SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/x/ Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1998
/ / Transition Report Under Section 13 or 15(d) of
The Exchange Act For the Transition Period from
___________________ to _________________
Commission File Number 000-24197
DelSoft Consulting, Inc.
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(Exact Name of Small Business Issuer as Specified in its Charter)
Georgia 75-2719614
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
106 Bombay Lane, Roswell, Georgia 30076
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(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code: (770) 518-4289
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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 / /
At December 23, 1998, there were issued and outstanding
11,259,149 shares of Common Stock.
Transitional Small Business Disclosure Format (check one): Yes / / No/x/
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
<TABLE>
<CAPTION>
DELSOFT CONSULTING, INC.
Condensed Balance Sheet
September 30, 1998
(unaudited)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 112,419
Accounts receivable, net of allowance for doubtful accounts of $10,000 1,444,228
Deferred tax assets 51,600
Prepaid income taxes 91,720
Other current assets 28,120
------------
Total current assets 1,728,087
Equipment and furnishings, net of accumulated depreciation of $62,094 218,031
Intangible assets, net of accumulated amortization of $126,092 1,324,632
Other assets 67,086
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Total $ 3,337,836
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 548,436
Current portion of long-term debt 39,701
Accounts payable 144,662
Accrued compensation and other liabilities 308,129
------------
Total current liabilities 1,040,928
Long-term debt, net of current portion 74,769
Deferred tax liabilities 17,200
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Total liabilities 1,132,897
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Commitments and contingencies
Stockholders' equity:
Common stock, no par value; 100,000,000 shares authorized;
11,159,149 shares issued and outstanding 2,775,652
Retained earnings 333,584
Unearned compensation (904,297)
------------
Total stockholders' equity 2,204,939
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Total $ 3,337,836
============
</TABLE>
See Notes to Condensed Financial Statements.
2
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<TABLE>
<CAPTION>
DELSOFT CONSULTING, INC.
Condensed Statements of Operations
Three Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
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<S> <C> <C>
Gross revenue $2,345,207 $2,318,557
Direct project costs 1,703,559 1,692,522
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Net revenues 641,648 626,035
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Expenses:
Selling, general and administrative expenses 676,490 481,328
Interest expense 20,364 35,927
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Totals 696,854 517,255
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Income (loss) before provision (credit) for income taxes (55,206) 108,780
Provision (credit) for income taxes (14,200) 37,932
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Net income (loss) $ (41,006) $ 70,848
========== ==========
Basic earnings (loss) per share $ - $.01
==== ====
Basic weighted average common shares outstanding 11,159,149 10,080,164
========== ==========
</TABLE>
See Notes to Condensed Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
DELSOFT CONSULTING, INC.
Statements of Stockholders' Equity
Three Months Ended September 30, 1998
Common Stock
-------------------------
Total
Number of Retained Unearned Stockholders'
Shares Amount Earnings Compensation Equity
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<S> <C> <C> <C> <C> <C>
Balance, July 1, 1998 11,159,149 $2,775,652 $374,590 $(937,500) $2,212,742
Amortization of unearned
compensation
33,203 33,203
Net Loss (41,006) (41,006)
------------ ----------- -------- --------- ----------
Balance, September 30, 1998
11,159,149 $2,775,652 $333,584 $(904,297) $2,204,939
========== ========== ======== ========= ==========
</TABLE>
See Notes to Condensed Financial Statements.<PAGE>
<TABLE>
<CAPTION>
DELSOFT CONSULTING, INC.
