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, 1999
OR
+---+ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
| | OF THE SECURITIES EXCHANGE ACT OF 1934
+---+
For the transition period from to
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Commission file no. 0-3677
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DATATAB, INC.
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(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
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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 14, 1999 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
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<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
JUNE 30, DECEMBER 31,
-------- ------------
1999 1998
-------- ------------
(UNAUDITED)
Current assets:
<S> <C> <C>
Cash ............................................ $ 30,473 $ 11,071
Accounts receivable ............................. 19,221 18,605
Receivable from Data Probe, Inc. ................ 215,680 181,562
Inventories of work in process .................. 1,165 1,165
Prepaid expenses and other current
assets ................................. 100 --
-------- --------
Total current assets .......... 266,639 212,403
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$124,532 in 1999 and $123,801
in 1998) .............................. 2,148 2,879
Other assets .................................... 627 627
-------- --------
Total ......................... $269,414 $215,909
======== ========
</TABLE>
(Continued)
-1-
<PAGE>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
LIABILITIES
JUNE 30, DECEMBER 31,
-------- ------------
1999 1998
-------- ------------
(UNAUDITED)
Current liabilities:
<S> <C> <C>
Accounts payable .............................. $ 36,945 $ 31,149
Accrued expenses and taxes .................... 113,128 121,983
Customer advances ............................. 41,100 --
----------- -----------
Total current liabilities ................ 191,173 153,132
Other liabilities ................................ 14,600 16,600
----------- -----------
Total liabilities ........................ 205,773 169,732
----------- -----------
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 .......................................... (3,084,328) (3,101,792)
----------- -----------
195,098 177,634
Less cost of 83,119 common shares
held in treasury .............................. 131,457 131,457
----------- -----------
Total Shareholders' Equity ............... 63,641 46,177
----------- -----------
TOTAL ............................................ $ 269,414 $ 215,909
=========== ===========
</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,
-----------------------
1999 1998
--------- ----------
<S> <C> <C>
Sales ............................................... $ 354,983 $ 179,000
Cost of sales ....................................... 266,498 192,867
--------- ---------
Gross profit ........................................ 88,485 (13,867)
Selling and administrative
expenses ................................... 81,055 79,236
--------- ---------
(Loss) from operations .............................. 7,430 (93,103)
Interest income ..................................... 10,034 12,018
--------- ---------
Profit (loss) before
provision for income taxes ................. $ 17,464 $ (81,085)
Income tax provision ................................ -- --
--------- ---------
Net profit (loss) ................................... $ 17,464 $ (81,085)
========= =========
Profit (loss) per share ............................. $ .02 $ (.11)
========= =========
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)
Three Months Ended
JUNE 30,
-------------------
1999 1998
------- -------
Sales ............................................... $ 282,967 $ 120,552
Cost of sales ....................................... 175,904 104,997
--------- ---------
Gross profit ........................................ 107,063 15,555
Selling and administrative
expenses ................................... 44,326 38,539
--------- ---------
Profit (loss) from operations ....................... 62,737 (22,984)
Interest income ..................................... 5,611 5,841
--------- ---------
Profit (loss) before
provision for income taxes ................. $ 68,348 $ (17,143)
Income tax provision ................................ -- --
--------- ---------
Net profit (loss) ................................... $ 68,348 $ (17,143)
========= =========
Profit (loss) per share ............................. $ .10 $ (.02)
========= =========
Weighted average number
of shares outstanding ...................... 705,836 705,836
========= =========
Dividends per share ................................. NONE NONE
========= =========
The attached notes are made a part hereof.
----------------------------
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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 six months period ended June 30, 1999 increased 98.3%
to $354,983 as compared to $179,000 for the corresponding period of 1998.
Revenue for the three months period ended June 30, 1999 increased 134.7% to
$282,967 as compared to $120,552 for the corresponding period of 1999. The
increases in revenue for both the three and six month periods were due to an
increase in volume received by the Registrant from existing customers and from
new client.
In line with the increase in revenue there were increases in the Cost
of sales in both the three and six months periods ended June 30, 1999 as
compared to the similar periods of 1998.
Selling and Administrative (S&A) expenses remained approximately the
same for the six months period ending June 30, 1999 as compared to the similar
period of 1998. For the three months period ending June 30, 1999, S&A expenses
increased by 15.0% as compared to the corresponding period of 1998.
