<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1998
COMMISSION FILE NUMBER 0-15885
NATIONAL DATACOMPUTER, INC.
(Name of Small Business Issuer in its Charter)
<TABLE>
<S> <C>
DELAWARE 04-2942832
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification #)
900 Middlesex Turnpike, Bldg. 5
Billerica, Ma. 01821
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number including area code (978) 663-7677
---------------------------------------------
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Securities and Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the past
ninety (90) days.
Yes X No_____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of June 30, 1998.
COMMON STOCK, $0.08 PAR VALUE 1,896,994
(Title of each class) (number of shares)
<PAGE> 2
NATIONAL DATACOMPUTER, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheet as of
June 30, 1998 (unaudited) and December 31,1997...................3
Statement of Operations
Three and six months ended
June 30, 1998 and June 29, 1997 (unaudited).....................4
Statement of Changes in
Stockholders' Equity for the six
months ended June 30, 1998 (unaudited)..........................5
Statement of Cash Flows
for the six months ended
June 30, 1998 and June 29, 1997 (unaudited).....................6
Notes to Financial Statements.....................................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS........................................9
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.................................................12
ITEM 2. Changes in Securities.............................................12
ITEM 3. Defaults upon Senior Securities...................................12
ITEM 4. Submissions of Matters to a Vote of Security Holders..............12
ITEM 5. Other Information.................................................12
ITEM 6. Exhibits and Reports on Form 8-K..................................12
SIGNATURES.................................................................13
<PAGE> 3
NATIONAL DATACOMPUTER, INC.
BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 603,451 $ 208,731
Accounts receivable, net of allowance for doubtful accounts 770,685 1,545,319
Inventories 1,593,762 1,298,979
Other current assets 143,490 59,800
------------ ------------
Total current assets 3,111,388 3,112,829
Fixed assets, net 207,484 259,512
------------ ------------
$ 3,318,872 $ 3,372,341
============ ============
Liabilities and stockholders' equity
Current Liabilities:
Convertible debt to related party $ 175,000 $ 75,000
Current obligations under capital lease 19,918 41,810
Accounts payable 190,198 349,807
Accrued payroll and related taxes 165,783 127,675
Accrued expenses - other 228,459 264,024
Accrued interest on preferred stock 3,500 102,750
Deferred revenues, current portion 602,932 470,125
Deferred compensation 27,620 45,214
------------ ------------
Total current liabilities 1,413,410 1,476,405
Convertible debt to related party -- 158,730
Obligations under capital lease 70,617 70,617
Deferred revenues 38,143 38,143
------------ ------------
1,522,710 1,743,895
------------ ------------
Stockholders' equity
Preferred stock, Series A convertible, $0.001 par value; 20 shares
authorized; 0 shares issued and outstanding at June 30, 1998 and December 31, 1997 -- --
Preferred stock, Series B convertible $0.001 par value; 4,200 shares
authorized, issued and outstanding (liquidating preference of $4,200,000) 3,685,206 3,685,206
Preferred stock, Series C convertible $0.001 par value; 900 shares
authorized, issued and outstanding (liquidating preference of $900,000) 834,370 808,412
Preferred stock, Series D convertible $0.001 par value; 350 shares
authorized, issued and outstanding (liquidating preference $350,000) 324,639 303,995
Preferred stock, Series E convertible $0.001 par value; 500 shares
authorized; 500 and 0 shares issued and outstanding at June 30, 1998 and December 31, 1997,
respectively (liquidating preference of $500,000) 273,880 --
Common stock, $0.08 par value; 5,000,000 shares authorized; 1,896,994 and 1,628,332
shares issued and outstanding at June 30, 1998 and December 31, 1997, respectively 151,760 130,267
Capital in excess of par value 10,764,916 10,310,761
Accumulated deficit (13,809,627) (13,165,753)
Unamortized stock compensation (77,173) (93,173)
Notes receivable - employees (351,269) (351,269)
------------ ------------
Total stockholders' equity 1,796,702 1,628,446
------------ ------------
$ 3,318,872 $ 3,372,341
============ ============
</TABLE>
The accompanying notes are an integral part
of these financial statements.
