<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 June 17, 1996
(Date of earliest event reported): April 4, 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)
</TABLE>
1055 LENOX PARK BOULEVARD, ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
(404) 841-4334
(Company's telephone number, including area code)
This Form 8-K/A amends Registrant's previously filed Form 8-K dated April
4, 1996, which was filed on or about April 18, 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 NTEX Holding B.V. as of and for December 31, 1995 are attached
hereto as Exhibit 99(a):
-Report of the Auditors
-Consolidated Balance Sheet as of December 31, 1995
-Consolidated Statement of Operations for the Year ended December 31,
1995
-Consolidated Statement of Shareholders' Equity (Deficiency )for the
Year ended December 31, 1995
-Consolidated Statement of Cash Flows for the Year ended December 31,
1995
-Notes to Consolidated 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 4, 1996 (previously
filed).
99(a) Audited Financial Statements of NTEX Holding, B.V. 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.
1
<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: June 17, 1996
2
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
NTEX HOLDING, B.V.
Report of the Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheet as of December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statement of Operations for the
Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statement of Shareholders' Equity (Deficiency) for the
Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated 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-14
Unaudited Pro Forma Consolidated Statement of Operations for the
Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-15
Notes to Unaudited Pro Forma Consolidated Condensed
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16
</TABLE>
3
<PAGE> 1
EXHIBIT 99(a)
CONSOLIDATED FINANCIAL STATEMENTS
NTEX HOLDING B.V.
ROTTERDAM, THE NETHERLANDS
DECEMBER 31,1995
F-1
<PAGE> 2
CONTENTS
Report of the auditors / 3
Financial statements
- - Consolidated Balance Sheet / 4
- - Consolidated Statement of Operations / 5
- - Consolidated Statement of Shareholders' Equity (Deficiency) / 6
- - Consolidated Statement of Cash Flows / 7
- - Notes to Consolidated Financial Statements / 8
F-2
<PAGE> 3
REPORT OF THE AUDITORS
We have audited the accompanying consolidated balance sheet of NTEX Holding
B.V, as of December 31, 1995, and the related consolidated statement of
operations, shareholders 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 auditing standards generally
accepted in the United States. 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of NTEX Holding B.V. at December 31, 1995, and the consolidated result of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States.
/s/ MORET ERNST & YOUNG ACCOUNTANTS
June 12, 1996 MORET ERNST & YOUNG ACCOUNTANTS
F-3
<PAGE> 4
NTEX HOLDING B.V.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
ASSETS
<TABLE>
<CAPTION>
Notes 1995
------- --------------------------
USD NLG
<S> <C> <C> <C>
CURRENT ASSETS
Trade accounts receivable less allowance for bad debts
of USD 99,300 (NLG 159,128) 504,740 808,846
Other accounts receivable 153,492 245,971
Prepayments 81,171 130,076
---------- -----------
Total current assets 739,403 1,184,893
---------- -----------
COMPUTER EQUIPMENT, FIXTURES AND FITTINGS 4 1,012,059 1,621,825
Less: accumulated depreciation 4 (920,755) (1,475,510)
---------- -----------
91,304 146,315
---------- -----------
TOTAL ASSETS 830,707 1,331,208
========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY/ (DEFICIENCY)
CURRENT LIABILITIES
Bank overdraft 5 352,819 565,392
Trade accounts payable:
- - Lifetime Networks B.V. 12 203,834 326,644
- - Other 431,647 691,715
Other accounts payable and accrued expenses 489,898 785,062
Deferred revenue 473,112 758,162
Current portion of long-term debt 7 371,589 595,472
Subordinated debt 8 450,546 722,000
---------- -----------
Total current liabilities. 2,773,445 4,444,447
---------- -----------
PROVISIONS
Pension provision 1,882 3,015
SHAREHOLDERS' EQUITY/(DEFICIENCY)
Common stock, NLG 10 par value:
- - Authorized charge - 152,250
Issued and fully paid shares - 52,525 327,769 525,250
Additional paid-in capital 5,325,478 8,534,078
Accumulated deficit (7,597,867) (12,175,582)
---------- -----------
(1,944.620) (3,116,254)
---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIENCY) 830,707 1,331,208
========== ===========
</TABLE>
See accompanying notes
F-4
<PAGE> 5
NTEX HOLDING B.V.
