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 December 31, 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 December 31, 1997:
17,386,052 shares of Common Stock, par value $.01 per share.
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<CAPTION>
Cyber Digital, Inc.
BALANCE SHEETS
ASSETS
December 31, March 31,
1997 1997
(Unaudited) (Audited)
<C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,176,456 $ 5,002,773
Accounts receivable 357,287 327,377
Inventories 433,064 434,473
Prepaid expenses 6,415 10,243
------------ ------------
Total Current Assets $ 3,973,223 $ 5,774,866
PROPERTY AND EQUIPMENT, NET
Equipment $ 229,259 $ 66,345
Furniture and Fixtures 59,425 58,120
Leasehold Improvements 2,920 2,920
-------------- ------------
$ 291,604 $ 127,385
Accumulated depreciation (106,843) (83,287)
-------------- ------------
Total Property And Equipment $ 184,761 $ 44,098
OTHER ASSETS
Other $ 15,977 $ 10,392
-------------- ------------
$ 4,173,961 $ 5,829,356
============== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and
accrued expenses $ 71,026 $ 42,273
Current maturities
of long-term debt 0 0
-------------- ------------
Total Current Liabilities $ 71,026 $ 42,273
Long-Term Debt,
less current maturities 0 0
-------------- ------------
$ 71,026 $ 42,273
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 December 31, 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 December 31, 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,
17,386,052 shares and 17,095,176
shares at December 31, 1997 and
March 31, 1997, respectivel 173,861 170,952
Additional paid-in capital 13,664,111 13,919,241
Accumulated deficit (9,735,137) (8,303,214)
-------------- ------------
$ 4,102,935 $ 5,787,083
------------- ------------
$ 4,173,961 $ 5,829,356
============= ============
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</TABLE>
[CAPTION]
<TABLE>
Cyber DigitaI, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31,
1997 1996
<C> <C>
Net sales $ 0 $ 4,564
Cost of sales 49,188 5,556
--------- ---------
Gross profit $ (49,188) $ (1,001)
--------- ---------
Operating Expenses
Selling, general and administrative
expenses $ 441,248 $ 244,296
Research and development 67,457 19,296
--------- ----------
Total operating expenses $ 508,705 $ 263,592
--------- ----------
Operating Profit (Loss) $(557,893) $ (264,593)
Other Income, net 44,737 40,684
--------- ----------
Net Loss $(513,156) $ (223,909)
========= ==========
Net loss per common and
common share equivalent $ (0.03) $ (0.01)
Weighted average number of
common shares outstanding 17,327,822 15,379,893
========== ==========
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<CAPTION>
Cyber DigitaI, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
December 31,
1997 1996
<C> <C>
Net sales $ 28,410 $ 34,273
Cost of sales 93,514 23,326
---------- ----------
Gross profit (loss) $ (65,104) $ 10,947
---------- ----------
Operating Expenses
Selling, general and
administrative expenses $1,082,784 $ 684,319
Research and development 159,020 34,142
---------- ----------
Total operating expenses $1,241,804 $ 718,461
---------- ----------
Operating Loss $(1,306,908) $ (707,514)
Other Income, net 152,232 110,948
---------- ----------
Loss before
extraordinary item $(1,154,676) $ (596,566)
Extraordinary gain 0 343,667
----------- ----------
Net Loss $(1,154,676) $ (252,899)
Earnings (loss) per common
and common equivalent share
Earnings (loss) before
extraordinary item $ (0.07) $ (0.04)
Extraordinary item 0.00 0.02
------------ ----------
Net earnings (loss) per
common and common equivalent $ (0.07) $ (0.02)
============ ==========
Weighted average number of
common shares outstanding 17,327,822 15,379,893
=========== ==========
</TABLE>
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<TABLE>
<CAPTION>
Cyber Digital, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended December 31,
1997 1996
<C> <C>
Cash Flows from Operating Activities
Net loss $(1,154,676) $ (252,899)
Adjustments to reconcile net
Loss to net cash provided by
(used in) operating
activities:
Depreciation 21,921 7,854
Amortization 770 365
Forgiveness of debt 0 (343,667)
(Increase) decrease in operating assets
Accounts receivable (29,910) 6,143
Inventories 1,409 (3,076)
Prepaid expenses 3,828 (2,775)
Other assets (4,720) 0
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses 28,754 (16,966)
----------- ---------
Net cash used in
operating activities $(1,132,624) $ (605,021)
----------- -----------
