SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1994
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 Number: 0-12162
MULTI SOLUTIONS, INC
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2418056
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4262 US Route 1, Monmouth Junction, New Jersey 08852
(Address of principal executive offices)
Issuer's telephone number, including area code: (908) 329-9200
Check whether the issuer (1) 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 |_|
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding at October 31, 1994
- ------------------------------------ ------------------------------------
Common Stock, par value 15,806,898
$.001 per share
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying financial statements are unaudited for the interim
periods, but include all adjustments (consisting only of normal recurring
accruals) which management considers necessary for the fair presentation of
results for the nine and three months ended October 31, 1994.
Moreover, these financial statements do not purport to contain complete
disclosure in conformity with generally accepted accounting principles and
should be read in conjunction with the Company's audited financial statements
at, and for the fiscal year ended January 31, 1995.
The results reflected for the nine and three months ended October 31, 1994
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
Multi Solutions, Inc and Subsidiary
CONSOLIDATED BALANCE SHEETS
October 31, January 31,
1994 1994
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ -- $ 33,454
Accounts receivable( net of allowance of
$32,880 and $25,269 respectively) 131,622 253,223
Prepaid expenses and other current assets 13,500 12,828
----------- -----------
145,122 299,505
FURNITURE AND EQUIPMENT, AT COST
Research and development equipment 368,382 368,382
Office furniture and other 111,550 173,625
----------- -----------
479,932 542,007
Less accumulated depreciation and amortization (471,173) (527,477)
----------- -----------
8,759 14,530
OTHER ASSETS
Capitalized software and development costs 2,549,277 2,325,706
Less accumulated amortization (1,800,056) (1,624,955)
----------- -----------
749,221 700,751
$ 903,102 $ 1,014,786
=========== ===========
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
October 31, January 31,
1994 1994
(Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Notes payable $ 56,250 $ 321,415
Accrued payroll 36,556 30,977
Payroll and other taxes payable 80,000 118,034
Accounts payable and accrued expenses 445,699 371,260
Deferred Compensation due officers/shareholders 340,749 274,942
Accrued Officer Compensation 146,323 16,916
Deferred revenues 340,087 292,835
Loans from officers 39,500 --
----------- -----------
1,485,164 1,426,379
DEFERRED REVENUES - Net of Current Portion 243,750 243,750
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$ .001 Par Value
Issued and outstanding: 15,806,898 (1995) and
15,257,198 (1994) Respectively 15,807 15,257
Additional paid-in capital 8,420,537 8,322,141
Accumulated deficit (9,262,156) (8,992,741)
----------- -----------
(825,812) (655,343)
$ 903,102 $ 1,014,786
=========== ===========
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
October 31, October 31,
1994 1993 1994 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
License fees $ 151,492 $ 649,354 $ 85,814 $ 457,754
Maintenance Revenue 389,384 360,648 318,604 142,871
Consulting and other fees 36,008 99,157 13,961 63,700
------------ ------------ ------------ ------------
Total revenues 576,884 1,109,159 418,379 664,325
Operating expenses
Software development and technical support 349,567 514,355 81,338 173,391
Selling and administrative expenses 492,738 622,062 195,360 205,883
------------ ------------ ------------ ------------
Total expenses 842,305 1,136,417 276,698 379,274
Loss from operations (265,421) (27,258) 141,681 285,051
Other Income (Expenses)
Interest income
Interest expense (3,994) (36,392) (1,465) (15,800)
------------ ------------ ------------ ------------
(3,994) (36,392) (1,465) (15,800)
NET LOSS $ (269,415) $ (63,650) $ 140,216 $ 269,251
============ ============ ============ ============
Weighted average number of shares outstanding 15,196,415 15,321,000 15,196,415 15,582,198
============ ============ ============ ============
Loss per share $ (0.02) $ (0.01) $ -- $ (0.02)
============ ============ ============ ============
</TABLE>
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
October 31,
1994 1993
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss $(269,415) $ (63,650)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities
Depreciation and amortization 180,872 321,817
Common stock issued as compensation to officers -- 58,042
Discount to investors -- --
Changes in assets and liabilities
Decrease (increase) in accounts receivable 121,601 (370,047)
(Increase) decrease in prepaid expenses and other current assets (672) 3
Increase in accrued payroll 32,477 (129,520)
(Decrease) in payroll and other taxes payable (154,816) --
Increase (decrease) in accounts payable and accrued expenses 94,992 (5,470)
Increase (decrease) in accrued officer compensat 84,453 --
Increase in deferred compensation 180,092 --
(Decrease) increase in deferred revenues 47,252 (1,000)
Increase (decrease) in long term deferred revenues -- --
--------- ---------
Net cash provided by operating activities 316,836 (189,825)
Cash flows from investing activities
Capitalized software development cost (223,571) (125,000)
Loan to officer 39,500 (10,500)
Capital Expenditures -- 7,653
--------- ---------
Net cash used in investing activities (184,071) (127,847)
Cash flows from financing activities
Net (repayments) borrowings under loan and line of credit ageements (265,165) (13,500)
Issuance of Convertable notes in private placement 268,060
Investment in subsidiary by minority shareholders 27,500
Issuance of Stock 98,946
--------- ---------
Net cash provided by (used in) financing activities (166,219) 282,060
Net (decrease) in cash (33,454) (35,612)
Cash at beginning of year 33,454 45,365
Cash at end of year $ -- $ 9,753
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Nine months Ended October 31, 1994 Compared to Nine monhts Ended October 31,
1993 and three months ended October 31, 1994 compared to three months ended
October 31, 1993
Revenues for the current nine months of fiscal year 1994 decreased $532,275 or
47.9% compared with the comparable period of the prior year. Revenues for the
three month period decreased $245,946 compared with the comparable period of the
prior year. The decrease revenues is attributable to decreased license and
maintenance fees.
