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- --------------------------------------------------------------------------------
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: SEPTEMBER 30, 1999
COMMISSION FILE NUMBER 0-15885
NATIONAL DATACOMPUTER, INC.
---------------------------
(Name of Small Business Issuer in its Charter)
DELAWARE 04-2942832
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification #)
900 Middlesex Turnpike, Bldg. 5
Billerica, Ma. 01821
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
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 September 30, 1999.
COMMON STOCK, $0.08 PAR VALUE 3,531,466
- ----------------------------- ------------------
(Title of each class) (number of shares)
<PAGE>
NATIONAL DATACOMPUTER, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
ITEM 1. FINANCIAL STATEMENTS: --------
Balance Sheet as of September 30, 1999 (unaudited)
and December 31, 1998...............................................3
Statement of Operations
Three and nine months ended
September 30, 1999 and September 30, 1998 (unaudited)...............4
Statement of Stockholders' Equity
for the nine months ended September 30, 1999(unaudited).............5
Statement of Cash Flows
for the nine months ended
September 30, 1999 and September 30, 1998 (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 Holder.................12
ITEM 5. Other Information...................................................12
ITEM 6. Exhibits and Reports on Form 8-K....................................12
SIGNATURES...................................................................13
2
<PAGE>
NATIONAL DATACOMPUTER, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1998
(Unaudited)
--------------- ---------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 630,971 $ 491,174
Accounts receivable, net of allowance for doubtful accounts 893,459 1,048,315
Inventories 1,416,139 1,516,306
Other current assets 36,693 31,493
--------------- ---------------
Total current assets 2,977,262 3,087,288
Fixed assets, net 159,736 205,508
--------------- ---------------
$ 3,136,998 $ 3,292,796
=============== ===============
Liabilities and stockholders' equity
Current Liabilities:
Current obligations under capital lease $ 31,260 $ 44,198
Accounts payable 265,518 356,866
Accrued payroll and related taxes 125,155 78,224
Accrued expenses - other 139,420 218,264
Accrued interest on preferred stock - 6,125
Deferred revenues, current portion 551,128 552,334
--------------- ---------------
Total current liabilities 1,112,481 1,256,011
Obligations under capital lease 5,741 25,754
Deferred revenues 41,307 6,143
--------------- ---------------
1,159,529 1,287,908
--------------- ---------------
Stockholders' equity
Preferred stock, Series A convertible, $0.001 par value; 20 shares
authorized; 0 shares issued and outstanding at September 30, 1999 and December 31, 1998 - -
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) 834,370 834,370
Preferred stock, Series D convertible $0.001 par value; 350 shares
authorized, issued and outstanding (liquidating preference $350,000) 324,639 324,639
Preferred stock, Series E convertible $0.001 par value; 500 shares
authorized, issued and outstanding (liquidating preference $500,000) 273,880 273,880
Preferred stock, Series F convertible $0.001 par value; 175 shares
authorized, issued and outstanding (liquidating preference $175,000) 175,000 118,750
Common stock, $0.08 par value; 5,000,000 shares authorized; 3,531,466 and 2,276,850
shares issued and outstanding at September 30, 1999 and December 31, 1998, respectively 282,517 182,148
Capital in excess of par value 11,153,159 10,998,903
Accumulated deficit (14,362,860) (14,000,566)
Unamortized stock compensation (37,173) (61,173)
Notes receivable - employees (351,269) (351,269)
--------------- ---------------
Total stockholders' equity 1,977,469 2,004,888
--------------- ---------------
$ 3,136,998 $ 3,292,796
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Third Fiscal Quarter Nine Months
Ended Ended
----------------------------------- -----------------------------------
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Net product revenue $ 820,941 $ 1,269,903 $ 2,295,587 $ 2,656,580
Service and other revenue 467,237 402,416 1,285,256 1,250,994
--------------- --------------- --------------- ---------------
1,288,178 1,672,319 3,580,843 3,907,574
Cost of sales and services 552,936 749,642 1,726,386 2,006,832
--------------- --------------- --------------- ---------------
735,242 922,677 1,854,457 1,900,742
--------------- --------------- --------------- ---------------
