SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1999
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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.
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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
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(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
November 15, 1999 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
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<TABLE>
<CAPTION>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
SEPTEMBER 30, DECEMBER 31,
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1999 1998
---- ----
(UNAUDITED)
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Current assets:
<S> <C> <C>
Cash ........................................... $ 15,593 $ 11,071
Accounts receivable ............................ 22,547 18,605
Receivable from Data Probe, Inc. ............... 174,200 181,562
Inventories of work in process ................. 1,165 1,165
Prepaid expenses and other current
assets ............................... 395 --
-------- --------
Total current assets ....... 213,900 212,403
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$124,898 in 1999 and $123,801
in 1998) ...................................... 1,783 2,879
Other assets .............................................. 627 627
-------- --------
Total ...................... $216,310 $215,909
======== ========
</TABLE>
(Continued)
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<TABLE>
<CAPTION>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
SEPTEMBER 30, DECEMBER 31,
1999 1998
---- ----
(UNAUDITED)
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<S> <C> <C>
Current liabilities:
Accounts payable ...................... $ 38,869 $ 31,149
Accrued expenses and taxes ............ 55,977 121,983
Accrued officers compensation ......... 62,305 --
Customer advances ..................... 39,600 --
----------- -----------
Total current liabilities .... 196,751 153,132
Other liabilities ................................ 14,600 16,600
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Total liabilities .................. 211,351 169,732
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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 .......................................... (3,143,010) (3,101,792)
----------- -----------
136,416 177,634
Less cost of 83,119 common shares
held in treasury ...................... 131,457 131,457
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Total Shareholders' Equity ......... 4,959 46,177
----------- -----------
TOTAL ............................................ $ 216,310 $ 215,909
=========== ===========
</TABLE>
See accompanying notes to financial statements
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<TABLE>
<CAPTION>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
-------------
1999 1998
---- ----
<S> <C> <C>
Sales ........................................... $ 451,893 $ 264,915
Cost of sales ................................... 386,104 299,800
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Gross profit .................................... 65,789 (34,885)
Selling and administrative
expenses ............................. 122,429 128,159
--------- ---------
(Loss) from operations .......................... (56,640) (163,044)
Interest income ................................. 15,422 16,708
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(Loss) before
provision for income taxes ........... $ (41,218) $(146,336)
Income tax provision ............................ -- --
--------- ---------
Net (Loss) ...................................... $ (41,218) $(146,336)
========= =========
(Loss) per share ................................ $ (.06) $ (.21)
========= =========
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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<TABLE>
<CAPTION>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30,
1999 1998
---- ----
<S> <C> <C>
Sales ........................................... $ 96,910 $ 85,915
Cost of sales ................................... 117,106 106,933
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Gross profit. (loss) ........................... (20,196) (21,018)
Selling and administrative
expenses ............................. 43,875 48,923
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(Loss) from operations .......................... (64,071) (69,941)
Interest income ................................. 5,388 4,690
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(Loss) before
provision for income taxes ........... $ (58,683) $ (65,251)
Income tax provision ............................ -- --
--------- ---------
Net (loss) ...................................... $ (58,683) $ (65,251)
========= =========
(Loss) per share ................................ $ (.08) $ (.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.
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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 months period ended September 30, 1999
increased 70.6% to $451,893 as compared to $264,915 for the
corresponding period of 1998. Revenue for the three months period
ended September 30, 1999 increased 12.8% to $96,910 as compared to
$85,915 for the corresponding period of 1998. The increases in
revenue for both the three and nine month periods were the direct
result of an increase in volume of projects received from existing
customers and from various new clients.
Cost of sales increased in both the three and six months
periods ended September 30, 1999 as compared to the similar periods
of 1998. During the nine months period of 1999 cost of sales
increased by 28.8% to $386,104 as compared to $299,800 for the
corresponding period of 1998. During the three months period ended
September 1999 cost of sales increased by 9.5% to $117,106 as
compared to $106,933 for the corresponding period in 1998. The
increase in cost of sales during the three and nine months periods
were due to the increase in the volume of revenue.
