<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 Report July 2, 1996
(Date of earliest event reported): April 20, 1996
HARBINGER CORPORATION
(Exact name of Company specified in its charter)
<TABLE>
<S> <C> <C>
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)
</TABLE>
(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.
================================================================================
<PAGE> 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.
<PAGE> 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
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
HARBINGER N.V.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
F-1
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 4
Harbinger N.V. and subsidiaries
CONSOLIDATED BALANCE SHEETS
(as of December 31, 1995, 1994 and 1993)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(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
=====================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
3
F-5
<PAGE> 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)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Cumulative 1995 1994 1993
since
inception
- -----------------------------------------------------------------------------------------------------
(in US$)
<S> <C> <C> <C> <C>
Revenues 49,941 49,941 - -
Direct costs 143,094 91,272 51,822 -
------------------------------------------------
Gross margin (93,153) (41,331) (51,822) -
Operating costs:
Selling and marketing 143,743 47,987 95,756 -
General and administrative 2,752,349 1,432,566 1,043,743 276,040
Depreciation and amortization 37,238 25,793 11,445 -
Write-off of software development costs 25,119 25,119 -
Recharged and other (15,863) (15,863) - -
------------------------------------------------
Total operating costs 2,942,586 1,515,602 1,150,944 276,040
Operating loss (3,035,739) (1,556,933)(1,202,766) (276,040)
Interest income (105,550) (29,866) (68,692) (6,992)
Foreign currency exchange loss 234,779 73,005 161,757 17
-------------------------------------------------
Net loss (3,164,968) (1,600,072)(1,295,831) (269,065)
======================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
4
F-6
<PAGE> 6
Harbinger N.V. and subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(for the years ended December 31, 1995 and 1994 and the one-month period ended
December 31, 1993)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Common stock Additional Deficit Cumulative Total
paid-in accumulated effect of share-
capital during the foreign holders'
development currency equity
------------------------- stage translation
Shares Amount
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(in US$)
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
========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
5
F-7
<PAGE> 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)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Cumulative 1995 1994 1993
since
inception
- -------------------------------------------------------------------------------------------------------------------------
(in US$)
<S> <C> <C> <C> <C>
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
</TABLE>
6
F-8
<PAGE> 8
Harbinger N.V. and subsidiaries
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Cumulative 1995 1994 1993
since
inception
- -------------------------------------------------------------------------------------------------------------------------
(in US$)
<S> <C> <C> <C> <C>
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
=============================================================
</TABLE>
See accompanying notes to consolidated financial statements
7
F-9
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
1995 1994
===================================================================
(in US$)
<S> <C> <C>
Computer and communications equipment 70,555 54,141
Furniture and fixtures 38,140 34,076
Machinery and equipment 9,409 8,688
------- ------
118,104 96,905
Less: Accumulated depreciation (33,807) (11,991)
-------- ------
84,297 84,914
===================================================================
</TABLE>
9
F-11
<PAGE> 11
Harbinger N.V. and subsidiaries
3 INCOME TAXES
The provision for income taxes includes income taxes deferred because of
temporary differences between the consolidated financial statement and
tax bases of assets and liabilities and any increase or decrease in the
valuation allowance for deferred income tax assets.
Income tax benefit is zero for the years ended December 31, 1995, 1994
and 1993.
The significant components of the deferred income tax benefit for the
years ended December 31, 1995, 1994 and 1993 are summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1995 1994 1993
-------------------------------------------------------------------------------
(in US$)
<S> <C> <C> <C>
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
--------------------------------------
- - -
==============================================================================
</TABLE>
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:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1995 1994 1993
-------------------------------------------------------------------------------
(in US$)
<S> <C> <C> <C>
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
--------------------------------------
- - -
==============================================================================
</TABLE>
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
<PAGE> 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:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Stock options
------------------------------------
Number Range
-----------------------------------------------------------------------
(in Dutch guilders)
<S> <C> <C> <C> <C>
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
======================================================================
</TABLE>
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
<PAGE> 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, $98,191 and zero for 1995, 1994 and 1993,
respectively. Future minimum lease payments under operating leases with
noncancelable lease terms in excess of one year for the next five years and the
aggregate are as follows:
<TABLE>
<CAPTION>
(in US$)
<S> <C>
1996 43,953
1997 34,055
1998 14,081
1999 4,755
------
96,844
======
</TABLE>
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
<PAGE> 1
EXHIBIT 99 (b)
HARBINGER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C> <C>
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
======= ==== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
----------------------------------------
Historical Pro Forma Pro Forma
--------------------------------------
HNV Adjustments Consolidated
--- ----------- ------------
(in thousands, except for share and per share data)
<S> <C> <C> <C>
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
====== =======
</TABLE>
F-15
<PAGE> 2
HARBINGER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C> <C>
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
======= ====== ======= ====== =======
<CAPTION>
December 31, 1995
--------------------------------------
Historical
---------- Pro Forma Pro Forma
HNV Adjustments Consolidated
--- ----------- ------------
(in thousands, except per share data)
<S> <C> <C> <C>
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
====== =======
</TABLE>
F-16
<PAGE> 3
HARBINGER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C> <C>
(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
======= ======= =======
<CAPTION>
Twelve Months Ended December 31, 1995
---------------------------------------
Historical
---------- Pro Forma Pro Forma
HNV Adjustments Consolidated
--- ----------- ------------
(in thousands, except per share data)
<S> <C> <C> <C>
(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
=======
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
