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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, 2007
 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
 o
  o o þ
 o þ




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    12Item 2. Properties
    
    
    12Item 3. Legal Proceedings
    
    
    13Item 4. Submission of Matters to a Vote of Security Holders
    
    
    13Executive Officers of the Registrant
    
    
    13PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    15Item 6. Selected Financial Data
    
    
    16Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    17Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 8. Financial Statements and Supplementary Data
    
    
    24Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    25Item 9A. Controls and Procedures
    
    
    25Item 9B. Other Information
    
    
    25PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    25Item 11. Executive Compensation
    
    
    25Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    25Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    25Item 14. Principal Accountant Fees and Services
    
    
    25PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    26SIGNATURES
    
    
    30EXHIBIT INDEXRestated Articles of IncorporationBylawsCertificate of Amendment of Certificate of Designation of Preferences of Series B Preferred Stock2002 Long-Term Incentive and Stock Option PlanForm of Stock Option Agreement for DirectorsForm of Stock Option Agreement for EmployeesConsentCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906
 ii




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Forward Looking Statements
   Trademark Notice
 ® ® ® ® ® ®
 
 PART I
 
 Item 1. Business
 About XATA




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Trucking Industry Background and Trends
    
    
    Increased operating costs: Driver salaries, fuel, insurance, and other operating
costs continue to increase. These trends encourage operators to utilize onboard
information systems to control costs and more effectively manage their fleets.
    
    Government regulations: U.S. Department of Transportation (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. The revised regulations became
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enforceable after a period of transitional
compliance on January 1, 2006. The rate of change
in the rules is a major obstacle to compliance within the trucking industry.
 The FMCSA is currently evaluating the benefit of Electronic Onboard Recorders (EOBRs)
to increase hours-of-service compliance, and in turn, highway safety. We believe
computer generated driver logs may eventually be mandated by federal or state
governments.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.
    
    New technologies: Historically, affordability, simplicity and acceptance of new
wireless communications and internet technologies have proven to be barriers for
customers to purchase our solutions. New technologies are helping to diminish 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. This trend encourages integration
of mobile technology with the host information systems of trucking fleet operators.
 Our Products and Services
    
    
    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
 3




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scheduling.
 
    
    Mobile two-way messaging and real-time vehicle location.
    
    Diagnostic and accident data capture.
 XATANET Fleet Management System
    Mobile Applications
  Onboard Hardware
  
 Driver Displays
   4




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Wireless Communications
  Legacy OpCenter Fleet Management System
     Target Markets
  Private Fleets
   5




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For-Hire Carriers
  Other Markets
  Major Customers
   Sales and Marketing
  Direct Sales Channel
   Indirect Sales Channel
  6




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Competition
   Key Alliances and Relationships
  Communication Providers
  Indirect Sales Channel Alliances
   7




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Manufacturers
   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. For
example, in September, 2007, we implemented a new storage area network (SAN) for improved
performance and anticipated increase in transactional volume. At the same time, we
deployed additional network servers to support enhanced capabilities in our on-demand
XATANET with no interruption in service to our customers.
    
    Software.We intend to continue to develop our software applications by offering new
features while enhancing existing features. For example, in October, 2007, we announced the
availability of XATANET 4.0, the latest version of our on-demand fleet management system
that offers a streamlined system management with instant notification of critical events
and enhanced support for third-party in-cab displays and handheld devices. The release
included XATAScope which provides reports on second-by-second speed, minute-by-minute
speed, speed changes and speeding, giving fleet managers multiple views on driver driving
habits and their impact on fuel use and road safety.
    
    Hardware.We intend to continue to develop and release platform upgrades to add new
features as well as to enhance existing features through our own development efforts and
those of our strategic hardware partners
 8




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Employees
  
 Item 1A. Risk Factors
 We do not have a long or stable history of profitable operations.
 We are dependent on key customers.
 Our sales cycle is long.
 We have competitors who are larger than we are.
 We have a limited number of products and those products are concentrated in one industry.
 Our target market is highly cyclical.
 9




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The effectiveness of our selling efforts depends on knowledgeable staff and effective marketing
 alliances.
 We are dependent on proprietary technology.
 We depend on wireless communication networks owned and controlled by others.
 Our products may quickly become obsolete.
 JDSTG and Trident Capital, who are represented on our Board of Directors, individually and together
own enough stock to exert significant influence over XATA.
 10




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We are dependent on key personnel.
 We may need additional capital.
 We may issue additional stock without shareholder consent.
 Our common stock could be delisted due to failure to satisfy a continued listing rule or standard.
 We may be unable to manage rapid growth.
 11




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Our directors liability is limited under Minnesota law and under certain agreements.
 Anti-takeover provisions.
 We face burdens relating to the recent trend toward stricter corporate governance and financial
reporting standards.
 Failure to achieve and maintain effective internal controls could have a material adverse effect on
our business, operating results and stock price.
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
   12