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Notes 1995
------- ----------------------------
USD NLG
<S> <C> <C> <C>
REVENUES
Services 2,245,912 3,590,090
Software 125,944 201,322
Hardware 180,908 289,181
--------- ---------
2,552,764 4,080,593
--------- ---------
COST OF SALES
Services 487,344 775,949
Software 5,966 9,500
Hardware 246,918 393,143
--------- ---------
740,228 1,178,592
--------- ---------
Gross profit 1,812,536 2,902,001
--------- ---------
OPERATING COSTS
Selling and marketing 484,372 771,217
General and administrative 1,153,945 1,837,311
Depreciation 4 40,041 63,753
Product development 3 435,662 693,661
--------- ---------
2,114,020 3,365,942
--------- ---------
OPERATING LOSS (301,484) (463,941)
Other income (expense):
Interest expenses (99,301) (158,107)
--------- ---------
LOSS BEFORE INCOME TAXES (400,785) (622,048)
Income taxes 2
--------- ---------
NET LOSS (400,785) (622.048)
========= =========
</TABLE>
See accompanying notes
F-5
<PAGE> 6
NTEX HOLDING B.V.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY/(DEFICIENCY)
YEAR ENDED DECEMBER 31,1995
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
stock capital deficit Total
NLG NLG NLG NLG
------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 525,250 8,534,078 (11,553,534) (2,494,206)
Net loss - - (622,048) (622,048)
------- --------- ----------- ----------
Balance at December 31, 1995 525,250 8,534,078 (12,175,582) (3,116,254)
======= ========= =========== ==========
Additional Currency
Common Paid-In Accumulated Translation
stock capital deficit adjustment Total
-------- ---------- ----------- ----------- -----------
USD USD USD USD USD
Balance at December 31, 1994 327,769 5,325,478 (7,209,694) - (1,556,447)
Net loss (400,785) (400,785)
Currency translation adjustment 12,612 12,612
------- --------- ----------- ------ ----------
Balance at December 31, 1995 327,769 5,325,478 (7,610,479) 12,612 (1,944,620)
======= ========= =========== ====== ==========
</TABLE>
See accompanying notes
F-6
<PAGE> 7
NTEX HOLDING B.V.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995
----------------------------
USD NLG
<S> <C> <C>
OPERATING ACTIVITIES
Net loss (400,785) (622,048)
Adjustments to reconcile net loss to net cash used
by operating activities:
- - depreciation 40,041 63,753
Changes in operating assets and liabilities
- - accounts receivable and prepayments (381,897) (608,057)
- - trade accounts payable 346,691 552,002
- - other accounts payable & accrued expenses 321,204 511,421
- - pension provision 1,894 3,015
-------- --------
Net cash used by operating activities (72,852) (99,914)
-------- --------
INVESTING ACTIVITIES
Purchases of computer equipment. fixtures and fittings (58,505) (93,152)
-------- --------
Net cash used in investing activities (58,505) (93,152)
-------- --------
FINANCING ACTIVITIES
Proceeds from subordinated debt 170,833 272,000
Repayments of bank loans (48,989) (78,000)
-------- --------
Net cash provided by financing activities 121,844 194,000
-------- --------
Effect of exchange rate changes on cash (16,987) -
-------- --------
Net decrease in bank overdraft (26,500) 934
Bank overdraft at beginning of year (326,319) (566,326)
-------- --------
Bank overdraft at end of year (352,819) (565,392)
======== ========
OTHER INFORMATION
Interest paid 74,536 118,676
======== ========
</TABLE>
See accompanying notes
F-7
<PAGE> 8
NTEX HOLDING B.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
1 ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
The Company is comprised of NTEX Holding B.V. and its two wholly-owned
subsidiaries, NTEX Computer Centrum B.V. and NTEX datacommunications B.V. Each
company is a Dutch limited liability corporation.
