. 86"). Under SFAS No. 86, the costs
associated with software development are required to be
capitalized after technological feasibility has been
established. Based on the Company's product development
process, technological feasibility is generally established
upon completion of the working model. Costs incurred by the
Company between completion of the working model and the point
at which the product is ready for general release have been
insignificant and, as a result, the Company has to date not
capitalized any software development costs.
(e) Income taxes:
The Company uses the asset and liability method of accounting
for income taxes. Deferred 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 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 tax assets and
liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
(f) Stock option plans:
The Company accounts for its stock option plans in accordance
with the provisions of Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. As such, compensation expense would
be recorded on the date of grant only if the current market
price of the underlying stock exceeded the exercise price.
Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation, ("SFAS No. 123")
permits entities to recognize, as expense over the vesting
period, the fair value of all stock-based awards on the date
of grant. Currently, the Company has no options that fall
under SFAS No. 123, since the options that are issued are
redeemable at set amounts over the vesting period.
F-8
<PAGE> 12
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(g) Fair values of financial instruments:
Statement of Financial Accounting Standards No. 107,
Disclosures About Fair Value of Financial Instruments,
requires disclosure of fair values of certain financial
instruments. Cash and cash equivalents, accounts receivable,
subscription notes receivable and other current assets, as
well as accounts payable and accrued liabilities and other
current liabilities, as reflected in the consolidated
financial statements, approximate fair values because of the
short-term nature of these instruments.
(h) Cash and cash equivalents:
The Company considers all liquid investments purchased with an
original maturity of three months or less to be cash
equivalents.
(i) Use of estimates:
Management 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 the
accompanying consolidated financial statements in conformity
with generally accepted accounting principles. Actual results
could differ from those estimates.
(j) Basic and diluted income (loss) per share:
Basic and diluted income (loss) per share were computed by
dividing net income (loss) applicable to common stockholders
by the weighted average number of shares of common stock
outstanding for each period presented. Common stock
equivalents were not considered for each of the periods
presented since their effect would be antidilutive. There were
no common share equivalents during the period ended September
30, 1998 and the year ended December 31, 1998.
F-9
<PAGE> 13
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(k) Credit risks and concentrations:
The Company's financial instruments, which are exposed to
concentration of credit risk, consist primarily of cash and
cash equivalents and accounts receivable. The Company
maintains its accounts for cash and cash equivalents with
large low-credit-risk financial institutions in Canada in
order to reduce its exposure. At September 30, 1999, three
customers accounted for 78% of total accounts receivable, each
of which was 48%, 13% and 17%. At December 31, 1998 and 1997,
three customers accounted for 96% and 100% of total accounts
receivable, respectively. Revenue from three customers
represented 41%, 17% and 11% of total revenue for the period
ended September 30, 1999. Revenue from a single customer
represented 93% of total revenue for the year ended December
31, 1998.
(l) Unaudited interim financial information:
The unaudited consolidated balance sheet as at September 30,
1999 and the unaudited consolidated statements of operations,
stockholders' equity (deficiency) and cash flows for the nine
months ended September 30, 1998 and 1999 include, in the
opinion of management, all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the
Company's consolidated financial position, results of
operations and cash flows. Operating results for the nine
months ended September 30, 1999 are not necessarily indicative
of the results that may be expected for the year ended
December 31, 1999.
(m) Foreign currency translation:
The functional currency of the Company is the Canadian dollar.
The translation of the applicable foreign currency into U.S.
dollars is performed for balance sheet accounts using current
exchange rates in effect at the balance sheet date and for
revenue and expense accounts using average rates of exchange
prevailing during the period. Adjustments resulting from the
translation of foreign currency financial statements for the
period from inception on February 20, 1997 to December 31,
1997 and for the year ended December 31, 1998 were not
significant. Such amounts were recorded in the consolidated
statements of operations for each period.
F-10
<PAGE> 14
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(n) Segment information:
Effective January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No.
131"). SFAS No. 131 establishes standards for the way that
public business enterprises report information about operating
segments in annual financial statements and requires those
enterprises to report selected information about operating
segments in interim financial reports issued to stockholders.
The Company operates in one segment for management reporting
purposes.
