<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(July 1, 1999)
The IXATA Group, Inc.
(Formerly SecurFone America, Inc.)
(Exact name of registrant as specified in its charter)
DELAWARE 33-83526 94-4453386
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
8080 Dagget Street San Diego, CA 92111
------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(858) 677-5580
----------
(Registrant's telephone number, including area code)
=============================================================
1
<PAGE>
This amends the form 8-K filed on July 20, 1999 to provide financial statements
and pro forma financial information.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
IXATA, Inc.
Report of Independent Auditors
Balance Sheet as of June 30, 1999
Statement of Operations for the Period from Inception
(January 15, 1999) to June 30, 1999
Statement of Stockholder' Equity (Deficit) for the Period from
Inception (January 15, 1999) to June 30, 1999.
Statement of Cash Flows for the Period from Inception (January 15,
1999) to June 30, 1999
Notes to Financial Statements for the Period from Inception
(January 15, 1999) to June 30, 1999
(b) Pro Forma financial information
Introduction
Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1999 (unaudited)
Pro Forma Condensed Consolidated Statement of Operations
for the Period Ended June 30, 1999 (unaudited)
Notes to Pro Forma Condensed Consolidated Financial
Information for the Period Ended June 30, 1999
(unaudited)
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
23.1 Consent of Nation Smith Hermes Diamond,
independent accountants.
27.1 Financial data schedule.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
By: /S/ PAUL B. SILVERMAN
-----------------------
Paul B. Silverman
Chief Executive Officer
Date: March 10, 2000
2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
IXATA, Inc.
We have audited the accompanying balance sheet of IXATA, Inc. (a development
stage company) as of June 30, 1999, and the related statement of operations,
stockholders' equity (deficit), and cash flows for the period from inception
(January 15, 1999) to June 30, 1999. These financial statements are the
responsibility the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IXATA, Inc. (a development
stage company) as of June 30, 1999, and the results of its operations and cash
flows for the period from inception (January 15, 1999) to June 30, 1999, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1(e) to the
financial statements, the Company is dependent upon its Parent Company to
provide the working capital necessary to emerge from the development stage and
remain liquid until it has sufficiently developed its client base. This
condition raises substantial doubt about its ability to continue as a going
concern. Management's plan regarding this matter is also described in Note 1(e).
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Nation Smith Hermes Diamond
August 31, 1999
3
<PAGE>
IXATA, INC.
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
BALANCE SHEET
===========================================================================================
JUNE 30, 1999
- -------------------------------------------------------------------------------------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash (Note 8) $ 46,978
Accounts receivable 3,596
Prepaid assets 3,425
- -------------------------------------------------------------------------------------------
Total current assets 53,999
FIXED ASSETS - NET (Notes 1(c) and 3) 23,274
OTHER ASSETS - NET (Note 4) 9,333
- -------------------------------------------------------------------------------------------
$ 86,606
===========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of notes payable (Note 5) $ 162,000
Accounts payable and accrued expenses 78,899
Related party payables 175,136
Deferred revenue 11,245
- -------------------------------------------------------------------------------------------
Total current liabilities 427,280
NOTES PAYABLE - NET OF CURRENT PORTION (Note 5) 11,365
- -------------------------------------------------------------------------------------------
Total liabilities 438,645
CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; 10,000,000 shares authorized, no shares
issued and outstanding --
Common stock, no par value; 20,000,000 shares authorized,
1,292,641 shares issued and outstanding (Note 7) 151,953
Stock subscriptions receivable (Note 7) (3,107)
Additional paid-in capital (Note 4) 9,340
Deficit accumulated during the development stage (510,225)
- -------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) (352,039)
- -------------------------------------------------------------------------------------------
$ 86,606
===========================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
4
<PAGE>
IXATA, INC.