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 EXECUTIVE OFFICERS OF THE REGISTRANT
  John J. Coughlan, Chairman of the Board, Chief Executive Officer and President
  Mark E. Ties, Chief Financial Officer & Treasurer
  Thomas L. Schlick, Senior Vice President of Services and Support
  David A. Gagne, Executive Vice President of Sales and Marketing
  13




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James C. Griffin Jr., Executive Vice President of Research and Development
  14




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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 2007
    
    Low
    
    HighFirst Quarter
    
    $
    5.08
    
    
    $
    5.50Second Quarter
    
    
    4.84
    
    
    
    5.25Third Quarter
    
    
    3.79
    
    
    
    4.70Fourth Quarter
    
    
    2.67
    
    
    
    4.03
 Fiscal Year 2006
    
    Low
    
    HighFirst Quarter
    
    $
    3.29
    
    
    $
    5.20Second Quarter
    
    
    4.01
    
    
    
    5.25Third Quarter
    
    
    4.70
    
    
    
    5.32Fourth Quarter
    
    
    4.35
    
    
    
    5.50
   
 
 15




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Dividend Policy
   Sale of Unregistered Securities
  
 Item 6. Selected Financial Data
  
 For the Years Ended Septmeber 30,2007
    
    2006
    
    2005
    
    2004
    
    2003Net sales
    
    $
    30,676
    
    
    $
    30,629
    
    
    $
    19,303
    
    
    $
    18,932
    
    
    $
    11,350Gross profit %age
    
    
    44.8
    %
    
    
    41.8
    %
    
    
    37.7
    %
    
    
    33.5
    %
    
    
    24.8
    %Operating loss
    
    
    (7,309
    )
    
    
    (1,969
    )
    
    
    (6,079
    )
    
    
    (1,156
    )
    
    
    (3,724
    )Net loss to common shareholders
    
    
    (7,810
    )
    
    
    (2,065
    )
    
    
    (6,736
    )
    
    
    (2,057
    )
    
    
    (3,784
    )Net loss per common share
basic and diluted
    
    $
    (0.99
    )
    
    $
    (0.28
    )
    
    $
    (0.93
    )
    
    $
    (0.29
    )
    
    $
    (0.55
    )Working capital
    
    $
    10,539
    
    
    $
    6,345
    
    
    $
    6,285
    
    
    $
    5,898
    
    
    $
    732Total assets
    
    
    24,153
    
    
    
    21,723
    
    
    
    22,504
    
    
    
    13,392
    
    
    
    7,257Total shareholders equity
    
    
    7,078
    
    
    
    5,190
    
    
    
    5,037
    
    
    
    5,136
    
    
    
    2,034
 16




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Critical Accounting Policies
  Revenue Recognition. Software Revenue Recognition Software Revenue Recognition with Respect to Certain Transactions Revenue Recognition in Financial
Statements
   Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to
Use Software Stored on Another Entitys Hardware
 Allowance for doubtful accounts and sales returns.
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Capitalized system development costs Accounting for the Costs of Computer Software to Be
Sold, Leased, or Otherwise Marketed
  Income taxes
 Stock-based Compensation. Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation
 Share-Based Payment,
  18




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Operating Results
  For the Years Ended Septmeber 30,2007
    
    2006
    
    2005Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross profit
    
    
    44.8
    %
    
    
    41.8
    %
    
    
    37.7
    %Selling, general and administrative expense
    
    
    54.4
    %
    
    
    35.1
    %
    
    
    50.4
    %Research and development expense
    
    
    14.2
    %
    
    
    13.2
    %
    
    
    18.8
    %Operating loss
    
    
    (23.8
    %)
    
    
    (6.4
    %)
    
    
    (31.5
    %)Net loss
    
    
    (22.2
    %)
    
    
    (5.7
    %)
    
    
    (31.0
    %)
 Comparison of Fiscal 2007 operating results to Fiscal 2006
 Net Sales
   Cost of Goods Sold
  19




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Selling, General and Administrative Expenses
  Research & Development Expenses
  Net Interest Income
  Income Taxes
  Net Loss to Common Shareholders
  20




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Comparison of Fiscal 2006 operating results to Fiscal 2005
 Net Sales
    Cost of Goods Sold
  Selling, General and Administrative Expenses
  Research & Development Expenses
 Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed.
 21




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Net Interest Income
  Net Loss to Common Shareholders
  Liquidity and Capital Resources
       Contractual Obligations
  2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    ThereafterContractual ObligationsCapital leases
    
    $
    193
    
    
    $
    112
    
    
    $
    98
    
    
    $
    22
    
    
    $
    15
    
    
    $
    Operating leases
    
    
    453
    
    
    
    416
    
    
    
    421
    
    
    
    414
    
    
    
    421
    
    
    
