U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
_________________________________________
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to ________
Commission File Number 0-13992
CYBER DIGITAL, INC.
(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2644640
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
400 Oser Avenue, Suite 1650, Hauppauge, New York 11788
(Address of principal executive offices)
(516) 231-1200
(Issuer's telephone number)
Check whether the issuer [1] has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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
_____ _____
The number of shares of stock outstanding at September 30, 1996:
758 shares of Series A Preferred Stock, par value $.05 per share and
15,289,246 shares of Common Stock, par value $.01 per share.
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
ASSETS
September 30, March 31,
1996 1996
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $6,395,475 $ 156,027
Accounts receivable 684,438 684,875
Inventories 429,944 433,582
Prepaid expenses 6,792 4,007
__________ __________
Total Current Assets $7,516,649 $1,278,491
__________ __________
PROPERTY AND EQUIPMENT, NET
Equipment $ 632,219 $ 625,060
Furniture and Fixtures 53,988 53,988
__________ __________
$ 686,207 $ 679,048
Accumulated Depreciation (652,938) (648,357)
__________ __________
Total Property and Equipment $ 33,269 $ 30,691
__________ __________
OTHER ASSETS
Other $ 10,680 $ 10,680
__________ __________
$7,560,598 $1,319,862
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, March 31,
1996 1996
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 57,315 $ 48,385
Current maturities of long-term debt 0 748,037
___________ ___________
Total Current Liaiblities $ 57,315 $ 796,422
Long-Term Debt, less current maturities 0 148,997
___________ ___________
$ 57,315 $ 945,419
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred Stock - $.05 par value;
authorized, 10,000,000 shares; issued
and outstanding, 758 shares and 0 shares
at September 30, 1996 and
March 31, 1996, respectively. $ 38 $ 0
Common Stock - $.01 par value;
authorized, 30,000,000 shares; issued
and outstanding, 158,289,246 shares and
15,110,311 shares at September 30, 1996
and March 31, 1996, respectively 152,892 151,103
Additional paid-in-capital 13,420,615 6,253,146
Accumulated deficit (6,070,262) (6,029,806)
___________ ___________
$ 7,503,283 $ 374,443
___________ ___________
$ 7,560,598 $ 1,319,862
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
1996 1995
<S> <C> <C>
Net Sales $ 10,974 $ 253,393
Cost of Sales 9,187 38,836
__________ __________
Gross Profit $ 1,787 $ 214,557
__________ __________
Operating Expenses
Selling, general and
administrative expenses $ 352,147 $ 101,680
Research and development 14,846 0
__________ __________
Total Operating Expenses $ 366,993 $ 101,680
__________ __________
Operating Profit (Loss) $ (365,206) $ 112,877
Other Income, net 58,091 705
__________ __________
Earnings (loss) before extraordinary item $ (307,115) $ 113,582
Extraordinary gain 51,911 0
__________ __________
Net Income (Loss) $ (255,204) $ 113,582
Earnings (loss) per common and
common equivalent share
Earnings (loss) before extraordinary
item $ (0.02) $ 0.01
Extraordinary item 0.00 0.00
__________ __________
Net earnings (loss) per common and
common equivalent $ (0.02) $ 0.01
=========== ===========
Weighted average number of
shares outstanding 15,112,311 14,883,304
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
September 30,
1996 1995
<S> <C> <C>
Net Sales $ 29,709 $ 527,018
Cost of Sales 17,761 132,143
___________ ___________
Gross Profit $ 11,948 $ 394,875
___________ ___________
Operating Expenses
Selling, general and administrative
expenses $ 440,023 $ 203,486
Research and development 14,846 0
___________ ___________
Total Operating Expenses $ 454,869 $ 203,486
___________ ___________
Operating Profit (Loss) $ (442,921) $ 191,389
Other Income, Net 58,798 1,007
___________ ___________
Earnings (loss) before extraordinary
item $ (384,123) $ 192,396
Extraordinary item 343,667 0
___________ ___________
Net Income (Loss) $ (40,456) $ 192,396
Earnings (loss) per common and
common equivalent share
Earnings (loss) before extraordinary
item $ (0.02) $ 0.01
Extraordinary item 0.02 0.00
___________ ___________
Net earnings (loss) per common and
common equivalent share $ 0.00 $ 0.01
=========== ===========
Weighted average number of common
shares outstanding 15,112,311 14,883,304
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings (loss) $ (40,456) $ 192,396
Adjustments to reconcile net earnings
(loss) to net cash used in operating
activities:
Depreciation 4,581 4,184
Amortization 0 7,524
Forgiveness of debt (343,667) 0
(Increase) decrease in operating assets
Accounts Receivable 437 (501,113)
Inventories 3,638 103,914
Prepaid Expenses (2,785) 2,232
Increase (Decrease) in operating liabilities
Accounts payable and accrued expenses 6,472 2,893
__________ _________
Net cash used in operating activities $ (371,780) $(187,970)
__________ _________
Cash Flows from Investing Activities
Purchase of equipment $ (7,159) $ 0
__________ _________
Net cash used in investing activities $ (7,159) $ 0
__________ _________
Cash Flows from Financing Activities
Issuance of preferred stock $7,049,500 $ 0
Issuance of common stock 119,798 67,510
Payments of long-term debt (550,911) (944)
Proceeds from borrowings 0 45,000
__________ _________
Net cash provided by
financing activities $6,618,387 $ 111,566
__________ __________
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $6,239,448 $ (76,404)
Cash and cash equivalents at beginning
of period 156,027 81,888
__________ _________
Cash and cash equivalents at end of period $6,395,475 $ 5,484
========== =========
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the period for
income taxes $ 404 $ 421
</TABLE>
The accompanying notes are an integral part of these statements
<PAGE>
CYBER DIGITAL, INC.
