10-Q 1 t23056.txt QUARTERLY REPORT 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, 2001 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 ------ DATATAB, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) NEW YORK 13-1917838 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 49 EAST 21ST STREET, NEW YORK, NEW YORK 10010 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 228-6800 -------------- 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 August 15, 2000 (EXCLUSIVE OF 83,119 SHARES IN TREASURY)

DATATAB, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ASSETS ~~MARCH~~JUNE 3130 DECEMBER 31, -------- ------------ 2001 2000 -------- ------------ (UNAUDITED) Current assets: Cash ............................................ $ 25,~~552~~584 $ 986 Accounts receivable ............................. 3621,~~124~~668 13,050 Receivable from Data Probe, Inc. ................ ~~126~~116,~~927~~614 105,161 Inventories of work in process .................. 1,175 1,175 Prepaid expenses and other current assets ................................. ~~(400)~~102 -- -------- -------- Total current assets .......... ~~166~~145,~~378~~143 120,372 Furniture, fixtures, equipment and improvements (at cost, less accumulated depreciation of $126,~~029~~168 in 2001 and $125,~~890~~563 in 2000) .............................. ~~651~~512 790 Other assets .................................... 170 170 -------- -------- Total ......................... $~~167~~145,~~199~~825 $121,332 ======== ========

(Continued)

DATATAB, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET LIABILITIES ~~MARCH~~JUNE 3130, DECEMBER 31, --------- ------------ 2001 2000 --------- ------------ (UNAUDITED) Current liabilities: Accounts payable ........................ $ 4047,~~589~~637 $ 26,510 Accrued expenses and taxes .............. ~~107~~124,~~044~~262 109,934 Customer advances ....................... 145,000 145,000 ----------- ----------- Total current liabilities .......... ~~292~~316,~~633~~899 281,444 Other liabilities ................................ 10,600 10,600 ----------- ----------- Total liabilities .................. ~~303~~327,~~233~~499 292,044 ----------- ----------- 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,~~284~~329,~~003~~643) (3,318,681) ----------- ----------- (450,~~577~~217) (39,255) Less cost of 83,119 common shares held in treasury ........................ 131,457 131,457 ----------- ----------- Total Shareholders' Equity ............ (~~136~~181,~~034~~674) (170,~~710~~712) ----------- ----------- TOTAL ............................................ $ ~~167~~145,~~199~~825 $ 121,332 =========== =========== ~~See accompanying notes to financial statements~~

See accompanying notes to financial statements

DATATAB, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (NOTES A AND B) (UNAUDITED) ~~THREE~~Six ~~MONTHS~~Months ~~ENDED~~Ended ~~MARCH~~June 3130, ------------------------- 2001 2000 ~~--------- ---------~~ Sales ............................................ $ ~~160~~386,~~620~~830 $ ~~142~~371,~~704~~288 Cost of sales .................................... 90318,~~684~~514 ~~124~~311,~~546~~958 --------- --------- Gross profit ..................................... 6968,~~936~~316 1859,~~158~~330 Selling and administrative expenses .............................~~.......~~ 3786,~~496~~695 3976,~~225~~931 --------- --------- ~~Profit~~ (~~loss~~Loss) from operations .......................... 32(18,~~440~~379) (2117,~~067~~601) Interest income .................................. 27,~~238~~417 512,~~591~~740 Profit from investments ......................... -- 2,079 --------- --------- ~~Profit~~ (~~loss~~Loss) Profit before provision for income taxes ...........~~.......~~ 34$ (10,~~678~~962) $ (152,~~476~~782) Income tax provision ............................. -- -- --------- --------- Net ~~profit~~ (~~loss~~Loss) ....................................... $ 34(10,~~678~~962) $ (152,~~476~~782) ========= ========= ~~Profit/~~(Loss) Profit per share ........................... $ (.0502) $ (.~~02)~~00 ========= ========= 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 ~~CASH~~OF ~~FLOWS~~OPERATIONS (NOTES A AND B) (UNAUDITED) ~~THREE~~Three ~~MONTHS~~Months ~~ENDED~~Ended ~~MARCH~~June 3130, ---------------------- 2001 2000 --------- --------- ~~Cash~~Sales ~~flows provided (used) from operating activities: Net Income/(Loss)~~ ........................................... $ 34226,~~678~~210 $~~(15~~228,~~467)~~584 ~~Adjustments~~Cost toof ~~reconcile~~sales ~~net (loss) to net cash provided by operating activities: Depreciation and amortization~~ .................... ~~139 163 (Increase)/Decrease in accounts receivable~~ ............... ~~(23~~227,~~074)~~830 29187,~~247~~412 ~~Decrease/(Increase)~~--------- in-------- ~~prepaid~~Gross ~~expenses~~profit ~~and other assets~~ .................................... ~~400 400 Increase/~~(~~Decrease~~1,620) in41,172 ~~accounts~~Selling ~~payable~~and administrative expenses ............................. 1449,~~079~~200 537,~~495~~706 ~~(Decrease)/Increase~~--------- in-------- ~~accrued~~Profit ~~expenses~~from ~~and~~operations ~~taxes~~ .......................... (50,820) 3,466 Interest income .......... ~~( 2,890) (6,024) (Decrease)/Increase in customer deposits~~ ....................... -5,180 ~~(74~~7,~~000)~~149 ~~--------~~Profit ~~-------- Net cash flow provided (used)~~ from ~~operating~~investments ~~activities~~ .......................... ~~23,332~~-- ~~(60~~2,~~195)~~079 --------- -------- ~~Cash~~Profit ~~flows provided~~ (~~used~~loss) bybefore ~~investing~~provision ~~activities:~~for ~~Payments~~income ~~from~~taxes ........... $ (to45,640) an$ ~~affiliate~~12,694 Income tax provision ............................ ~~(21,766)~~-- ~~23,832~~-- --------- -------- Net ~~cash flow provided~~ (~~used~~Loss) byprofit ~~investing activities~~ ............................... $ (2145,~~766~~640) 23$ 12,~~832~~694 ~~--------~~========= ~~--------~~======== ~~Net increase/~~(~~Decrease~~Loss) inProfit ~~cash~~per share ......................... ~~1,566~~$ (~~36,363~~.06) ~~Cash~~$ at.02 ~~beginning~~========= ======== Weighted average number of ~~period~~shares outstanding ................~~........~~ ~~986~~705,836 90705,~~015~~836 ~~--------~~========= ~~--------~~======== ~~Cash~~Dividends atper ~~end~~share ~~of period~~ .............................. $NONE ~~2,552~~NONE ~~$ 53,652~~ ========= ======== ~~The notes to financial statements are made a part hereof.~~

