UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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[XX] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
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Commission File Number: 00-09322
iEXALT, INC.
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(Exact Name of small business issuer as specified in its charter)
Nevada 75-1667097
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(State of Incorporation) (IRS Employer ID Number)
4301 Windfern Drive, Houston, Texas 77041
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(Address of principal executive offices)
(281) 600-4000
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by SECTION
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES [XX] NO[ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
March 31, 2000: 26,632,667 Shares.
Transitional Small Business Disclosure Format (check one): YES[ ] NO [XX]
iEXALT, INC.
Table of Contents
Page
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Part I - Financial Information
Item 1. Consolidated Financial Statements 3
Item 2. Management's Discussion and Analysis and
Plan of Operation 15
Part II - Other Information
Item 1. Legal Proceedings 21
Item 2. Changes in Securities 21
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 25
2
Part I - Item 1
FINANCIAL STATEMENTS
iEXALT, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
ASSETS
FEBRUARY 29,
2000
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CURRENT ASSETS
Cash and cash equivalents ............................ $ 294,267
Accounts receivable, trade, net ...................... 166,548
Inventory ............................................ 74,393
Prepaid expenses and other current assets ............ 143,410
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TOTAL CURRENT ASSETS ................................. 678,618
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PROPERTY AND EQUIPMENT, net .............................. 485,306
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OTHER ASSETS
Goodwill and other intangible assets, net ............ 3,917,038
Other assets ......................................... 88,644
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$ 5,169,606
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to shareholders ........................ $ 800,000
Short-term borrowings ................................ 327,197
Accounts payable, trade .............................. 469,585
Deferred revenue ..................................... 227,281
Accounts payable, affiliates ......................... 50,627
Royalties payable .................................... 59,169
Other accrued liabilities ............................ 73,648
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TOTAL CURRENT LIABILITIES ............................ 2,007,507
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SHAREHOLDERS' EQUITY
Common stock, $.001 par value, 100,000,000
shares authorized, 25,280,333 shares
issued and outstanding at February 29, 2000 ........ 25,280
Paid-in capital ...................................... 4,726,678
Retained deficit ..................................... (1,589,859)
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TOTAL SHAREHOLDERS' EQUITY ........................... 3,162,099
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$ 5,169,606
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See accompanying notes to unaudited financial statements.
3
iEXALT, INC.
CONSOLIDATED CONSDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS SIX MONTHS
ENDED ENDED
---------------------------------
FEBRUARY 29, FEBRUARY 29,
2000 2000
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REVENUES ............................. $ 841,788 $ 1,295,443
COSTS AND EXPENSES
Direct costs .................... 494,128 838,353
Selling, general and
administrative ................ 1,052,290 1,656,658
Depreciation and
amortization ................. 43,206 55,316
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TOTAL COSTS AND EXPENSES ............. 1,589,624 2,550,327
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LOSS FROM OPERATIONS ................. (747,836) (1,254,884)
OTHER INCOME/(EXPENSES)
Interest income ................. 363 5,252
Interest expense ................ (3,590) (4,364)
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LOSS BEFORE INCOME TAXES ............. (751,063) (1,253,996)
INCOME TAXES ......................... -- --
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NET LOSS ............................. $ (751,063) $ (1,253,996)
============ ============
BASIC LOSS PER SHARE ................. $ (0.03) $ (0.05)
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WEIGHTED NUMBER OF SHARES
OUTSTANDING ....................... 24,460,007 22,927,759
============ ============
See accompanying notes to unaudited financial statements.
4
iEXALT, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
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FEBRUARY 29,
2000
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CASH FLOWS FROM OPERATING ACTIVITES:
Net loss ............................................ $(1,253,996)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization ..................... 55,316
Compensation expense for contributed services ..... 71,250
Changes in assets and liabilities, net
of effects of acquisitions:
Accounts receivable ............................. (8,546)
Inventory ....................................... (26,574)
Prepaid expenses ................................ (5,327)
Other assets .................................... (70,000)
Accounts payable ................................ 362,385
Royalties payable ............................... 15,467
Other accrued expenses .......................... (149,282)
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Net cash used by operating activities ........... (1,009,307)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net liabilities of acquisitions, net of cash
acquired .......................................... 64,087
Purchases of property and equipment ................. (312,109)
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Net cash used by investing activities ........... (248,022)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock .............. 782,497
Proceeds from issuance of debt ...................... 300,000
Borrowings under bank line of credit ................ 150,000
Net change in other notes payable ................... (32,213)
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Net cash provided by financing activities ....... 1,200,284
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NET DECREASE IN CASH AND CASH EQUIVALENTS ............... (57,045)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .......... 351,312
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CASH AND CASH EQUIVALENTS, END OF PERIOD ................ $ 294,267
===========
See accompanying notes to unaudited financial statements.
5
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION, BUSINESS AND BASIS OF PRESENTATIONS - iExalt, Inc.,
("iExalt" or "the Company"), was originally incorporated as Louisiana
Northern Gas, Inc. a Nevada corporation on April 23, 1979. The name of
the Company was changed to Sunbelt Exploration, Inc. on December 21,
1979. From 1989 until September 1, 1999, the Company had very limited
operations.
On September 1, 1999, the Company consummated a merger (hereinafter
referred to as the "Merger") with iExalt, Inc., a Texas corporation
incorporated on January 7, 1999, ("iExalt-Texas") whereby the
shareholders of iExalt-Texas acquired an 89% ownership interest in the
Company. The acquisition was effected through the issuance of
18,393,666 shares of the Company's common stock to the shareholders of
iExalt-Texas in exchange for all of the outstanding shares of
iExalt-Texas common stock. Upon the closing of the transaction, there
were 20,874,166 shares of common stock issued and outstanding. The
Merger has been accounted for as a reverse takeover with the Company
being the surviving legal entity and iExalt-Texas being the acquiror
for accounting purposes. Concurrent with the Merger, the Company
changed its name from Sunbelt Exploration, Inc. to iExalt, Inc.
iExalt-Texas had very limited operations in the six months ended
February 28, 1999, and therefore no comparative balances are
presented.
