<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 1, 1996
(Date of earliest event reported): April 19, 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
19, 1996, which was filed on or about May 2, 1996.
This document includes the financial statements and pro forma financial
information which had been omitted from the previously filed document as
permitted by Item 7(a)(4) of Form 8-K.
================================================================================
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. The following financial
statements for INOVIS GmbH & Company are attached hereto as Exhibit 99(a):
-Independent Auditors' Report
-Balance Sheet as of December 31, 1995
-Statement of Operations for the Year ended December 31, 1995
-Statement of Partners Equity for the Year ended December 31, 1995
-Statement of Cash Flows for the Year ended December 31, 1995
-Notes to Financial Statements for the Year ended December 31, 1995
(b) Pro Forma Financial Information. Attached hereto as Exhibit 99(b) are the
unaudited pro forma consolidated condensed statement of operations for the
year ended December 31, 1995 and the unaudited pro forma consolidated condensed
balance sheet as of December 31, 1995.
(c) Exhibits.
2(a) Definitive Purchase agreement dated April 19, 1996 (previously
filed).
99(a) Audited Financial Statements of INOVIS GmbH & Co. for the year ended
December 31, 1995.
99(b) Unaudited pro forma consolidated condensed statement of operations
for the year ended December 31, 1995 and the unaudited consolidated condensed
balance sheet as of December 31, 1995.
<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 1, 1996
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
<TABLE>
PAGE
INOVIS GMBH & COMPANY ----
<S> <C>
Independent Auditors' Report........................................................................... F-3
Balance Sheet as of December 31, 1995.................................................................. F-4
Statement of Operations for the Year ended December 31, 1995........................................... F-5
Statement of Partners' Equity for the Year ended December 31, 1995..................................... F-6
Statement of Cash Flows for the Year ended December 31, 1995........................................... F-7
Notes to Consolidated Financial Statements for the
Year ended December 31, 1995................................................................ F-8
HARBINGER CORPORATION
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1995................................. F-15
Unaudited Pro Forma Consolidated Statement of Operations for the
Year ended December 31, 1995................................................................ F-16
Notes to Unaudited Pro Forma Consolidated
Financial Statements........................................................................ F-17
</TABLE>
F-1
<PAGE> 1
EXHIBIT 99(a)
INOVIS GmbH & Co.
computergestutze informationssysteme
Financial Statements
December 31, 1995
With Independent Auditor's Report Thereon
F-2
<PAGE> 2
INDEPENDENT AUDITOR'S REPORT
The Partners
INOVIS GmbH & Co. computergestutzte Informationssysteme
We have audited the accompanying balance sheet of INOVIS GmbH & Co.
computergestutzte Informationssyteme as of December 31, 1995 and the related
statement of earnings and accumulated deficit, statement of partner's equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of INOVIS GmbH & co.
computergestutze Informationssyteme as of December 31, 1995 and the results of
its operations and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States.
June 11, 1996 /s/ KPMG Deutsche Treuhand-Gesellschaft AG
------------------------------------------
Munchen, Germany KPMG Deutsche Treuhand-Gesellschaft AG
F-3
<PAGE> 3
INOVIS Gmbh & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995
-----------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,638
Accounts receivable, less allowance for doubtful accounts
of $9,370 566,279
Due from partners (note 5) 31,547
Other current assets (note 4) 60,080
Prepaid expenses 8,934
-----------
Total current assets 668,478
-----------
Property and equipment, net (note 2) 314,212
Investments in subsidiary and related company (note 3) 49,650
-----------
$ 1,032,340
===========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Short-term borrowings (note 6) $ 185,896
Loan from silent partner (note 7) 139,860
Accounts payable 40,866
Advance payments received 16,213
Due to affiliated companies (note 8) 227
Due to partners (note 9) 138,042
Accrued expenses and other liabilities (note 10) 308,720
-----------
Total current liabilities 829,824
-----------
Partners' equity:
Partners' paid-in capital 308,866
Retained earnings (105,611)
Foreign currency translation adjustment (739)
-----------
Total partners' equity 202,516
Commitments and contingencies (note 11) -----------
$ 1,032,340
===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 4
INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
YEAR ENDED DECEMBER 31,1995
<TABLE>
<CAPTION>
1995
----------
<S> <C>
Revenue:
Services $2,435,217
Software 524,306
----------
Total revenues (note 12) 2,959,523
----------
Direct costs:
Services 907,171
Software 34,722
----------
Total direct costs 941,893
----------
Gross profit 2,017,630
----------
Operating costs:
Selling and marketing 712,463
General and administrative 587,738
Product development 437,162
Depreciation and amortization 178,358
----------
Total operating costs 1,915,721
----------
Operating Income 101,909
Interest expense, net (32,651)
----------
Income before income taxes 69,258
Income taxes (note 13) 89,144
----------
Net loss 19,886
Accumulated deficit, beginning of the year 84,999
Profit distribution to unlimited partner 726
----------
Accumulated deficit, end of year $ 105,611
</TABLE> ==========
See accompanying notes to financial statements.
