##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended September 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 For the transition period from  to
 Commission File Number 0-27166
 XATA Corporation
 (Exact name of registrant as specified in its charter)
 Minnesota
    
    41-1641815(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)965 Prairie Center Drive
    
    55344Eden Prairie, Minnesota
    
    (Zip Code)(Address of principal executive offices)
 Registrants telephone number, including area code:
(952)707-5600
 Securities registered pursuant to Section 12(b) of the Act:
 (Title of Class)
    
    (Name of each exchange on which registered)Common Stock, $0.01 par value per share
    
    Nasdaq Capital Market
 Securities registered pursuant to Section 12(g) of the Act:
None
 o þ
 o þ
 þ o
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 o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
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TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    13Item 2. Properties
    
    
    13Item 3. Legal Proceedings
    
    
    13Item 4. Submission of Matters to a Vote of Security Holders
    
    
    13PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    14Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    15Item 8. Financial Statements and Supplementary Data
    
    
    F-1Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    F-29Item 9A. Controls and Procedures
    
    
    F-29Item 9B. Other Information
    
    
    F-29PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    F-29Item 11. Executive Compensation
    
    
    F-30Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    F-30Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    F-30Item 14. Principal Accountant Fees and Services
    
    
    F-30PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    F-30SIGNATURES
    
    
    F-32EXHIBIT INDEXEX-23EX-31.1EX-31.2EX-32.1EX-32.2
  ii




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Forward Looking Statements
   
 PART I
 
 Item 1. Business
 About XATA
    
    
    Our first-generation products, introduced in the early 1990s, included our
revolutionary touch-screen Driver Computer and PC-based Fleet Management System software.
Valuable data was downloaded from driver computers to the fleet management system host
software in batch mode via our patented driver key for compliance reporting and analysis.
    
    In 1999, we introduced OpCenter, a Microsoft Windows-based customer-hosted system that
can manage multiple operation centers and users over a wide area network.
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
    
    In 2004, we introduced XATANET, our next-generation Web-based system. Over the past
several years we have invested heavily in product enhancements and additional software
applications to ensure that XATANET continues to meet the needs of fleet operators. We
believe that the XATANET platform enables us to service approximately 3.2 million medium
and heavy duty vehicle private fleet transportation market.
    
    In 2008, XATA completed its acquisition of GeoLogic Solutions, Inc., which provides the
commercial trucking industry with wireless asset management solutions in the for-hire
segment of the over-the-road transportation sector.
    
    In 2009, XATA partnered with Digi International to deliver a state-of-the-art on-truck
hardware to support XATAs next-generation onboard communications technology. Under the
agreement, Digi will deliver iDigi services and a range of cellular and satellite
communications products to meet XATAs technology and connectivity needs for the for-hire
and private fleet trucking marketplaces.
    
    In December 2009, the Company acquired Turnpike Global Technologies, Inc. and Turnpike Global
Technologies LLC (combined Turnpike). Turnpikes RouteTracker products allow us to
continue our growth strategy by expanding our addressable market to include small and
medium-size fleets in North America and key vertical markets, such as Less Than Truckload
(LTL), and the automation of fuel tax reporting.
 Trucking Industry Background and Trends
    
    
    Increased operating costs: Driver salaries, fuel, insurance, and other operating
costs continue to fluctuate. Recent challenging economic conditions have also increased
the need for cost saving efforts. These trends encourage operators to utilize onboard
information systems to control costs and more effectively manage their fleets,
including fleet consolidation in order to optimize asset utilization.
    
    Government regulations: DOT driver log requirements have become more stringent. The
Federal Motor Carrier Safety Administration (FMCSA), an administration within the DOT,
implemented new driver hours-of-service rules in January 2004, tightening driver work
rules. These rules were challenged in federal court and the FMSCA issued revised rules
effective October 1, 2005. On November 19, 2008, the FMCSA published a final rule
adopting the provisions of its December 17, 2007, interim final rule on the
hours-of-service rules. The final regulation took effect on January 19, 2009. This
final rule allows commercial motor vehicle (CMV) drivers to continue to drive up to 11
hours within a 14-hour, non-extendable window from the start of the workday, following
at least 10 consecutive hours off duty (11-hour rule). This rule has currently been
issued a court ruling, due to pressure from groups such as Public Citizen, which has
required the FMCSA to develop and produce alternatives to
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this 11-hour rule within the next 9 months and have an amended regulation published
within the next year.The FMCSA is currently in the processes of issuing a new regulation in the use of
Electronic Onboard Recorders (EOBRs) to increase hours-of-service compliance and
compliance-related highway safety. Because of illegal paper log adjustments, the FMCSA
would like to mandate the use of EOBRs for drivers with poor safety records, while
providing additional incentives for those who will switch voluntarily. These logbooks
could be used to force drivers to adhere to the hour-of-service restrictions and save
time by no longer using the paper log. In 1997, FMCSA issued a memorandum limiting the
use of advanced technology in compliance reviews and enforcement. On November 19, 2008,
FMCSA issued a policy change that rescinded the 1997 memorandum. We believe the change
in policy will make computer-generated driver logs and EOBRs systems more widely
accepted and eventually result in federal or state government mandates. This regulation
is currently published to go to the White House Office of Management and Budget in the
next 60 days.As of December 3, 2009, the FMCSA has issued a New Proposed Rule Making on the EOBR
Supporting Documents to go in conjunction with the New Regulation for EOBR in commercial
motor vehicles. This concerns all documents that are defined to support HOS DOT audits.Additionally, states require trucks to pay state fuel taxes based on the amount of fuel
consumed in their state. To comply with these regulations, drivers must record state
border crossing and fuel purchase information. Many long haul vehicles cross up to 25
state borders per week, resulting in significant paperwork for the driver, the clerical
staff of the carrier and the processor of the carriers fuel tax returns. In order to
comply with these requirements, records must be maintained at the fleet home base as
well as at the carriers headquarters. Records must also be readily available for
federal regulators to review fuel tax compliance. Our systems are designed to automate
compliance with each of these regulatory requirements.Furthermore, there is increased pressure, by a variety of federal and state government
agencies, to implement environmental, green regulations to reduce the countrys carbon
footprint and greenhouse gas emissions. Policies that may be favored by environmental
concerns include a national speed limit of 65 miles per hour for all trucks, decreased
idling, reducing highway congestion and other policies that seek to get more value out
of every gallon of fuel burned. In order to comply with any such requirements, records
will need to be maintained and be available for federal and state regulators to review.
Our systems can help with the monitoring of these types of environmental components.
    
    New technologies: Affordability, simplicity and acceptance of new wireless
communications and internet technologies have historically proven to be barriers for
customers to purchase our solutions. New technologies are helping to reduce these
barriers.
    
    Safety and security concerns: Since the terrorist attacks of September 11, 2001,
public authorities and fleet operators have become more acutely interested in
technology solutions to increase the safety and security of their drivers and cargo.
This is especially true for companies transporting petroleum products and other
hazardous loads.
    
    Mobile technology: As companies increasingly rely on just-in-time inventory
management and seek to control and monitor inventories throughout their entire supply
chain, they demand better service and increased capabilities from their trucking
operators and vendors. In addition, as companies increasingly adopt mobile
technologies, including the internet, to reduce communication costs, paperwork and
processing times, trucking operators are adopting technology to comply with the
operating processes and systems of their customers.
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This trend encourages integration of mobile technology with the host information systems
of trucking fleet operators.
 Our Products and Services
  XATANET Fleet Management System
    
    
    Automation of DOT driver log requirements and state fuel tax reporting.
    
