<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB
(Mark One)

/x/    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
       of 1934 For the quarterly period ended June 30, 1999.

/ /    Transition report under Section 13 or 15(d) of the Exchange Act For the
       transition period from to

                        Commission file number: 33-83526


                              THE IXATA GROUP, INC.
-------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter


                      DELAWARE                       34-1833574
---------------------------------------      ----------------------------------
              (State of Incorporation)     (I.R.S. Employer Identification No.)


               8080 DAGGET, SUITE 220 SAN DIEGO, CALIFORNIA 92111
-------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                             SECURFONE AMERICA, INC.
-------------------------------------------------------------------------------
                                  (Former Name)


                                  619-677-5580
-------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


     Check whether issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

     Yes / /    No /X/

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

COMMON STOCK, $0.001 PAR VALUE PER SHARE: 11,888,142 (AS OF JANUARY 1, 2000)
------------------------------------------------------------------------------

     Transition Small Business Disclosure Format (check one):

     Yes / /    No /X/

<PAGE>

                              THE IXATA GROUP, INC.
                         Quarterly Report on Form 10-QSB
                       For the Quarter Ended June 30, 1999
-------------------------------------------------------------------------------


                              THE IXATA GROUP, INC.

                         QUARTERLY REPORT ON FORM 10-QSB
                       FOR THE QUARTER ENDED JUNE 30, 1999


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

Item                                                                                                   Page
----                                                                                                   ----
<S>                                                                                                    <C>
PART I --FINANCIAL INFORMATION                                                                            2
     Item 1. Financial Statements.                                                                        2
     Item 2. Management's Discussion and Analysis or Plan of Operations.                                 16
     Overview                                                                                            16
     Results of Operations:                                                                              19
       Second Quarter of 1999 Compared to Second Quarter of 1998                                         19
       First Half of 1999 Compared to First Half of 1998                                                 20
       Liquidity and Capital Resources                                                                   21
       Year 2000                                                                                         22
     Related Party Transactions                                                                          22
     Forward-Looking Statements                                                                          22
PART II--OTHER INFORMATION                                                                               27
     Item 1. Legal Proceedings.                                                                          27
     Item 2. Changes in Securities and Use of Proceeds.                                                  27
     Item 3. Defaults Upon Senior Securities.                                                            27
     Item 4. Submission of Matters to a Vote of Security Holders.                                        27
     Item 5. Other Information.                                                                          27
     Item 6. Exhibits and Reports on Form 8-K.                                                           27
</TABLE>

------------------------------------------------------------------------------
                                       Page 1
<PAGE>

                              THE IXATA GROUP, INC.
                         Quarterly Report on Form 10-QSB
                       For the Quarter Ended June 30, 1999
-------------------------------------------------------------------------------


                         PART I -- FINANCIAL INFORMATIOn
<TABLE>
<CAPTION>
<S>                                                                                                              <C>
ITEM 1.  FINANCIAL STATEMENTS.


         Consolidated Balance Sheets..............................................................................3

         Consolidated Statements of Operations....................................................................4

         Consolidated Statements of Stockholders' Equity..........................................................5

         Consolidated Statements of Cash Flows....................................................................6

         Notes to Financial Statements.........................................................................7-15

</TABLE>


-------------------------------------------------------------------------------
                                       Page 2
<PAGE>

                             THE IXATA GROUP, INC.
                        Quarterly Report on Form 10-QSB
                      For the Quarter Ended June 30, 1999
--------------------------------------------------------------------------------
                          CONSOLIDATED BALANCE SHEET
                            JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
                                                               1999          1998
                                                           ------------   ------------
<S>                                                        <C>            <C>
                                      ASSETS
CURRENT ASSETS:
  Cash & cash equivalents                                   $     7,818    $    36,123
  Accounts receivable, net                                        4,501         63,427
  Marketable securities                                         150,000        770,000
  Prepaid expenses                                                  --         105,100
                                                           ------------   ------------
                                                                162,319        974,650
PROPERTY AND EQUIPMENT, net of accumulated depreciation          83,757        215,267

OTHER ASSETS:
  Note receivable-IXATA, Inc.                                   150,000            --
  Intangible assets, net of
    accumulated amortization                                        --         230,201
  Deposits                                                        1,225          1,225
                                                           ------------   ------------
    Total other assets                                          151,225        231,426
                                                           ------------   ------------
    Total assets                                            $   397,301    $ 1,421,343
                                                           ============   ============
                LIABILITIES AND STOCKHOLDERS' EQUITY (ACCUMULATED DEFICIT)
<CAPTION>
                                                               1999          1998
                                                           ------------   ------------
<S>                                                        <C>            <C>

CURRENT LIABILITIES:
  Current portion of long term liabilities                  $    72,419    $    61,463
  Accounts payable                                              300,908        342,782
  Accrued interest                                              173,653         16,569
  Accrued payroll                                               158,678         46,664
  Notes payable                                                 578,250         50,000
                                                           ------------   ------------
    Total current liabilities                                 1,283,908        517,478
                                                           ------------   ------------
LONG-TERM LIABILITIES:
  Advances payable                                                  --         827,000
  Notes payable-net of current portion                        1,000,000          4,181
  Obligation under capital leases-net of current portion         34,323         70,248
                                                           ------------   ------------
    Total long term liabilities                               1,034,323        901,429
                                                           ------------   ------------
    Total liabilities                                         2,318,231      1,418,907
                                                           ------------   ------------

STOCKHOLDERS' EQUITY (ACCUMULATED DEFICIT):
  Common stock-SecurFone America, Inc.                            6,275          5,880
    $.001 par value, authorized 100,000,000
    shares, outstanding 6,275,169 shares at
    June 30, 1999 and 5,965,216 shares
    at June 30, 1998
  Additional paid-in capital                                  4,709,138      4,330,145
  Additional paid-in capital-stock options                    2,874,475      2,869,525
    Unrealized holding (loss) on marketable securities         (150,000)       770,000
    Deficit accumulated during the development stage         (9,360,818)    (7,973,114)
                                                           ------------   ------------
      Total stockholders' equity (accumulated deficit)       (1,920,930)         2,436
                                                           ------------   ------------
    Total liabilities and stockholders' equity
      (accumulated deficit)                                 $   397,301    $ 1,421,343
                                                           ------------   ------------
</TABLE>

See accompanying notes.

--------------------------------------------------------------------------------
                                    Page 3
<PAGE>

                             THE IXATA GROUP, INC.
                        Quarterly Report on Form 10-QSB
                      For the Quarter Ended June 30, 1999
---------------------------------------------------------------------------
                      CONSOLIDATED STATEMENT OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED
   JUNE 30, 1999 AND 1998 AND THE PERIOD MAY 20, 1996 (DATE OF INCEPTION)
                               TO JUNE 30, 1999
<TABLE>
<CAPTION>
                                                            1999                       1998              May 20, 1996
                                                 ------------------------   -------------------------   (Inception Date)
                                                 Three Months  Six Months   Three Months  Six Months    June 30, 1999
                                                 ------------  ----------   ------------  -----------   ----------------
<S>                                              <C>           <C>          <C>           <C>          <C>
REVENUES                                         $       --    $      --    $       --    $       --    $          --

OPERATING EXPENSES                                       --           --            --            --               --
                                                 ------------  ----------   ------------  -----------   ----------------
    Gross profit                                         --           --            --            --               --
                                                 ------------  ----------   ------------  -----------   ----------------
OPERATING EXPENSES
  Selling, general and administrative                  69,274     141,976           --            --           141,976
  Restructuring charge                                143,932     505,832       661,451     2,814,331       10,008,577
                                                 ------------  ----------   ------------  -----------   ----------------
      Total Operating Expenses                        213,206     647,808       661,451     2,814,331       10,150,553

      Income (Loss) from Continuing Operations       (213,206)   (647,808)     (661,451)   (2,814,331)     (10,150,553)
                                                 ------------  ----------   ------------  -----------   ----------------
OTHER INCOME (EXPENSE):
  Gain on disposal of cellular assets                 708,419     708,419           --            --           708,419
  Realized stock gains                                    --          --            --            --            50,000
  Interest expense - capital lease                        --       (1,206)          --            --           (23,835)
  Interest income                                         --          --            --            --            14,949
                                                 ------------  ----------   ------------  -----------   ----------------
      Total other income (expense)                    708,419     707,213           --            --           749,533
                                                 ------------  ----------   ------------  -----------   ----------------
      Income (Loss) Before Income Taxes and
        Extraordinary Item                            495,213      59,405      (661,451)   (2,814,331)      (9,401,020)
                                                 ------------  ----------   ------------  -----------   ----------------
PROVISION FOR INCOME TAXES                                --        1,600         1,649         1,649            3,249
                                                 ------------  ----------   ------------  -----------   ----------------
      Income (Loss) before extraordinary items        495,213      57,805      (663,100)   (2,815,980)      (9,404,269)
                                                 ------------  ----------   ------------  -----------   ----------------
EXTRAORDINARY ITEMS

  Gain on debt extinguishment
                                                 ------------  ----------   ------------  -----------   ----------------
     (less $0 Income tax)                                 --       43,451                                       43,451
                                                 ------------  ----------   ------------  -----------   ----------------
     Net income (loss)                                495,213     101,256      (663,100)   (2,815,980)      (9,360,818)

OTHER COMPREHENSIVE INCOME (LOSS):
  Unrealized (loss) gain on securities               (150,000)   (150,000)      490,000       770,000         (150,000)
                                                 ------------  ----------   ------------  -----------   ----------------
     Comprehensive income (loss)                 $    345,213  $  (48,744)  $  (173,100)  $(2,045,980)  $   (9,510,818)
                                                 ============  ==========   ===========   ===========   ================

Net (loss) per share - basic
  Income (loss) from continuing operations       $     (0.03)  $    (0.11)  $     (0.11)  $     (0.47)
                                                 ===========   ==========   ===========   ===========
  Loss before extraordinary items                $      0.08   $     0.01   $     (0.11)  $     (0.47)
                                                 ===========   ==========   ===========   ===========
  Gain (loss) on extraordinary items             $       -     $     0.01   $       -     $       -
                                                 ===========   ==========   ===========   ===========
  Net income (loss)                              $      0.08   $     0.02   $     (0.11)  $     (0.47)

  Comprehensive income (loss)                    $      0.05   $    (0.01)  $     (0.03)  $     (0.34)
                                                 -----------   ----------   -----------   -----------

Net (loss) per share - fully diluted
  Income (loss) from continuing operations       $     (0.03)  $    (0.11)  $     (0.11)  $     (0.47)
                                                 ===========   ==========   ===========   ===========
  Loss before extraordinary items                $      0.08   $     0.01   $     (0.11)  $     (0.47)
                                                 ===========   ==========   ===========   ===========
  Gain (loss) on extraordinary items             $       -     $     0.01   $       -     $       -
                                                 ===========   ==========   ===========   ===========
  Net income (loss)                              $      0.08   $     0.02   $     (0.11)  $     (0.47)

  Comprehensive income (loss)                    $      0.05   $    (0.01)  $     (0.03)  $     (0.34)
                                                 -----------   ----------   -----------   -----------

</TABLE>

See accompanying notes.