The Company is currently developing Internet resources created to
support a safe and efficient environment for families, businesses and
Christian organizations. The Company currently operates as a
nationwide filtered Internet Service Provider, publishes Christian
electronic books and reference materials as well as a Christian events
magazine, and operates one of the largest speakers bureaus dedicated
to Christian speakers. In addition, the Company sells tickets for
Christian events, owns and markets its own business-to-business
content management products, and utilizes independent sales
representatives to market and sell a variety of products and services
at discounted prices for the individual, home and family.
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries.
All significant intercompany balances and transactions have been
eliminated.
INTERIM RESULTS - The accompanying consolidated condensed financial
statements of the Company for the three-month and six-month periods
ended February 29, 2000 reflect the results of operations of iExalt,
Inc. from the date of acquisition, September 1, 1999. The accompanying
consolidated condensed financial statements of the Company reflect the
historical results of iExalt-Texas prior to September 1, 1999.
6
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month and six-month
periods are not necessarily indicative of the results that may be
expected for an entire year.
For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the year ended August 31, 1999.
CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
debt instruments having maturities of three months or less at the date
of purchase to be cash equivalents.
INVENTORIES - Electronic publishing inventories are comprised of
compact discs and related supplies. Inventory is stated at the lower
of cost, determined by the average cost method, or market.
PROPERTY AND EQUIPMENT - Property and equipment is carried at original
cost or adjusted net realizable value, as applicable. Maintenance and
repair costs are charged to expense as incurred. When assets are sold
or retired, the remaining costs and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is
included in income.
For financial reporting purposes depreciation of property and
equipment is provided using the straight-line method based upon the
expected useful lives of each class of assets. Estimated useful lives
of assets were as follows: Furniture and fixtures - five to seven
years; computers and other office equipment - three to five years.
FINANCIAL INSTRUMENTS - FAIR VALUE - The carrying values of the
Company's financial instruments, which include cash and cash
equivalents, accounts receivable, accounts payable and accrued
liabilities, royalties and debt, approximate their respective fair
values.
CREDIT RISK - The Company maintains its cash and cash equivalents with
high credit quality institutions and limits the credit exposure to any
one institution. The Company's accounts receivable arise from sales to
customers and the Company periodically evaluates its credit exposure
with its customers. To date credit related losses have been
immaterial.
7
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
GOODWILL AND OTHER INTANGIBLES - Goodwill represents the cost in
excess of fair value of the assets of businesses acquired and is being
amortized using the straight-line method over 40 years. Other
intangible assets represent costs allocated to covenants not to
compete and other intangibles acquired in business acquisitions. Other
intangible assets are being amortized using the straight-line method
over their estimated useful lives, which range from three to ten
years. Accumulated amortization at February 29, 2000 was $22,711.
REVENUE RECOGNITION - The Company generally recognizes revenue on
services as they are performed and on products when they are sold net
of sales returns. Speaker revenues are recognized when the speech or
event occurs. The Company grants refunds and returns on electronic
publishing products if the software and publications sold are returned
within thirty days. Revenue from ticket operations is recognized as
tickets are sold. Although iExalt collects ticket receipts
representing the full ticket price on behalf of its clients, the
Company only records as revenue the convenience charges and handling
fees included in the ticket price.
INCOME TAXES - The Company operates as a corporation. No tax provision
has been reflected because of the net operating loss for the Company.
The tax benefits related to the net operating losses are fully
reserved by a valuation allowance.
RECLASSIFICATIONS - Certain reclassifications have been made in the
accompanying balance sheet when compared to prior periods.
MANAGEMENT'S ESTIMATES - 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 liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
While it is believed that such estimates are reasonable, actual
results could differ from those estimates.
CONDITIONS AFFECTING ONGOING OPERATIONS - The Company hopes to obtain
additional debt and equity financing from various sources in order to
finance its operations and to continue to grow through merger and
acquisition opportunities. In the event the Company is unable to
obtain additional debt and equity financing, the Company will not be
able to continue its current level of operations. If the Company is
unable to continue its current level of operations, the value of the
Company's assets could experience a significant decline in value from
the net book values reflected in the accompanying consolidated balance
sheet.
The Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a
timely basis, to comply with the terms of its financing agreements, to
obtain additional financing or refinancing as may be required, and
ultimately to attain profitability.
8
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE B ACQUISITIONS
The Company acquired the proprietary assets of netFilter Technologies,
a proxy-filtering software company on October 1, 1999 for $60,000 and
60,000 shares of the Company's common stock.
On October 1, 1999, the Company acquired Wordcross Enterprises, Inc.
d/b/a Christian Happenings ("Wordcross"). In consideration for this
purchase, the selling shareholders received 850,000 shares of common
stock of iExalt, Inc. and 250,000 common stock options exercisable
at$1.80 per share. The options vest in the amount of 50,000 shares per
year on the anniversary date of the acquisition. Both former
shareholders of Wordcross have employment agreements with the Company
for a period of five years. The transaction was accounted for as a
purchase and the amount of goodwill recorded was $272,000.
On November 16, 1999, the Company acquired Solutions Global, Inc.
("Solutions Global"). In consideration for this purchase, the selling
shareholders received 40,000 shares of common stock of iExalt, Inc.
and 60,000 common stock options exercisable at $1.80 per share. The
options vest in the amount of 20,000 shares per year on the
anniversary date of the acquisition. Both former shareholders of
Solutions Global have employment agreements with the Company for a
period of three years. The transaction was accounted for as a purchase
and goodwill of $72,000 was recorded.