2. FIXED ASSETS:
<TABLE>
<CAPTION>
=====================================================================
Accumulated
depreciation
and Net book
December 31, 1997 Cost amortization value
---------------------------------------------------------------------
<S> <C> <C> <C>
Computer equipment $ 73,478 $ 11,022 $ 62,456
=====================================================================
</TABLE>
<TABLE>
<CAPTION>
=====================================================================
Accumulated
depreciation
and Net book
December 31, 1997 Cost amortization value
---------------------------------------------------------------------
<S> <C> <C> <C>
Computer equipment $155,633 $ 47,895 $107,738
Computer software 65,329 32,665 32,664
Furniture and fixtures 29,935 2,993 26,942
---------------------------------------------------------------------
$250,897 $ 83,553 $167,344
=====================================================================
</TABLE>
F-11
<PAGE> 15
2. FIXED ASSETS (CONTINUED):
<TABLE>
<CAPTION>
=====================================================================
Accumulated
depreciation
and Net book
September 30, 1999 Cost amortization value
---------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Computer equipment $332,008 $108,700 $223,308
Computer software 130,882 64,494 66,388
Furniture and fixtures 79,196 12,158 67,038
Leasehold improvements 2,371 226 2,145
---------------------------------------------------------------------
$544,457 $185,578 $358,879
=====================================================================
</TABLE>
3. NOTE PAYABLE:
The note payable to Internetworking Systems Group Inc. was non-interest
bearing, with no fixed terms of repayment. The note was issued in
September 1998 and was repaid in full in January 1999.
4. ADVANCES FROM SHAREHOLDER:
Advances from shareholder are non-interest bearing and have no fixed
terms of repayment.
F-12
<PAGE> 16
5. INCOME TAXES:
The provision for income taxes differs from the amount computed by
applying the combined federal and provincial income tax rate of 44.6%
to the income (loss) before provision for income taxes as a result of
the following:
<TABLE>
<CAPTION>
=============================================================================================================
Period from
inception on
February 20, Nine months Nine months
1997 to Year ended ended ended
December 31, December 31, September 30, September 30,
1997 1998 1998 1999
-------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net income (loss) $(112,836) $ 1,952 $ 520,721 $(1,661,261)
=============================================================================================================
Computed expected tax expense
(recovery) $ (50,325) $ 871 $ 232,242 $ (740,922)
Increase (reduction) in income tax
expense (recovery) resulting from:
Permanent differences 3,102 16,914 3,778 23,099
Non-recognition of tax benefit
of losses 21,700 -- -- 717,823
Utilization of losses -- (18,225) (118,337) --
Reduction due to small
business rate 25,523 440 (117,683) --
-------------------------------------------------------------------------------------------------------------
Income tax provision $ -- $ -- $ -- $ --
=============================================================================================================
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the future tax assets and future tax liabilities at
December 31, 1997 and December 31, 1998 and September 30, 1999 are
presented below:
<TABLE>
<CAPTION>
=====================================================================================
December 31, September 30,
1997 1998 1999
-------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Future tax assets:
Non-capital loss carried forward $ 21,700 $ 3,475 $ 721,298
Less valuation allowance (21,700) (3,475) (721,298)
-------------------------------------------------------------------------------------
Net future tax assets $ -- $ -- $ --
=====================================================================================
</TABLE>
F-13
<PAGE> 17
5. INCOME TAXES (CONTINUED):
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. Management considers projected future
taxable income, uncertainties related to the industry in which the
Company operates and tax planning strategies in making this assessment.
Based upon the level of historical taxable income and projections for
future taxable income over the periods in which the deferred tax assets
would be realized, management believes it is more likely than not the
Company will not realize the benefits of these deductible differences.
The Company is entitled to Canadian federal and provincial investment
tax credits which are earned as a percentage of eligible current and
capital research and development expenditures incurred in each taxation
year. Certain investment tax credits are fully refundable to the
Company until such time as the Company loses its status as a
Canadian-controlled private corporation. All other investment tax
credits are available to be applied against future income tax
liabilities, subject to a 10-year carryforward period. Investment tax
credits are accounted for as a reduction of the related expenditure for
items of a current nature and a reduction of the related asset cost of
items of a long-term nature, provided that the Company has reasonable
assurance that the tax credits will be realized. The Company has not
recognized any such tax credits for the periods presented.
