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, 2003
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.
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(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)
350 FIFTH AVENUE, SUITE 1729, NEW YORK, NEW YORK 10118
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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
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COMMON SHARES $1.00 PAR VALUE - 705,836 SHARES OUTSTANDING AS OF
June 30, 2003 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
JUNE 30, DECEMBER 31,
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2003 2002
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(UNAUDITED)
Current assets:
Cash ............................................ $ 438 $ 2,203
Accounts receivable ............................. 2,127 3,960
Inventories of work in process .................. 1,000 1,000
Prepaid expenses and other current
assets ................................. 9 200
-------- --------
Total current assets .......... 3,574 7,363
Furniture, fixtures, equipment and
improvements (at cost, less
accumulated depreciation of
$126,680 in 2003 and $126,553
in 2002) .............................. 127 163
Other assets .................................... 150 150
-------- --------
Total ......................... $ 3,851 $ 7,676
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(Continued)
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES
JUNE 30, DECEMBER 31,
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2003 2002
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(UNAUDITED)
Current liabilities:
Accounts payable ........................ $ 16,670 $ 13,167
Accrued expenses and taxes .............. 204,801 167,361
Customer advances ....................... 70,000 70,000
Payable to Data Probe .............. 70,659 89,186
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Total current liabilities .......... 362,130 339,714
Other liabilities ................................ 10,600 10,600
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Total liabilities .................. 372,730 350,314
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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 .......................................... (3,516,848) (3,490,607)
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(237,422) (211,181)
Less cost of 83,119 common shares
held in treasury ........................ 131,457 131,457
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Total Shareholders' Equity ............ (368,879) (342,638)
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TOTAL ............................................ $ 3,851 $ 7,676
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See accompanying notes to financial statements
DATATAB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
2003 2002
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Sales ...................................... $ 112,423 $ 143,795
Cost of sales .............................. 59,913 153,967
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Gross profit ............................... 52,510 (10,172)
Selling and administrative
expenses ........................ 78,751 74,382
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(Loss) from operations ..................... (26,241) (84,554)
Interest income ............................ -- 1,808
Miscellaneous Income ....................... -- 9,401
(Loss) before provision
for income taxes ................ $ (26,241) $ (73,345)
Income tax provision ....................... -- --
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Net(Loss) .................................. $ (26,241) $ (73,345)
========= =========
(Loss) Profit per share .................... $ (.04) $ (.10)
========= =========
Weighted average number
of shares outstanding 705,836 705,836
========= =========
Dividends per share ........................ NONE NONE
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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,
2003 2002
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Sales ........................................... $ 14,744 $ 105,754
Cost of sales ................................... 28,481 68,544
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Gross profit .................................... (13,737) 37,210
Selling and administrative
expenses ............................. 40,981 37,981
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(Loss) from operations .......................... (54,718) (771)
Interest income ................................. -- 819
Miscellaneous Income ............................ -- 448
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Profit (loss) before provision for
income taxes .................................... $ (54,718) $ 496
Income tax provision ............................ -- --
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Net profit (Loss) ............................... $ (54,718) $ 496
========= =========
Profit (Loss) per share ......................... $ (.08) $ .00
========= =========
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, 2003 decreased by 22.0%
from $143,795 in the first six months of fiscal year 2002 to $112,423 during the
corresponding period of fiscal year 2003. Revenue for the three months period
ended June 30, 2003 decreased 86.0% to $14,744 as compared to $105,754 for the
corresponding period of 2002. The large decrease in revenue during the second
quarter of the fiscal year was due to cut backs by major clients coupled with an
increase in competitive forces in market research data processing. During the
second quarter the Registrant was not successful in finding new clients to
replace the lost revenues.
In line with the decrease in sales the Registrant had a decrease of
61.0% or $94,054 in the Cost of Sales during the first six months of fiscal year
2003. The large reduction in Cost of Sales during the second quarter was mainly
due to a major cut back in labor costs. During the first six months of fiscal
year 2002 there was a decrease of $164,547 in the Cost of Sales as compared to
the corresponding six months period of fiscal year 2001. Most of that decrease
occurred during the second quarter due to major cut back in labor costs.
During the first six months of fiscal year 2003 Selling and
Administrative expenses increased by $4,369 to $78,751. This increase was due to
interest expense coupled with a one-time expense of $5,080 for a move to new
premises. The move to new offices has resulted in a saving of approximately
$3,000 per month. During the six months period ending June 30, 2002 Selling and
Administrative expenses were lower by $11,913, or 14%, as compared to the
similar period of 2001. This decrease was mainly due to the cut back in labor
costs during the second quarter.
During the six months period ending June 30, 2003 the company incurred
interest expense of $2,296 for money advanced to it by Data Probe, Inc. During
previous fiscal years the Registrant advanced money to Data Probe. However,
during fiscal year 2002 Data Probe has repaid to Registrant all its principal
and interest obligations. (See NOTE F of "Notes to Form 10-Q" contained in this
report for additional information).
The Registrant had a loss of ($26,241), or ($.04), during the six months
period ending June 30, 2003 as compared to a loss of ($73,345) in the similar
period of 2002. During the three months period ending June 30, 2003 the
Registrant had a loss of ($54,718) or ($.08) as compared to a profit of $496 for
the same period of fiscal year 2002.
(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 2003 and does not anticipate adding any material capital assets for
the balance of fiscal year 2003.
LIQUIDITY AND CAPITAL RESOURCES.
Working capital decreased by $26,205 in the first six months of 2003,
from a deficit of ($332,351) at December 31, 2002 to a deficit of ($358,556) at
June 30, 2003.
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,
2003 2002
Cash flows (used) provided from operating activities: -------- --------
Net (loss) ............................................................. $(26,241) $(73,345)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization ........................................ 36 35
Decrease (Increase) in accounts receivable ........................... 1,833 11,081
Decrease (Increase) in prepaid expenses and
other assets ................................................ 191 (414)
Increase (Decrease) in accounts payable .............................. 3,503 (13,584)
Increase (Decrease) in accrued expenses
and taxes ................................................... 37,440 26,899
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Net cash flow provided from (used in)
Operating activities .............................................. $ 16,762 $(49,328)
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Cash flows (used) provided by investing activities:
Payments (from) to an affiliate ...................................... (18,527) 53,366
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Net cash flow (used) provided (by
investing activities .............................................. (18,527) 53,366
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Net (Decrease)increase in cash ......................................... $ (1,765) 4,038
Cash at beginning of period ............................................ 2,203 9,483
-------- --------
Cash at end of period .................................................. $ 438 $ 13,521
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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, 2002; 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,
2003 are not necessarily indicative of the results of operations for the year
ending December 31, 2003.
(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, 2002, for financial accounting and income tax purposes,
the Registrant had $1,023,000 of net operating loss carry forwards. $120,000
will expire 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, 2003 December 31, 2002
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Work in process $ 1,000 $ 1,000
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(NOTE F:)
Data Probe, Inc., the majority stockholder, has made advances to the
Registrant. At June 30, 2003 Registrant's indebtedness to Data Probe was $70,659
and was evidenced by a demand note bearing interest at 2% above the prime rate.
For the six months ended June 30, 2003, Data Probe, Inc. charged the
Registrant $7,544 for services rendered and $29,836 in rent related expenses. In
addition, Data Probe, Inc. charged the Registrant, in the same six months
period, $2,296 for interest. During the first six months of the fiscal year the
Registrant charged Data Probe, $98,484 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
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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