    Comprehensive vehicle and driver performance reporting.
    
    Real-time asset tracking, route management, trip optimization and stop activity
scheduling.
    
    Mobile two-way messaging and real-time vehicle location.
    
    Diagnostic and accident data capture.
    
    
    Mobile Applications: These core XATANET applications provide for the optimization of
fleet operations, including electronic driver logs, automated fuel tax, driver and vehicle
management. The mobile environment is designed with easy integration with third-party
complementary applications such as proof of delivery, navigation, and routing systems. XATA
provides onboard, rugged, mobile computing platforms that connect to the engine, gathering
vehicle and diagnostic information.
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
    
    Driver Displays: Touch-screen driver displays are mounted in the cab of the truck
capturing and communicating fleet performance information. With the ability to monitor
fuel economy, estimated time of arrival (ETA), and regulatory compliance drivers can help ensure the fleet
reaches optimum performance levels.
    
    Wireless Communications: XATANET systems use patented technologies that utilize
lowest-cost communication methods synchronizing trip and driver data with maximum
efficiency. Our multi-mode systems combine CDMA 1xRTT and satellite wireless networks to
provide no-gap coverage and high speed data download. The XATANET onboard mobile
computing platforms include GPS and wireless communications hardware that collect, store
and intelligently manage data communications.
 MobileMax Fleet Management System
    
    
    Mobile Applications: These core applications provide for the optimization of fleet
operations, including automated fuel tax, driver and vehicle management.
    
    Driver Displays: Color touch-screen driver displays are mounted in the cab of the truck
capturing and communicating fleet performance information. These displays also provide
in-cab communications between drivers on the road and home base.
    
    Communications: MobileMax systems use patented technologies that utilize lowest-cost
communication methods synchronizing trip and driver data with maximum efficiency. The
multi-mode system combines GSM GPRS terrestrial communication with L-band geosynchronous
satellite networks to provide no-gap coverage and high-speed data download. MobileMaxs
onboard hardware combines the systems transceiver and antenna in one shell that uses a
single-cable connection to handle data communications.
 RouteTracker Fleet Management System
   Legacy OpCenter Fleet Management System
  Professional
Services
  
    
    Implementation services include project management, website setup and configuration,
best-practices recommendations, data integration and software implementation.
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
    
    Training services include online training, on-site training and one-on-one training for
fleet management and drivers. This includes teaching how to use the in-cab devices (for
drivers) and how to best use the XATANET reports (for fleet management personnel).
    
    Best-practice consulting includes examining a customers fleet operations and making
recommendations for improvements, using the XATANET or MobileMax fleet management
solutions.
    
    XATAs custom reporting service allows XATANET and MobileMax customers to have
specialized reports made for their operations, beyond the suite of standard reports already
offered by XATA.
 Target Markets
  Private Fleets
   For-Hire Carriers
  Other Markets
  6




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Major Customers
   Sales and Marketing
    Competition
   Key Alliances and Relationships
  Communication Providers
  7




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Manufacturers
 
 Third-party Application and Hardware Providers
   Patents, Trademarks, and Copyrights
 ® ® ®
 Research and Development
  
    
    SaaS Infrastructure.We intend to continue to improve our SaaS infrastructure to meet
the increasing needs of our expanding customer base and the associated increase in
transactions. Also, we will continue to monitor and analyze the XATANET infrastructures
capacity and ability to meet the service level requirements of our customers.
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
    
    Software. XATA intends to continue developing our software applications by offering new
features while enhancing our existing features. Several enhancements were made to XATANET
in 2009, including integrated navigation specifically for professional truck drivers, and
several advancements to our fleet-data reporting and analytic capabilities. Added
functionality to XATANET included integration between industry-standard handheld devices
and third-party fleet management software. MobileMax developments in 2009 included the release of our professional
navigation function. XATA intends to continue developing and releasing platform upgrades to
support our new and enhanced software features. This will be conducted through our own
development efforts and through those of our strategic hardware-partners.
 Employees
  
 Item 1A. Risk Factors
 We do not have a long or stable history of profitable operations.
 Our existing customers might cancel contracts with us, fail to renew contracts or fail to purchase
additional services and products.
 Our market is highly competitive and is subject to revenue fluctuations.
 We have a limited number of products and those products are concentrated in one industry.
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We are dependent on key personnel and contract manufacturers.
 We are dependent on proprietary technology.
 We depend on wireless communication networks owned and controlled by others.
 Our products may quickly become obsolete.
 Third parties may claim we infringe their intellectual property rights.
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Our acquisition of Turnpike is accompanied by a variety of risks, any of which may adversely affect our business.
  
    
    failure to achieve the financial and strategic goals for the acquired and combined
business;
    
    difficulty and unexpected costs in assimilating the operations and personnel of the
acquired businesses;
    
    product liability and other exposure associated with acquired businesses or the sale of
their products;
    
    unanticipated liabilities, legal risks and costs;
    
    retention of key personnel; and
    
    distraction of management from our ongoing business.
  JDSTG and Trident Capital, who are represented on our Board of Directors, individually and together
own enough stock to exert significant influence over XATA.
 We may need additional capital.
 If our common share price decreases to a level such that the fair value of our net assets is less than the carrying value of our net assets, we may be required to record additional significant
non-cash charges associated with goodwill impairment. Intangibles  Goodwill and Others.
 11




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Fair
value assessments of our intangible assets required by GAAP may require us to record significant non-cash charges associated with intangible asset impairment. Property, Plant, and Equipment  Overall,
 We may issue additional stock without shareholder consent.
 Our directors liability is limited under Minnesota law and under certain agreements.
 We
face burdens relating to the recent trend toward stricter corporate governance and financial reporting standards.
 12




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Item 1B.  Unresolved Staff Comments
  
 Item 2.  Properties
   
 Item 3.  Legal Proceedings
  
 Item 4.  Submission of Matters to a Vote of Security Holders
  13




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PART II
 
 Item 5.   Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  Fiscal Year 2009
    
    Low
    
    
    HighFirst Quarter
    
    $
    1.52
    
    
    $
    3.85Second Quarter
    
    
    1.47
    
    
    
    3.00Third Quarter
    
    
    1.62
    
    
    
    3.98Fourth Quarter
    
    
    2.49
    
    
    
    4.00
 Fiscal Year 2008
    
    Low
    
    
    HighFirst Quarter
    
    $
    2.64
    
    
    $
    4.21Second Quarter
    
    
    2.98
    
    
    
    3.54Third Quarter
    
    
    3.05
    
    
    
    3.80Fourth Quarter
    
    
    3.35
    
    
    
    3.95
  Dividend Policy
   Sale of Unregistered Securities
  Issuer Purchases of Equity Securities
  14




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Item 7.  Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Overview
     Technology, People, Processes
  
    
    Technology.XATA provides a total fleet management solution, including hardware,
software and services through the following solutions:
 
    
    XATANET, our web-based, on-demand scalable software, includes a variety
of web-based enterprise applications. XATANET, provides critical real-time
information about our customers fleets, allows for paperless driver logs and
provides summary and granular reports on driver and vehicle performance. XATANET
can also integrate with back-office applications, for a seamless flow of
information, and our software works with a variety of in-cab communications
devices.
    