6. CONVERTIBLE DEBENTURE AND SHARE PURCHASE AGREEMENT:
On September 27, 1999, the Company entered into an agreement with The
Vengrowth Investment Fund Inc. ("Vengrowth"), whereby Vengrowth
purchased a debenture in the principal amount of $3,500,000 issued by
the Company and subscribed for 1,877,416 Class D preferred shares of
the Company (note 7). The debenture had a maturity date of January 27,
2000 and bore interest at the rate of 5% per annum. The agreement
provided that the debenture automatically converted into 1,686,747
Class D preferred shares of the Company if the Company did not, by
October 27, 1999, obtain a commitment from an investor group to provide
the Company with equity financing of not less than $3,500,000 at a per
share price of not less than $1.864. The debenture converted in
accordance with the above term on October 27, 1999.
F-14
<PAGE> 18
6. CONVERTIBLE DEBENTURE AND SHARE PURCHASE AGREEMENT (CONTINUED):
At the time the debenture was issued, the fair value of the Company's
obligation to make future payments of principal and interest was
$3,280,688 and the fair value of the conversion option was $219,312.
Interest expense for the nine months ended September 30, 1999 relating
to this security was $7,177.
7. CAPITAL STOCK:
Authorized:
Unlimited Class A shares, voting, participating, redeemable
Unlimited Class B shares, non-voting, participating, redeemable
Unlimited Class C shares, non-voting, participating, redeemable
Unlimited Class D preferred shares, voting Unlimited common shares
Common shares:
Each common share entitles the holder to one vote. The holders of the
common shares are entitled to receive dividends when declared by the
Board of Directors.
Class A shares:
Class A shares are voting and are redeemable at the option of the
Company at any time (in whole or in part) upon payment of the
redemption price. The redemption price is fixed as follows: (a) until
March 31, 2000, at nil per share; (b) from April 1, 2000 until March
31, 2001, at $0.26 per share; (c) from April 1, 2001 until March 31,
2002, at $0.39 per share; (d) from April 1, 2002 until March 31, 2003,
at $0.52 per share; and (e) from April 1, 2003 and thereafter, at $0.65
per share. The Class A shareholders are entitled to participate ratably
with the common, Class B and Class C shares in any distribution of
assets or property of the Company.
F-15
<PAGE> 19
7. CAPITAL STOCK (CONTINUED):
Class B shares:
Class B shares are non-voting and are redeemable at the option of the
Company at any time (in whole or in part) upon payment of the
redemption price which is fixed at $0.26 per share. The holders of the
Class B shares are entitled to receive dividends when declared by the
Board of Directors and to participate ratably with the common, Class A
and Class C shares in any distribution of assets or property of the
Company.
Class C shares:
Class C shares are non-voting and are redeemable at the option of the
Company at any time (in whole or in part) upon payment of the
redemption price which is fixed as follows: (a) for the first 30 months
, at nil per share; (b) after 42 months at $0.26 per share; (c) after
54 months, at $0.39 per share; (d) after 66 months, at $0.52 per share;
and (e) after 78 months and any subsequent time thereafter, at $0.65
per share. The Class C shareholders are entitled to participate ratably
with the common, Class A and Class B shares in any distribution of
assets or property of the Company.
F-16
<PAGE> 20
7. CAPITAL STOCK (CONTINUED):
Class D preferred shares:
Class D preferred shares are voting and are entitled to receive
dividends when declared by the Board of Directors, provided that a
dividend is declared on the common shares. The holders of Class D
preferred shares are entitled, at their option, to convert Class D
preferred shares into common shares on a one for one basis. The Class D
preferred shares shall automatically be converted into common shares in
the event of a sale of all the shares of the Company or substantially
all the assets of the Company or an underwritten distribution of common
shares in Canada or the United States by the Company with gross
proceeds of at least $25,000,000.
8. CAPITAL STOCK COMPENSATION ARRANGEMENTS:
(a) Share issuances:
On April 1, 1998, the Company issued 350,000 and 325,000
common shares of the Company to two employees at a price of
$0.01 per share. On August 19, 1998, the employees converted
these common shares into an equivalent number of Class A
shares. On August 19, 1998, the Company issued 10,000 Class A
shares to another employee at a price of $0.01 per share. The
Company has recorded deferred compensation expense equal to
the difference between the share issue price of $0.01 per
share and the estimated fair value at date of issue of $0.26
per share. The compensation expense is being amortized on a
straight-line basis from the date of issue of the shares to
March 31, 2000.