NOTES TO FINANCIAL STATEMENTS
=============================
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results
for the six months ended September 30, 1996 are not necessarily indicative
of the results that may be expected for the year ending March 31, 1997.
For further information, refer to the financial statements and footnotes
thereto included in the Company's Form 10-KSB for the fiscal year ended
March 31, 1996.
NOTE 2 - INVENTORIES
Inventory of purchased parts and work-in-process for eventual resale to
customers are valued at the lower of cost or market, as determined by the
first-in, first-out (FIFO) method and consisted of the following:
<TABLE>
<CAPTION>
September 30, 1996 March 31, 1996
<S> <C> <C>
Finished goods $ 120,228 $ 123,866
Work-in-process 33,123 33,123
Raw materials 276,593 276,593
_________ _________
$ 429,944 $ 433,582
========= =========
</TABLE>
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
For Three Months Ended September 30, 1996
Net sales decreased 96% in quarter ended September 30, 1996 over the
prior year's same quarter. Net sales for quarter ended September 30, 1996
were $10,974 as compared to $253,393 for quarter ended September 30, 1995.
Gross profit for quarter ended September 30, 1996 was 16% of net sales as
compared to 85% for quarter ended September 30, 1995. Fluctuations in
gross profit margins are primarily attributable to price changes, changes
in sales mix by product or distribution channel. Selling, general and
and administrative expenses as a percentage of sales increased from 40%
in quarter ended September 30, 1995 to 3,209% in quarter ended September 30,
1996. Profit (loss) from operations for quarter ended September 30, 1996
was $(365,206) as compared with $112,877 for quarter ended September 30,
1995. Extraordinary gain on debt restructure for the period ended
September 30, 1996 was $51,911 or $.00 per share. Net income (loss) for
quarter ended September 30, 1996 was $(255,204) or $(.02) per share as
compared to $113,582 or $.01 per share for quarter ended September 30, 1995.
For Six Months Ended September 30, 1996
Net sales decreased 94% in the period ended September 30, 1996 over the prior
year's same period. Net sales for the six month period ended September 30,
1996 were $29,709 as compared with $527,018 for the period ended September
30, 1995. Gross profit for the period ended September 30, 1996 was
40% of net sales as compared to 75% for the period ended September 30, 1996.
Fluctuations in gross profit margins are primarily attributable to price
changes, changes in sales mix by product or distribution channel. Selling,
general and administrative expenses as a percentage of sales increased from
39% in the period ended Septebmer 30, 1995 to 1,481% in the period ended
September 30, 1996 due to a decrease in revenues. Profit (loss) from
operations for the period ended September 30, 1996 was $(442,921) as compared
with $191,389 for the period ended September 30, 1995. Extroardinary gain
on debt restructure for the period ended September 30, 1996 was $343,667
or $.02 per share. Net income (loss) for the period ended September 30, 1996
was $(40,456) or $.00 per share as compared with $192,396 for $.01 per
share for the period ended September 30, 1995.
Liquidity and Capital Resources
On July 11, 1996, the Company concluded a private placement of its
Series A Preferred Stock and accompanying warrants to accredited
investors and received net proceeds of $7,049,500. Total working
capital increased by $6,977,265 to $7,459,334 for quarter ended
September 30, 1996 from $482,069 for period ended March 31, 1996. The
current ratio increased to 131.0 to 1 as at September 30, 1996 from
1.6 to 1 as at March 31, 1996. Current levels of inventory are adequate
to meet short term sales. There were no significant capital
expenditures in the quarter ended September 30, 1996. The Company
believes that its current sources of liquidity will be sufficient to
meet its needs for the foreseeable future. The Company believes that,
if needed, it will be able to obtain additional funds required for
future needs.
<PAGE>
CYBER DIGITAL, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS IN FORM 8-K
A). Exhibits.
None.
B). Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant for the
six months ended September 30, 1996.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
CYBER DIGITAL, INC.
By: \s\ Jawahar Chatpar
______________________
Chairman, Principal
Financial Officer
DATED: November 6, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000721295
<NAME> CYBER DIGITAL, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,395,475
<SECURITIES> 0
<RECEIVABLES> 684,438
<ALLOWANCES> 0
<INVENTORY> 429,944
<CURRENT-ASSETS> 7,516,649
<PP&E> 686,207
<DEPRECIATION> 652,938
<TOTAL-ASSETS> 7,560,598
<CURRENT-LIABILITIES> 57,315
<BONDS> 0
<COMMON> 152,892
0
38
<OTHER-SE> 7,350,353
<TOTAL-LIABILITY-AND-EQUITY> 7,560,598
<SALES> 29,709
<TOTAL-REVENUES> 29,709
<CGS> 17,761
<TOTAL-COSTS> 443,638
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,231
<INCOME-PRETAX> (384,123)
<INCOME-TAX> 0
<INCOME-CONTINUING> (384,123)
<DISCONTINUED> 0
<EXTRAORDINARY> 343,667
<CHANGES> 0
<NET-INCOME> (40,456)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