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, 2001 increased by 1.0% to $386,830 as compared to $371,288 for the corresponding period of 2000. Revenue for the three months period ended June 30, 2001 decreased 1.0% to $226,210 as compared to $228,584 for the corresponding period of 2000. There was no significant increase or decrease in revenue during the six months period or the three months period ending June 2001. There was an increase of $40,418 in Cost of Sales during the second quarter of the current fiscal year. This increase 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 the fiscal year. Selling and Administrative expenses were higher during the six months period ending June 30, 2001 as compared to the similar period of 2001. This increase was mainly due to finance costs associated with advances made to the company. Interest revenue was lower during the six months period ending June 30, 2001 when compared to the similar period of 2000. 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 the previous fiscal year 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 ($10,962) during the six months period ending June 30, 2001 as compared to a loss of ($2,782) in the similar period of 2000. During the three months period ending June 30, 2001 the Registrant had a loss of ($45,640) as compared to a profit of $12,694 for the same period of fiscal year 2000. (Continued) DATATAB, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS YEAR 2000 COMPLIANCE After a review of the Registrant's software, services and internal systems it was concluded that the software and services provided by the Registrant are Year 2000 compliant. The Registrant has, also, upgraded its accounting and payroll systems to be fully compliant under the Year 2000 requirements. To date, the Registrant has not found any area where a Year 2000 compliance problem, with either its internal systems or outside providers, could have a material adverse impact on any part of the Registrant's business operations. CAPITAL EXPENDITURES The Registrant did not incur any capital expenditures in the first six months of 2001 and does not anticipate adding any material capital assets for the balance of fiscal year 2001. LIQUIDITY AND CAPITAL RESOURCES. Working capital decreased by $16,684 in the first six months of 2001, from a deficit of ($161,072) at December 31, 2000 to a deficit of ($171,756) at June 30, 2001. 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.

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, 2000; 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, 2001 are not necessarily indicative of the results of operations for the year ending December 31, 2001. (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, 2000, for financial accounting and income tax purposes, the Registrant had $1,433,000 of net operating loss carry forwards. $175,000 will expire in 2001, $199,000 in 2002, $120,000 in 2003, $87,000 in 2004, $ 94,000 in 2005, $84,000 in 2006, and the balance in 2007 and thereafter. (NOTE E): Inventories are summarized as follows: June 30, 2001 December 31, 2000 ----------------- ----------------- Work in process . . . . . . . $ 1,175 $ 1,175 ================== ================= (NOTE F:) Data Probe, Inc., the majority stockholder, is indebted to the Registrant for advances made. At June 30, 2001 that indebtedness was $116,614 and was evidenced by a demand note bearing interest at 2% above the prime rate. For the six months ended June 30, 2001, Data Probe, Inc. charged the Registrant $208,013 for services rendered and $34,117 in rent related expenses. In addition, the Registrant charged Data Probe, Inc. in the same six months period, $7,417 for interest, and $217,336 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, 2001 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, 2001 /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, 2001 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, 2001 /s/ Yitzhak N. Bachana ---------------------------- Yitzhak N. Bachana, President, Treasurer, Principal Executive Officer, Principal Financial Officer, Director

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