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, 1997
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, 1997
- ----------------------- ----------------------------
Common Stock, par value 18,016,898
$.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 six and three months ended July 31, 1997.
Moreover, these consolidated 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, 1997.
The results reflected for the six and three months ended July 31, 1997 are
not necessarily indicative of the results for the entire fiscal year. Multi
Solutions, Inc. owns 55.4% of Mult Soft, Inc's common stock. Multi Solutions
Inc. financial statements are consolidated with Multi Soft and its other
subsidiary NetCast, Inc. which is currently in the development stage.
<PAGE>
Multi Solutions, Inc and Subsidiary's
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, January 31,
1997 1997
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 7,033 $ 13,575
Accounts receivable (net of allowance of
$26,854 and $32,880 respectively) 120,343 18,571
Prepaid expenses and other current assets 32,936 13,532
----------- -----------
160,312 45,678
FURNITURE AND EQUIPMENT, AT COST
Research and development equipment 14,603 14,603
Office furniture and other 22,476 22,476
----------- -----------
37,079 37,079
Less accumulated depreciation and amortization (12,039) (9,119)
----------- -----------
25,040 27,960
Capitalized Organizational Costs 2,173 2,415
OTHER ASSETS
Capitalized software and development costs 1,990,758 1,852,822
Less accumulated amortization (1,266,878) (1,110,741)
----------- -----------
723,880 742,081
Intangibles 200 200
$ 911,605 $ 818,334
=========== ===========
</TABLE>
<PAGE>
Multi Solutions, Inc. and Subsidiary's
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, January 31,
1997 1997
LIABILITIES AND STOCKHOLDERS' DEFICIENCY (Unaudited)
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES
Loan payable $ 20,343 $ 25,497
Note Payable 13,506 15,504
Accrued payroll 51,654 --
Payroll and other taxes payable 30,869 38,070
Accounts Payable 178,680 164,902
Accrued Officer Compensation 174,725 103,349
Deferred revenues 171,054 168,411
----------- -----------
640,831 515,733
Deferred Compensation due officers/shareholders 631,605 631,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$ .001 Par Value issued and outstanding
18,016,898 and 18,016,898 Net of Deferred Compensation 18,017 18,017
of $2,001 and $2,667 Additional paid-in capital 8,593,101 8,592,434
Minority Interest 71,503 87,092
Accumulated deficit (9,043,452) (9,026,547)
----------- -----------
(360,831) (329,004)
$ 911,605 $ 818,334
=========== ===========
</TABLE>
<PAGE>
Multi Solutions, Inc. and Subsidiary's
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
License fees $ 84,914 $ 254,066 $ 54,545 $ 168,197
Maintenance Revenue 374,333 312,384 170,673 152,631
Consulting and other fees 49,845 17,757 25,055 17,530
------------ ------------ ------------ ------------
Total revenues 509,092 584,207 250,273 338,358
Operating expenses
Software development and technical support 156,547 171,244 91,901 86,920
Selling and administrative expenses 372,143 413,093 178,371 202,680
------------ ------------ ------------ ------------
Total expenses 528,690 584,337 270,272 289,600
Income (Loss) from operations (19,598) (130) (19,999) 48,758
Other Income (Expenses)
Interest expense (1,291) (4,806) (637) (3,782)
Total other expense (1,291) (4,806) (637) (3,782)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (20,889) $ (4,936) $ (20,636) $ 44,976
============ ============ ============ ============
Weighted average number of shares outstanding 18,016,898 17,844,398 18,016,898 17,844,398
============ ============ ============ ============
Loss per share $ -- $ -- $ -- $ --
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI-SOLUTIONS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
July 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income (Loss) $ (20,889) $ (4,936)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization 159,299 172,270
Changes in assets and liabilities
Accounts receivable (101,772) (3,543)
Prepaid expenses and other current assets (19,404) --
Accrued payroll 51,654 (30,285)
Payroll and other taxes payable (7,201) (21,638)
Note Payable (1,998)
Accounts payable and accrued expenses 13,778 (69,033)
Accrued officer compensation 71,376 16,665
Deferred officer compensation -- 12,539
Deferred revenues 2,643 (20,236)
Long term deferred revenues -- (8,022)
--------- ---------
Net cash provided by operating activities 147,486 43,781
Cash flows from investing activities
Capital expenditures -- (12,074)
Capitalized software development costs (137,936) (116,086)
--------- ---------
Net cash used in investing activities (137,936) (128,160)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (5,154) (6,980)
Increase in Minority Interest (11,605) 154,466
Amorization of Stock Grants 667
Issuance of capital stock -- 3,750
--------- ---------
Net cash provided by financing activities (16,092) 151,236
NET INCREASE (DECREASE) IN CASH (6,542) 66,857
Cash at beginning of year 13,575 89,575
Cash at end of period $ 7,033 $ 156,432
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Six months ended July 31, 1997 compared to six months ended July 31, 1996 and
three months ended July 31, 1997 compared to three months ended July, 31 1996
Revenues for the current six months of fiscal year 1997 decreased $75,116 or
12.85% compared with the comparable period of the prior year. Revenues for the
three month period ending July 31, 1997 decreased $88,086 compared with the
comparable period of the prior year. The decrease in revenues for the current
six and three month period is attributable to receiving advance royalty
payments, in the prior three and six month period which did not reoccur in the
current period of the current year.