The principal business activities of the Company are the development and
marketing of computer software, videotex software, computer networks and medical
databases, as well as providing related computer software consultancy, support
and maintenance.
GENERAL
The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States. The financial
statements are prepared for the purpose of inclusion in the consolidated
financial statements of the Company's new parent company (see note 14) and are
not the Company's statutory accounts. As a result, the statements include only
the 1995 accounts of the Company. The Company's statutory year ends on
December 31.
The financial statements are presented in both the Company's functional
currency, Dutch Guilders, and in US Dollars, the reporting currency of its new
parent company (see note 14). The statements of operations and cash flows have
been translated into US dollars at the weighted average exchange rate for the
year. The balance sheet has been translated at the year-end exchange rate. The
resulting net translation adjustment is included as a separate component of
shareholders' equity/(deficiency).
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of NTEX Holding
B.V. and its subsidiaries. Significant intercompany accounts, transactions
and any unrealized profits on intercompany transactions have been eliminated
in consolidation.
REVENUE RECOGNITION
Software Licenses
The Company recognizes revenue from sales of software licenses upon delivery of
the software product to a customer, unless the Company has significant related
obligations remaining, such as installation services. When significant
obligations remain after the software product has been delivered, revenue is not
recognized until such obligations have been completed or are no longer
significant. The costs of any insignificant obligations are accrued when the
related revenue is recognized.
F-8
<PAGE> 9
Postcontract Customer Support and Software Services
Revenue from Postcontract customer support is recognized over the period the
customer support services are provided. Software services revenue is
recognized as services are performed.
Software Contracts
For purposes of these statements revenue from customized software contracts has
been deferred until client acceptance has taken place, while expenses incurred
in relation to such contracts are recognized when incurred. Deferred income
involved amounts to USD 130,000 (NLG 209,000) at the beginning of 1995 and USD
60,000 (NLG 96,000) at year-end.
Revenue from software contracts is recognized on the percentage-of-completion
method with progress-to-completion measured based upon labor costs incurred or
achievement of contract milestones.
COMPUTER SOFTWARE DEVELOPMENT COSTS
Costs incurred in creating computer software products are expensed when incurred
until the technological feasibility of the product has been established. Upon
technological feasibility being established, software production costs are
capitalized.
Capitalized costs are amortized in proportion to current and expected revenues
with an annual minimum amortization equal to the straight-line amortization
over the remaining estimated economic life of the product. At December 31,
1995, no costs had been capitalized.
COMPUTER EQUIPMENT, FIXTURES AND FITTINGS
Computer equipment, fixtures and fittings are stated at cost. Depreciation is
computed using the straight-line method at rates based on the useful lives of
the various classes of assets, as follows: computer software - 16 2/3% to 33
1/3%; computer hardware - 33 1/3%; fixtures & fittings - 20%.
PENSIONS
The Company has established a defined benefit pension plan covering certain
employees. Obligations for prior and future services are provided for on the
basis of actuarial calculations.
CASH AND CASH EQUIVALENTS
The Company considers all highly-liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
2 INCOME TAXES
The Company's operating loss carryforwards as at December 31, 1995, totaled
approximately USD 2,600,000 (NLG 4,100,000). The tax asset arising from these
net operating loss carryforwards has been fully offset by an allowance due to
the uncertainty of their realization. These amounts may be carried forward
indefinitely.
NTEX Holding B.V. does not form a fiscal entity with its subsidiaries. Total
loss carry forwards of the subsidiaries amount to USD 4,200,000 (NLG 6,700,000)
F-9
<PAGE> 10
3 PRODUCT DEVELOPMENT COSTS
During the period 1992 through 1995 the Company incurred and expensed USD
1,945,882 (NLG 3,098,234) in the development of its 'PhoTeX' software product.
These amounts were expensed because the project had not yet met the
capitalization criteria regarding technical feasibility.
