1 EXHIBIT 99.4 F-23 Page 28 of 33 2 HARBINGER CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS The following unaudited pro forma consolidated statements of operations of Harbinger Corporation (the "Company") set forth below for the year ended December 31, 1996 and for the nine months ended September 30, 1997 give effect to the Company's acquisition of Acquion, Inc. ("Acquion") which has been accounted for using the purchase method of accounting. The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 1997 also reflects the elimination of the charge of $2.7 million for acquired in-process product development costs and the $2.4 million loss on extinguishment of the Debenture related to the acquisition of the minority interest of HNS since this purchase business combination occurred on January 1, 1997 (see page F-19). The operations of HNS have been included in the Company's historical operations since January 1, 1997. The unaudited pro forma consolidated statements of operations should be read in conjunction with the historical financial statements and notes thereto of the Company and Acquion. The unaudited pro forma consolidated statements of operations do not necessarily represent results which would have occurred if the transactions had taken place on the dates indicated nor are they necessarily indicative of the results of future operations. F-24 Page 29 of 33 3 HARBINGER CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT FOR PER SHARE DATA) Adjusted Company Historical Pro Forma Pro Forma Subtotal (1) Acquion (2) Adjustments Consolidated ------------ ----------- ------------ ------------ Revenues: Services $ 39,168 $ 41 $ 39,209 Software 22,441 82 22,523 ----------- ------- -------- Total revenues 61,609 123 61,732 ----------- ------- -------- Direct costs: Services 14,703 1,074 15,777 Software 3,341 10 3,351 ----------- ------- -------- Total direct costs 18,044 1,084 19,128 ----------- ------- -------- Gross margin 43,565 (961) 42,604 ----------- ------- -------- Operating costs: Selling and marketing 16,294 1,467 17,761 General and administrative 15,068 1,297 16,365 Depreciation and amortization 3,981 98 330 (3) 4,409 Product development 13,527 1,251 14,778 Charge for purchased in-process product development and acquisition-related charges 626 - 626 ----------- ------- -------- Total operating costs 49,496 4,113 53,939 ----------- ------- -------- Operating loss (5,931) (5,074) (11,335) Interest expense (income), net 50 - 959 (4) 1,009 Foreign currency exchange loss 18 - 18 Equity in losses of joint ventures 119 - 119 ----------- ------- -------- Loss before income tax (benefit) (6,118) (5,074) (12,481) Income tax expense (benefit) 168 - 168 ----------- ------- -------- Net loss (6,286) (5,074) (12,649) Preferred stock dividends (28) - (28) ----------- ------- -------- Net loss applicable to common shareholders $ (6,314) (5,074) $(12,677) =========== ======= ======== Net loss per common share $ (0.34) $ (0.68) =========== ======== Weighted average common and common equivalent shares outstanding 18,707 18,707 =========== ======== See Notes to Unaudited Pro Forma Consolidated Statements of Operations. F-25 Page 30 of 33 4 HARBINGER CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 (IN THOUSANDS, EXCEPT FOR PER SHARE DATA) Historical Historical Pro Forma Pro Forma Company Acquion (5) Adjustments Consolidated ----------- ----------- ----------- ------------ Revenues: Services $ 37,892 460 $ 38,352 Software 20,307 24 20,331 ---------- --------- -------- Total revenues 58,199 484 58,683 ---------- --------- -------- Direct costs: Services 12,921 1,448 14,369 Software 2,520 - 2,520 ---------- --------- -------- Total direct costs 15,441 1,448 16,889 ---------- --------- -------- Gross margin 42,758 (964) 41,794 ---------- --------- -------- Operating costs: Selling and marketing 11,614 1,537 13,151 General and administrative 10,999 649 11,648 Depreciation and amortization 5,700 78 248 (3) 6,026 Product development 3,033 1,145 4,178 Charge for purchased in-process product development and acquisition-related charges 31,185 - (10,917) (6) 17,568 (2,700) (7) ---------- --------- -------- Total operating costs 62,531 3,409 52,571 ---------- --------- -------- Operating loss (19,773) (4,373) (10,777) Interest expense (income), net (426) - 720 (4) 294 Foreign currency exchange loss - - - Equity in losses of joint ventures 38 - 38 ---------- --------- -------- Loss before income tax expense (19,385) (4,373) (11,109) Income tax expense 1,419 - 1,419 ---------- --------- -------- Net loss (20,804) (4,373) (12,528) Extraordinary loss on debt extinguishment (2,419) - 2,419 (7) - ========== ========= ======== Net