<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 1997
Commission file number: 33-21508
DATALINK SYSTEMS CORPORATION
----------------------------------------------------
(Exact name of small business issuer in its charter)
Nevada 35-3574355
- ------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification
Incorporation or Organization) Number)
1735 Technology Drive, Suite 790, San Jose, CA 95110
-----------------------------------------------------------
(Address of Principal Executive Offices including zip code)
(408) 367-1700
---------------------------
(Issuer's telephone number)
Check whether the 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 [ X ] No [ ]
There were 20,182,925 shares of the Registrant's Common Stock outstanding as
of December 31, 1997.
Transitional Small Business Disclosure Format: Yes --- No -X-
<PAGE>
DATALINK SYSTEMS CORPORATION
(a development stage company)
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
a. Condensed Consolidated Balance Sheets
December 31, 1997 and March 31, 1997 3
b. Condensed Consolidated Statements of Operations
for three months ended December 31, 1997 and 1996,
and the nine months ended December 31, 1997 and 1996
and the period from June 15, 1993 (date of inception)
to December 31, 1997 4
c. Condensed Consolidated Statements of Cash Flows
nine months ended December 31, 1997 and 1996 and
the period from June 15, 1993 (date of inception)
to December 31, 1997 5-6
d. Notes to the Condensed Consolidated Financial
Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8-11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. 12
ITEM 2. CHANGES IN SECURITIES. 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 12
ITEM 4. SUBMISSION 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
EXHIBITS
INDEX TO EXHIBITS 13
EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF NET
LOSS PER SHARE
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<PAGE>
DATALINK SYSTEMS CORPORATION
(a development stage company)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31 March 31
1997 1997
(unaudited) (audited)
ASSETS: ----------- -----------
Current assets:
Cash and cash equivalents $ 8,365,784 $1,916,509
Accounts receivable 72,533 49,685
Other receivables 823 4,733
Prepaid expenses 33,587 5,432
----------- ----------
Total current assets 8,472,727 1,976,359
Fixed assets, net 582,667 321,368
Other assets 28,601 14,741
----------- ----------
Total assets $ 9,083,995 $2,312,468
=========== ==========
LIABILITIES:
Current liabilities:
Bank Overdraft $ 21,521
Accounts payable $ 180,382 131,188
Accrued liabilities 229,591 93,024
Current portion capital leases 11,025 -
Current portion on advance
on technology sales 462,469 263,292
Deferred revenue 113,683 -
----------- ---------
Total current liabilities 997,150 509,025
Capital lease, net of current portion 68,522 -
Advance on technology sale, net
of current portion 2,281,098 1,531,154
----------- ----------
Total Liabilities 3,346,770 2,040,179
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock 2,740 -
Common stock 20,183 19,183
Additional paid-in capital 17,375,037 8,335,777
Foreign currency translation
adjustment (43,857) (57,655)
Note receivable (1,792,979) (1,089,410)
Deficit accumulated during the
development stage (9,823,899) (6,935,606)
----------- ----------
Total shareholders' equity 5,737,225 272,289
----------- ----------
Total liabilities and shareholders'
equity $ 9,083,995 $2,312,468
=========== ==========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
DATALINK SYSTEMS CORPORATION
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Period from
June 15, 1993
(date of in-
Three Months Ended Nine months Ended ception) to
December 31, December 31, December 31,
1997 1996 1997 1996 1997
----------- ---------- ---------- ---------- -----------
Net sales $ 271,367 $ 27,404 $ 643,632 $ 87,923 $ 840,523
Cost and
expenses:
Cost of
services
provided (136,515) (22,847) (341,982) (62,046) (501,040)
Research and
development (201,652) (165,183) (520,325) (423,486) (1,438,734)
Sales and
marketing (536,185) (201,603) (1,351,825) (399,483) (2,629,977)
General and
administrative (569,737) (1,773,400) (1,852,879) (3,273,848) (6,986,185)
Other (note 3) 242,724 94,090 535,086 46,765 891,514
