UNITED STATES
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 (Date of earliest event reported): December 11, 2000 (September
27, 2000)
IEXALT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
75-1667097
NEVADA 00-09322 (IRS EMPLOYER
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) IDENTIFICATION NO.)
4301 WINDFERN
HOUSTON, TEXAS 77041
(ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
(281) 600-4000
(REGISTRANT"S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 27, 2000, iExalt, Inc., a Nevada corporation (the "Company"),
entered into an agreement with iExalt Financial Services, Inc., a Texas
corporation (the "Buyer"), to sell to the Buyer all of the issued and
outstanding stock of First Choice Marketing, Inc., d/b/a iExaltFamily.com,
("First Choice") a wholly-owned subsidiary of the Company. The Buyer is owned by
Tom Dahl, a former member of the Board of Directors of the Company and President
of First Choice, who had resigned from the Company's Board of Directors on
September 22, 2000. The Company has no ownership in the Buyer, and the Buyer has
agreed to change its operating name within 180 days. First Choice is engaged in
marketing discounted products, services and benefit plans to its members. The
primary assets on the books of the Company related to First Choice are goodwill
and other intangible assets. Under the principle terms of the disposition, the
Company agreed to pay up to $18,000 of outstanding payables of First Choice, to
pay the payroll costs of First Choice through September 27th, to make additional
contingent payments of up to $75,000 by December 1, 2000, and to issue 25,000
shares of the Company's restricted, unregistered common stock to an employee of
First Choice for services previously rendered. First Choice has generated little
revenue and a negative cash flow since its acquisition in December 1999 and was
projected to continue to require a net investment by the Company before the
possibility of generating positive cash flow late in fiscal year 2001. The
disposition was made as a part of a plan to improve current cash flow and
re-focus the Company on its core activities. The consideration involved in the
transaction was based on arms-length negotiation among the parties.
Two other dispositions in unrelated businesses have been made by the
Company as a part of its plan to improve cash flow and re-focus its activities.
Neither disposition constitutes ten percent of the Company's total assets. On
September 27, 2000, the Company entered into an agreement to sell the principle
assets of nXp Technologies, Inc. ("nXp") and the related filtering technology
assets owned by the Company. nXp is a wholly-owned subsidiary of the Company,
engaged in developing filtering software, firewall applications and server-based
software to allow organizations to manage their Internet access. The Company
retained the right to use the technology and to market it as a Christian brand
to the Christian community. On September 21, 2000, the Company agreed to
terminate its Funding Agreement, Management Agreement and preliminary Letter of
Intent relating to the acquisition of an e-commerce company. Both activities had
been projected to require a continuing investment by the Company before there
was a possibility of generating positive cash flow.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
The appropriate pro forma financial information relating to the
disposition of First Choice is filed herewith as Annex A.
2
<PAGE>
(c) EXHIBITS.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 (1) Stock Purchase Agreement dated
September 27, 2000, between iExalt,
Inc. and iExalt Financial Services,
Inc. (exhibits omitted).
99.1 (1) Press release issued by the Company
relating to the disposition of First
Choice and nXp, and the termination
of the acquisition Letter of Intent.
(1) Previously filed as an exhibit to the Company's
current report on Form 8-K filed with the Securities
and Exchange Commission on October 12, 2000 and
incorporated herein by reference.
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.
DATE: December 11, 2000. iExalt, Inc.
By: /s/ CHRIS L. SISK
---------------------------------
Chris L. Sisk
VICE PRESIDENT AND
CHIEF ACCOUNTING OFFICER
3
<PAGE>
ANNEX A
The unaudited pro forma information is presented based upon the Company's
fiscal year end of August 31. Because the Company acquired First Choice within
the fiscal year (on December 31, 1999), the pro forma information presents what
the effect would have been if the disposition of First Choice had occurred on
the same date as the acquisition and includes all material adjustments
considered necessary by management for presentation in accordance with generally
accepted accounting principles.
The unaudited pro forma balance sheet reflects the disposition by the
Company of First Choice on September 27, 2000 as if it had occurred on August
31, 2000. The unaudited pro forma statement of operations is for the year ended
August 31, 2000 and reflects the following acquisitions as if they had occurred
on September 1, 1999: Keener Communications Group, Inc. (July, 2000),
PremierCare, LLC (July, 2000), First Choice Marketing, Inc. (December, 1999),
Premiere Speakers Bureau, Inc. (December, 1999), and Wordcross Enterprises, Inc.