    993Purchase obligations
    
    
    8,076
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    8,722
    
    
    $
    528
    
    
    $
    519
    
    
    $
    436
    
    
    $
    436
    
    
    $
    993
 22




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Subsequent Events
  Off-Balance Sheet Arrangements
  Recently Issued Accounting Pronouncements
 Accounting Changes and Error Corrections (Statement 154)
 Accounting Changes and Error Corrections  a
replacement of APB Opinion No. 20 and FASB Statement No. 3 Accounting Changes
 Accounting for Uncertainty in Income Taxes (FIN 48)
 Accounting for Uncertainty in Income Taxes
 23




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Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statement (SAB 108)
 Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements
 Fair Value Measurements (FAS 157)
  The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159)
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  Item 8. Financial Statements and Supplementary Data
 24




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











Share-Based Payments







F-1



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XATA CORPORATION
BALANCE SHEETS
  September 30,
    
    
    September 30,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    13,675
    
    
    $
    6,354Accounts receivable, less allowances for doubtful accounts
and sales returns of $256 and $472
    
    
    3,280
    
    
    
    5,260Inventories
    
    
    2,672
    
    
    
    2,212Deferred product costs
    
    
    752
    
    
    
    3,433Prepaid expenses
    
    
    393
    
    
    
    270Total current assets
    
    
    20,772
    
    
    
    17,529Equipment and leasehold improvements, net
    
    
    1,583
    
    
    
    1,316Capitalized system development costs, net
    
    
    
    
    
    
    1,191Deferred product costs, net of current portion
    
    
    1,798
    
    
    
    1,687Total assets
    
    $
    24,153
    
    
    $
    21,723LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCurrent portion of long-term obligations
    
    $
    161
    
    
    $
    94Accounts payable
    
    
    3,419
    
    
    
    1,688Accrued expenses
    
    
    3,548
    
    
    
    2,674Deferred revenue
    
    
    3,105
    
    
    
    6,728Total current liabilities
    
    
    10,233
    
    
    
    11,184Long-term obligations, net of current portion
    
    
    220
    
    
    
    88Deferred rent
    
    
    98
    
    
    
    Deferred revenue, net of current portion
    
    
    6,524
    
    
    
    5,261Total liabilities
    
    
    17,075
    
    
    
    16,533Shareholders EquityPreferred stock, no par, 10,000 shares authorized:Series B, 4% convertible, 2,250 shares designated;
shares issued and outstanding: 1,851 at September 30, 2007
and 1,779 at September 30, 2006
    
    
    4,921
    
    
    
    4,579Series C, convertible, 1,400 shares designated;
1,269 shares issued and outstanding at September 30, 2007
and September 30, 2006
    
    
    4,845
    
    
    
    4,845Series D, convertible, 1,600 shares designated;
1,567 shares issued and outstanding at September 30, 2007
and 0 at September 30, 2006
    
    
    5,937
    
    
    
    Common stock, par value $0.01 per share; 25,000 shares
authorized; shares issued and outstanding: 8,516 at September 30, 2007
and 7,963 at September 30, 2006
    
    
    85
    
    
    
    80Additional paid-in capital
    
    
    25,760
    
    
    
    23,246Unearned stock based compensation
    
    
    
    
    
    
    (900
    )Accumulated deficit
    
    
    (34,470
    )
    
    
    (26,660
    )Total shareholders equity
    
    
    7,078
    
    
    
    5,190Total liabilities and shareholders equity
    
    $
    24,153
    
    
    $
    21,723
  F-2




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XATA CORPORATION
STATEMENTS OF OPERATIONS
  For the Years Ended Septmeber 30,2007
    
    
    2006
    
    
    2005Net sales
    
    $
    30,676
    
    
    $
    30,629
    
    
    $
    19,303Costs and expensesCost of goods sold
    
    
    16,932
    
    
    
    17,814
    
    
    
    12,024Selling, general and administrative
    
    
    16,702
    
    
    
    10,746
    
    
    
    9,736Research and development
    
    
    4,351
    
    
    
    4,038
    
    
    
    3,622Total costs and expenses
    
    
    37,985
    
    
    
    32,598
    
    
    
    25,382Operating loss
    
    
    (7,309
    )
    
    
    (1,969
    )
    
    
    (6,079
    )Net interest income
    
    
    501
    
    
    
    226
    
    
    
    99Loss before income taxes
    
    
    (6,808
    )
    
    
    (1,743
    )
    
    
    (5,980
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    (6,808
    )
    
    
    (1,743
    )
    
    
    (5,980
    )Preferred stock dividends
    
    
    (185
    )
    
    
    (178
    )
    
    
    (169
    )Preferred stock deemed dividends
    
    
    (817
    )
    
    
    (144
    )
    
    
    (587
    )Net loss to common shareholders
    
    $
    (7,810
    )
    
    $
    (2,065
    )
    
    $
    (6,736
    )Net loss per common share  basic and diluted
    
    $
    (0.99
    )
    
    
    ($0.28
    )
    
    
    ($0.93
    )Weighted average common and
common share equivalentsBasic and Diluted
    
    
    7,922
    
    
    
