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 July 31, 1996
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 July 31, 1996
----- ----------------------------
Common Stock, par value 17,881,898
$.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 three months ended July 31, 1996.
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, 1996.
The results reflected for the three and six months ended July 31, 1996 are
not necessarily indicative of the results for the entire fiscal year.
<PAGE>
Multi Solutions, Inc and Subsidiary
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, January 31,
1996 1996
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 156,432 $ 89,575
Accounts receivable( net of allowance of
$28,932 and $37,063 respectively) 103,971 100,428
Prepaid expenses and other current assets 13,532 13,532
----------- -----------
273,935 203,535
FURNITURE AND EQUIPMENT, AT COST
Research and development equipment 4,158 259,907
Office furniture and other 17,968 10,053
----------- -----------
22,126 269,960
Less accumulated depreciation and amortization (7,185) (266,066)
----------- -----------
14,941 3,894
OTHER ASSETS
Capitalized software and development costs 1,606,217 1,980,130
Less accumulated amortization (937,397) (1,256,153)
----------- -----------
668,820 723,977
$ 957,696 $ 931,406
=========== ===========
</TABLE>
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, January 31,
1996 1996
LIABILITIES AND STOCKHOLDERS' DEFICIENCY (Unaudited)
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES
Notes payable $ 34,119 $ 41,099
Accrued payroll -- 30,285
Payroll and other taxes payable 53,355 74,993
Accounts payable and accrued expenses 147,521 216,554
Deferred Compensation due officers/shareholders 649,144 636,605
Accrued Officer Compensation 126,681 110,016
Deferred revenues 289,556 309,792
Loans from officers -- --
----------- -----------
1,300,376 1,419,344
DEFERRED REVENUES-Net of Current Portion -- 8,022
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$ .001 Par Value
Issued and outstanding: 17,806,898 (1996) and
17,881,898 respectively 17,882 17,807
Additional paid-in capital 8,582,212 8,578,537
Minority Interest 154,466
Accumulated deficit (9,097,240) (9,092,304)
----------- -----------
(342,680) (495,960)
$ 957,696 $ 931,406
=========== ===========
</TABLE>
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
License fees $ 254,066 $ 388,146 $ 168,197 $ 245,088
Maintenance Revenue 312,384 280,763 152,631 151,906
Consulting and other fees 17,757 12,195 17,530 9,906
------------ ------------ ------------ ------------
Total revenues 584,207 681,104 338,358 406,900
Operating expenses
Software development and technical support 171,244 153,391 86,920 78,921
Selling and administrative expenses 413,093 492,650 202,680 245,659
------------ ------------ ------------ ------------
Total expenses 584,337 646,041 289,600 324,580
Income (Loss) from operations (130) 35,063 48,758 82,320
Other Income (Expenses)
Interest expense (4,806) (2,621) (3,782) (1,638)
------------ ------------ ------------ ------------
Total Other (Expenses) (4,806) (2,621) (3,782) (1,638)
NET INCOME (LOSS) (4,936) 32,442 44,976 80,682
============ ============ ============ ============
Weighted average number of shares outstanding 17,844,398 15,846,240 17,844,398 15,846,240
============ ============ ============ ============
Loss per share $ -- $ -- $ -- $ --
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOLUTIONS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
July 31,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income(loss) $ (4,936) $ 32,442
Adjustments to reconcile net Income (loss) to net cash
provided (used) by operating activities
Depreciation and amortization
Common stock issued as compensation to employees 172,270 164,096
Discount to investors
Changes in assets and liabilities
(Increase) decrease in accounts receivable (3,543) 63,369
Decrease in prepaid expenses and other current assets -- (13,214)
Increase (decrease) in accrued payroll (30,285) 46,133
(Decrease) in payroll and other taxes payable (21,638) (5,514)
Increase (decrease) in accounts payable and accrued expenses (69,033) (31,494)
(Decrease) increase in accrued officer compensation 16,665 93,291
Increase in Deferred Compensation 12,539 132,446
Increase (decrease) in deferred revenues (20,236) (44,439)
Increase (decrease) in long term deferred revenues (8,022) (171,432)
--------- ---------
Net cash provided by operating activities 43,781 265,684
Cash flows from investing activities
Capital Expenditures net of disposition (12,074)
Capitalized software development costs (116,086) (178,058)
--------- ---------
Net cash used in investing activities (128,160) (178,058)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (6,980) (26,725)
Issuance of stock 3,750
Minority Interest 154,466
--------- ---------
Net cash provided by (used ) In financing activities 151,236 (26,725)
NET INCREASE (DECREASE) IN CASH 66,857 60,901
Cash at beginning of period 89,575 18,342
Cash at end of period $ 156,432 $ 79,243
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Six and three months ended July 31, 1996 compared to six and three months ended
July 31, 1995
Revenues for the current six months of fiscal year 1996 decreased $96,897or
14.2% compared with the comparable period of the prior year. Revenues for the
three month period July 31, 1996 decreased $68,542 compared with the comparable
period of the prior year. The decrease in revenues for the current six and three
month period is attributable to the recognition of $150,000 of long term
deferred revenue, in the prior three and six month period which did not reoccur
in the current period. Without giving effect to long term deferred revenue ,
Multi Soft would have experience a $53,103 and $81,458 increase for the six and
three month period of July, 1996 respectively.