3
<PAGE> 4
NATIONAL DATACOMPUTER, INC.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Second Fiscal Quarter Six Months
Ended Ended
----------- ----------- ----------- -----------
June 30, June 29, June 30, June 29,
1998 1997 1998 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Net product revenue $ 915,536 $ 875,070 $ 1,386,677 $ 2,119,034
Service and other revenue 417,966 314,723 848,578 606,197
----------- ----------- ----------- -----------
1,333,502 1,189,793 2,235,255 2,725,231
Cost of sales and services 682,928 720,167 1,257,190 1,541,792
----------- ----------- ----------- -----------
650,574 469,626 978,065 1,183,439
----------- ----------- ----------- -----------
Operating expenses:
Research and development 212,465 361,397 418,486 738,687
Selling, general and administrative 489,716 647,457 967,338 1,278,562
----------- ----------- ----------- -----------
702,181 1,008,854 1,385,824 2,017,249
----------- ----------- ----------- -----------
Loss from operations (51,607) (539,228) (407,759) (833,810)
Other income (expense):
Interest income 1,056 4,897 1,056 6,633
Interest expense (5,979) (4,557) (31,671) (10,039)
----------- ----------- ----------- -----------
Net loss $ (56,530) $ (538,888) $ (438,374) $ (837,216)
=========== =========== =========== ===========
Calculation of net loss per common share and dilutive share equivalent:
Net loss $ (56,530) $ (538,888) $ (438,374) $ (837,216)
Preferred stock preferences (102,750) (102,750) (466,102) (199,250)
----------- ----------- ----------- -----------
Net loss attributable to common shareholders $ (159,280) $ (641,638) $ (904,476) $(1,036,466)
=========== =========== =========== ===========
Basic and diluted net loss per share $ (0.10) $ (0.50) $ (0.51) $ (0.82)
=========== =========== =========== ===========
Weighted average shares and dilutive
share equivalents outstanding 1,666,740 1,272,607 1,771,383 1,262,266
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements
4
<PAGE> 5
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREFERRED STOCK SERIES B PREFERRED STOCK SERIES C PREFERRED STOCK SERIES D
--------------------------- --------------------------- ---------------------------
NET ISSUANCE NET ISSUANCE NET ISSUANCE
SHARES PRICE SHARES PRICE SHARES PRICE
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 4,200 $ 3,685,206 900 $ 808,412 350 $ 303,995
Net loss
Issuance of preferred stock
Interest on preferred stock (Note 7)
Amortization of stock compensation
Amortization of discounted
conversion rate on Preferred
Stock 25,958 20,644
Adjustment for fractional shares
------------ ------------ ------------ ------------ ------------ ------------
Balance at March 31, 1998 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
============ ============ ============ ============ ============ ============
Net loss
Issuance of preferred stock
Interest on preferred stock (Note 7)
Amortization of stock compensation
Issuance of common stock
in satisfaction of accrued
interest
Adjustment for fractional shares
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 1998 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
============ ============ ============ ============ ============ ============
<CAPTION>
PREFERRED STOCK SERIES E COMMON STOCK
--------------------------- ------------------------------------------
CAPITAL IN NOTES
NET ISSUANCE PAR EXCESS RECEIVABLE
SHARES PRICE SHARES VALUE OF PAR VALUE EMPLOYEES
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 -- 1,628,332 $ 130,267 $ 10,310,761 $ (351,269)
Net loss
Issuance of preferred stock 500 273,880 214,000
Interest on preferred stock (Note 7)
Amortization of stock compensation
Amortization of discounted
conversion rate on Preferred
Stock (46,602)
Adjustment for fractional shares 10 1 (1)
------------ ------------ ------------ ------------ ------------ ------------
