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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
+---+
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
+---+ SECURITIES EXCHANGE ACT OF 1934
For the quarterly period JUNE 30, 2002
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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.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1917838
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(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
June 30, 2002 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
JUNE 30 DECEMBER 31,
-------- ------------
2002 2001
-------- ------------
(UNAUDITED)
Current assets:
Cash ............................................ $ 13,521 $ 9,483
Accounts receivable ............................. 8,637 19,718
Receivable from Data Probe, Inc. ................ 11,435 64,801
Inventories of work in process .................. 1,100 1,100
Prepaid expenses and other current
assets ................................. 464 50
-------- --------
Total current assets .......... 35,157 95,152
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$126,168 in 2001 and $125,563
in 2000) .............................. 199 234
Other assets .................................... 140 140
-------- --------
Total ......................... $ 35,496 $ 95,526
======== ========
(Continued)
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
JUNE 30, DECEMBER 31,
--------- ------------
2002 2001
--------- ------------
(UNAUDITED)
Current liabilities:
Accounts payable ........................ $ 11,694 $ 25,278
Accrued expenses and taxes .............. 180,187 153,288
Customer advances ....................... 145,000 145,000
----------- -----------
Total current liabilities .......... 336,881 323,566
Other liabilities ................................ 10,600 10,600
----------- -----------
Total liabilities .................. 347,481 334,166
----------- -----------
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 .......................................... (3,459,954) (3,386,609)
----------- -----------
(180,528) (107,183)
Less cost of 83,119 common shares
held in treasury ........................ 131,457 131,457
----------- -----------
Total Shareholders' Equity ............ (311,985) (238,640)
----------- -----------
TOTAL ............................................ $ 35,496 $ 95,526
=========== ===========
See accompanying notes to financial statements
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
Six Months Ended
JUNE 30,
---------------------------
2002 2001
------------ ----------
Sales . . . . . . . . . . . . . . . . . . . $ 143,795 $ 386,830
Cost of sales . . . . . . . . . . . . . . . 153,967 318,514
------------ ----------
Gross profit. . . . . . . . . . . . . . . . (10,172) 68,316
Selling and administrative
expenses . . . . . . . . . . . . . . . 74,382 86,695
------------ ----------
(Loss) from operations. . . . . . . . . . . (84,554) (18,379)
Interest income . . . . . . . . . . . . . . 1,808 7,417
Miscellaneous Income . . . . . . . . . . . 9,401 --
------------ ---------
(Loss) before provision
for income taxes . . . . . . . . . . $ (73,345) $ (10,962)
Income tax provision. . . . . . . . . . . . -- --
------------ ----------
Net(Loss) . . . . . . . . . . . $ (73,345) $ (10,962)
============ ==========
(Loss) Profit per share . . . . . . . . . . $ (.10) $ (.02)
============ ===========
Weighted average number
of shares outstanding. . . . . . . . . 705,836 705,836
============ ===========
Dividends per share . . . . . . . . . . . . NONE NONE
============ ===========
The attached notes are made a part hereof.
----------------------------
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30,
---------------------------
2002 2001
------------ ----------
Sales . . . . . . . . . . . . . . . . . . . $ 105,754 $ 226,210
Cost of sales . . . . . . . . . . . . . . . 68,544 227,830
---------- ----------
Gross profit. . . . . . . . . . . . . . . . 37,210 (1,620)
Selling and administrative
expenses . . . . . . . . . . . . . . . 37,981 49,200
---------- ----------
(Loss) from operations . . . . . . . . . . ( 771) (50,820)
Interest income . . . . . . . . . . . . . . 819 5,180
Miscellaneous Income . . . . . . . . . . . 448 --
---------- ----------
Profit (loss) before
provision for income taxes . . . . . . $ 496 $ (45,640)
Income tax provision . . . . . . . . . . . . -- --
---------- -----------
Net profit (Loss) . . . . . . . . . . . . . $ 496 $ (45,640)
=========== ==========
Profit (Loss) per share . . . . . . . . . . $ .00 $ (.06)
=========== ==========
Weighted average number
of shares outstanding. . . . . . . . . 705,836 705,836
=========== ==========
Dividends per share . . . . . . . . . . . . NONE NONE
========== ===========
The attached notes are made a part hereof.
----------------------------
Management's discussion and analysis of financial condition and
results of operations is included on the following page.
DATATAB, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the six months period ended June 30, 2002
decreased by 63.0% to $143,795 as compared to $386,830 for the
corresponding period of 2001. Revenue for the three months period
ended June 30, 2002 decreased 53.0% to $105,754 as compared to
$226,210 for the corresponding period of 2001. The large decrease in
revenue during the first six month of the fiscal year was due to a
general slow down in the United States economy which led to drastic
reduction in market research activities.