----------- ----------- ----------- ----------- ------------
Net loss $( 929,998)$(2,041,539)$(2,888,293)$(4,024,175)$( 9,823,899)
=========== =========== =========== =========== ============
Basic loss per
share $ (0.05)$ (0.11)$ (0.14)$ (0.23)$ (0.68)
=========== =========== =========== =========== ============
Diluted loss
per share $ (0.05)$ (0.11)$ (0.14)$ (0.23)$ (0.68)
=========== =========== =========== =========== ============
Shares used in
per share
calculations
(Note 4) 19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
=========== =========== =========== =========== ============
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
DATALINK SYSTEMS CORPORATION
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Period from
June 15, 1993
(date of
Nine months Ended inception) to
December 31, December 31,
1997 1996 1997
---------- ----------- ------------
Cash flows from operating
activities:
Net loss $(2,888,293) $(4,024,175) $(9,823,899)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 79,882 27,418 148,620
Foreign currency translation
adjustment 13,798 88,773 (43,857)
Amortization of technology
advances (354,444) (62,856) (486,737)
Amortization of note receivable 346,431 348,611 825,771
Common stock issued for services - 2,271,643 3,188,857
Changes in assets and liabilities:
Accounts and other receivables (18,938) (3,832) (73,356)
Prepaid and other assets (28,155) (4,168) (46,296)
Accounts payable and accrued
liabilities 164,240 (68,292) 523,656
Deferred revenue 113,683
----------- ---------- ----------
Net cash used in operating
activities (2,571,796) (1,426,878) (5,787,241)
----------- ---------- ----------
Cash flows from investing activities:
Acquisition of fixed assets (259,541) (223,934) (649,647)
Deposits (13,860) - (15,892)
----------- ---------- ----------
Net cash used in investing
activities (273,401) (223,934) (665,539)
----------- ---------- ----------
Cash flows from financing activities:
Issuance of preferred stock 9,226,000 - 9,226,000
Offering expenses, sale of
preferred stock (1,233,000) - (1,233,000)
Payments on capital leases (2,093) - (2,093)
Issuance of convertible debentures -- 2,000,000 2,000,000
Proceeds from sale of common stock -- 138,240 1,607,353
Repurchases of common stock (10,000) (10,000)
Advances on technology fee 1,303,565 1,925,057 3,230,304
----------- ---------- ----------
Net cash provided by
financing activities 9,294,472 4,053,297 14,818,564
----------- ---------- ----------
Net increase in cash and cash
equivalents 6,449,275 2,402,485 8,365,784
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
Statements of cash flows, continued
Period from
June 15, 1993
Nine months Ended (date of inception)
December 31, to December 31,
1997 1996 1997
----------- ---------- ----------
Cash and cash equivalents,
beginning of period 1,916,509 357,556 --
----------- ---------- ----------
Cash and cash equivalents,
end of period $ 8,365,784 $2,760,041 $8,365,784
=========== ========== ==========
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in
exchange for services performed -- 1,655,214 1,755,214
Issuance of stock options in
exchange for services performed -- -- 152,892
Issuance of common stock in exchange
for employee compensation -- -- 110,751
Common stock exchanged for debentures
exercised -- 1,270,000 1,270,000
Issuance of common stock in exchange
for stock subscriptions -- 271,049 271,049
Common stock issued in exchange for
notes receivable -- 1,568,750 1,568,750
Preferred stock issued in exchange
for notes receivable 1,050,000 -- 1,050,000
Equipment exchange for capital lease 81,640 -- 81,640
Stock issued in conjunction with
antidilutive agreement 1,000 -- 1,000
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<PAGE>
DATALINK SYSTEMS CORPORATION
(a development stage company)
CONDENSED CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Formation and Business of the Company:
Datalink Systems Corporation (formerly Lord Abbott, Inc., a publicly traded
shell corporation) (the Company), is engaged in research and development and
marketing of wireless communication technologies. The Company s primary
activities to date have been acquiring and developing certain wireless
technologies, marketing, recruiting personnel and obtaining capital.
