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 April 30, 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
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(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 April 30, 1996
- ------------------------------------ ----------------------------------
Common Stock, par value 11,638,979
$.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 three months ended April 30, 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 contained in the company's
Form 10KSB filed with The Securities & Exchange Commission on May 14, 1996.
The results reflected for the three months ended April 30, 1996 are not
necessarily indicative of the results for the entire fiscal year.
2
<PAGE>
MULTI SOFT, INC.
a 56.8% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, January 31,
1996 1996
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 8,933 $ 88,015
Accounts Receivable (net of allowance
of $32,880 and $37,063 respectively) 111,195 100,428
Prepaid expenses and other current assets 16,532 13,532
----------- ----------
136,660 201,975
FURNITURE AND EQUIPMENT
Research and Development Equipment 261,957 259,907
Office furniture and other equipment 10,053 10,053
----------- ----------
272,010 269,960
Less: Accumulated Depreciation (266,476) (266,066)
----------- ----------
5,534 3,894
OTHER ASSETS
Capitalized software development costs 1,541,681 1,980,130
Less accumulated amortization (850,477) (1,256,153)
----------- ----------
691,204 723,977
Due from Solutions 408,762 408,762
----------- ----------
$ 1,242,160 $1,338,608
=========== ==========
</TABLE>
3
<PAGE>
MULTI SOFT, INC.
a 56.8% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, January 31,
1996 1996
(Unaudited)
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 36,489 $ 41,099
Accrued payroll 19,510 30,285
Payroll and other taxes payable 61,370 74,993
Accounts Payable 162,908 173,652
Deferred compensation due officer/shareholders 586,605 586,605
Accrued officer compensation 118,349 110,016
Deferred Revenues 295,800 309,792
---------- ----------
1,281,031 1,326,442
DEFERRED REVENUES - net of current portion -- 8,022
---------- ----------
TOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
11,483,979 respectivley and respectively 11,484 11,484
Additional paid-in capital, net of deferred
compensation $181 and $234 respectively 5,862,355 5,862,316
Accumulated deficit (5,912,710) (5,869,656)
---------- ----------
(38,871) 4,144
$1,242,160 $1,338,608
========== ==========
</TABLE>
4
<PAGE>
MULTI SOFT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30
1996 1995
--------------- ---------------
<S> <C> <C>
REVENUES
License fees $ 85,869 $ 143,058
Maintenance fees 159,753 128,857
Consulting and Other fees 227 2,289
------------- --------------
Total revenues 245,849 274,204
EXPENSES
Software development and technical support 84,324 74,470
Selling and administrative 203,555 240,141
------------- --------------
Total expenses 287,879 314,611
------------- --------------
Loss from operations (42,030) (40,407)
OTHER INCOME(EXPENSE)
Interest Expense (1,024) (983)
Total other income(expense) (1,024) (983)
------------- --------------
NET LOSS $ (43,054) $ (41,390)
============= ==============
Weighted average shares outstanding 10,109,000 9,189,000
============= ==============
Loss per share $ -- $ --
============= ==============
</TABLE>
5
<PAGE>
MULTI -SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (43,054) $ (41,390)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities
Depreciation and amortization 84,734 79,466
Common stock issued as compensation to employees --
Discount to investors --
Changes in assets and liabilities --
Due to / from Multi Solutions -- 23,984
(Increase) decrease in accounts receivable (10,767) (20,620)
Decrease in prepaid expenses and other current assets (3,000) (4,147)
Increase (decrease) in accrued payroll (10,775) 21,889
(Decrease) in payroll and other taxes payable (13,623) (901)
Increase (decrease) in accounts payable and accrued expenses (10,744) (16,856)
(Decrease) increase in accrued officer compensation 8,332 42,542
Increase in Deferred Compensation -- 59,972
Increase (decrease) in deferred revenues (13,992) (22,059)
Increase (decrease) in long term deferred revenues (8,022) (10,716)
------------ -----------
Net cash provided (used) by operating activities (20,911) 111,164
Cash flows from investing activities
Capitalized Research and developement (2,050)
Capitalized software development costs (51,550) (89,030)
------------ -----------
Net cash used in investing activities (53,600) (89,030)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (4,610) (3,034)
Payment of line of credit -- (19,100)
Amortization of Stock Grants 39 --
------------ -----------
Net cash provided by (used ) financing activities (4,571) (22,134)
NET INCREASE (DECREASE) IN CASH (79,082) --
Cash at beginning of year 88,015 --
Cash at end of year $ 8,933 $ --
============= ===========
</TABLE>
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Quarter Ended April 30, 1996 Compared to Quarter Ended April 30, 1995
Revenues for the current first quarter of fiscal year 1996 decreased
$28,355 or 10.34% compared with the comparable period of the prior year. The
decrease in revenues is attributable to decreased license fees offset in part by
an increase in maintenance revenue. The increase in maintenance revenue is
attributed to a monthly maintenance agreement with IBM which guarantees $10,000
per month. The shrinking license fees are attributed to sales that occurred in
the first quarter of last year that did not occur this year, due to normal sales
fluctuations.
Operating expenses as a percent of revenues for the current first quarter
was 117.09% compared with 114.7% for the comparable period of the prior year.
The increase in operating expenses as a percent of revenues was primarily
attributable to the lower revenue volume and an increase in technical support
salaries offset in part by a decrease in selling and administrative expenses.
The operating loss, before other income (expense) of ($42,030) for the
current first quarter increased $1,623 compared with the comparable period of
the prior year.
Other income (expense) for the current first quarter was ($1,024) as
compared with ($983) for the comparable period of the prior year.
For the current first quarter, a net loss of $43,054) was incurred compared
with a net loss of ($41,390), an increase of $1,664.
Major Customers
In the first quarter 1996, IBM accounted for 36.2% of total revenues. In
the first quarter 1995, IBM accounted for 31.25% of total revenues.
Liquidity and Capital Resources
At April 30, 1996, the Company had a negative working capital position of
($1,144,371); and has been experiencing cash flow problems. The cash flow
deficiency is a result of certain receivables that remain uncollected coupled
with normal fluctuations in sales.
Management 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 ServerTM for
Windows. It provides remote presentation support for IMS. Multi Soft and
7
<PAGE>
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.
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 to 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 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.
8
<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
None
9
<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: 5/29/96 By: /s/ CHARLES J. LOMBARDO
--------------------------------------------
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1996
<CASH> 8933
<SECURITIES> 0
<RECEIVABLES> 111,195
<ALLOWANCES> 32,880
<INVENTORY> 0
<CURRENT-ASSETS> 136,660
<PP&E> 272,010
<DEPRECIATION> 266,476
<TOTAL-ASSETS> 1,242,160
<CURRENT-LIABILITIES> 1,281,031
<BONDS> 0
0
0
<COMMON> 11,484
<OTHER-SE> (38,871)
<TOTAL-LIABILITY-AND-EQUITY> 1,242,160
<SALES> 85,869
<TOTAL-REVENUES> 245,849
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,024
<INCOME-PRETAX> (43,054)
<INCOME-TAX> 0
<INCOME-CONTINUING> (43,054)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,054)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