Balance at March 31, 1998 500 $ 273,880 1,628,342 $ 130,268 $ 10,478,158 $ (351,269)
============ ============ ============ ============ ============ ============
Net loss
Issuance of preferred stock
Interest on preferred stock (Note 7)
Amortization of stock compensation
Issuance of common stock
in satisfaction of accrued
interest 268,649 21,492 286,758
Adjustment for fractional shares 3
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 1998 500 $ 273,880 1,896,994 $ 151,760 $ 10,764,916 $ (351,269)
============ ============ ============ ============ ============ ============
<CAPTION>
UNAMORTIZED TOTAL
STOCK ACCUMULATED STOCKHOLDERS'
COMPENSATION DEFICIT EQUITY
------------ ------------ ------------
<S> <C> <C> <C>
Balance at December 31, 1997 $ (93,173) $(13,165,753) $ 1,628,446
Net loss (381,844) $ (381,844)
Issuance of preferred stock $ 487,880
Interest on preferred stock (Note 7) (102,750) $ (102,750)
Amortization of stock compensation 8,000 $ 8,000
Amortization of discounted
conversion rate on Preferred
Stock
Adjustment for fractional shares
------------ ------------ ------------
Balance at March 31, 1998 $ (85,173) $(13,650,347) $ 1,639,732
============ ============ ============
Net loss (56,530) $ (56,530)
Issuance of preferred stock
Interest on preferred stock (Note 7) (102,750) $ (102,750)
Amortization of stock compensation 8,000 $ 8,000
Issuance of common stock
in satisfaction of accrued
interest $ 308,250
Adjustment for fractional shares
------------ ------------ ------------
Balance at June 30, 1998 $ (77,173) $(13,809,627) $ 1,796,702
============ ============ ============
</TABLE>
The accompanying notes are an integral part
of these financial statements
5
<PAGE> 6
NATIONAL DATACOMPUTER, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1998 June 29, 1997
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (438,374) $ (837,216)
Adjustments to reconcile net loss to net
cash provided by (used for) operating activities:
Depreciation and amortization 57,585 53,097
Amortization of stock compensation 16,000 15,596
Amortization of deferred debt issuance costs
and debt discount 18,789 --
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 774,634 (552,623)
Increase in inventories (294,783) (245,552)
(Increase) decrease in other current assets (86,209) 33,326
(Decrease) increase in accounts payable (159,609) 257,297
Decrease in accrued expenses
and deferred compensation (11,550) (125,231)
Increase (decrease) in deferred revenues 132,807 (145,347)
----------- -----------
Net cash provided by (used for) operating activities 9,290 (1,546,653)
----------- -----------
Cash flows from investing activities:
Purchases of fixed assets (5,557) (117,949)
----------- -----------
Net cash used for investing activities (5,557) (117,949)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of preferred stock and warrants,
net of issuance costs 487,880 1,224,583
Proceeds from issuance of convertible note to related party -- 250,000
Principal payment on convertible debt (75,000) --
Principal payments on obligations under capital lease (21,893) (21,166)
----------- -----------
Net cash provided by financing activities 390,987 1,453,417
----------- -----------
Net increase in cash and cash equivalents 394,720 (211,185)
Cash and cash equivalents at beginning of year 208,731 722,285
----------- -----------
Cash and cash equivalents at end of period $ 603,451 $ 511,100
=========== ===========
Supplemental Cash Flow Information:
Cash paid for interest $ 12,882 $ 9,902
Non-cash investing and financing activities:
Accrued Interest on preferred stock charged to
accumulated deficit 205,500 205,500
Purchase of property and equipment under capital lease -- 14,185
Common stock issued in satisfaction of interest on
preferred stock 308,250 84,000
</TABLE>
The accompanying notes are an integral part
of these financial statements.
