Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
(a) MARKET INFORMATION. Our common stock first began trading on the OTC Bulletin
Board on May 9, 1997. On December 29, 1999, trading in our common stock moved to
the American Stock Exchange ("AMEX"), under the symbol "DLK". On August 14,
2000, trading in our common stock moved to the Nasdaq National Market
("Nasdaq"), under the symbol "XLNK". On December 18, 2000, trading in our common
stock moved back to the AMEX under the symbol "DLK".
A 2 for 1 forward stock split became effective on April 27, 2000. Share prices
have been adjusted to reflect this split.
The following table sets forth the high and low closing sales prices of our
common stock as reported by the AMEX for the periods indicated:
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HIGH LOW
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FISCAL YEAR ENDED MARCH 31, 2002
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Quarter ended June 30, 2001 $ 3.15 $ 1.46
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Quarter ended September 30, 2001 $ 1.75 $ 0.66
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Quarter ended December 31, 2001 $ 1.05 $ 0.53
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Quarter ended March 31, 2002 $ 0.94 $ 0.60
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FISCAL YEAR ENDED MARCH 31, 2003
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Quarter ended June 30, 2002 $ 0.70 $ 0.25
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Quarter ended September 30, 2002 $ 0.39 $ 0.14
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Quarter ended December 31, 2002 $ 0.27 $ 0.10
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Quarter ended March 31, 2003 $ 0.20 $ 0.11
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FISCAL YEAR ENDED MARCH 31, 2004
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Quarter ended June 30, 2003 $ 0.68 $ 0.10
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Quarter ended September 30, 2003 $ 1.39 $ 0.36
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Quarter ended December 31, 2003 $ 0.94 $ 0.65
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Quarter ended March 31, 2004 $ 0.94 $ 0.53
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(b) HOLDERS. As of March 31, 2004, we had approximately 450 shareholders of
record. We believe that in excess of 15,000 beneficial owners hold shares of our
common stock in depository or nominee form.
(c) DIVIDENDS. We have never declared or paid any cash dividends on our common
stock. We currently intend to retain earnings, if any, to support the
development and growth of our business and we do not anticipate paying any cash
dividends in the foreseeable future.
(d) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS. The
information required by this Item will be included in our Proxy Statement for
the Annual Meeting of Shareholders to be held in September 2004 under the
caption "Executive Compensation - Summary Information Concerning Stock Option
Plans," which will be filed with the Securities and Exchange Commission no later
than 120 days after the close of the fiscal year ended March 31, 2004, and is
incorporated herein by reference.
RECENT SALES OF UNREGISTERED SECURITIES. During the quarter ended March 31, 2004
we issued securities which were not registered under the Securities Act of 1933,
as amended, as follows:
In connection with a private placement of $1,028,750 that occurred in January of
2004, we issued 1,959,523 common shares at $0.525 per share and 489,880 share
purchase warrants. Each warrant entitles the holder to purchase an additional
share of common stock at a price of $0.8625 per share for a period of five
years. In connection with the private placement, we also paid a placement fee, a
portion of which was paid by the issuance of 64,350 shares of common stock and
40,476 share purchase warrants. In addition, during the quarter ended March 31,
2004, we issued a total of 16,250 shares to various suppliers of services. With
respect to these transactions, we relied on Section 4(2) of the Securities Act
of 1933, as amended. The investors were sophisticated and were given complete
information concerning the Company. The appropriate restrictive legend was
placed on the certificates and stop transfer instructions were issued to the
transfer agent.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected consolidated financial data should be read in conjunction
with Item 7 "Management's Discussion and Analysis of Financial Condition and
Results of Operations," our consolidated financial statements and notes thereto
and other financial information included elsewhere in this report. The selected
consolidated statements of operations data for the years ended March 31, 2000,
2001, 2002, 2003 and 2004 are derived from our audited consolidated financial
statements.
YEAR ENDED MARCH 31,
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2004 2003 2002 2001 2000*
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(UNAUDITED)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues $ 1,338,373 $ 1,339,190 $ 1,416,940 $ 1,910,194 $ 1,459,920
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Cost of revenues 323,848 352,285 539,692 1,034,603 805,099
Gross profit 1,014,525 986,905 877,248 875,591 654,821
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Operating expenses:
Research and development 563,602 719,965 999,589 1,187,348 600,957
Sales and marketing 725,114 959,191 1,718,190 4,098,228 1,608,056
General and administrative 963,790 2,159,498 2,781,714 4,218,224 3,428,314
Impairment of goodwill -- -- 909,272 -- --
Impairment of intangible assets -- -- 3,420,000 -- --
Depreciation and amortization 201,181 1,255,635 2,360,771 1,786,514 --
Stock, option and warrant expense 952,473 52,455 496,181 601,932 --
Operating loss from continuing operations (2,391,635) (4,159,839) (11,808,469) (11,016,655) (4,982,506)
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Loss from continuing operations (2,357,519) (3,157,234) (11,249,054) (9,913,215) (4,246,949)
Income (loss) from discontinued
operations 105,834 (403,698) (7,195,424) (1,380,166) --
Gain from disposal of discontinued
operations -- 128,582 -- -- --
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Net loss $ (2,251,685) $ (3,432,350) $(18,444,478) $(11,293,381) $ (4,246,949)
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Loss per common share from continuing
operations $ (0.11) $ (0.17) $ (0.66) $ (0.65) $ (0.59)
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Loss per common share from discontinued
operations $ 0.00 $ (0.02) $ (0.43) $ (0.09) --
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Net loss per common share $ (0.11) $ (0.19) $ (1.09) $ (0.74) $ (0.59)
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Weighted average shares 20,604,458 18,039,262 16,975,660 15,199,895 7,213,715
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents (including
restricted cash) $ 1,717,052 $ 1,969,910 $ 4,763,928 $ 7,330,749 $ 15,673,264
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Working capital 1,682,495 1,464,645 2,064,396 7,479,156 15,753,980
Total assets 3,551,930 4,648,556 10,337,063 21,769,961 16,597,406
Long-term liabilities -- 336,405 821,475 898,617 1,362,590
Preferred shareholders' equity -- -- 5,682,456 5,682,456 9,315,501
Common shareholders' equity 3,261,456 3,309,727 294,481 13,182,551 5,804,468
* Fiscal year 2000 selected financial data is presented in this table as
originally filed by Semotus with the SEC. The data are not restated to take into
consideration the acquisition of Five Star on December 28, 2000 under the
pooling method of accounting, which, because of the discontinuance of the
operations of Five Star, would have appeared only in the net loss or gain from
discontinued operations.