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, 1998
[ ] 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, 1998:
17,386,053 shares of Common Stock, par value $.01 per share.
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
ASSETS
September 30, March 31,
1998 1998
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,051,093 $ 2,436,473
Accounts receivable 492,611 383,603
Inventories 447,750 447,750
Prepaid expenses 6,083 23,545
____________ ____________
Total Current Assets $ 1,997,537 $ 3,291,371
____________ ____________
PROPERTY AND EQUIPMENT, NET
Equipment $ 359,201 $ 275,819
Furniture and Fixtures 68,271 68,271
Leasehold Improvements 3,920 2,920
____________ ____________
$ 431,392 $ 347,010
Accumulated depreciation (151,453) (119,045)
____________ ____________
Total Property And Equipment $ 279,939 $ 227,965
____________ ____________
OTHER ASSETS
Other $ 14,783 $ 14,350
____________ ____________
$ 2,292,259 $ 3,533,686
============ ============
</TABLE>
The accompanying notes are an integral part of these statements
2
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, March 31,
1998 1998
(Unaudited) (Audited)
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable and accrued expenses $ 109,671 $ 140,949
__________ __________
Total Current Liabilities $ 109,673 $ 140,949
Long-term debt, less current maturities 0 0
__________ __________
$ 109,673 $ 140,949
__________ __________
SHAREHOLDERS' EQUITY
Convertible preferred stock - Series A
$.05 par value; authorized 9,991,940
shares; issued and outstanding, 0
and 0 shares at September 30, 1998 and
March 31, 1998 respectively $ 0 $ 0
Convertible, cumulative and participating
preferred stock - Series B-1 $.05 par
value; authorized 3,225 shares;
issued and outstanding 2,200 and 2,200
shares at September 30, 1998 and
March 31, 1998, respectively 110 110
Preferred Stock - Series B-2 cumulative,
convertible and participating $.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,
17,386,053 shares and 17,386,053 shares
at September 30, 1998 and March 31, 1998,
respectively 173,861 173,861
Additional paid-in capital 13,860,257 13,860,257
Accumulated deficit (11,851,642) (10,641,491)
___________ __________
$ 2,182,586 $ 3,392,737
____________ ____________
$ 2,292,259 $ 3,533,686
============ ============
</TABLE>
The accompanying notes are an integral part of these statements
3
<PAGE>
<TABLE>
<CAPTION>
Cyber DigitaI, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
1998 1997
<S> <C> <C>
Net sales $ 182,679 $ 28,410
Cost of sales 144,260 26,002
___________ ___________
Gross profit $ 38,419 $ 2,408
___________ ___________
Operating Expenses
Selling, general and administrative
expenses $ 410,474 $ 413,603
Research and development 197,406 46,056
___________ ___________
Total operating expenses $ 607,880 $ 459,659
___________ ___________
Operating Loss $ (569,461) $ (457,251)
Other Income, net 17,426 50,380
___________ ___________
Net Loss $ (552,035) $ (406,871)
=========== ===========
Earnings (loss) per common and common equivalent share
Net earnings (loss) per common and
common equivalent $ (0.03) $ (0.02)
=========== ==========
Weighted average number of common
shares outstanding 17,386,053 17,146,528
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
September 30,
1998 1997
<S> <C> <C>
Net sales $ 264,060 $ 28,410
Cost of sales 275,009 44,326
__________ __________
Gross profit $ (10,949) $ (15,916)
__________ __________
Operating Expenses
Selling, general and administrative
expenses $ 872,005 $ 641,535
Research and development 370,979 91,564
__________ __________
Total operating expenses $1,242,984 $ 733,099
__________ __________
Operating Loss $(1,253,933) $ (749,015)
Other Income, net 43,783 107,495
__________ __________
Net Loss $(1,210,150) $ (641,520)
=========== ==========
Earnings (loss) per common and common equivalent share
Net earnings (loss) per common and
common equivalent $ (0.07) $ (0.02)
=========== ==========
Weighted average number of common
shares outstanding 17,386,053 17,146,528
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements
5
<PAGE>
<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended September 30,
1998 1997
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings (loss) $ (1,210,150) $ (641,520)
Adjustments to reconcile net earnings
(loss) to net cash provided by
(used in) operating activities:
Depreciation 32,408 11,576
Amortization 216 432
(Increase) decrease in operating assets
Accounts receivable (109,007) (30,010)
Inventories 0 (10,358)
Prepaid expenses 17,462 3,920
Other assets (649) 0
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses (31,278) 35,263
___________ ___________
Net cash used in operating activities $ (1,300,998) (630,697)
_____________ ___________
Cash Flows from Investing Activities
Purchase of equipment $ (83,382) $ (105,749)
Purchase of furniture & fixtures 0 (1,305)
Purchase of leasehold improvements (1,000) 0
____________ ____________
Net cash used in investing activities $ (84,382) $ (107,054)
____________ ___________
Cash Flows from Financing Activities
Redemption of preferred stock $ 0 $ (613,274)
Issuance of common stock 0 67,500
____________ ___________
Net cash provided by financing activities $ 0 $ (545,774)
____________ ___________
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ (1,385,380) $ 1,283,525)
Cash and cash equivalents at
beginning of period 2,436,473 5,002,773
____________ ___________
Cash and cash equivalents at end of period $ 1,051,093 $ 3,719,248
============ ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for Income taxes $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these statements
6
<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, 1998 are not necessarily indicative of the
results that may be expected for the year ending March 31, 1999.
