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 JUNE 30, 1998
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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
- --------------------------------------------------------------------------------
(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
August 13, 1998 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
---------- ------------
(UNAUDITED)
Current assets:
<S> <C> <C>
Cash .............................................. $ 6,907 $ 8,682
Accounts receivable ............................... 14,746 27,520
Receivable from Data Probe, Inc. .................. 200,999 259,781
Inventories of work in process .................... 1,275 1,200
Prepaid expenses and other current
assets ................................... 5,000 --
-------- --------
Total current assets ............ 228,927 297,183
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$122,926 in 1998 and $122,050
in 1997) ................................ 3,755 4,630
Other assets ...................................... 627 627
-------- --------
Total ........................... $233,309 $302,440
======== ========
</TABLE>
(Continued)
-1-
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ --------------
(UNAUDITED)
Current liabilities:
<S> <C> <C>
Accounts payable ............................. $ 28,833 $ 42,289
Accrued expenses and taxes ................... 126,416 94,606
Accrued officers compensation ................ --
Customer advances ............................ 10,000 16,400
----------- -----------
Total current liabilities .. 165,249 153,295
Other liabilities ..................................... 18,600 18,600
----------- -----------
Total liabilities ................... 183,849 171,895
----------- -----------
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 ............................................... (3,098,509) (3,017,424)
----------- -----------
180,917 262,002
Less cost of 83,119 common shares
held in treasury ............................. 131,457 131,457
----------- -----------
Total Shareholders' Equity .......... 49,460 130,545
----------- -----------
TOTAL ................................................. $ 233,309 $ 302,440
=========== ===========
</TABLE>
See accompanying notes to financial statements
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
1998 1997
------------ ----------
<S> <C> <C>
Sales .............................................. $ 179,000 $ 268,899
Cost of sales ...................................... 192,867 196,773
--------- ---------
Gross profit ....................................... (13,867) 72,126
Selling and administrative
expenses .................................. 79,236 79,457
--------- ---------
(Loss) from operations ............................. (93,103) (7,331)
Interest income .................................... 12,018 18,572
--------- ---------
Profit (loss) before
provision for income taxes ................ $ (81,085) $ 11,241
Income tax provision ............................... -- --
--------- ---------
Net profit (loss) .................................. $ (81,085) $ 11,241
========= =========
Profit (loss) per share ............................ $ (.11) $ .02
========= =========
Weighted average number
of shares outstanding ..................... 705,836 705,836
========= =========
Dividends per share ................................ NONE NONE
========= =========
</TABLE>
The attached notes are made a part hereof.
----------------------------
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
-----------------------
1998 1997
----------- ---------
<S> <C> <C>
Sales ............................................... $ 120,552 $ 180,884
Cost of sales ....................................... 104,997 110,322
--------- ---------
Gross profit ........................................ 15,555 70,562
Selling and administrative
expenses ................................... 38,539 34,993
--------- ---------
Profit (loss) from operations ....................... (22,984) 35,569
Interest income ..................................... 5,841 9,780
--------- ---------
Profit (loss) before
provision for income taxes ................. $ (17,143) $ 45,349
Income tax provision ................................ -- --
--------- ---------
Net profit (loss) ................................... $ (17,143) $ 45,349
========= =========
Profit (loss) per share ............................. $ (.02) $ .06
========= =========
Weighted average number
of shares outstanding ...................... 705,836 705,836
========= =========
Dividends per share ................................. NONE NONE
========= =========
</TABLE>
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 six month period ended June 30, 1998 decreased 33.3% to
$179,000 as compared to $268,899 for the corresponding period of 1997. Revenue
for the three month period ended June 30, 1998 decreased 33.4% to $120,552 as
compared to $180,884 for the corresponding period of 1997. The decreases in
revenue for both the three and six month periods were the direct result of a
decrease in volume received by the Registrant's largest client.
Cost of sales decreased slightly in both the three and six month
periods ended June 30, 1998 as compared to the similar periods of 1997. The 1997
period ended June 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 (S&A) expenses remained approximately the
same for the six month period ending June 30, 1998 as compared to the similar
period of 1997. For the three month period ending June 30, 1998, S&A expenses
increased 10.1% as compared to the corresponding period of 1997. Reductions
realized in standard expenses were offset by the inclusion of rent expenses that
were not present in the first half of 1997 due to the abatement mentioned
earlier.