    7,484
    
    
    
    7,212
  F-3




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XATA CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 Series B
    
    
    Series C
    
    
    Series D
    
    
    Additional
    
    
    UnearnedCommon Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Paid-In
    
    
    Stock-Based
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Deficit
    
    
    TotalBalance at September 30, 2004
    
    
    7,254
    
    
    $
    73
    
    
    
    1,643
    
    
    $
    3,923
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    19,499
    
    
    $
    (499
    )
    
    $
    (17,860
    )
    
    
    5,136Common stock issued on exercise of options
    
    
    118
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404
    
    
    
    
    
    
    
    
    
    
    
    405Issuance of restricted shares of common stock
    
    
    197
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,016
    
    
    
    (1,018
    )
    
    
    
    
    
    
    Amortization of unearned stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    435
    
    
    
    
    
    
    
    435Elimination of unearned compensation related to
terminated employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )
    
    
    75
    
    
    
    
    
    
    
    Forfeiture of restricted shares of common stock
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    25Issuance of preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,269
    
    
    
    4,426
    
    
    
    
    
    
    
    
    
    
    
    589
    
    
    
    
    
    
    
    
    
    
    
    5,015Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    170
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (169
    )
    
    
    1Preferred stock deemed dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    419
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (586
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,980
    )
    
    
    (5,980
    )Balance at September 30, 2005
    
    
    7,549
    
    
    
    76
    
    
    
    1,710
    
    
    
    4,260
    
    
    
    1,269
    
    
    
    4,845
    
    
    
    
    
    
    
    
    
    
    
    21,458
    
    
    
    (1,007
    )
    
    
    (24,595
    )
    
    
    5,037Common stock issued on exercise of options
    
    
    344
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,255
    
    
    
    
    
    
    
    
    
    
    
    1,258Common stock issued on exercise of warrants
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of restricted shares of common stock
    
    
    199
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    963
    
    
    
    (965
    )
    
    
    
    
    
    
    Amortization of unearned stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    566
    
    
    
    
    
    
    
    566Elimination of unearned compensation related to
terminated employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (506
    )
    
    
    506
    
    
    
    
    
    
    
    Forfeiture of restricted shares of common stock
    
    
    (138
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    75Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (178
    )
    
    
    (3
    )Preferred stock deemed dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (144
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,743
    )
    
    
    (1,743
    )Balance at September 30, 2006
    
    
    7,963
    
    
    
    80
    
    
    
    1,779
    
    
    
    4,579
    
    
    
    1,269
    
    
    
    4,845
    
    
    
    
    
    
    
    
    
    
    
    23,246
    
    
    
    (900
    )
    
    
    (26,660
    )
    
    
    5,190Common stock issued on exercise of options
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    54Issuance of restricted shares of common stock
    
    
    450
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    Elimination of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (900
    )
    
    
    900
    
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,021
    
    
    
    
    
    
    
    
    
    
    
    2,021Forfeiture of restricted shares of common stock
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock
    
    
    112
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604
    
    
    
    
    
    
    
    
    
    
    
    605Issuance of preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,567
    
    
    
    5,279
    
    
    
    739
    
    
    
    
    
    
    
    
    
    
    
    6,018Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (185
    )
    
    
    (2
    )Preferred stock deemed dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    658
    
    
    
    
    
    
    
    
    
    
    
    (817
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,808
    )
    
    
    (6,808
    )Balance at September 30, 2007
    
    
    8,516
    
    
    $
    85
    
    
    
    1,851
    
    
    $
    4,921
    
    
    
    1,269
    
    
    $
    4,845
    
    
    
    1,567
    
    
    $
    5,937
    
    
    $
    25,760
    
    
    $
    
    
    
    $
    (34,470
    )
    
    $
    7,078
  F-4




---



##### Table of Contents



XATA CORPORATION
STATEMENTS OF CASH FLOWS
 For the Years Ended September30,2007
    
    
    2006
    
    
    2005Cash provided by operating activitiesNet loss
    
    $
    (6,808
    )
    
    $
    (1,743
    )
    
    $
    (5,980
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    664
    
    
    
    451
    
    
    
    266Impairment loss on capitalized development costs
    
    
    1,930
    
    
    
    
    
    
    
    Issuance of warrants for services rendered
    
    
    33
    
    
    
    75
    
    
    
    25Stock based compensation
    
    
    2,021
    
    
    
    566
    
    
    
    435Changes in assets and liabilities:Accounts receivable, net
    
    
    1,980
    
    
    
    2,552
    
    
    
    (2,311
    )Inventories
    
    
    (1,039
    )
    
    
    (955
    )
    
    
    (190
    )Deferred product costs
    
    
    2,570
    
    
    
    553
    
    
    
    (4,858
    )Prepaid expenses
    
    
    (123
    )
    
    
    (66
    )
    
    
    27Accounts payable
    
    
    1,731
    
    
    
    (699
    )
    