On December 1, 1999, the Company acquired, all of the issued and
outstanding stock of Premiere Speakers Bureau, Inc. d/b/a
Christianspeakers.com ("Christian Speakers"), a Tennessee corporation
in the business of scheduling well-known speakers to speak to groups
on Christian issues. The consideration issued to the sole stockholder
of Christian Speakers, was: (i) 500,000 shares of Company common
stock, (ii) aggregate cash consideration of $40,000, of which $10,000
was payable at closing, and $5,000 is payable monthly over a period of
six months beginning January 2000, and (iii) a stock option to
purchase an aggregate 250,000 shares of Company common stock at an
exercise price of $1.80 per share. The stock option vests in the
amount of 50,000 shares per year on the anniversary date of the
agreement, and is subject to the former owner of Christian Speakers
remaining an employee of the Company. The term of the stock option is
three years from the date of vesting. The former owner of Christian
Speakers has entered into a five-year employment agreement with the
Company. The transaction was accounted for as a purchase and goodwill
was recorded in the amount of $490,011.
Effective December 31, 1999, the Company acquired all of the issued
and outstanding stock of First Choice Marketing, Inc., ("First
Choice"), a Texas corporation in the business of directly marketing a
variety of goods and services through commission-based
representatives.
9
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE B ACQUISITIONS (continued)
The consideration payable to the shareholders of First Choice, was (i)
2,302,000 shares of Company common stock and (ii) cash consideration
of $30,000 paid to key employees in exchange for non-compete
agreements. For the years 2000 through 2002, the shareholders are also
entitled to receive 333,333 additional shares per year if certain
financial benchmarks and employment agreements are satisfied. The
Company also agreed to assume certain warrant obligations of First
Choice to a party related to the Company totaling 810,000 shares of
the Company's common stock at an exercise price of $1.00 per share.
One-third of these warrants become exercisable in each of the years
2000 through 2002 if First Choice achieves the financial benchmarks
established in each of those years in connection with the contingent
share issuance to First Choice shareholders discussed above.
Exercisable warrants expire in 2004 if not previously exercised. A key
management employee of First Choice has entered into a three-year
employment agreement with the Company. In addition, the key employee
will receive up to 150,000 stock options subject to the achievement of
the financial benchmarks referred to above. The transaction was
accounted for as a purchase and goodwill was recorded in the amount of
$2,926,434. Subsequent to the purchase, the Company negotiated an
agreement to issue 190,890 registered shares of common stock to a
related party for their consulting services in effecting the
acquisition.
The unaudited pro forma results of operations of the Company for the
six months ended February 29, 2000 and February 28, 1999 (assuming
Wordcross, Solutions Global, Christian Speakers and First Choice had
been acquired as of the beginning of the respective periods) are shown
below.
PRO FORMA FOR
SIX MONTHS ENDED
---------------------------
FEBRUARY 29, FEBRUARY 28,
2000 1999
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REVENUES ................. $ 1,922,606 $ 1,550,055
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NET INCOME(LOSS) ......... $(1,387,780) $ (72,583)
=========== ============
EARNINGS/(LOSS) PER SHARE $ (0.05) $ 0.00
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Pro Forma Weighted Average
Shares Outstanding ..... 25,409,606 25,273,056
=========== ============
10
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE B ACQUISITIONS (continued)
In management's opinion, the pro forma combined results of operations
may not be indicative of the actual results that would have occurred
had the acquisitions been consummated at the beginning of the
respective periods or of the future operations of the combined
companies.
NOTE C PROPERTY AND EQUIPMENT
Property and equipment as of February 29, 2000 consisted primarily of
furniture and fixtures, computers, software and other office equipment
with an original cost of $517,911. The accumulated depreciation at
February 29, 2000 was $32,605.
NOTE D NOTES PAYABLE AND OTHER SHORT-TERM BORROWINGS
Notes payable and other short-term borrowings at February 29, 2000
consisted of the following:
Secured note payable to shareholder $350,000
Unsecured note payable to shareholder 150,000
Bank line of credit 150,000
Unsecured note payable to related party 156,000
Unsecured note payable to shareholder 300,000
Other unsecured notes payable 21,197
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$1,127,197
==========
The non-interest bearing shareholder promissory note in the amount of
$350,000 is secured by certain assets and is payable at such time that
the Company's net assets are equal to or exceed $5,000,000. This note
is classified as a current liability since it is expected that the
Company will meet such threshold within one year.
The unsecured $150,000 note payable to shareholder is payable on July
1, 2000.
On December 17, 1999, the Company increased its revolving line of
credit from $50,000 to $150,000. As of February 29, 2000, $150,000 in
borrowings was outstanding under this line of credit. The line of
credit is secured by the personal guarantee of a shareholder of the
Company. The line of credit was fully repaid on March 7, 2000.
In the December 31, 1999 acquisition of First Choice, the Company
assumed a $156,000 unsecured note payable to a related party.
Interest accrues at a rate of ten percent (10%) per annum and the note
and accrued interest is due on March 14, 2000, unless renewed for an
additional ninety (90) day period. This note was renewed and its new
maturity date is June 12, 2000.
11
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE D NOTES PAYABLE AND OTHER SHORT-TERM BORROWINGS (continued)
In January and February 2000, the Company entered into note agreements
totaling $300,000 with a shareholder of the Company to fund working
capital requirements. These notes are non-interest bearing. On March
21, 2000 the Company repaid the $300,000 due to the shareholder
resulting from these transactions.
NOTE E SHAREHOLDERS' EQUITY
The Company currently has a Private Placement Memorandum ("PPM")
offering 2,000,000 shares of iExalt common stock to qualified
purchasers at a price of $1.80 per share. Funds resulting from the
sale of the Company's common stock will be used for funding the
day-to-day operations of the Company, development of new products and
services, marketing, and acquisitions of other businesses in similar
industries, among other things. There is no assurance that there will
be adequate cash resulting from this transaction to accomplish the
above stated objectives. The Company has committed to pay six percent
of the offering proceeds raised to registered brokers as finder's fees
related to the sale of common stock subject to this offering. As of
February 29, 2000, 450,278 shares had been issued pursuant to this
offering and no finder's fees have been incurred. (See Note H).
