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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 22,1999
The IXATA Group, Inc.
(Formerly SecurFone America, Inc.)
(Exact name of registrant as specified in its charter)
DELAWARE 33-83526 95-4453386
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
8080 Dagget Street San Diego, CA 92111
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(Address of Principal Executive Offices) (Zip Code)
(858) 677-5580
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(Registrant's telephone number, including area code)
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<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 30, 1999, The IXATA Group, Inc., formerly SecurFone America,
Inc. (the "Company"), executed an agreement with Teledata World Services, Inc.
("Teledata") (OTC/BB:TWOS), to sell certain prepaid cellular assets to Teledata
for cash and Teledata common stock. The transaction was closed on April 22,
1999. Under the terms of the agreement, the Company sold its wholly-owned
subsidiary, SecurFone, Inc., to Teledata for $498,000 in cash, 600,000 shares of
Teledata common stock, and the option to sell the stock back to Teledata at a
price of $2.50 per share effective one year from the date of the transaction if
the market price of the Teledata stock is less than $2.50 per share. SecurFone,
Inc. assets include certain cellular service resale agreements, the Company's
Miami customer service center, rights to the Buy-The-Minute-TM- product and
selected distribution channels. The asset sale improved the Company's balance
sheet and was consistent with the Company's new business objective pursuing
opportunities in the Internet and electronic commerce markets.
A description of the transaction is set forth in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1998, incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
(1) UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION OF THE
IXATA GROUP, INC. (FORMERLY SECURFONE AMERICA, INC.)
The following unaudited pro forma condensed financial
information is being filed herewith:
Page:
Unaudited Pro Forma Condensed Balance Sheet at March
31, 1999 4
Unaudited Pro Forma Condensed Statement of Operations
for the Three Months Ended March 31, 1999 5
Unaudited Pro Forma Condensed Statement of Operations
for the Year Ended December 31, 1998 6
Notes to Unaudited Pro Forma Condensed Financial
Information 7
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<PAGE>
(c) EXHIBITS
10.1 Purchase Agreement, dated February 1999, between the Company
and Teledata (incorporated by reference to the Company's
Annual Report on Form 10-KSB for the year ended December 31,
1998 (File No. 033-83526) (the "1998 10-KSB"))
10.2 Security Agreement, dated February 1999, between the Company
and Teledata (incorporated by reference to the Company's
1998 10-KSB)
10.3 Secured Promissory Note of the Company in the original
principal amount of $248,000, dated February 1999, payable
to Teledata(incorporated by reference to the Company's 1998
10-KSB)
10.4 First Amendment to Purchase Agreement, dated April 15, 1999,
between the Company and Teledata (incorporated by reference
to the Company's 1998 10-KSB)
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.
THE IXATA GROUP, INC.
(FORMERLY SECURFONE AMERICA, INC.)
By: /S/ PAUL B. SILVERMAN
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Paul B. Silverman
Chief Executive Officer
Date: March 13, 2000
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<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
The unaudited pro forma information set forth below gives effect to the sale of
certain prepaid cellular assets to Teledata for cash and restricted common
stock. The unaudited pro forma consolidated financial information set forth
below reflects certain adjustments, including adjustment to restructure the
operations of the Company after electing not to pursue prepaid cellular
operations further. The Company will focus its efforts on the
business-to-business e-commerce opportunities presented in conjunction with the
IXATA, Inc. acquisition.
A description of the IXATA, Inc. transaction, by reference, is set forth in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1998
filed with the Securities and Exchange Commission on September 28, 1999.
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<PAGE>
The IXATA Group, Inc.
(a development stage company)
(Formerly SecurFone America, Inc.)
Unaudited Pro Forma Balance Sheet
March 31, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
HISTORICAL PRO FORMA PRO FORMA
ADJUSTMENTS
-----------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 5,869 1 $ 133,268 $ 139,137
Accounts receivable 8,853 - 8,853
Marketable equity securities - 1 300,000 300,000
------------------------- ---------------------- ---------------------
TOTAL CURRENT ASSETS 14,722 433,268 447,990
FIXED ASSETS - NET 155,337 1 (88,581) 66,756
OTHER ASSETS
Deposits 1,225 - 1,225
------------------------- ---------------------- ---------------------
TOTAL OTHER ASSETS 1,225 - 1,225
------------------------- ---------------------- ---------------------
TOTAL ASSETS $ 171,284 $ 344,687 $ 515,971
========================= ====================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion long term debt $ 64,193 $ - $ 64,193
Notes payable 1,000,983 1 (364,732) 636,251
Accounts payable and accrued liabilities 558,737 - 558,737
Accrued payroll - officers 114,246 - 114,246
------------------------- ---------------------- ---------------------
TOTAL CURRENT LIABILITIES 1,738,159 (364,732) 1,373,427
LONG-TERM LIABILITIES
Capital leases, less current portion 45,274 - 45,274
Notes payable, less current portion 1,000,000 - 1,000,000
------------------------- ---------------------- ---------------------
TOTAL LONG-TERM LIABILITIES 1,045,274 - 1,045,274
------------------------- ---------------------- ---------------------
TOTAL LIABILITIES 2,783,433 (364,732) 3,418,701
STOCKHOLDERS' DEFICIT
Common stock 6,092 - 6,092
Additional paid-in capital 4,363,315 - 4,363,315
Additional paid-in capital - Stock options 2,874,475 - 2,874,475
Accumulated deficit during development stage (9,856,031) 709,419 (9,146,612)
------------------------- ---------------------- ---------------------
STOCKHOLDERS' DEFICIT (2,612,149) 709,419 (1,902,730)
------------------------- ---------------------- ---------------------
LIABILITIES AND STOCKHOLDERS' EQUITY $ 171,284 $ 344,687 $ 515,971
========================= ====================== =====================
</TABLE>
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<PAGE>
The IXATA Group, Inc.
