SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
+---+
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
+---+ SECURITIES EXCHANGE ACT OF 1934
For the quarterly period SEPTEMBER 30, 1998
OR
+---+ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
| | OF THE SECURITIES EXCHANGE ACT OF 1934
+---+
For the transition period from____________to______________
Commission file no. 0-3677
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DATATAB, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1917838
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
49 EAST 21ST STREET, NEW YORK, NEW YORK 10010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 228-6800
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
---- ----
COMMON SHARES $1.00 PAR VALUE - 705,836 SHARES OUTSTANDING AS OF
November 12, 1998 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ------------
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash ........................................ $ 9,771 $ 8,682
Accounts receivable ......................... 10,226 27,520
Receivable from Data Probe, Inc. ............ 147,397 259,781
Inventories of work in process .............. 1,275 1,200
Prepaid expenses and other current
assets ............................. 5,514 --
-------- --------
Total current assets ...... 174,183 297,183
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$123,364 in 1998 and $120,957
in 1997) ................................... 3,317 4,630
Other assets ......................................... 627 627
-------- --------
Total ..................... $178,127 $302,440
======== ========
</TABLE>
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(Continued)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ------------
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
Current liabilities:
Accounts payable ................................. $ 34,036 $ 42,289
Accrued expenses and taxes ....................... 88,438 84,029
Accrued officers compensation .................... 53,844 10,577
Customer advances ................................ -- 16,400
----------- -----------
Total current liabilities ...... 176,318 153,295
Other liabilities ......................................... 17,600 18,600
----------- -----------
Total liabilities ....................... 193,918 171,895
----------- -----------
STOCKHOLDERS' EQUITY
Preferred shares - authorized 500,000
shares, par value $1 a share;
none issued ...................................... -- --
Common shares - authorized 2,000,000 shares,
par value $1 a share; issued 788,955 (including
shares held in treasury) ......................... 788,955 788,955
Additional paid in capital ................................ 2,490,471 2,490,471
Deficit ................................................... (3,163,760) (3,017,424)
----------- -----------
115,666 262,002
Less cost of 83,119 common shares
held in treasury ................................. 131,457 131,457
----------- -----------
Total Shareholders' Equity .............. (15,791) 130,545
----------- -----------
TOTAL...................................................... $ 178,127 $ 302,440
=========== ===========
</TABLE>
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See accompanying notes to financial statements
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Sales ......................................... $ 264,915 $ 386,628
Cost of sales ................................. 299,800 306,329
---------- ---------
Gross profit.(loss) ........................... (34,885) 80,299
Selling and administrative
expenses ............................. 128,159 118,847
---------- ---------
(Loss) from operations ........................ (163,044) (38,548)
Interest income ............................... 16,708 27,929
--------- ---------
(Loss) before
provision for income taxes ........... $(146,336) $ (10,619)
Income tax provision .......................... -- --
--------- ---------
Net (Loss) .................................... $(146,336) $ (10,619)
========= =========
(Loss) per share .............................. $ (.21) $ (.02)
========= =========
Weighted average number
of shares outstanding ................ 705,836 705,836
========= =========
Dividends per share ........................... NONE NONE
========= =========
</TABLE>
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<PAGE>
The attached notes are made a part hereof.
----------------------------
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Sales ................................................ $ 85,915 $ 117,729
Cost of sales ........................................ 106,933 109,556
--------- ---------
Gross profit. (loss) ................................ (21,018) 8,173
Selling and administrative
expenses .................................... 48,923 39,390
--------- ---------
(Loss) from operations ............................... (69,941) (31,217)
Interest income ...................................... 4,690 9,357
--------- ---------
(Loss) before
provision for income taxes .................. $ (65,251) $ (21,860)
Income tax provision ................................. -- --
--------- ---------
Net (loss)............................................ $ (65,251) $ (21,860)
========= =========
(Loss) per share ..................................... $ (.09) $ (.03)
========= =========
Weighted average number
of shares outstanding ....................... 705,836 705,836
========= =========
Dividends per share .................................. NONE NONE
========= =========
</TABLE>
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<PAGE>
The attached notes are made a part hereof.
----------------------------
Management's discussion and analysis of financial condition and
results of operations is included on the following page.
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the nine month period ended September 30, 1998 decreased
31.5% to $264,915 as compared to $386,628 for the corresponding period of 1997.
Revenue for the three month period ended September 30, 1998 decreased 27.0% to
$85,915 as compared to $117,729 for the corresponding period of 1997. The
decreases in revenue for both the three and nine month periods were the direct
result of a decrease in volume of projects received from the Registrant's
largest client.
Cost of sales decreased slightly in both the three and six month
periods ended September 30, 1998 as compared to the similar periods of 1997. The
1997 period ended September 30th, included a rent abatement associated with the
relocation of the Registrant's offices which reduced both cost of sales and
administrative expenses.
Selling and Administrative expenses during the nine month period and
the three month period ending September 30, 1998 increased by approximately
$9,500. The increase was mainly due to escalation in rent charges, an increase
in telephone expense, and a slight increase in advertising costs.