    
    653Accrued expenses
    
    
    970
    
    
    
    500
    
    
    
    578Deferred revenue
    
    
    (2,360
    )
    
    
    880
    
    
    
    6,950Net cash provided by operating activities
    
    
    1,569
    
    
    
    2,114
    
    
    
    (4,405
    )Cash used in investing activitiesPurchase of equipment and leasehold improvements
    
    
    (624
    )
    
    
    (755
    )
    
    
    (610
    )Additions to system development costs
    
    
    (160
    )
    
    
    (906
    )
    
    
    (285
    )Sales of short-term investments
    
    
    
    
    
    
    
    

    
    
    3,990Net cash used in investing activities
    
    
    (784
    )
    
    
    (1,661
    )
    
    
    3,095Cash provided by financing activitiesBorrowings on bank line of credit
    
    
    
    
    
    
    200
    
    
    
    1,800Payments on bank line of credit
    
    
    
    
    
    
    (2,000
    )
    
    
    (518
    )Borrowings on long-term obligations
    
    
    
    
    
    
    49
    
    
    
    Payments on long-term obligations
    
    
    (108
    )
    
    
    (79
    )
    
    
    (252
    )Proceeds from issuance of common stock
    
    
    605
    
    
    
    
    
    
    
    Proceeds from issuance of preferred stock and warrants
    
    
    5,985
    
    
    
    
    
    
    
    5,015Proceeds from options and warrants exercised
    
    
    54
    
    
    
    1,258
    
    
    
    405Net cash provided by (used in) financing activities
    
    
    6,536
    
    
    
    (572
    )
    
    
    6,450Increase (decrease) in cash and cash equivalents
    
    
    7,321
    
    
    
    (119
    )
    
    
    5,140Cash and cash equivalentsBeginning
    
    
    6,354
    
    
    
    6,473
    
    
    
    1,333Ending
    
    $
    13,675
    
    
    $
    6,354
    
    
    $
    6,473Supplemental disclosures of cash flow informationCash payments for interest
    
    $
    24
    
    
    $
    86
    
    
    $
    77Supplemental schedule of noncash investing and financing activitiesIssuance of restricted stock
    
    $
    
    
    
    $
    965
    
    
    $
    1,018Preferred stock deemed dividends
    
    
    817
    
    
    
    144
    
    
    
    587Unearned compensation for terminated employees
    
    
    
    
    
    
    506
    
    
    
    75Preferred stock dividends payable
    
    
    63
    
    
    
    61
    
    
    
    58Preferred stock dividends paid
    
    
    185
    
    
    
    175
    
    
    
    170Equipment purchased under capital lease
    
    
    306
    
    
    
    212
    
    
    
    
  F-5




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##### Table of Contents



Note 1. Description of Business
  Note 2. Summary of Significant Accounting Policies
 Revenue Recognition
 Software Revenue Recognition Software Revenue Recognition with Respect to Certain Transactions Revenue Recognition in Financial
Statements
   Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to
Use Software Stored on Another Entitys Hardware
 Segment Reporting
   F-6




---



##### Table of Contents



Use of Estimates
  Cash Equivalents and Short-Term Investments
  Concentration of Credit Risk
   Value of Financial Instruments
   Inventories
  F-7




---



##### Table of Contents



September 30,
    
    
    September 30,2007
    
    
    2006Parts and accessories
    
    $
    1,021
    
    
    $
    786Finished goods
    
    
    1,651
    
    
    
    1,426Total inventories
    
    $
    2,672
    
    
    $
    2,212
 Equipment and Leasehold Improvements
   September 30,
    
    
    September 30,2007
    
    
    2006Office furniture and equipment
    
    $
    3,353
    
    
    $
    2,543Engineering and manufacturing equipment
    
    
    574
    
    
    
    564Leasehold improvements
    
    
    78
    
    
    
    344,005
    
    
    
    3,141Less: accumulated depreciation
    
    
    (2,422
    )
    
    
    (1,825
    )Equipment and leasehold improvements, net
    
    $
    1,583
    
    
    $
    1,316
 Capitalized System Development Costs
 Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed
  Long-Lived Assets
  Product Warranties
  F-8




---



##### Table of Contents



Shipping and Handling Costs
  Advertising Costs
  Research and Development Costs
  Income taxes
 Accounting for
Income Taxes
 Stock-Based Compensation
 Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation
  F-9




---



##### Table of Contents



For the Years Ended September 30,2006
    
    
    2005Net loss to common shareholders, as reported
    
    $
    (2,065
    )
    
    $
    (6,736
    )Deduct: Total stock-based employee compensation
expense determined under fair value based
methods
for all awards, net of related tax effects
    
    
    (62
    )
    
    
    (155
    )Pro forma net loss to common shareholders
    
    $
    (2,127
    )
    
    $
    (6,891
    )Basic and diluted net loss to common shareholders
per common shareAs reported
    
