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, 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 October 31, 1996
Common Stock, par value 17,881,898
$.001 per share
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying consolidated 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 months ended October 31, 1996.
The financial statements are presented on a consolidated basis, with Multi
Soft, Inc a 55.7% owned subsidiary and NetCast ,Inc a 77% owned subsidiary.
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 nine months ended October 31, 1996
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
MULTI SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
October 31, January 31,
1996 1996
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 31,988 $ 89,575
Accounts receivable (net of allowance
of $28,932 and $37,063 respectively) 85,723 100,428
Prepaid expenses and other current assets 17,032 13,532
----------- -----------
134,743 203,535
FURNITURE AND EQUIPMENT
Research and development equipment 11,241 259,907
Office furniture and other equipment 16,703 10,053
----------- -----------
27,944 269,960
Less: Accumulated Depreciation (7,736) (266,066)
----------- -----------
20,208 3,894
OTHER ASSETS
Capitalized software development costs 1,762,943 1,980,130
Less accumulated amortization (1,023,019) (1,256,153)
----------- -----------
739,924 723,977
Mailing Lists, Trademarks 200,000
$ 1,094,875 $ 931,406
=========== ===========
<PAGE>
MULTI SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
October 31, January 31,
1996 1996
(Unaudited)
----------- ------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 29,259 $ 41,099
Accrued payroll -- 30,285
Payroll and other taxes payable 50,401 74,993
Accounts Payable 188,885 216,554
Deferred compensation due officer/shareholders 655,355 636,605
Accrued officer compensation 134,962 110,016
Deferred Revenues 204,039 309,792
----------- -----------
1,262,901 1,419,344
DEFERRED REVENUES - net of current portion 8,022
----------- -----------
STOCKHOLDERS' DEFICIENCY
Common stock,$.001 par value authorized
40,000,000 issued and outstanding:
17,881,898 and 17,806,898 respectivley 17,882 17,807
Additional paid-in capital, 8,582,212 8,578,537
Minority interest 350,954 --
Accumulated deficit (9,119,074) (9,092,304)
----------- -----------
(168,026) (495,960)
$ 1,094,875 $ 931,406
=========== ===========
=
<PAGE>
MULTI SOLUTIONS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
October 31, October 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
License fees $ 328,693 $ 505,868 $ 74,627 $ 117,722
Maintenance fees 487,491 414,409 175,107 133,646
Consulting and other fees 48,204 40,507 30,446 28,312
------------ ------------ ------------ ------------
Total revenues 864,388 960,784 280,180 279,680
EXPENSES
Software development and technical support 256,866 236,764 85,622 83,373
Selling and administrative 627,173 746,548 214,079 253,898
------------ ------------ ------------ ------------
Total expenses 884,039 983,312 299,701 337,271
------------ ------------ ------------ ------------
Loss from operations (19,651) (22,528) (19,521) (57,591)
OTHER EXPENSE
Interest Expense (7,119) (3,921) (2,313) (1,300)
Total other expense (7,119) (3,921) (2,313) (1,300)
NET LOSS $ (26,770) $ (26,449) $ (21,834) $ (58,891)
============ ============ ============ ============
Weighted average shares outstanding 17,844,398 15,846,240 17,844,398 15,846,240
============ ============ ============ ============
Loss per share NIL NIL NIL NIL
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
October, 31
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net $ (26,770) $ (26,449)
Adjustments to reconcile net Income (loss) to net cash
provided by operating activities
Depreciation and amortization 258,443 252,443
Changes in assets and liabilities
(Increase) decrease in accounts receivable 14,705 63,127
Increase in prepaid expenses and other current assets (3,500) (19,822)
Increase (decrease) in accrued payroll (30,285) 54,890
(Decrease) in payroll and other taxes payable (24,592) 1,783
Increase (decrease) in accounts payable and accrued expenses (27,669) -28402
(Decrease) increase in accrued officer compensation 24,946 135,832
Increase in Deferred Compensation 18,750 198,669
Increase (decrease) in deferred revenues (105,753) (106,429)
Increase (decrease) in long term deferred revenues (8,022) (182,148)
--------- ---------
Net cash provided by operating activities 90,253 343,494