Operating expenses:
Research and development 196,808 271,918 680,099 690,404
Selling, general and administrative 426,717 441,783 1,215,946 1,409,121
--------------- --------------- --------------- ---------------
623,525 713,701 1,896,045 2,099,525
--------------- --------------- --------------- ---------------
Income (loss) from operations 111,717 208,976 (41,588) (198,783)
Other income (expense):
Interest income - - - 1,056
Other income 1,124 1,124
Interest expense (1,597) (5,221) (6,580) (36,892)
--------------- --------------- --------------- ---------------
Net income (loss) $ 111,244 $ 203,755 $ (47,044) $ (234,619)
=============== =============== =============== ===============
Calculation of net loss per common share and dilutive share equivalents:
Net income (loss) $ 111,244 $ 203,755 $ (47,044) $ (234,619)
Preferred stock preferences (124,125) (102,750) (371,500) (568,852)
--------------- --------------- --------------- ---------------
Net income (loss) attributable to common
shareholders $ (12,881) $ 101,005 $ (418,544) $ (803,471)
=============== =============== =============== ===============
Weighted average number of
shares outstanding
Basic 2,985,842 1,846,129 2,600,596 1,801,876
Diluted 2,985,842 2,700,378 2,600,596 1,801,876
Net income (loss) per share
Basic $ (0.00) $ 0.05 $ (0.16) $ (0.45)
=============== =============== =============== ===============
Diluted $ (0.00) $ 0.04 $ (0.16) $ (0.45)
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
<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, 1998 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
Net loss
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- ------------- ------------- ------------
Balance at March 31, 1999 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
============= ============= ============= ============= ============= ============
Net income
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- ------------- ------------- ------------
Balance at June 30, 1999 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
============= ============= ============= ============= ============= ============
Net income
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- ------------- ------------- ------------
Balance at September 30, 1999 4,200 $ 3,685,206 900 $ 834,370 350 $ 324,639
============= ============= ============= ============= ============= ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK SERIES E PREFERRED STOCK SERIES F COMMON STOCK
-------------------------- --------------------------- -----------------------------------------
NET ISSUANCE NET ISSUANCE PAR CAPITAL IN
SHARES PRICE SHARES PRICE SHARES VALUE EXCESS
OF PAR VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 500 $ 273,880 175 $ 118,750 2,276,850 $ 182,148 $ 10,998,903
Net loss
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest 320,742 25,659 74,466
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock 18,750 (18,750)
------------ ------------ ------------ ------------- ------------- ----------- -------------
Balance at March 31, 1999 500 $ 273,880 175 $ 137,500 2,597,592 $ 207,807 $ 11,054,619
============ ============ ============ ============= ============= =========== =============
Net income
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest 278,112 22,249 83,126
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock 18,750 (18,750)
------------ ------------ ------------ ------------- ------------- ----------- -------------
Balance at June 30, 1999 500 $ 273,880 175 $ 156,250 2,875,704 $ 230,056 $ 11,118,995
============ ============ ============ ============= ============= =========== =============
Net income
Issuance of preferred stock
Interest on preferred stock
Issuance of common stock
in satisfaction of accrued
interest 655,762 52,461 52,914
Amortization of stock compensation
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock 18,750 (18,750)
------------ ------------ ------------ ------------- ------------- ----------- -------------
Balance at September 30, 1999 500 $ 273,880 175 $ 175,000 3,531,466 $ 282,517 $ 11,153,159
============ ============ ============ ============= ============= =========== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
NOTES UNAMORTIZED TOTAL
RECEIVABLE STOCK ACCUMULATED STOCKHOLDERS'
EMPOLYEES COMPENSATION DEFICIT EQUITY
<S> <C> <C> <C> <C>
Balance at December 31, 1998 ($ 351,269) ($ 61,173) ($ 14,000,566) $ 2,004,888
Net loss (199,626) ($ 199,626)
Issuance of preferred stock
Interest on preferred stock (104,500) ($ 104,500)
Issuance of common stock
in satisfaction of accrued