(October, 1999). The pro forma adjustments relating to the acquisitions listed
above are shown under the heading of "Acquired Companies". The pro forma
adjustments to reflect the disposition as if it occurred concurrent with the
First Choice acquisition are shown separately.
Pro forma adjustments for the disposition primarily reflect (a)
reclassifying operating costs and impairment losses from continuing operations
to discontinued operations and (b) giving effect to transaction costs incurred
in the disposition.
Under the contingent payment terms, the Company paid $25,000 to Buyer in
November. This amount, made subsequent to the disposition, is not included in
the pro forma statements.
The pro forma financial data do not purport to represent what the
Company's combined financial position or results of operations would actually
have been if such transactions in fact had occurred on these dates and are not
necessarily representative of the Company's combined financial position or
results of operations for any future period. Since the acquired entities were
not under common control or management prior to their acquisitions by the
Company and the business being disposed of was primarily in a development stage,
historical combined results may not be comparable to, or indicative of, future
performance. The unaudited pro forma combined financial statements should be
read in conjunction with the historical consolidated financial statements and
notes thereto included in the company's most recent report filed on Form 10-KSB.
4
<PAGE>
IEXALT, INC.
UNAUDITED PRO FORMA BALANCE SHEET
AUGUST 31, 2000
IEXALT
AND DISCONTINUED PRO FORMA
SUBSIDIARIES OPERATIONS TOTAL
-------------------------------------------------
ASSETS:
Current assets $ 1,295,486 (B) $ (74,379) $ 1,221,107
Property & equipment, net 717,025 (B) (45,225) 671,800
Goodwill, net 2,462,244 -- 2,462,244
Other assets 272,853 (B) (6,852) 266,001
-------------------------------------------------
TOTAL ASSETS $ 4,747,608 $(126,456) $ 4,621,152
=================================================
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current liabilities $ 2,894,951 (B) $ (22,447) $ 2,872,504
Long-term liabilities 98,074 -- 98,074
Shareholders' equity 1,754,583 (B) (104,009) 1,650,574
-------------------------------------------------
TOTAL LIABILITIES &
EQUITY $ 4,747,608 $(126,456) $ 4,621,152
=================================================
5
<PAGE>
IEXALT, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2000
<TABLE>
<CAPTION>
IEXALT
AND ACQUIRED PRO FORMA
SUBSIDIARIES COMPANIES ADJUSTMENTS SUBTOTAL
------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES ................................ $ 4,276,883 $ 3,824,400 $ -- $ 8,101,283
EXPENSES ................................ 12,016,302 3,817,421 96,329 15,930,052
------------ ------------ ------------ ------------
NET LOSS ................................ $ (7,739,419) $ 6,979 $ (96,329) $ (7,828,769)
============ ============ ============ ============
LOSS PER SHARE .......................... $ (0.29)
============
PROFORMA WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING .................. 27,032,656
============
<CAPTION>
DISCONTINUED PRO FORMA
SUBTOTAL OPERATIONS TOTAL
------------------------------------------------------------
<S> <C> <C> <C>
REVENUES ................................ $ 8,101,283 (A) $ (198,786) $ 7,902,497
EXPENSES ................................ 15,930,052 (A) (3,891,342) 12,038,710
------------ ------------ ------------
NET LOSS FROM CONTINUING OPERATIONS ..... (7,828,769) 3,692,556 (4,136,213)
(A) (3,692,556)
NET LOSS FROM DISCONTINUED OPERATIONS ... -- (B) (136,009) (3,828,565)
------------ ------------ ------------
NET LOSS ................................ $ (7,828,769) $ (136,009) $ (7,964,778)
============ ============ ============
LOSS PER SHARE FROM CONTINUING OPERATIONS $ (0.15)
LOSS PER SHARE FROM DISCONTINUED
OPERATIONS.............................. (0.14)
------------
NET LOSS PER SHARE ...................... $ (0.29) $ (0.29)
============ ============
PROFORMA WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING .................. 27,032,656 27,057,656
============ ============
</TABLE>
6
<PAGE>
The Pro Forma Adjustments consisted of the following:
(A) To reclass the loss through August 31, 2000 of First Choice to discontinued
operation
(B) To reflect the disposition of the assets of First Choice and the related
profit and loss effect through the date of disposition.
7