Interest revenue was lower for both the three and six month period
ending June 30, 1998 when compared to the similar period of 1997. The majority
of the interest income currently being recognized is from Data Probe, Inc. and
it's receivable 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 $(81,085) during the six month period
ending June 30, 1998 as compared to a profit of $11,241 in the similar period of
1997. The Registrant also reported a loss of $(17,143) for the three month
period ending June 30, 1998 as compared to a profit of $45,349 for the same
period of 1997. The losses in the current fiscal year are the direct result of
the Registrant's inablility to generate sufficient revenue to cover it's current
structure of costs.
(Continued)
-5-
<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 six
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 $80,210 in the first six months of 1998
from a surplus of $143,888 at December 31, 1997 to a surplus of $63,678 at June
30, 1998.
The Registrant receives cash deposits from a client in association with
a various projects. 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.
-6-
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT
CASH FLOWS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------------
1998 1997
------------ --------
Cash flows (used) provided from operating activities:
<S> <C> <C>
Net (loss) profit ................................................... $(81,085) $ 11,241
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization ..................................... 876 2,188
Increase in accounts receivable ................................... 12,774 17,853
(Increase) in prepaid expenses and
other assets ............................................... (5,000) (3,401)
(Decrease) increase in accounts payable ........................... (13,456) 9,139
Increase in accrued expenses
and taxes .................................................. 31,734 230
(Decrease) in customer deposits ................................... (6,400) (13,073)
(Decrease) in other liabilities ................................... -- (2,000)
-------- --------
Net cash flow provided from
operating activities ........................................... $(60,557) $ 22,177
-------- --------
Cash flows provided (used) by investing activities:
Payments from (to) an affiliate ................................... 58,782 (8,596)
Sale of equipment ................................................. -- 1,437
-------- --------
Net cash flow provided (used) by
investing activities .................................... 58,782 (7,159)
-------- --------
Cash flows provided by financing activities:
None ....................................................... -- --
-------- --------
Net cash flow provided
by financing activities ..................................... -- --
-------- --------
Net (decrease) increase in cash ..................................... (1,775) 15,018
Cash at beginning of period ......................................... 8,682 26,535
-------- --------
Cash at end of period ............................................... $ 6,907 $ 41,553
======== ========
</TABLE>
The notes to financial statements are made a part hereof.
-7-
<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 June 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 $2,790,000 and $14,000, respectively, expiring at various dates
starting in 1998.
(NOTE E):
Inventories are summarized as follows:
June 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 June 30, 1998 that indebtedness was $200,999
and was evidenced by a demand note bearing interest at 2% above the prime rate.
For the six months ended June 30, 1998, Data Probe, Inc. charged the
Registrant $39,823 for services rendered and $31,696 in rent related expenses.
In addition, the Registrant charged Data Probe, Inc. in the same six month
period, $12,018 for interest, and $48,847 for services rendered.
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
-8-
<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: August 14, 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: August 14, 1998 /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
Dated: August 14, 1998 /S/ HERBERT E. SHAVER
---------------------
Herbert E. Shaver,
Vice President, Controller,
Principal Accounting Officer,
Director
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027099
<NAME> DATATAB, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 6,907
<SECURITIES> 0
<RECEIVABLES> 215,745
<ALLOWANCES> 0
<INVENTORY> 1,275
<CURRENT-ASSETS> 228,927
<PP&E> 126,681
<DEPRECIATION> 122,926
<TOTAL-ASSETS> 233,309
<CURRENT-LIABILITIES> 165,249
<BONDS> 0
788,955
0
<COMMON> 0
<OTHER-SE> (739,495)
<TOTAL-LIABILITY-AND-EQUITY> 233,309
<SALES> 179,000
<TOTAL-REVENUES> 191,018
<CGS> 192,867
<TOTAL-COSTS> 272,103
<OTHER-EXPENSES> 79,236
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (81,085)
<INCOME-TAX> 0
<INCOME-CONTINUING> (81,085)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (81,085)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
