<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1996
----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO _______________
COMMISSION FILE NUMBER 0-19705
LINKON CORPORATION
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
NEVADA 13-3469932
------ ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
140 SHERMAN STREET,
FAIRFIELD, CONNECTICUT 06430
----------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(203) 319-3175
--------------
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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 ________
STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON
EQUITY, AS OF THE LATEST PRACTICABLE DATE.
CLASS OUTSTANDING AT NOVEMBER 8, 1996
- --------------------------------- -------------------------------
COMMON STOCK, PAR VALUE $.001 PER SHARE 10,753,252
==========
TRANSITIONAL (SMALL BUSINESS DISCLOSURE FORMAT CHECK ONE):
YES ; NO X
----- ------
<PAGE>
LINKON CORPORATION
FORM 10-QSB
QUARTERLY REPORT
FOR THE THREE MONTHS ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
Page to Page
------------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheet - October 31, 1996 and 1995
and January 31, 1996 3 - 4
Statements of Operations - Nine Months
Ended October 31, 1996 and 1995 5
Statements of Operations - Three Months
Ended October 31, 1996 and 1995 6
Statements of Cash Flows - Nine Months
Ended October 31, 1996 and 1995 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of the
Financial Condition and Results of Operations 9 - 10
Exhibit I - Calculation of Earnings per Share 11
PART II. Other Information 12 - 13
Signatures 14
Financial Data Schedule 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LINKON CORPORATION AND SUBSIDIARY
---------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(UNAUDITED)
A S S E T S
-----------
OCTOBER 31, OCTOBER 31, JANUARY 31,
1996 1995 1996
------ ------ ------
CURRENT ASSETS
- --------------
<S> <C> <C> <C>
Cash and Cash Equivalents $ 133,064 $ 569,664 $ 522,569
Certificate of Deposit 66,808 62,993 63,934
Accounts Receivable (Net of Allowance) 900,129 1,113,871 611,387
Notes Receivable 51,000 51,000 51,000
Other Receivables 29,019 63,475 51,213
Inventory 1,090,218 840,997 888,655
Prepaid Expenses 54,200 61,253 27,406
---------- ---------- ----------
Total Current Assets 2,324,438 2,763,253 2,216,164
---------- ---------- ----------
MACHINERY & EQUIPMENT
- ---------------------
Machinery & Equipment, at cost 1,061,500 941,935 1,046,008
Equipment under Capital Leases 156,965 156,965 156,965
---------- ---------- ----------
1,218,465 1,098,900 1,202,973
Less: Accumulated Depreciation 818,006 654,278 696,283
---------- ---------- ----------
Machinery & Equipment, Net 400,459 444,622 506,690
---------- ---------- ----------
OTHER ASSETS
- ------------
Software (Net of Amortization) 989,885 891,669 928,148
Investments, at cost 34,613 375,182 375,182
Prepaid Financing Costs 31,371 41,828 39,213
Deferred Offering Costs -- -- --
Security Deposits 7,696 32,811 19,931
Organization Costs (Net of
Amortization) -- -- --
Total Other Assets 1,063,565 1,341,490 1,362,474
---------- --------- ---------
$3,788,462 $4,549,365 $4,085,328
========== ========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this report.
