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, 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: 0-15976
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, 1996
Common Stock, par value 11,716,229
$.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, 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 nine and three months ended October 31, 1996
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
MULTI SOFT, INC.
a 55.7% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, January 31,
1996 1996
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 11,201 $ 88,015
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
----------- -----------
113,956 201,975
FURNITURE AND EQUIPMENT
Research and development equipment 6,584 259,907
Office furniture and other equipment 10,053 10,053
----------- -----------
16,637 269,960
Less: Accumulated Depreciation (7,736) (266,066)
----------- -----------
8,901 3,894
OTHER ASSETS
Capitalized software development costs 1,664,259 1,980,130
Less accumulated amortization (1,023,019) (1,256,153)
----------- -----------
641,240 723,977
Due from Multi Solutions, Inc. 420,662 408,762
----------- -----------
$ 1,184,759 $ 1,338,608
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC.
a 55.7% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, January 31,
1996 1996
(Unaudited)
------------ ------------
<S> <C> <C>
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 84,846 173,652
Deferred compensation due officer/shareholders 586,605 586,605
Accrued officer compensation 134,962 110,016
Deferred revenues 204,039 309,792
------------ ------------
1,090,112 1,326,442
DEFERRED REVENUES - net of current portion -- 8,022
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
11,716,239 and 11,483,979 shares, respectivley 11,716 11,484
Additional paid-in capital, net of deferred
compensation $4,140 and $2,150 respectively 5,923,242 5,862,316
Accumulated deficit (5,840,311) (5,869,656)
------------ ------------
94,647 4,144
$ 1,184,759 $ 1,338,608
============ ============
</TABLE>
<PAGE>
MULTI SOFT, INC
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 571,058 726,097 192,192 247,048
------------ ------------ ------------ ------------
Total expenses 827,924 962,861 277,814 330,421
------------ ------------ ------------ ------------
Income (Loss) from operations 36,464 (2,077) 2,366 (50,741)
OTHER (EXPENSE)
Interest Expense (7,119) (3,921) (2,313) (1,300)
------------ ------------ ------------ ------------
Total other expense (7,119) (3,921) (2,313) (1,300)
NET INCOME(LOSS) $ 29,345 $ (5,998) $ 53 $ (52,041)
============ ============ ============ ============
Weighted average shares outstanding 11,560,000 9,189,000 11,560,000 9,189,000
============ ============ ============ ============
Income (Loss) per share $ -- $ -- $ -- $ --
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Month Ended
October 31
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income (loss) $ 29,345 $ (5,998)
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
Due to / from Multi Solutions (11,900) 18,150
(Increase) decrease in accounts receivable 14,706 63,127
Decrease 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 (88,806) (30,203)
(Decrease) increase in accrued officer compensation (174,830) 135,832
Increase in Deferred Compensation 476,589 179,919
Increase (decrease) in deferred revenues (382,566) (106,429)
Increase (decrease) in long term deferred revenues (8,022) (182,148)
--------- ---------
Net cash provided by operating activities 54,582 361,544
Cash flows from investing activities
Capitalized Research and developement (6,583)
Capitalized software development costs (174,131) (267,088)
--------- ---------
Net cash used in investing activities (180,714) (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)
Amortization of Stock Grants 690 99
Issued Common Stock 60,468 --
--------- ---------
Net cash provided by (used) financing activities 49,318 (29,826)
NET INCREASE (DECREASE) IN CASH (76,814) 64,630
Cash at beginning of period 88,015 --
--------- ---------
Cash at end of period $ 11,201 $ 64,630
========= =========
</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
the long term deferred revenue , Multi Soft would have experienced a $53,604
increase in revenues for the current nine month period of October 31, 1996 as
compared with prior period.
Operating expenses as a percent of revenues for the nine month period was
95.78% compared with 100% for the comparable period of the prior year. Operating
expense ending October 31, 1996 as a percent of revenues for the current three
month period was 99.15 % compared with 118% for the prior year. The decrease in
the nine month period is a result of a reduction of legal and outside consulting
fees partially offset by the long term deferred revenue mentioned above.
Operating income, before other expense of $36,464 for the current nine month
period increased $38,541 compared with the comparable period of the prior year.
Operating income , before other expense of $2,366 for the current three month
period increased $53,107 compared with comparable period of the prior year.
Excluding the $150,000 long term deferred revenue from the prior year Multi Soft
experienced a $188,541 increase in revenue for October 31, 1996.
Other expense for the current nine month period was $7,119 as compared with
$3,921 for the comparable period of the prior year. The increase is attributable
to a miscellaneous tax expense.
For the current nine month period , net income of $29,345 was incurred
compared with a net loss of $5,998 for the prior period an increase of $35,343.
For the current three month period, a net income of $53 was incurred compared
with a loss of 52,041 in the comparable period for the prior year, which results
in an increase of $52,094. Without giving effect to the long term deferred
revenue Multi Soft would have experienced an increase of 185,343 in net income
for the nine month period ending October 31, 1996.
During the nine months ended October 31, 1996 Multi Soft issued 232,260
shares of its common stock to certain persons in satisfaction of $90,727 of
indebtedness and for other consideration.
Major Customers
<PAGE>
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
At October 31, 1996, the Company had a negative working capital position of
$976,156; 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, 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 maintenance guarantee of
25,000 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
<PAGE>
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 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 SOFT, 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> 11,201
<SECURITIES> 0
<RECEIVABLES> 85,723
<ALLOWANCES> 28,932
<INVENTORY> 0
<CURRENT-ASSETS> 113,956
<PP&E> 16,637
<DEPRECIATION> 7,736
<TOTAL-ASSETS> 1,184,759
<CURRENT-LIABILITIES> 1,090,112
<BONDS> 0
0
0
<COMMON> 11,716
<OTHER-SE> 96,647
<TOTAL-LIABILITY-AND-EQUITY> 1,184,759
<SALES> 328,693
<TOTAL-REVENUES> 864,388
<CGS> 0
<TOTAL-COSTS> 827,924
<OTHER-EXPENSES> 7,119
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,119
<INCOME-PRETAX> 29,345
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,345
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