Interest revenue was slightly lower for both the three and six months
period ending June 30, 1999 when compared to the similar period of 1998. The
majority of the interest income currently being recognized is from Data Probe,
Inc. due to Registrant's accounts receivable from Data Probe, Inc. (See NOTE F
of "Notes to Form 10-Q" contained in this report for additional information)
The Registrant had a profit of $17,464 during the six months period
ending June 30, 1999 as compared to a loss of ($81,085) in the similar period of
1998. The Registrant also reported a profit of $68,348 for the three months
period ending June 30, 1999 as compared to a loss of ($17,143) for the same
period of 1998. The profits in the current fiscal year are the direct result of
the Registrant's success in generating sufficient additional 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
YEAR 2000 COMPLIANCE
The Registrant has diligently studied the impact of the year 2000 on
the software and services it sells as well as its own internal systems.
It was concluded that the software and services provided by the
Registrant are Year 2000 compliant. The Registrant has, also, upgraded its
accounting and payroll systems to be fully compliant under the Year 2000
requirements.
To date, the Registrant has not found any area where a Year 2000
compliance problem, with either its internal systems or outside providers, could
have a material adverse impact on any part of the Registrant's business
operations.
CAPITAL EXPENDITURES
The Registrant did not incur any capital expenditures in the first six
months of 1999 and does not anticipate adding any material capital assets for
the balance of fiscal year 1999.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital increased by $16,195 in the first six months of 1999,
from a surplus of $59,271 at December 31, 1998 to a surplus of $75,466 at June
30, 1999.
From time to time the Registrant receives cash advances and deposits
from clients in association with various projects. There is no assurance that
the stream of sales and revenue from the Registrant's existing clients will
continue. If the current level of revenues cannot be sustained then the
Registrant once again will realize losses. Should the losses reoccur, 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)
Three Months Ended
JUNE 30,
----------------------
1999 1998
---- ----
Cash flows (used) provided from operating activities:
Net profit (loss) .................................. $ 17,464 $(81,085)
Adjustments to reconcile net (loss) to
net cash provided by operating activities:
Depreciation and amortization ..................... 731 876
Increase in accounts receivable ................... 616 12,774
Increase (Decrease)in prepaid expenses and
other assets ............................... 100 (5,000)
Increase (Decrease) in accounts payable ........... 5,796 (13,456)
(Decrease) Increase in accrued expenses
and taxes .................................. (8,855) 31,734
Increase (Decrease) in customer deposits .......... 41,100 (6,400)
-------- --------
Net cash flow provided from (used in)
operating activities ........................... $ 56,952 $(60,557)
-------- --------
Cash flows (used) provided by
investing activities:
Payments (to) from an affiliate ................... (37,550) 58,782
Sale of equipment ................................. -- --
-------- --------
Net cash flow (used) provided by
investing activities .................... (37,550) 58,782
-------- --------
Cash flows provided by financing activities:
None ....................................... -- --
-------- --------
Net cash flow provided
by financing activities ..................... -- --
-------- --------
Net increase (decrease) in cash ..................... 19,402 (1,775)
Cash at beginning of period ......................... 11,071 8,682
-------- --------
Cash at end of period ............................... $ 30,473 $ 6,907
======== ========
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, 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
June 30, 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, 1998, for financial accounting and income tax
purposes, net operating loss carry forwards existed in excess of $1,061,000,
expiring at various dates ending in 2005.
(NOTE E):
Inventories are summarized as follows:
June 30, 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 June 30, 1999 that indebtedness was $215,680
and was evidenced by a demand note bearing interest at 2% above the prime rate.
For the six months ended June 30, 1999, Data Probe, Inc.
charged the Registrant $141,610 for services rendered and $34,008 in rent
related expenses. In addition, the Registrant charged Data Probe, Inc. in the
same six months period, $10,034 for interest, and $166,581 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: August 13, 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: August 13, 1999 /S/ YITZHAK N. BACHANA
----------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
-9-
<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 13, 1999 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: August 13, 1999 -----------------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027099
<NAME> DATATAB, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 30,473
<SECURITIES> 0
<RECEIVABLES> 234,901
<ALLOWANCES> 0
<INVENTORY> 1,165
<CURRENT-ASSETS> 266,639
<PP&E> 126,680
<DEPRECIATION> 124,532
<TOTAL-ASSETS> 269,414
<CURRENT-LIABILITIES> 191,173
<BONDS> 0
0
0
<COMMON> 788,955
<OTHER-SE> (725,314)
<TOTAL-LIABILITY-AND-EQUITY> 269,414
<SALES> 354,983
<TOTAL-REVENUES> 365,017
<CGS> 266,498
<TOTAL-COSTS> 347,553
<OTHER-EXPENSES> 81,055
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 17,464
<INCOME-TAX> 0
<INCOME-CONTINUING> 17,464
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,464
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