    $
    0.28
    
    
    $
    0.93Pro forma
    
    
    0.28
    
    
    
    0.96
 Share-Based Payment,
   Basis of Presentation
  Major Customers
  F-10




---



##### Table of Contents



Percentage of Net Sales
    
    Percentage of Ending ReceivablesFor the Year Ended September 30,
    
    For the Year Ended September 30,2007
    
    2006
    
    2005
    
    2007
    
    2006
    
    2005Customer A
    
    
    19.6
    %
    
    
    18.4
    %
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Customer B
    
    
    *
    
    
    
    18.2
    %
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
 
 *
    
    Customer total was less than 10 percent of net sales or ending receivables.  Major Suppliers
  Recently Issued Accounting Standards
 Accounting Changes and Error Corrections (Statement 154)
 Accounting Changes and Error Corrections  a
replacement of APB Opinion No. 20 and FASB Statement No. 3 Accounting Changes
 Accounting for Uncertainty in Income Taxes (FIN 48)
 Accounting for Uncertainty in Income Taxes
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statement (SAB 108)
 Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements
 F-11




---



##### Table of Contents



Fair Value Measurements (FAS 157)
  The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159)
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 Note 3. Bank Line of Credit
  Note 4. Long-Term Liabilities
  Years ending September 30,2008
    
    $
    1932009
    
    
    1122010
    
    
    982011
    
    
    222012
    
    
    15Total payments
    
    
    440Amounts representing interest (weighted average interest rate of 10.6%)
    
    
    (59
    )Present value of minimum capitalized lease payments
    
    $
    381
  F-12




---



##### Table of Contents



Note 5. Net Loss Per Share
   Note 6. Income Taxes
  September 30,2007
    
    
    2006Current deferred tax assets:Inventory and warranty reserve
    
    $
    619
    
    
    $
    415Accrued expenses, deferred revenue and other
    
    
    1,541
    
    
    
    873Accounts receivable and sales reserve
    
    
    95
    
    
    
    1752,255
    
    
    
    1,463Non-current deferred tax assets:Product development costs
    
    
    
    
    
    
    (441
    )Depreciation
    
    
    12
    
    
    
    (8
    )Research and development credit
    
    
    1,400
    
    
    
    1,191Net operating loss carryforwards
    
    
    9,160
    
    
    
    8,16010,572
    
    
    
    8,902Total deferred tax asset
    
    
    12,827
    
    
    
    10,365Less: valuation allowance
    
    
    (12,827
    )
    
    
    (10,365
    )Net deferred tax asset
    
    $
    
    
    
    $
    
   F-13




---



##### Table of Contents



September 30,2007
    
    
    2006
    
    
    2005Statutory federal rate applied to loss
before income taxes
    
    $
    (2,315
    )
    
    $
    (593
    )
    
    $
    (2,033
    )State income tax benefit
    
    
    (183
    )
    
    
    (52
    )
    
    
    (179
    )Permanent differences
    
    
    246
    
    
    
    (67
    )
    
    
    4Change in valuation allowance
    
    
    2,462
    
    
    
    769
    
    
    
    2,401Research and development credit
    
    
    (209
    )
    
    
    (25
    )
    
    
    (190
    )Other
    
    
    (1
    )
    
    
    (32
    )
    
    
    (3
    )$
    
    
    
    $
    
    
    
    $
    Current
    
    $
    
    
    
    $
    
    
    
    $
    Deferred
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    




Note 7. Commitments


Leases






Years ending September 30,2008
    
    $
    4532009
    
    
    4162010
    
    
    4212011
    
    
    4142012
    
    
    421Thereafter
    
    
    993Total
    
    $
    3,118




401(k) Plan




F-14



---



##### Table of Contents



Note 8. Shareholders Equity
 Common Stock
  Preferred Stock
  Series B
      F-15




---



##### Table of Contents



Series C
     Series D
  F-16




---



##### Table of Contents



Stock Option Plans
    F-17




---



##### Table of Contents



WeightedAverageShares
    
    Exercise PriceOptions outstanding at September 30, 2004
    
    
    690
    
    
    $
    3.76Granted
    
    
    25
    
    
    
    5.23Exercised
    
    
    (118
    )
    
    
    3.43Cancelled
    
    
    (39
    )
    
    
    4.48Options outstanding at September 30, 2005
    
    
    558
    
    
    
    3.84Granted
    
    
    199
    
    
    
    5.09Exercised
    
    
    (356
    )
    
    
    3.71Cancelled
    
    
    (13
    )
    
    
    3.76Options outstanding at September 30, 2006
    
    
    388
    
    
    
    4.60Granted
    
    
    894
    
    
    
    5.15Exercised
    
    
    (15
    )
    
    
    3.73Cancelled
    
    
    (35
    )
    
    
    4.83Options outstanding at September 30, 2007
    
    
    1,232
    
    
    
    5.01
 Options Outstanding
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    AverageRemaining
    
    Weighted
    
    
    
    
    