- 3 -
<PAGE>
LINKON CORPORATION AND SUBSIDIARY
---------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
OCTOBER 31, OCTOBER 31, JANUARY 31,
1996 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
CURRENT LIABILITIES
- -------------------
Accounts Payable $ 962,274 $409,060 $1,004,125
Bank Loan Payable 45,229 -- 30,230
Taxes Payable 14,928 17,306 18,108
Capital Leases Payable -
Current Portion -- 338 --
Interest Payable 133,750 76,639 100,000
Accrued Expenses 59,757 7,272 7,272
---------- -------- ----------
Total Current Liabilities 1,215,938 510,615 1,159,735
---------- -------- ----------
LONG TERM LIABILITIES
- ---------------------
Notes Payable, Net 1,262,903 1,310,367 1,251,265
--------- --------- ---------
Total Long Term Liabilities 1,262,903 1,310,367 1,251,265
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES -- -- --
- -----------------------------
STOCKHOLDERS' EQUITY
- --------------------
Common Stock, $.001 Par Value,
25,000,000 shares authorized,
10,753,252 shares issued and
outstanding 10,754 10,753 10,754
Capital in Excess of Par Value 9,129,970 9,129,970 9,129,970
Retained Earnings (Accumulated Deficit) (7,831,103) (6,412,340) (7,466,396)
---------- ---------- ----------
Total Stockholders' Equity 1,309,621 2,728,383 1,674,328
---------- ---------- ----------
$3,788,462 $4,549,365 $4,085,328
========== ========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this report.
- 4 -
<PAGE>
LINKON CORPORATION AND SUBSIDIARY
---------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED OCTOBER 31, ENDED OCTOBER 31,
1996 1995
------------------ ------------------
<S> <C> <C>
Gross Revenues $ 2,117,127 $ 1,181,010
----------- -----------
Cost of Goods Sold - Product 1,049,999 572,155
- Software amortization 170,649 142,380
----------- -----------
1,220,648 714,535
----------- -----------
Gross Margin On Sales 896,479 466,475
----------- -----------
Selling, General and
Administrative Expenses 1,341,009 1,577,118
Research and Development 409,858 522,365
----------- -----------
1,750,867 2,099,483
----------- -----------
Operating Loss ( 854,388) (1,633,008)
----------- -----------
OTHER INCOME (EXPENSE)
- ----------------------
Interest Income 5,938 10,318
Recovery of Bad Debt 22,400 --
Gain (Loss) on Foreign Currency
Translation ( 445) 635
Gain on Sale of Securities 679,909 --
Interest Expense ( 212,598) (118,806)
----------- -----------
495,204 (107,853)
----------- -----------
Loss Before Income Taxes ( 359,184) (1,740,861)
Income Taxes 5,523 1,571
----------- -----------
Net Loss $ ( 364,707) $(1,742,432)
=========== ===========
Loss Per Share $(.03) $(.19)
=========== ===========
Weighted Average Number of Shares
Outstanding 10,753,252 9,037,797
=========== ===========
Fully Diluted Loss Per Share $(.03) $(.19)
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this report.
- 5 -
<PAGE>
LINKON CORPORATION AND SUBSIDIARY
---------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED OCTOBER 31, ENDED OCTOBER 31,
1996 1995
------------------ -----------------
<S> <C> <C>
Gross Revenues $ 1,252,146 $ 200,113
----------- ----------
Cost of Goods Sold - Product 672,916 94,403
- Software amortization 56,883 47,460
----------- ----------
729,799 141,863
----------- ----------
Gross Margin On Sales 522,347 58,250
----------- ----------
Selling, General and
Administrative Expenses 487,056 460,650
Research and Development 134,883 176,886
----------- ----------
621,939 637,536
----------- ----------
Operating Loss ( 99,592) (579,286)
----------- ----------
OTHER INCOME (EXPENSE)
- ----------------------
Interest Income 1,775 5,677
Gain (Loss) on Foreign Currency
Translation 0 ( 337)
Interest Expense ( 93,772) ( 39,031)
----------- ----------
( 91,997) ( 33,691)
----------- ----------
Loss Before Income Taxes ( 191,589) (612,977)
Income Taxes -- 1,571
----------- ----------
Net Income (Loss) $ ( 191,589) $ (614,548)
=========== ==========
Income (Loss) Per Share $(.02) $(.06)
=========== ==========
Weighted Average Number of Shares
Outstanding 10,753,252 9,466,146
=========== ==========
Fully Diluted Income (Loss) Per Share $(.02) $(.06)
=========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this report.