Cash Flows from Investing Activities
Purchase of equipment $ (162,914) $ (19,323)
Purchase of furniture & fixtures (1,305) (4,132)
Purchase of leasehold improvements 0 (2,920)
----------- -----------
Net cash used in investing
activities $ (164,219) $ (26,375)
----------- -----------
Cash Flows from Financing Activities
Issuance of preferred stock
Series A $ 0 $ 7,050,368
Redemption of preferred
stock Series A (613,274) (1,649,849)
Issuance of preferred Stock
Series B 0 1,780,000
Issuance of common stock 83,800 119,796
Conversion of debenture 0 (100,000)
Payments of long-term debt 0 (450,911)
----------- -----------
Net cash provided by (used in)
financing activities $ (529,474) $ 6,749,404
----------- -----------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS $(1,826,319) $ 6,118,008
Cash and cash equivalents
at beginning of period 5,002,773 156,027
----------- ------------
Cash and cash equivalents
at end of period $ 3,176,456 $ 6,274,035
=========== ============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the
period for Income taxes $ 126 $ 3,328
</TABLE>
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[CAPTION]
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 nine months ended December 31, 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>
December 31, 1997 March 31, 1997
<C> <C>
Finished goods $ 110,223 $ 110,223
Work-in-process 46,718 46,718
Raw materials 285,843 277,532
---------- ----------
$ 433,064 $ 434,473
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
For Three Months Ended December 31, 1997
Net sales for quarter ended December 31, 1997 were zero
as compared to $4,564 for quarter ended December 31, 1996.
Gross profit for quarter ended December 31, 1997 was $(49,188)
as compared to $(1,001) for quarter ended December 31, 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 were $441,248
in quarter ended December 31, 1997 as compared to $244,296
for quarter ended December 31, 1996. Profit (loss)
from operations for quarter ended December 31, 1997 was
$(557,893) as compared with $(264,593) for quarter ended
December 31, 1996. Net income (loss) for quarter ended
December 31, 1997 was $(513,156) or $(.03) per share as
compared to $(223,909) or $(.01) per share for quarter ended
December 31, 1996.
For Nine Months Ended December 31, 1997
Net sales for the period ended December 31, 1997 were $28,410
as compared to $34,273 for the period ended December 31, 1996.
Gross profit for the period ended December 31, 1997 was $(65,104)
as compared to $10,947 for the period ended December 31, 1996.
Selling, general and administrative expenses were $1,082,784
for the period ended December 31, 1997 as compared to $684,319
for the period ended December 31, 1996. Profit (loss) from
operations for the period ended December 31, 1997 was
$(1,306,908) as compared with $(707,514) for the period ended
December 31, 1996. Extraordindary gain on debt restructure
for the period ended December 31, 1997 was zero as compared with
$343,667 or $.02 per share for the period ended December 31, 1996.
Net income (loss) for the period ended December 31, 1997 was
$(1,154,676) or $(.07) per share as compared with $(252,899) or
$(.02) per share for the period ended December 31, 1996.
Liquidity and Capital Resources
Total working capital decreased by $1,830,396 to $3,902,197 for
quarter ended December 31, 1997 from $5,732,593 for period
ended March 31, 1997. The current ratio decreased to 55.94 to 1
as at December 31, 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 December 31, 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.
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 December 31, 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: February 14, 1997
By: \s\ J.C. Chatpar
Chairman, Principal Financial
Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Mar-31-1998
<PERIOD-END> Dec-31-1997
<CASH> 3,176,456
<SECURITIES> 0
<RECEIVABLES> 357,287
<ALLOWANCES> 0
<INVENTORY> 433,064
<CURRENT-ASSETS> 3,973,223
<PP&E> 291,604
<DEPRECIATION> 106,843
<TOTAL-ASSETS> 4,173,961
<CURRENT-LIABILITIES> 71,026
<BONDS> 0
0
100
<COMMON> 173,861
<OTHER-SE> 3,928,974
<TOTAL-LIABILITY-AND-EQUITY> 4,173,961
<SALES> 28,410
<TOTAL-REVENUES> 28,410
<CGS> 93,514
<TOTAL-COSTS> 1,176,298
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,154,676)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,154,676)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,154,676)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
<PAGE>
</TABLE>
