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 MARCH 31, 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
- --------------------------------------------------------------------------------
(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
May 14, 1998 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
MARCH 31 DECEMBER 31,
-------- ------------
1998 1997
-------- ------------
(UNAUDITED)
Current assets:
Cash ............................................ $ 8,753 $ 8,682
Accounts receivable ............................. 16,806 27,520
Receivable from Data Probe, Inc. ................ 205,105 259,781
Inventories of work in process .................. 1,275 1,200
Prepaid expenses and other current
assets ................................. 4,586 --
-------- --------
Total current assets .......... 236,525 297,183
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$122,480 in 1998 and $122,050
in 1997) .............................. 4,193 4,630
Other assets .................................... 627 627
-------- --------
Total ......................... $241,345 $302,440
======== ========
(Continued)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
MARCH 31, DECEMBER 31,
--------- ------------
1998 1997
--------- ------------
(UNAUDITED)
Current liabilities:
Accounts payable ........................ $ 50,633 $ 42,289
Accrued expenses and taxes .............. 95,433 94,606
Customer advances ....................... 10,000 16,400
----------- -----------
Total current liabilities .......... 156,066 153,295
Other liabilities ................................ 18,600 18,600
----------- -----------
Total liabilities .................. 174,666 171,895
----------- -----------
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 .......................................... (3,081,290) (3,017,424)
----------- -----------
198,136 262,002
Less cost of 83,119 common shares
held in treasury ........................ 131,457 131,457
----------- -----------
Total Shareholders' Equity ............ 66,679 130,545
----------- -----------
TOTAL ............................................ $ 241,345 $ 302,440
=========== ===========
See accompanying notes to financial statements
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------------
1998 1997
--------- ---------
Sales ............................................ $ 58,448 $ 88,015
Cost of sales .................................... 87,870 86,451
--------- ---------
Gross profit ..................................... (29,422) 1,564
Selling and administrative
expenses .................................... 40,697 44,464
--------- ---------
Profit (loss) from operations .................... (70,119) (42,900)
Interest income .................................. 6,177 8,792
--------- ---------
Profit (loss) before
provision for income taxes .................. $ (63,942) $ (34,108)
Income tax provision ............................. -- --
--------- ---------
Net profit (loss) ................................ $ (63,942) $ (34,108)
========= =========
Profit per share.................................. $ (.09) $ (.05)
========= =========
Weighted average number
of shares outstanding ....................... 705,836 705,836
========= =========
Dividends per share .............................. NONE NONE
========= =========
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.
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the three month period ended March 31, 1998 decreased 33.62% to
$58,448 as compared to $88,015 for the corresponding period of 1997. The
decrease in revenue was the direct result of a decrease in volume received by
the Registrant's largest client.
Cost of sales increased slightly in the three month period ended March 31,
1998 as compared to the similar period of 1997. Cost of sales remained at a
similar level due to rent charges paid during the quarter ended March 31, 1998,
which were not required to be paid during the corresponding quarter of 1997 due
to a rent abatement.
Selling and Administrative (S&A) expenses decreased 8.5% to $40,697 for the
three month period ended March 31, 1998 as compared to $44,464 for the
corresponding period of 1997.
Interest revenue was lower for the three month period ending March 31, 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 $(63,942) during the three month period ending
March 31, 1998 as compared to a loss of $(34,108) in the similar period of 1997.
The loss is the direct result of the Registrant's inability to generate
sufficient revenue to cover it's current structure of costs.
(Continued)
<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 three
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 $63,429 in the first three months of 1998 from
a surplus of $143,888 at December 31, 1997 to a surplus of $80,459 at March 31,
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.
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT
CASH FLOWS
(NOTES A AND B)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------
1998 1997
--------- ---------
Cash flows provided (used)
from operating activities:
Net (loss) ......................................... $(63,941) $(34,108)
Adjustments to reconcile net (loss) to
net cash provided by operating activities:
Depreciation and amortization .................... 438 1,094
Increase in accounts receivable .................. 10,714 10,077
(Increase) in prepaid expenses and
other assets ................................. (4,586) (3,698)
Increase in accounts payable ..................... 8,344 42,007
Increase in accrued expenses
and taxes .................................... 826 7,323
(Decrease) in customer deposits .................. (6,400) (12,266)
Increase (decrease) in other liabilities ......... -- --
-------- --------
Net cash flow provided from
operating activities .......................... $ 9,336 $ 44,537
-------- --------
Cash flows provided by
investing activities:
Payments from (to) an affiliate .................. 54,676 6,826
Sale of equipment ................................ -- 1,437
-------- --------
Net cash flow provided by
investing activities ................... 54,676 8,263
-------- --------
Cash flows provided by financing activities:
None ...................................... -- --
-------- --------
Net cash flow provided
by financing activities ............... -- --
-------- --------
Net increase in cash ............................... 71 18,692
Cash at beginning of period ........................ 8,682 26,535
-------- --------
Cash at end of period .............................. $ 8,753 $ 45,227
======== ========
The notes to financial statements are made a part hereof.
<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 March 31,
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:
March 31, 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 March 31, 1998 that indebtedness was $205,105
and was evidenced by a demand note bearing interest at 2% above the prime rate.
For the three months ended March 31, 1998, Data Probe, Inc. charged
the Registrant $45,046 for services rendered and $13,818 in rent related
expenses. In addition, the Registrant charged Data Probe, Inc. in the same three
month period $6,177 for interest.
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
<PAGE>
SIGNATURES
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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: May 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: May 14, 1998 /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
Dated: May 14, 1998 /S/ HERBERT E. SHAVER
---------------------
Herbert E. Shaver,
Vice President, Controller,
Principal Accounting Officer,
Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027099
<NAME> DATATAB, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 8,753
<SECURITIES> 0
<RECEIVABLES> 221,911
<ALLOWANCES> 0
<INVENTORY> 1,275
<CURRENT-ASSETS> 236,525
<PP&E> 126,680
<DEPRECIATION> 122,480
<TOTAL-ASSETS> 241,345
<CURRENT-LIABILITIES> 156,066
<BONDS> 0
788,955
0
<COMMON> 0
<OTHER-SE> (722,276)
<TOTAL-LIABILITY-AND-EQUITY> 241,345
<SALES> 58,448
<TOTAL-REVENUES> 64,625
<CGS> 87,870
<TOTAL-COSTS> 128,567
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (63,942)
<INCOME-TAX> 0
<INCOME-CONTINUING> (63,942)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (63,942)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
