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, 1999
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, 1999 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
MARCH 31 DECEMBER 31,
-------- ------------
1999 1998
-------- ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash ............................................ $ 20,539 $ 11,071
Accounts receivable ............................. 20,917 18,605
Receivable from Data Probe, Inc. ................ 129,667 181,562
Inventories of work in process .................. 1,165 1,165
Prepaid expenses and other current
assets ................................. 4,705 --
-------- --------
Total current assets .......... 176,993 212,403
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$124,166 in 1998 and $123,801
in 1997) .............................. 2,514 2,879
Other assets .................................... 627 627
-------- --------
Total ......................... $180,134 $215,909
======== ========
</TABLE>
(Continued)
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
LIABILITIES
MARCH 31, DECEMBER 31,
--------- ------------
1999 1998
--------- ------------
(UNAUDITED)
Current liabilities:
<S> <C> <C>
Accounts payable ........................ $ 28,305 $ 31,149
Accrued expenses and taxes .............. 128,208 121,983
Customer advances ....................... 10,000 --
----------- -----------
Total current liabilities .......... 166,513 153,132
Other liabilities ................................ 16,600 16,600
----------- -----------
Total liabilities .................. 183,113 169,732
----------- -----------
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 .......................................... (3,150,948) (3,101,792)
----------- -----------
128,478 177,634
Less cost of 83,119 common shares
held in treasury ........................ 131,457 131,457
----------- -----------
Total Shareholders' Equity ............ (2,979) 46,177
----------- -----------
TOTAL ............................................ $ 180,134 $ 215,909
=========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1999 1998
--------- ---------
<S> <C> <C>
Sales ............................................ $ 72,017 $ 58,448
Cost of sales .................................... 90,594 87,870
--------- ---------
Gross profit ..................................... (18,577) (29,422)
Selling and administrative
expenses .................................... 37,502 40,697
--------- ---------
Profit (loss) from operations .................... (56,079) (70,119)
Interest income .................................. 4,423 6,177
--------- ---------
Profit (loss) before
provision for income taxes .................. $ (51,656) $ (63,942)
Income tax provision ............................. -- --
--------- ---------
Net profit (loss) ................................ $ (51,656) $ (63,942)
========= =========
Profit per share.................................. $ (.07) $ (.09)
========= =========
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.
<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, 1999 increased 23.2% to
$72,017 as compared to $58,448 for the corresponding period of 1998. The
increase in revenue was the result of an increase in volume received from other
clients and in spite of the fact that the Registrant's revenue from its largest
client was significantly lower during the first quarter of the fiscal year.
Cost of sales increased slightly in the three month period ended March 31,
1999 as compared to the similar period of 1998.
Selling and Administrative (S&A) expenses decreased 7.9% to $37,502 for the
three month period ended March 31, 1999 as compared to $40,697 for the
corresponding period of 1998.
Interest revenue was lower for the three month period ending March 31, 1999
when compared to the similar period of 1998. 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 $(51,656), or ($.07) per share, during the
three month period ending March 31, 1999 as compared to a loss of $(63,942), or
($.09) per share, in the similar period of 1998. The loss is the direct result
of the Registrant's inability to generate sufficient additional 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 expenditure in the first three
months of 1999. To conform to the year 2000 requirements, the Registrant intends
to upgrade the equipment and software it uses for accounting. This capital
expenditure will occur during the second quarter of fiscal year 1999.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital decreased by $48,791 in the first three months of 1999 from
a surplus of $59,271 at December 31, 1998 to a surplus of $10,480 at March 31,
1999.
The Registrant receives cash deposits from a client in association with
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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1999 1998
--------- ---------
Cash flows provided (used) from operating activities:
<S> <C> <C>
Net (loss) ......................................... $(51,656) $(63,942)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization .................... 365 438
Increase in accounts receivable .................. 4,111 10,714
(Increase) in prepaid expenses and
other assets ................................. (4,705) (4,586)
(Decrease)/Increase in accounts payable .......... (2,845) 8,344
Increase in accrued expenses
and taxes .................................... 6,225 826
Increase/(Decrease) in customer deposits ......... 10,000 (6,400)
Increase/(decrease) in other liabilities ......... -- --
-------- --------
Net cash flow provided from
operating activities .......................... $ 13,151 $ 9,336
-------- --------
Cash flows provided by investing activities:
Payments from (to) an affiliate .................. 43,647 54,676
Sale of equipment ................................ -- --
-------- --------
Net cash flow provided by
investing activities ................... 43,647 54,676
-------- --------
Cash flows provided by financing activities:
None ...................................... -- --
-------- --------
Net cash flow provided
by financing activities ............... -- --
-------- --------
Net increase in cash ............................... 9,468 71
Cash at beginning of period ........................ 11,071 8,682
-------- --------
Cash at end of period .............................. $ 20,539 $ 8,753
======== ========
</TABLE>
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, 1998; 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,
1999 are not necessarily indicative of the results of operations for the year
ending December 31, 1999.
(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, 1999, for financial accounting and income tax
purposes, the Registrant has available net operating loss carryforwards in
excess of $1,061,000. $116,000 of the NOL will expire in 1999, $320,000 in 2000,
$175,000 in 2001, 199,000 in 2002, 120,000 in 2003, $87,000 in 2004 and the
balance in 2005 and thereafter.
(NOTE E):
Inventories are summarized as follows:
March 31, 1999 December 31, 1998
-------------- -----------------
Work in process ...................... $1,165 $1,165
============== =================
(NOTE F:)
Data Probe, Inc., the majority stockholder, is indebted to the
Registrant for advances made. At March 31, 1999 that indebtedness was $129,667
and was evidenced by a demand note bearing interest at 2% above the prime rate.
For the three months ended March 31, 1999, Data Probe, Inc. charged
the Registrant $47,265 for services rendered and $15,439 in rent related
expenses. In addition, the Registrant charged Data Probe, Inc. in the same three
month period $4,423 for interest and $16,159 for services rendered.
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
<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: May 14, 1999 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, 1999 /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027099
<NAME> DATATAB, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 20,539
<SECURITIES> 0
<RECEIVABLES> 150,584
<ALLOWANCES> 0
<INVENTORY> 1,165
<CURRENT-ASSETS> 176,993
<PP&E> 126,680
<DEPRECIATION> 124,167
<TOTAL-ASSETS> 180,134
<CURRENT-LIABILITIES> 166,513
<BONDS> 0
788,955
788,955
<COMMON> 788,955
<OTHER-SE> (722,276)
<TOTAL-LIABILITY-AND-EQUITY> 180,134
<SALES> 72,017
<TOTAL-REVENUES> 76,440
<CGS> 90,594
<TOTAL-COSTS> 128,096
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (51,656)
<INCOME-TAX> 0
<INCOME-CONTINUING> (51,656)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51,656)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