Prior to the reverse takeover, a shareholder of the Company purchased
2,250,000 shares of iExalt's common stock for cash of $500,000. As
part of this purchase, the shareholder also committed the services of
an executive to assist the Company in the initial start-up and
structuring of its business for up to one year at no cash cost to the
Company. The Company recorded compensation expense of $60,000 and
$30,000 for the six-month and three-month periods ending February 29,
2000 respectively, for such services.
Certain shareholders provided management services to the Company
during the three-month period ended February 29, 2000 for which the
Company recognized expenses of $11,250 and reduced receivables from
shareholders by the same amount.
NOTE F STOCK OPTIONS AND WARRANTS
The former owners of Wordcross were granted options to purchase
250,000 shares of common stock at an exercise price of $1.80 per share
and vesting 50,000 shares per year as of the end of each of the first
five years of their employment by iExalt.
On September 1, 1999 an agreement for consulting services with
Consulting & Strategy International, Inc., ("CSI") went into effect.
In partial consideration for the consulting services to be offered by
CSI, CSI was granted an option to purchase 600,000 shares of iExalt
stock at an exercise price of $1.00 per share on or before six months
12
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE F STOCK OPTIONS AND WARRANTS (continued)
after the first day upon which the Company's stock begins full
reporting, full compliance and publicly trading. In addition, CSI was
granted 250,000 warrants to purchase common stock at an exercise price
of $3.00 per share; 250,000 warrants to purchase common stock at an
exercise price of $4.00 per share; 250,000 warrants to purchase common
stock at an exercise price of $5.00 per share; and 250,000 warrants to
purchase common stock at an exercise price of $7.00 per share.
On August 30, 1999, the shareholders approved an Employees Stock
Option Plan ("Plan") reserving 1,000,000 shares of authorized but
unissued common stock to be distributed by the compensation committee
of the board of directors pursuant to the Plan. On November 12, 1999
the compensation committee elected to issue stock options to current
employees and contract consultants of the Company pursuant to the Plan
at a price of $1.80 per share for an aggregate of 561,000 shares of
Company common stock. These options vest equally over a three-year
period beginning September 1, 1999. In addition, the compensation
committee elected to issue stock options to a current director of the
Company pursuant to the Company's Director Stock Option Plan at a
price of $1.80 per share for 50,000 shares of Company common stock.
The former owners of Solutions Global were granted options to purchase
60,000 shares of common stock for $1.80 per share and vesting 20,000
shares per year as of the end of each of the first three years of
their employment by iExalt.
The former owner of Christian Speakers was granted options to purchase
250,000 shares of common stock for $1.80 per share and vesting 50,000
shares per year as of the end of each of the first five years of his
employment by iExalt.
In the acquisition of First Choice, the Company granted options for
the purchase of 150,000 shares to the chief executive officer of First
Choice. In addition, the Company issued warrants to purchase an
aggregate of 810,000 shares of common stock to the holders of First
Choice warrants at an exercise price of $1.00 per share over three
years. Both the options and the warrants can be exercised only if
First Choice meets certain income performance tests over three years.
On January 11, 2000, the board of directors elected to issue stock
options at an exercise price of $1.80 per share to any director or
officer of the Company for a number of shares equal to the number of
dollars loaned to the Company which is either personally guaranteed by
any such officer or director, or is made by such officer or director
on a non-interest bearing basis. At February 29, 2000, borrowings and
guarantees in the amount of $450,000 were outstanding pursuant to this
agreement. Accordingly, options to purchase an aggregate at 450,000
shares of common stock have been granted.
13
iEXALT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
(UNAUDITED)
NOTE F STOCK OPTIONS AND WARRANTS (continued)
As of February 29, 2000, 2,671,000 stock options and 1,810,000
warrants have been granted and none of these have been exercised as of
that date.
NOTE G LEASES
The Company's corporate offices are leased on a month-to-month basis
from a related party. The lease expense on the corporate offices
during the six months ended February 29, 2000 was $18,316. The
Company's other office and warehouse space are leased under long-term
operating leases from third parties. Rental expense attributable to
long-term leases for the six months ended February 29, 2000 was
$36,839.
NOTE H SUBSEQUENT EVENTS
During March 2000, an additional 1,352,334 shares were issued under
the private placement for cash proceeds of $2,434,201. (See Note E).
14
PART I - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read together with the financial
statements of iExalt, Inc., which are included earlier in this Form 10-QSB. The
following discussion contains certain forward-looking statements regarding
iExalt's expectations for its business and its capital resources. These
expectations are subject to various uncertainties and risks that may cause
actual results to differ significantly from these forward-looking statements.
GENERAL
iExalt-Texas was incorporated on January 7, 1999. On September 1, 1999,
iExalt-Texas consummated a reverse takeover of Sunbelt Exploration, Inc., a
Nevada corporation, which had originally been incorporated on April 23, 1979, as
Louisiana Northern Gas, Inc. and had had no significant operation since 1989. As
a reverse takeover, the surviving legal entity was Sunbelt Exploration, Inc.,
but iExalt-Texas was the acquiror for accounting purposes. Concurrent with the
merger, Sunbelt Exploration, Inc., changed its name to iExalt, Inc. ("iExalt" or
"the Company").
On February 4, 1999, the Company acquired certain intangible assets valued
on the accompanying balance sheet at $750 from a shareholder of the Company in
exchange for shares of iExalt common stock.
On May 31, 1999, the Company acquired all of the assets and assumed
certain liabilities of Hunter Community Interests, LTD. and AgroSource, Inc.