F-5
<PAGE> 5
INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
STATEMENT OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
Partner Foreign
Fixed Capital Retained Currency
Accounts Earnings Adjustment Total
------------- ---------- ---------- -------
<S> <C> <C> <C> <C>
As at January 1, 1995 $308,866 (84,999) - 223,867
Capital contributions during the year - - - -
Drawings during year - - - -
Profit distribution to unlimited partner - (726) - (726)
Result for year - (19,866) (739) (20,625)
-------- -------- ------ -------
As at December 31, 1995 $308,866 (105,611) (730) 202,516
======== ======== ====== =======
</TABLE>
F-6
<PAGE> 6
INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995
---------
<S> <C>
Cash flows from operating activities:
Net loss $ (19,886)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 178,358
Changes in operating assets and liabilities
Trade receivables, net (205,173)
Other current assets (20,926)
Prepaid expenses (3,346)
Accounts payable (25,265)
Advance payments received 16,100
Income taxes payable (90,969)
Decrease in net liabilities to affiliated companies (17,048)
Accrued expenses and other liabilities 127,590
---------
Net cash used by operating liabilities (60,565)
---------
Cash flows from investing activities:
Capital expenditures (259,330)
---------
Net cash used by investing activitie (259,330)
---------
Cash flows from financing activities:
Proceeds from net borrowings under line-of-credit agreements 96,455
Profit distributed to unlimited partner (726)
Decrease of net liabilities to partners (3,167)
---------
Net cash provided by financing activities 92,562
---------
Effect of exchange rate changes on cash 16,260
---------
Decrease in cash (211,073)
Cash, beginning of year 212,711
---------
Cash, end of year $ 1,638
=========
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE> 7
INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND PRESENTATION
INOVIS GmbH & Co. computergestutze Informationssysteme (the "Company"), a
partnership, develops, markets and supports software products especially for
the communication between business partners (EDI) and provides services for the
administration and distribution of business data (Electronic commercial
solutions). The business activities are based in Germany.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabiities and disclosure of
contingent assets and liabilities as of the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
The Commpany owns a 100% interest in INOVISmedia Gesellschaft fur Informatik
mbH which was not consolidated in view of the immaterial assets and liabilities
as well as the immaterial revenues and expenses involved.
All amounts are in US-dollars.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with the American institues of
Certified Public Accountants' Statement of Position 91-1 as follows:
- - Projects
Revenues derived from services rendered to cutomers are recognized over the
service period applying the percentage-of-compleetion method for uncompleted
projects at year-end.
- -EDI business
Revenues arising from rendering EDI services are recognized on a contraced
monthly basis.
- -Software sales
Revenues derived from the sale of software products are recognized upon
shipment to customer.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
F-8
(Continued)
<PAGE> 8
INOVIS GmbH & CO. COMPUTERGESTUTZE INFORMATIONSSYSTEME
Notes to Financial Statements
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets as follows:
Years
Computer and communication equipment 3-4
Software 3
Furniture, fixtures and leasehold improvements 4-8
Automobiles 4
INVESTMENTS IN SUBSIDIARY AND COMPANY RELATED
The Company's 100% investment in INOVISmedia Gesellschaft fur Informatik mbH
and its 14% investment in RegioService-Gesellschaft fur regionale
Netzwerkdlenste mbH are accounted for at acquisitions cost which equal the
Company's capital contribution.
INCOME TAXES
The Company accounts for income taxes under the asset and liability method of
accounting for income taxes in accordance with Statement of Financial
Accounting Standards, No. 109,"Accounting for Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the year which those temporary
differences are expected to be recovered or settled.
FOREIGN CURRENCIES
The functional currency of the Company is the Deutsche mark.
There are no foreign currency transactions. The transactions of the financial
statements denominated in Deutsche Mark into US-$ was made in accordance with
FAS 52 to facilitate US reporting.