Condensed Statements of Cash Flows
Three Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
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<S> <C> <C>
Operating activities:
Net income (loss) $ (41,006) $ 70,848
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation of equipment and furnishings 16,081 7,542
Amortization of intangible assets 72,536
Amortization of unearned income 33,203
Deferred income taxes (22,200) 33
Changes in operating assets and liabilities:
Accounts receivable (260,834) 63,011
Prepaid income taxes (91,720)
Other current assets (7,564) (59,334)
Other assets (46,484) (309)
Accounts payable (54,852) (103,503)
Accrued compensation and other liabilities (155,788) 17,182
Income taxes payable (180,346) 37,948
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Net cash provided by (used in) operating activities (738,974) 33,418
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Investing activities - capital expenditures (1,816) (7,695)
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Financing activities:
Net proceeds from (repayments of) line of credit borrowings 548,436 (338,126)
Repayments of long-term borrowings (8,678) (15,816)
Proceeds from issuances of common stock 250,000
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Net cash provided by (used in) financing activities 539,758 (103,942)
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Net decrease in cash and cash equivalents (201,032) (78,219)
Cash and cash equivalents, beginning of period 313,451 197,514
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Cash and cash equivalents, end of period $ 112,419 $ 119,295
========== =========
Supplemental disclosure of cash flow data:
Interest paid $ 17,503 $ 32,946
========== =========
Income taxes paid $ 280,066 $ 16,100
========== =========
</TABLE>
See Notes to Condensed Financial Statements.
<PAGE>
DELSOFT CONSULTING, INC.
Notes to Condensed Financial Statements
(Unaudited)
Note 1 - Unaudited interim financial statements:
In the opinion of management, the accompanying unaudited
condensed financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present
fairly the financial position of Delsoft Consulting, Inc.
(the "Company") as of September 30, 1998, its results of
operations and cash flows for the three months ended
September 30, 1998 and 1997 and its changes in stockholders'
equity for the three months ended September 30, 1998. Certain
terms used herein are defined in the audited financial
statements of the Company as of June 30, 1998 and for the
years ended June 30, 1998 and 1997 (the "Audited Financial
Statements") also included in the Company's Annual Report
on Form 10-KSB for the year ended June 30, 1998 that has also
been filed with the United States Securities and Exchange
Commission. Accordingly, these unaudited condensed
financial statements should be read in conjunction with the
Audited Financial Statements and the other information also
included in the Form 10-KSB.
The results of the Company's operations for the three months
ended September 30, 1998 are not necessarily indicative of
the results of operations for the full year ending June 30,
1999.
Note 2 - Earnings (loss) per common share:
As further explained in Note 1 to the Audited Financial
Statements, the Company presents basic and, if appropriate,
diluted earnings (loss) per share in accordance with the
provisions of Statement of Financial Accounting Standards No.
128, Earnings per Share ("SFAS 128"). Diluted per share
amounts have not been presented in the accompanying unaudited
condensed statements of operations because: (i) the Company
had a net loss for the three months ended September 30, 1998
and, accordingly, the assumed effects of the exercise of all
of the Company's outstanding stock options and warrants and
the application of the treasury stock method would have been
anti-dilutive; and (ii) the assumed effects of the exercise
of all of the Company's outstanding stock options and
warrants and the application of the treasury stock method for
the three months ended September 30, 1997 would have had an
insignificant effect on the weighted average number of common
shares outstanding and no effect on earnings per share.
Note 3 - Note payable to bank:
At September 30, 1998, the Company had borrowed $548,436
under the revolving credit agreement that provides it with a
$1,250,000 line of credit (see Note 4 of the notes to the
Audited Financial Statements). Interest on outstanding
borrowings is payable monthly at the higher of 1.5% above the
prime rate or 7% (an effective rate of 9.75% at September 30,
1998).
Note 4 - Long-term debt:
At September 30, 1998, long-term debt consisted of equipment
loans totaling $114,470 which are payable in monthly
installments and bear interest at rates ranging from 8.15% to
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8.95%. The loans were secured by equipment with a net book
value that approximated the total outstanding balance.
Principal payment requirements for long-term obligations in
each of the years subsequent to September 30, 1998 total
$39,701 in 1999; $43,258 in 2000; $20,048 in 2001; $8,030 in
2002; and $3,433 in 2003.
See Note 5 of the notes to the Audited Financial Statements
for additional information regarding long-term debt.