loss applicable to common shareholders $ (23,223) $ (4,373) $(12,528) ========== ========= ======== Net loss per share of common stock $ (1.19) $ (0.64) ========== ======= Weighted average common and common equivalent shares outstanding 19,587 19,587 ========== ======= See Notes to Unaudited Pro Forma Consolidated Statements of Operations. F-26 Page 31 of 33 5 HARBINGER CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS Effective August 22, 1997, Harbinger (the "Company") acquired all of the outstanding shares of Acquion, Inc. ("Acquion"), a California corporation based in Greenville, South Carolina for $13.6 million, consisting of $12.0 million in cash and the assumption of $1.6 million in liabilities including transaction costs. The Company recorded the acquisition using the purchase method of accounting with $10.9 million of the purchase price allocated to in-process product development costs, $641,000 allocated to purchased technology, and $2.0 million allocated to goodwill. The Company determined that certain of the acquired technologies had not reached technological feasibility and therefore expensed the portion of the purchase price allocable to such in-process product development to the consolidated statement of operations on August 22, 1997. The unaudited pro forma consolidated statements of operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 illustrate the estimated effects on the Company's consolidated statements of operations of the acquisition as if it had occurred as of the beginning of those two periods. The unaudited pro forma consolidated statements of operations 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 the acquisition. For purposes of the unaudited pro forma consolidated statements of operations, such allocations have been made based upon currently available information and management's estimates. The historical statements are derived from the audited consolidated financial statements of the Company as of and for the year ended December 31, 1996, the audited statements of Acquion as of and for the year ended October 31, 1996 and the unaudited financial statements of the Company and Acquion for the nine months ended September 30, 1997. The unaudited pro forma consolidated statements of operations do not purport to represent what the results of operations of the Company would actually have been if the acquisition had occurred on such dates or to project the results of operations of the Company for any future date or period. The unaudited pro forma consolidated statements of operations should be read together with the historical financial statements and notes thereto of the Company and Acquion. The unaudited pro forma consolidated statements of operations reflect the following pro forma adjustments: 1) Reflects the pro forma operating results of the Company for the year ended December 31, 1996 as combined with HNS, HNV, NTEX and INOVIS. 2) Reflects the historical operating results of Acquion for the year ended October 31, 1996. 3) Reflects the additional amortization of intangible assets recorded as a result of the allocation of the purchase price. These intangible assets and their lives are as follows: Goodwill $ 2,014,000 10 years Acquired technology $ 641,000 5 years 4) Reflects interest expense on the borrowings to fund the cash portion of the purchase price of Acquion at the rate of 8% per annum. F-27 Page 32 of 33 6 HARBINGER CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS 5) Reflects the historical unaudited operating results of Acquion for the period from January 1, 1997 through August 22, 1997. The operating results of Acquion for the period from August 23, 1997 to September 30, 1997 are included in the Company's unaudited operating results. 6) Reflects the elimination of the charge of $10.9 million for acquired in-process product development costs resulting from the acquisition of Acquion and the Company's purchase price allocation. 7) Reflects the elimination of the charge of $2.7 million for acquired in-process product development costs and the $2.4 million loss on extinguishment of the Debenture related to the acquisition of the minority interest of HNS recorded in the first quarter of 1997. The unaudited pro forma consolidated statements of operations do not reflect the $10.9 million charge for in-process product development related to the acquisition of Acquion, or the $2.7 million charge for the in-process product development and $2.4 million loss on the extinguishment of the Debenture related to the acquisition of the minority interest in HNS, all of which were directly attributable to the transactions. F-28 Page 33 of 33