    MobileMax helps for-hire trucking companies track and manage nearly
every aspect of their fleets activities to help control costs and increase ROI.
The MobileMax solution features Multi-Mode communication capabilities that
automatically switch between land-based and satellite communications to take
advantage of the cost-savings and reliability of both terrestrial and satellite
communication. MobileMax integrates with dispatching and routing applications for a
seamless flow of information.
 
    
    People.With employee expertise in safety, fleet management and technology, XATA is
able to provide consultation services to help organizations implement best practices for
fleet productivity and develop specific customer hardware and reporting requirements.
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
    
    Processes.All XATA processes are designed to make managing fleets easier. Drawing on
hundreds of successful implementations with a wide variety of fleets including
multibillion-dollar organizations, XATA carefully plans each phase of the implementation
and follows well established methodologies. The process begins with assessing our
customers objectives. Then, we develop a detailed implementation schedule that includes
all aspects of the project, from implementation to conversion, integration, training and
problem solving.
 Critical Accounting Policies
  Revenue Recognition. Software  Revenue Revenue Recognition  Overall
    Allowance for doubtful accounts.
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Goodwill. Intangibles  Goodwill and Others,
 Property, Plant, and Equipment  Overall,
 Product Warranties.
 Capitalized system development costs Software  Costs to Be Sold, Leased, or Otherwise Marketed
 Income taxes
 Income Tax
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Stock-based Compensation. Compensation Stock Compensation, Compensation  Stock Compensation -
Overall,
 Operating Results
  18




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For the Twelve Months EndedSeptember 30,2009
    
    
    2008SoftwareRevenue
    
    $
    34,776
    
    
    $
    23,794Cost of goods sold
    
    
    9,582
    
    
    
    7,245Gross margin
    
    $
    25,194
    
    
    $
    16,549Gross margin %
    
    
    72.4
    %
    
    
    69.6
    %SystemsRevenue
    
    $
    25,215
    
    
    $
    25,681Cost of goods sold
    
    
    22,871
    
    
    
    19,556Gross margin
    
    $
    2,344
    
    
    $
    6,125Gross margin %
    
    
    9.3
    %
    
    
    23.9
    %ServicesRevenue
    
    $
    5,334
    
    
    $
    4,251Cost of goods sold
    
    
    3,687
    
    
    
    3,155Gross margin
    
    $
    1,647
    
    
    $
    1,096Gross margin %
    
    
    30.9
    %
    
    
    25.8
    %TotalRevenue
    
    $
    65,325
    
    
    $
    53,726Cost of goods sold
    
    
    36,140
    
    
    
    29,956Gross margin
    
    $
    29,185
    
    
    $
    23,770Gross margin %
    
    
    44.7
    %
    
    
    44.2
    %
 Comparison of Fiscal 2009 operating results to Fiscal 2008
 Revenue
     19




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Cost of Goods Sold and Gross Margin
 Cost of software
 Cost of systems
 Cost of services
 Selling, General and Administrative Expenses
  Research & Development Expenses
  Net Interest Expense
  20




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Income Taxes
 Income Tax
  Net Loss to Common Shareholders
  Liquidity and Capital Resources
       21




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Subsequent Events
    22




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Off-Balance Sheet Arrangements
  Recently Issued Accounting Pronouncements
 Fair Value Measurements and Disclosures (ASC 820)
 Fair Value Measurements and Disclosures
 Business Combinations  Revised (ASC 805)
 Business Combinations
 The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles
 The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
 Subsequent Events (ASC 855)
 Subsequent Events
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Revenue Recognition (ASU 2009-13 and ASU 2009-14)
 Revenue Recognition (ASC
Topic 605)  Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues
Task Force Software (ASC Topic 985)  Certain Revenue Arrangements That
Include Software Elements, a consensus of the FASB Emerging Issues Task Force
 ASU No. 2009-13: Revenue Recognition-Multiple Element Arrangements
 ASU No. 2009-14: Software-Revenue
Recognition
  24




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Item 8. Financial Statements and Supplementary Data
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ Grant Thornton LLPMinneapolis, MinnesotaDecember 18, 2009 F-1




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XATA CORPORATION
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    September 30,2009
    
    
    2008ASSETSCurrent assetsCash and cash equivalents
    
    $
    3,440
    
    
    $
    8,904Accounts receivable, less allowances
of $368 and $333
    
    
    9,323
    
    
    
    11,365Inventories
    
    
    4,104
    
    
    
    2,735Deferred product costs
    
    
    2,060
    
    
    
    1,474Current portion of investment in sales-type leases
    
    
    281
    
    
    
    768Prepaid expenses and other current assets
    
    
    783
    
    
    
    691Total current assets
    
    
    19,991
    
    
    
    25,937Equipment and leasehold improvements, net
    
    
    3,980
    
    
    
    3,925Intangible assets, net
    
    
    10,725
    
    
    
    12,420Goodwill
    
    
    3,011
    
    
    
    3,011Deferred product costs, net of current portion
    
    
    2,470
    
    
    
    2,685Investment in sales-type leases, net of current portion
    
    
    29
    
    
    
    310Debt financing costs, net
    
    
    458
    
    
    
    708Total assets
    
    $
    40,664
    
    
    $
    48,996LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term obligations
    
    $
    84
    
    
    $
    1,845Accounts payable
    
    
    5,366
    
    
    
    4,394Accrued expenses
    
    
    5,914
    
    
    
    6,574Deferred revenue
    
    
    5,280
    
    
    
    4,996Total current liabilities
    
    
    16,644
    
    
    
    17,809Long-term obligations, net of current portion
    
    
    8,534
    
    
    
    16,342Deferred revenue, net of current portion
    
    
    6,101
    
    
    
    7,848Other long-term liabilities
    
    
    820
    
    
    
    805Total liabilities
    
    
    32,099
    
    
    
    42,804Shareholders equityPreferred stock, no par, 10,000 shares authorized:Series B, 4% convertible, 2,250 shares designated;
shares issued and outstanding: 2,004 at September 30, 2009
and 1,926 at September 30, 2008
    
    
    4,790
    
    
    
    5,181Series C, convertible, 1,400 shares designated;
1,269 shares issued and outstanding at September 30, 2009
and September 30, 2008
    
    
    4,426
    
    
    
    4,845Series D, convertible, 1,600 shares designated;
1,567 shares issued and outstanding at September 30, 2009
and September 30, 2008
    
    
    5,279
    
    
    
    5,937Series F, convertible, 1,400 shares designated;
1,356 shares issued and outstanding at September 30, 2009
    
    
    2,365
    
    
    
    Common stock, par value $0.01 per share; 25,000 shares
authorized; shares issued and outstanding: 8,789 at
September 30, 2009 and 8,745 at September 30, 2008
    
    
    88
    
    
    
    87Additional paid-in capital
    
    
    32,536
    
    
    
    28,234Accumulated deficit
    
    
    (40,919
    )
    
    
    (38,092
    )Total shareholders equity
    
    
    8,565
    
    
    
    6,192Total liabilities and shareholders equity
    
    $
    40,664
    
    
    $
    48,996
  F-2




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XATA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Years Ended September 30,2009
    