In 1993 the Netherlands Ministry of Economic Affairs agreed to assist in the
development of the 'PhoTeX' software product. This assistance was made by
providing development funding in the form of TOK credits. The cumulative amount
of credits received as at December 31, 1995, was USD 806,026 (NLG 1,291,657) on
which interest is charged at the rate of 8%.
The credits are recognized in line with expenses incurred and are netted
against the product development costs being written off.
Over the period 1996 to 2005, 32% of revenue realized on the sale of the PhoTeX
software product will be applied towards the repayment of TOK credits and
accrued interest. Any balance which remains outstanding as at 2006 will be
waived.
Sales of this product are expected to commence in 1996.
4 COMPUTER EQUIPMENT, FIXTURES AND FITTINGS
<TABLE>
<CAPTION>
USD NLG
<S> <C> <C>
Cost as at January 1, 1995 880,826 1,528,673
Additions 58,505 93,152
-------- ----------
939,331 1,621,825
-------- ----------
Accumulated depreciation as at January 1, 1995 (813,458) (1,411,757)
Depreciation (40,041) (63,753)
-------- ----------
Accumulated depreciation as at December 31, 1995 (853,499) (1,475,510)
-------- ----------
Effect of exchange rate changes 5,472 -
-------- ----------
Net book value as at December 31, 1995 91,304 146,315
======== ==========
</TABLE>
5 BANK OVERDRAFT
The Company maintains an overdraft facility with a bank which has a maximum
limit of USD 436,817 (NLG, 700,000). The facility is secured by the:
- - pledging of certain computer equipment, fixtures and fittings;
- - pledging of trade accounts receivable and the rights to credit insurance
receipts; and
- - joint guarantees offered by NTEX Holding B.V., NTEX Computer Centrum B.V.
and NTEX datacommunications B.V.
Interest is charged on the overdrawn balance at the rate of 7.5%.
F-10
<PAGE> 11
6 ACCRUED PENSION COST
The Company has established a defined benefit pension plan that covers 17% of
employees. Benefits are based on years of service and each employee's
compensation during the last five years of employment. The Company's funding
policy is to make payments to an assurance company based upon a calculated
interest rate of 4%. A discount is granted based upon a 10-year average
yieldrate on certain investments as defined by the insurance company.
In 1996 the Company established a defined contribution pension plan covering
the majority of employees not included in the existing defined benefit pension
plan.
The following table sets forth the funded status and amount recognized for the
Company's defined benefit pension plan in the consolidated balance sheet at
December 31, 1995:
<TABLE>
<CAPTION>
USD NLG
<S> <C> <C>
Actuarial present value of accumulated benefit obligation,
including vested benefits in 1995 61,888 99,175
======= =======
Actuarial present value of projected benefit obligation for
services rendered to date 103,793 166,328
Plan assets at fair value, primarily listed stocks 66,771 107,000
------- -------
Projected benefit obligation in excess of plan assets 37,022 59,328
Unrecognized net loss from past experience different from
that assumed and effects of changes in assumptions 8,139 13,043
Unrecognized net obligation at December 31, 1995 27,001 43,270
------- -------
Accrued pension cost 1,882 3,015
======= =======
</TABLE>
Net pension cost included the following components:
<TABLE>
<CAPTION>
USD NLG
<S> <C> <C>
Service cost - benefits earned during the period 15,428 24,564
Interest cost on projected benefit obligation 4,764 7,586
Actual return on plan assets (3,052) (4,860)
Net amortization and deferral 1,359 2,164
------- -------
Net pension cost 18,499 29,454
======= =======
</TABLE>
Following is a summary of significant actuarial assumptions used:
<TABLE>
<S> <C>
Discount rates 6%
Rates of increase in compensation levels
general increase: 2%
specific increase above inflation:
- up to 54 years 2%
- 55 years and older 0%
Expected long-term rate of return on assets 6%
</TABLE>
F-11
<PAGE> 12
7 LONG-TERM DEBT
The long-term debt was repaid on June 5, 1996. Interest was charged on this
loan at the rate of 8%.