- 6 -
<PAGE>
LINKON CORPORATION AND SUBSIDIARY
---------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(UNAUDITED)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
NINE MONTHS ENDED OCTOBER 31,
1996 1995
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- --------------------------------------
Net Income (Loss) $( 364,707) $(1,742,432)
Add: Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities:
Depreciation & Amortization 304,009 268,392
Gain on Sale of Securities ( 679,909) --
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable ( 288,742) ( 186,804)
(Increase) Decrease in Other Receivables 22,194 33,784
(Increase) Decrease in Inventory ( 201,563) 273,212
(Increase) Decrease in Prepaid Expense ( 26,794) ( 49,807)
Increase in Software ( 232,386) ( 314,285)
Increase in Deferred Offering Costs 7,842 29,019
(Increase) Decrease in Security Deposits 12,235 ( 7,131)
Increase (Decrease) in Accounts Payable ( 41,851) ( 391,169)
Increase (Decrease) in Accrued Expenses
Payable 52,485 ( 60)
Increase in Interest Payable 33,750 32,928
Increase (Decrease) in Taxes Payable ( 3,180) 5,111
----------- -----------
Net Cash Used in Operating Activities (1,406,617) (2,049,242)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Cash Paid to Purchase Equipment ( 15,492) ( 112,360)
Proceeds from Sale of Securities 1,020,000 --
Investment in Non-Marketable Securities 479 ( 357)
----------- -----------
Net Cash Provided by (Used in) Investing Activities 1,004,987 ( 112,717)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Proceeds from Sale of Common Stock -- 2,148,401
Borrowings(Payments) on Bank Debt 14,999 --
Principal Payments Under Capital Lease Obligations -- ( 6,245)
----------- -----------
Net Cash Provided by (Used in) Financing Activities 14,999 2,142,156
----------- -----------
Net Increase (Decrease) in Cash ( 386,631) ( 19,803)
Cash and Cash Equivalents at Beginning of Period 586,503 652,460
----------- -----------
Cash and Cash Equivalents at End of Period $ 199,872 $ 632,657
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this report.
- 7 -
<PAGE>
LINKON CORPORATION
------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
OCTOBER 31, 1996
----------------
1) In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments, (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of October 31,
1996 and 1995, and January 31, 1996, and the results of operations for the nine
month and three month periods ended October 31, 1996 and 1995 and cash flows for
the nine month periods ended October 31, 1996 and 1995.
The accounting policies followed by the Company are set forth in Note
3 to the Company's financial statements in the Linkon Corporation. Annual Report
- - January 31, 1996.
2) ANALYSIS OF STOCKHOLDERS' EQUITY:
---------------------------------
<TABLE>
<CAPTION>
Capital
Outstanding in Excess Accumulated
Shares Amount of Par Value Deficit
----------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Balance January 31, 1996 10,753,252 $10,754 $9,129,970 $(7,466,396)
Loss for Nine Months
Ended October 31, 1996 -- -- -- ( 364,707)
----------- ------- ------------ -----------
Balance - October 31, 1996 10,753,252 $10,754 $9,129,970 $(7,831,103)
----------- ------- ------------ -----------
</TABLE>
3) RECLASSIFICATION OF THE AMORTIZATION OF CAPITALIZED SOFTWARE COSTS:
--------------------------------------------------------------------
During the quarter ending October 31,1996 the Company reclassified the
amortization of capitalized software costs from the Research & Development
category to Cost of Goods Sold. Due to this reclassification the Company has
restated all financial statements being presented to take account of this
reclassification for prior periods. This reclassification had no effect on the
results of operations or net loss being reported on the income statements being
presented. All information provided in the following Management's Discussion and
Analysis of Financial Condition and Results of Operations is being presented
after taking into consideration this reclassification.