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
===========================================================================================
<S> <C>
PERIOD FROM INCEPTION (JANUARY 15, 1999) TO JUNE 30, 1999
- -------------------------------------------------------------------------------------------
REVENUES $ 901
Cost of revenues 2,359
- -------------------------------------------------------------------------------------------
GROSS PROFIT (LOSS) (1,458)
Selling, general and administrative expenses 501,995
- -------------------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) (503,453)
Interest expense 6,772
- -------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (510,225)
===========================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
5
<PAGE>
IXATA, INC.
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
===========================================================================================================================
Common Stock Additional
----------------------- Subscriptions Paid-in Accumulated
Shares Amount Receivable Capital Deficit Total
----------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 15, 1999 -- $ -- $ -- $ -- $ -- $ --
Notes payable converted to equity 49,824 130,822 -- -- -- 130,822
Shares issued for cash 938,066 9,492 -- -- -- 9,492
Contributed capital -- -- -- 9,340 -- 9,340
Shares issued for services 2,844 8,532 -- -- -- 8,532
Shares subscribed 301,907 3,107 (3,107) -- -- --
Net loss -- -- -- -- (510,225) (510,225)
- ------------------------------------------ --------- --------- --------- --------- --------- ---------
BALANCE AT JUNE 30, 1999 1,292,641 $ 151,953 $ (3,107) $ 9,340 $(510,225) $(352,039)
========================================== ========= ========= ========= ========= ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
6
<PAGE>
IXATA, INC.
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
========================================================================================================
PERIOD FROM INCEPTION (JANUARY 15, 1999) TO JUNE 30, 1999
- --------------------------------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (510,225)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 910
Change in operating assets and liabilities:
Accounts receivable (3,596)
Prepaid and other current assets (3,425)
Accounts payable and accrued expenses 97,797
Related party payables 175,136
Deferred revenue 11,245
- --------------------------------------------------------------------------------------------------------
Net cash used in operating activities (232,158)
- --------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets (23,517)
- --------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt 300,000
Offering costs (16,179)
Proceeds from sale of common stock 9,492
Capital contributions 9,340
- --------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 302,653
- --------------------------------------------------------------------------------------------------------
Net increase in cash 46,978
CASH AT BEGINNING OF PERIOD -
- --------------------------------------------------------------------------------------------------------
CASH AT END OF PERIOD $ 46,978
========================================================================================================
NONCASH INVESTING AND FINANCING ACTIVITIES:
Debt and accrued interest converted to equity $ 155,533
Accounts payable converted to debt $ 13,365
Intellectual property acquired by financing $ 10,000
Equity issued for offering costs $ 8,582
Stock subscriptions $ 3,107
========================================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
7
<PAGE>
IXATA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SUMMARY OF A summary of the Company's significant
SIGNIFICANT accounting policies applied in the preparation
ACCOUNTING of the accompanying financial statements
POLICIES follows.
(a) ORGANIZATION IXATA, INC. (the "Company") was incorporated in
California on January 15, 1999 with the purpose
of providing internet based business to business
e-commerce automated solutions to a broad
spectrum of clients in the hotel and corporate
travel related industry. Subsequent to June 30,
1999, the Company has also entered into
contracts authorizing certain strategic partners
to sublicense its software.
(b) USE OF The preparation of financial statements in
ESTIMATES conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect the reported amounts
of assets and liabilities and disclosure of
contingent assets and liabilities at the date of
the balance sheet. Actual results could differ
from those estimates.
(c) DEPRECIATION Depreciation and amortization are provided on
the straight-line method over the estimated
useful lives of the related assets.
(d) INCOME TAXES Deferred income taxes are recognized for the tax
consequences in future years of differences
between the tax basis of assets and liabilities
and their financial reporting amounts at each
year end based on enacted tax laws and statutory
tax rates applicable to the periods in which the
differences are expected to affect taxable
income.
Valuation allowances are established when
necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax
expense is the combination of the tax payable
for the year and the change during the year in
deferred tax assets and liabilities.
8
<PAGE>
(e) LIQUIDITY To meet both current contractual commitments and
business growth objectives, the Company will
require additional financing which will be
provided by the parent company (the "Parent")
(See Note 11). To address these financing needs,
the Parent is pursuing a three phase strategy.