Operating expenses as a percent of revenues for the nine month period was 146%
compared with 102.4% for the comparable period of the prior year. Operating
expense as a percent of revenues for the current three month period was
66.1%compared with 57.1% for the prior year. The increase in operating expenses
as a percent of revenues was primarily attributable to the lower revenue volume.
The operating loss, before other income (expense) of $(265,421) for the current
nine month period decreased $238,163 compared with the comparable period of the
prior year. Operating Income, before other income (expense) $141,681 for the
current three month decreased $143,370, compared with comparable period of the
prior year.
Other income (expense) for the current nine month period was ($3,994) as
compared with ($36,392) for the comparable period of the prior year. The
decrease is attributable to tax penalties attributed in the prior year not
incurred in the current year.
For the current nine month period , net loss of $(269,415) or ($.02) cents per
share was incurred compared with a net loss of ($63,500) in the prior period or
($.01) cents per share an increase of $205,915. For the current three month
period, a net income of $140,216 or .00 cents per share was incurred compared
with a income of $269,251 in the comparable period for the prior year an
decrease of $129,035.
Major Customers
In the first nine months of 1994 , IBM accounted for 13.2% of total
revenues. In the first nine months of 1993, IBM accounted for 10.7% and Exxon
accounted for 11.3%.
Liquidity and Capital Resources
At October 31, 1994, the Company had a negative working capital position of
($1,340,042); and has been experiencing cash flow problems.
Management of the company has taken various steps to correct this
situation. Overhead costs have been cut drastically as a result of staff
reductions and curtailment of all outside marketing and advertising costs. In
<PAGE>
addition, senior staff salaries were reduced and executive officers' salaries
were partly deferred. Secondly, Multi Soft broadened its product base into the
Windows environment and has made its Windows based products easier to learn and
use.
Multi Soft has entered into an International Software Licensing Agreement
with IBM which grants IBM the non-exclusive rights and license to market an
extended runtime version of Multi Soft's WCL product as an IBM logo product.
This IBM EXTENDED VERSION of Multi Soft's WCL is named IMS Client Server(TM) for
Windows. It provides remote presentation support for IMS. Multi Soft and IBM
also have entered into International Marketing Agreements to market Multi Soft's
WCL Toolkit under the name IMS Client Server Toolkit(TM) for Windows in the
United States, Puerto Rico, the Asian Pacific Region, Europe, the Middle East
and Africa and Canada.
In addition, in September 1994, Multi Soft entered into an International
Software Licensing Agreement with IBM's Personal Communications 3270 division
("P-Comm"). This agreement allows IBM to logo and market a P-Comm specific
version of both the Toolkit and Runtime of Multi Soft's WCL(TM). Pursuant to
this agreement, the Company will receive a minimum of $75,000 per quarter over a
two year period representing minimum advances against royalties.
It is Multi Soft's intent to remain a technology provider and search out
multiple distribution channels, rather than to try and grow via an expensive
direct sales force. This allows the focus to stay on technology, with a low
overhead cost for each distribution channel used. However, if the Company
obtains additional funds from operations or otherwise, it plans to expand
in-house marketing activities by advertising in trade publications and by
conducting targeted mailing.
Dividend Policy
The Company has not declared or paid any dividends on its common stock
since its inception and does not anticipate the declaration or payment of cash
dividends in the foreseeable future. The Company intends to retain earnings, if
any, to finance the development and expansion of its business. Future dividend
policy will be subject to the discretion of the Board of Directors and will be
contingent upon future earnings, if any, the Company's financial condition,
capital requirements, general business conditions and other factors. Therefore,
there can be no assurance that dividends of any kind will ever be paid.
Effect of Inflation
Management believes that inflation has not had a material effect on its
operations for the periods presented.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MULTI SOLUTIONS, INC.
Dated: November 3, 1995
By: /S/ CHARLES J. LOMBARDO
------------------------------------------
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