-------------------------------------------------------------------------------
                                     Page 4
<PAGE>

                             THE IXATA GROUP, INC.
                        Quarterly Report on Form 10-QSB
                      For the Quarter Ended June 30, 1999
-------------------------------------------------------------------------------
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      MAY 20, 1996 THROUGH JUNE 30, 1999
<TABLE>
<CAPTION>
                                                                     Additional     Deficit
                                                                      Paid-in     Accumulated    Accumulated
                                                        Additional    Capital-     during the       Other
                                               Common     Paid-in      Stock       Development  Comprehensive
                                                Stock     Capital     Options         Stage     Income (Loss)      Total
                                             --------   -----------  ----------   ------------  -------------   -----------
<S>                                          <C>        <C>          <C>          <C>           <C>             <C>
Initial issuance of common
  Stock, May 20, 1996                        $      3   $  975,797   $       --   $       --    $        --     $   975,800

Stock split 1,333.33 to 1 - March 6, 1997      39,970      (39,970)          --           --             --              --

Sale of stock - 1997                            1,200      118,800           --           --             --         120,000

Acquisition - August 1, 1997                  (36,173)      36,173           --           --             --              --

Stock options granted August-November, 1997        --           --    1,227,250           --             --       1,227,250

Contingent shares issued - December 31, 1997
  and March 18, 1998                              740    3,099,260           --           --             --       3,100,000

Stock options exercised - March 19, 1998          225           --       22,275           --             --          22,500

Stock options granted - January 6, 1998            --           --    1,620,000           --             --       1,620,000

Stock issued - May 12, 1998                        35      139,965           --           --             --         140,000

Stock options exercised - August 6, 1998           50           --        4,950           --             --           5,000

Stock issued - November 17, 1998                   42       33,290           --           --             --          33,332

Stock issued - May 11-19, 1999                    122      242,066           --           --             --         242,188

Stock issued - June 30, 1999                       61      103,757           --           --             --         103,818

Unrealized holding gains on securities -
  June 30, 1999                                    --           --           --           --       (150,000)       (150,000)

Deficit accumulated June 30, 1999                  --           --           --    (9,360,818)           --      (9,360,818)
                                             --------   -----------  ----------   ------------  -------------   -----------
Balance June 30, 1999                        $  6,275   $4,709,138   $2,874,475   $(9,360,818)  $  (150,000)    $(1,920,930)
                                             --------   -----------  ----------   ------------  -------------   -----------
</TABLE>

See accompanying notes.

--------------------------------------------------------------------------------
                                   Page 5
<PAGE>

                             THE IXATA GROUP, INC.
                        Quarterly Report on Form 10-QSB
                      For the Quarter Ended June 30, 1999
---------------------------------------------------------------------------
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE THREE AND SIX MONTHS ENDED
   JUNE 30, 1999 AND 1998 AND THE PERIOD MAY 20, 1996 (DATE OF INCEPTION)
                               TO JUNE 30, 1999
<TABLE>
<CAPTION>
                                                                      1999                       1998                May 20, 1996
                                                           ------------------------   -------------------------- (Date of Inception)
                                                           Three Months  Six Months   Three Months   Six Months    to June 30, 1999
                                                           ------------  ----------   ------------  ------------   ----------------
<S>                                                        <C>           <C>          <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                        $ 495,213     $ 101,256    $  (663,100)  $(2,815,980)   $   (9,360,818)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Depreciation and amortization                            7,743        27,499         29,623        59,246           216,504
      Sale of subsidiary                                    (708,419)     (708,419)           --            --           (708,419)
      Stock options granted and contingent
        shares issued                                            --            --             --      1,620,000         4,327,250
      Decrease (increase) in accounts receivable               4,352         2,637         (2,101)      (28,323)           (4,501)
      Decrease (increase) in notes receivable                    --            --             --         89,353             5,833
      Decrease (increase) in royalties receivable                --            --             --        100,000               --
      Decrease (increase) in inventory                           --            --             --         22,153               --
      Decrease (increase) in intangible and other assets         --            --             --            --            (56,680)
      Decrease (increase) in prepaid expenses                    --         35,000       (104,800)     (105,100)              --
      (Decrease) increase in accounts payable,
        payroll payable and accrued expenses                 (39,745)      (47,973)       143,571       233,144           598,238
      (Decrease) increase in deferred royalty revenue            --            --             --       (100,000)              --
                                                           ------------  ----------   ------------  ------------   ----------------
        NET CASH PROVIDED IN (USED)
          OPERATING ACTIVITIES                              (240,856)     (590,000)      (596,807)     (925,507)       (4,982,593)
                                                           ------------  ----------   ------------  ------------   ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds from sale of subsidiary and related assets    472,257       472,257            --            --            472,257
  Investment in subsidiary                                  (150,000)     (150,000)           --            --           (150,000)
  Purchase of property and equipment                             --           (157)        (6,701)      (12,457)         (314,474)
                                                           ------------  ----------   ------------  ------------   ----------------
        NET CASH PROVIDED IN (USED)
          INVESTING ACTIVITIES                               322,257       322,100         (6,701)      (12,457)            7,783
                                                          ------------  ----------   ------------  ------------   ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Contribution to paid-in capital                            345,823       345,823        140,000      162,500          1,589,667
  Issuance of stock options and contingent shares                --            --             --           --           1,647,500
  Issuance of stock for debt                                     183           183            --           --                 183
  Proceeds from capital lease                                    --            --             --           --             159,650
  Proceeds from advances payable                                 --            --         500,000      827,000                --
  Proceeds from notes payable                                 54,003       416,231         (3,880)      (7,699)         2,101,273
  Repayments on advances                                    (338,000)     (338,000)           --           --            (338,000)
  Repayments on notes payable                               (137,718)     (143,095)           --           --            (143,095)
  Repayments under capital lease                              (3,743)       (6,946)        (6,155)     (15,221)           (83,206)
                                                          ------------  ----------   ------------  ------------   ----------------
        NET CASH PROVIDED IN (USED)
          FINANCING ACTIVITIES                               (79,452)      274,186        629,965      966,580          4,933,972
                                                           ------------  ----------   ------------  ------------   ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                      1,949         6,286         26,457       28,616            (40,838)

BEGINNING CASH AND CASH EQUIVALENTS                            5,869         1,532          9,666        7,507                --
                                                          ------------  ----------   ------------  ------------   ----------------
CASH AND CASH EQUIVALENTS AT JUNE 30                      $    7,818    $    7,818   $     36,123  $    36,123    $       (40,838)
                                                          ============  ==========   ============  ============   ================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the period for interest                $    3,839    $   27,806   $     29,545  $    49,851    $       384,114
                                                          ============  ==========   ============  ============   ================
  Cash paid during the period for income taxes            $      --     $    1,600   $      1,649  $     1,649    $         2,400
                                                          ============  ==========   ============  ============   ================
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
  Amortization of prepaid loan fees paid by stock issued  $      --     $   35,000   $     35,000  $    35,000    $       140,000
                                                          ============  ==========   ============  ============   ================
  Issuance of stock for operating services                $  346,006    $  346,006            --           --     $       346,006
                                                          ============  ==========   ============  ============   ================
  (Decrease) Increase in fair value of
    marketable securities                                 $ (150,000)   $ (150,000)  $    490,000  $   490,000    $           --
                                                          ============  ==========   ============  ============   ================
  Purchase of stock and options in exchange
    for sale of subsidiary                                $  300,000    $  300,000            --           --     $       300,000
                                                          ------------  ----------   ------------  ------------   ----------------
</TABLE>

See accompanying notes.

--------------------------------------------------------------------------------
                                     Page 6
<PAGE>

                              THE IXATA GROUP, INC.
                         Quarterly Report on Form 10-QSB
                       For the Quarter Ended June 30, 1999
-------------------------------------------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE THREE AND SIX MONTHS ENDED
              JUNE 30, 1999 AND 1998 AND THE PERIOD MAY 20, 1996 (DATE OF
                          INCEPTION) TO JUNE 30, 1999

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of The
IXATA Group, Inc. and its wholly owned subsidiary, SecurFone Services, Inc.
(collectively referred to as the "Company"). Inter-company transactions and
balances have been eliminated in the consolidated financial statements.

NATURE OF OPERATIONS

During the period reported, the Company was principally engaged in the sale of
prepaid cellular phone services. The Company provided these services in some
markets and, in other markets, licensed the Company's resources to unrelated
parties.

     The Company offered three main products:

-    Buy-The-Minute -TM- - a software modified handset for which the Company
     provides underlying national airtime, activation, and administrative
     services for end users.
-    SFA Local Network Solution - the Company's flagship product that
     telephonically connects directly to the underlying wireless service
     provider to accomplish call routing and completion.
-    Carrier Network Services - the wholesale prepaid wireless platform service
     that the Company sells directly to wireless carriers that do not wish to
     create their own platform

On August 1, 1997, SecurFone, Inc. was acquired by Material Technology, Inc.
(Formerly Tensiodyne Scientific Corporation) and became a publicly traded
corporation. On August 1, 1997, Material Technology, Inc. was renamed to
SecurFone America, Inc. In April of 1999 the name of SecurFone, Inc was changed
to SecurFone Services, Inc. and a new subsidiary was formed named SecurFone,
Inc. This new subsidiary was subsequently sold. On January 31, 2000, SecurFone
America, Inc. changed its name to The IXATA Group, Inc.