    
    2008Revenue
    
    $
    65,325
    
    
    $
    53,726Costs and expensesCost of goods sold
    
    
    36,140
    
    
    
    29,956Selling, general and administrative
    
    
    24,236
    
    
    
    21,062Research and development
    
    
    5,507
    
    
    
    5,032Total costs and expenses
    
    
    65,883
    
    
    
    56,050Operating loss
    
    
    (558
    )
    
    
    (2,324
    )Interest income
    
    
    112
    
    
    
    404Interest expense
    
    
    (1,621
    )
    
    
    (1,441
    )Loss before income taxes
    
    
    (2,067
    )
    
    
    (3,361
    )Income tax expense
    
    
    (35
    )
    
    
    Net loss
    
    
    (2,102
    )
    
    
    (3,361
    )Preferred stock dividends
    
    
    (200
    )
    
    
    (192
    )Preferred stock deemed dividends
    
    
    (525
    )
    
    
    (69
    )Net loss to common shareholders
    
    $
    (2,827
    )
    
    $
    (3,622
    )Net loss per common share  basic and diluted
    
    $
    (0.33
    )
    
    $
    (0.44
    )Weighted average common and
common share equivalentsBasic and diluted
    
    
    8,551
    
    
    
    8,326
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XATA CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 Series B
    
    
    Series C
    
    
    Series D
    
    
    Series F
    
    
    
    
    
    
    
    
    
    
    AdditionalPreferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Common Stock
    
    
    Paid-In
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance at September 30, 2007
    
    
    1,851
    
    
    $
    4,921
    
    
    
    1,269
    
    
    $
    4,845
    
    
    
    1,567
    
    
    $
    5,937
    
    
    
    
    
    
    $
    
    
    
    
    8,516
    
    
    $
    85
    
    
    $
    25,760
    
    
    $
    (34,470
    )
    
    $
    7,078Common stock issued on exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    44Issuance of restricted shares of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,588
    
    
    
    
    
    
    
    1,588Forfeiture of restricted shares of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    1
    
    
    
    843
    
    
    
    
    
    
    
    844Preferred stock dividends
    
    
    75
    
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (192
    )
    
    
    (1
    )Preferred stock deemed dividends
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (69
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,361
    )
    
    
    (3,361
    )Balance at September 30, 2008
    
    
    1,926
    
    
    
    5,181
    
    
    
    1,269
    
    
    
    4,845
    
    
    
    1,567
    
    
    
    5,937
    
    
    
    
    
    
    
    
    
    
    
    8,745
    
    
    
    87
    
    
    
    28,234
    
    
    
    (38,092
    )
    
    
    6,192Issuance of restricted shares of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,613
    
    
    
    
    
    
    
    1,613Forfeiture of restricted shares of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,356
    
    
    
    2,365
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    2,865Record the beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (484
    )
    
    
    
    
    
    
    
    
    
    
    484
    
    
    
    
    
    
    
    Preferred stock dividends
    
    
    78
    
    
    
    197
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    (3
    )Preferred stock deemed dividends
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    484
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (525
    )
    
    
    Adjustment to reflect value of beneficial conversion feature
    
    
    
    
    
    
    (629
    )
    
    
    
    
    
    
    (419
    )
    
    
    
    
    
    
    (658
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,706
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,102
    )
    
    
    (2,102
    )Balance at September 30, 2009
    
    
    2,004
    
    
    $
    4,790
    
    
    
    1,269
    
    
    $
    4,426
    
    
    
    1,567
    
    
    $
    5,279
    
    
    
    1,356
    
    
    $
    2,365
    
    
    
    8,789
    
    
    $
    88
    
    
    $
    32,536
    
    
    $
    (40,919
    )
    
    $
    8,565
  F-4




---



##### Table of Contents



XATA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years Ended September 30,2009
    
    
    2008Operating activitiesNet loss
    
    $
    (2,102
    )
    
    $
    (3,361
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Depreciation and amortization
    
    
    3,017
    
    
    
    2,426Amortization of debt financing costs
    
    
    250
    
    
    
    167Loss on disposal of long-lived assets
    
    
    
    
    
    
    42Stock based compensation
    
    
    1,613
    
    
    
    1,588Changes in assets and liabilities, net of impact of acquisition:Accounts receivable, net
    
    
    2,042
    
    
    
    (4,034
    )Inventories
    
    
    (1,368
    )
    
    
    2,289Deferred product costs
    
    
    (372
    )
    
    
    (1,609
    )Prepaid expenses and other assets
    
    
    (92
    )
    
    
    (520
    )Lease equipment receivable
    
    
    769
    
    
    
    746Accounts payable
    
    
    972
    
    
    
    (1,946
    )Accrued expenses
    
    
    (649
    )
    
    
    (148
    )Deferred revenue
    
    
    (1,463
    )
    
    
    3,215Net cash provided by (used in) operating activities
    
    
    2,617
    
    
    
    (1,145
    )Investing activitiesPurchase of equipment and leasehold improvements
    
    
    (1,377
    )
    
    
    (3,117
    )Purchase of GeoLogic Solutions, Inc., net of cash acquired
    
    
    
    
    
    
    (16,280
    )Net cash used in investing activities
    
    
    (1,377
    )
    
    
    (19,397
    )Financing activitiesBorrowings on long-term obligations
    
    
    18,077
    
    
    
    19,224Payments on long-term obligations
    
    
    (27,646
    )
    
    
    (3,167
    )Payments on financing costs
    
    
    
    
    
    
    (339
    )Proceeds from issuance of preferred stock and warrants
    
    
    2,865
    
    
    
    Proceeds from options exercised
    
    
    
    
    
    
    53Net cash (used in) provided by financing activities
    
    
    (6,704
    )
    
    
    15,771Decrease in cash and cash equivalents
    
    
    (5,464
    )
    
    
    (4,771
    )Cash and cash equivalentsBeginning
    
    
    8,904
    
    
    
    13,675Ending
    
    $
    3,440
    
    
    $
    8,904Supplemental disclosures of cash flow informationCash payments for interest
    
    $
    1,513
    
    
    $
    1,035Supplemental schedule of noncash investing and financing activitiesPreferred stock deemed dividends
    
    $
    525
    
    
    $
    69Preferred stock dividends
    
    $
    200
    
    
    $
    192Preferred stock dividends paid
    
    $
    197
    
    
    $
    191Issuance of warrants in consideration for financing fees
    
    
    
    
    
    $
    535Issuance of sellers note
    
    
    
    
    
    $
    1,750Issuance of common stock related to purchase of GeoLogic Solutions, Inc.
    