F-17
<PAGE> 21
8. CAPITAL STOCK COMPENSATION ARRANGEMENTS (CONTINUED):
On June 1, 1999, the Company issued 270,000 Class C shares of the
Company to three employees at a price of $0.01 per share. On August 11,
1999, the Company issued 350,000 Class C shares to another employee at
a price of $0.01 per share. The Company issued a further 90,000 Class C
shares on September 22, 1999 to another employee at a price of $0.01
per share. The Company has recorded deferred compensation expense equal
to the difference between the exercise price of $0.01 per share and the
estimated fair value at date of issue of $0.26 per share. The
compensation expense is being amortized on a straight-line basis over a
42-month period from the date of issue of the Class C shares.
(b) Stock option plan:
On August 19, 1998, the Board of Directors of the Company
adopted an employee stock option plan (the "Plan"). The
maximum number of shares which can be issued under the Plan is
30% of the total outstanding shares of all classes. The
options granted under the Plan are for a term not exceeding 10
years from the date of grant and are exercisable at the
earlier of: (i) the vesting date set out in the option
agreements; (ii) the date on which the Company is party to a
merger, amalgamation, consolidation or other transaction or
arrangement by which the Company sells all or substantially
all of its assets, or (iii) the date on which the Company
becomes a public company, as specified in the terms of the
employee stock option plan. All of the options issued under
the terms of the plan as at September 30, 1999 vest after a
period of 48 months and are exercisable at the price of $0.01
per share.
F-18
<PAGE> 22
8. CAPITAL STOCK COMPENSATION ARRANGEMENTS (CONTINUED):
The Plan provided that if a participant leaves the Company, they can
exercise up to the full amount of the optioned shares held by him or
her for up to 30 days from the date of departure. In these
circumstances, the Plan provides that the shares held by such employee
will be redeemed by the Company based on the fair market value of the
class of such shares. All of the options issued are in respect of Class
C shares. The Company has recorded compensation expense equal to the
difference between the exercise price of $0.01 per share and the
redemption price of $0.26 per share. The compensation expense is being
amortized on a straight-line basis over a 42-month period from the date
of grant of the option.
Effective June 2, 1999, the Board of Directors of the Company approved
a resolution to amend the terms of the Plan relating to the treatment
of a departing participant of the Plan. The amendment provides that
upon departure, the employee has 30 days to exercise only that portion
of the stock options the employee is entitled to exercise at that time
and the remaining unexercised options expire. A participant who has
exercised options in accordance with this term is required to sell all
such optioned shares to the Company at a redemption price of $0.26 per
share. The Company has recorded deferred compensation expense on the
grant of such options equal to the difference between the estimated
fair value of $0.26 per share and the exercise price of $0.01 per
share. Such compensation expense is being amortized to expense on a
straight-line basis over the vesting term of 48 months.
F-19
<PAGE> 23
8. CAPITAL STOCK COMPENSATION ARRANGEMENTS (CONTINUED):
As of September 30, 1999, there were 490,500 options to purchase Class
C shares at a price of $0.01 per share outstanding. These options are
exercisable commencing in 2002.
9. SUBSCRIPTION NOTES RECEIVABLE:
These notes were issued during 1999 in connection with the issue of
common shares and are non-interest bearing with no fixed terms of
repayment. Subsequent to September 30, 1999, the notes were paid in
full.
10. COMMITMENTS:
(a) Leases:
The Company's commitments under operating leases are as
follows:
<TABLE>
<S> <C>
=========================================================
2000 $ 119,830
2001 122,571
2002 109,188
2003 32,130
2004 and thereafter 32,130
---------------------------------------------------------
$ 415,849
=========================================================
</TABLE>
(b) Royalty commitment:
Under the terms of an agreement, the Company is committed to
pay royalties based on 20% of the licence fee revenues from
certain products up to an aggregate maximum of $575,800. The
royalty expense incurred for the nine months ended September
30, 1999 and the year ended December 31, 1998 and 1997 were
$100,859, nil and nil, respectively.