interest $ 100,125
Amortization of stock compensation 8,000 $ 8,000
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- -------------
Balance at March 31, 1999 ($ 351,269) ($ 53,173) ($ 14,304,692) $ 1,808,887
============= ============= ============= =============
Net income 41,338 $ 41,338
Issuance of preferred stock
Interest on preferred stock (105,375) ($ 105,375)
Issuance of common stock
in satisfaction of accrued
interest $ 105,375
Amortization of stock compensation 8,000 $ 8,000
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- -------------
Balance at June 30, 1999 ($ 351,269) ($ 45,173) ($ 14,368,729) $ 1,858,225
============= ============= ============= =============
Net income 111,244 $ 111,244
Issuance of preferred stock
Interest on preferred stock (105,375) ($ 105,375)
Issuance of common stock
in satisfaction of accrued
interest $ 105,375
Amortization of stock compensation 8,000 $ 8,000
Discounted conversion rate on
Preferred Stock
Amortization of discounted
conversion rate on Preferred
Stock
------------- ------------- ------------- -------------
Balance at September 30, 1999 ($ 351,269) ($ 37,173) ($ 14,362,860) $ 1,977,469
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30, September 30,
1999 1998
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (47,044) $ (234,619)
Adjustments to reconcile net loss to net
cash provided by (used for) operating activities:
Depreciation 61,377 88,277
Gain on sale of fixed asset (1,124) -
Amortization of stock compensation 24,000 24,000
Amortization of deferred debt issuance costs
and debt discount - 18,789
Changes in assets and liabilities:
Decrease in accounts receivable 154,856 277,307
Decrease (increase) in inventories 100,167 (140,679)
Increase in other current assets (5,200) (77,337)
Decrease in accounts payable (91,348) (103,636)
Decrease in accrued expenses
and deferred compensation (42,413) (63,023)
Increase in deferred revenues 33,958 110,632
------------- -------------
Net cash provided by (used for) operating activities 187,229 (100,289)
------------- -------------
Cash flows from investing activities:
Purchases of fixed assets (16,381) (33,783)
Proceeds from sale of fixed assets 1,900 -
------------- -------------
Net cash used for investing activities (14,481) (33,783)
------------- -------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock and warrants,
net of issuance costs - 487,880
Principal payment on convertible debt - (75,000)
Principal payments on obligations under capital lease (32,951) (30,285)
------------- -------------
Net cash (used for) provided by financing activities (32,951) 382,595
------------- -------------
Net increase in cash and cash equivalents 139,797 248,523
Cash and cash equivalents at beginning of year 491,174 208,731
------------- -------------
Cash and cash equivalents at end of period $ 630,971 $ 457,254
============= =============
Supplemental Cash Flow Information:
Cash paid for interest $ 16,464 $ 18,102
Noncash investing and financing activities:
Conversion of promissory note into Series F Preferred Stock 175,000
Accrued interest on preferred stock charged to
accumulated deficit 315,250 308,250
Common stock issued in satisfaction of interest on
preferred stock 310,875 411,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
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, 1998 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 nine months ended September 30, 1999 are not
necessarily indicative of the results to be expected for the full year.
REVENUE RECOGNITION
The Company recognizes revenues for products upon shipment at the time
of delivery to the customer, provided that the Company has no remaining
significant service obligations that are essential to the functionality of
the product delivered, collectibility is considered probable, and the fees
are fixed and determinable.
Revenue from installation and training is recognized upon completion of
the project. Service revenue is recognized ratably over the contractual
periods.
7
<PAGE>
EARNINGS PER SHARE
Net income (loss) per share is computed under Statement of Financial
Accounting Standards No. 128, "Earnings Per Share." Basic net income
(loss) per share is computed by dividing net income (loss), after
deducting certain amounts associated with the Company's preferred stock,
by the weighted average number of common shares outstanding for the
period. Diluted net income (loss) per share is computed using the weighted
average number of common shares outstanding and gives effect to all
dilutive common share equivalents outstanding during the period.