(a development stage company)
(Formerly SecurFone America, Inc.)
Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
HISTORICAL PRO FORMA PRO FORMA
ADJUSTMENTS
-------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $ 22,642 2 $ (22,642) $ -
COST OF SALES 55,809 2 (55,809) -
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GROSS PROFIT (LOSS) (33,167) 33,167 -
OPERATING EXPENSES
General and administrative expenses 301,515 2 (228,813) 72,702
Restructuring charges - 2 261,980 261,980
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TOTAL OPERATING EXPENSES 301,515 33,167 334,682
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LOSS FROM OPERATIONS (334,682) - (334,682)
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OTHER INCOME (EXPENSES)
Gain on sale of subsidiary assets - 1 709,419 709,419
Interest expense (101,126) - (101,126)
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TOTAL OTHER INCOME (EXPENSES) (101,126) 709,419 608,293
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LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND EXTRAORDINARY ITEM (435,808) 709,419 273,611
PROVISION FOR INCOME TAXES 1,600 - 1,600
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM (437,408) 709,419 272,011
EXTRAORDINARY ITEM
Extraordinary gain on extinguishment
of debt, net of income tax of $0 43,451 - 43,451
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NET INCOME (LOSS) $ (393,957) $ 709,419 $ 315,462
===============================================================================
BASIC INCOME (LOSS) PER SHARE
Loss before extraordinary item $ (0.07) $ 0.04
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Extraordinary item $ 0.01 $ 0.01
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Net Loss $ (0.06) $ 0.05
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FULLY DILUTED INCOME (LOSS) PER SHARE
Loss before extraordinary item $ (0.07) $ 0.04
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Extraordinary item $ 0.01 $ 0.01
=================== =======================
Net Loss $ (0.06) $ 0.05
=================== =======================
Weighted Ave. Number of Shares - Basic 6,091,881 6,091,881
=================== =======================
Weighted Ave. Number of Shares - Fully Diluted 6,151,881 6,151,881
=================== =======================
</TABLE>
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<PAGE>
The IXATA Group, Inc.
(a development stage company)
(Formerly SecurFone America, Inc.)
Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
ADJUSTMENTS
---------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $ 367,358 2 $ (367,358) $ -
COST OF SALES 476,728 2 (476,728) -
---------------------------------------------------------------------------------
GROSS PROFIT (LOSS) (109,370) 109,370 -
OPERATING EXPENSES
General and administrative expenses 2,437,287 2 (2,437,287) -
Stock-based compensation 1,620,000 2 (1,620,000) -
Restructuring charges - 2 4,166,657 4,166,657
---------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 4,057,287 109,370 4,166,657
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LOSS FROM OPERATIONS (4,166,657) - (4,166,657)
OTHER INCOME (EXPENSES)
Gain on sale of subsidiary assets - 1 709,419 709,419
Other income - net 150,000 - 150,000
Interest expense (288,286) - (288,286)
---------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSES) (138,286) 709,419 571,133
PROVISION FOR INCOME TAXES - - -
---------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM $ (4,304,943) $ 709,419 $ (3,595,524)
=================================================================================
BASIC AND FULLY DILUTED LOSS PER SHARE
Net Loss $ (0.72) $ (0.60)
===================== =======================
Weighted Ave. Number of Shares 5,949,174 5,949,174
===================== =======================
</TABLE>
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<PAGE>
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
Pro forma adjustments for the balance sheet as of March 31, 1999 and the
statements of operations for the three months ended March 31, 1999 and the year
ended December 31, 1998 are as follows:
(1) Reflects the sale of certain assets held in the Company's
wholly-owned subsidiary, SecurFone, Inc., to Teledata, World
Services, Inc. (an unrelated entity). Fixed assets used in
the prepaid cellular phone efforts were sold for $498,000 in
cash and $300,000 of fair value restricted common shares.
Teledata advanced cash proceeds of $364,732 to the Company
prior to the closing of the agreement (April 22, 1999). Upon
the close, the remaining proceeds of $133,268 were paid and
the advances reduced the related debt on the Company's
balance sheet. The sale of the subsidiary's assets resulted
in realized gain of approximately $709,000.
(2) Subsequent to the sale of SecurFone, Inc. to Teledata, the
Company's management elected not to pursue prepaid cellular
operations further. Therefore, all revenue and expenses
related to the cellular operations was reclassified to be
shown as a restructuring charge in the operating expense
section of the statement of operations.
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