F-20
<PAGE> 24
(b) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements give effect to the acquisition of Inlogic Software, Inc. and
subsidiary ("Inlogic") which occurred on December 16, 1999 using the
purchase method of accounting. Under the purchase method of accounting,
the purchase price is allocated to the assets acquired and liabilities
assumed based on their estimated fair values. The estimated fair values
included herein are preliminary in nature and may not be indicative of
the final allocation of the purchase consideration. Such estimated fair
values of the assets and liabilities of Inlogic have been combined with
the recorded values of the assets and liabilities of Daleen
Technologies, Inc. and subsidiaries ("Daleen") in the unaudited pro
forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated balance sheet gives
effect to the purchase as if it had occurred on September 30, 1999. The
unaudited pro forma condensed consolidated statements of operations for
the year ended December 31, 1998 and the nine months ended September
30, 1999 assumes the acquisition was consummated on January 1, 1998.
The unaudited pro forma condensed consolidated financial statements are
for illustrative purposes only and do not purport to represent what
Daleen's financial position or results of operations would have been if
the acquisition had occurred on the dates indicated or to project
Daleen's financial position or results of operations as of any future
date or for any future period. The unaudited pro forma condensed
consolidated financial statements, including the notes thereto, are
qualified in their entirety by reference to, and should be read in
conjunction with, the historical consolidated financial statements of
Daleen included in its (a) Form S-1 Registration Statement, as amended
for the year ended December 31, 1998 and (b) quarterly report on Form
10-Q for the quarter ended September 30, 1999, as well as the
historical financial statements and the related notes hereto of Inlogic
included herein.
The unaudited pro forma adjustments have been applied to the financial
information derived from the financial statements of Daleen and Inlogic
to account for the acquisition as a purchase and, accordingly, the
assets acquired and liabilities assumed are reflected at their
estimated fair values.
The unaudited pro forma financial information has been prepared based
on the assumptions described in the notes thereto and includes
assumptions relating to the allocation of the consideration paid for
the assets of Inlogic based on the estimates of their fair value. In
the opinion of Daleen, all adjustments necessary to present fairly such
unaudited pro forma financial information have been based on the terms
and structure of the acquisition.
F-21
<PAGE> 25
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARY
Pro forma Condensed Consolidated Balance Sheet
As of September 30, 1999
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
DALEEN INLOGIC PROFORMA PROFORMA
ASSETS HISTORICAL HISTORICAL ADJUSTMENTS BALANCES
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 8,666 7,039 (4,216)(5),(6) 11,489
Restricted cash 123 -- -- 123
Securities available for sale 3,083 -- -- 3,083
Accounts receivable, net 4,613 262 -- 4,875
Costs in excess of billings 1,859 11 -- 1,870
Other current assets 231 12 -- 243
-------- ------ ------- -------
Total current assets 18,575 7,324 (4,216) 21,683
Notes receivable 549 -- -- 549
Deferred offering costs 1,100 -- -- 1,100
Property and equipment, net 3,030 359 -- 3,389
Goodwill, net -- -- 60,901 (2),(6) 60,901
Intangible assets, net -- -- 2,500 (2) 2,500
Other assets 533 -- -- 533
-------- ------ ------- -------
Total assets $ 23,787 7,683 59,185 90,655
======== ====== ======= =======
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable 680 287 -- 967
Accrued payroll and other accrued expenses 4,863 113 -- 4,976
Billings in excess of costs 2,736 385 (385)(3) 2,736
Other current liabilities 48 1 2,210 (1) 2,259
-------- ------ ------- -------
Total current liabilities 8,327 786 1,825 10,938
Convertible debenture -- 3,288 (3,288)(4) --
-------- ------ ------- -------
Total liabilities 8,327 4,074 (1,463) 10,938
Mandatorily redeemable convertible preferred stock 35,323 -- -- 35,323