DEVELOPMENT STAGE OPERATIONS

The Company was organized to develop and market prepaid wireless products and
services in various U.S. markets. The Company invested significant capital and
effort in development of its network, software, routing and carrier interface
technology throughout 1997 and 1998. In 1998, the Company began its initial
introduction of services to various U.S. markets. During development and market
testing the industry experienced price reductions, new competition and other
margin pressures. In late 1998 the Company revised its business plan to reflect
the significant additional funding that would be required to achieve the
business scale required to create significant shareholder value. Recognizing the
explosive growth of the internet and e-commerce markets, and the long term
prospects for integrating new wireless and internet-based services, the Company
established a new objective to pursue opportunities in the internet and
e-commerce market sectors. To meet this objective, the Company has, since late
1998, pursued the sale of portions of its wireless business, acquired a new
Internet-based e-commerce subsidiary, IXATA.COM, and raised additional funding.

CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, the Company considers all highly
liquid investments with an original maturity of three months or less to be cash
equivalents. The Company maintains its cash accounts in three commercial banks.
Accounts are guaranteed by the Federal Deposit Insurance Company (FDIC) up to
$100,000.


-------------------------------------------------------------------------------
                                       Page 7
<PAGE>

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to credit risk
include temporary cash investments and trade receivables. Concentration of
credit risk with respect to trade receivables is limited due to the Company's
large number of customers and wide range of locations served. The Company
occasionally maintains deposits in excess of federally insured limits.
Management believes that the risk is limited by maintaining all deposits in high
quality financial institutions.

PROPERTY AND EQUIPMENT

The cost of property and equipment is depreciated over the estimated useful
lives of the related assets. Depreciation is calculated using the accelerated
depreciation method for both financial reporting and income tax purposes. For
the quarters ended June 30, 1999 and 1998 depreciation expense of $7,743 and
$14,077 was charged to operations, respectively. For the six months ended June
30, 1999 and 1998 depreciation expense of $27,499 and $28,154 was charged to
operations, respectively.

REVENUE AND EXPENSE RECOGNITION

The Company recognizes revenue from sales of cellular airtime, net of an
allowance for uncollectible amounts, when substantially all significant services
to be provided by the Company have been performed. Expenses are recognized in
the period in which they are incurred. An allowance has been provided for
uncollectible accounts based on management's evaluation of the accounts and
their history.

CHANGE IN ACCOUNTING PRINCIPLE

Effective December 1, 1998, the Company retroactively changed its method of
recognizing start-up costs in its consolidated financial statements to conform
with a recent pronouncement of the AICPA, SOP 98-5 Reporting on the Costs of
Start-Up Activities. The Company previously amortized these costs over a
five-year period beginning January 1, 1997, using the straight-line method. The
new pronouncement requires start-up costs to be expensed as incurred. As a
result, the cumulative effect of applying the new method retroactively as of
January 1, 1997 was charged to 1998 earnings as required by SOP 98-5.
Amortization in the amount of $15,546 was charged to expense for the quarter
ended June 30, 1998. Amortization in the amount of $31,092 was charged to
expense for the six months ended June 30, 1998.

USE OF ESTIMATES

In preparing the Company's consolidated financial statements, management is
required to make estimates and assumptions that effect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. These estimates are based on management's
knowledge and experience. Accordingly, actual results could differ from those
estimates.

COMPENSATED ABSENCES

The Company does not have a vacation policy as of June 30, 1999. Unpaid vacation
has not been accrued since it is considered immaterial.

RECLASSIFICATIONS

Certain accounts in the prior-year consolidated financial statements have been
reclassified for comparative purposes to conform with the presentation in the
current-year consolidated financial statements.


-------------------------------------------------------------------------------
                                       Page 8
<PAGE>

Note 2. MARKETABLE SECURITIES

Cost and fair value of marketable  securities  available  for sale at June 30,
1999 and 1998  consisted of equities as follows:
<TABLE>
<CAPTION>
     ------------------------ ----------------------------- ---------------------------- -------------------
                                          Cost                Unrealized Gain (Loss)         Fair Value
     ------------------------ ----------------------------- ---------------------------- -------------------
     <S>                               <C>                    <C>                            <C>
     June 30, 1999                     $ 300,000                    $(150,000)               $ 150,000
     ------------------------ ----------------------------- ---------------------------- -------------------
     June 30, 1998                        $ 0                        $ 770,000               $ 770,000
     ------------------------ ----------------------------- ---------------------------- -------------------
</TABLE>

At June 30, 1999 and 1998 the Company held securities that have unrealized
losses and gains of $(150,000) and $770,000, respectively. Due to the net loss
carry forwards there is no tax expense (benefit) on the realization of this loss
or gain.


Note 3. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 1999 and 1998 is comprised of the following:
<TABLE>
<CAPTION>
                                                                 June                 June
                                                                 1999                 1998
                                                                 ----                 ----
         <S>                                               <C>
          Office Furniture and Equipment                    $   31,105           $   35,043
          Computer Software                                      1,138               88,802
          Computer Hardware                                    160,819              190,691
                                                              --------              -------
                                                               193,062              314,536
          Accumulated Depreciation                           (109,305)             (99,269)
                                                              --------              -------
                                                            $   83,757           $  215,267
                                                              ========              =======
</TABLE>

Note 4. NOTE RECEIVABLE

The note receivable at June 30, 1999 consists of advances made to IXATA, Inc.
("IXATA.COM") for operating expenses. IXATA.COM became a subsidiary in July
1999. See Note 14 - Subsequent Events.


Note 5. SHORT TERM NOTES PAYABLE

As of June 30, 1999 and 1998 notes payable, other obligations and short term
debt consisted of the following:
<TABLE>
<CAPTION>
                                                                                           1999               1998
                                                                                           ----               ----
     <S>                                                                              <C>                <C>
     Note payable to Material Technology, Inc.                                        $       --         $  165,000
     Notes  payable   (formerly  treated  as  an  advances  payable)  to
         unrelated  parties  for  advances  of  $130,000  that  was  due
         January 30, 1999, with 10% interest. The note is unsecured.                  $  130,000         $       --
     Notes  payable  dated  September 1, 1998 for  advances  made to the
         Company by a Nevada  corporation and an individual  bearing 10%
         interest per annum,  principal and interest  payable August 31,
         1999                                                                            298,250                 --
     Note  payable  for a  settlement  to the  Company's  former  CEO to
         resolve  all  outstanding  Company  obligations  related to his
         employment due April 1, 1999.                                                    50,000                 --
     Note  payable  to  a  limited  partnership  bearing  15%  interest,
         principal  and  interest  due  November  1, 1999  secured  by a
                                                                                         100,000                 --
                                                                                        ---------            -------


------------------------------------------------------------------------------------------------------------------------
                                       Page 9
<PAGE>
     <S>                                                                             <C>
       certain stock pledge agreement                                                $  578,250           $  50,000
                                                                                          =======             ======
</TABLE>

Note 5. LONG TERM DEBT

As of June 30, 1999 and 1998 notes payable, other obligations and long term debt
consisted of the following:
<TABLE>
<CAPTION>
                                                                                            1999               1998
                                                                                            ----               ----
     <S>                                                                             <C>                   <C>
     Advances payable to unrelated parties and potential investors who
         have committed the funds on a long term basis. Negotiations
         with various parties have not characterized the debt and
         equity nature of the funds or finalized interest rates,
         maturity dates, repayment terms or other features for the
         advances                                                                     $       ---          $  827,000
     Convertible debenture in the amount of $1,000,000 issued August
         21, 1998 for advances made to the Company. The debenture has
         12% interest rate payable quarterly. The principal is payable
         on the earlier of (1) the Company's receipt of at least $8
         million proceeds from a public offering of Company securities
         or (2) August 21, 2001. Non-detachable warrants for 500,000
         shares exercisable at $2.72 per share were issued in
         connection with the convertible debenture. The warrants expire
         August 21, 2003.                                                              1,000,000                 --
     Note payable with a vendor under an agreement dated October 1997
         is a two year, unsecured note with an annual interest rate of
         6% and monthly payments of $1,407 including interest. The
         balance at June 30, 1999 requires payment within six months                       6,928             20,295

     CAPITAL LEASE

     In March 1997, the Company entered into a sale-leaseback
         arrangement under which computer equipment capitalized at
         $159,649 is being accounted for as a capital lease. Under the
         agreement, the Company sold certain equipment and leased it
         back for a period of 48 months, at which time the Company will
         repurchase the equipment from the lessor                                         99,814            115,597
                                                                                          ------            -------

     Total                                                                             1,106,742            962,892

     Less: Current Portion of notes and other maturities                                (72,419)           (61,463)
                                                                                         -------            -------

              Total long term liabilities                                          $  1,034,323        $    901,429
                                                                                       =========            =======
</TABLE>

Minimum future lease payments under non-cancelable capital leases for the next
five years are as follows:

<TABLE>
                          <S>                                         <C>
                          June 30, 2000                               $65,491
                          June 30, 2001                                34,323
                                                                       ------

                         Total minimum future lease payments          $99,814
                                                                     ========
</TABLE>

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                                      Page 10
<PAGE>

         The note payable maturities on long term debt for the next five years
are as follows:

<TABLE>
                         <S>                        <C>
                         1999                          $106,928
                         2000                                 0
                         2001                         1,000,000
                         ----                         ---------
                         Total                      $ 1,106,928
                         =====                      ===========
</TABLE>

Note 6. COMMON STOCK

At December 31, 1996, 30,000 shares of SecurFone America, Inc.'s stock were
authorized and 3,000 shares were issued and outstanding.

On March 5, 1997, an additional 4,700,000 shares were authorized by the Board of
Directors.

On March 6, 1997, the shareholders of SecurFone America, Inc. approved a
stock split of 1,333,333 to 1 shares, increasing the 3,000 shares issued and
outstanding to 4,000,000 shares with a par value of $.01 per share. The
amount of $39,970 was transferred from the paid-in capital account to common
stock account to record the split.

Prior to the reorganization between SecurFone America, Inc. and Material
Technology, Inc., Material Technology, Inc. had as of July 31, 1997
100,000,000 shares authorized and 5,000,000 shares outstanding with a reverse
split of 1 for 10 resulting in 500,216 shares issued and outstanding. Also,
Material Technology, Inc. issued an additional 4,500,000 shares on July 31,
1997 for a total of 5,000,216 shares issued and outstanding. On August 1,
1997, SecurFone America, Inc. completed a reorganization with Material
Technology, Inc. whereby 4,000,000 shares issued and outstanding common stock
of SecurFone America, Inc. were exchanged for 4,500,000 shares issued and
outstanding common stock of Material Technology, Inc. As a result of the
reorganization, there were 5,000,216 shares issued and outstanding and
100,000,000 shares authorized. The amount of $36,173 was transferred from the
common stock account to the additional paid-in capital account to reflect the
par value change from $.01 to $.001 per share.