The Company is a development stage organization and accordingly its principal
functions have been completion of research and development activities, and
establishment of market presence.
2. Summary of Significant Accounting Policies
Comparative consolidated financial statement information for the period ended
December 31, 1996 has been restated for certain errors and omissions as a
result of the annual financial statement process as of March 31, 1997 on Form
10-KSB.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the nine-month
period ended December 31, 1997, are not necessarily indicative of the results
that may be expected for the year ended March 31, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-KSB for the year
ended March 31, 1997.
Certain expense accounts have been reclassified in the fiscal year ended March
31, 1997 for consistency of presentation with the fiscal year ended March 31,
1998. The reclassifications do not affect net income or earnings per share.
-7-
<PAGE>
3. Other Income
Other income (expense) consists of the following items:
Period from
6/15/93
(date
of inception)
Three months ended Nine months ended to
------------------- --------------------- -------------
Description 12/31/97 12/31/96 12/31/97 12/31/96 12/31/97
- ---------------- ---------- ---------- ----------- --------- -----------
Owners fee sale
of technology $(392,500) $ - $(1,177,500) $ - $1,451,250
Interest on note
from sale of
technology 392,500 - (1,177,500) - (1,451,250)
Amortization of
technology
advance 120,570 - 354,444 - 490,645
Interest income 122,837 - 228,891 - 368,408
Miscellaneous (683) 94,090 (48,249) 46,765 32,461
Total other
income (expense) $ 242,724 $94,090 $ 535,086 $46,765 $ 891,514
========= ======= =========== ======= ==========
4. Earnings Per Share (EPS) Disclosures:
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 128, Earnings Per Share ("SFAS 128") effective December 31,
1997. SFAS 128 requires the presentation of basic and diluted earnings per
share. Basic EPS is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for
the period. Diluted EPS is computed giving affect to all dilutive potential
common shares that were outstanding during the period. Dilutive potential
common shares consist of the incremental common shares issuable upon the
conversion of convertible preferred stock (using the "if converted' method)
and exercise of stock options and warrants for all periods. All prior period
earnings per share amounts have been restated to comply with the SFAS 128.
In accordance with the disclosure requirements of SFAS 128, a reconciliation
of the numerator and denominator of basic and diluted EPS is provided as
follows:
-8-
<PAGE>
Period from
June 15, 1993
Three Months Nine Months (inception)
Ended Ended to
December 31, December 31, December 31,
1997 1996 1997 1996 1997
---------- ----------- ------------ ---------- -----------
Numerator -
loss and
diluted EPS
Net loss $ (929,998) $(2,041,539) $(2,888,293) $(4,024,175) $(9,823,899)
Denominator -
Basic EPS
Common stock
outstanding 19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
---------- ---------- ---------- ---------- ----------
Basic loss per
share $ (0.05) $ (0.11) $ (0.14) $ (0.23) $ (0.68)
========= ========== ========== ========== =========
Denominator -
Diluted EPS
Denominator -
Basic EPS 19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
Effect of
Dilutive
Securities:
Common
stock
options -- -- -- -- --
Convertible
preferred
stock -- -- -- -- --
19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
Diluted earn-
ings per
share $ (0.05) $ (0.11) $ (0.14) $ (0.23) $ (0.68)
========== ========== ========== ========== ==========
5. New Accounting Standards
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
This Statement establishes standards for reporting and displaying
comprehensive income and its components in the consolidated financial
statements. It does not, however, require a specific format for the
statement, but requires the Company to display an amount representing total
comprehensive income for the period in that financial statement. This
Statement is effective for the Company's 1999 fiscal year.