Note 5 - Related party transactions:
During the three months ended September 30, 1998, there were
no transactions between the Company and Bridgton (see Note 6
of the notes to the Audited Financial Statements). During the
three months ended September 30, 1997, the Company billed
Bridgton approximately $91,000 for the services of its
programmers and engineers and realized a gross profit of
approximately $16,000 on such billings, and Bridgton billed
the Company approximately $224,000 for the services of its
programmers and engineers and, based on information provided
by the management of Bridgton, realized a gross profit of
approximately $54,000. Bridgton also billed the Company
approximately $50,000 during the three months ended September
30, 1997 to obtain reimbursement for the overhead expenses it
incurred on behalf of the Company.
Note 6 - Provision (credit) for income taxes:
The provision (credit) for income taxes for the three months
ended September 30, 1998 and 1997 consisted of the following:
1998 1997
---- ----
Federal:
Current provision $ 5,000 $30,212
Deferred provision (credit) (18,900) 33
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Totals (13,900) 30,245
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State:
Current provision 3,000 7,687
Deferred credit (3,300)
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Totals (300) 7,687
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Totals $ (14,200) $37,932
========= =======
7
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The provision (credit) for income taxes for the three months
ended September 30, 1998 and 1997 differs from the amount
computed using the Federal statutory rate of 34% as a result of
the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Tax at Federal statutory rate (34)% 34%
State income taxes, net of Federal income tax effect 5
Effect of nondeductible expenses 7 15
Other items, primarily surtax exemptions 1 (19)
--- ---
Effective tax rate (26)% 35%
=== ===
</TABLE>
At September 30, 1998, deferred tax assets and liabilities were
attributable to the following:
Deferred tax assets:
Provision for doubtful accounts $ 4,700
Unearned compensation 13,300
Amortization of intangible assets 33,600
---------
Total 51,600
Deferred tax liabilities - depreciation (17,200)
---------
Net deferred tax assets $ 34,400
=========
Note 7 - Stock option plan:
Subject to ratification by the Company's stockholders, the
Company may grant incentive and/or nonincentive stock options
for the purchase of up to 2,000,000 shares of the Company's
common stock to key executives, other members of management,
other employees and directors of the Company under the
Company's Stock Option Plan (the "Plan"), as further explained
in Note 9 of the Notes to the Audited Financial Statements.
As of June 30, 1998, the Company had options outstanding for
the purchase of a total of 3,652,750 shares of common stock at
exercise prices ranging from $.50 to $2.25 per share, including
options not subject to the Plan for the purchase of 2,500,000
shares of common stock exercisable at $.50 per share granted to
two executive officers during the year ended June 30, 1998.
During the three months ended September 30, 1998, the Company
granted options subject to the Plan to purchase a total of
550,750 shares of common stock at an exercise price of $2.00
per share and no options were exercised or canceled.
Accordingly, as of September 30, 1998, the Company had options
outstanding for the purchase of a total of 4,203,500 shares of
common stock at exercise prices ranging from $.50 to $2.25 per
share, of which options to purchase a total of 3,002,500 shares
were exercisable.
The Company has elected to continue to use the provisions of
APB 25 in accounting for its stock options. Since the exercise
price of the options not subject to the Plan for the
purchase of 2,500,000 shares of common stock granted to the two
8<PAGE>
executive officers during 1998 was less than the fair market
value at the date of grant, the Company recorded deferred
compensation of $937,500 in 1998, of which $72,536 was
amortized during the three months ended September 30, 1998
(there was no charge for amortization during the three months
ended September 30, 1997). The Company has not recognized any
earned or unearned compensation cost in connection with the
issuance of any other options or warrants since the exercise
price of all of those options approximated the fair market
value at the date of grant. Had compensation cost for all of
the other stock options granted by the Company been determined
based on the fair value of the options at the grant date under
the provisions of SFAS 123, the Company's net income (loss) and
earnings (loss) per share would have been reduced from the
amounts reported in the accompanying unaudited condensed
statements of operations for the three months ended September 30,
1998 and 1997 as shown below:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Net income (loss) - as reported $(41,006) $70,848
Net income (loss) - pro forma (99,538) 51,787
Basic weighted average common shares
outstanding - as reported 11,159,149 10,080,164
Basic weighted average common shares
outstanding - pro forma 13,335,927 10,080,164
Basic earnings (loss) per share - as reported $ - $.01
Basic earnings (loss) per share - pro forma $(.01) $.01
</TABLE>
The fair value of each option granted was estimated on the
date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions: risk-free
interest rate of 6.3%; expected option lives of ten years;
expected volatility of 16.0%; and expected dividends of 0%.