4) EMPLOYEE STOCK OPTIONS:
------------------------
On May 1, 1996 the Company granted 697,400 incentive stock options to employees
and directors. These options are exerciseable at $0.75 per share until April 30,
2006. The options will qualify for incentive stock option treatment under the
Internal Revenue Code of 1986 if the Company's 1996 Stock Option and Performance
Incentive Plan is approved by the Company's stockholders at the next annual
meeting of stockholders; if stockholders fail to approve the option plan, these
options will be treated as non-statutory stock options. There is no compensation
recorded as a result of the grant of these options as the Company is following
accounting prescribed in APB Opinion # 25 since the stock price at the time of
the grant was $0.75 per share.
5) FINANCING OF OPERATIONS:
-------------------------
See Management's Discussion and Analysis- Liquidity and Capital Resources as to
the Company's need for additional capital and any plans for the future financing
of its operations.
- 8 -
<PAGE>
LINKON CORPORATION
------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
NET INCOME (LOSS)
- -----------------
The Company reported a net loss of $364,707 for the first nine months of fiscal
1997 as compared to a net loss of $1,742,432 for the same period during the
prior year. This improvement in the net loss reported by the Company was due to
several factors.
During the quarter ending July 31, 1996 the Company sold its stock investment in
Concentric Network Corporation for $1,020,000 and recognized a gain of $679,909,
which has been included in net income.
Revenues for the nine months ended October 31, 1996 were $2,117,127 as compared
to $1,181,010 for the same nine months in the prior year. This represented a 79%
increase in revenues for that period. Gross margins increased from 39.5% to
42.34% for the nine month periods. The additional revenue generated a $430,004
contribution to the gross margin.
Selling, general and administrative expenses decreased from $1,577,118 in the
first nine months of fiscal year 1996 to $1,341,009 in the same nine months of
fiscal year 1997. This represented a 15% decrease from period to period, as
discussed more fully under the section entitled "Selling, General and
Administrative Expenses" below.
For the three months ended October 31, 1996 the Company reported a net loss of
$191,589 as compared to a net loss of $614,548 for the three months ending
October 31,1995. This decrease in net loss was due primarily to a 525% increase
in revenues for the quarter ending October 31,1996, as discussed more fully
below.
REVENUES
- --------
For the nine months ended October 31, 1996 revenues increased $936,117 from the
nine month period ended October 31, 1995, an increase of 79%. This increase was
due mainly to increased shipments to AT&T and CAT Technologies. The Company
received a $2.4M contract from AT&T for product to be shipped by December
31, 1996. Shipments to AT&T for October 1996 totalled $741,987 with $874,020 and
$790,920 of product to be shipped in November and December, respectively.
Revenues for the three month period ended October 31,1996 increased $1,052,033
from the three month period ended October 31, 1995, an increase of 525%. This
increase was due mainly to increased shipments to AT&T and CAT Technologies.
The Company continues to concentrate on developing and expanding its customer
base and is currently working on several new projects for other major customers
which it anticipates will diversify its customer base and increase revenues in
the near and long-term. While the certainty of these new projects becoming
future revenues for the Company cannot be measured at this point in time, the
management of the Company is encouraged by the enquiries it is receiving
concerning its products. Order backlog for the period ended 10/31/96 was
$1,777,324, representing products scheduled to be shipped during the fourth
fiscal quarter.
During the Company's third fiscal quarter, the Company secured a $2.4M contract
with AT&T. While this contract will be completed by December 31, 1996, the
Company will continue to work towards maintaining a positive and continuing
relationship with AT&T, as well as its other current customers.
-9-
<PAGE>
The Company is also currently developing new strategies to promote and market
its products in the computer and telecommunications industries. These new
strategies are still under development and discussion. It is envisioned that as
they are implemented over the next few quarters they will give greater exposure
to the Company's products in the marketplace and lead to additional
opportunities to generate additional revenues for the Company.
During the first fiscal quarter, the Company added a new Vice President of
Operations. As the Company grows and as finances permit, additional sales,
administrative, technical and customer service staff will be hired for the
purpose of increasing revenues. Programs have been designed and implemented to
maintain a streamlined operation utilizing external support resources where
practicable or necessary.
