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, 1995
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: 0-15976
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 July 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 six and three months ended July 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 six and three months ended July 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
July 31, January 31,
1995 1995
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 77,328 $ --
Accounts Receivable (net of allowance
of $10,807 and $37,063 respectively) 32,422 95,791
Prepaid expenses and other current assets 30,524 17,310
----------- -----------
140,274 113,101
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 (265,270) (263,693)
----------- -----------
4,689 6,266
OTHER ASSETS
Capitalized software development costs 1,791,574 1,613,516
Less accumulated amortization (1,049,124) (886,605)
----------- -----------
742,450 726,911
Due from Solutions 240,485 256,912
----------- -----------
$ 1,127,898 $ 1,103,190
=========== ===========
<PAGE>
MULTI SOFT, INC.
a 50.3% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
July 31, January 31,
1995 1995
(Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 47,604 $ 53,729
Accrued payroll 77,323 31,190
Payroll and other taxes payable 73,093 78,607
Accounts Payable 342,475 375,169
Deferred compensation due officer/shareholders 466,659 346,713
Accrued officer compensation 245,537 152,246
Deferred Revenues 244,952 289,391
Loans from Officers 1,400 22,000
----------- -----------
1,499,043 1,349,045
DEFERRED REVENUES - net of current portion 29,453 200,885
----------- -----------
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 $447 and $2,150 respectively (5,944,497) (5,990,540)
----------- -----------
Accumulated deficit (400,598) (446,740)
----------- -----------
$ 1,127,898 $ 1,103,190
=========== ===========
<PAGE>
MULTI SOFT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
License fees $ 388,146 $ 63,698 $ 245,088 $ 27,804
Maintenance fees 280,763 70,760 151,906 57,614
Consulting and Other fees 12,195 22,047 9,906 17,488
----------- ----------- ----------- -----------
Total revenues 681,104 156,505 406,900 102,906
EXPENSES
Software development and technical support 153,391 268,229 78,921 173,400
Selling and administrative 479,049 354,878 238,809 104,303
----------- ----------- ----------- -----------
Total expenses 632,440 623,107 317,730 277,703
----------- ----------- ----------- -----------
Income (Loss) from operations 48,664 (466,602) 89,170 (174,797)
OTHER (EXPENSE)
Interest Expense (2,621) (2,529) (1,638) (1,465)
Special discount granted to investors (28,215)
----------- ----------- ----------- -----------
Total other (expense) (2,621) (30,744) (1,638) (1,465)
NET INCOME (LOSS) $ 46,043 $ (497,346) $ 87,532 $ (176,262)
=========== =========== =========== ===========
Weighted average shares outstanding 9,189,000 8,618,865 9,189,000 8,844,868
=========== =========== =========== ===========
Income (Loss) per share $ -- $ (0.05) $ 0.01 $ (0.01)
=========== =========== =========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended July 31,
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income (loss) $ 46,043 $(320,998)
Adjustments to reconcile net Income (loss) to net cash
provided (used) by operating activities
Depreciation and amortization 164,096 60,858
Common stock issued as compensation to employees -- 9,000
Discount to investors -- 28,215
Changes in assets and liabilities
Due to/from Multi Solutions 16,427 26,701
(Increase) decrease in accounts receivable 63,369 96,438
Decrease in prepaid expenses and other current assets (13,214) (4,282)
Increase (decrease) in accrued payroll 46,133 --
(Decrease) in payroll and other taxes payable (5,514) --
Increase (decrease) in accounts payable and accrued expenses (32,694) 22,408
(Decrease) increase in accrued officer compensation 93,291 (34,460)
Increase in Deferred Compensation 119,946 --
Increase (decrease) in deferred revenues (44,439) 84,403
Increase (decrease) in long term deferred revenues (171,432)
--------- ---------
Net cash provided (used) by operating activities 282,012 (31,717)
Cash flows from investing activities
Capitalized software development costs (178,058) (93,441)
--------- ---------
Net cash used in investing activities (178,058) (93,441)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (6,125) 33,614
Payment of line of credit (20,600)
Amortization of Stock Grants 99 91,544
--------- ---------
Net cash provided by (used) In financing activities (26,626) 125,158
NET INCREASE (DECREASE) IN CASH 77,328 0
------ ---------
Cash at beginning of year 0 0
------ ---------
Cash at end of year $ 77,328 $ --
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Six months Ended July 31, 1995 Compared to six monhts Ended July 31, 1994 and
three months ended July 31, 1995 compared to three months ended July, 31 1994
Revenues for the current six months of fiscal year 1995 increased $524,599 or
335.1% compared with the comparable period of the prior year. Revenues for the
three month period increased $303,994 compared with the comparable period of the
prior year. The increase in revenues is attributable to increased license and
maintenance fees as a result of customer requests for product updates, technical
assistance and support. The current second quarter also reflects the recognition
of 150,000 of the year ended January 31, 1994's Long Term Deferred Revenue.
Operating expenses as a percent of revenues for the six month period was 92.8%
compared with 398.1% for the comparable period of the prior year. Operating
expense as a percent of revenues for the current three month period was
78.1% compared with 270% for the prior year. The decrease in operating expenses
as a percent of revenues was primarily attributable to the higher revenue volume
and a reduction in technical support salaries.
The operating income, before other income (expense) of $48,665 for the current
six month period increased $515,266 compared with the comparable period of the
prior year. Operating Income, before other income (expense) $89,170 for the
current three month increased $263,967 compared with comparable period of the
prior year.
Other income (expense) for the current six month period was ($2,621) as compared
with ($30,744) 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 six month period, net income of $46,043 or ($.00) cents per
share was incurred compared with a net loss of ($497,346) or ($.05) cents per
share an increase of $543,389. For the current three month period, a net income
of $87,532 or .01 cents per share was incurred compared with a loss of
($176,262) in the comparable period for the prior year an increase of $263,794.
Major Customers
In the first six months of 1995, IBM accounted for 47.19% of total
revenues. In the first six months of 1994, IBM accounted for 10.7% and Exxon
accounted for 11.3%.
Liquidity and Capital Resources
At July 31, 1995, the Company had a negative working capital position of
($1,358,769); and has been experiencing cash flow problems.
<PAGE>
Management of Multi Soft, Inc. 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: October 3 , 1995
By: 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-31-1995
<CASH> 77,328
<SECURITIES> 0
<RECEIVABLES> 43,229
<ALLOWANCES> 10,807
<INVENTORY> 0
<CURRENT-ASSETS> 140,274
<PP&E> 269,959
<DEPRECIATION> 265,270
<TOTAL-ASSETS> 1,127,898
<CURRENT-LIABILITIES> 1,499,043
<BONDS> 0
<COMMON> 9,984
0
0
<OTHER-SE> (410,582)
<TOTAL-LIABILITY-AND-EQUITY> 1,127,898
<SALES> 388,146
<TOTAL-REVENUES> 681,104
<CGS> 0
<TOTAL-COSTS> 632,440
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,621
<INCOME-PRETAX> 46,043
<INCOME-TAX> 0
<INCOME-CONTINUING> 46,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,043
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