    
    
    
    
    $
    300
  F-5




---



##### Table of Contents



Notes to Consolidated Financial Statements
 Note 1. Description of Business
  Note 2. Summary of Significant Accounting Policies
 Principles of Consolidation
  Revenue Recognition
 Software
 Revenue Recognition Revenue Recognition  Overall
    Allowance for Doubtful Accounts
  F-6




---



##### Table of Contents



Segment Reporting
   Use of Estimates
  Basis of Presentation
  As Previously
    
    
    
    
    
    As CurrentlyReported
    
    Reclassification
    
    ReportedFor fiscal 2008:Cost of goods sold
    
    $
    28,246
    
    
    $
    1,710
    
    
    $
    29,956Selling, general and administrative expenses
    
    
    21,777
    
    
    
    (715
    )
    
    
    21,062Research and development expenses
    
    
    6,027
    
    
    
    (995
    )
    
    
    5,032
  F-7




---



##### Table of Contents



Cash and Cash Equivalents
  Concentration of Credit Risk
   Fair Value of Financial Instruments
 Fair Value Hierarchy
 Fair Value Measurement and Disclosures,
 Level 1 
 Level 2 
 Level 3 
   Inventories
  F-8




---



##### Table of Contents



Investment in Sales-Type Leases
  Years ending September 30,2010
    
    $
    2962011
    
    
    42Total minimum lease payments
    
    
    338Less: amount representing interest (at 11.71%)
    
    
    (28
    )Present value of net minimum sales-type lease payments
    
    
    310Less: current portion of investment in sales-type leases
    
    
    (281
    )Investment in sales-type leases, excluding current portion
    
    $
    29
  Debt Financing Costs
  Equipment and Leasehold Improvements
  F-9




---



##### Table of Contents



September 30,
    
    
    September 30,2009
    
    
    2008Office furniture and equipment
    
    $
    4,984
    
    
    $
    4,003Engineering and manufacturing equipment
    
    
    900
    
    
    
    831Leasehold improvements
    
    
    2,650
    
    
    
    2,4738,534
    
    
    
    7,307Less: accumulated depreciation
    
    
    (4,554
    )
    
    
    (3,382
    )Equipment and leasehold improvements, net
    
    $
    3,980
    
    
    $
    3,925
  Capitalized System Development Costs
 Software  Costs
to Be Sold, Leased, or Otherwise Marketed
  Long-Lived Assets
  Goodwill and Intangible Assets
 Intangibles  Goodwill and Others,
 F-10




---



##### Table of Contents



Property, Plant, and Equipment  Overall,
  Weighted Average
    
    
    
    
    
    
    AccumulatedLife (years)
    
    
    Cost
    
    
    Amortization
    
    
    NetAcquired customer contracts
    
    
    8
    
    
    $
    13,500
    
    
    $
    (2,812
    )
    
    $
    10,688Other intangibles
    
    
    7
    
    
    
    49
    
    
    
    (12
    )
    
    
    37Total
    
    
    8
    
    
    $
    13,549
    
    
    $
    (2,824
    )
    
    $
    10,725
  Weighted Average
    
    
    
    
    
    
    AccumulatedLife (years)
    
    
    Cost
    
    
    Amortization
    
    
    NetAcquired customer contracts
    
    
    8
    
    
    $
    13,500
    
    
    $
    (1,125
    )
    
    $
    12,375Other intangibles
    
    
    7
    
    
    
    49
    
    
    
    (4
    )
    
    
    45Total
    
    
    8
    
    
    $
    13,549
    
    
    $
    (1,129
    )
    
    $
    12,420
  Years ending September 30,2010
    
    $
    1,6952011
    
    
    1,6952012
    
    
    1,6952013
    
    
    1,6952014
    
    
    1,695Thereafter
    
    
    2,250Total expected amortization expense
    
    $
    10,725
 F-11




---



##### Table of Contents



Product Warranties
   Shipping Costs
  Advertising Costs
  Income taxes
 Income Taxes -
Overall
 Stock-Based Compensation
 Compensation  Stock Compensation, Compensation  Stock Compensation  Overall,
 F-12




---



##### Table of Contents



Major Customers
  Percentage of Revenue
    
    Percentage of Ending ReceivablesFor the Year Ended September 30,
    
    At September 30,2009
    
    2008
    
    2009
    
    2008Customer A
    
    
    13.7
    %
    
    
    12.3
    %
    
    
    19.6
    %
    
    
    *Customer B
    
    
    14.1
    %
    
    
    *
    
    
    
    *
    
    
    
    15.1
    %
 
 *
    
    Customer total was less than 10 percent of revenue or ending receivables.  Major Suppliers
  Recently Issued Accounting Standards
 Fair Value Measurements and Disclosures (ASC 820)
 Fair Value Measurements and Disclosures
 Business Combinations  Revised (ASC 805)
 Business Combinations
 F-13




---



##### Table of Contents



The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles
 The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
 Subsequent Events (ASC 855)
 Subsequent Events
 Revenue Recognition (ASU 2009-13 and ASU 2009-14)
  ASU No. 2009-13:
 ASU No. 2009-14:
  F-14




---



##### Table of Contents



Note 3. Revenue and Cost of Goods Sold Information
  For the Years Ended September 30,2009
    
    
    2008Revenue:Software
    
    $
    34,776
    
    
    $
    23,794Systems
    
    
    25,215
    
    
    
    25,681Services
    
    
    5,334
    
    
    
    4,251Total revenue
    
    $
    65,325
    
    
    $
    53,726
 For the Years Ended September 30,2009
    
    
    2008Cost of goods sold:Software
    
    $
    9,582
    
    
    $
    7,245Systems
    
    
    22,871
    
    
    
    19,556Services
    
    
    3,687
    
    
    
    3,155Total cost of goods sold
    
    $
    36,140
    
    
    $
    29,956
   Note 4. GeoLogic Solutions, Inc. Acquisition
   F-15




---



##### Table of Contents



Cash
    
    
    
    
    
    $
    15,277Debt obligations
    
    
    
    
    
    
    1,750Common stock
    
    
    
    
    
    
    300Transaction costs
    
    
    
    
    
    
    1,560Total purchase price
    
    
    
    
    
    $
    18,887Cash
    
    $
    557Other current assets
    
    
    6,208Property and equipment
    
    
    554Intangible and other assets
    
    
    1,049Current liabilities
    
    
    (5,992
    )Net assets
    
    
    
    
    
    
    2,376Acquired customer contracts
    
    
    
    
    
    
    13,500Goodwill
    
    
    
    
    
    
    3,011Total
    
    
    
    
    
    $
    18,887
  Revenue
    
    $
    60,679Net loss to common shareholders
    
    $
    (7,582
    )Net loss per common share  basic and diluted
    
    $
    (0.91
    )Weighted average common and common
share equivalents  basic and diluted
    
    
    8,326
  Note 5. Financing Arrangements
  F-16




---



##### Table of Contents



September 30,
    
    
    September 30,2009
    
    
    2008Subordinated notes issued to seller
    
    $
    
    
    
    $
    1,225Subordinated convertible notes issued to seller
    
    
    
    
    
    
    525Total notes payable issued to seller
    
    
    
    
    
    
    1,750Senior secured revolving credit facility
    
    
    500
    
    
    
    8,223Secured term loan
    
    
    8,000
    
    
    
    8,000Capitalized leases
    
    
    118
    
    
    
    214Total long-term obligations
    
    
    8,618
    
    
    
    18,187Less current portion of long-term obligations
    
    
    84
    
    
    
    1,845Total long-term obligations, net of current portion
    
    $
    8,534
    
    
    $
    16,342
  Years ending September 30,2010
    
    $
    842011
    
    
    3,5202012
    
    
    5,014Total
    
    $
    8,618
 Note 6. Net Loss Per Share
  F-17




---



##### Table of Contents



Note 7. Income Taxes
  September 30,2009
    
    
    2008Current deferred tax assets:Inventory and warranty reserve
    
    $
    838
    
    
    $
    862Accrued expenses, deferred revenue and other
    
    
    2,733
    
    
    