Operating expenses for the six month period decreased $55,647 or 9.52% compared
with the comparable period of the prior year. Operating expense for the three
month period ending July 31, 1997 decreased $19,328 or 6.67% compared with the
prior year. The decrease in the six month and three month period was due to the
reduction of certain expenses such as legal fees, outside marketing and outside
consulting. Also, the software development expense has decreased, $14,697. The
reason for this decrease is that Multi Soft reduced its development staff which
decreases the capitalization value of the software.
Operating loss, before other Income (expense) of $19,598 for the current six
month period increased $19,468 compared with the comparable period of the prior
year. Operating loss, before other income (expense) was $19,999 for the current
three month increased $68,757 compared with the operating income from the
comparable period of the prior year. The reason for this increase is the advance
royalty received last year during the comparable quarter which did not reoccur
in the current period. Also, expenses from Multi Solutions new subsidiary
NetCast, Inc. have been consolidated during this period but did not exist during
the comparable period of the prior year.
Other (expense) for the current six month period was ($1,291) as compared with
($4,806) for the comparable period of the prior year. The decrease is
attributable to a miscellaneous expense in the comparable period that did not
reoccur in the current period.
For the current six month period , net loss of $20,889 or ($.00) cents per share
was incurred compared with a net loss of $4,936 or ($.00) cents per share an
increase of $15,953. For the current three month period, a net loss of $20,636
was incurred compared with income of $44,976 in the comparable period for the
prior year a decrease of $65,612. As previously stated, the reason for this
decrease was due to the royalty advance received during the comparable period of
the prior year that did not reoccur during the current period.
Major Customers
In the first six months of 1997, IBM accounted for 29.46% of total revenues. In
the first six months of 1996, IBM accounted for 17.19%.
<PAGE>
Liquidity and Capital Resources
At July 31, 1997, the Company had a negative working capital position of
($480,519); 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
addition, senior staff salaries were reduced and executive officers' salaries
were partly deferred. Secondly, the company's subsidiary 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 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 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 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. As of November
1996, the contract with IBM was extended for two more years and IBM is paying
Multi Soft monthly maintenance and 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 of the Sun Solaris Unix environment. Also, it
provides for a joint marketing agreement in which both companies will share
marketing royalties.
It is the company'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.
<PAGE>
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>
Cautionary Statement
This Form 10-KSB contains certain forward-looking statements regarding ,
among other things, the anticipated financial and operating results of the
company. For this purpose, forward-looking statements are any statements
contained herein that are not statements of historical fact and include , but
are not limited to, those preceded by or that include the words, "believes,"
"expects," "anticipated," or similar expressions. In connection with the safe
harbor provisions of the Private Securities Litigation Reform act of 1995, the
Company is including this cautionary statement identifying important factors
that could cause the company's actual results to differ materially from those
projected in forward looking statements made by, or on behalf of, the company.
These factors, many of which are beyond the control of the company and include
the Company's ability to, (I) continue as a going concern, (ii) continue to
receive royalties from its existing licensing and consulting arrangements(iii)
develop additional marketable software and technology, (iv) compete with larger,
better capitalized competitors, and reverse ongoing liquidity and cash flow
problems.
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
<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: August 27, 1997
By: /s/ Charles J. Lombardo
--------------------------------------------
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
[MSOG0012.124]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
MULTI SOLUTIONS, INC
Financial Data Schedule
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> JUL-31-1997
<CASH> 7,033
<SECURITIES> 0
<RECEIVABLES> 147,197
<ALLOWANCES> 26,854
<INVENTORY> 0
<CURRENT-ASSETS> 160,312
<PP&E> 37,079
<DEPRECIATION> 12,039
<TOTAL-ASSETS> 911,605
<CURRENT-LIABILITIES> 640,831
<BONDS> 0
0
0
<COMMON> 18,017
<OTHER-SE> (360,831)
<TOTAL-LIABILITY-AND-EQUITY> 911,605
<SALES> 84,914
<TOTAL-REVENUES> 509,092
<CGS> 0
<TOTAL-COSTS> 528,690
<OTHER-EXPENSES> 1,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,291
<INCOME-PRETAX> (20,889)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,889)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,889)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