On November 13, 1997, the Company registered with the Securities and Exchange
Commission on Form S-8 (the "S-8 filing") 1,000,000 shares under the 1997 Stock
Option Plan to grant incentive stock options and non-qualified stock options to
officers and key employees. At the same time a similar registration for 250,000
shares under the 1997 Director Non-qualified Stock Option Plan was made. At
various dates the Company granted stock options under the two stock option plans
totaling 830,900 shares consisting of 300,000 shares at an option price of $1.00
per share, 130,900 shares at an option price of $2.50 per share and 400,000
shares at an option price of $0.10 per share. These options are exercisable
during 1997 and 1998. These shares were recorded as $1,227,250 selling, general
& administrative (SG&A) expense and additional paid-in capital - stock options
at the grant date in accordance with Statement of Financial Accounting Standards
NO. 123 (SFAS 123) "Accounting for Stock-Based Compensation."

On December 3, 1997, the Company issued 620,000 conditional shares of common
stock with a par value of $.001 per share registered with the S-8 filing. These
shares were issued pursuant to various employment, retainer, consulting and fee
agreements. As of December 31, 1997 all conditions of these shares had been met
and $3,100,000 was recorded as SG&A expense, and common stock and additional
paid in capital accounts at the issue date.

On January 6, 1998, the Company granted stock options under the 1997 Stock
Option Plan for 400,000 shares at an option price of $.10 per share. These
options are exercisable immediately and are recorded as $1,620,000 SG&A expense
and additional paid in capital - stock options at the grant date in accordance
with Statement of Financial Accounting Standards NO. 123 (SFAS 123) "Accounting
for Stock-Based Compensation." On February 18, 1999 the 350,000 unexercised
options were returned.

On March 19, 1998, an additional 345,000 shares were issued as a result of the
following transactions: 225,000 shares of stock issued pursuant to warrants
exercised by the individuals providing credit accommodations in connection with
letters of credit issued by the Company; 120,000 shares were the result of two
stock subscriptions in private placements.


------------------------------------------------------------------------------
                                       Page 11
<PAGE>

On May 12, 1998, 35,000 shares were issued in connection with credit
accommodations provided to the Company by investors (see Note 1).

On August 6, 1998, 50,000 shares were issued on the exercise of stock options.

On November 17, 1998, the Company issued 41,665 shares of unregistered common
stock in exchange for investment banking services and bridge funding and a cash
payment of $2,500.

On April 23, 1999, the Company granted a director 20,000 fully vested stock
options under the 1997 Stock Option Plan that are exercisable at $.125 per share
and expire April 23, 2009.

On May 11, 1999, the Company converted $50,000 debt for legal services by
issuance of 50,000 unregistered shares of common stock.

On May 12, 1999, the Company converted debt to an unrelated individual in the
amount of $25,000 by issuance of 12,500 unregistered shares of common stock.

On May 19, 1999, the Company converted $118,532 of debt including a note payable
of $115,000 due to Young Management Company by issuance of 59,266 unregistered
shares of the Company's common stock.

On June 30, 1999, the Company settled a dispute with Associated Barter Services,
Inc. ("ABS") for advertising services in the amount of $103,818 by issuance of
61,522 shares of the Company's common stock.

On June 30, 1999, the Company granted 50,000 stock options (fully vested June
30, 2000) under the 1997 Directors Stock Option Plan to a director exercisable
at $1.28 per share with an expiration date of June 30, 2009.

As of June 30, 1999, a total of 100,000,000 shares of common stock were
authorized and 6,275,169 shares were issued and outstanding.

Note 7. RELATED PARTIES

The Secretary of the Company is also a partner in the law firm that represents
the Company in its legal matters.

The accrued payroll is due to officers and directors of the Company. The expense
recognized for the quarters ended June 30, 1999 and 1998 is $67,509 and $17,499,
respectively. The expense recognized for the six months ended June 30, 1999 and
1998 is $140,211 and $46,664, respectively.

Note 8. LOSS ON SECURFONE NEW YORK

In August 1996 the Company entered into a licensing agreement with SecurFone New
York, Inc (SFNY). As part of the agreement the Company forwarded monies to SFNY
to cover various start up costs. Shortly thereafter, SFNY fell into default
under the term of the licensing agreement and ceased operations. The monies paid
by the Company to SFNY were written off as a one-time charge to income of
$48,980.

Note 9. INCOME TAXES

Income taxes are provided based on earnings reported for financial statement
purposes pursuant to the provisions of Statement of Financial Accounting
Standards No. 109 (FASB 109). The provision for income taxes differs from the
amounts currently payable because of timing differences in the recognition of
certain income and expense items for financial and tax reporting purposes.

FASB 109 uses the asset and liability method to account for income taxes which
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between tax basis and financial
reporting basis of assets and liabilities.

For the year ended December 31, 1998, the Company had net operating loss carry
forwards for federal income and state income tax purposes. These carry forwards
may provide future tax benefits. The federal net operating loss will begin to
expire in 2011, if not utilized to offset taxable income. Various state net
operating loss carry forwards will


------------------------------------------------------------------------------
                                       Page 12
<PAGE>

begin to expire earlier. Future changes in ownership, as defined by Section
382 of the Internal Revenue Code, could limit the amount of net operating
loss carry forwards used in any one year.

An allowance has been provided for by the Company that reduced the tax benefits
accrued by the Company for its net operating losses to zero. It cannot be
determined when, or if, the tax benefits derived from these losses will
materialize. Income taxes in the amounts of $0 and $819 were paid in the
quarters ended June 30, 1999 and 1998, respectively. Income taxes in the amounts
of $1,600 and $1,649 were paid in the six months ended June 30, 1999 and 1998,
respectively.

Note 10. SALE OF SUBSIDIARY (net of tax effect) EXTINGUISHMENT

On January 30, 1999 the Company executed an agreement with Teledata World
Services, Inc., a publicly traded company ("TWOS"), whereby certain prepaid
cellular assets would be sold to TWOS for cash and TWOS common stock. On
April 22, 1999, the Company executed a final agreement to sell a wholly-owned
subsidiary, SecurFone, Inc. to TWOS for cash and stock. Under the agreement
TWOS acquired all outstanding shares of SecurFone, Inc. for $498,000 in cash,
600,000 shares of unregistered TWOS common stock (subject to Rule 144) valued
at $300,000 and the option to sell the stock back to TWOS at a price of $2.50
per share effective one year from the date of the transaction if the market
price of the TWOS stock is less than $2.50 per share. As of June 30, 1999, no
value has been recorded for the option. 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. Under the agreement, the Company could continue to
offer prepaid cellular services and could establish resale and joint service
arrangements to serve selected markets. As a result of the net operating loss
carry forwards there are no income taxes.

Subsequent to the sale of certain prepaid cellular assets to TWOS and given the
B2B e-commerce opportunity presented in conjunction with the IXATA acquisition,
the Company ceased its prepaid cellular operations, effective June 30, 1999. The
net loss from operations of the ceased cellular operations is a reflection of
the historic financial performance of this business line, which the Company has
elected not to pursue further. This net loss is represented as a Restructuring
Charge under continuing operations for the current and previous periods. The
Company retains the net operating loss carry forwards from this disposed
business line.

Note 11. EXTRAORDINARY GAIN ON DEBT EXTINGUISHMENT

The extraordinary gain is a result of the settlement agreement with the
Company's former CEO to resolve all outstanding Company obligations related to
his employment with the Company in exchange for a payment of $50,000 payable not
later than April 1,1999. As a result of the net operating losses sustained by
the Company, there is no tax effect.

Note 12. COMMITMENTS AND CONTINGENCIES

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
sustained losses totaling $9,327,509 since its inception, of which $5,157,131
represents expenses associated with stock-based compensation plans as noted at
Note 6.

The continuing losses resulting from operations, and not necessarily those costs
associated with stock-based compensation plans, are an indication that the
Company may not be able to continue to operate without an additional cash
infusion. The Company has been and is currently seeking private and public
equity and bridge loans in order to finance operations. The Company has retained
business advisory firms to assist the Company in meeting its financing needs.

Paul Silverman executed an employment agreement assuming the role of Chief
Executive Officer as of November 1, 1998 and was elected to the Board of
Directors on December 11, 1998. Mr. Silverman was also granted options to
acquire 100,000 shares of the Company's stock at $0.10 per share upon execution
of the employment agreement, and qualified incentive stock options to acquire up
to 300,000 additional shares of the Company's stock based on achievement of
Company goals established by the Board of Directors. Mr. Silverman was granted
options to acquire 50,000 shares of the Company's stock at $0.28 per share under
the Company's 1997 Directors Option Plan. Total deferred compensation as of June
30, 1999 is approximately $89,000.


------------------------------------------------------------------------------
                                       Page 13
<PAGE>

Note 13. QUARTERLY INFORMATION

Following is computational information for earnings per share information
calculated under Statement of Financial Accounting Standards No. 130, Earnings
Per Share (EPS) which is effective for periods beginning after December 15,
1997.

<TABLE>
<CAPTION>
                                    QUARTER ENDED JUNE 30, 1999                 QUARTER ENDED JUNE 30, 1998
                                    ---------------------------                 ---------------------------
                            Income (Loss)       Shares       Per Share   Income (Loss)      Shares       Per Share
                             (Numerator)     (Denominator)     Amount     (Numerator)    (DENOMINATOR)     AMOUNT
<S>                         <C>              <C>             <C>         <C>             <C>             <C>
BASIC EPS
Income (loss) available
to common Stockholders           $ 495,213        6,152,764     $.08        $(663,100)        5,982,716    $(.11)

EFFECT OF DILUTIVE SECURITIES
Stock Options                                       375,642                                          0*
                                              -------------                               -------------

DILUTED EPS
Income available to
common stockholders and
assumed conversions               $543,869        6,528,406     $.08        $(663,100)        5,982,716    $(.11)

</TABLE>

     *   SFAS 128 requires the use of weighted averages for stock outstanding
           during the quarter. Although stock options issued under Company plans
           had exercise prices which were below the average market price of the
           common shares, they were not computed in calculating diluted earnings
           per share because SFAS 128 does not include stock dilutions that
           would reduce per share losses. If computed, outstanding stock options
           would have increased outstanding shares by 536,535.

As of June 30, 1999 1,350,900 stock options were issued, 700,900 were vested,
500,000 had been forfeited and 50,000 had been exercised.