COST OF GOODS SOLD
- ------------------
Cost of goods sold, consisting of parts, supplies and manufacturing costs for
the Company's hardware and software products, constituted approximately 57.66%
and 60.50% of revenues for the nine months ended October 31, 1996 and 1995
respectively.
Cost of goods sold for the three months ended October 31,1996 and 1995
constituted approximately 58.28% and 70.89%, respectively.
The primary costs incurred by the Company included in cost of goods sold are
materials and equipment relating to its hardware products, which carry lower
profit margins than the Company's software products. The Company manufactures
and assembles all hardware through contracted third party suppliers under the
direct supervision of the Company's management.
Management attributes the change in cost of goods sold to the changes in the
mixture of its hardware and software products sold, and to highly competitive
pricing associated with the $2.4M AT&T purchase order.
While management continues to believe that its products can be sold with a less
than 45% cost of goods sold, management also realizes the need to gain market
share for its products and will, for the near term, be aggressive in its pricing
policy. However, management also believes that the cost of sales will go down as
customers begin to order enhanced software features which carry higher gross
margins than the company's hardware products.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling, general and administrative expenses decreased $236,109 or 15% for the
nine months ended October 31, 1996 compared to the same period in the prior
fiscal year. Management attributes this decrease in selling, general and
administrative expenses to planned reductions in operating expenses including
the closing of the Company's New York City office. Selling, general and
administrative expenses for the nine months ended October 31, 1996 and 1995
constituted approximately 63% and 134% of sales for such periods, respectively.
For the three months ended October 31, 1996 and 1995 selling, general and
administrative expenses constituted 39% and 230% of sales for such periods,
respectively. This decrease for the first 3 months of fiscal year 1997 when
compared with the first 3 months of fiscal year 1996 was due primarily to the
planned reduction of expenses.
RESEARCH, DEVELOPMENT AND SOFTWARE
- ----------------------------------
The Company incurred research, development and software costs of approximately
$642,244 and $836,650 for the nine month periods ended October 31, 1996 and 1995
respectively. Management attributes this decrease in cost to planned
restructuring of research, development and software resources. These amounts
consist of internal salaries, outside consulting services, equipment and fixed
overhead costs. The Company expects research, development and software costs to
increase in future periods as finances permit.
-10-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company has historically funded operations from cash flow generated
principally from the receipt of the proceeds from private placements of debt and
equity, including the exercise of warrants, interest earned from the investment
of proceeds in interest earning assets, and revenues from operations. On June 6,
1996, the Company sold its investment in Concentric Network Corporation for
$1,020,000, resulting in cash proceeds of such an amount and a capital gain in
the Company's second quarter of approximately $680,000. The sale of this
investment provided the Company with additional liquidity during the current
fiscal quarter from which to fund its operations.
During the second half of its 1996 fiscal year and the first half of its fiscal
year 1997, the Company's cash flow and liquidity was severely impaired due
primarily to a delay in the release of the Company's Maestro/TM/ System. This
product, which was expected to be ready for general commercial distribution
during the early part of fiscal year 1996, was in fact unavailable until
October, 1995. This delay caused the company to generate lower than anticipated
earnings during the first two quarters of fiscal 1997, thereby adversely
affecting the Company's cash flow and liquidity. Upon production, distribution
and customer acceptance of these products in the market, revenues have
substantially increased in the third quarter. While the Company is still being
adversely affected by the Maestro's delay, the Company's management believes
that in the immediate future, the Company will be cash flow positive from its
operations as the Maestro System's products continue to gain acceptance and
popularity in the marketplace.
Management believes that it has sufficient resources available to meet its
liquidity needs over the next twelve months. Based primarily on the strength of
its purchase orders with AT&T and other major customers, the Company has begun
to be able to finance its operations through receivables financing, secured by
purchase orders from creditworthy customers. As discussed below, the Company
was able to consummate a receivables debt financing with IBJS Financial
Corporation, secured by the Company's rights under the above mentioned purchase
orders from AT&T. Provided the Company's Maestro System continues to gain
market acceptance, the Company believes that it will be able to rely for its
long-term liquidity needs less on private equity financing and the exercise of
warrants by existing warrant holders and more on cash flow generated from
revenues from increased hardware and software sales to fund its continued
operations.