6
<PAGE> 7
NATIONAL DATACOMPUTER, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
National Datacomputer, Inc. (the "Company") designs, develops,
manufactures, markets and services a line of hand-held battery powered
microprocessor-based data collection products and computers and associated
peripherals for use in mobile operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited financial statements, which are for
interim periods, do not include all disclosures provided in the annual
financial statements. These unaudited financial statements should be read
in conjunction with the financial statements and the footnotes thereto
contained in the Annual Report on Form 10-KSB for the year ended December
31, 1997 of National Datacomputer, Inc., as filed with the Securities and
Exchange Commission.
INTERIM PERIODS
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (which are of a normal and recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
REVENUE RECOGNITION
The Company recognizes revenues for products upon shipment. Revenue
from installation and training is recognized upon completion of the
project. Service revenue is recognized ratably over the contractual
periods.
LOSS PER SHARE
Loss per share is determined by dividing net loss, after deducting
certain amounts associated with the Company's preferred stock, by the
weighted average number of common shares outstanding during the year.
7
<PAGE> 8
Interest payable to preferred stockholders, the fair value of
inducements to convert preferred stock into common stock, and any discount
implicit in the conversion terms upon issuance of preferred stock are
added to the net loss to determine the amount of net loss attributable to
common stockholders.
RESEARCH AND DEVELOPMENT AND COMPUTER SOFTWARE DEVELOPMENT COSTS
Research and development costs, other than software development
costs, have been charged to operations as incurred. SFAS No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed", requires the capitalization of certain computer
software development costs incurred after technological feasibility is
established. No software development costs have been capitalized at June
30, 1998 or June 29, 1997.
3. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following: JUNE 30, DECEMBER 31,
1998 1997
---------- ----------
<S> <C> <C>
Raw Material $ 765,108 $ 623,593
Work-in-process 552,412 450,238
Finished goods 276,242 225,148
---------- ----------
Total $1,593,762 $1,298,979
========== ==========
</TABLE>
Inventories are stated at the lower of cost (first-in, first-out) or
market.
4. CONVERTIBLE PREFERRED STOCK AND PROMISSORY NOTE
In March 1998, the Company designated and sold 500 shares of Series E
Convertible Preferred Stock with a warrant to purchase up to 700,000 shares of
common stock at an exercise price of $.75 per share, for net proceeds of
$487,880. The warrant expires in March 2000. The Series E Convertible Preferred
Stock was sold to the same stockholder of the previously issued Series B, Series
C and Series D Convertible Preferred Stock. The proceeds of this financing were
allocated to the preferred shares and warrant based on an estimate of their fair
values. This resulted in $214,000 being ascribed to the warrant which was
recorded as additional paid-in-capital and $273,880 being recorded as preferred
stock. Series E Convertible Preferred Stock has voting rights, dividend
preference, liquidation preference, mandatory conversion and Company redemption
terms similar to the Company's existing Series B, Series C and Series D
Convertible Preferred Stock. The Subscription Agreement for Series E Convertible
Preferred Stock offers anti-dilution protection to its shareholders. Series E
Convertible Preferred Stock is convertible into shares of common stock at a
conversion price of $.75.
8
<PAGE> 9
The Company, in conjunction with the issuance of the Series E Convertible
Preferred Stock, canceled its previously issued warrants to purchase 700,000
shares of common stock for $4.00 per share. Additionally, the Company changed
the conversion price on the Series B and Series C Convertible Preferred Stock to
$2.74 and offered anti-dilution protection to these shareholders. In addition,
the shareholder of the Series E Convertible Preferred Stock agreed to place into
escrow 2,100 shares of the Series B Convertible Preferred Stock that is also
owned by this shareholder. The Company may at its option and at any time through
January 31, 2000 redeem the escrowed shares of Series B Convertible Preferred
Stock, which has a face value of $1,000 per share, at a price of $1,250 per
share.
Also in March 1998, the Company refinanced the $250,000 convertible debt
by making a principal payment of $75,000 and issuing a convertible note payable
for $175,000. The note bears interest at a rate of 6% per annum, matures in
March 1999, and is convertible into shares of the Company's common stock at a
conversion price equal to the average closing bid price for the Company's common
stock for the five days ending March 6, 1998. The note can be converted at the
option of the holder after January 1, 1999.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 COMPARED WITH THREE MONTHS ENDED JUNE 29,
1997.