    Remaining
    
    WeightedRange of
    
    Number
    
    Contractual
    
    Average
    
    Number
    
    Contractual
    
    Averageexercise
    
    of
    
    Life
    
    Exercise
    
    of
    
    Life
    
    Exerciseprice
    
    Shares
    
    (Years)
    
    Price
    
    Shares
    
    (Years)
    
    Price$2.85 - $2.95
    
    
    13
    
    
    
    0.46
    
    
    $
    2.95
    
    
    
    13
    
    
    
    0.46
    
    
    $
    2.95$3.03 - $3.99
    
    
    107
    
    
    
    1.03
    
    
    
    3.77
    
    
    
    92
    
    
    
    0.41
    
    
    
    3.79$4.18 - $4.98
    
    
    116
    
    
    
    4.33
    
    
    
    4.68
    
    
    
    41
    
    
    
    4.11
    
    
    
    4.53$5.03 - $5.40
    
    
    996
    
    
    
    4.99
    
    
    
    5.21
    
    
    
    104
    
    
    
    5.14
    
    
    
    4.631,232
    
    
    
    4.54
    
    
    $
    5.01
    
    
    
    250
    
    
    
    2.78
    
    
    $
    4.43
   For the Years Ended September 30,2007
    
    2006
    
    2005Number of shares granted
    
    
    894
    
    
    
    199
    
    
    
    25Fair value
    
    $
    1.79
    
    
    $
    1.78
    
    
    $
    1.87Risk-free interest rate
    
    
    4.65
    %
    
    
    4.56
    %
    
    
    3.77
    %Expected volatility
    
    
    35.39
    %
    
    
    28.00
    %
    
    
    33.00
    %Expected life (in years)
    
    
    4.04
    
    
    
    5.5
    
    
    
    5.00Dividend yield
    
    
    
    
    
    
    
    
    
    
    
 F-18




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##### Table of Contents



Restricted Stock Awards
   WeightedNumber of
    
    Average GrantShares
    
    Date Fair ValueRestricted stock outstanding at September 30, 2004
    
    
    140
    
    
    $
    4.32Granted
    
    
    197
    
    
    
    5.17Vested
    
    
    (58
    )
    
    
    4.53Cancelled
    
    
    (20
    )
    
    
    3.99Restricted stock outstanding at September 30, 2005
    
    
    259
    
    
    
    4.94Granted
    
    
    199
    
    
    
    4.85Vested
    
    
    (107
    )
    
    
    4.84Cancelled
    
    
    (139
    )
    
    
    4.87Restricted stock outstanding at September 30, 2006
    
    
    212
    
    
    
    4.95Granted
    
    
    450
    
    
    
    5.34Vested
    
    
    (278
    )
    
    
    5.23Cancelled
    
    
    (23
    )
    
    
    4.98Restricted stock outstanding at September 30, 2007
    
    
    361
    
    
    $
    5.22
     F-19




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##### Table of Contents



Common stock warrants
    WeightedWeighted
    
    AverageNumber of
    
    Average
    
    RemainingWarrants
    
    Exercise Price
    
    Life (years)Warrants outstanding at September 30, 2004
    
    
    639
    
    
    $
    3.10
    
    
    
    4.13Granted
    
    
    385Exercised
    
    
    Cancelled
    
    
    (5
    )Warrants outstanding at September 30, 2005
    
    
    1,019
    
    
    
    3.43
    
    
    
    3.83Granted
    
    
    40Exercised
    
    
    (6
    )Cancelled
    
    
    (20
    )Warrants outstanding at September 30, 2006
    
    
    1,033
    
    
    
    3.49
    
    
    
    2.99Granted
    
    
    505Exercised
    
    
    Cancelled
    
    
    Warrants outstanding at September 30, 2007
    
    
    1,538
    
    
    $
    3.61
    
    
    
    2.89
 Note 9. Related Party Transactions
  Note 10. Legal Proceedings
  Note 11. Selected Quarterly Financial Data  Unaudited
  F-20




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##### Table of Contents



Fiscal year 2007December 31,
    
    
    March 31,
    
    
    June 30,
    
    
    September 30,2006
    
    
    2007
    
    
    2007
    
    
    2007Net sales
    
    $
    7,774
    
    
    $
    8,162
    
    
    $
    7,984
    
    
    $
    6,756Costs and expensesCost of goods sold
    
    
    4,181
    
    
    
    4,670
    
    
    
    4,282
    
    
    
    3,799Selling, general and administrative
    
    
    3,057
    
    
    
    3,438
    
    
    
    3,620
    
    
    
    6,587Research and development
    
    
    1,174
    
    
    
    1,024
    
    
    
    1,061
    
    
    
    1,093Operating loss
    
    
    (637
    )
    
    
    (970
    )
    
    
    (979
    )
    
    
    (4,723
    )Net loss
    
    
    (554
    )
    
    
    (875
    )
    
    
    (875
    )
    
