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 April 30, 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 April 30, 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 April 30, 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 months ended April 30, 1996 are not
necessarily indicative of the results for the entire fiscal year.
<PAGE>
Multi Solutions, Inc and Subsidiary
CONSOLIDATED BALANCE SHEETS
April 30, January 31,
1996 1996
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 10,485 $ 89,575
Accounts receivable( net of allowance of
$32,880and $37,063 respectively) 111,195 100,428
Prepaid expenses and other current assets 16,532 13,532
----------- -----------
138,212 203,535
FURNITURE AND EQUIPMENT, AT COST
Research and development equipment 261,957 259,907
Office furniture and other 10,053 10,053
----------- -----------
272,010 269,960
Less accumulated depreciation and amortization (266,476) (266,066)
----------- -----------
5,534 3,894
OTHER ASSETS
Capitalized software and development costs 1,541,681 1,980,130
Less accumulated amortization (850,477) (1,256,153)
----------- -----------
691,204 723,977
$ 834,950 $ 931,406
=========== ===========
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
April 30, January 31,
1996 1996
LIABILITIES AND STOCKHOLDERS' DEFICIENCY (Unaudited)
----------- -----------
CURRENT LIABILITIES
Notes payable $ 36,489 $ 41,099
Accrued payroll 19,510 30,285
Payroll and other taxes payable 61,370 74,993
Accounts payable and accrued expenses 206,411 216,554
Deferred Compensation due officers/shareholders 642,893 636,605
Accrued Officer Compensation 118,349 110,016
Deferred revenues 295,800 309,792
----------- -----------
1,380,822 1,419,344
DEFERRED REVENUES-Net of Current Portion 0 8,022
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$ .001 Par Value
Issued and outstanding: 17,806,898 17,807 17,807
Additional paid-in capital 8,578,537 8,578,537
Accumulated deficit (9,142,216) (9,092,304)
----------- -----------
(545,872) (495,960)
$ 834,950 $ 931,406
=========== ===========
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
April 30,
1996 1995
----------- -----------
Revenues
License fees $ 85,869 $ 143,058
Maintenance Revenue 159,753 128,857
Consulting and other fees 227 2,289
----------- -----------
Total revenues 245,849 274,204
Operating expenses
Software development and technical support 84,324 74,470
Selling and administrative expenses 210,413 246,991
----------- -----------
Total expenses 294,737 321,461
Loss from operations (48,888) (47,257)
Other Income (Expenses)
Interest expense (1,024) (983)
NET LOSS $ (49,912) $ (48,240)
=========== ===========
Weighted average number of shares outstanding 17,806,898 15,846,240
=========== ===========
Loss per share NIL NIL
=========== ===========
<PAGE>
Multi Solutions, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
April 30,
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net loss $(49,912) $(48,240)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities
Depreciation and amortization 84,734 79,466
Common stock issued as compensation to officers --
Discount to investors --
Changes in assets and liabilities
Decrease (increase) in accounts receivable (10,767) (20,620)
(Increase) decrease in prepaid expenses and other current assets (3,000) (4,147)
Increase in accrued payroll (10,775) 21,889
(Decrease) in payroll and other taxes payable (13,623) (901)
Increase (decrease) in accounts payable and accrued expenses (10,144) (10,612)
Increase (decrease) in accrued officer compensation 8,333 42,540
Increase in deferred compensation 6,288 66,222
(Decrease) increase in deferred revenues (13,992) (22,059)
Increase (decrease) in long term deferred revenues (8,022) (10,716)
-------- --------
Net cash provided (used) by operating activities (20,880) 92,822
Cash flows from investing activities
Capitalized software development cost (51,550) (89,030)
Capitalized Research and Developement (2,050) --
-------- --------
Net cash used in investing activities (53,600) (89,030)
Cash flows from financing activities
Net (repayments) borrowings under loan and line of credit ageements (4,610) (22,134)
-------- --------
Net cash provided by (used in) financing activities (4,610) (22,134)
Net (decrease) in cash (79,090) (18,342)
Cash at beginning of year 89,575 18,342
Cash at end of year $ 10,485 $ --
======== ========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three months ended April 30, 1996 compared to three months ended April 30, 1995
Revenues for the current three months of fiscal year 1996 decreased $28,355
or 10.34% compared with the comparable period of the prior year. The decrease in
revenues is attributable to decreased license fees offset in part by an increase
in maintenance. The increase in maintenance is attributed to a maintenance
contract with IBM which guarantees $10,000 per month. The shrinking license fees
is attributed to sales made in the first quarter of last year that have not
occured this year, due to normal sales fluctuation.
Operating expenses as a percent of revenues for the three month period was
120% compared with 117.2.% for the comparable period of the prior year. The
increase in operating expenses as a percent of revenues was primarily
attributable to the lower revenue volume and an increase in technical support
salaries, offset by an decrease in Selling and Administrative expenses.
The operating loss, before other income (expense) of $48,888 for the current
three month period increased $1,631 compared with the comparable period of the
prior year. Other income (expense) for the current three month period was
($1,024) as compared with ($983) for the comparable period of the prior year.
For the current three month period , a net loss of $49,912 was incurred compared
with a net loss of $48,240 an increase of $1,672.
Major Customers
In the first three months of 1996, IBM accounted for 36.2% of total
revenues. In the first three months of 1995, IBM accounted for 31.25% of total
revenues.
Liquidity and Capital Resources
At April 30, 1996, the Company had a negative working capital position of
($1,242,610) 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 56.8% 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.
<PAGE>
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.
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
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: May 28, 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> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1996
<CASH> 10,485
<SECURITIES> 0
<RECEIVABLES> 111,195
<ALLOWANCES> 32,880
<INVENTORY> 0
<CURRENT-ASSETS> 138,212
<PP&E> 272,010
<DEPRECIATION> 266,476
<TOTAL-ASSETS> 834,950
<CURRENT-LIABILITIES> 1,380,882
<BONDS> 0
0
0
<COMMON> 17,807
<OTHER-SE> (545,872)
<TOTAL-LIABILITY-AND-EQUITY> 834,950
<SALES> 85,869
<TOTAL-REVENUES> 245,849
<CGS> 0
<TOTAL-COSTS> 294,737
<OTHER-EXPENSES> 1,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,024
<INCOME-PRETAX> (49,912)
<INCOME-TAX> 0
<INCOME-CONTINUING> (49,912)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,912)
<EPS-PRIMARY> 0.003
<EPS-DILUTED> 0.00
</TABLE>