(Continued)
F-9
<PAGE> 9
INOVIS GMBH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
Notes to Financial Statements
RELATED PARTIES
The Company has business relations with the following companies which are
considered as related parties:
- - INOVIS Verwaltungs GmbH,
- - RegloService-Gesellschaft fur regionale Netzwerkdienste mbH.
INOVIS Verwaltungs GmbH, the unlimited liability partner of the Company, holds
an interest of 14.4% in the partnership's capital. The Company was charged by
INOVIS Verwaltungs GmbH for administration expenses totalling $142,945 in 1995.
RegioService-Gesellschaft fur regionale Netzwerkdienste mbH is a joint venture
in which the Company has a 14% stake. The purpose of the joint venture is the
implementation and maintenance of an on-line information network for the
Karlsruhe, Germany, area. The other joint venture partners are software or
research companies and individuals.
2. PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following at December 31, 1995:
<TABLE>
<S> <C>
Computer and communication equipment $1,182,156
Software 403,929
Furniture, fixtures and leasehold improvements 202,745
Automobiles 70,693
----------
1,859,523
less accumulated depreciation and amortization (1,545,311)
----------
$ 314,212
==========
</TABLE>
3. INVESTMENTS IN SUBSIDIARY AND RELATED COMPANY
Investments consist of the following as at December 31, 1995:
<TABLE>
<S> <C>
INOVISmedia Gesellschaft fur Informatik mbH
(100% subsidiary) $ 34,965
RegioService - Gesellschaft fur regionale
Netzwerkdienste mbH (14% owned by the Company) 14,685
----------
$ 49,650
==========
</TABLE>
F-10
(Continued)
<PAGE> 10
INOVIS GMBH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
Notes to Financial Statements
The following table sets forth the condensed balance sheet and statement of
operations of INOVISmedia Gesellschaft fur Informatik mbH as of and for the
year ended December 31, 1995.
<TABLE>
<S> <C>
Balance sheet
Property and equipment $18,289
Current assets 11,943
-------
$30,232
=======
Accruals and current liabilities $ 8,825
Shareholder's equity 21,407
-------
$30,232
=======
Statement of operations:
Revenue $15,497
General and administrative 16,983
Depreciation and amortization 16,235
-------
Operating loss 17,721
Interest expense, net 949
Other income, net 4,696
Income taxes 1,611
-------
Loss after taxes $15,585
=======
</TABLE>
RegioService - Gesellschaft fur regionale Netzwerkdienste mbH was founded in
December 1995 and did not have any business activities in 1995.
4. OTHER CURRENT ASSETS
Other current assets consist of:
<TABLE>
<S> <C>
Unbilled fees $38,811
Supplies 13,949
Trade tax refund 4,295
Sundry 3,025
-------
$60,080
=======
</TABLE>
F-11
(Continued)
<PAGE> 11
INOVIS GmbH & Co. computergestutzte Informationssysteme
Notes to Financial Statements
5. DUE FROM PARTNERS
The amount results from short-term loans granted by some limited liable
partners in the past which were netted with prior years losses attributable to
those partners. The loans bear interest of 10% p.a.
6. SHORT-TERM BORROWINGS
<TABLE>
<S> <C>
Short-term borrowings comprise:
Current account
Deutsche Bank, Karlsruhe $143,945
Dresdner Bank, Karlsruhe 29,575
Cash in transit 12,376
--------
$185,896
========
</TABLE>
The current accounts bear interest of 10% p.a. at year-end. Average interes
rate during the year was 10.25% (from 9.75% to 11.00%). Interest expense was
$7,516 for the year. The borrowings are granted under line-of-credit
agreements.
According to a blanket assignment agreement between INOVIS and Deutsche Bank
dated November 11, 1993 the Company automatically transfers the legal ownership
of its accounts receivable to Deutsche Bank as security for all current and
future claims of Deutsche Bank.
7. LOAN FROM SILENT PARTNER
The silent partner, Mittelstandische Beteiligungsgesellschaft Baden-Wurttemberg
GmbH, a state owned venture capitalist firm, granted in 1986 a loan of $139,860
for the development of a data base system. The loan bears an interest of 8,25%
p.a. The term silent partner is used to indicate that the entity
(Mittelstandische Beteiligungsgesellschaft Baden-Wurttemberg) has no say in
the running of the business. The silent partnership was terminated effective
January 31, 1996 and a new annuity loan bearing interest of 6% p.a. replaced
the agreement. The loan is repayable by monthly installments within 3 years.
