UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 8, 2002
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"), executed a Settlement
Agreement and Mutual Release on June 24, 2002 that included as one of the terms
the disposition of the Company's electronic publication business
("ePublishing"). The assets and liabilities of ePublishing were effectively
transferred at the close of May 31, 2002 including the name of the business, all
intellectual property, and intangible assets. Excluded from the assignment were
any inter-company related payable or receivable transactions.
iExalt agreed to the settlement that resolves any obligations related to
the disputed shareholder loans with J. Tompkins, note receivable related to the
nXp Technologies, Inc. and compensation claims of ARTA Equity Advisors. For
consideration of assignment from the Company of the assets and selected
liabilities related to ePublishing, issuance of 300,000 of the Company's common
shares, settlement of claims with JP Morgan Chase Bank related to the line of
credit and the note payable, and execution of a note payable in the amount of
$150,000 to J. Tompkins the parties have agreed to compromise, settle, and
provide for the final termination of all disputes, claims, and controversies.
ITEM 5. OTHER EVENTS
iExalt, Inc., a Nevada corporation ("iExalt"), subsequent to the sale of
the existing line of credit and note payable obligations previously owned by
Chase Bank to J.A.K. IV LP, agreed to an advance under the terms of the Interim
Loan Agreement with J.A.K. IV LP dated June 24,2002 of $300,000 to resolve any
outstanding obligation that might remain with the assigned line of credit and
note payable.
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 ePublishing is filed herewith as
Annex A.
c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
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2.1 Settlement Agreement and Mutual Release, dated
June 24, 2002, between iExalt, Inc. and Jack I.
Tompkins
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: July 8, 2002 iExalt, Inc.
By: /s/ Chris L. Sisk
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Chris L. Sisk
Executive Vice President and
Primary Financial Officer
ANNEX A
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The unaudited pro forma balance sheet of the Company as of February 28,
2002 assumes the disposition of ePublishing had taken place on February 28,
2002. The unaudited pro forma results of operations of the Company for the
six-month period ended February 28, 2002 and the year ended August 31, 2001
assumes that the ePublishing disposition had been completed as of the beginning
of the respective periods. 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 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. The unaudited pro forma combined financial
statements should be read along with the historical consolidated financial
statements and notes thereto included in the Company's most recent annual report
filed on Form 10-KSB.
iExalt, Inc.
UNAUDITED PRO FORMA BALANCE SHEET
February 28, 2002 (unaudited)
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iExalt & ePublishing Pro Forma
Subsidiaries Disposition Total
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Current assets $ 964,519 $ (259,768) $ 704,751
Property, plant & equipment 353,938 (13,336) 340,602
Goodwill and other intangibles 2,551,511 (162,349) 2,389,162
Other assets 20,775 (1,400) 19,375
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Total assets $ 3,890,743 $ (436,853) $3,453,890
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Current liabilities $ 4,333,903 $ (199,603) $4,134,300
Long-term debt and other 8,058 - 8,058
Shareholders' equity (451,218) (237,250) (688,468)
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Total liabilities & equity $ 3,890,743 $ (436,853) $3,453,890
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iExalt, Inc.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
Six Months Ended February 28, 2002 (unaudited)
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Form 10-QSB
Pro Forma ePublishing Pro Forma
Note B Disposition Total
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Revenues $ 3,025,690 $ (669,893) $ 2,355,797
Loss from operations $ (2,494,952) $ (44,698) $(2,539,650)
Net loss $ (3,049,222) $ (43,348) $(3,092,570)
Earnings/(loss) per share $ (2.19) $ (2.22)
ProForma Weighted Average
Number of Shares Outstanding 1,395,466 1,395,466
iExalt, Inc.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
Year Ended August 31, 2001 (unaudited)
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Form 10-KSB
Pro Forma ePublishing Pro Forma
Note N Disposition Total
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Revenues $ 5,632,890 $ (1,314,720) $ 4,318,170
Loss from operations $ (8,462,578) $ (50,755) $(8,513,333)
Net loss $ (8,999,330) $ (48,721) $(9,048,051)
Earnings/(loss) per share $ (11.43) $ (11.49)
ProForma Weighted Average
Number of Shares Outstanding 787,536 787,536