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): September 13, 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 an Asset Purchase
Agreement on August 31, 2002 with Christian Happenings Acquisition Corp., Ltd.,
an Ohio limited liability corporation ("CH"). iExalt sold the intangible and
tangible assets of its wholly owned subsidiary WordCross Enterprises, Inc.
("WordCross"). The purchase price was Three Hundred Thousand dollars
($300,000.00) to be paid with cash of $100,000.00 and the balance through an
earn-out calculated on the EBITDA related to the business during the subsequent
two years. CH will pay one-third of the amount by which EBITDA exceeds One
Hundred Thousand Dollars until the earn-out is paid in full or two years
following the closing date; provided, however, that if at any time during the
earn-out period, iExalt shall not be considered a going concern, CH shall have
the right to repurchase the earn-out for One Thousand Dollars.
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 WordCross is filed herewith as
Annex A.
c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
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2.1 Asset Purchase Agreement dated August 31, 2002
between iExalt, Inc. and Christian Happenings
Acquisition Corp., Ltd.
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: September 13, 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 May 31, 2002
assumes the disposition of the assets of WordCross Enterprises, Inc. had taken
place on May 31, 2002. The unaudited pro forma results of operations of the
Company for the nine-month period ended May 31, 2002 and May 31, 2001 assumes
that the 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
May 31, 2002 (unaudited)
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iExalt &
Subsidiaries WordCross
Form 10-QSB Asset Pro Forma
ProForma Note K Disposition Total
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Current assets $ 482,017 $ (138,463) $ 343,554
Property, plant & equipment 326,640 (60,877) 265,763
Goodwill and other intangibles 2,201,661 (281,574) 1,920,087
Other assets 18,934 - 18,934
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Total assets $ 3,029,252 $ (480,914) $2,548,338
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Current liabilities $ 3,651,248 $ (132,036) $3,519,212
Long-term debt and other 6,552 - 6,552
Shareholders' equity (628,548) (348,878) (977,426)
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Total liabilities & equity $ 3,029,252 $ (480,914) $2,548,338
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iExalt, Inc.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
Nine Months Ended May 31, 2002 (unaudited)
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Form 10-QSB WordCross
Pro Forma Asset Pro Forma
Note K Disposition Total
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Revenues $ 4,024,580 $ (950,897) $ 3,073,683
Loss from operations $ (3,704,721) $ (9,222) $(3,713,943)
Net loss $ (4,381,452) $ (9,934) $(4,391,386)
Earnings/(loss) per share $ (2.36) $ (2.36)
ProForma Weighted Average
Number of Shares Outstanding 1,856,453 1,856,453
iExalt, Inc.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
Nine Months Ended May 31, 2001 (unaudited)
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Form 10-QSB WordCross
Pro Forma Asset Pro Forma
Note K Disposition Total
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Revenues $ 3,201,306 $ (864,512) $ 2,336,794
Loss from operations $ (4,418,532) $ 60,576 $(4,357,956)
Net loss $ (4,757,469) $ 59,127 $(4,698,342)
Earnings/(loss) per share $ (4.68) $ (4.62)
ProForma Weighted Average
Number of Shares Outstanding 1,016,203 1,016,203