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." The Statement establishes standards for
how
-9-
<PAGE>
public business enterprises are to report information about operating segments
in annual financial statements and requires those enterprises to report
selected information about operating segments in interim financial reports
issued to shareholders. This Statement is effective for the Company's 1999
fiscal year. The Company does not believe it currently has any separately
reportable segments.
6. Private Placement
The Company entered into an agreement with an investment banking firm to sell
units of the Company's preferred stock in a Private Placement. 68.5 units
were sold at a cost of $150,000 per unit. Each unit consisted of 40,000
shares of preferred stock, par value $.001, convertible into 400,000 shares of
common stock. The conversion of the preferred to common is mandatory, and
occurs on May 5, 1999, if certain conditions are met. Also included with each
unit was a detachable common stock purchase warrant to purchase 200,000 shares
of the Company's common stock at a purchase price of $.50 per share,
exercisable beginning on May 5, 1999. The Company received approximately $8.0
million in cash, net of expenses, and $1.05 million in a note receivable from
an officer of the Company. Expenses and commissions related to the private
placement totalled approximately $1.3 million in cash. The Company also
provided the investment banking firm with 8,243,826 warrants to purchase
shares of the Company's common stock at $0.37 per share. The warrants are
immediately exercisable. In conjunction with the private placement, three
additional Board members were appointed to the Board of Directors.
7. Stock Split
On January 28, 1998, the Company announced a 1 for 10 reverse stock split.
The stock split is effective for shareholders of record as of February 9,
1998.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion contains predictions, estimates and other
forward-looking statements that involve a number of risks and uncertainties.
While this outlook represents the Company's current judgment in the future
direction of the business, such risks and uncertainties could cause actual
results to differ materially from any future performance suggested herein.
Risk factors related to the Company have been discussed in the Form 10-KSB for
the year ended March 31, 1997. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Quarter Ended Percent Nine months Ended Percent
12/31/97 12/31/96 Change 12/31/97 12/31/96 Change
--------- ----------- ------ ----------- ------------ ------
Net Sales $ 271,367 $ 27,404 890% $ 643,632 $ 87,923 631%
Gross Profit $ 134,852 $ 4,557 2,859% $ 301,650 $ 25,877 1,065%
Percentage of
net sales 49% 16% 46% 29%
Research &
Development $ 201,652 $ 165,183 22% $ 520,325 $ 423,486 22%
Percentage of
net sales 74% 602% 80% 481%
Sales &
Marketing $ 536,185 $ 201,603 165% $ 1,351,825 $ 399,483 238%
Percentage of
net sales 197% 735% 210% 454%
General &
Administrative $ 569,737 $ 1,773,400 73% $ 1,852,879 $ 3,273,848 43%
Percentage of
net sales 209% 6,471% 287% 3,723%
TOTAL REVENUES AND GROSS PROFIT:
As can be seen from the above table, total revenues for the third quarter of
fiscal year 1998 as well as for the first nine months of the fiscal year
increased when compared to both the third quarter of fiscal year 1997 and the
first nine months of fiscal year 1997. This increase was due to the Company
commencing sales of its QuoteXpress and SplitXpress products. The QuoteXpress
product sales were in the early stages in first quarter of fiscal year 1997,
and have increased markedly since that time. The SplitXpress product sales
began in August 1997 and represented approximately $54,000 of the sales for
the latest quarter and approximately $77,000 of the sales for the nine months
ended December 31, 1997. The remaining sales represented sales of QuoteXpress
products.
Gross profit for both the third quarter of fiscal year 1998 as well as for the
first nine months of the fiscal year increased when compared to both the
second quarter of fiscal year 1997 and the first nine months of fiscal year
1997. This increase was due to increasing sales volumes as discussed above.
Gross profit percentages for both the third quarter of fiscal year 1998 as
well as for the first nine months of the fiscal year increased when compared
to both the third quarter of fiscal year 1997 and the first nine months of
fiscal year 1997. This
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<PAGE>
increase was due to increasing efficiencies as the Company has increased
sales. Overhead and indirect cost of providing services have steadily
decreased as a percent of sales as those costs are distributed over a larger
subscriber base.