Interest income was lower for both the three and nine month period
ending September 30, 1998 when compared to the similar period of 1997. The
majority of the interest income currently being recognized is from Data Probe,
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<PAGE>
Inc. and it's note payable to the Registrant. (See NOTE F of "Notes to Form
10-Q" contained in this report for additional information)
The Registrant had a loss of $(146,336) during the nine month period
ending September 30, 1998 as compared to a loss of $(10,619) in the similar
period of 1997. The Registrant also reported a loss of $(65,251) for the three
month period ending September 30, 1998 as compared to a loss of $(21,860) for
the same period of 1997. The losses in the current fiscal year are the direct
result of the Registrant's inability to generate sufficient revenue to cover
it's current structure of costs.
(Continued)
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL EXPENDITURES.
The Registrant did not incur any capital expenditures in the first nine
months of 1998 and does not anticipate adding any material capital assets for
the balance of fiscal year 1998.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital decreased by $146,023 in the first nine months of 1998
from a surplus of $143,888 at December 31, 1997 to a deficit of $(2,135) at
September 30, 1998.
There is no assurance that the stream of sales and revenue from the
Registrant's major client will continue. If additional revenues cannot be
sustained and the Registrant once again realizes losses, the Registrant's
ability to continue to operate would be severely affected in the absence of
securing some type of supplemental financing, the availability of which there
can be no assurance.
The notes to financial statements are made a part hereof.
-9-
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT
CASH FLOWS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------
1998 1997
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net (loss) ........................................... $(146,336) $ (10,619)
Adjustments to reconcile net (loss)
to net cash used in operating activities:
Depreciation and amortization ...................... 1,313 3,280
Decrease in accounts receivable .................... 17,294 1,293
(Increase) in prepaid expenses and
other assets ................................ (5,589) (4,694)
(Decrease) increase in accounts payable ............ (8,253) 19,770
Increase (Decrease) in accrued expenses
and taxes ................................... 47,676 (7,186)
(Decrease) in customer deposits .................... (16,400) (29,980)
(Decrease) in other liabilities .................... (1,000) (2,000)
--------- ---------
Net cash flow (used in)
operating activities............................. $(111,295) $ (30,136)
--------- ---------
Cash flows from investing activities:
Repayment of receivable from Data Probe, Inc. ...... 112,384 29,772
Sale of equipment .................................. -- 1,437
--------- ---------
Net cash flow provided by
investing activities ............................... 112,384 31,209
--------- ---------
Net increase in cash ................................. 1,089 1,073
Cash at beginning of period .......................... 8,682 26,535
--------- ---------
Cash at end of period ................................ $ 9,771 $ 27,608
========= =========
</TABLE>
The notes to financial statements are made a part hereof.
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
(UNAUDITED)
(NOTE A):
The financial information contained in this Form 10-Q represents
condensed financial data and, therefore, does not include all footnote
disclosures required to be included in financial statements prepared in
conformity with generally accepted accounting principles. Such footnote
information was included in the Registrant's annual 10K report to the SEC for
the year ended December 31, 1997. The condensed financial data included herein
should be read in conjunction with that report.
(NOTE B):
(1) In management's opinion, all necessary adjustments have been made
in order to present fairly the consolidated results of operations for the
interim periods.
(2) The results of operations for the interim period ending September
30, 1998 are not necessarily indicative of the results of operations for the
year ending December 31, 1998.
(NOTE C):
Profit and loss per share is based on the average number of shares of
common stock outstanding during each period after deducting treasury shares and
taking into consideration the dilutive effect of outstanding stock options when
applicable.
(NOTE D):
At December 31, 1997, for financial accounting and income tax purposes,
net operating loss carryforwards and investment tax credit carryforwards existed
in excess of $2,371,000 and $1,000, respectively, expiring at various dates
starting in 1998.
(NOTE E):
Inventories are summarized as follows:
September 30, 1998 December 31, 1997
------------------ -----------------
Work in process ..................... $ 1,275 $ 1,200
================== =================
(NOTE F:)
Data Probe, Inc., the majority stockholder, is indebted to the
Registrant for advances made. At September 30, 1998 that indebtedness was
$147,397 and was evidenced by a demand note bearing interest at 2% above the
prime rate.
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<PAGE>
For the nine months ended September 30, 1998, Data Probe, Inc. charged
the Registrant $165,970 for services rendered and 49,005 in rent related
expenses. In addition, the Registrant charged Data Probe, Inc. in the same nine
month period, $16,708 for interest, and $66,304 for services rendered.
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DATATAB, INC.
Dated: November 12, 1998 By: /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana,
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Dated: November 12, 1998 /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
DATATAB, INC.
Dated: November 12, 1998 By:------------------------
Yitzhak N. Bachana,
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Dated: November 12, 1998 --------------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027099
<NAME> DATATAB, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 9,771
<SECURITIES> 0
<RECEIVABLES> 157,623
<ALLOWANCES> 0
<INVENTORY> 1,275
<CURRENT-ASSETS> 174,183
<PP&E> 126,681
<DEPRECIATION> 123,364
<TOTAL-ASSETS> 178,127
<CURRENT-LIABILITIES> 176,318
<BONDS> 0
<COMMON> 0
788,955
0
<OTHER-SE> (804,746)
<TOTAL-LIABILITY-AND-EQUITY> 178,127
<SALES> 264,915
<TOTAL-REVENUES> 281,623
<CGS> 299,800
<TOTAL-COSTS> 427,959
<OTHER-EXPENSES> 128,159
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (146,336)
<INCOME-TAX> 0
<INCOME-CONTINUING> (146,336)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (146,336)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