(d/b/a NetXpress), a Houston, Texas based Internet Service Provider ("ISP") from
certain shareholders of the Company. In this purchase, the Company issued
3,000,000 shares of common stock and assumed a non-interest bearing note payable
to a shareholder for $350,000. The purchase price in excess of the net book
value of assets acquired of $314,000 was recognized as a reduction in paid-in
capital because the business purchased was under common control.
On June 21, 1999, the Company acquired certain tangible and intangible
assets of Interactive Communications Concepts of Texas, a Houston, Texas based
ISP company, for a combination of $15,000 in cash and 72,000 shares of the
Company's common stock. The purchase price in excess of the value of the assets
acquired of $6,572 was recorded as goodwill.
On July 1, 1999, the Company acquired certain tangible and intangible
assets and liabilities of NavPress Software, a Texas general partnership that
specializes in developing, manufacturing and marketing various types of software
and electronic books for the Christian community. As consideration for this
purchase, the Company executed a non-interest bearing note payable in the amount
of $150,000 due in one year and issued 900,000 shares of common stock to the
sellers. The president of NavPress Software also signed an employment agreement
with a one-year term. The purchase price in excess of the net value of assets
acquired of $174,623 was recorded as goodwill. NavPress Software is now
conducting business as iExalt Electronic Publishing, an iExalt division.
15
On October 1, 1999, the Company acquired WordCross Enterprises, Inc. d/b/a
Christian Happenings ("Wordcross"). As consideration, the Company issued 850,000
shares of common stock and granted 250,000 common stock options exercisable at
$1.80 per share to the former Wordcross shareholders. The options vest in the
amount of 50,000 shares per year on each anniversary date of the acquisition
over the next five years. Both former shareholders of Wordcross have employment
agreements with the Company for a period of five years. The transaction was
accounted for as a purchase and the amount of goodwill recorded was $272,000.
The Company acquired the proprietary assets of netFilter Technologies, a
proxy-filtering software company on October 1, 1999 for $60,000 and 60,000
shares of the Company's common stock.
On November 16, 1999, the Company acquired Solutions Global, Inc.
("Solutions Global"). As consideration, the shareholders of Solutions Global
received 40,000 shares of iExalt common stock and 60,000 common stock options
exercisable at $1.80 per share. The options vest in the amount of 20,000 shares
per year on the anniversary date of the acquisition. Both former shareholders of
Solutions Global have employment agreements with the Company for a period of
three years. The transaction was accounted for as a purchase and goodwill was
recorded in the amount of $72,000.
Effective December 1, 1999, the Company acquired all of the stock of
Premiere Speakers Bureau, Inc. d/b/a ChristianSpeakers.com ("Christian
Speakers"), a Tennessee corporation in the business of scheduling well-known
speakers to speak to groups on Christian issues. The consideration issued to the
sole stockholder of Christian Speakers consisted of: (i) 500,000 shares of
Company common stock, (ii) an aggregate $40,000, of which $10,000 was payable at
closing, and $5,000 is payable monthly for a period of six months beginning
January 2000, and (iii) a stock option to purchase an aggregate 250,000 shares
of Company common stock at an exercise price of $1.80 per share. The stock
option vests in the amount of 50,000 shares per year on each anniversary date of
the agreement over the next five years. The former shareholder has entered into
a five-year employment agreement with the Company. The transaction was accounted
for as a purchase and goodwill in the amount of $490,011 was recorded.
Effective December 31, 1999, the Company acquired all of the stock of
First Choice Marketing, Inc. ("First Choice"), a Texas corporation, in exchange
for 2,302,000 shares of Company common stock, assumption of a $156,000
short-term note payable, and assumption of certain warrant obligations of First
Choice by issuance of warrants to purchase 810,000 common shares of the Company
at an exercise price of $1.00. The warrants can only be exercised if First
Choice meets certain earnings goals over a three-year period. The shareholders
of First Choice are entitled to additional consideration of up to 999,999 shares
of Company common stock over a three-year period provided these earnings goals
and certain employment agreements are satisfied. The President of First Choice
entered into a three-year employment agreement with the Company and was granted
150,000 stock options at an exercise price of $1.80 per share and vesting
ratably over three years and which are also subject to the same earnings goals.
Subsequent to the purchase, the Company negotiated an agreement to issue 190,890
registered shares to the principals of Consulting & Strategy International,
Inc., for their consulting services in effecting the acquisition. The
transaction was accounted for as a purchase and goodwill was recorded in the
amount of $2,926,434. First Choice is now conducting business as
iExaltFamily.com.
16
iExalt is continuing to expand its Internet resources to support a safe
and efficient environment for families, businesses and Christian organizations.
iExalt's mission is to use the influence of the Internet as a positive force in
the lives of families, businesses and Christian organizations by providing
filtered Internet access, developing a Christian-based Internet portal and by
creating content-based Web sites that will provide information and resources for
its target markets.
RESULTS OF OPERATIONS
iExalt has material operations in five divisions: the ISP, Electronic
Publishing, Events, Christian Speakers, and iExaltFamily.com. iExalt-Texas, the
accounting acquiror, was incorporated on January 7, 1999, and had no material
operations for the three months and six months ended February 28, 1999.
Therefore, the discussion of results analyzes operations for the three months
and six months ended February 29, 2000, but does not compare results to the
prior year.
Revenues
Overall revenues were $841,788 in the three months ended February 29, 2000
and $1,295,443 in the six months then ended. Comparison to the prior year is not
meaningful; the growth in revenues from one quarter to the next was generated
both from acquisitions and internal growth.
The ISP division had revenues for the three months and six months ended
February 29, 2000, of $26,554 and $35,521 respectively. The Company's ISP became
available nationally in December, 1999.
iExalt Electronic Publishing had revenues of $276,922 and $594,786 for the
three months and six months ended February 29, 2000, representing 33% and 46% of
the Company's revenues respectively.
