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, 1997
[ ] 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, 1997:
17,366,052 shares of Common Stock, par value $.01 per share.
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<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
ASSETS
September 30, March 31,
1997 1997
(Unaudited) (Audited)
<C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,719,248 $ 5,002,773
Accounts receivable 357,387 327,377
Inventories 444,831 434,473
Prepaid expenses 6,325 10,243
Total Current Assets $ 4,527,791 $ 5,774,866
PROPERTY AND EQUIPMENT, NET
Equipment $ 172,093 $ 66,345
Furniture and Fixtures 59,425 58,120
Leasehold Improvements 2,920 2,920
$ 234,438 $ 127,385
Accumulated depreciation (95,294) (83,287)
Total Property And Equipment $ 139,144 $ 44,098
OTHER ASSETS
Other $ 10,392 $ 10,392
$ 4,677,327 $ 5,829,356
Cyber Digital, Inc.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, March 31,
1997 1997
(Unaudited) (Audited)
<C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 77,537 $ 42,273
Current maturities of long-term debt 0 0
Total Current Liabilities $ 77,537 $ 42,273
Long-Term Debt, less current maturities 0 0
$ 77,537 $ 42,273
SHAREHOLDERS' EQUITY Deficit in shareholders' equity
Preferred Stock - $.05 par value;
authorized 10,000,000 shares
Convertible preferred stock
- Series A $.05 par value;
authorized 805 shares; issued
and outstanding, 0 and 86 shares
at September 30, 1997 and March 31,
1997 respectively 0 4
Convertible, cumulative and
participating preferred stock
- Series B-1 $.05 par value;
authorized 3,225 shares; issued
and outstanding 2,000 and 2,000
shares at September 30, 1997
and March 31, 1997, respectively 100 100
Convertible, cumulative and
participating preferred stock
- Series B-2 $.05 par value;
authorized 4,835 shares; issued
and outstanding; none 0 0
Common Stock - $.01 par value;
authorized, 30,000,000
shares; issued and outstanding,
17,366,052 shares and 17,095,176
shares at September 30, 1997 and
March 31, 1997, respectively $ 173,661 $ 170,952
Additional paid-in capital 13,648,011 13,919,241
Accumulated deficit (9,221,982) (8,303,214)
$ 4,599,790 $ 5,787,083
$ 4,677,327 $ 5,829,356
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<CAPTION>
Cyber DigitaI, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
1997 1996
<C> <C>
Net sales $ 28,410 $ 10,974
Cost of sales 26,002 9,187
Gross profit $ 2,408 $ 1,787
Operating Expenses
Selling, general and administrative
expenses $ 413,603 $ 352,147
Research and development 46,056 14,846
Total operating expenses $ 459,659 $ 366,993
Operating Profit (Loss) $ (457,251) $ (365,206)
Other Income, net 50,380 58,091
Earnings (loss) before
extraordinary item
NET EARNINGS (LOSS) $ (406,871) $ (307,115)
Extraordinary gain 0 51,911
Net Income (Loss) $ (406,871) $ (255,204)
Earnings (loss) per common
and common equivalent share
Earnings (loss) before
extraordinary item $ (0.02) $ (0.02)
Extraordinary item 0.00 0.00
Net earnings (loss) per
common and common equivalent $ (0.02) $ (0.02)
Weighted average number of
common shares outstanding 17,146,528 15,112,311
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<CAPTION>
Cyber DigitaI, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
September 30,
1997 1996
<C> <C>
Net sales $ 28,410 $ 29,709
Cost of sales 44,326 17,761
Gross profit $ (15,916) $ 11,948
Operating Expenses
Selling, general and
administrative expenses $ 641,535 $ 440,023
Research and development 91,564 14,846
Total operating expenses $ 733,099 $ 454,869
Operating Profit (Loss) $ (749,015) $(442,921)
Other Income, net 107,495 58,798
Earnings (loss) before
extraordinary item $ (641,520) $(384,123)
Extraordinary item 0 343,667
Net Income (Loss) $ (641,520) $ (40,456)
Earnings (loss) per common
and common equivalent share
Earnings (loss) before
extraordinary item $ (0.02) $ (0.02)
Extraordinary item 0.00 0.02
Net earnings (loss) per
common and common equivalent $ (0.02) $ 0.00
Weighted average number of
common shares outstanding 17,146,528 15,112,311
</TABLE>
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<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended September 30,
1997 1996
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings (loss) $ (641,520) $ (40,456)
Adjustments to reconcile net
earnings (loss) to net cash
provided by (used in) operating
activities:
Depreciation 11,576 4,581
Amortization 432 0
Forgiveness of debt 0 (343,667)
(Increase) decrease in operating assets
Accounts receivable (30,010) 437
Inventories (10,358) 3,638
Prepaid expenses 3,920 (2,785)
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses 35,263 6,472
Net cash used in
operating activities $ (630,697) $(371,780)
Cash Flows from Investing Activities
Purchase of equipment $ (105,749) $ (7,159)
Purchase of Furniture & Fixtures (1,305) 0
Net cash used in investing
activities $ (107,054) $ (7,159)
Cash Flows from Financing Activities
Redemption of preferred stock $ (613,274) $ 7,049,500
Issuance of common stock 67,500 119,798
Payments of long-term debt 0 (550,911)
Proceeds from borrowings 0 0
Net cash provided by
financing activities $ (545,774) $ 6,618,387
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS $ (1,283,525) $ 6,239,448
Cash and cash equivalents
at beginning of period 5,002,773 156,027
Cash and cash equivalents
at end of period $ 3,719,248 $ 6,395,475
Supplemental Disclosure of Cash Flow Information:
Cash paid during the
period for Income taxes $ 0 $ 404
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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, 1997 are not necessarily
indicative of the results that may be expected for the year
ending March 31, 1998. 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, 1997.