    2,615Accounts receivable and sales reserve
    
    
    136
    
    
    
    1233,707
    
    
    
    3,600Non-current deferred tax assets:Depreciation and amortization
    
    
    949
    
    
    
    907Tax credit carryforwards
    
    
    1,748
    
    
    
    1,456Net operating loss carryforwards
    
    
    16,520
    
    
    
    16,930Identifiable intangible assets
    
    
    (3,968
    )
    
    
    (4,595
    )15,249
    
    
    
    14,698Total deferred tax asset
    
    
    18,956
    
    
    
    18,298Less: valuation allowance
    
    
    (18,956
    )
    
    
    (18,298
    )Net deferred tax asset
    
    $
    
    
    
    $
    
  F-18




---



##### Table of Contents



September 30,2009
    
    
    2008Statutory federal rate applied to lossbefore income taxes
    
    $
    (703
    )
    
    $
    (1,143
    )State income tax expense (benefit)
    
    
    (23
    )
    
    
    (81
    )Stock based compensation
    
    
    242
    
    
    
    195Other permanent differences
    
    
    83
    
    
    
    32Change in valuation allowance
    
    
    658
    
    
    
    1,053Research and development credit
    
    
    (258
    )
    
    
    (56
    )Alternative minimum tax
    
    
    25
    
    
    
    Other
    
    
    11
    
    
    
    $
    35
    
    
    $
    Current
    
    $
    35
    
    
    $
    Deferred
    
    
    
    
    
    
    $
    35
    
    
    $
    
  Income Taxes
  F-19




---



##### Table of Contents



Note 8. Commitments
 Leases
   Years ending September 30,2010
    
    $
    1,0892011
    
    
    7482012
    
    
    5272013
    
    
    5402014
    
    
    551Thereafter
    
    
    147Total
    
    $
    3,602
  401(k) Plan
  Note 9. Shareholders Equity
 Common Stock
  Preferred Stock
  F-20




---



##### Table of Contents



Series B
       F-21




---



##### Table of Contents



Series C
     Series D
  F-22




---



##### Table of Contents



Series E and Series F
    F-23




---



##### Table of Contents



Stock Plans
   Stock Options
  WeightedAverageShares
    
    
    Exercise PriceOptions outstanding at September 30, 2007
    
    
    1,232
    
    
    $
    5.01Granted
    
    
    323
    
    
    
    3.05Exercised
    
    
    (15
    )
    
    
    2.98Cancelled
    
    
    (301
    )
    
    
    4.43Options outstanding at September 30, 2008
    
    
    1,239
    
    
    
    4.66Granted
    
    
    732
    
    
    
    2.18Cancelled
    
    
    (66
    )
    
    
    4.15Options outstanding at September 30, 2009
    
    
    1,905
    
    
    
    3.73
 F-24




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    Average
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    Remaining
    
    
    AverageRange of
    
    Number
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    Contractual
    
    
    Exerciseexercise price
    
    of Shares
    
    
    Life (Years)
    
    
    Price
    
    
    of Shares
    
    
    Life (Years)
    
    
    Price$2.00 - $2.99
    
    
    883
    
    
    
    9.1
    
    
    $
    2.25
    
    
    
    122
    
    
    
    8.6
    
    
    $
    2.75$3.15 - $3.99
    
    
    132
    
    
    
    8.7
    
    
    
    3.64
    
    
    
    29
    
    
    
    8.2
    
    
    
    3.49$4.33 - $4.98
    
    
    35
    
    
    
    6.9
    
    
    
    4.64
    
    
    
    30
    
    
    
    6.8
    
    
    
    4.70$5.03 - $5.40
    
    
    855
    
    
    
    7.0
    
    
    
    5.23
    
    
    
    716
    
    
    
    6.9
    
    
    
    5.251,905
    
    
    
    8.1
    
    
    
    3.73
    
    
    
    897
    
    
    
    7.2
    
    
    
    4.83
    For the Years EndedSeptember 30,2009
    
    2008Number of shares granted
    
    
    732
    
    
    
    323Fair value per share
    
    $
    0.87
    
    
    $
    0.81Risk-free interest rate
    
    
    2.29
    %
    
    
    2.24
    %Expected volatility
    
    
    40.29
    %
    
    
    30.88
    %Expected life (in years)
    
    
    5.73
    
    
    
    3.70Dividend yield
    
    
    
    
    
    
    
  F-25




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##### Table of Contents



Restricted Stock Awards
   WeightedNumber of
    
    
    Average GrantShares
    
    
    Date Fair ValueRestricted stock outstanding at September 30, 2007
    
    
    361
    
    
    $
    5.22Granted
    
    
    151
    
    
    
    3.04Vested
    
    
    (198
    )
    
    
    4.94Cancelled
    
    
    (29
    )
    
    
    4.08Restricted stock outstanding at September 30, 2008
    
    
    285
    
    
    
    4.37Granted
    
    
    48
    
    
    
    3.24Vested
    
    
    (173
    )
    
    
    4.48Cancelled
    
    
    (4
    )
    
    
    2.99Restricted stock outstanding at September 30, 2009
    
    
    156
    
    
    
    3.93
   Restricted Stock Units
   WeightedNumber of
    
    
    Average GrantShares
    
    
    Date Fair ValueRestricted stock outstanding at September 30, 2008
    
    
    
    
    
    
    Granted
    
    
    241
    
    
    $
    2.00Restricted stock outstanding at September 30, 2009
    
    
    241
    
    
    
    2.00
  F-26




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##### Table of Contents



Common stock warrants
    WeightedWeighted
    
    
    AverageNumber of
    
    
    Average
    
    
    RemainingWarrants
    
    
    Exercise Price
    
    
    Life (years)Warrants outstanding at September 30, 2007
    
    
    1,538
    
    
    $
    5.22
    
    
    
    2.9Granted
    
    
    457Warrants outstanding at September 30, 2008
    
    
    1,995
    
    
    
    3.54
    
    
    
    2.6Granted
    
    
    407Cancelled
    
    
    (461
    )Warrants outstanding at September 30, 2009
    
    
    1,941
    
    
    
    3.34
    
    
    
    4.0
 Note 10. Legal Proceedings
  Note 11. Subsequent Events
   F-27




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##### Table of Contents



F-28




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##### Table of Contents



Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of disclosure controls and procedures.
 Managements report on internal control over financial reporting.
   Changes in internal controls over financial reporting.
 
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  www.xata.com,
 F-29




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##### Table of Contents



Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  
 Item 13. Certain Relationships and Related Transactions, Director Independence
  
 Item 14. Principal Accountant Fees and Services
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a) Documents Filed as Part of Form 10-K
 1.
    
    Financial Statements
      2.
    
    Financial Statement Schedules
  3.
    