The Events division, which includes Wordcross from its acquisition on
October 1, 1999, had revenues of $318,385 and $445,209 for the three months and
six months ended February 29, 2000. These revenues constituted 38% and 34% of
Company revenue, respectively. When acquired, Christian Happenings magazine was
distributed in fourteen regions of the country east of the Mississippi and had a
circulation of approximately 250,000. As of the end of March, 2000, the magazine
was distributed in eighteen markets with a circulation of approximately 350,000.
The revenue for the Events division consists almost entirely of advertising and
ticket sales.
Christian Speakers had revenues from the date of its acquisition (December
1, 1999) to February 29, 2000, of $174,476, representing 21% and 13% of Company
revenue for the three months and six months then ended.
iExaltFamily.com was acquired on December 31, 1999, prior to commencement
of operations on a nationwide basis. Sales through February 29, 2000, totaled
$17,061.
Direct Costs
Direct costs were $494,128 in the three months ended February 29, 2000,
and $838,353 in the six months then ended. Gross profit (revenues less direct
costs) was $347,660 and $457,090 for the respective three-month and six-month
periods.
17
The ISP division had direct costs of $110,494 and $202,719 for the three
months and six months ended February 29, 2000 constituting 22% and 24% of
Company direct costs respectively. These costs reflect the high start up costs
associated with acquiring management and technical skills required to operate
the equipment and provide services for a nationwide filtered ISP product. Costs
consist primarily of Internet connection costs, communication costs, and direct
labor.
iExalt Electronic Publishing had direct costs of $120,968 and $305,421 for
the three months and six months ended February 29, 2000, constituting 24% and
36% of Company direct costs respectively. These costs are primarily materials,
royalties and direct labor.
The Events division had direct costs of $83,581 and $151,128 for the three
months and six months ended February 29, 2000, constituting 17% and 18% of
Company direct costs respectively. Costs consist primarily of materials,
shipping, and credit card fees.
Christian Speakers had direct costs of $137,212 from the date of
acquisition to February 29, 2000, constituting 28% and 16% of Company direct
costs for the three months and six months then ended.
The direct costs for iExaltFamily.com from the date of acquisition to
February 29, 2000 was $19,426. This reflected costs relating to the start up of
operations.
Selling, General and Administrative
The selling, general and administrative costs for iExalt were $1,052,290
for the three months ended February 29, 2000, and $1,656,658 for the six months
then ended. The increase reflects the costs resulting from the five acquisitions
made during the six month period and the costs necessary to support an
aggressive plan of acquisitions and rapid internal growth.
The ISP division had selling, general and administrative costs of $42,585
and $78,058 for the three months and six months ended February 29, 2000. These
costs are primarily administrative salaries and related expenses.
iExalt Electronic Publishing had selling, general and administrative costs
of $120,468 and $259,143 for the three months and six months ended February 29,
2000. These costs are principally salaries, advertising and travel expenses.
The Events division had selling, general and administrative costs of
$228,422 and $296,626 for the three months and six months ended February 29,
2000. These costs are primarily salaries, communication expenses and outside
contracted services.
Christian Speakers had selling, general and administrative costs of
$57,461 from the date of acquisition to February 29, 2000. These cost are
primarily salaries and advertising expenses.
iExaltFamily.com had selling, general and administrative costs of $137,296
from the date of acquisition to February 29, 2000. These costs principally
consist of salaries, commissions, advertising, and travel expenses.
The selling, general and administrative costs of iExalt's corporate and
other activities totaled $466,058 and $828,074 for the three months and six
18
months ended February 29, 2000. These costs consist primarily of salaries and
contract labor, advertising, and professional fees.
LIQUIDITY AND CAPITAL RESOURCES
As of February 29, 2000, iExalt had $678,618 in current assets, $2,007,507
in current liabilities and a retained deficit of $1,589,859. The Company had net
losses of $751,063 for the three months ended February 29, 2000 and $1,253,996
for the six months then ended. Negative cash flow from operations for the six
months ended February 29, 2000 was $1,009,307.
To fund the development of its Internet products and services, iExalt
offered through a Private Placement up to two million shares of common stock at
a price of $1.80 per share. Under this private placement iExalt has issued
450,278 shares of unregistered common stock for cash invested of $810,500 from
nineteen accredited investors as of February 29, 2000. During March an
additional 1,352,334 shares were issued under the private placement for cash
invested of $2,434,201 by forty-one additional accredited investors.
iExalt's post-merger working capital requirements and cash flow provided
by operating activities can vary from quarter to quarter, depending on revenues,
operating expenses, capital expenditures and other factors. iExalt's on-going
business will require substantial working capital. It is expected that iExalt
will need to raise additional capital in order to succeed and to continue in
business. Since inception, iExalt has experienced negative cash flow from
operations and will continue to experience negative cash flow for some time into
the future. As of March 31, 2000, iExalt's monthly cash operating expenditures
exceed its monthly cash receipts by approximately $250,000.
On December 17, 1999, the Company increased its revolving line of credit
with a bank from $50,000 to $150,000. The line of credit is secured by a
personal guarantee of a shareholder of the Company. As of February 29, 2000,
$150,000 in borrowings was outstanding under this line of credit. The line of
credit was fully repaid on March 7, 2000.
In addition, in January and February, 2000, the Company borrowed $300,000
from a shareholder of the Company. This short-term loan was repaid on March 21,
2000.
The Company will be required to obtain additional financing or capital to
attain profitable operations. The Company's internally generated cash flows from
operations have historically been and continue to be insufficient for its cash
needs. As of March 31, 2000 the Company's sources of external and internal
financing were limited. It is not expected that the internal source of liquidity
will improve until significant net cash is provided by operating activities, and
until such time, the Company intends to rely upon external sources for
liquidity.
iExalt has not entered into any arrangements with any financial
institutions or third parties to provide additional financing. If iExalt is
unable to obtain additional financing or raise adequate working capital in the
amounts desired and on acceptable terms, iExalt may be required to significantly
reduce the scope of its presently anticipated activities.