Management continues to believe, however, that the Company's long-term cash flow
and liquidity needs will also have to be met through debt and equity private
placements, the exercise of outstanding warrants or borrowings from financial
institutions, including factors and other asset based lenders. Due to the
planned introduction of new and improved products, and the anticipated growth
due to, among other things, the manufacturing of hardware and software products
and the expansion of operations, management anticipates that there will be a
continued need for cash resources to meet, among other things, anticipated
commitments for raw materials, increased marketing activities, and personnel.
The Company does not currently contemplate any significant capital expenditures
during fiscal 1997. The Company does not believe that there are any
contingencies which would have a material adverse effect on the Company's
financial condition, future operating results or liquidity.
Statements throughout this quarterly report that state the Company's or its
management's intentions, beliefs, expectations or predictions of the future are
forward looking statements. It is important to note that the Company's actual
results could differ materially from those projected in such forward looking
statements.
- 11 -
<PAGE>
PART 1. FINANCIAL INFORMATION EXHIBIT I
-------------------------------
LINKON CORPORATION
------------------
CALCULATION OF EARNINGS PER SHARE
---------------------------------
(UNAUDITED)
NINE MONTHS NINE MONTHS
ENDED ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
---------------- ----------------
Loss for the Period $( 364,707) $(1,742,432)
========== ===========
Weighted Number of Shares Outstanding 10,753,252 9,037,797
========== ===========
Loss Per Share: $ (.03) $ (.19)
========== ===========
- 12 -
<PAGE>
LINKON CORPORATION
------------------
PART II. OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
On September 30, 1996, the Company's then CFO, Kenneth S. Weiner, resigned
from such position. The Company's Vice President of Operations, Thomas V.
Cerabona, had supervisory responsibility for the CFO's principal duties prior to
Mr. Weiner's resignation. Mr. Weiner's responsibilities have been assumed by Mr.
Cerabona.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibit - Calculation of Earnings per Share - Exhibit I.
b. Reports on Form 8-K - There were no reports on Form 8-K
filed for the three months ended October 31, 1996.
c. Exhibits
INDEX TO EXHIBITS
Exhibit
No. Description of Document
------ -----------------------
27 Financial Data Schedule for the period ended
October 31, 1996
- 13 -
<PAGE>
LINKON CORPORATION
------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LINKON CORPORATION
------------------
Registrant
DATED: December 12, 1996 /s/ Lee W. Hill
----------------
BY: LEE W. HILL
CHIEF EXECUTIVE OFFICER
DATED: December 12, 1996 /s/ Thomas V. Cerabona
-----------------------
BY: THOMAS V. CERABONA
VICE PRESIDENT OF OPERATIONS
- 14 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> Oct-31-1996
<CASH> 133,064
<SECURITIES> 66,808
<RECEIVABLES> 1,021,039
<ALLOWANCES> 40,891
<INVENTORY> 1,090,218
<CURRENT-ASSETS> 2,324,438
<PP&E> 1,218,465
<DEPRECIATION> 818,006
<TOTAL-ASSETS> 3,788,462
<CURRENT-LIABILITIES> 1,215,938
<BONDS> 1,262,903
0
0
<COMMON> 10,754
<OTHER-SE> 1,298,867
<TOTAL-LIABILITY-AND-EQUITY> 3,788,462
<SALES> 2,117,127
<TOTAL-REVENUES> 2,117,127
<CGS> 1,220,648
<TOTAL-COSTS> 1,220,648
<OTHER-EXPENSES> 1,750,867
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 212,598
<INCOME-PRETAX> (359,184)
<INCOME-TAX> 5,523
<INCOME-CONTINUING> (364,707)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (364,707)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