Note 14. SUBSEQUENT EVENTS

Subsequent to the sale of certain prepaid cellular assets to TWOS the Company
effectively discontinued its prepaid cellular operations. See Note 10 - Sale of
Subsidiary (net of tax effect) Extinguishment.

On May 7, 1999, the Company executed an agreement to acquire all outstanding
common stock of IXATA.COM, Inc., a privately held provider of Internet-based
e-commerce services targeting the travel industry, in exchange for 4,500,000
shares of the Company. The acquisition was finalized on July 1, 1999. As of June
30, 1999 IXATA's financial statement showed the following results for the period
February 1 through June 30, 1999: revenue $901, net loss $510,335.

The Company has agreed to pay Global One, Inc. (Global) 600,000 shares of common
stock for brokering services as a part of the purchase of IXATA.COM. Global is
an international business corporation in Nevis, British Virgin Islands. The
Company intends to issue the shares to Global in the first quarter of 2000.

In October 1999 the Company agreed to issue 50,000 unregistered shares of the
Company's common stock to eliminate total debts to Kohrman Jackson & Krantz
P.L.L. ("KJK"), the Company's legal counsel, in the amount of $50,000. The
Company issued the shares to KJK in the fourth quarter of 1999.

On August 18, 1999, an individual exercised options under the Directors Option
Plan for 9,500 shares of common stock.

In November of 1999, the Company offered equity investments to private parties.
As of January 1, 2000, the Company had sold 1,177,003 shares of its unregistered
common stock for $0.85 a share in connection with the offering. Proceeds to the
Company were $ 941,602 after the deduction of Scott & Stringfellow, Inc.'s
placement agent fee of $0.05 per share. As of January 1, 2000, 1,053,473 shares
were issued. The purchasers in the offering


-------------------------------------------------------------------------------
                                      Page 14
<PAGE>

were granted the right in certain
instances to include their shares in future offerings of registered stock by the
Company.

Effective January 31, 2000, the Company changed its name to The IXATA Group,
Inc. from SecurFone America, Inc.

--------------------------------------------------------------------------------
                                      Page 15

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

     The following describes certain factors which produced changes in the
results of operations of The IXATA Group, Inc. (the "Company") during the
three and six months ended June 30, 1999 and as compared with the three and
six months ended June 30, 1998 as indicated in the Company's Consolidated
Financial Statements. The following should be read in conjunction with the
Consolidated Financial Statements and related notes. Historical results of
operations are not necessarily indicative of results for any future period.
All material inter-company transactions have been eliminated in the results
presented in this Quarterly Report.

     Certain matters discussed in this Quarterly Report constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act") and involve risks and
uncertainties. These forward-looking statements relate to, among other
things, expectations of the business environment in which the Company
operates, projections of future performance, perceived opportunities in the
market and statements regarding the Company's mission and vision. The
Company's actual results, performance or achievements may differ
significantly from the results, performance, or achievements expressed or
implied in these forward-looking statements. See "-- Forward-Looking
Statements."

OVERVIEW

THE COMPANY

     The Company was organized to develop and market prepaid wireless
products and services in various markets throughout the United States. In
late 1998, the Company established a new strategic objective of refocusing
the Company's mission to pursue new complimentary Internet-related and
e-commerce opportunities. In 1999, the Company actively implemented its new
mission by, among other actions, selling a portion of the Company's business
no longer considered essential for the new strategy and purchasing a company
whose business thrust is in line with the new strategy. See "The Company's
Business Case for New Electronic Commerce and Internet Business Directions."

     Throughout 1997 and 1998, the Company developed and marketed prepaid
wireless products and services in various markets throughout the United
States. By late 1998, the Company had substantially completed development of
all major aspects of its prepaid wireless network systems, and previously
planned to implement the marketing and sales programs necessary to create a
sustainable revenue base. The Company invested significant capital and effort
to develop its network, software, routing and carrier interface technology,
for the hiring and development of an experienced management team, and the
initial introduction of services to the roll-out markets. The products and
services that the Company developed during its start-up phase were initially
introduced to a limited number of U.S. cities to fully test the network,
administrative, engineering and marketing infrastructure prior to full-scale
roll-out. To effectively manage the Company's growth and maintain quality
controls over its services and network, the Company needed to expand its
internal management, technical resources, accounting and other administrative
support systems, all of which required additional investment. In the third
quarter 1998, the Company developed a business plan showing the investment
required to develop a full-scale program for commercial product launch and
broad marketing and distribution program in 1999. Significant additional
funding was required to support these activities.

     On January 30, 1999, 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- ("BTM") product and selected
distribution channels. The asset sale improved the Company's balance


-----------------------------------------------------------------------------
                                      Page 16
<PAGE>

sheet and was consistent with the Company's new business objective of
pursuing opportunities in the Internet and electronic commerce markets.

     On May 7, 1999, the Company executed an agreement to acquire all
outstanding common stock of IXATA, Inc. ("IXATA.COM"), a privately held
provider of Internet-based information and electronic commerce services
targeting the travel industry. The acquisition was finalized on July 1, 1999
and is consistent with the Company's new business objectives. The Company is
now operating IXATA.COM as a wholly-owned subsidiary and plans to
significantly expand IXATA.COM's operations to offer new enhanced information
services in the travel market, targeting existing and new corporate clients.

     By closing the IXATA.COM acquisition, the Company has established itself
as a provider of Internet-based, electronic commerce services in rapidly
growing market for travel information services, serving an expanding base of
more than twenty major Fortune 500 firms and other organizations. IXATA.COM's
principal service, RFP Express, integrates a user-friendly, Internet-based
interface with a sophisticated data-warehousing system, interactive telephone
and fax technology to deliver automated solutions for creating, sending,
receiving and managing the preferred lodging programs request for proposal
process in the hospitality services market ("RFP process"), typically
involving hundreds or, in some cases, thousands of properties worldwide. By
automating the users' RFP business process, and also providing user-friendly
Internet access to a sophisticated data warehousing system, RFP Express,
provides dramatic cost savings to users, typically 70% or more compared to
costs for manual processes. Pricing for RFP Express includes an annual
subscription fee and transaction fees for each RFP handled. The
Internet-based, electronic commerce and operational platforms developed to
support the RFP Express offering can be used to address similar needs in
other vertical markets.

     Subsequent to the sale of the prepaid cellular assets to Teledata, the
Company had planned to continue to offer prepaid wireless services, focusing
on higher margin opportunities, primarily through resale. Given the
opportunities available through IXATA.COM and the associated resources
required, the Company has discontinued its prepaid cellular operations. The
discontinuing of operations was consistent with the Company's planned
strategy of refocusing its business objectives to pursue new e-commerce and
Internet-based business opportunities to create significant shareholder value.

     Effective January 31, 2000, the Company changed its name to The IXATA
Group, Inc. from SecurFone America, Inc. The Company believed it was in the
best interest of the Company to change its corporate name to "The IXATA
Group, Inc." to capitalize upon the success of the Company's IXATA.COM
subsidiary and to establish an image that is consistent with the Company's
focus on Internet-related and e-commerce solutions. The Company believes that
the name change will act as a critical facilitator in the expansion of its
business objective to pursue new opportunities in Internet-based business
offerings and e-commerce markets.

     The Company's principal executive offices are located at 8080 Dagget
Street, Suite 220, San Diego, California 92111, and its telephone number is
(800) 473-6748.

THE COMPANY'S BUSINESS CASE FOR NEW ELECTRONIC COMMERCE AND INTERNET BUSINESS
DIRECTIONS

     Since inception, the Company has primarily pursued opportunities in the
prepaid wireless services market. The Company developed several unique
products to address the prepaid wireless services market and had achieved
some success in 1998. However, the emergence of new competition, industry
price reductions and other margin pressures in the prepaid wireless services
market suggested that significant additional investment would be required to
achieve the business scale required to create substantial shareholder value.

     Recognizing the explosive growth of the Internet, and the long term
prospects for integrating new wireless and Internet-based services, in late
1998 the Company established a new business objective to pursue new
opportunities in the Internet and business-to-business ("B2B") electronic
commerce markets. In 1998, the consumer segment of electronic commerce
consumer retailing revenues totaled $7.8 billion, with business-to-business
e-commerce service revenues estimated at $43 billion, according to a recent
study by Forrester Research, a leading information industry consulting firm.
By the year 2003, business-to-business e-commerce is expected to increase to
$1.3 trillion,


-----------------------------------------------------------------------------
                                    Page 17
<PAGE>

representing about 9% of all projected US trade in the year 2003. The
recently-closed acquisition of IXATA.COM is the Company's initial step in
entering the market for business-to-business, Internet-based electronic
commerce services, which management believes is the optimum strategy to
deliver substantial value to the Company's shareholders.

     Another key element in the Company's new growth strategy is to focus on
next generation, "pro-active" B2B electronic commerce solutions which employ
e-commerce solutions to address labor intensive processes, rather than to
solely displace paper-based solutions. Management believes such pro-active
e-commerce solutions, which go well beyond today's basic electronic
cataloging, web portals and web-based ordering services, will change users'
business processes, create significant operating efficiencies and
dramatically reduce users' costs. More importantly, management believes such
pro-active e-commerce services will play a key role in the future market for
business-to-business e-commerce services described above. IXATA.COM's RFP
Express Service represents a pro-active e-commerce service which, in
management's view, is ideally positioned to meet the needs of the travel
services market. IXATA.COM's expanding corporate user base of more than 20
major firms, demonstrate strong, growing market acceptance for the Company's
e-commerce services. Since acquiring the new IXATA.COM subsidiary, the total
base of major corporate users has increased to more than 70 firms as of
January 2000, further attesting to the growing acceptance of the Company's
RFP Express service.

     The Company is now expanding its management team and plans to secure new
financing to support both expansion of the IXATA.COM revenue base, as well as
development of new enhancements and related Internet-based services targeting
the travel and hospitality sectors.

     While the outlook for Internet-based, electronic commerce services is
impressive, there can be no assurances that the Company will secure the
additional investment capital needed to succeed in this highly competitive,
rapidly changing and technology driven market, nor are there any assurances
that the Company's initial acquisition of IXATA.COM will be successful.
Investors should carefully review the risk factors described in this document
and other documents filed by the Company with the Securities and Exchange
Commission. See "Management Discussion and Analysis of Financial Condition
and Results of Operations - Forward Looking Statements."