F-12
<PAGE> 12
INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
Notes to Financial Statements
8. DUE TO AFFILIATED COMPANIES
The amount is due to INOVISmedia Gesellschaft fur Informatik mbH.
9. DUE TO PARTNERS
The amount results from short-term loans granted by some limited liable
partners in prior years. The loans were matched with losses attributable to
those partners and bear interest of 10% p.a.
10. ACCRUED EXPENSES AND OTHER LIABILITIES
The accrued expenses and other liabilities mainly consist of an accrual for
untaken vacation as of year end ($115,664), VAT payables ($48,863), a trade tax
payable for the year 1994 ($38,728), social security expenses ($32,820) as well
as an accrual for outstanding invoices ($31,224).
11. COMMITMENTS AND CONTINGENCIES
The Company leases office facilities, furniture and equipment under operating
leases with remaining terms of up to seven years. Future minimum lease
payments under non-cancellable operating leases are as follows:
<TABLE>
<CAPTION>
Year ending December 31
<S> <C>
1996 $276,923
1997 226,573
1998 222,378
1999 161,538
2000 18,182
2001 17,483
2002 12,587
thereafter -
--------
Total minimum lease payments $935,664
========
</TABLE>
F-13
<PAGE> 13
INOVIS GmbH & CO. COMPUTERGESTUTZTE INFORMATIONSSYSTEME
Notes to Financial Statements
12. REVENUES
Revenues were all earned in the Federal Republic of Germany.
13. INCOME TAXES
Income tax expense for the year ending December 31, 1995:
<TABLE>
<CAPTION>
Current Deferred Total
------- -------- -----
<S> <C> <C> <C>
Trade income tax $89,144 0 89,144
</TABLE>
The tax effects of temporary differences between German GAAP and US-GAAP
(arising from the application of the percentage of completion method and
considering accrued expenses for untaken vacation of the partners) result in a
deferred tax asset of $29,000 applying a future tax rate of 57%. A full
valuation allowance against this deferred tax asset has been made due to the
uncertainty surrounding its realization.
14. CASH FLOW INFORMATION
The following amounts were paid in 1995:
<TABLE>
<S> <C>
Interest $29,900
Income taxes $91,852
</TABLE>
15. SUBSEQUENT EVENTS
Effective March 31, 1996 Harbinger Corporation acquired a 100% ownership
interest in INOVIS GmbH & Co. Computergestutzte Informationssysteme from the
partners by exchanging 140,184 unregistered shares of Harbinger Corporation's
common stock for 100% ownership of the partnership.
F-14
<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>
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; 9,902,720 issued 1 328 (328)(1) 1 0 0 (5) 1
Additional paid in capital 32,201 5,325 (5,325)(1) 33,505 309 (309)(5) 36,027
1,304 (1) 2,522 (5)
Accumulated deficit (5,554) (7,598) 7,598 (1) (10,003) (107) 107 (5) (13,303)
(4,449)(1) (3,300)(5)
------- ------- -------- ------ -------
Total shareholders' equity 29,133 (1,945) 25,988 202 25,210
------- ------- -------- ------ -------
$40,260 $ 831 $ 40,541 $1,032 $41,800
======= ======= ======== ====== =======
</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
------- ------ ------- ------ -------
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
======= ======= =======
</TABLE>
The Company charged $7,849,000 to its historical statement of operations in
the period ended March 31, 1996 resulting from a valuation of acquired
in-process product development costs associated with the acquisitions.
This non-recurring charge was directly attributable to the transactions and
is not included in this pro forma statement.
F-17
<PAGE> 4
HARBINGER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
Effective March 31, 1996, Harbinger ("the Company") acquired all of the
shares of INOVIS GmbH & Co. ("INOVIS"), a German partnership based in
Karlsruhe, Germany for $1,409,000 in cash, $557,000 note payable, the issuance
of 140,184 shares of the Company's common stock at a price of $17.25 per share
and warrants to purchase up to 20,000 shares of the Company's stock. The
company recorded the acquisition, which was completed on April 19, 1996, using
the purchase method of accounting with $3,300,000 of the purchase price
allocated to in-process product development and charged to the consolidated
statement of operations on March 31, 1996.