During the current initial phase, the Parent's
core investors and bankers are providing
additional short-term capital to meet the
(e) LIQUIDITY (CONT) Company's near term obligations. The Phase II
financing plan will be to develop and close by
year-end, a private financing round. The Parent
is discussing required private placement funding
levels and expects the total Phase II placement
to be in the range of $3 to $5 million. The
planned Phase III financing round will be a
public offering in the second or third quarter
of 2000. There can be no assurance that the
planned financing will be completed under terms
acceptable to the Company or at all.
The accompanying financial statements do not
include any adjustments to reflect the possible
future effects on the recoverability and
classification of assets or the amounts and
classification of liabilities that may result
from the possible inability of the Company to
continue as a going concern.
2. DEVELOPMENT Operations since the Company's inception have
STAGE been devoted primarily to developing its client
OPERATIONS base and funding operations.
3. FIXED ASSETS Fixed assets consisted of the following:
<TABLE>
JUNE 30, 1999
--------------------------------------------------------------
<S> <C>
Computer hardware $ 20,517
Furniture and equipment 3,000
--------------------------------------------------------------
23,517
Less accumulated depreciation (243)
--------------------------------------------------------------
$ 23,274
==============================================================
</TABLE>
Depreciation expense was $243 for the period
ended June 30, 1999.
4. INTELLECTUAL On February 16, 1999, the Company purchased
PROPERTY intellectual property from a company with
substantially the same stockholders for $10,000.
9
<PAGE>
AGREEMENT The intellectual property consisted of the key
software program used in operations. This asset
is being amortized over five years. Amortization
expense was $667 for the period ended June 30,
1999.
Subsequent to acquiring this software, the
Company received approximately $14,000 of
revenue earned by the prior owner. This amount,
net of approximately $4,900 of related expenses,
was recorded as additional paid-in capital.
5. NOTES Notes payable consisted of the following:
PAYABLE
<TABLE>
JUNE 30, 1999
-------------------------------------------------------------------------------------
<S> <C>
Unsecured note payable to a corporation that
purchased all of the outstanding common stock of
the Company subsequent to June 30, 1999 (see
Note 11); interest at 10%; principal and accrued
interest are due June 30, 2000.
$ 150,000
Account payable converted to note on June 21, 1999; interest at
8%; payable in $2,000 installments of principal and interest
beginning July 1, 1999. 13,365
Note payable to a related party; interest at 5%;
principal and accrued interest are due on
February 16, 2004. (See Note 4) 10,000
-------------------------------------------------------------------------------------
Total 173,365
Less current portion (162,000)
-------------------------------------------------------------------------------------
Long-term portion $ 11,365
=====================================================================================
Future minimum principal payments on notes payable are as follows:
PERIOD ENDING JUNE 30,
-------------------------------------------------------------------------------------
2000 $ 162,000
2001 1,365
2002 -
2003 -
2004 10,000
-------------------------------------------------------------------------------------
$ 173,365
=====================================================================================
</TABLE>
10
<PAGE>
6. INCOME Deferred income taxes are provided for temporary
TAXES differences in recognizing certain income and
expense items for financial and tax reporting
purposes. The deferred tax assets consisted
primarily of the income tax benefits from net
operating loss carryforwards. Valuation
allowances have been recorded to fully offset
the deferred tax assets as realization of such
assets is not assured.
At June 30, 1999, the Company had federal and
state tax net operating loss carryforwards of
6. INCOME approximately $510,000. The federal and state
TAXES, cont'd tax loss carryforwards will expire between 2008
through 2020, unless previously utilized.
