UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2001 (May 31, 2001)
IEXALT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 00-09322 75-1667097
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER
IDENTIFICATION NO.)
12000 AEROSPACE AVENUE, SUITE 375
HOUSTON, TEXAS 77034
(ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
(281) 464-8400
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
iExalt, Inc., a Nevada corporation ("iExalt"), closed a transaction on May
31, 2001 to sell certain assets to 711.NET, Inc., a North Carolina corporation
("Buyer"). The assets sold are related to CleanWeb, Inc., a Texas corporation
("CleanWeb"), owned by iExalt, which among its business activities provides
Internet dial-up services, Internet Filter services for its consumer clients,
and other Internet services.
Assets sold include iExalt's right, title and interest in all of iExalt's
current subscribers, selected other assets used in, related to, and common and
necessary to the operations of the business and certain tangible/intangible
property.
CleanWeb will continue to market, resell, and produce additional business
and Internet subscriber sales and services to iExalt constituency, market
influences, and other organizations as a Reseller of such Internet services of
the Buyer's ISPBrand Internet access services through a Strategic Marketing and
Reseller Agreement with the Buyer. iExalt expects to produce additional
subscribers for Buyer and has committed to securing at least 10,000 new
subscribers to the Buyer within the initial twelve months following closing.
iExalt will receive royalty amounts on a monthly basis for all active fully
paying subscribers developed through the Marketing relationship. For subscribers
up to 10,000 a royalty of $5.00 per subscriber per month will be remitted. For
subscribers from 10,001 - 20,000 a royalty of $6.00 per subscriber per month
will be remitted. For subscribers over 20,000 a royalty of $7.00 per subscriber
per month will be remitted. Should iExalt not equal or exceed 10,000 subscribers
in the initial twelve months after closing, then it will pay the Buyer $50,000
worth of common shares of iExalt not to exceed 100,000 shares.
As consideration for the sale, iExalt received a lump sum payment of
$150,000 cash at closing, an agreement that Buyer will pay $648,000 such amount
to be paid in monthly payments of not less than $24,000 and payable in not more
than 25 months from the date of transition, and an agreement that Buyer will
issue 438,667 shares of Buyer's common stock issued at a price of $1.50 per
share for a value of $658,000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
b) Pro Forma Financial Information.
The appropriate pro forma financial information relating to the
disposition of certain assets of CleanWeb is filed herewith as
Annex A.
c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
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2.1 (1) Asset Purchase Agreement, dated May 29,
2001, between iExalt, Inc. and 711.NET, Inc.
(1) Previously filed as an exhibit to the Company's
current report on Form 8-K filed with the Securities and
Exchange Commission on June 8, 2001 and incorporated
herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
DATE: August 3, 2001 iExalt, Inc.
By: /s/ CHRIS L. SISK
---------------------------------
Chris L. Sisk
Executive Vice President and
Primary Financial Officer
ANNEX A
- -------
The unaudited pro forma information is presented based upon the Company's
fiscal year end of August 31. The Company has included accounting information as
well as material adjustments considered necessary by management for presentation
in accordance with generally accepted accounting principles.
The unaudited pro forma balance sheet reflects the disposition by the
Company of certain assets of CleanWeb, Inc., a 100% owned subsidiary of the
Company, on May 31, 2001 as if it had occurred on February 28, 2001, the most
recent quarterly filing date by the Company before the disposition of the
CleanWeb assets.
The unaudited pro forma statements of operations are for the year ended
August 31, 2000 and for the six months ended February 28, 2001 as if the
CleanWeb disposition had occurred on September 1, 1999. The unaudited pro forma
statement of operations should be read along with the pro forma statement of
operations filed in Note B of iExalt, Inc.'s 10-KSB for year ended August 31,
2000 that is the starting point for the pro forma statement of operations. The
pro forma statement of operations filed within the 10-KSB reflects the following
acquisitions as if they had occurred on September 1, 1999: Keener Communications
Group, Inc. (July, 2000), PremierCare, LLC (July, 2000), First Choice Marketing,
Inc. (December, 1999), Premiere Speakers Bureau, Inc. (December, 1999),
Solutions Global, Inc. (November, 1999), and Wordcross Enterprises, Inc.
(October, 1999). The pro forma statement of operations also reflects the
subsequent acquisition of CleanWeb (October, 2000) as if it had occurred on
September 1, 1999 and the disposition of First Choice Marketing, Inc.