There was a decrease of $164,547 in Cost of Sales during
the first six months of the current fiscal year. Most of this
decrease occurred during the second quarter. The large reduction in
Cost of Sales during the second quarter was mainly due to a major cut
back in labor costs. The increase in cost of sales during the initial
six months of the previous fiscal year was due to cost overruns
associated with a large project received from a new client. Overall,
there was a marginal increase of $6,556 in the Cost of Sales during
the first six months of that fiscal year.
Selling and Administrative expenses were lower by $11,913,
or 14%, during the six months period ending June 30, 2002 as compared
to the similar period of 2001. This decrease was mainly due to the
cut back in labor costs during the second quarter.
Interest revenue was lower during the six months period
ending June 30, 2002 when compared to the similar period of 2001. The
majority of the interest income currently being recognized is from
Data Probe, Inc. due to Registrant's accounts receivable from Data
Probe, Inc. (See NOTE F of "Notes to Form 10-Q" contained in this
report for additional information). During the second quarter of
fiscal year 2001 the Registrant took advantage of an increase in the
value of an investment. The liquidation of that investment resulted
in a gain of $2,079.
The Registrant had a loss of ($73,345), or ($.10), during
the six months period ending June 30, 2002 as compared to a loss of
($10,962) in the similar period of 2001. During the three months
period ending June 30, 2002 the Registrant had a profit of $496 as
compared to a loss of ($45,640) for the same period of fiscal year
2001.
(Continued)
DATATAB, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL EXPENDITURES
The Registrant did not incur any capital expenditures in the first
six months of 2002 and does not anticipate adding any material capital
assets for the balance of fiscal year 2002.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital decreased by $73,310 in the first six months of 2002,
from a deficit of ($228,414) at December 31, 2001 to a deficit of
($301,724) at June 30, 2002 .
From time to time the Registrant receives cash advances and deposits
from clients in association with various projects. There is no assurance
that the stream of sales and revenue from the Registrant's existing
clients will continue. If the current level of revenues cannot be
sustained then the Registrant once again will realize losses. Should the
losses reoccur, 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.
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT
CASH FLOWS
(NOTES A AND B)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
----------------------
2002 2001
----------------------
Cash flows (used) provided from operating activities:
Net (loss) . . . . . . . . . . . . . . . . . . . $(73,345) $(10,962)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . 35 278
Decrease (Increase) in accounts receivable . . . . 11,081 (8,618)
(Increase)Decrease in prepaid expenses and
other assets . . . . . . . . . . . . . . . (414) (102)
(Decrease)Increase in accounts payable . . . . . . (13,584) 21,127
Increase (Decrease) in accrued expenses
and taxes . . . . . . . . . . . . . . . . 26,899 14,328
--------- --------
Net cash flow provided from (used in)
Operating activities . . . . . . . . . . . $(49,328) $ 16,051
--------- --------
Cash flows (used) provided by investing activities:
Payments (to) from an affiliate . . . . . . . 53,366 (11,453)
--------- --------
Net cash flow provided (used) by
investing activities . . . . . . . . . 53,366 (11,453)
--------- --------
Cash flows provided by financing activities:
Decrease in other assets . . . . . . . . -- --
--------- --------
Net cash flow provided
by financing activities . . . . . . . . -- --
--------- --------
Net increase (Decrease) in cash . . . . . . . . $ 4,038 4,598
Cash at beginning of period . . . . . . . . . . 9,483 986
--------- --------
Cash at end of period . . . . . . . . . . . . . $ 13,521 $ 5,584
======== =========
The notes to financial statements are made a part hereof.
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, 2001; 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 June 30,
2002 are not necessarily indicative of the results of operations for the year
ending December 31, 2002.
(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, 2001, for financial accounting and income tax
purposes, the Registrant had $1,326,000 of net operating loss carry forwards.
$199,000 will expire in 2002, $120,000 in 2003, $87,000 in 2004, $ 94,000 in
2005, $84,000 in 2006, $99,000 in 2007 and the balance in 2008 and thereafter.
(NOTE E):
Inventories are summarized as follows:
June 30, 2002 December 31, 2001
--------------- -----------------
Work in process . . . . . . . $ 1,100 $ 1,175
=============== =================
(NOTE F:)
Data Probe, Inc., the majority stockholder, is indebted to the
Registrant for advances made. At June 30, 2002 that indebtedness was $11,435 and
was evidenced by a demand note bearing interest at 2% above the prime rate.
For the six months ended June 30, 2002, Data Probe, Inc. charged the
Registrant $86,052 for services rendered and $34,087 in rent related expenses.
In addition, the Registrant charged Data Probe, Inc. in the same six months
period, $10,586 for interest, and $109,644 for services rendered.
PART II
Item 1. Legal Proceedings.
NONE
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: August 14, 2002 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: August 14, 2002 /S/ YITZHAK N. BACHANA
---------------------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director
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: August 14, 2002 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: August 14, 2002
---------------------------------
Yitzhak N. Bachana, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Director