8 SUBORDINATED DEBT
The subordinated debt is payable to the shareholders and was repaid on April 4.
1996 (see note 14). Interest was charged on this loan at the rate of 11.5%.
9 COMMITMENTS
Future minimum payments under noncancelable operating leases with initial terms
of one year or more consisted of the following as at December 31, 1995:
<TABLE>
<CAPTION>
USD NLG
<S> <C> <C>
1996 276,079 442,416
1997 243,179 389,695
1998 130,680 209,415
1999 4,062 6,510
2000 - -
Thereafter - -
------- ---------
Total minimum lease payments 654,000 1,048,036
======= =========
</TABLE>
Operating lease payments made in 1995 totaled USD 295,190 (NLG 470,000).
A bank guarantee has been provided by the Company guaranteeing building
operating lease payments to a maximum of USD 81,123 (NLG 130,000). Building
operating lease payments are subject to an annual revision on July 1.
10 CONTINGENT LIABILITIES
A credit was granted for the development of the 'PhoTeX' software product,
(part of) which credit may have to be paid back. Refer to note 3 for further
details.
A claim for USD 76,131 (NLG 122,000) has been filed against NTEX
datacommunications B.V. on the grounds of damages incurred from the perceived
malfunctioning of software supplied to the plaintiff. The court is yet to make
final ruling on this matter. NTEX datacommunications B.V.'s legal adviser and
Directors regard the claim as unfounded. No provision for this claim has been
made in the financial statements.
F-12
<PAGE> 13
11 COOPERATION AGREEMENT
In conjunction with the sale of certain business units to a third party, NTEX
datacommunications B.V. has entered into an agreement with the purchaser to
purchase services totalling a minimum of USD 149,766 (NLG 240,000) between
November 1, 1995, and October 31, 1996, and for a minimum of USD 131,045 (NLG
210,000) for the year ended October 31, 1997. During 1995, the Company
purchased services totalling USD 178,177 (NLG 283,694) under this agreement
which were charged on normal terms and conditions.
NTEX datacommunications B.V. will receive USD 56,162 (NLG 90,000) as
compensation for the NTEX Holding B.V. group waiving their rights under the
cooperation agreement.
12 TRANSACTIONS WITH RELATED PARTIES
During the year the Company purchased services from Lifeline Networks B.V., a
former subsidiary of NTEX Holding B.V. and a company in which Mr. Nederlof, a
director of NTEX Holding B.V., holds an interest. Fees were charged on normal
terms and conditions and accounted in 1995 for 7% of total expenses. On the
other hand, Lifeline Networks B.V. purchased technical and consulting services
from NTEX Holding B.V. during the year in the amount of NLG 3000,000. Trade
accounts payable as at December 31, 1995 includes an amount of USD 203,834
(NLG 326,644) which is payable to Lifeline.
13 FINANCIAL INSTRUMENTS
The Company believes there are no material differences between the fair value
and carrying amounts of financial instruments.
Non-disputed trade accounts receivable are insured with a third party. The
Company is not exposed to any concentrations of credit risk.
14 SUBSEQUENT EVENT
On April 4, 1996, 100% of the shares in NTEX Holding B.V. were acquired by
Harbinger Corporation, a United States company whose shares are publicly traded.