Note 8 - Concentrations of credit risk:
Approximately 82% and 65% of the Company's net revenues were
derived from two customers during the three months ended
September 30, 1998 and 1997, respectively, who also accounted
for approximately 75% of its accounts receivable balance at
September 30, 1998. The Company closely monitors the
extension of credit to its customers while maintaining
appropriate allowances for potential credit losses.
Accordingly, management does not believe that the Company was
exposed to significant credit risk at September 30, 1998.
Note 9 - Venture capital agreement:
As of September 30, 1998, the Group had not fulfilled its
commitment to provide the Company with $550,000 of equity
financing pursuant to their October 4, 1996 agreement (see
Note 11 of the notes to the Audited Financial Statements).
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing
elsewhere in this report.
OVERVIEW
DelSoft Consulting, Inc. is a professional services staffing firm that
was incorporated in Georgia on July 1, 1996. The Company offers its
clients value added services, including professional services
staffing, solutions and services for the Year 2000 problem, and
application maintenance outsourcing (collectively referred to as
"solutions"). DelSoft markets solutions to both existing and
potential clients with the objective of becoming one of such client's
preferred providers of comprehensive information technology ("IT")
services and solutions.
DelSoft's revenues are derived from fees paid by clients for
professional services. Historically, a substantial majority of the
Company's projects have been client-managed. On client-managed
projects, DelSoft provides professional services as a member of the
project team on a time-and-materials basis. The Company recognizes
revenues on such projects as the services are performed.
DelSoft's most significant cost item is its personnel expense, which
consists primarily of salaries and benefits for the Company's billable
personnel. The number of IT professionals assigned to projects may
vary depending on the size and duration of each engagement. Moreover,
project terminations and completion and scheduling delays may result
in short periods when personnel are not assigned to active projects.
DelSoft manages its personnel costs by closely monitoring client needs
and basing personnel increases on specific project engagements. While
the number of IT professionals may be adjusted to reflect active
projects, the Company continues to process H1-B visas and maintain a
database of available professionals to respond to increased demand for
the Company's services on both existing projects and new engagements.
The Company provides its services and solutions primarily to Fortune
1,000 companies with significant IT budgets and recurring staffing or
software development needs. Substantially all of the Company's
clients are large companies, major systems integrators or governmental
agencies.
The solutions offered by the Company include the following:
(a) PROFESSIONAL SERVICES STAFFING: Providing highly-skilled
software professionals to augment the internal information management
staffs of major corporations remains the Company's primary business.
The Company supplies clients' staffing needs from among its diverse
supply of software professionals. The Company is committed to
expanding its professional services staffing operations in conjunction
with its solutions business in the mainframe and client/server
development environments and enterprise resource planning software
market.
(b) SERVICES AND SOLUTIONS FOR THE YEAR 2000 PROBLEM: The
Company offers NYE2000(TM), a proprietary software toolset, which
facilitates the analysis and conversion of NATURAL(TM) source code to
make it Year 2000 compliant. NYE2000(TM) allows a user to choose between
10
<PAGE>
full field expansion, windowing, or a combination of both. Customers
may license the toolset and use it in their environment, or DelSoft
will provide the toolset in conjunction with proven methodologies,
experienced project management, and skilled resources with significant
Year 2000 project experience.
(c) APPLICATION MAINTENANCE OUTSOURCING: Spurred by global
competition and rapid technological change, large companies, in
particular, are downsizing and turning to outside service providers to
perform their IT functions. The reasons for such outsourcing range
from cost reduction to capital asset improvement and from improved
technology introduction to better strategic focus. In response to
this trend, the Company, has at its disposal a complete staff that
includes experienced project managers, technicians and operators.