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, 1997 March 31, 1997
<C> <C>
Finished goods $ 110,223 $ 110,223
Work-in-process 46,718 46,718
Raw materials 287,890 277,532
$ 444,831 434,473
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
For Three Months Ended September 30, 1997
Net sales increased 159% in quarter ended September 30, 1997
over the prior year's same quarter. Net sales for quarter ended
September 30, 1997 were $28,410 as compared to $10,974 for
quarter ended September 30, 1996. Gross profit for quarter
ended September 30, 1997 was 8% of net sales as compared to 16%
for quarter 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 decreased from 3,209% in quarter ended September 30, 1996
to 1,456% in quarter ended September 30, 1997. Profit (loss)
from operations for quarter ended September 30, 1997 was
$(457,251) as compared with $(365,206) for quarter ended
September 30, 1996. Net income (loss) for quarter ended
September 30, 1997 was $(406,871) or $(.02) per share as
compared to $(255,204) or $(.02) per share for quarter ended
September 30, 1996.
For Six Months Ended September 30, 1997
Net sales decreased 4% in the period ended September 30, 1997
over the prior year's same period. Net sales for the six month
period ended September 30, 1997 were $28,410 as compared with
$29,709 for the period ended September 30, 1996. Gross profit
for the period ended September 30, 1997 was 56% of net sales as
compared to 40% for the period ended September 30, 1996.
Selling, general and administrative expenses as a percentage of
sales increased from 1,481% in the period ended September 30,
1996 to 2,258% in the period ended September 30, 1997 due to a
decrease in revenues during such periods. Profit (loss) from
operations for the period ended September 30, 1997 was
$(749,015) as compared with $(442,921) for the period ended
September 30, 1996. Net income (loss) for the period ended
September 30, 1997 was $(641,520) or $(.02) per share as
compared with $(40,456) or $.00 per share for the period ended
September 30, 1996.
Liquidity and Capital Resources
Total working capital decreased by $1,282,339 to $4,450,254 for
quarter ended September 30, 1997 from $5,732,593 for period
ended March 31, 1997. The current ratio decreased to 58.40 to 1
as at September 30, 1997 from 136.6 to 1 as at March 31, 1997.
Current levels of inventory are adequate to meet short term
sales. There were no significant capital expenditures in the
quarter ended September 30, 1997. 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.
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CYBER DIGITAL, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS IN FORM 8-K
A). Exhibits.
3.1 Composite Amended and Restated Bylaws of the Company.
10.1 Amended and Restated Employment Agreement, dated as of
August 4, 1997, between the Company and J.C. Chatpar.
27 Financial Data Schedule
B). Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant for
the three months ended September 30, 1997.
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.
DATED: November 14, 1997
By: \s\ J.C. Chatpar
Chairman, Principal Financial
Officer
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Mar-31-1997
<PERIOD-END> Sep-30-1997
<CASH> 3,719,248
<SECURITIES> 0
<RECEIVABLES> 357,387
<ALLOWANCES> 0
<INVENTORY> 444,831
<CURRENT-ASSETS> 4,527,791
<PP&E> 234,438
<DEPRECIATION> 95,294
<TOTAL-ASSETS> 4,677,327
<CURRENT-LIABILITIES> 77,537
<BONDS> 0
0
100
<COMMON> 173,661
<OTHER-SE> 4,426,029
<TOTAL-LIABILITY-AND-EQUITY> 4,677,327
<SALES> 28,410
<TOTAL-REVENUES> 28,410
<CGS> 44,326
<TOTAL-COSTS> 733,099
<OTHER-EXPENSES> 0
<loss-provission> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (641,520)
<INCOME-TAX> 0
<INCOME-CONTINUING> (641,520)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (641,520)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
<PAGE>
</TABLE>
