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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-15976
MULTI SOFT, INC
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2588030
(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, 1995
- ------------------------------------ ------------------------------------
Common Stock, par value 9,983,979
$.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, 1995.
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, 1995
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
MULTI SOFT, INC.
a 50.3% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, January 31,
1995 1995
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 64,630 $ --
Accounts Receivable (net of allowance
of $23,169 and $37,063 respectively) 32,664 95,791
Prepaid expenses and other current assets 37,132 17,310
----------- -----------
134,426 113,101
FURNITURE AND EQUIPMENT
Research and Development Equipment 259,907 259,907
Office furniture and other equipment 10,052 10,052
----------- -----------
269,959 269,959
Less: Accumulated Depreciation (265,680) (263,693)
----------- -----------
4,279 6,266
OTHER ASSETS
Capitalized software development costs 1,880,604 1,613,516
Less accumulated amortization (1,137,061) (886,605)
----------- -----------
743,543 726,911
Due from Solutions 238,763 256,912
----------- -----------
$ 1,121,010 $ 1,103,190
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC.
a 50.3% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, January 31,
1995 1995
(Unaudited)
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 44,404 $ 53,729
Accrued payroll 86,080 31,190
Payroll and other taxes payable 80,390 78,607
Accounts Payable 344,966 375,169
Deferred compensation due officer/shareholders 526,632 346,713
Accrued officer compensation 288,078 152,246
Deferred Revenues 182,962 289,391
Loans from Officers 1,400 22,000
----------- -----------
1,554,912 1,349,045
DEFERRED REVENUES - net of current portion 18,737 200,885
----------- -----------
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
9,983,979 respectively 9,984 9,984
Additional paid-in capital, net of deferred 5,533,915 5,533,816
compensation $357 and $2,150 respectively (5,996,538) (5,990,540)
----------- -----------
Accumulated deficit (452,639) (446,740)
----------- -----------
$ 1,121,010 $ 1,103,190
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
October 31, October 31,
1995 1994 1995 1994
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
REVENUES
License fees $ 505,868 $ 151,492 $ 117,722 $ 85,814
Maintenance fees 414,409 389,384 133,646 318,604
Consulting and Other fees 40,507 36,008 28,312 13,961
----------- ----------- ---------- -----------
Total revenues 960,784 576,884 279,680 418,379
EXPENSES
Software development and technical support 236,764 349,567 83,373 81,338
Selling and administrative 726,097 564,939 247,048 208,061
----------- ----------- ---------- -----------
Total expenses 962,861 914,506 330,421 289,399
----------- ----------- ---------- -----------
Income (Loss) from operations (2,077) (337,622) (50,741) 128,980
OTHER (EXPENSE)
Interest Expense (3,921) (3,994) (1,300) (1,465)
Special discount granted to investors (28,215)
----------- ----------- ---------- -----------
Total other (expense) (3,921) (32,209) (1,300) (1,465)
NET INCOME (LOSS) $ (5,998) $ (369,831) $ (52,041) $ 127,515
=========== =========== ========== ===========
Weighted average shares outstanding 9,189,000 8,882,905 9,189,000 9,502,035
=========== =========== ========== ===========
Income (Loss) per share Nil $ (0.04) Nil $ 0.01
=========== =========== ========== ===========
</TABLE>
<PAGE>
MULTI-SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
October 31,
1995 1994
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<S> <C> <C>
Cash flows from operating activities
Net Income (loss) $ (5,998) $(369,831)
Adjustments to reconcile net Income (loss) to net cash
provided (used) by operating activities
Depreciation and amortization 252,443 185,578
Common stock issued as compensation to employees -- 27,000
Discount to investors -- 28,215
Changes in assets and liabilities
Due to/from Multi Solutions 18,150 10,702
(Increase) decrease in accounts receivable 63,127 121,601
Decrease in prepaid expenses and other current assets (19,822) (672)
Increase (decrease) in accrued payroll 54,890 --
(Decrease) in payroll and other taxes payable 1,783 --
Increase (decrease) in accounts payable and accrued expenses (30,203) 30,263
(Decrease) increase in accrued officer compensation 135,832 22,337
Increase in Deferred Compensation 179,919 --
Increase (decrease) in deferred revenues (106,429) 47,252
Increase (decrease) in long term deferred revenues (182,148) --
--------- ---------
Net cash provided (used) by operating activities 361,544 102,445
Cash flows from investing activities
Capital Expenditures -- (1,339)
Capitalized software development costs (267,088) (223,571)
--------- ---------
Net cash used in investing activities (267,088) (224,910)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (9,325) 34,335
Payment of line of credit (20,600)
Amortization of Stock Grants 99
Issuance of Common Stock -- 88,130
--------- ---------
Net cash provided by (used ) In financing activities (29,826) 122,465
NET INCREASE (DECREASE) IN CASH 64,630 0
Cash at beginning of year 0
Cash at end of year 64,630 0
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations nine months Ended October 31, 1995 Compared to nine months
Ended October 31, 1994 and three months ended October 31, 1995 compared to three
months ended October, 31 1994
Revenues for the current nine months of fiscal year 1995 increased $383,900 or
66.5% compared with the comparable period of the prior year. Revenues for the
three month period decreased $138,699 compared with the comparable period of the
prior year. The increase in revenues for the nine month period is attributable
to increased license and maintenance fees as a result of customer requests for
product updates, technical assistance and support.
Operating expenses as a percent of revenues for the nine month period was 100.2%
compared with 158% for the comparable period of the prior year. Operating
expense as a percent of revenues for the current three month period was 118%
compared with 69.1% for the prior year. The decrease in operating expenses, for
the nine month period, as a percent of revenues was primarily attributable to
the higher revenue volume and a reduction in technical support salaries, offset
by an increase in Selling and Administrative expenses.
The operating loss, before other income (expense) of $2,077 for the current nine
month period decreased $335,545 compared with the comparable period of the prior
year. Operating Loss, before other income (expense) $50,741 for the current
three month increased $179,721 compared with the operating income of 128,980 for
the comparable period of the prior year.
Other income (expense) for the current nine month period was ($3,921) as
compared with ($32,209) for the comparable period of the prior year. The
decrease is attributable to the special discount granted to investors in the
prior year which did not occur in the current period.
For the current nine month period, net loss of $5,998 or ($.00) cents per share
was incurred compared with a net loss of $369,831 or ($.04) cents per share a
decrease of $363,833. For the current three month period, a net loss of $52,041
or .00 cents per share was incurred compared with net income of $127,515 in the
comparable period for the prior year.
Major Customers
In the first nine months of 1995, IBM accounted for 47.19% of total
revenues. In the first nine months of 1994, IBM accounted for 13.9% of revenues.
Liquidity and Capital Resources
At October 31, 1995 the Company had a negative working capital position of
$1,420,486 and has been experiencing cash flow problems.
<PAGE>
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, 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 SOFT, INC.
Dated: December 13, 1995
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> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> OCT-31-1995
<CASH> 64,630
<SECURITIES> 0
<RECEIVABLES> 55,833
<ALLOWANCES> 23,169
<INVENTORY> 0
<CURRENT-ASSETS> 134,426
<PP&E> 479,931
<DEPRECIATION> (475,652)
<TOTAL-ASSETS> 882,440
<CURRENT-LIABILITIES> 1,639,597
<BONDS> 0
<COMMON> 15,807
0
0
<OTHER-SE> 775,894
<TOTAL-LIABILITY-AND-EQUITY> 882,440
<SALES> 505,568
<TOTAL-REVENUES> 960,784
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,921
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,921
<INCOME-PRETAX> (5,998)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,449)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,449)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