Stockholders' equity (deficit):
Series C Convertible Preferred stock - $.01 par value 5,301 -- -- 5,301
Preferred stock - $.01 par value -- 3,719 (3,719)(4) --
Common stock - $.01 par value 37 2,097 (2,075)(1),(4) 59
Stockholders notes receivable (435) (584) 584 (5) (435)
Deferred stock compensation (565) (352) (2,178)(2),(4) (3,095)
Additional paid-in capital 4,578 501 72,611 (1),(2),(4) 77,690
Accumulated deficit (28,779) (1,772) (4,575)(2),(4) (35,126)
-------- ------ ------- -------
Total stockholders' equity (deficit) (19,863) 3,609 60,648 44,394
-------- ------ ------- -------
Total liabilities, redeemable preferred stock and
stockholders' equity (deficit) $ 23,787 7,683 59,185 90,655
======== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
F-22
<PAGE> 26
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARY
Pro forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1998
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
DALEEN INLOGIC PROFORMA PROFORMA
HISTORICAL HISTORICAL ADJUSTMENTS BALANCES
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Revenue $ 5,231 1,668 -- 6,899
Cost of revenue 4,242 153 -- 4,395
-------- ----- ------- -------
Gross profit 989 1,515 -- 2,504
Operating expenses:
Sales and marketing 2,435 203 -- 2,638
Research and development 6,653 823 -- 7,476
General and administrative 4,824 487 -- 5,311
Amortization of goodwill, other intangibles and
deferred stock-based compensation -- -- 15,463 (2) 15,463
-------- ----- ------- -------
Total operating expenses 13,912 1,513 15,463 30,888
-------- ----- ------- -------
Operating (loss) income (12,923) 2 (15,463) (28,384)
Nonoperating income 754 -- -- 754
-------- ----- ------- -------
Net (loss) income (12,169) 2 (15,463) (27,630)
Accretion of preferred stock (65) -- -- (65)
-------- ----- ------- -------
Net loss applicable to common stockholders $(12,234) 2 (15,463) (27,695)
======== ===== ======= =======
Net loss applicable to common stockholders per
share - basic and diluted $ (3.78) (5.07)
======== =======
Weighted average shares - basic and diluted 3,240 2,218 5,458
======== ======= =======
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
F-23
<PAGE> 27
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARY
Pro forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1999
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
DALEEN INLOGIC PROFORMA PROFORMA
HISTORICAL HISTORICAL ADJUSTMENTS BALANCES
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 13,198 1,572 -- 14,770
Cost of revenue 5,423 569 -- 5,992
-------- ------ ------- -------
Gross profit 7,775 1,003 -- 8,778
Operating expenses:
Sales and marketing 2,368 649 -- 3,017
Research and development 6,187 1,194 -- 7,381
General and administrative 5,649 821 -- 6,470
Amortization of goodwill, other intangibles and
deferred stock-based compensation -- -- 11,597 (2) 11,597
-------- ------ ------- -------
Total operating expenses 14,204 2,664 11,597 28,465
-------- ------ ------- -------
Operating loss (6,429) (1,661) (11,597) (19,687)
Nonoperating income 279 -- -- 279
-------- ------ ------- -------
Net loss (6,150) (1,661) (11,597) (19,408)
Accretion of preferred stock (122) -- -- (122)
-------- ------ ------- -------
Net loss applicable to common stockholders $ (6,272) (1,661) (11,597) (19,530)
======== ====== ======= =======
Net loss applicable to common stockholders per
share - basic and diluted $ (1.85) (3.49)
======== =======
Weighted average shares - basic and diluted 3,381 2,218 5,599
======== ======= =======
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
F-24
<PAGE> 28
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The purchase price for Inlogic was approximately $67.5 million, including
approximately $2.2 million of acquisition costs, and was comprised of 2.385
million of newly issued shares and options of Daleen.
This purchase was accounted for under the purchase method of accounting in
accordance with APB No. 16, whereby the purchase price is allocated to the
assets acquired and liabilities assumed based on their estimated fair values.
Estimates of the fair values of the assets and liabilities of Inlogic have been
consolidated with the Daleen column in the unaudited pro forma condensed
consolidated financial statements.