A reconciliation of the statutory U.S. federal
rate and effective rates is as follows:
<TABLE>
PERIOD ENDED JUNE 30, 1999
---------------------------------------------------------------------------------------
<S> <C>
Statutory U.S federal rate 34%
State income taxes 6%
Net operating loss for which no tax benefit is
currently available (40%)
---------------------------------------------------------------------------------------
-%
=======================================================================================
The tax effects of temporary differences and
carryforwards that give rise to deferred tax
assets and liabilities consist of the following:
JUNE 30, 1999
---------------------------------------------------------------------------------------
Deferred tax assets:
Net operating loss carryforwards $ 204,000
Valuation allowance (204,000)
---------------------------------------------------------------------------------------
$ -
=======================================================================================
</TABLE>
7. COMMON On February 5, 1999, the Company issued 938,066
STOCK shares of its common stock at approximately $.01
per share for cash. Members of the Board of
Directors purchased 799,928 of the shares.
On February 5, 1999, the Company subscribed
301,907 shares of its common stock at
approximately $.01 per share.
11
<PAGE>
On February 18, 1999, the Company issued 2,844
shares of its common stock at $3 per share in
exchange for offering costs. The stock was
valued based on the share price of the
investment facilitated.
On June 30, 1999, the Company issued 49,824
shares of its common stock at approximately $3
per share. These shares were recorded net of
approximately $25,000 of offering costs.
7. COMMON These shares were issued pursuant to a private
STOCK, cont'd placement memo dated January 26, 1999. Bridge
loans in the amount of $150,000 at 10% interest
were issued to the Company in February 1999. The
principal and accrued interest related to the
bridge loans were converted to equity on June
30, 1999.
8. CONCENTRATIONS The Company maintains cash balances at a local
bank, which at times may exceed the $100,000
FDIC insurance limit. All cash balances at June
30, 1999 were insured.
9. RELATED PARTY The Company purchased certain intellectual
TRANSACTIONS property from a company with substantially the
same shareholders and received the proceeds of
accounts receivable generated by the prior owner
of the intellectual property. See Note 4.
The Company sold shares of its common stock to
members of its Board of Directors. See Note 7.
The Company entered into a management and
services agreement with a company that has
substantially the same stockholders. Related
expenses for the period ended June 30, 1999 was
$116,700. Related party payables included
$108,560 at June 30, 1999.
The Company entered into consulting agreements
with members of its Board of Directors. Related
expense for the period ended June 30, 1999 was
$95,000. Related party payables included $53,000
at June 30, 1999, related to the consulting
agreement.
12
<PAGE>
The Company paid consulting fees not pursuant to
a consulting agreement to a member of its Board
of Directors in the amount of $27,500.
Related party payables at June 30, 1999 included
$13,576 due to a member of its Board of
Directors for Company charges incurred on his
personal credit card.
10. YEAR 2000 The Company could be adversely affected if the
ISSUE computer systems it, its suppliers or its
(UNAUDITED) customers use do not properly process and
calculate date-related information and data from
the period surrounding and including January 1,
2000. This is commonly known as the "Year 2000"
issue. Additionally, this issue could impact
non-computer systems and devices, such as
equipment. At this time, because of the
complexities involved in the issue, management
cannot provide assurances that the Year 2000
issue will not have an impact on the Company's
operations.
11. SUBSEQUENT Effective July 1, 1999, an unrelated party
EVENT purchased 100% of the Company's outstanding
common stock.
13
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
The unaudited pro forma consolidated information set forth below gives effect to
the acquisition of all the issued and outstanding capital stock of IXATA, Inc.
("IXATA") as if the acquisition occurred on January 15, 1999 (IXATA's inception
date). The unaudited pro forma consolidated financial information set forth
below reflects certain adjustments, including adjustment to reflect the
amortization of capitalized goodwill.
14
<PAGE>
The IXATA Group, Inc.
(Formerly SecurFone America, Inc.)