Total revenue during the three months ended June 30, 1998 was $1,333,502,
an increase of 12%, compared to total revenue of $1,189,793 during the prior
comparable quarter. Revenue from product sales increased by 5% to $915,536
during the three months ended June 30, 1998, compared to $875,070 during the
prior comparable quarter.
Service and other revenue increased by 33% to $417,966 during the three
months ended June 30, 1998, compared to $314,723 during the prior comparable
quarter. The Company expects that service and other revenues will continue to
rise as a result of improved maintenance and pricing policies instituted.
9
<PAGE> 10
Cost of sales and services, as a percentage of net revenues, decreased to
51% during the three months ended June 30, 1998 from 61% during the prior
comparable period. This decrease is primarily attributable to the institution of
the Company's quality control programs, which improved the quality of the
Company's products and led to fewer field support demands and, thereby, lower
field support costs.
Research and development expenses decreased to $212,465 in the second
quarter of 1998, from $361,397 for the same period in 1997, a decrease of
approximately 41%. The decrease resulted primarily from a reduction in the
Company's product development staff due in part to the completion of the new
Datacomputer model DC4 which was introduced in the later part of 1997.
Selling, general and administrative expenses decreased to $489,715 in the
second quarter of 1998, from $647,457 for the same period in 1997, a decrease of
approximately 24%. The lower level of costs resulted primarily from the
Company's ongoing programs of streamlining its operations and organizational
structure, combined with, higher legal and professional fees in the second
quarter of 1997 associated with the Company's filing and listing on NASDAQ stock
market.
As a result, the Company incurred a net loss of $56,529 during the three
months ended June 30, 1998, compared to a net loss of $538,888 during the three
months ended June 29, 1997.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED JUNE 29,
1997.
The Company's total revenue for the six months ended June 30, 1998 were
$2,235,255 which represents an 18% decrease from total revenue of $2,725,231 for
the same period of the prior fiscal year. The decrease in revenue was
attributable to a decrease in sales of units of the Company's Datacomputers
which decreased 35% to $1,386,677 during the six months ended June 30, 1998 from
$2,119,034 during the same period in the prior fiscal year.
Service and other revenue for the six months ended June 30, 1998 were
$848,578 compared to $606,197 for the same period of the prior fiscal year, an
increase of 40%. The Company expects that service and other revenues will
continue to rise as a result of improved maintenance and pricing policies
instituted.
Cost of sales and services as a percentage of revenues for the six months
ended June 30, 1998 was 56% as compared to 57% for the same period of the prior
fiscal year. The improved gross margin resulted from the institution of the
Company's quality control programs, which led to fewer field support demands
and, thereby, lower field support costs. This was offset by a higher percentage
of peripheral sales in the first three months of 1998 which carry a lower
margin.
10
<PAGE> 11
Research and development expenses for the six months ended June 30, 1998
decreased to $418,486 as compared to $738,687 for the same period in 1997, a
decrease of approximately 43%. The decrease resulted primarily from a reduction
in the Company's product development staff due to the completion of the new
Datacomputer model DC4 which was introduced in the later part of 1997.
Selling, general and administrative expenses for the six months ended June
30, 1998 decreased to $967,337 as compared to $1,278,562 for the same period in
1997, a decrease of approximately 24%. The lower level of costs resulted
primarily from the Company's ongoing programs of streamlining its operations and
organizational structure, combined with, higher legal and professional fees in
the six months of 1997 associated with the Company's filing and listing on
NASDAQ stock market.
As a result, the Company's operating loss for the six months ended June
30, 1998 was $407,759 as compared to an operating loss of $833,810 for the same
period of the prior fiscal year.