These professionals provide essential data functions including,
applications development, systems maintenance, data network
management, voice network administration and help desk operations.
During 1998, the Company redirected its focus to expanding its
professional services staffing operations through direct and/or end-
user client placements that generate higher revenues and higher gross
margins than subcontractor placements. As a result, DelSoft released
any consultants not meeting this general profile. In the first
quarter, this process continued. New placements during this period
will generate an average of approximately $220,000 in gross revenues
per placement (on an annualized basis) at an average gross margin of
approximately 44%. This compares to an average of approximately
$137,000 in gross revenues per placement (on an annualized basis) at
an average gross margin of approximately 37% during the three-month
period ending September 30, 1997.
During the first quarter, the Company signed a letter of intent to
acquire a computer-consulting firm, providing a variety of computer
programming services with an emphasis on client-server
("Acquisition"). The target company, which is headquartered in New
York City, has approximately one hundred IT professionals throughout
the tri-state area and Europe. Management of the target company
estimates revenues of approximately $9.6 million and profits (prior to
taxes, compensation and distributions to shareholders) of
approximately $1 million in 1998. The companies are in the process of
completing their respective due diligence. The terms of the
Acquisition, including the purchase price, have not been finalized.
The Acquisition will be paid for with a combination of cash and stock.
The target company has agreed to a payout over three years. In
addition, the purchase price is subject to reduction in the event the
revenues and/or profits of the target company decline.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1997
REVENUES. The Company's revenue increased slightly to approximately
$2,345,000 million for the first quarter of 1999 from $2,319,000 for
the first quarter of 1998. This increase in revenues in spite of a
decrease in the total number of consultants is primarily attributable
to significantly higher billable rates for services provided to
existing clients and engagements with new clients as compared to the
billable rates for the same period last year.
DIRECT PROJECT COSTS. Direct project costs consist primarily of
salaries and employee benefits for billable IT professionals and the
associated travel and relocation costs of these professionals, as well
as the cost of the independent contractors used by the Company.
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Direct project costs increased slightly to approximately $1,704,000
for the first quarter of 1999 from $1,693,000 for the first quarter of
1998. The increase in direct project costs in spite of a decrease in
the total number of consultants is primarily attributable to the
increase in professional salaries to attract and retain qualified IT
professionals to staff existing and additional projects due to
increased competition in the marketplace.
NET REVENUE. Net revenue consists of revenues less direct project
costs. Net revenue increased slightly from approximately $626,000
during the three-month period ended September 30, 1997 to
approximately $642,000 during the three-month period ended September
30, 1998. This increase in spite of a decrease in the total number of
consultants is primarily attributable to billing rates increasing at
higher levels than professional salaries and engagements with new
clients being more profitable than those with existing clients. The
increase in net revenue was offset by higher personnel expenses
resulting from the hiring of additional IT professionals at higher
salaries to support existing and additional client engagements.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses consist of costs associated with the Company's
sales and marketing efforts, executive management, finance and human
resource functions, facilities and telecommunications costs and other
general overhead expenses. Selling, general and administrative
expenses increased to approximately $676,000 in the first quarter of
1999 from approximately $481,000 in the first quarter of 1998. In
addition, the Company recognized charges relating to the amortization
of intangible assets and unearned compensation of approximately
$73,000 and $33,000, respectively during the three months ended
September 30, 1998, with no corresponding charges in the comparable
prior period. The increase in selling, general, and administrative
expenses is primarily attributable to the Company's continued
investment in infrastructure and in the initiatives required to
implement the Company's marketing strategies. These costs include the
development of additional services offerings, the expansion of its
recruiting capabilities, and the opening of additional offices. The
most significant of these costs consisted of the sales and marketing
efforts associated with the Company's proprietary Year 2000 software
toolset, NYE2000 .
NET INCOME (LOSS). The Company's net income for the three months
ended September 30, 1997, of approximately $71,000 decreased by
approximately $112,000 to a net loss of approximately $41,000 for the
comparable period in 1998. The primary reason for this decrease is
attributable to the non-cash charges of $73,000 and $33,000,
respectively, relating to amortization of the intangibles and unearned
compensation plus the efforts associated with marketing and selling
the Company's proprietary Year 2000 software toolset, NYE2000(TM).