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, 1998.
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, 1998 March 31, 1998
__________________ ______________
<S> <C> <C>
Finished goods $ 312,792 $ 312,792
Work-in-process 37,076 37,076
Raw materials 97,882 97,882
__________ __________
$ 447,750 $ 447,750
========== ==========
</TABLE>
7
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
For Three Months Ended September 30, 1998
Net sales for quarter ended September 30, 1998 were $182,679 as
compared to $28,410 for quarter ended September 30, 1997. Gross
profit for quarter ended September 30, 1998 was 21% of net sales
as compared to 8% for quarter ended September 30, 1997.
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 for the quarter ended
September 30, 1998 were $410,474 as compared to $413,603 for the
quarter ended September 30, 1997. Loss from operations for quarter
ended September 30, 1998 was $(569,461) as compared with $(457,251)
for quarter ended September 30, 1997. Net loss for quarter ended
September 30, 1998 was $(552,035) or $(.03) per share as compared to
$(406,871) or $(.02) per share for quarter ended September 30,
1997.
For Six Months Ended September 30, 1998
Net sales for the six month period ended September 30, 1998 were
$264,060 as compared with $28,410 for the period ended September
30, 1997. Gross profit (loss) for the period ended September 30, 1998
was (4)% of net sales as compared to (56)% for the period ended
September 30, 1997. Selling, general and administrative
expenses for the period ended September 30, 1998 were $872,005
as compared to $641,535 for the period ended September 30, 1997.
Loss from operations for the period ended September 30, 1998 was
$(1,253,933) as compared with $(749,015) for the period ended
September 30, 1997. Net loss for the period ended September 30,
1998 was $(1,210,150) or $(.07) per share as compared with $(641,520)
or $(.02) per share for the period ended September 30, 1997.
Liquidity and Capital Resources
Total working capital decreased by $1,262,558 to $1,887,864 for
quarter ended September 30, 1998 from $3,150,422 for period
ended March 31, 1998. The current ratio decreased to 18.2 to 1
as at September 30, 1998 from 23.3 to 1 as at March 31, 1998. Current
levels of inventory are adequate to meet short term sales.
There were no significant capital expenditures in the quarter
ended September 30, 1998. 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.
8
<PAGE>
CYBER DIGITAL, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS IN FORM 8-K
A). Exhibits.
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, 1998.
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 9,1998 By:\s\ J.C. Chatpar
________________
Chairman, Principal
Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 1,051,093
<SECURITIES> 0
<RECEIVABLES> 492,611
<ALLOWANCES> 0
<INVENTORY> 447,750
<CURRENT-ASSETS> 1,997,537
<PP&E> 431,392
<DEPRECIATION> 151,453
<TOTAL-ASSETS> 2,292,259
<CURRENT-LIABILITIES> 109,673
<BONDS> 0
0
110
<COMMON> 173,861
<OTHER-SE> 2,008,615
<TOTAL-LIABILITY-AND-EQUITY> 2,292,259
<SALES> 264,060
<TOTAL-REVENUES> 264,060
<CGS> 275,009
<TOTAL-COSTS> 1,242,984
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,253,933)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,253,933)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,210,150)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