Selling and Administrative expenses during the nine months
period ended September 30, 1999 decreased by approximately $5,730.
Most of this decrease occurred during the third quarter ended
September 30, 1999.
Interest income was slightly lower during the nine months
period ended September 30, 1999 when compared to the similar period
of 1998. Interest income during the third quarter of the fiscal year
was slightly higher. The majority of the interest income currently
being recognized is from Data Probe, 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 $(41,218) during the nine
month period ended September 30, 1999 as compared to a loss of
$(146,336) in the similar period of 1998. The Registrant also
(Continued)
<PAGE>
reported a loss of $(58,683) for the three months period ending
September 30, 1999 as compared to a loss of $(65,251) for the same
period of 1998. The losses in the current fiscal year are due to
increase in costs associated with the increase in volume of sales
during both the three and nine months periods.
CAPITAL EXPENDITURES.
The Registrant incurred less then $1,000 in capital
expenditures during the second quarter of fiscal year 1999. These
expenditures were due to an upgrade of the Registrant's accounting
software. By doing so the Registrant have complied with the Year 2000
requirements. The registrant does not anticipate adding any material
capital assets for the balance of fiscal year 1999.
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.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital decreased by 42,122 in the first nine
months of 1999 from a surplus of $59,271 at December 31, 1998 to a
surplus of $17,149 at September 30, 1999.
There is no assurance that the stream of sales and revenue
from the Registrant's clients 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>
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<CAPTION>
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT
CASH FLOWS
(NOTES A AND B)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net (loss) ........................................... $(41,218) $(146,336)
Adjustments to reconcile net (loss) to
net cash used in operating activities:
Depreciation and amortization ...................... 1,097 1,313
(Increase) Decrease in accounts receivable ......... (3,940) 17,294
(Increase) in prepaid expenses and
other assets .............................. (395) (5,589)
Increase (Decrease) in accounts payable ............ 7,720 (8,253)
(Decrease) Increase in accrued expenses
and taxes ................................. (3,701) 47,676
Increase (Decrease) in customer deposits ........... 39,600 (16,400)
(Decrease) in other liabilities .................... (2,000) (1,000)
--------- ---------
Net cash flow (used in)
operating activities ............................ $( 2,837) $(111,295)
--------- ---------
Cash flows from
investing activities:
Repayment of receivable from Data Probe, Inc. ...... 7,362 112,384
Sale of equipment .................................. -- --
--------- ---------
Net cash flow provided by
investing activities ............................... 7,362 112,384
--------- ---------
Net increase in cash ................................. 4,522 1,089
Cash at beginning of period .......................... 11,071 8,682
--------- ---------
Cash at end of period ................................ $ 15,593 $ 9,771
========= =========
</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
September 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, the Registrant had available net
operating loss carryforwards in excess of $1,061,000, of which $116,000 expires
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:
September 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 September 30, 1999 that indebtedness was
$174,200 and was evidenced by a demand note bearing interest at 2% above the
prime rate.
<PAGE>
For the nine months ended September 30, 1999, Data Probe,
Inc. charged the Registrant $202,488 for services rendered and 51,707 in rent
related expenses. In addition, the Registrant charged Data Probe, Inc. in the
same nine months period, $15,292 for interest, and $182,081 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: November 15, 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: November 15, 1999 /S/ YITZHAK N. BACHANA
---------------------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
<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 15, 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: November 15, 1999
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 15,593
<SECURITIES> 0
<RECEIVABLES> 196,747
<ALLOWANCES> 0
<INVENTORY> 1,165
<CURRENT-ASSETS> 213,900
<PP&E> 126,680
<DEPRECIATION> 124,897
<TOTAL-ASSETS> 216,310
<CURRENT-LIABILITIES> 196,751
<BONDS> 0
788,955
0
<COMMON> 0
<OTHER-SE> (783,959)
<TOTAL-LIABILITY-AND-EQUITY> 216,310
<SALES> 451,893
<TOTAL-REVENUES> 467,315
<CGS> 386,104
<TOTAL-COSTS> 508,533
<OTHER-EXPENSES> 122,429
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,218)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,218)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,218)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