Effective March 31, 1996, Harbinger ("the Company") acquired all of the
common stock of NTEX Holding, B. V. ("NTEX"), a Dutch corporation based in
Rotterdam, The Netherlands for $3,195,000 in cash, the issuance of 71,852
shares of the company's common stock at a price of $16.75 per share and
warrants to purchase up to 12,500 shares of the Company's stock. The company
recorded the acquisition, which was completed on April 4, 1996, using the
purchase method of accounting with $4,449,000 of the purchase price allocated
to in-process product development and charged to the consolidated statement of
operations on March 31, 1996.
The unaudited pro forma consolidated statements of operations for the year
ended December 31, 1995 and the unaudited pro forma consolidated balance sheet
as of December 31, 1995 illustrate the estimated effects of the acquisitions as
if they had occurred as of the beginning of and for the period presented.
The unaudited pro forma consolidated financial statements have been
prepared using the purchase method of accounting, whereby the total cost of the
acquisition is allocated to the tangible and intangible assets acquired and
liabilities assumed based upon their respective fair values at the effective
date of such acquisition. For purposes of the unaudited pro forma consolidated
financial statements, such allocations have been made based upon currently
available information and management's estimates.
The historical financial statements are derived from the audited financial
statements of the Company for the year ended December 31, 1995, and the audited
statements of INOVIS and NTEX as of and for December 31, 1995.
The unaudited pro forma consolidated financial statements do not purport
to represent what the results of operations or financial position of the
company would actually have been if the acquisition had occurred on such dates
or to project the results of operations for financial position of the Company
for any future date or period. The unaudited pro forma consolidated financial
statements should be read together with the Financial Statements and Notes
thereto of the Company.
1) Reflects adjustments to record the acquisition of NTEX including the
purchase price allocation. The purchase price of NTEX includes the
payment of $3,195,000 in cash to the stockholders of NTEX and assumes
certain other payments in Harbinger common stock and warrants in the
amount of $1,304,000. The purchase price allocation reflects: (i) a
$2,648,000 increase in goodwill and other intangibles; (ii) a $4,449,000
increase in the Company's accumulated deficit resulting from a valuation
of in-process research and development, which was charged to the
consolidated statement of operations on March 31, 1996; (iii) a provision
of $650,000 for certain other liabilities; and (iv) the elimination of
the historical equity accounts of NTEX.
2) Reflects the balance sheet of NTEX as of December 31, 1995 and the
historical operating results for the year ended December 31, 1995.
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<PAGE> 5
3) Reflects an increase in amortization expense as a result of the
acquisition of NTEX. Amortization of goodwill arising from the acquisition
is provided using the straight-line method over ten years. Software
development costs are amortized on a product-by product basis at the
greater of the amounts computed using (a) the ratio of current gross
revenues for a product or enhancement to the total current and anticipated
future gross revenues for that product or enhancement or (b) the
straight-line method over the remaining estimated economic life of the
product or enhancement, not to exceed five years.
4) Reflects interest expense on the cash payment of $3,195,000 to fund the
NTEX acquisition at the prime rate (8%) for the period.
5) Reflects adjustments to record the acquisition of INOVIS including the
purchase price allocation. The purchase price of INOVIS includes the
payment of $1,409,000 in cash and $557,000 note payable to shareholders
of INOVIS and assumes certain other payments in Harbinger common stock
and warrants in the amount of $2,522,000. The purchase price allocation
reflects: (i) a $1,536,000 increase in goodwill and other intangibles;
(ii) a $3,300,000 increase in the Company's accumulated deficit resulting
from a valuation of in-process research and development, which was charged
to the consolidated statement of operations on March 31, 1996; (iii) a
provision of $650,000 for certain other liabilities; and (iv) the
elimination of the historical equity accounts of INOVIS.
6) Reflects the balance sheet of INOVIS as of December 31, 1995 and the
historical operating results for the year ended December 31, 1995.
7) Reflects an increase in amortization expense as a result of the
acquisition of INOVIS. Amortization of goodwill arising from the
acquisition is provided using the straight-line method over ten years.
Software development costs are amortized on a product-by product basis at
the greater of the amounts computed using (a) the ratio of current gross
revenues for a product or enhancement to the total current and anticipated
future gross revenues for that product or enhancement or (b) the
straight-line method over the remaining estimated economic life of the
product or enhancement, not to exceed five years.
8) Reflects interest expense on the cash payment of $1,409,000 and the note
payable in the amount of $557,000 to fund the INOVIS acquisition at the
prime rate (8%) for the period.
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