ADDITIONAL ISSUANCE OF SECURITIES

     For rendering brokering services and as a part of the transaction to
purchase IXATA.COM, the Company agreed to pay Global One, Inc. ("Global")
600,000 shares of common stock of the Company. Global is an international
business corporation in Nevis, British Virgin Islands. The Company intends to
issue the shares to Global in the first quarter of 2000.

     In 1999, agreement was secured from Kohrman Jackson & Krantz P.L.L.
("KJK"), the Company's legal counsel, to convert existing debt to
unregistered shares of the Company's common stock. On October 19, 1999, KJK
agreed to receive 50,000 unregistered shares of the Company's common stock to
eliminate total debts of $50,000. The Company issued the shares to KJK in the
fourth quarter of 1999.

     In November of 1999, the Company offered equity investments to private
parties in an offering exempt from registration pursuant to Regulation D of
the Securities Act of 1933. As of January 21, 2000, the Company had sold
1,344,651 shares of its unregistered common stock for $0.85 a share in
connection with the offering. Proceeds to the Company were $1,075,721 after
the deduction of Scott & Stringfellow, Inc.'s ("S&S") placement agent fee of
$0.05 per share. The purchasers in the offering were granted the right in
certain instances to include their shares in future offerings of registered
stock by the Company.

     For rendering investment banking services, the Company agreed to issue
643,553 warrants to S&S for the price of $0.01 per warrant. These warrants
expire in October of 2004. The exercise price of the warrants is $1.687 per
warrant. The warrants will be exercisable after the earlier of a) one year
from November 2, 1999, b) immediately upon change of control of the Company,
or c) upon closing of a firmly underwritten public offering of the Company's
equity securities.


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                                    Page 18
<PAGE>

RESULTS OF OPERATIONS:

     The Company, in the second quarter of 1999, sold the Company's
Buy-The-Minute-TM- ("BTM") product and the Company discontinued operation of the
Company's SFA Local Network Solution ("SFN"). As a result of these
transactions, certain accounts in the prior-year financial statements have
been reclassified for comparative purposes to conform with the presentation
in the current-year financial statements. Therefore, detailed comparison of
financial results are not meaningful.

SECOND QUARTER OF 1999 COMPARED TO SECOND QUARTER OF 1998

REVENUES

     The Company only began full-scale operations in the first quarter of
1998. The Company discontinued operation of the Company's SFN solution
effective as of June 30, 1999 and sold the Company's BTM product line in
April of 1999. Accordingly, the Company has recognized no revenue from
continuing operations in either the second quarter of 1999 or the second
quarter of 1998.

COST OF GOODS SOLD

     The Company had no continuing operations effectively as of June 30,
1999. Accordingly, the Company has recognized no Cost of Goods Sold from
continuing operations in either the second quarter of 1999 or the second
quarter of 1998.

 GROSS PROFIT/MARGIN

     The Company had no continuing operations effectively as of June 30,
1999. Accordingly, the Company has recognized no Gross Profit/Margin from
continuing operations in either the second quarter of 1999 or the second
quarter of 1998.

OPERATING EXPENSES

     Selling, general and administrative expenses from continuing operations
increase to $69,724 in the second quarter of 1999 from $0 in the second
quarter of 1998. This increase was due to the declaration of discontinued
operation effective June 30, 1999 resulting in operating expenses from
continuing operations in the second quarter of 1999 for expenses incurred
from ongoing operations related to the general management of the Company as
the Company's direction was being refocused. See "The Company's Business Case
for New Electronic Commerce and Internet Business Directions."

     The Company previously engaged in the sale of prepaid cellular phone
services. The Company provided these services in some markets and, in other
markets, licensed the Company's resources to unrelated parties. In a limited
number of instances, certain distribution rights were offered in various
markets for a license fee. As of June 30, 1999, the Company effectively
ceased these operations and restructured the basic company focus. Net loss
for restructured operations decreased to $143,932 in the second quarter of
1999 from $661,451 in the second quarter of 1998. This was due to the
Company's effort to control its financial exposure in a business that was
under increasing revenue and profitability pressure and the Company limiting
its operations as it transitioned to its new B2B e-commerce focus.

     Loss from continued operations in the second quarter of 1999 decreased
to $213,206 from $661,451 in the second quarter of 1998 due to the reduction
in the restructuring charge associated with the of the cellular operations.

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                                    Page 19
<PAGE>

OTHER EXPENSES

     The Company recorded a gain on the sale of a product line of $708,419 in
the second quarter of 1999. The Company did not sell any assets in the second
quarter of 1998. The Company does not foresee selling any additional assets
in the near future.

FIRST HALF OF 1999 COMPARED TO FIRST HALF OF 1998

REVENUES

     The Company only began full-scale operations in the first quarter of
1998, and discontinued these operations of the Company's SFN solution
effective as of June 30, 1999 and sold of the Company's BTM product line in
April of 1999. Accordingly, the Company has recognized no revenue from
continuing operations in either the first half of 1999 or the first half of
1998.

COST OF GOODS SOLD

     The Company had no continuing operations effectively as of June 30,
1999. Accordingly, the Company has recognized no Cost of Goods Sold from
continuing operations in either the first half of 1999 or the first half of
1998.

 GROSS PROFIT/MARGIN

     The Company had no continuing operations effectively as of June 30,
1999. Accordingly, the Company has recognized no Gross Profit/Margin from
continuing operations in either the first half of 1999 or the first half of
1998.

OPERATING EXPENSES

     Selling, general and administrative expenses from continuing operations
increase to $141,976 in first half of 1999 from $0 in the first half of 1998.
This increase was due to the declaration of discontinued operation effective
June 30, 1999 resulting in operating expenses from continuing operations in
the first half of 1999 for expenses incurred from ongoing operations related
to the general management of the Company as the Company's direction was being
refocused. See "The Company's Business Case for New Electronic Commerce and
Internet Business Directions."

     The Company previously engaged in the sale of prepaid cellular phone
services. The Company provided these services in some markets and, in other
markets, licensed the Company's resources to unrelated parties. In a limited
number of instances, certain distribution rights were offered in various
markets for a license fee. As of June 30, 1999, the Company effectively
ceased these operations and restructured the basic company focus. Net loss
for restructured operations decreased to $505,832 in the first half of 1999
from $2,814,331 in the first half of 1998. This was due to the Company's
effort to control its financial exposure in a business that was under
increasing revenue and profitability pressure and the Company limiting its
operations as it transitioned to its new B2B e-commerce focus.

     Loss from continued operations in the first half of 1999 decreased to
$647,808 from $2,814,331 in the first half of 1998 due to the reduction in
the restructuring charge associated with the of the cellular operations.

OTHER EXPENSES

     The Company recorded a gain on the sale of a product line of $708,419 in
the first half of 1999. The Company did not sell any assets in the first half
of 1998. The Company does not foresee selling any additional assets in the
near future.

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                                    Page 20
<PAGE>

     The Company recorded an extraordinary gain on debt of $43,451 in the
first half of 1999. This was related to a settlement to the Company's former
CEO to resolve all outstanding Company obligations related to his employment.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has incurred significant operating and net losses as a
result of the development and operation of its service platform and
supporting networks. The Company expected that such losses would continue to
increase as the Company focused on the development, construction and
expansion of its service platform and underlying networks and expands its
customer base. Cash provided by operations would not be sufficient to fund
the expansion of the product offerings and resultant subscriber base. The
Company is continually reviewing various sources of additional financing to
fund its growth. As of June 30, 1999, the Company had received advances in
the amount of $1,578,250 from private investors.

     The Company was required by underlying wireless carriers to post
irrevocable letters of credit to secure the purchase of airtime. Prompt
payment history, as well as overall financial condition will also effect each
carrier's decision to stabilize, increase or eliminate these financial
guarantees. The Company has an agreement with two investors that may obtain
letters of credit of up to $1.0 million that are secured by their personal
assets (the "LC Agreement"). These investors have renewed the LC Agreement
through April 1, 1999. As compensation for their initial agreement to provide
letters of credit, the Company issued warrants to these investors to purchase
a total of 225,000 shares of common stock (the "LC Warrants"). In connection
with the renewal of the LC Agreement, the Company issued a total of 35,000
additional shares of common stock to these investors. An amount of $35,000
was recorded as interest expense in the first quarter of 1999 for the
issuance of the shares. At June 30, 1999, these Letters of Credit were no
longer in effect and are not required because of the Company's sale of the
BTM assets to Teledata.

     At June 30, 1999, the Company had cash and cash equivalents of $7,818.
In addition, the Company had accounts receivable totaling $4,501 from the
sale of the Company's switch-based debit cellular product. Net cash used by
operating activities was $541,344 in the first half of 1999 compared to
$925,507 in the first half of 1998. Net cash provided by investing activities
in the first half of 1999 was $322,257, consisting of $472,257 provided by
the sale of a subsidiary and related assets, $150,000 used for investment in
subsidiary, and $157 used to purchase equipment as compared with the use of
$12,457 to purchase equipment in the first half of 1998. Net cash provided by
financing activities in the first half of 1999 totaled $225,530 which
consisted primarily of $416,221 in proceeds from notes payable to the Company
from private investors as compared with $966,580 in the first half of 1998
which consisted primarily of proceeds from advances payable of $827,000.

     On February 4, 1999, the Company executed a Purchase Agreement with All
Points Telecom, Inc. ("APT"), a privately-held telecommunications firm,
whereby APT would acquire a controlling interest in the Company through the
purchase of 4.5 million shares of the Company's common stock from Montpilier
Holdings, Inc. ("Montpilier"). Montpilier is the principal stockholder of the
Company and is owned indirectly by Michael M. Grand, a Director of the
Company. Under the terms of the agreement, APT would also loan up to $1.8
million at the time of closing to the Company. The proceeds of this loan
would be used to repay existing debt and provide additional working capital
to meet the Company's growth needs. On April 12, 1999, the Company rejected a
modified APT proposal, the Company and APT terminated discussions and the
Company elected to pursue other alternatives.

     On October 12, 1999, the Company entered into a relationship with Scott
& Stringfellow, Inc., an investment banker, to act as the exclusive financial
advisor to the Company, in connection with the exploration of potential
alternative strategic transactions, including without limitation one or more
private equity offerings, mergers and acquisitions and a public equity
offering. See "-Overview - Additional Issuances of Securities."

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                                    Page 21
<PAGE>

YEAR 2000

     Year 2000 problems did not impact the Company's internal operations or
cause it to incur material costs to modify its systems. However, unforeseen
Year 2000 problems may still cause significant unanticipated expenses.
Further, the Company's key vendors or suppliers may suffer from undiscovered
Year 2000 problems, which could harm the Company's business and results of
operations.