    Exhibits
  (b) Exhibits
  F-30




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##### Table of Contents



(c) Financial Statement Schedules
  F-31




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##### Table of Contents



SIGNATURES
  XATA CORPORATIONDated:  December 18, 2009
    By:
    /s/     John J. CoughlanJohn J. Coughlan, Chairman, Chief Executive Officer andPresident (Principal executive officer)  Dated:  December 18, 2009
    By:
    /s/     John J. CoughlanJohn J. Coughlan, Chairman, Chief Executive Officer andPresidentDated:  December 18, 2009
    By:
    /s/     Carl M. FredericksCarl M. Fredericks, DirectorDated:  December 18, 2009
    By:
    /s/    Thomas G. HudsonThomas G. Hudson, DirectorDated:  December 18, 2009
    By:
    /s/     Roger W. KleppeRoger W. Kleppe, DirectorDated:  December 18, 2009
    By:
    /s/     Chad LindbloomChad Lindbloom, DirectorDated:  December 18, 2009
    By:
    /s/     Michael J. PaxtonMichael J. Paxton, DirectorDated:  December 18, 2009
    By:
    /s/     Christopher P. MarshallChristopher P. Marshall, DirectorDated:  December 18, 2009
    By:
    /s/     Bharat S. VedakBharat S. Vedak, DirectorDated:  December 18, 2009
    By:
    /s/    Mark E. TiesMark E. Ties, Chief Financial Officer (Principal  accountingand financial officer) F-32




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##### Table of Contents



Schedule II
XATA Corporation
Valuation and Qualifying Accounts
(in thousands)
 Balance at
    
    Charged to
    
    Charged tobeginning of
    
    costs and
    
    other
    
    Deductions
    
    Balance atDescription
    
    period
    
    expenses
    
    accounts (1)
    
    (2)
    
    end of periodYear ended September 30, 2008 deducted
from assets accounts:Accounts receivable allowance for
bad debts
    
    $
    130
    
    
    $
    92
    
    
    $
    638
    
    
    $
    527
    
    
    $
    333Year ended September 30, 2009 deducted
from assets accounts:Accounts receivable allowance for
bad debts
    
    
    333
    
    
    
    115
    
    
    
    
    
    
    
    80
    
    
    
    368
 
 (1)
    
    This amount represents allowance for bad debts established at the time of acquisition of GeoLogic
Solutions, Inc.(2)
    
    Amounts recorded in fiscal 2008 include $511,000 for accounts reserved for at the time of acquisition
from GeoLogic Solutions, Inc. F-33




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits3.1
    
    Second Restated Articles of Incorporation, as amended through April 17, 2009 (incorporated by reference
to Exhibit 3.1 of the Companys Report on Form 10-K filed with the SEC on December 17, 2008, and
Exhibits 3.1, 3.2 and 3.3 of the Companys Report on Form 8-K filed with the SEC on April 21,
2009).(28)3.2
    
    Restated Bylaws, as amended February 4, 2009 (22)4.1
    
    Common Stock Warrant and Series B Preferred Stock Purchase Agreement, dated December 6, 2003
(1)4.2
    
    Common Stock Warrant and Series C Preferred Stock Purchase Agreement, dated September 7, 2005
(2)4.3
    
    Common Stock Warrant and Series D Preferred Stock Purchase Agreement, dated June 18, 2007 (3)4.4
    
    Form of warrant issued to Trident entities in connection with Common Stock Warrant and Series B
Preferred Stock Purchase Agreement (1)4.5
    
    Form of warrant issued to Cherry Tree Securities, LLC for its service as placement agent in connection
with Common Stock Warrant and Series B Preferred Stock Purchase Agreement (1)4.6
    
    Form of warrant issued to Trident entities in connection with Common Stock Warrant and Series C
Preferred Stock Purchase Agreement (2)4.7
    
    Form of warrant issued to Trident entities in connection with Common Stock Warrant and Series D
Preferred Stock Purchase Agreement (3)4.8
    
    Investor Rights Agreement, dated June 19, 2007 (3)4.9
    
    Form of Senior Subordinated Convertible Notes issued on January 31, 2008, by XATA Corporation to each
of Platinum Equity Capital Partners, L.P., Platinum Equity Capital Partners-A, L.P., Platinum Equity
Capital Partners-PF, L.P. and Platinum Transportation Principals, LLC (24)4.10
    
    Common Stock Warrant, dated as of January 31, 2008, issued by XATA Corporation to Silicon Valley Bank
(24)4.11
    
    Common Stock Warrant, dated as of January 31, 2008, issued by XATA Corporation to Partners for Growth
II, L.P. (30)4.12
    
    Amended and Restated Investor Rights Agreement dated as of February 12, 2009 by and among the Company,
Trident Capital Fund-V, L.P., Trident Capital Fund-V Affiliates Fund, L.P., Trident Capital Fund-V
Affiliates Fund (Q), L.P., Trident Capital Fund-V Principals Fund, L.P. and Trident Capital Parallel
Fund-V, C.V.(31)4.13
    
    Form of Warrant issued on February 12, 2009 to Trident Capital Fund-V, L.P., Trident Capital Fund-V
Affiliates Fund, L.P., Trident Capital Fund-V Affiliates Fund (Q), L.P., Trident Capital Fund-V
Principals Fund, L.P., Trident Capital Parallel Fund-V, C.V., GW 2001 Fund, L.P., Weber Capital
Partners II, L.P.and certain members of the Companys management (24)9.0
    
    Amended and Restated Voting Agreement, dated September 7, 2005 (2)10.4
    
    Trident Investor Indemnification Agreement (1)10.5
    
    Trident Director Indemnification Agreement (1)10.6
    
    Stock Purchase Agreement with JDSTG, dated August 30, 2000 (6)
 F-34




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits10.7
    
    Registration Rights Agreement with JDSTG dated August 30, 2000 (6)10.8
    
    Amendment No. 1, dated October 31, 2000, to Stock Purchase Agreement with JDSTG (7)10.9
    
    Side Agreement with JDSTG dated December 28, 2000 (8)10.10
    
    Loan and Security Agreement with Silicon Valley Bank, dated as of December 17, 2004 (9)10.11
    
    First Amendment to Loan and Security Agreement with Silicon Valley Bank, dated as of December 16, 2005
(10)10.12
    
    Employment Agreement dated October 1, 2000 with Thomas N. Flies (11)10.13
    
    Form of Warrant issued to directors as equity compensation (12)10.14
    
    2002 Long-Term Incentive and Stock Option Plan (22)10.15
    
    Form of Restricted Stock Award Agreement pursuant to 2002 Long-Term Incentive and Stock Option Plan
(13)10.16
    
    Form of Directors Restricted Stock Award Agreement pursuant to 2002 Long-Term Incentive and Stock
Option Plan(14)10.17
    
    2007 Long-term Incentive and Stock Option Plan (15)10.18
    
    Form of Stock Option Agreement for Directors pursuant to 2007 Long-term Incentive and Stock Option Plan
(22)10.19
    
    Form of Stock Option Agreement for Employees pursuant to 2007 Long-term Incentive and Stock Option Plan
(22)10.20
    
    Change of Control Agreement with Mark Ties (16)10.21
    
    Change of Control Agreement with Thomas Schlick (17)10.22
    
    Executive Employment Agreement with John J. Coughlan (18)10.23
    
    Incentive Stock Option Agreement with John J. Coughlan (18)10.24
    
    Restricted Stock Award Agreement with John J. Coughlan (18)10.25
    
    Matching Restricted Stock Award Agreement with John J. Coughlan (18)10.26
    
    Change of Control Agreement with David Gagne (19)10.27
    
    Non-Qualified Stock Option Agreement with David Gagne(19)10.28
    
    Matching Restricted Stock Award Agreement with David Gagne(19)10.29
    
    Separation and Release Agreement with Peter A. Thayer (19)10.30
    
    Business Agreement with Winland Electronics dated June 28, 2005 (20)10.31
    
    Reseller Agreement with Orbcomm, Inc. dated July 31, 2006 (20)10.32
    
    Second Amendment to Custom Service Agreement with Sprint Solutions, Inc. effective January 1, 2007
(20)
 F-35