<TABLE>
(in thousands)
<S> <C>
Estimated Purchase Price:
Shares of Daleen common stock 2,218
Daleen share price based on the average
closing price for two days before and
after the purchase was agreed to and
announced $ 27.39
-----------
Consideration for Daleen common stock $ 60,742
Fair value of Daleen vested and nonvested stock
options issued to Inlogic employees 4,577
Estimated transaction costs 2,210
-----------
$ 67,529
===========
Purchase Price Allocation
Fair value of net tangible assets of Inlogic $ (4,749)
Estimated fair value adjustments relating to:
In process research and development 6,347
Employee work force 2,500
Deferred compensation 2,530
Goodwill 60,901
-----------
$ 67,529
===========
</TABLE>
On a pro forma basis as of September 30, 1999 intangible assets are comprised
of the following amounts and estimated useful lives:
<TABLE>
<S> <C> <C>
Employee work force $ 2,500 4 years
Goodwill 60,901 4 years
-----------
63,401
===========
</TABLE>
The above purchase price allocation and the lives assigned to the assets are
preliminary and have been made solely for the purpose of developing the Daleen
unaudited pro forma financial statements. The preliminary estimates are subject
to the receipt of the final valuation report.
F-25
<PAGE> 29
PROFORMA ADJUSTMENTS
(1) To record the purchase of Inlogic. The value of the Daleen common stock
was approximately $60.7 million.
(2) To record the excess of the purchase price over the estimated fair
value of assets and liabilities acquired in connection with the Inlogic
acquisition and the related amortization. The intangible components of
the consideration for this transaction which includes goodwill and
other purchased intangibles, will be amortized on a straight-line basis
over a period of four years. The deferred stock-based compensation
which was the result of stock options issued pursuant to the purchase
agreement will be amortized over the vesting period of the stock
options. In process research and development costs were immediately
expensed upon purchase as is reflected in the pro forma condensed
consolidated balance sheet at September 30, 1999. They are not included
in the pro forma condensed consolidated statements of operations since
they are considered to be a one-time nonrecurring charge.
(3) To eliminate deferred revenue for Inlogic at September 30, 1999 to
ensure it is not included in the purchase price.
(4) To eliminate the historical equity and convertible debenture of
Inlogic.
(5) To reflect payment of stockholders note receivable at September 30,
1999.
(6) Prior to the closing of the transaction, the board of directors of
Inlogic declared a cash dividend to the shareholders of Inlogic. The
dividend amounted to $4.8 million. The pro forma condensed consolidated
balance sheet at September 30, 1999, reflects the payment of dividends
on September 30, 1999.
PRO FORMA LOSS PER COMMON SHARE
Basic and diluted pro forma loss per share is computed using the weighted
average number of Daleen common shares outstanding during the period plus shares
of Daleen common stock issued in connection with the Inlogic acquisition. Shares
issued in connection with the Inlogic acquisition are assumed to be issued and
outstanding for each of the periods presented.
The following information reconciles the number of shares used to compute
Daleen's historical basic and diluted earnings per share to pro forma basic and
diluted earnings per share (in thousands):
<TABLE>
<CAPTION>
Nine Months Year Ended
Ended December 31,
September 30, 1999 1998
------------------ ------------
<S> <C> <C>
Weighted average shares -- historical 3,381 3,240
Common shares issued in connection
with the purchase 2,218 2,218
----- -----
5,599 5,458
===== =====
</TABLE>
F-26
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DALEEN TECHNOLOGIES, INC.
By: /s/ Richard A. Schell
--------------------------------------------------------------
Richard A. Schell,
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Dated: February 28, 2000
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
----
<S> <C> <C>
The following Exhibit is filed herewith:
23 Consent of KPMG, chartered accountants.
</TABLE>
<PAGE> 1
EXHIBIT 23
The Board of Directors
Daleen Technologies, Inc. and Subsidiary
We consent to the incorporation by reference in the registration statement
(No. 333-89121) on Form S-8 of Daleen Technologies, Inc. of our report dated
November 29, 1999, with respect to the consolidated balance sheets of Inlogic
Software Inc. and subsidiary as of December 31, 1997 and 1998, and the related
consolidated statements of operations, stockholders' equity (deficiency), and
cash flows for the period from inception on February 20, 1997 to December 31,
1997 and the year ended December 31, 1998, which report appears in the Form
8-K/A of Daleen Technologies, Inc. dated February 29, 2000.
/s/ KPMG LLP
Chartered Accountants
Toronto, Canada
February 29, 2000