RELATED PARTY TRANSACTIONS

     On February 1, 1999, IXATA.COM and Tel.n.Form, Inc. ("Tel.n.Form")
entered into a management and support agreement whereby Tel.n.Form agreed to
provide selected consulting services to support IXATA.COM's business
development through December 31, 1999. The agreement also provided that
IXATA.COM would reimburse Tel.n.Form for use of certain shared expenses such
as office space and computer facilities. After completion of the acquisition
of IXATA.COM by the Company on July 1, 1999, the Company continued the
Tel.n.Form agreement to minimize any potential disruption of IXATA.COM's
operations and support the transition to the Company. For support services
provided by Tel.n.Form, the Company incurs total costs of approximately
$23,840 per month. The Company believes costs incurred under the agreement
are reasonable and no more than it would incur under an agreement with an
unaffiliated third party. The support services agreement expired on December
31, 1999 and to minimize any disruption of operations, the Company continued
selected support services, such as office space and shared computer
facilities, as needed, on a month-by-month basis consistent with the
agreement. Since the Company has added additional IXATA.COM management
personnel, expanded the IXATA.COM staff and has now fully incorporated
IXATA.COM into the Company, it no longer requires the services provided by
Tel.n.Form. The Company has notified Tel.n.Form that the agreement will be
terminated in its entirety as of March 31, 2000.

     The majority owner of Tel.n.Form is the Gluckman Family Trust, which is
a significant shareholder of the Company. Fred Gluckman, who currently serves
as Executive Vice President - Technology and Automation of IXATA.COM, and as
a Director of the Company, is the Chairman of the Board of Tel.n.Form. Mr.
Gluckman also serves as a trustee of the Gluckman Family Trust. Vera Ellen
Andreoli is the Trustee of the Andreoli Family Trust, which is a significant
shareholder of the Company. Mrs. Andreoli also provides consulting services
to Tel.n.Form, and Mrs. Andreoli's husband is a significant owner of
Tel.n.Form and a Tel.n.Form employee and provided selected consulting
services to IXATA.COM under the management services agreement.

FORWARD-LOOKING STATEMENTS

     Statements that are not historical facts, including statements about the
Company's confidence in its prospects and strategies and its expectations
about expansion into new markets, growth in existing markets, and the
Company's ability to attract new sources of financing, are forward-looking
statements that involve risks and uncertainties. These risks and
uncertainties include, but are not limited to:

-    THE COMPANY HAS A SHORT OPERATING HISTORY UPON WHICH TO BASE AN INVESTMENT
     DECISION. The Company established a new strategic objective of refocusing
     the Company's mission to pursue Internet-related and e-commerce
     opportunities in the travel and hospitality service markets in late 1998.
     As a result, its business plan is currently in the early stage and,
     accordingly, the Company has a limited operating history on which to base
     an evaluation of its business and prospects. The Company's prospects must
     be considered in light of the risks, expenses and difficulties frequently
     encountered by companies in their early stage of development. To address
     these risks, the Company must, among other things, attract a number of
     major corporate clients/customers and strategic alliance partners,
     implement and successfully execute its marketing and sales strategy, and
     successfully recruit and motivate qualified sales and technical personnel.
     There can be no assurance that the Company will be successful in addressing
     such risks, and the failure to do so could have a material adverse effect
     on the Company. The likelihood of success of the Company must be considered
     in light of the problems, expenses, complications and delays frequently
     encountered in connection with the development of an early stage


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                                    Page 22
<PAGE>

     business. It is impossible to predict the degree of success the Company
     will have in achieving its objectives.

-    THE COMPANY REQUIRES SIGNIFICANT ADDITIONAL CAPITAL, WHICH IT MAY NOT BE
     ABLE TO OBTAIN. As the Company continues to implement its business plan,
     present sources of financing will not be adequate to support the Company's
     increased cash needs. Furthermore, the Company's entry into new Internet
     and electronic commerce business areas will create additional demands for
     investment capital. The Company may not be able to obtain future equity or
     debt financing on satisfactory terms or at all. If the Company fails to
     obtain necessary short-term financing, it will not be able to continue
     operations. Long-term liquidity will depend on the Company's ability to
     obtain long-term financing and attain profitable operations. The Company's
     auditors issued an opinion with its most recent audit of the Company's
     financial statements raising doubt about the Company's ability to continue
     as a going concern if it does not obtain additional debt or equity
     financing.

-    IF THE COMPANY IS UNABLE TO SUCCESSFULLY INTEGRATE IXATA.COM, ITS FINANCIAL
     RESULTS WILL SUFFER. The Company completed its acquisition of IXATA.COM on
     July 1, 1999. Its future profitability will depend heavily on its ability
     to integrate IXATA.COM. Failure to successfully integrate the companies may
     cause significant operating inefficiencies and adversely affect
     profitability. To successfully integrate the companies, the Company must,
     among other things, install and standardize adequate operational, financial
     and control systems.

     Although the Company has no definitive plans to acquire any business in the
     near future, if it does acquire additional companies, it will face business
     integration risks similar to those described above. In addition, during the
     beginning stage of development and operation, the Company may encounter
     expenses and difficulties that it may not expect or are beyond its control.
     As a result, it may not be able to achieve or maintain profitability.

-    THE COMPANY'S FAILURE TO PROTECT OR MAINTAIN ITS INTELLECTUAL PROPERTY
     RIGHTS COULD PLACE IT AT A COMPETITIVE DISADVANTAGE AND RESULT IN LOSS OF
     REVENUE AND HIGHER EXPENSES. The Company's performance and ability to
     compete are dependent to a significant degree on its proprietary electronic
     commerce system and services. The steps the Company has taken to protect
     its proprietary intellectual property rights may not prevent or deter
     someone else from using or claiming rights to its intellectual property.
     Third party infringement or misappropriation of trade secrets, copyrights,
     trademarks or other proprietary information could seriously harm the
     Company's business. The Company also cannot assure that it will be able to
     prevent the unauthorized disclosure or use of its proprietary knowledge,
     practices and procedures if its senior managers or other key personnel
     leave it. In addition, although the Company believes that its proprietary
     rights do not infringe on the intellectual property rights of others, other
     parties may claim that it has violated their intellectual property rights.
     These claims, even if not true, could result in significant legal and other
     costs and may distract management.

-    THE COMPANY'S BUSINESS PROSPECTS DEPEND ON DEMAND FOR AND MARKET ACCEPTANCE
     OF THE INTERNET. The Company is currently dependent on the Internet as an
     access and transmission medium to provide its services. Although the
     Company believes that the acceptability and usability of the Internet will
     increase over time, any increase in the rates charged by Internet service
     providers resulting in a decreased usage of the Internet or decreased use
     of the Internet for electronic commerce transactions, would have a
     materially adverse effect on the Company's operating margins. Failure to
     promote Internet access as the preferred means of accessing the Company's
     service could also have a materially adverse effect on the Company,
     including the possibility that the Company may need to significantly
     curtail or cease its Internet based e-commerce operations or to develop its
     own capabilities at a cost in excess of the Company's ability to fund such
     undertakings.

-    IF THE COMPANY'S MARKET DOES NOT GROW AS EXPECTED, ITS REVENUES WILL BE
     BELOW ITS EXPECTATIONS AND ITS BUSINESS AND FINANCIAL RESULTS WILL SUFFER.
     The Company is engaging in a developing business with an unproven market.
     Accordingly, it cannot accurately estimate the size of its market or the
     potential demand for its services. If its customer base does not expand or
     if there is not widespread acceptance of its products and services, its
     business and prospects will be harmed. The Company believes that its
     potential to grow and increase its market acceptance depends principally on
     the following factors, some of which are beyond its control:

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<PAGE>

         (a) the effectiveness of its marketing strategy and efforts;
         (b) its product and service quality;
         (c) its ability to provide timely, effective customer support;
         (d) its distribution and pricing strategies as compared to its
         competitors;
         (e) its industry reputation; and
         (f) general economic conditions.

-    ANY FAILURE OF THE COMPANY'S INTERNET AND E-COMMERCE INFRASTRUCTURE COULD
     LEAD TO SIGNIFICANT COSTS AND DISRUPTIONS WHICH COULD REDUCE REVENUES AND
     HARM BUSINESS AND FINANCIAL RESULTS. The Company's success, in particular
     its ability to automate the RFP process successfully, largely depends on
     the efficient and uninterrupted operation of its computer and
     communications hardware and software systems. The Company's systems and
     operations are vulnerable to damage or interruption from fire, flood, power
     loss, telecommunications failure, break-ins, earthquake and similar events.
     The Company presently has very limited redundant systems. It does not have
     a formal disaster recovery plan and carries no business interruption
     insurance to compensate it for losses that may occur. Temporary or
     permanent loss of data or systems through casualty or operating malfunction
     could have a materially adverse effect on the Company's business.

-    THE COMPANY COULD LOSE CUSTOMERS AND EXPOSE ITSELF TO LIABILITY IF BREACHES
     OF ITS NETWORK SECURITY DISRUPT SERVICE TO ITS CUSTOMERS OR JEOPARDIZE THE
     SECURITY OF CONFIDENTIAL INFORMATION STORED IN ITS COMPUTER SYSTEMS.
     Despite the implementation of network security measures, the Company's
     network infrastructure is vulnerable to computer viruses, break-ins and
     similar disruptive problems caused by its customers or Internet users. Any
     of these acts could lead to interruptions, delays or cessation in service
     to the Company's customers and subscribers. Furthermore, such inappropriate
     use of the network by third parties could also potentially jeopardize the
     security of confidential information stored in the computer systems and the
     Company's customers' computer systems, which may result in liability to
     existing customers and may also deter potential customers. Any security
     measures the Company implements may be circumvented in the future. The
     costs and resources required to eliminate computer viruses and alleviate
     other security problems may result in interruptions or delays to the
     Company's customers that could cause harm to the Company's reputation as
     well as its business and financial results.