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits10.33
    
    Stock Purchase Agreement, dated as of December 19, 2007, between XATA Corporation, GeoLogic Solutions,
Inc., GeoLogic Management, Inc., Platinum Equity Capital Partners, L.P., Platinum Equity Capital
Partners-A, L.P., Platinum Equity Capital Partners-PF, L.P. and Platinum Transportation Principals,
LLC.(23)10.34
    
    First Amendment to Stock Purchase Agreement, dated as of January 31, 2008, between XATA Corporation,
GeoLogic Solutions, Inc., GeoLogic Management, Inc., Platinum Equity Capital Partners, L.P., Platinum
Equity Capital Partners-A, L.P., Platinum Equity Capital Partners-PF, L.P. and Platinum Transportation
Principals, LLC. (24)10.35
    
    Loan and Security Agreement, dated as of January 31, 2008, between Silicon Valley Bank, XATA
Corporation and GeoLogic Solutions, Inc. (24)10.36
    
    Loan and Security Agreement, dated as of January 31, 2008, between Partners for Growth II, L.P., XATA
Corporation and GeoLogic Solutions, Inc. (24)10.37
    
    Separation Agreement, dated January 16, 2008, between XATA Corporation and Thomas L. Schlick
(25)10.38
    
    Severance Agreement between Mark E. Ties and the Company dated May 8, 2008 (26)10.39
    
    Separation Agreement, dated March 1, 2007, between XATA Corporation and James Griffin (27)10.40
    
    Amendment to Separation Agreement, dated October 1, 2008, between XATA Corporation and James Griffin
(27)10.41
    
    Second Amendment to Loan and Security Agreement dated
November 20,
2008. (37)10.42
    
    First Amendment to PFG Loan and Security Agreement dated
November 20,
2008. (38)10.43
    
    Severance Agreement between XATA Corporation and David Gagne dated May 7, 2009 (29)10.44
    
    Common Stock Warrant and Series E Preferred Stock Purchase Agreement dated as of February 12, 2009 by
and among XATA Corporation, Trident Capital Fund-V, L.P., Trident Capital Fund-V Affiliates Fund, L.P.,
Trident Capital Fund-V Affiliates Fund (Q), L.P., Trident Capital Fund-V Principals Fund, L.P., Trident
Capital Parallel Fund-V, C.V., Weber Capital Partners II, L.P., GW 2001 Fund, L.P. and certain members
of the Companys management (32)10.45
    
    Exchange Agreement dated February 12, 2009 by and among XATA Corporation, Trident Capital Fund-V, L.P.,
Trident Capital Fund-V Affiliates Fund, L.P., Trident Capital Fund-V Affiliates Fund (Q), L.P., Trident
Capital Fund-V Principals Fund, L.P., Trident Capital Parallel Fund-V, C.V., Weber Capital Partners II,
L.P., GW 2001 Fund, L.P. and certain members of the Companys management (33)10.46
    
    Amendment, dated January 27, 2009, to certain promissory notes issued by the Company on January 31,
2008 to Platinum Equity Capital Partners, L.P., Platinum Equity Capital Partners-A, L.P., Platinum
Equity Capital Partners-PF, L.P. and Platinum Transportation Principals, LLC (34)10.47
    
    2007 Long-term Incentive and Stock Option Plan, as amended
effective February 4, 2009
(35)10.48
    
    Form of XATA Corporation Restricted Stock Unit Award
Agreement (36)23
    
    Consent of Grant Thornton LLP, independent registered public accounting firm*31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 *32.2
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 **
    
    Filed herewith
 F-36




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits(1)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on December 9, 2003(2)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on September 22, 2005(3)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on June 22, 2007(4)
    
    Incorporated by reference to exhibit filed as a part of Report on Form 10-QSB for the fiscal quarter
ended March 31, 1997(5)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-QSB for the fiscal quarter
ended March 31, 2003(6)
    
    Incorporated by reference to exhibit filed as a part of Report on Form 8-K on September 7, 2000(7)
    
    Incorporated by reference to exhibit filed as a part of Report on Form 8-K on November 2, 2000(8)
    
    Incorporated by reference to exhibit filed as a part of Report on Form 10-KSB for the fiscal year ended
September 30, 2000(9)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-KSB for the fiscal year ended
September 30, 2004(10)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-KSB/A for the fiscal year ended
September 30, 2005(11)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-QSB for the fiscal quarter
ended December 31, 2000(12)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-KSB for the fiscal year ended
September 30, 2002(13)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-KSB for the fiscal year ended
September 30, 2004(14)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on March 1, 2006(15)
    
    Incorporated by reference to exhibit filed as part of Registration Statement on Form S-8 on February
15, 2007(16)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on April 12, 2005(17)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on April 11, 2006(18)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on October 4, 2006(19)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on January 8, 2007(20)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-KSB for the fiscal year ended
September 30, 2006(21)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K on July 9, 2007(22)
    
    Incorporated by reference to Exhibit 3.1 of the Companys Report on Form 8-K filed with the SEC on
February 10, 2009(23)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K filed with the SEC on December
24, 2007(24)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K filed with the SEC on February
6, 2008
 F-37




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits(25)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K filed with the SEC on January
18, 2008(26)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-Q for the fiscal quarter ended
June 30, 2008.(27)
    
    Incorporated by reference to exhibit filed as part of Report on Form 8-K filed with the SEC on October
7, 2008(28)
    
    Incorporated by reference to Exhibit 3.1 of the Companys Report on Form 10-K filed with the SEC on
December 17, 2008, and Exhibits 3.1, 3.2 and 3.3 of the Companys Report on Form 8-K filed with the SEC
on April 21, 2009(29)
    
    Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed with the
SEC on May 11, 2009(30)
    
    Incorporated by reference to Exhibit 4.1 of the Companys Report on Form 8-K filed with the SEC on
February 18, 2009(31)
    
    Incorporated by reference to Exhibit 4.2 of the Companys Report on Form 8-K filed with the SEC on
February 18, 2009(32)
    
    Incorporated by reference to Exhibit 10.1 of the Companys Report on Form 8-K filed with the SEC on
February 18, 2009(33)
    
    Incorporated by reference to Exhibit 10.2 of the Companys Report on Form 8-K filed with the SEC on
February 18, 2009(34)
    
    Incorporated by reference to exhibit filed as part of Report on Form 10-Q for the fiscal quarter ended
March 31, 2009(35)
    
    Incorporated by reference to Appendix A to the Companys Proxy Statement filed with the Securities and
Exchange Commission on December 22, 2008(36)
    
    Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K/A filed with the SEC
on December 10, 2009(37)
    
    Incorporated by reference to Exhibit 10.41 of the
Companys Report on Form 10-K filed with the SEC
on December 17, 2008(38)
    
    Incorporated by reference to Exhibit 10.42 of the
Companys Report on Form 10-K filed with the SEC
on December 17, 2008
 F-38