F-13
<PAGE> 1
EXHIBIT 99 (b)
HARBINGER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31, 1995
------------------------------------------------
Historical
----------------- Pro Forma Pro Forma
Company NTEX Adjustments Consolidated
------- ------ ----------- ------------
(in thousands, except for share and per share data)
ASSETS (2)
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $11,918 $ 0 (3,195)(1) $ 8,723
Accounts receivable, net 5,624 659 6,283
Royalty receivable 1,382 0 1,382
Deferred income taxes 999 0 999
Due from joint venture 566 0 566
Other current assets 283 81 364
------- ------- -------
Total current assets 20,772 740 18,317
------- ------- -------
Property and equipment, net 3,772 91 3,863
Investments in joint ventures 7,480 0 7,480
Intangible assets, net 6,298 0 7,094 (1) 8,943
(4,449)(1)
Deferred income taxes 1,938 0 1,938
------- ------- -------
$40,260 $ 831 $40,541
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,335 $ 638 $ 1,973
Accrued expenses 2,759 490 650 (1) 3,899
Deferred revenues 2,358 473 2,831
Payable due to acquisitions 0 0 0
Line of credit/Debt 0 1,175 1,175
------- ------- -------
Total current liabilities 6,452 2,776 9,878
------- ------- -------
Redeemable preferred stock:
Zero Coupon, $1.00 redemption value;
4,000,000 issued 0 0 0
Puttable common stock:
$0.0001 par value; 550,000 issued 4,675 0 4,675
Shareholders' equity:
Preferred stock; 250,000 issued 2,485 0 2,485
Common stock 9,690,684 issued 1 328 (328)(1) 1
Additional paid in capital 32,201 5,325 (5,325)(1) 33,505
1,304 (1)
Accumulated deficit (5,554) (7,598) 7,598 (1) (10,003)
(4,449)(1)
------- ------- -------
Total shareholders' equity 29,133 (1,945) 25,988
------- ------- -------
$40,260 $ 831 $40,541
======= ======= =======
</TABLE>
F-14
<PAGE> 2
HARBINGER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Twelve Months Ended December 31, 1995
------------------------------------------------
Historical
------------------ Pro Forma Pro Forma
Company NTEX Adjustments Consolidated
-------- ---- ----------- ------------
(in thousands, except for share and per share data)
(2)
<S> <C> <C> <C> <C>
Revenues:
Services and other $ 16,418 $2,426 $ 18,844
Software 6,699 126 6,825
---------- ------ ----------
Total revenues 23,117 2,552 25,669
---------- ------ ----------
Direct costs:
Services and other 4,323 734 5,057
Software 1,349 6 1,355
---------- ------ ----------
Total direct costs 5,672 740 6,412
---------- ------ ----------
Gross margin 17,445 1,812 19,257
---------- ------ ----------
Operating costs:
Selling and marketing 4,875 484 5,359
General and administrative 4,832 1,154 5,986
Depreciation and amortization 794 40 312 (3) 1,146
Product development 3,809 436 4,245
---------- ------ ----------
Total operating costs 14,310 2,114 16,736
---------- ------ ----------
Operating income (loss) 3,135 (302) 2,521
Interest expense (income), net (65) 0 256 (4) 191
Equity in losses of joint venture 1,266 0 1,266
---------- ------ ----------
Income (loss) before income tax expense 1,934 (302) 1,064
Income tax expense 687 99 786
---------- ------ ----------
Net income (loss) 1,247 (401) 278
Preferred stock dividends (199) 0 (199)
---------- ------ ----------
Net income (loss) applicable to common
shareholders $ 1,048 ($401) $ 79
========== ====== ==========
Net income (loss) per share of common stock $ 0.12 $ 0.01
========== ==========
Weighted average common and common
equivalent shares outstanding 8,932,000 9,004,000
========== ==========
</TABLE>
The Company charged $4,449,000 to its histocial statement of opertions in
the period ended March 31, 1996 resulting from a valuation of acquired
in-process product development costs associated with the acquisition. This
non-recurring charge was directly attributable to the transaction and is
not included in this pro forma statement.
F-15
<PAGE> 3
HARBINGER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
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 and warrants to purchase up to 12,500
shares of the Company's stock at a price of $16.75 per share. 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 NTEX
acquisition as if it had occurred as of the beginning of 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 as of and for December 31, 1995 and
the audited statements of NTEX as of and for December 31, 1995. The unaudited
financial statements reflect all adjustments which in the opinion of management
are necessary for a fair presentation of results for the respective periods.
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.
F-16
<PAGE> 4
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
acquisition at the prime rate (8%) for the period.
F-17