Management believes that net proceeds of future anticipated securities
offerings, and giving effect to revenues, which are projected to be realized
from operations, should be sufficient to fund ongoing operations and its
19
business plan. However, there is no assurance that anticipated offerings will be
undertaken, and if undertaken, will be successful or the proceeds derived from
such offerings will, in fact, be sufficient to fund operations and meet the
needs of the Company's business plans. There is no assurance that the current
working capital will be sufficient to cover cash requirements for the balance of
the current fiscal year or to bring the Company to a positive cash flow
position.
PLAN OF OPERATIONS
iExalt is building a comprehensive, integrated product and service line
through internal development and strategic acquisitions. Many services are
already available and others are in various stages of development. The Company's
services can be divided into Business to Consumer ("B2C") and Business to
Business ("B2B) groups.
The B2C group consists of Internet-related products and services designed
to support the needs of families and organizations that share the principles of
the Christian community. Services already available in this group are a
nationwide filtered ISP, a comprehensive Christian portal website, free
web-based e-mail, electronic publication of Christian books and educational
material, Christian events websites and the Christian Happenings magazine, a
Christian speakers bureau, and direct marketing of discounted products and
services for the family. Websites included in this set of services are
iexalt.net, iexalt.com, iexaltmail.com, wordsearchbible.com, ievents.net,
christianhappenings.com, christianspeakers.com, and iexaltfamily.com.
The B2B service is licensing the Company's filtering technology to
businesses, schools, libraries, government agencies, and other organizations.
The Company's filter can run on a licensee's server and be configured to filter
out the types of content specified by the licensee. In addition to the filtering
function, in this capacity our technology provides a variety of user- level
monitoring capabilities. The Company offers this service under the name
netFilter Technologies and is located on the Internet at netfilter.com.
The Company's plan of operations is to aggressively continue the
development and acquisition of related products and services. Increased
resources will also be dedicated to branding and marketing both existing and
future products.
The Company's financial statements are prepared using principles
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. While the Company
has succeeded in raising significant cash as of March 31, 2000, such cash may
not be sufficient to assure its continuation as a going concern and the Company
may in the future experience significant fluctuations in its results of
operations. Such fluctuations may result in volatility in the price and/or value
of the Company's common stock. Shortfalls in revenues may adversely and
disproportionately affect the Company's results of operations because a high
percentage of the Company's operating expenses are relatively fixed.
Accordingly, the Company believes that period-to-period comparisons of results
of operations should not be relied upon as an indication of future results of
operations. There can be no assurance that the Company will be profitable.
20
FORWARDING-LOOKING STATEMENTS
This quarterly report on Form 10-QSB includes "forward-looking statements"
within the meaning of SECTION 27A of the Securities Act of 1933 and SECTION 21E
of the Securities Exchange Act of 1934. These forward-looking statements may
relate to such matters as anticipated financial performance, future revenues or
earnings, business prospects, projected ventures, new products and services,
anticipated market performance and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. To comply with the terms of the safe harbor, we caution readers that
a variety of factors could cause our actual results to differ materially from
the anticipated results or other expressed in our forward-looking statements.
These risks and uncertainties, many of which are beyond our control, include (i)
the sufficiency of our existing capital resources and our ability to raise
additional capital to fund cash requirements for future operations, (ii)
uncertainties involved in the rate of growth and acceptance of the Internet,
(iii) adoption by the Christian community of electronic technology for gathering
information, facilitating e-commerce transactions, and providing new products,
websites, and services, (iv) volatility of the stock market, particularly within
the technology sector, and the ability to use our capital stock as a currency
for acquisitions, and (v) general economic conditions. Although we believe that
the expectations reflected in these forward-looking statements are reasonable,
we cannot give any assurance that such expectations reflected in these
forward-looking statements will prove to have been correct.
We cannot guarantee any future results, levels of activity, performance or
achievements. Except as required by law, we undertake no obligation to update
any of the forward-looking statements in this Form 10-QSB after the date of this
quarterly report.
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
The following sales of unregistered securities occurred during the six
months ended February 29, 2000, in private transactions in which the Company
relied on the exemption from registration available under SECTION 4(2) of the
Securities Act of 1933, as amended.
The Company offered to accredited investors through a Private Placement up
to two million shares of unregistered common stock at a price of $1.80 per
share. Pursuant to this Private Placement, the Company issued 133,000 shares of
unregistered common stock for cash invested of $239,400 by nine investors
between September 1, 1999 and November 30, 1999. From December 1, 1999, to
February 29, 2000, 287,278 additional shares of unregistered common stock were
issued for additional cash invested of $517,100 from eight investors.
Effective September 1, 1999, the Company entered into an agreement for
consulting services with Consulting & Strategy International, Inc., ("CSI"). As
partial consideration for the consulting services to be offered by CSI under the
agreement, CSI was granted an option to purchase 600,000 shares of the Company's
common stock at $1.00 per share on or before six months after the first day upon
21
which the Company's stock begins full reporting, full compliance and public
trading. CSI was granted 250,000 warrants to purchase common stock at $3.00 per
share; 250,000 warrants to purchase common stock at $4.00 per share; 250,000
warrants to purchase common stock at $5.00 per share; and 250,000 warrants to
purchase common stock at $7.00 per share.
On October 1, 1999, the Company acquired WordCross Enterprises, Inc. d/b/a
Christian Happenings ("Wordcross"). As consideration, the Wordcross shareholders
received 850,000 unregistered shares of common stock of iExalt, Inc. and 250,000
common stock options exercisable at $1.80 per share. The options vest in the
amount of 50,000 shares per year on each anniversary date of the acquisition
over the next five years.
On October 1, 1999, the Company acquired the proprietary assets of
netFilter Technologies, a proxy-filtering software company for $60,000 and the
issuance of 60,000 unregistered shares of the Company's common stock paid to the
owners of netFilter.