-    RAPID GROWTH IN THE COMPANY'S BUSINESS COULD STRAIN ITS RESOURCES AND HARM
     ITS BUSINESS AND FINANCIAL results. The planned expansion of the Company's
     operations will place a significant strain on its management, financial
     controls, operations systems, personnel and other resources. The Company
     expects that its customers increasingly will demand additional information,
     reports and services related to the services and products the Company
     currently provides. If the Company is successful in implementing its
     marketing strategy, it also expects the demands on its network
     infrastructure and technical support resources to grow rapidly, and it may
     experience difficulties responding to customer demand for its services and
     providing technical support in accordance with its customers' expectations.
     The Company may not be able to keep pace with any growth, successfully
     implement and maintain its operational and financial systems or
     successfully obtain, integrate and utilize the employees, facilities,
     third-party vendors and equipment, or management, operational and financial
     resources necessary to manage a developing and expanding business in an
     evolving industry. If the Company is unable to manage growth effectively,
     it may lose customers or fail to attract new customers and its business and
     financial results will suffer.

-    THE COMPANY MAY NOT BE ABLE TO COMPETE IN ITS MARKET SINCE THIS MARKET IS
     HIGHLY COMPETITIVE. The Internet-based electronic commerce market has
     become increasingly competitive due to the entry of large, well-financed
     service providers into the market. Other potential competitors in the
     market for Internet-based electronic commerce services for the travel and
     hospitality industry may include companies with substantially greater
     financial and marketing resources than those of the Company. No assurance
     can be given that competitors possessing greater financial resources than
     the Company will not be able to develop a product which is more appealing
     or offer similar products at lower prices than those of the Company. The
     Company may not be able to operate successfully in this competitive
     environment. Direct competitors today include JBH and Lanyon, among others
     seeking to enter the market for e-commerce services targeting the travel
     and hospitality sectors.


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<PAGE>

     Other potential competitors, such as Ariba, Inc., have existing,
     well-established e-commerce platforms and have also indicated an interest
     in pursuing IXATA.COM's target market. While to date the market reaction
     to the Company's service has been positive vis-a-vis competitive services,
     there is no assurance this will continue in the future.

-    THE COMPANY DEPENDS ON THE SERVICES OF SENIOR MANAGEMENT AND OTHER KEY
     PERSONNEL AND THE ABILITY TO HIRE, TRAIN AND RETAIN SKILLED EMPLOYEES. The
     success of the Company will be dependent on the skill and experience of
     certain key employees. The Company believes that the loss of Paul B.
     Silverman, CEO, or Andrew H. Kent, CFO, Robert Steiner, President and
     Vice-President - Marketing of IXATA.COM, or Fred Gluckman Vice-President
     -Technology of IXATA.COM, could disrupt or delay the Company's business or
     would otherwise have a material adverse effect on the Company's business.
     The Company's future success also depends on its ability to identify,
     attract, hire, retain and motivate other well qualified managerial, sales
     and marketing personnel. There can be no assurance that these professionals
     will be available in the market or that the Company will be able to meet
     their compensation requirements.

-    RISKS ASSOCIATED WITH OPERATING IN INTERNATIONAL MARKETS COULD RESTRICT THE
     COMPANY'S ABILITY TO EXPAND GLOBALLY AND HARM ITS BUSINESS AND PROSPECTS.
     The Company markets and sells its services and products in the United
     States and internationally. The Company's failure to manage its
     international operations effectively could limit the future growth of its
     business. There are certain risks inherent in conducting the Company's
     business internationally, such as:

         (a)  changes in international regulatory requirements could restrict
              the Company's ability to deliver services to its international
              customers;
         (b)  differing technology standards across countries that may impede
              the Company's ability to integrate its product offerings across
              international borders;
         (c)  difficulties collecting accounts receivable in foreign
              jurisdictions;
         (d)  political and economic instability could lead to appropriation of
              the Company's physical assets, its ability to deliver its services
              to customers and harm its financial results;
         (e)  protectionist laws and business practices favoring local
              competitors; and
         (f)  potentially adverse tax consequences due to unfavorable changes in
              tax laws.

-    GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD LIMIT THE COMPANY'S
     BUSINESS OR SLOW ITS GROWTH. Although Internet-based electronic commerce is
     not currently subject to government regulation, it is under increased
     scrutiny by regulatory agencies and may undergo rapid and drastic
     regulatory changes. There can be no assurances that one or more services
     currently offered by the Company will not be negatively impacted by
     newly-created or interpreted regulations.

-    UNDISCOVERED YEAR 2000 COMPUTER COMPLICATIONS COULD DISRUPT THE COMPANY'S
     OPERATIONS AND HARM ITS BUSINESS. Although Year 2000 problems did not
     materially impact internal operations or cause the Company to incur
     material costs to modify systems, unforeseen Year 2000 problems may still
     cause significant unanticipated expenses. Further, key vendors or suppliers
     may suffer from undiscovered Year 2000 problems, which could harm the
     Company's business and results of operations.

-    THE COMPANY'S OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS WHICH MAY
     CAUSE VOLATILITY OR A DECLINE IN THE PRICE OF ITS COMMON STOCK. The Company
     may experience significant fluctuations in its future quarterly operating
     results due to a variety of factors, many of which are outside the
     Company's control. Such fluctuations may cause the price of its common
     stock to fall. Factors that may adversely affect the Company's quarterly
     operating results include, without limitation:

         (a)  the Company's ability to retain existing customers, attract new
              customers at a steady rate and maintain customer satisfaction;
         (b)  the mix of products and services sold by the Company;
         (c)  the announcement or introduction of new products and services by
              the Company and its competitors;
         (d) price competition in the industry;


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<PAGE>

         (e) the amount and timing of operating costs and capital expenditures
             relating to any expansion of the Company's business, operations and
             infrastructure;
         (f) governmental regulation; and
         (g) general economic conditions and economic conditions specific to the
             travel and hospitality industry.

     Further, stock prices and trading volumes for many Internet companies
     fluctuate widely for a number of reasons, including some reasons which may
     be unrelated to their businesses or results of operations. This market
     volatility, as well as general domestic or international economic, market
     and political conditions, could materially adversely affect the price of
     the Company's stock without regard to the Company's operating performance.
     In addition, the Company's operating results may be below the expectations
     of public market analysts and investors. If this were to occur, the market
     price of the stock would likely significantly decrease.

-    THE COMPANY'S EXECUTIVE OFFICERS, DIRECTORS, AND PARTIES RELATED TO THEM,
     IN THE AGGREGATE, WILL CONTROL 53% OF THE COMPANY'S COMMON STOCK AND MAY
     HAVE THE ABILITY TO CONTROL MATTERS REQUIRING STOCKHOLDER APPROVAL. The
     Company's executive officers, directors and parties related to them own a
     large enough stake in the Company to determine matters presented to
     stockholders, the approval of significant corporate transactions, such as
     any merger, consolidation or sale of all or substantially all of the
     Company's assets, and the control of the management and affairs of the
     Company. In addition, certain executive officers, directors and other
     shareholders, representing 67% of the Company's outstanding common stock,
     have entered into a Voting Agreement in which the parties agree to vote
     their shares for certain directors. As a result, these stockholders may
     have the ability to control the election and removal of directors.
     Accordingly, such concentration of ownership may have the effect of
     delaying, deferring or preventing a change in control of the Company,
     impede a merger, consolidation, takeover or other business combination
     involving the Company or discourage a potential acquirer from making a
     tender offer or otherwise attempting to obtain control of the Company,
     which in turn could have an adverse effect on the market price of the
     Company's common stock.

-    THE COMPANY'S COMMON STOCK MAY BE DELISTED FROM THE NASDAQ OVER-THE-COUNTER
     BULLETIN BOARD SERVICE. Because of recent changes in the Nasdaq listing
     rules, the Company's common stock could be delisted from trading on the
     Nasdaq Over-the-Counter Bulletin Board Service, unless the Company makes
     required filings with the Securities and Exchange Commission. If the
     Company's stock were to be delisted, there would be no public market for
     the Common Stock and stockholders would have difficulty liquidating their
     investment. Although the Company intends to make the required filings with
     the Securities and Exchange Commission and retain its stock listing on the
     Nasdaq Bulletin Board, there can be no assurance that it will be able to do
     so.

These and other risks described in this Quarterly Report must be considered by
any investor or potential investor in the Company.


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PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     From time to time, the Company is involved in legal matters which are
incidental to its operations. In the opinion of management, the ultimate
resolution of these matters has not had a material adverse effect on the
Company's financial condition or results of operations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     On May 11, 1999, the Company issued 50,000 unregistered shares of common
stock in satisfaction of $50,000 in legal fees payable to the Company's
counsel. The Company believes the issuance to be exempt under Section 4(2) of
the Securities Act.

     On May 12, 1999, the Company extinguished debt to an unrelated
individual in the amount of $25,000 by the issuance of 12,500 unregistered
shares common stock. The Company believes the issuance to be exempt under
Section 4(2) of the Securities Act.

     On May 19, 1999, the Company satisfied $118,532 of debt, including a
note payable of $115,000, due to Young Management Company, by the issuance of
59,266 unregistered shares of the Company's common stock. The Company
believes the issuance to be exempt under Section 4(2) of the Securities Act.

     On June 30, 1999, the Company settled a dispute with Associated Barter
Services, Inc. ("ABS") for advertising services in the amount of $103,818 by
the issuance of 61,522 unregistered shares of the Company's common stock. The
Company believes the issuance to be exempt under Section 4(2) of the
Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     No defaults upon senior securities occurred during the second quarter of
1999.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of the Company's security holders
during the second quarter of 1999.

ITEM 5.  OTHER INFORMATION.

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Exhibits being filed with this Quarterly Report:

         3.3      Certificate of Amendment of Certificate of Incorporation of
                  SecurFone America, Inc. dated January 31, 2000

        10.13     Management Services and Support Agreement dated February 1,
                  1999, between Tel.n.Form, Inc. and IXATA.COM

        10.14     Executive Employment Agreement dated as of August 24, 1999,
                  between Andrew H. Kent and the Company


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<PAGE>

        10.15     Letter Agreement dated as of November 9, 1999 extending the
                  term of the Executive Employment Agreement between Paul B.
                  Silverman and the Company

        10.16     Form of Registration Rights Agreement for November, 1999,
                  private placement equity investment offering

        27        Financial Data Schedule

     (b) The Company is filing a report on Form 8-K relating to the acquisition
of IXATA, Inc. simultaneously with the filing of this Form 10-QSB. The Company
did not file any reports on Form 8-K during the second quarter of 1999.


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<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the Company caused
this Quarterly Report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                                     The IXATA Group, Inc.


Date: March 10, 2000                                 /s/ PAUL B. SILVERMAN
                                                     ---------------------
                                                     By Paul B. Silverman,
                                                     Chief Executive Officer