OPERATING EXPENSES:
Research and development expenses are expenses incurred to develop new
products and to develop product enhancements for current products. These
expenses are incurred in the Company's engineering offices located in
Vancouver B.C. Research and development expenses increased slightly for the
third quarter fiscal year 1998 when compared with the third quarter fiscal
year 1997, and increased for the nine month period ended December 31, 1997
when compared with the nine month period ended December 31, 1996. The increase
was due to the Company incurring costs for product enhancements for the
MailXpress product as well as for QuoteXpress product. Additionally, MessageX
reached completion during the second quarter of fiscal year 1998. During the
same period of fiscal year 1997 the Company was still in the early development
stages for MessageX and MailXpress. The Company also had a number of products
in the early stages of development during the quarter ended December 31, 1997
which were not in development in the comparable period in the prior fiscal
year.
Sales and marketing expenses consist of costs incurred to market the Company's
products through advertising, attendance at trade shows, as well as for the
development of an effective marketing strategy. Also included in this
category are costs for the maintenance of both an inside sales staff, and an
outside key account sales force. These costs have increased when compared
with comparable periods in the prior fiscal year. This is due to the
development of a marketing strategy, increased advertising costs necessary to
obtain customers, and an increase in the sales staff. The Company anticipates
further increases in this category due to ongoing marketing efforts,
anticipated increases in the sales staff, as well as for the development of
additional advertising campaigns necessitated by the completion of products
currently in research and development which will reach marketability in the
coming months.
General and administrative expenses are classified as costs incurred by the
infrastructure of the organization. These consist of accounting costs, legal
costs, rent, depreciation of Company fixed assets, utilities and allocation of
other overhead related costs. Also included in this category are salaries of
all administrative personnel, and the recruitment costs necessary to obtain
those individuals. Costs associated with this category have decreased for the
nine month period ended December 31, 1997 when compared to the comparable nine
month period in the previous year, as well as for the quarter ended December
31, 1997 when compared to the quarter ended December 31, 1996. The decrease
in general and administrative costs is attributable to costs incurred during
fiscal year 1997 to set up the Company which were charged to expense during
the quarter. These expenses did not reoccur during fiscal year ended March
31, 1998.
Quarter Ended Percent Nine Months Ended Percent
12/31/97 12/31/96 Change 12/31/97 12/31/96 Change
-------- ---------- ------ --------- ---------- ------
Other Income
(Expense) $242,724 $ 94,090 157% $535,086 $ 46,765 958%
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<PAGE>
OTHER INCOME AND EXPENSE:
Other income and expense category consists of non-operational revenues and
expenses. Examples of this category include Owners fees from the sales of
technology, Interest on notes received on sales of technology, amortization of
advances received in the sale with technology, and interest income. The
increase in other income is due to increases in interest income earned on
notes receivable and investments.
FINANCIAL CONDITION:
Nine months ended
December 31, Percent
1997 1996 Change
----------- ----------- ------
Net cash used in operating activities $(2,571,796) $(1,426,878) 80%
Net cash used in investing activities (273,401) (223,924) 22%
Net cash provided by financing activities 9,294,472 4,053,297 129%
Working capital has increased from $1,467,334 at March 31, 1997 to $7,475,577
at December 31, 1997. The increase was primarily attributable to the proceeds
of a private placement which netted the Company $8,000,000 as well as the
$1,303,565 which the Company received as an advance on the sale of the
QuoteXpress technology. The net loss was due to expenses incurred in
developing products, establishing and maintaining an administrative and
finance function and developing and implementing marketing and sales plans.
Cash used in investing activities increased as fixed assets were purchased by
the Company for the research and development department, and for
administrative functions.
Cash provided by financing activities increased for the nine months ended
December 31, 1997 when compared to the nine months ended December 31, 1996.