Operating expenses as a percent of revenues for the six month period was 100.%
compared with 94.8.% for the comparable period of the prior year. Operating
expense as a percent revenues for the current three month period was 85.6%
compared with 79.7% for the prior year. The increase in operating expenses as a
percent of revenues was primarily attributable to the consolidation of NetCast,
Inc. the companys new subsidiary which consisted primarily of expenses and no
revenue.
Operating income (loss) , before other income (expense) of $(130) for the
current six month period decreased $35,193 compared with the comparable period
of the prior year. For the current three month period operating income (loss),
before other income decreased $33,562 . Exluding the 150,000 deferred revenue
from July 31, 1995 the company would have experienced an increase of $114,807
and $116,438 for the current six and three month periods respectively.
For the current six month period , a net loss of $(4,936) was incurred compared
with a net income of $32,442 an decrease of $37,378. For the current three month
period a net income of $44,976 compared with net income from the prior period of
$80,682 represents a decrease of $35,706. As previously stated, without giving
effect to the long term deferred revenue recognized during period ending July
31, 1995 the company would have experienced an increase of $112,622 and $114,294
for the current six and three month periods respectively.
Multi Solutions issued 75,000 shares of common stock to certian parties in lieu
of indebtedness in the amount of $3,750.
Major Customers
In the first six months of 1996, IBM accounted for 17.19% of total
revenues. In the first six months of 1995, IBM accounted for 47.19% of total
revenues.
Liquidity and Capital Resources
<PAGE>
At July 31, 1996, the Company had a negative working capital position of
($1,026,441) and has been experiencing cash flow problems. The cash flow
defficiency derives from certain outstanding receivables that remain uncollected
coupled with normal fluctuations in sales.
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
addition, senior staff salaries were reduced and executive officers' salaries
were partly deferred. Secondly ,the company's 55.7% owned subsidiary, Multi Soft
Inc. 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 ServerTM 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 ToolkitTM for Windows in the United
States, Puerto Rico, the Asian Pacific Region, Europe, the Middle East 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 WCLTM. 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.
In 1995 Multi Soft, Inc. entered a joint developement and marketing
agreement with Bellcore to develop and Market a Sun Solaris Unix version of its
WCL product. The agreement provides that Bellcore pay Multi soft for developing
an extension of its WCL product ot the Sun Solaris Unix environment. Also, it
provides for a joint marketing agreement in which both companies will share
marketing 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.
<PAGE>
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 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
<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:September 11, 1996
By: /s/Charles J. Lombardo
--------------------------
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1996
<CASH> 156,432
<SECURITIES> 0
<RECEIVABLES> 132,903
<ALLOWANCES> 28,932
<INVENTORY> 0
<CURRENT-ASSETS> 273,935
<PP&E> 22,126
<DEPRECIATION> (7,185)
<TOTAL-ASSETS> 957,696
<CURRENT-LIABILITIES> 1,300,376
<BONDS> 0
0
0
<COMMON> 17,882
<OTHER-SE> 9,097,240
<TOTAL-LIABILITY-AND-EQUITY> 957,696
<SALES> 254,066
<TOTAL-REVENUES> 584,207
<CGS> 0
<TOTAL-COSTS> 584,337
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,806
<INCOME-PRETAX> (4,936)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,936)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,936)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