Unaudited Pro Forma Balance Sheet
June 30, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Originally Audited Pro Forma Consolidated
Filed IXATA Subtotal Consolidation Pro Forma
SecurFone Balances Adjustments FS
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 7,818 $ 46,978 $ 54,796 $ - $ 54,796
Accounts receivable 4,501 3,596 8,097 - 8,097
Marketable equity securities 150,000 - 150,000 - 150,000
Prepaid and other current assets - 3,425 3,425 - 3,425
-------------- ------------ -------------- -------------- --------------
TOTAL CURRENT ASSETS 162,319 53,999 216,318 - 216,318
FIXED ASSETS - NET 83,757 23,274 107,031 - 107,031
OTHER ASSETS
Note receivable - IXATA 150,000 - 150,000 2 (150,000) -
Other assets 1,225 9,333 10,558 - 10,558
Goodwill - - - 1,4 6,672,932 6,672,932
-------------- ------------ -------------- -------------- --------------
TOTAL OTHER ASSETS 151,225 9,333 160,558 6,522,932 6,683,490
-------------- ------------ -------------- -------------- --------------
TOTAL ASSETS $ 397,301 $ 86,606 $ 483,907 $ 6,522,932 $ 7,006,839
============== ============ ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion long term debt $ 72,419 $ - $ 72,419 $ - $ 72,419
Current portion notes payable 578,250 162,000 740,250 - 740,250
Accounts payable 300,908 78,899 379,807 - 379,807
Deferred revenue - 11,245 11,245 - 11,245
Related party payables - 175,136 175,136 2 (150,000) 25,136
Accrued interest 173,653 - 173,653 - 173,653
Accrued payroll 158,678 - 158,678 - 158,678
-------------- ------------ -------------- -------------- --------------
TOTAL CURRENT LIABILITIES 1,283,908 427,280 1,711,188 (150,000) 1,561,188
LONG-TERM LIABILITIES
Capital leases, less current portion 34,323 - 34,323 - 34,323
Notes payable, less current portion 1,000,000 11,365 1,011,365 - 1,011,365
-------------- ------------ -------------- -------------- --------------
TOTAL LONG-TERM LIABILITIES 1,034,323 11,365 1,045,688 - 1,045,688
-------------- ------------ -------------- -------------- --------------
TOTAL LIABILITIES 2,318,231 438,645 2,756,876 (150,000) 2,606,876
STOCKHOLDERS' DEFICIT
Preferred stock - - - - -
Common stock 6,275 151,953 158,228 1,4 (146,853) 11,375
Additional paid-in capital 4,709,138 9,340 4,718,478 1,4 6,309,560 11,028,038
Additional paid-in capital - Stock
options 2,874,475 - 2,874,475 - 2,874,475
Stock subscriptions receivable - (3,107) (3,107) - (3,107)
Accumulated deficit during development
stage (9,360,818) (510,225) (9,871,043) 4 510,225 (9,360,818)
Accumulated other comprehensive (loss):
Unrealized holding loss on marketable
securities (150,000) - (150,000) - (150,000)
-------------- ------------ -------------- -------------- --------------
STOCKHOLDERS' DEFICIT (1,920,930) (352,039) (2,272,969) 6,672,932 4,399,963
-------------- ------------ -------------- -------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY $ 397,301 $ 86,606 $ 483,907 $ 6,522,932 $ 7,006,839
============== ============ ============== ============== ==============
- - - - -
</TABLE>
15
<PAGE>
The IXATA Group, Inc.
(Formerly SecurFone America, Inc.)