Interest payable to preferred stockholders, the fair value of
inducements to convert preferred stock into common stock, and any
discounts implicit in the conversion terms upon issuance of preferred
stock are subtracted from the net income (loss) to determine the amount of
net income (loss) attributable to common stockholders
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingencies at the date of the financial statements, and
the reported results of operations during the reporting period. Actual
results could differ from these estimates.
3. INVENTORIES
Inventories consist
of the following: SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- -------------
Raw material $ 396,152 $ 424,173
Work-in-process 683,392 731,730
Finished goods 336,595 360,403
------------- -------------
Total $ 1,416,139 $ 1,516,306
============= =============
Inventories are stated at the lower of cost (first-in, first-out) or
market.
8
<PAGE>
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 SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Total revenues in the third quarter of fiscal year 1999 were $1,288,178
compared to $1,672,319 in the prior comparable quarter, a decrease of 23%. The
decrease reflects a broader, more desirable customer distribution in the third
quarter of 1999 where no customer accounted for more than 10% of total revenue,
as compared to the third quarter of 1998 where one customer accounted for 50% of
total revenue
Cost of sales and services, as a percentage of net revenues decreased
in the third quarter of fiscal 1999 to 43% from 45% in the comparable quarter of
the prior fiscal year. The decrease is primarily attributable to the sales of a
different mix of products in the third quarter of 1999 which carry a higher
margin. The higher margins which resulted from the product mix in the third
quarter of 1999 are not necessarily indicative of the margins to be expected in
future quarters.
Research and development expenses as a percentage of net revenue for
the third quarter of fiscal 1999 decreased to 15% from 16% in the comparable
quarter of the prior fiscal year. Actual research and development spending
decreased by 28% in absolute dollars to $196,808 in the third quarter of fiscal
1999, from $271,918 for the same period in 1998. The decrease in expenditures
reflects a change in emphasis in 1999 from 1998 that requires less funding. In
1999, this represents concentration on enhancing and refining both hardware and
software products, rather than focusing in 1998 on initiating new products
development.
Selling, general and administrative expenses as a percentage of net
revenues for the third quarter of fiscal 1999 increased to 33% from 26% in the
comparable quarter of the prior fiscal year. Actual selling, general and
administrative spending decreased by 3% in absolute dollars to $426,717 in the
third quarter of fiscal 1999, from $441,783 for the same period in 1998. The
lower level of costs resulted primarily from a decrease in sales personnel costs
and professional fees.
The Company's operating income was $111,717 for the third quarter of
fiscal 1999, compared to $208,976 in the third quarter of the prior fiscal year.
The decrease in income was primarily attributable to the lower sales level
offset by the improved margin combined with the lower expenses as discussed
above.
9
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998.
The Company's total revenues for the nine months ended September 30,
1999 were $3,580,843 which represents an 8% decrease from total revenue of
$3,907,574 for the same period of the prior fiscal year. As it was previously
discussed in the three months comparison, the decrease in revenue reflects a
broader, more desirable customer distribution in the nine months of 1999 where
no customers accounted for more than 5% of total revenue, as compared to the
nine months of 1998 where one customer accounted for 25% of total revenue.
Cost of sales and services, as a percentage of net revenues for the
nine months ended September 30, 1999 was 48% as compared to 51% for the same
period of the prior fiscal year. The improved gross margin is primarily
attributable to the sales of a different mix of products in the third quarter of
1999 which carry a higher margin. The higher margins which resulted from the
product mix in the nine months of 1999 are not necessarily indicative of the
margins to be expected in future periods.
Research and development expenses as a percentage of net revenues for
the nine months ended September 30, 1999 increased to 19% from 18% for the same
period in the prior fiscal year. Actual research and development spending
decreased only by 1% in absolute dollars to $680,099 in the nine months ended
September 30, 1999 from $690,404 for the same period in the prior fiscal year.