LIQUIDITY AND CAPITAL RESOURCES.
Historically, the Company has financed its working capital
requirements through internally generated funds, the sale of shares of
its common stock, and proceeds from short-term bank borrowings.
The Company currently has a $1.25 million revolving credit facility
with Emergent Financial Group. The credit facility bears interest at
the higher of 1.5% over the prime rate or 7%. Borrowings under the
revolving credit facility are secured by substantially all of the
Company's assets. In addition, certain of the Company's directors
have executed a limited personal guaranty. The facility contains
certain restrictive covenants, including, the maintenance of certain
12
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financial ratios and limitations on payment of dividends and
additional borrowings. As of September 30, 1998 and November 10,
1998, the Company had outstanding borrowings of approximately $548,000
and $590,000, respectively.
Except for additional cash that may be required to close the
Acquisition, the Company currently anticipates existing sources of
liquidity and cash generated from operations are sufficient to satisfy
its cash needs through the next twelve months. To close the
Acquisition or in the future, the Company may seek to increase the
amount of its credit facilities, negotiate additional credit
facilities or issue corporate debt or equity securities. Any debt
incurred or issued by the Company may be secured or unsecured, fixed
or variable rate interest and may be subject to such terms as the
board of directors of the Company deem prudent. The Company expects
any proceeds from such additional credit or sales of securities to be
used primarily in the hiring of further IT professionals and/or the
acquisition of other consulting companies.
The Company does not believe that its business is subject to seasonal
trends.
The Company does not believe that inflation had a significant impact
on the Company's results of operations for the periods presented. On
an ongoing basis, the Company attempts to minimize any effects of
inflation on its operating results by controlling operating costs,
and, whenever possible, seeking to insure that billing rates reflect
increases in costs due to inflation.
YEAR 2000. The "Year 2000" issue concerns the potential exposures
related to the automated generation of business and financial
misinformation resulting from the use of computer programs which have
been written using two digits, rather than four, to define the
applicable year of business transactions. The Company has evaluated,
and is continuing to evaluate, the potential cost associated with
becoming Year 2000 compliant. The Company believes that the principal
staffing and financial systems it intends on using as of January 1,
1999, which are licensed from and maintained by third-party software
development companies, are Year 2000 compliant. Management does not
anticipate that the remaining costs associated with assuring that its
internal systems will be Year 2000 compliant will be material to its
business, operations or financial condition.
The Company intends on conducting a risk evaluation and assessment
study to determine the preparedness level of customers, vendors, and
other service providers for the Year 2000 and the subsequent impact on
the Company. The Company will take such actions as management deems
appropriate based on the results of the review. The Company expects
to incur only minimal internal staff costs and other miscellaneous
expenses related to the risk evaluation and assessment project.
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements contained in the section captioned Management's
Discussion and Analysis of Financial Condition and Results of
Operations which are not historical are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements represent the Company's
present expectations or beliefs concerning future events. The Company
cautions that such forward-looking statements involve known and
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unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Such factors include, among other things, the uncertainty as to the
Company's future profitability; the uncertainty as to the demand for
information technology services and solutions; industry trends towards
outsourcing information technology services; increasing competition in
the information technology services market; the ability to hire, train
and retain sufficient qualified personnel; the ability to obtain
financing on acceptable terms to finance the Company's growth
strategy; and the ability to develop and implement operational and
financial systems to manage the Company's growth.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) No exhibits are filed as of part of this report.
(b) No Reports on Form 8-K were filed during this period
14
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
Company caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DELSOFT CONSULTING, INC.
By: /s/ Michael Osso Date: January 15, 1999
Michael Osso
President
/s/ Jeffrey A. Rinde Date: January 15, 1999
Jeffrey A. Rinde
Chief Financial Officer, General Counsel,
and Secretary (principal financial and
accounting officer)