Unaudited Pro Forma Statement of Operations
For the Six Months Ended June 30, 1999 and the Period
From Inception to June 30, 1999
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
SecurFone IXATA Business Pro
Six Months (January 15, 1999) Combined Combination Forma
Ended Inception Date to Adjustment Consolidated
June 30, 1999 June 30, 1999 June 30, 1999
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ 901 $ 901 $ - $ 901
COST OF SALES - 2,359 2,359 - 2,359
-------------------------------------------------------------------------------------
GROSS PROFIT (LOSS) - (1,458) (1,458) - (1,458)
OPERATING EXPENSES
General and administrative expenses 141,976 501,995 643,971 - 643,971
Restructuring charge 505,832 - 505,832 - 505,832
Amortization of goodwill - - - 3 614,612 614,612
-------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 647,808 501,995 1,149,803 614,612 1,764,416
-------------------------------------------------------------------------------------
LOSS FROM OPERATIONS (647,808) (503,453) (1,151,261) (614,612) 1,765,874)
OTHER INCOME (EXPENSES)
Gain on disposal of fixed assets 708,419 - 708,419 - 708,419
Interest expense (1,206) (6,772) (7,978) - (7,978)
-------------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSES) 707,213 (6,772) 700,441 - 700,441
PROVISION FOR INCOME TAXES 1,600 - 1,600 - 1,600
-------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM 57,805 (510,225) (452,420) (614,612) (1,067,033)
EXTRAORDINARY ITEM
Extraordinary gain on extinguishment
of debt, net of income tax of $0 43,451 - 43,451 - 43,451
-------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 101,256 $ (510,225) $ (408,969) $ (614,612) $ (1,023,582)
=====================================================================================
BASIC AND FULLY DILUTED LOSS PER SHARE
Loss before extraordinary item $ (0.09)
==================
Extraordinary item $ 0.00
==================
Net Loss $ (0.09)
==================
</TABLE>
16
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro forma adjustments for the consolidated balance sheet as of June 30, 1999 and
the consolidated statement of operations for the period ended June 30, 1999 are
as follows:
(1) Reflects the issuance of 4,500,000 shares of restricted common
stock related to the acquisition of 100 percent of the
outstanding common stock of IXATA, Inc. (an unrelated entity).
Also includes the issuance of 600,000 shares of restricted
common stock for direct combination costs related to the
purchase transaction. The fair value of the consideration given
by SecurFone was calculated using the average closing price of
SecurFone common stock for a period of five months prior to and
five month subsequent to the acquisition date, July 1, 1999. The
ten-month period was used to more fairly value the fair value of
the shares issued.
The cost of the shares issued for the acquisition and direct
combination costs plus approximately $32,000 of other direct
combination costs in excess of the net assets acquired from
IXATA, Inc. was capitalized as goodwill. Capitalized goodwill
was approximately $6.7 million dollars.
(2) Reflects the elimination of loans from SecurFone to IXATA prior
to the acquisition.
(3) Reflects the amortization of the goodwill amortized on a
straight-line basis over a five year period.
(4) Reflects the elimination of IXATA equity accounts in
consolidation.
17
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
23.1 Consent of Nation Smith Hermes Diamond,
independent accountants.
27.1 Financial data schedule.
</TABLE>
18
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation of our report dated August 31, 1999
relating to the financial statements of IXATA, Inc., which appears in the
Current Report on Form 8-K/A of The IXATA Group, Inc. (Formerly SecurFone
America, Inc.) dated March 9, 2000.
/s/ Nation Smith Hermes Diamond
Nation Smith Hermes Diamond
March 9, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
8K/A RELATED TO THE ACQUISITION OF IXATA, INC. BY THE IXATA GROUP, INC.
(FORMERLY SECURFOAM AMERICA, INC.)
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-15-1999
<PERIOD-END> JUN-30-1999
<CASH> 46,978
<SECURITIES> 0
<RECEIVABLES> 3,596
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,999
<PP&E> 23,517
<DEPRECIATION> 243
<TOTAL-ASSETS> 86,606
<CURRENT-LIABILITIES> 427,280
<BONDS> 11,365
0
0
<COMMON> 151,953
<OTHER-SE> 9340
<TOTAL-LIABILITY-AND-EQUITY> 86,606
<SALES> 901
<TOTAL-REVENUES> 901
<CGS> 0
<TOTAL-COSTS> 2,359
<OTHER-EXPENSES> 501,995
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,772
<INCOME-PRETAX> (510,225)
<INCOME-TAX> 0
<INCOME-CONTINUING> (510,225)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (510,225)
<EPS-BASIC> 0
<EPS-DILUTED> 0<F1>
<FN>
<F1>ON JULY 1, 1999, THE COMPANY WAS ACQUIRED BY THE IXATA GROUP, INC. (FORMERLY
SECURFOAM AMERICA, INC.) IN A STOCK FOR STOCK PURCHASE ACQUISTION.
</FN>
</TABLE>