Selling, general and administrative expenses as a percentage of net
revenues for the nine months ended September 30, 1999 decreased to 34% from 36%
for the same period in the prior fiscal year. Actual selling, general and
administrative spending decreased by 14% in absolute dollars to $1,215,946 in
the nine months ended September 30, 1999 from $1,409,121 for the same period in
the prior fiscal year. The lower level of costs resulted primarily from a
decrease in sales personnel costs and professional fees.
The Company's operating loss was $41,558 for the nine months ended
September 30, 1999, compared to an operating loss of $198,783 for the same
period in the prior fiscal year. The decreased loss was primarily attributable
to the improved margin combined with the decrease in the expenses as discussed
above.
Interest expense was $6,580 in the first nine months of fiscal 1999,
compared to $36,892 in the same period of the prior fiscal year. This decrease
resulted primarily from the amortization in the first quarter of 1998 of
approximately $23,000 to interest expense related to the discount on the
convertible debt recorded in 1997.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition strengthened as of September 30,
1999, when compared with December 31, 1998. The Company's cash balance increased
approximately $140,000, or 28%, to $630,971 with a current ratio of 2.7:1. 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 fiscal 1999. 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.
11
<PAGE>
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 (Loss).
(27) Financial Data Schedule.
12
<PAGE>
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.
November 12, 1999 /s/ Malcolm M. Bibby
--------------------------------
Malcolm M. Bibby
President
November 12, 1999 /s/ Gerald S. Eilberg
--------------------------------
Gerald S. Eilberg
Vice President, Finance and Administration
Chief Financial Officer
13
EXHIBIT 11
----------
COMPUTATION OF PER SHARE EARNINGS (LOSS)
National Datacomputer, Inc.
Statement recomputation of net income (loss) per common share
<TABLE>
<CAPTION>
Nine Months Ended
-------------------------------
September 30, September 30,
1999 1998
------------- -------------
<S> <C> <C>
Net loss, as reported $ (47,044) $ (234,619)
Preferred stock preference items:
Warrant $ (214,000)
Discount inherent in conversion terms of Series C
convertible preferred stock upon issuance $ (25,958)
Discount inherent in conversion terms of Series D
convertible preferred stock upon issuance $ (20,644)
Discount inherent in conversion terms of Series F
convertible preferred stock upon issuance $ (56,250) -
Interest on Series B, C, D and F convertible preferred stock $ (315,250) $ (308,250)
------------- -------------
Total preferred stock preference item $ (371,500) $ (568,852)
Net loss attributable to common stockholders $ (418,544) $ (803,471)
Weighted average shares outstanding:
A. Shares attributable to common stock outstanding 2,600,596 1,801,876
B. Shares attributable to convertible preferred stock outstanding - -
C. Shares attributable to common stock options and warrants
pursuant to APB 15, paragraph 38 (a) - -
------------- -------------
Weighted average shares outstanding 2,600,596 1,801,876
============= =============
Net loss per share $ (0.16) $ (0.45)
============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 630,971
<SECURITIES> 0
<RECEIVABLES> 1,118,205
<ALLOWANCES> (224,746)
<INVENTORY> 1,416,139
<CURRENT-ASSETS> 36,693
<PP&E> 1,638,827
<DEPRECIATION> (1,479,091)
<TOTAL-ASSETS> 3,136,998
<CURRENT-LIABILITIES> 1,112,481
<BONDS> 47,048
0
5,293,095
<COMMON> 282,517
<OTHER-SE> (3,598,143)
<TOTAL-LIABILITY-AND-EQUITY> 3,136,998
<SALES> 1,288,178
<TOTAL-REVENUES> 1,288,178
<CGS> 552,936
<TOTAL-COSTS> 552,936
<OTHER-EXPENSES> 623,525
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 473
<INCOME-PRETAX> 111,244
<INCOME-TAX> 0
<INCOME-CONTINUING> 111,244
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,244
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