(September, 2000) as if it had occurred concurrent with the First Choice
Marketing, Inc. acquisition. Pro forma adjustments reflect the amortization of
the related goodwill.
The pro forma financial data do not purport to represent what the
Company's combined financial position or results of operations would actually
have been if such transactions in fact had occurred on these dates and are not
necessarily representative of the Company's combined financial position or
results of operations for any future period. Since the acquired entities were
not under common control or management prior to their acquisitions by the
Company and the assets related to the dispositions were held for a short term
and in developmental stage, historical combined results may not be comparable
to, or indicative of, future performance. The unaudited pro forma combined
financial statements should be read in conjunction with the historical
consolidated financial statements and notes thereto included in the company's
most recent interim report filed on Form 10-QSB.
IEXALT, INC.
UNAUDITED PRO FORMA BALANCE SHEET
FEBRUARY 28, 2001
IEXALT CLEANWEB
AND DISPOSITION PRO FORMA
SUBSIDIARIES ADJUSTMENTS TOTAL
----------------------------------------------------
ASSETS:
Current assets $ 1,884,380 $ 438,000 $ 2,322,380
Property & equipment, net 790,857 (38,294) 752,563
Goodwill, net 5,864,566 (1,566,105) 4,298,461
Other assets 727,915 1,018,000 1,745,915
---------------------------------------------------
TOTAL ASSETS $ 9,267,718 $ (148,399) $ 9,119,319
===================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities $ 5,285,895 $ (173,844) $ 5,112,051
Long-term liabilities 94,741 -- 94,741
Shareholders' equity 3,887,082 25,445 3,912,527
---------------------------------------------------
TOTAL LIABILITIES & EQUITY $ 9,267,718 $ (148,399) $ 9,119,319
===================================================
IEXALT, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2000
PRO FORMA
IEXALT CLEANWEB
AND ACQUISITION
SUBSIDIARIES & FAMILY PRO FORMA
PER 10-KSB DISPOSITION ADJUSTMENTS SUBTOTAL
------------------------------------------------------------------------
REVENUES $ 8,101,283 $ 1,054,854 $ -- $ 9,156,137
EXPENSES 15,930,052 1,996,514 111,834 18,038,400
------------------------------------------------------------------------
NET INCOME $ (7,828,769) $ (941,660) $ (111,834) $ (8,882,263)
========================================================================
EARNINGS/(LOSS) PER SHARE (0.29) (0.30)
============ ============
PROFORMA WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 27,032,656 29,370,656
============ ============
CLEANWEB PRO FORMA PRO FORMA
SUBTOTAL DISPOSITION ADJUSTMENTS TOTAL
------------------------------------------------------------------------
REVENUES $ 9,156,137 $ (1,054,854) $ -- $ 8,101,283
EXPENSES 18,038,400 (1,500,505) (111,834) 16,426,061
------------------------------------------------------------------------
NET INCOME $ (8,882,263) $ 445,651 $ 111,834 $ (8,324,778)
========================================================================
EARNINGS/(LOSS) PER SHARE (0.28)
============
PROFORMA WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 29,370,656
============
IEXALT, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001
IEXALT
AND CLEANWEB PRO FORMA
SUBSIDIARIES ACQUISITION ADJUSTMENTS SUBTOTAL
------------------------------------------------------------------------
REVENUES $ 4,903,143 $ 210,971 $ -- $ 5,114,114
EXPENSES 8,428,000 372,101 18,639 8,818,740
------------------------------------------------------------------------
NET INCOME $ (3,524,857) $ (161,130) $ (18,639) $ (3,704,626)
========================================================================
EARNINGS/(LOSS) PER SHARE (0.11)
============
WEIGHTED AVERAGE NUMBER OF 32,539,289
============
SHARES OUTSTANDING
CLEANWEB PRO FORMA PRO FORMA
SUBTOTAL DISPOSITION ADJUSTMENTS TOTAL
------------------------------------------------------------------------
REVENUES $ 5,114,114 $ (729,804) $ -- $ 4,384,310
EXPENSES 8,818,740 (994,542) (18,639) 7,805,559
------------------------------------------------------------------------
NET INCOME $ (3,704,626) $ 264,738 $ 18,639 $ (3,421,249)
========================================================================
EARNINGS/(LOSS) PER SHARE (0.10)
============
PROFORMA WEIGHTED AVERAGE NUMBER OF 33,229,355
============
SHARES OUTSTANDING