On November 16, 1999, the Company acquired Solutions Global, Inc.
("Solutions Global"). As consideration, the shareholders of Solutions Global
received 40,000 unregistered shares of common stock of iExalt, Inc. and 60,000
common stock options exercisable at $1.80 per share. The options vest in the
amount of 20,000 shares per year on each anniversary date of the acquisition
over the next three years.
Effective December 1, 1999, the Company acquired all of the stock of
Premiere Speakers Bureau, Inc. d/b/a ChristianSpeakers.com ("Christian
Speakers"), a Tennessee corporation. The consideration issued to the sole
stockholder of Christian Speakers consisted of: (i) 500,000 unregistered shares
of Company common stock, (ii) an aggregate $40,000, of which $10,000 was payable
at closing, and $5,000 is payable monthly for a period of six months beginning
January 2000, and (iii) a stock option to purchase an aggregate 250,000 shares
of Company common stock at an exercise price of $1.80 per share. The stock
option vests in the amount of 50,000 shares per year on each anniversary date of
the agreement over the next five years.
Effective December 31, 1999, the Company acquired all of the stock of
First Choice Marketing, Inc. ("First Choice"), a Texas corporation, in exchange
for 2,302,000 shares of the Company's common stock, assumption of a $156,000
short-term note payable, and issuance of warrants to purchase an aggregate of
810,000 common shares in the Company with an exercise price of $1.00 per share
but which warrants can only be exercised if First Choice meets certain earnings
goals over the next three years. The former shareholders of First Choice are
entitled to additional consideration of up to 999,999 shares of the Company's
common stock over a three-year period provided these earnings goals and certain
employment agreements are satisfied. The president of First Choice entered into
a three-year employment agreement with the Company and was granted 150,000 stock
options vesting over three years but also subject to the same earnings tests.
On January 11, 2000, the board of directors elected to issue stock options
with an exercise price of $1.80 per share in an amount equal to the number of
dollars loaned to the Company by any officer or director of the Company who
makes a non-interest bearing loan to or personal guarantee on behalf of the
Company. As of February 29, 2000 borrowings and guarantees in the amount of
$450,000 were outstanding pursuant to this agreement. Accordingly, 450,000
options have been issued pursuant to this agreement.
22
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT DESCRIPTION OF EXHIBIT
*3.1 Restated Articles of Incorporation of the Company as filed with the
Nevada Secretary of State on September 13, 1999.
*3.2 Amended Bylaws of the Company as adopted on April 24, 1979.
10.1 Exchange Agreement among the Company, iExalt, Inc.-Texas, and the
Shareholders of iExalt, Inc.-Texas dated August 12, 1999 (Exhibit 1.1
to the Company's Current Report on Form 8-K, as filed with the
Commission on September 14, 1999, is incorporated herein by reference.
10.2 Contract for Sale and Purchase of Wordcross Enterprises, Inc. between
the Company and Wordcross Enterprises, Inc. d/b/a Christian Happenings
dated October 1, 1999 (Exhibit 1.1 to the Company's Current Report on
Form 8-K, as filed with the Commission on October 15, 1999, is
incorporated herein by reference.
10.4 Stock Purchase Agreement between the Company and Christian Speakers,
Inc. dated December 1, 1999 (Exhibit 1.1 to the Company's Current Report
on Form 8-K, as filed with the Commission on December 16, 1999, is
incorporated herein by reference).
10.5 Stock Purchase Agreement between the Company and First Choice Marketing,
Inc. dated December 31, 1999 (Exhibit 1.1 to the Company's Current
Report on Form 8-K, as filed with the Commission on January 28, 2000, is
incorporated herein by reference).
10.6 Company's Directors' Stock Option Plan (Exhibit 2.1 to the Company's
Current Report on Form 8-K, as filed with the Commission on September
14, 199, is incorporated herein by reference).
10.7 Company 1998 Stock Option Plan (Exhibit 2.2 to the Company's Current
Report on 8-K, as filed with the Commission on September 14, 1999, is
incorporated herein by reference).
*27.1 Financial Data Schedule
- --------------------
* Filed herewith
(b) Reports on Form 8-K and Form 8-K/A filed during the three months ended
February 29, 2000:
Form 8-K/A dated December 15, 1999 reporting (i) the acquisition by iExalt of
Wordcross Enterprises, Inc. d/b/a Christian Happenings, an Ohio Corporation in
the business of publishing and events advertising, and (ii) the financial
statements and pro forma financial information of the acquired company related
to the acquisition.
Form 8-K dated December 16, 1999 reporting the acquisition by iExalt of Premier
Speakers Bureau, Inc. d/b/a ChristianSpeakers.com, a Tennessee corporation in
the business of scheduling well known speakers to speak to groups on Christian
issues.
23
Form 8-K dated January 28, 2000 reporting the acquisition by iExalt of First
Choice Marketing, Inc., a Texas corporation in the business of directly
marketing a variety of goods and services through commission-based
representatives.
Form 8-K/A dated February 14, 2000 reporting (i) the acquisition by iExalt of
Premier Speakers Bureau, Inc. d/b/a ChristianSpeakers.com, a Tennessee
corporation in the business of scheduling well known speakers to speak to groups
on Christian issues, and (ii) the financial statements and pro forma financial
information of the acquired company related to the acquisition.
Form 8-K/A dated March 16, 2000 reporting (i) the acquisition by iExalt of First
Choice Marketing, Inc., a Texas corporation in the business of directly
marketing a variety of goods and services through commission-based
representatives, and (ii) the financial statements and pro forma financial
information of the acquired company related to the acquisition.
24
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
iEXALT, INC.
April 14, 2000 /s/ Kirwin Drouet
----------------------
Kirwin Drouet
Executive Vice President and
Chief Accounting Officer
25