Cash flows from investing activities
Capitalized expenditures net of disposition (220,304)
Capitalized software development costs (270,400) (267,088)
--------- ---------
Net cash used in investing activities (490,704) (267,088)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (11,840) (9,325)
Payment of line of credit (20,600)
Minority Interest 350,954
Issuance of Common Stock 3,750
--------- ---------
Net cash provided by (used ) In financing activities 342,864 (29,925)
NET INCREASE (DECREASE) IN CASH (57,587) 46,481
Cash at beginning of year 89,575 18,342
Cash at end of year $ 31,988 $ 64,823
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Nine and three months ended October 31, 1996 compared to nine and three months
ended October 31, 1995
Revenues of $864,388 for the current nine months of fiscal year 1996
decreased $96,396 or 10.0% compared with the comparable period of the prior
year. Revenues of $280,180 for the three month period ending October 31, 1996
increased $500 compared with the comparable period of the prior year. The
decrease in revenues for the current nine month period is attributable to the
recognition of $150,000 of long term deferred revenue, in the prior nine month
period which did not reoccur in the current period. Without giving effect to
long term deferred revenue , Multi Soft,Inc. would have experience a $53,604
increase in revenues for the nine month period ending October 31, 1996.
Operating expenses as a percent of revenues for the nine month period was
102% compared with 102% for the comparable nine month period. Operating expense
as a percent of revenues for the current three month period was 107% compared
with 121% for the prior year. The decrease in operating expenses as a percent of
revenues over the current three months was primarily attributable to a
curtailment of legal and outside consulting fees.
Operating loss , before other income expense of $19,651 for the current
nine month period decreased $2,877 compared with the comparable period of the
prior year. For the current three month period operating loss, before other
expense decreased $38,070. Excluding the $150,000 deferred revenue from the
prior nine month period, the company would have experienced an increase of
$152,877 for the current nine month periods ending October 31, 1996.
For the current nine month period , a net loss of $26,770 was incurred
compared with a net loss of $26,449 a increase of $321. For the current three
month period a net loss of $21,834 compared with net loss from the prior period
of $58,891 representing a decrease of $37,057. Without giving effect to the long
term deferred revenue recognized during period October 31, 1995 the Company
would have experienced an increase of $149,679 for the current nine month
period..
Multi Solutions issued 75,000 shares of common stock to certain parties in
lieu of indebtedness in the amount of $3,750.
Major Customers
In the first nine months of 1996, IBM accounted for 29.5% of total
revenues. In the first nine months of 1995, IBM accounted for 49.17% of total
revenues.
Liquidity and Capital Resources
<PAGE>
At October 31, 1996, the Company had a negative working capital position of
$1,128,158 and has been experiencing cash flow problems. The cash flow
deficiency derives from certain outstanding receivable 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 maintenance of $25,000 per month
plus royalties.
In 1995 Multi Soft, Inc. entered a joint development 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 for 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
<PAGE>
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 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: December 11 , 1996
By:__________________________________________
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> OCT-31-1996
<CASH> 31,988
<SECURITIES> 0
<RECEIVABLES> 85,723
<ALLOWANCES> 28,932
<INVENTORY> 0
<CURRENT-ASSETS> 134,743
<PP&E> 20,208
<DEPRECIATION> 7,736
<TOTAL-ASSETS> 1,094,875
<CURRENT-LIABILITIES> 1,262,901
<BONDS> 0
0
0
<COMMON> 17,882
<OTHER-SE> (168,026)
<TOTAL-LIABILITY-AND-EQUITY> 1,094,875
<SALES> 328,693
<TOTAL-REVENUES> 864,388
<CGS> 0
<TOTAL-COSTS> 884,039
<OTHER-EXPENSES> 7,119
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,119
<INCOME-PRETAX> (26,770)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,770)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,770)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