This is due to the Company selling preferred stock in the nine months ended
December 31, 1997; the Company also received the $1,303,565 from the sale of a
technology referred to above.
On November 5, 1997 the Company completed a private placement, selling
approximately 2.7 million shares of preferred stock for which approximately
$8.0 million in cash net of expenses was received. The cash received will be
used to implement the marketing plan as well as for ongoing research and
development efforts.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
ITEM 2. CHANGES IN SECURITIES.
During the quarter ended November 30, 1997, the Company sold 68.5
units of the Company's preferred stock to accredited investors in connection
with a Private Placement at a price of $150,000 per unit. Each unit consisted
of 40,000 shares of Series A convertible preferred stock, convertible into
400,000 shares of common stock, and 200,000 detachable common stock purchase
warrants. Each warrant entitles the holder to purchase one share of common
stock at a price of $.50 per share.
61.5 of the units were sold for cash for total gross proceeds of
$9,225,000 and 7 units were sold to an officer of the Company for a promissory
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<PAGE>
note in the amount of $1,050,000. In connection with this private offering
the Company paid Commonwealth Associates a commission of $719,250, a $205,500
expense allowance, and a $308,250 structuring fee for its services as
placement agent.
With respect to the Private Placement, the Company relied on
Section 4(2) of the Securities Act of 1933, as amended and Regulation D
promulgated thereunder. Each investor was given a copy of a Private Placement
Memorandum containing complete information concerning the Company. A Form D
was filed with the SEC and the Company complied with the applicable
requirements of Rule 506. Each investor signed a subscription agreement in
which he represented that he was purchasing the shares for investment only and
not for the purpose of resale or distribution. The appropriate restrictive
legend was placed on the certificates and stop transfer instructions were
issued to the transfer agent.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
ITEM 5. OTHER INFORMATION. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits have been filed with this report:
Exhibit 11.1 - Statement Regarding Computation of Net Loss
Per Share (p.11)
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K dated
November 5, 1997 which reported on Items 5 and 7.
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.
DATALINK SYSTEMS CORPORATION
Date: February 13, 1998 By:/s/ Anthony N. LaPine
Anthony N. LaPine, President and
Chief Executive Officer (Principal
Executive Officer)
By:/s/ Thomas C. Bland
Thomas C. Bland, Chief Financial
Officer (Principal Financial Officer)
INDEX TO EXHIBITS
EXHIBIT METHOD OF FILING
- ------- -------------------------
11.1 Statement Regarding Computation of
Net Loss Per Share Filed herewith electronically
27. Financial Data Schedule Filed herewith electronically
-14-
DATALINK SYSTEMS CORPORATION
COMPUTATION OF NET LOSS PER SHARE
(unaudited)
Cumulative
period from
June 15, 1993
Three Months Ended Nine months Ended (date of incep-
December 31, December 31, tion) to Decem-
1997 1996 1997 1996 ber 31, 1997
---------- ---------- ------------ ----------- ------------
Weighted
average
common shares
outstanding
for the
period 19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
Shares used
in per share
calculations 19,509,012 19,022,461 19,341,107 17,210,329 14,402,827
Net loss $ (929,998) $(2,041,539) $(2,888,293) $(4,024,175) $(9,823,899)
Net loss
per share $ (0.05) $ (0.11) $ (0.14) $ (.0.23) $ (0.68)
Calculated in accordance with the guidelines of Item 601 of Regulation S-B.
Primary and fully diluted calculations are substantially the same.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on pages 3 and 4 of the
Company's Form 10-Q for the year to date, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,491,129
<SECURITIES> 0
<RECEIVABLES> 102,443
<ALLOWANCES> (4,979)
<INVENTORY> 0
<CURRENT-ASSETS> 1,616,628
<PP&E> 513,628
<DEPRECIATION> (115,233)
<TOTAL-ASSETS> 2,045,656
<CURRENT-LIABILITIES> 1,078,265
<BONDS> 0
<COMMON> 19,183
0
0
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</TABLE>
