-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AFSMEUu85tGMbGAbM/ysxoUQJmdEk078TUKEO63EYcr+kW0SmFu0kMP3rKiCWbIQ FodCwY31fIpSSxiG/I5PYg== 0000912057-00-010862.txt : 20000313 0000912057-00-010862.hdr.sgml : 20000313 ACCESSION NUMBER: 0000912057-00-010862 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990701 ITEM INFORMATION: FILED AS OF DATE: 20000310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IXATA GROUP INC CENTRAL INDEX KEY: 0000929425 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 341833574 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 033-83526 FILM NUMBER: 565284 BUSINESS ADDRESS: STREET 1: 8080 DAGGETT STREET SUITE 220 CITY: SAN DIEGO STATE: CA ZIP: 92111 BUSINESS PHONE: 6196775580 MAIL ADDRESS: STREET 1: 8080 DAGGETT STREET SUITE 220 CITY: SAN DIEGO STATE: CA ZIP: 92111 FORMER COMPANY: FORMER CONFORMED NAME: SECURFONE AMERICA INC DATE OF NAME CHANGE: 19971114 FORMER COMPANY: FORMER CONFORMED NAME: MATERIAL TECHNOLOGY INC DATE OF NAME CHANGE: 19970326 FORMER COMPANY: FORMER CONFORMED NAME: MATERIAL TECHNOLOGIES INC DATE OF NAME CHANGE: 19970313 8-K/A 1 8-K/A 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 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.
Exhibit No. Description - ----------- ----------- 23.1 Consent of Nation Smith Hermes Diamond, independent accountants. 27.1 Financial data schedule.
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 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 IXATA, INC. (A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET =========================================================================================== JUNE 30, 1999 - ------------------------------------------------------------------------------------------- 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 ===========================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT. 4 IXATA, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS =========================================================================================== 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) ===========================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT. 5 IXATA, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) =========================================================================================================================== Common Stock Additional ----------------------- Subscriptions Paid-in Accumulated Shares Amount Receivable Capital Deficit Total ----------------------- ---------------------------------------------------- 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) ========================================== ========= ========= ========= ========= ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT. 6 IXATA, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS ======================================================================================================== PERIOD FROM INCEPTION (JANUARY 15, 1999) TO JUNE 30, 1999 - -------------------------------------------------------------------------------------------------------- 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 ========================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT. 7 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 (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: JUNE 30, 1999 -------------------------------------------------------------- Computer hardware $ 20,517 Furniture and equipment 3,000 -------------------------------------------------------------- 23,517 Less accumulated depreciation (243) -------------------------------------------------------------- $ 23,274 ==============================================================
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 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 JUNE 30, 1999 ------------------------------------------------------------------------------------- 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 =====================================================================================
10 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: PERIOD ENDED JUNE 30, 1999 --------------------------------------------------------------------------------------- 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) --------------------------------------------------------------------------------------- $ - =======================================================================================
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 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 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 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 The IXATA Group, Inc. (Formerly SecurFone America, Inc.) Unaudited Pro Forma Balance Sheet June 30, 1999
----------------------------------------------------------------------------------- Originally Audited Pro Forma Consolidated Filed IXATA Subtotal Consolidation Pro Forma SecurFone Balances Adjustments FS ----------------------------------------------------------------------------------- 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 ============== ============ ============== ============== ============== - - - - -
15 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
------------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------------- 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) ==================
16 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
Exhibit No. Description - ----------- ----------- 23.1 Consent of Nation Smith Hermes Diamond, independent accountants. 27.1 Financial data schedule.
18 EX-23.1 2 EXHIBIT 23.1 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 EX-27 3 EX-27
5 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.) OTHER DEC-31-1999 JAN-15-1999 JUN-30-1999 46,978 0 3,596 0 0 53,999 23,517 243 86,606 427,280 11,365 0 0 151,953 9340 86,606 901 901 0 2,359 501,995 0 6,772 (510,225) 0 (510,225) 0 0 0 (510,225) 0 0 ON JULY 1, 1999, THE COMPANY WAS ACQUIRED BY THE IXATA GROUP, INC. (FORMERLY SECURFOAM AMERICA, INC.) IN A STOCK FOR STOCK PURCHASE ACQUISTION.
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