    
    (4,502
    )Net loss to common shareholders
    
    $
    (695
    )
    
    $
    (921
    )
    
    $
    (1,643
    )
    
    $
    (4,549
    )Net loss per common shareBasic and diluted
    
    $
    (0.09
    )
    
    $
    (0.12
    )
    
    $
    (0.21
    )
    
    $
    (0.57
    )Weighted average common and common
share equivalentsBasic
    
    
    7,845
    
    
    
    7,921
    
    
    
    7,959
    
    
    
    7,964Diluted
 Fiscal year 2006December 31,
    
    
    March 31,
    
    
    June 30,
    
    
    September 30,2005
    
    
    2006
    
    
    2006
    
    
    2006Net sales
    
    $
    6,423
    
    
    $
    8,418
    
    
    $
    7,447
    
    
    $
    8,342Costs and expensesCost of goods sold
    
    
    3,772
    
    
    
    4,530
    
    
    
    4,437
    
    
    
    5,075Selling, general and administrative
    
    
    2,500
    
    
    
    2,815
    
    
    
    2,580
    
    
    
    2,851Research and development
    
    
    908
    
    
    
    1,036
    
    
    
    1,084
    
    
    
    1,011Operating income/(loss)
    
    
    (757
    )
    
    
    37
    
    
    
    (654
    )
    
    
    (595
    )Net income/(loss)
    
    
    (749
    )
    
    
    63
    
    
    
    (559
    )
    
    
    (498
    )Net income/(loss) to common shareholders
    
    $
    (844
    )
    
    $
    19
    
    
    $
    (696
    )
    
    $
    (543
    )Net income/(loss) per common shareBasic and diluted
    
    $
    (0.12
    )
    
    $
    
    
    
    $
    (0.09
    )
    
    $
    (0.07
    )Weighted average common and common
share equivalentsBasic
    
    
    7,301
    
    
    
    7,406
    
    
    
    7,539
    
    
    
    7,690Diluted
    
    
    7,301
    
    
    
    11,071
    
    
    
    7,539
    
    
    
    7,690
  F-21




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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.


Changes in internal controls over financial reporting.





Item 9B. Other Information







PART III





Item 10. Directors, Executive Officers and Corporate Governance











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




25



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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 ExhibitNo.
    
    Description of Exhibits3.1
    
    Restated Articles of Incorporation of XATA Corporation (22)3.2
    
    Bylaws of XATA Corporation *3.3
    
    Certificate of Designation of Preferences of Series B Preferred Stock (1)3.4
    
    Certificate of Amendment of Certificate of Designation of Preferences of Series B Preferred
Stock *3.5
    
    Certificate of Designation of Preferences of Series C Preferred Stock (2)3.6
    
    Certificate of Designation of Preferences of Series D Preferred Stock (3)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)9.0
    
    Amended and Restated Voting Agreement, dated September 7, 2005 (2)
 26




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits10.1
    
    Lease dated December 26, 1996 with Hoyt Properties, Inc. (4)10.2
    
    First Lease Amendment, dated May 5, 2003, which amends Lease dated December 26, 1996 with
Hoyt Properties, Inc. (5)10.3
    
    Lease Agreement, dated July 9, 2007, with 965 Partnership LLP (21)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)10.7
    
    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 *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 *10.19
    
    Form of Stock Option Agreement for Employees pursuant to 2007 Long-term
Incentive and Stock Option Plan *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)
 27




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibits10.28
    
    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)14
    
    Amended Code Of Ethics For Principal Executive Officer And Senior Financial Officers (9)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(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 28




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##### Table of Contents



(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 filed as part of Registration Statement on Form S-2 (Commission
File No. 33-98932) 
 29




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##### Table of Contents



SIGNATURES
  XATA CORPORATIONDated:  December 13, 2007
    By:
    /s/     John J. CoughlanJohn J. Coughlan, Chairman, ChiefExecutive Officer and President
(Principal executive officer)  Dated:  December 13, 2007
    By:
    /s/     John J. CoughlanJohn J. Coughlan, Chairman, ChiefExecutive Officer and PresidentDated:  December 13, 2007
    By:
    /s/     Carl M. FredericksCarl M. Fredericks, DirectorDated:  December 13, 2007
    By:
    /s/    Thomas G. HudsonThomas G. Hudson, DirectorDated:  December 13, 2007
    By:
    /s/     Roger W. KleppeRoger W. Kleppe, DirectorDated:  December 13, 2007
    By:
    /s/     Stephen A. LawrenceStephen A. Lawrence, DirectorDated:  December 13, 2007
    By:
    /s/     Mark E. TiesMark E. Ties, Chief Financial Officer(Principal  accounting and financial
officer)Dated:  December 13, 2007
    By:
    /s/     Christopher P. MarshallChristopher P. Marshall, DirectorDated:  December 13, 2007
    By:
    /s/     Charles R. Stamp, Jr.Charles R. Stamp, Jr., Director 30