Interest expenses was $31,671 in the first six months of 1998, compared to
$10,039 for the same period of the prior fiscal year. This increase resulted
primarily from the amortization of approximately $23,000 to interest expense
related to the discount on the convertible debt obtained in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a cash balance of $603,451 at June 30, 1998 compared to
$208,731 at December 31, 1997. The increase in cash was due primarily to cash
generated from the sale of 500 shares of Series E Convertible Preferred Stock
with a warrant to purchase up to 700,000 shares of common stock at an exercise
price of $.75 per share, for net proceeds of $487,880.
The Company also refinanced the $250,000 convertible debt by making a
principal payment of $75,000 and issuing a convertible note payable for
$175,000.
At June 30, 1998, the Company had cash of $603,451 and a current ratio of
2.1:1. The Company anticipates that available cash, together with cash flow from
anticipated operations, will be sufficient to meet its working capital needs for
the remainder of 1998. However, unanticipated adverse results of operations
could impact anticipated cash flows and, as a result, there can be no assurance
that the Company will not be required to raise additional capital or that the
Company will be able to raise additional capital on favorable terms, if at all.
The Letter of Intent "LOI" to merge signed by Infos International and
National Datacomputer, Inc. on February 17, 1998 and announced on February 20,
1998 has expired. Although there can be no guarantee, both companies intend to
resign an agreement and are currently in the process of negotiating the new LOI.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not presently involved in any material pending litigation.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - K
(a) Exhibits
(11) Statement Re: Computation of Per Share Earnings.
(27) Financial Data Schedule.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL DATACOMPUTER, INC.
August 13, 1998 ________________________________
Malcolm M. Bibby
President
August 13, 1998 ________________________________
Gerald S. Eilberg
Vice President, Finance and Administration
Chief Financial Officer
13
<PAGE> 1
Exhibit
No. Title
--- -----
11 COMPUTATION OF PER SHARE EARNINGS
National Datacomputer, Inc.
Statement recomputation of net income (loss) per common share
<TABLE>
<CAPTION>
----------- -----------
June 30, June 29,
1998 1997
----------- -----------
<S> <C> <C>
Net loss, as reported $ (438,374) $ (837,216)
Preferred stock preference items:
Discount inherent in conversion terms of Series C and D
convertible preferred stock upon issuance (46,602) --
Warrant (214,000) --
Interest on Series B, C and D convertible preferred stock (205,500) (199,250)
----------- -----------
Total preferred stock preference item (466,102) (199,250)
Net loss attributable to common stockholders $ (904,476) $(1,036,466)
----------- -----------
Weighted average shares outstanding 1,771,383 1,262,266
=========== ===========
Net loss per share $ (0.51) $ (0.82)
=========== ===========
</TABLE>
Note: Due to the Company's net loss, no exercises of options or conversions or
preferred stock have been assumed, all such items would be anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> APR-01-1998 DEC-30-1996
<PERIOD-END> JUN-30-1998 DEC-31-1997
<CASH> 603,451 208,731
<SECURITIES> 0 0
<RECEIVABLES> 872,299 1,653,921
<ALLOWANCES> (101,614) (108,602)
<INVENTORY> 1,593,762 1,298,979
<CURRENT-ASSETS> 143,490 59,800
<PP&E> 1,555,570 1,550,013
<DEPRECIATION> (1,348,086) (1,290,501)
<TOTAL-ASSETS> 3,318,872 3,372,341
<CURRENT-LIABILITIES> 1,413,410 1,476,405
<BONDS> 108,760 267,490
0 0
5,118,095 4,797,613
<COMMON> 151,760 130,267
<OTHER-SE> (3,473,153) (3,299,434)
<TOTAL-LIABILITY-AND-EQUITY> 3,318,872 3,372,341
<SALES> 915,536 0
<TOTAL-REVENUES> 1,333,502 0
<CGS> 682,928 0
<TOTAL-COSTS> 682,928 0
<OTHER-EXPENSES> 701,125 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 5,979 0
<INCOME-PRETAX> (56,530) 0
<INCOME-TAX> 0 0
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</TABLE>
