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, 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 six and three months ended July 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 six and three months ended July 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
July 31, January 31,
1996 1996
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 70,410 $ 88,015
Accounts Receivable (net of allowance
of $28,932 and $37,063 respectively) 103,971 100,428
Prepaid expenses and other current assets 13,532 13,532
----------- -----------
187,913 201,975
FURNITURE AND EQUIPMENT
Research and Development Equipment 4,158 259,907
Office furniture and other equipment 10,053 10,053
----------- -----------
14,211 269,960
Less: Accumulated Depreciation (7,185) (266,066)
----------- -----------
7,026 3,894
OTHER ASSETS
Capitalized software development costs 1,606,217 1,980,130
Less accumulated amortization (937,397) (1,256,153)
----------- -----------
668,820 723,977
Due from Multi Solutions 418,762 408,762
----------- -----------
$ 1,282,521 $ 1,338,608
=========== ===========
<PAGE>
MULTI SOFT, INC.
a 55.7% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
July 31, January 31,
1996 1996
(Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 34,119 $ 41,099
Accrued payroll -- 30,285
Payroll and other taxes payable 53,355 74,993
Accounts Payable 98,354 173,652
Deferred compensation due officer/shareholders 586,605 586,605
Accrued officer compensation 126,681 110,016
Deferred Revenues 289,556 309,792
----------- -----------
1,188,670 1,326,442
DEFERRED REVENUES - net of current portion -- 8,022
----------- -----------
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
11,716,239 and 11,483,979 respectively 11,716 11,484
Additional paid-in capital, net of deferred
compensation $4830 and $234 respectively 5,922,499 5,862,316
Accumulated deficit (5,840,364) (5,869,656)
----------- -----------
93,851 4,144
$ 1,282,521 $ 1,338,608
=========== ===========
<PAGE>
MULTI SOFT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
License fees $ 254,066 $ 388,146 $ 168,197 $ 245,088
Maintenance fees 312,384 280,763 152,631 151,906
Consulting and Other fees 17,758 12,195 17,531 9,906
------------ ------------ ------------ ------------
Total revenues 584,208 681,104 338,359 406,900
EXPENSES
Software development and technical support 171,244 153,391 86,920 78,921
Selling and administrative 378,866 479,049 175,311 238,809
------------ ------------ ------------ ------------
Total expenses 550,110 632,440 262,231 317,730
Income (Loss) from operations 34,098 48,664 76,128 89,170
OTHER (EXPENSE)
Interest Expense (4,806) (2,621) (3,782) (1,638)
Total other (expense) (4,806) (2,621) (3,782) (1,638)
NET INCOME(LOSS) $ 29,292 $ 46,043 $ 72,346 $ 87,532
============ ============ ============ ============
Weighted average shares outstanding 11,560,000 9,189,000 10,109,000 9,189,000
============ ============ ============ ============
Income (Loss) per share $ -- $ -- $ -- $ 0.01
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months ended
July 31 July 31
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash $ 29,292 $ 46,043
provided (used) by operating activities
Depreciation and amortization 172,270 164,096
Common stock issued as compensation to employees
Discount to investors --
Changes in assets and liabilities --
Due to / from Multi Solutions (10,000) 16,427
(Increase) decrease in accounts receivable (3,543) 63,369
Decrease in prepaid expenses and other current assets -- (13,214)
Increase (decrease) in accrued payroll (30,285) 46,133
(Decrease) in payroll and other taxes payable (21,638) (5,514)
Increase (decrease) in accounts payable and accrued expenses (75,297) (32,694)
(Decrease) increase in accrued officer compensation 16,665 93,291
Increase in Deferred Compensation -- 119,946
Increase (decrease) in deferred revenues (20,236) (44,439)
Increase (decrease) in long term deferred revenues (8,022) (171,432)
--------- ---------
Net cash provided (used) by operating activities 49,206 282,012
Cash flows from investing activities
Capitalized Research and developement (4,158)
Capitalized software development costs (116,086) (178,058)
--------- ---------
Net cash used in investing activities (120,244) (178,058)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (6,981) (6,125)
Payment of line of credit -- (20,600)
Amortization of Stock Grants 690 99
Issued Common Stock 59,724 0
--------- ---------
Net cash provided by (used ) financing activities 53,433
NET INCREASE (DECREASE) IN CASH (17,605) (26,626)
Cash at beginning of period 88,015 77,328
Cash at end of period $ 70,410 $ 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, 1996 compared to six months ended July 31, 1995 and
three months ended July 31, 1996 compared to three months ended July, 31 1995
Revenues for the current six months of fiscal year 1996 decreased $96,897 or
14.2% compared with the comparable period of the prior year. Revenues for the
three month period ending July 31, 1996 decreased $68,542 compared with the
comparable period of the prior year. The decrease in revenues for the current
six and three month period is attributable to the recognition of $150,000 of
long term deferred revenue, in the prior three and six 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 $53,103 and $81,458
increase for the six and three month period of July 31,1996 respectively.
Operating expenses as a percent of revenues for the six month period was 94.1%
compared with 92.8% for the comparable period of the prior year. Operating
expense ending July 31, 1996 as a percent of revenues for the current three
month period was 77.5%compared with 78.1% for the prior year. The increase in
the six month period is a result of the long term deferred mentioned above, the
decrease in operating expenses as a percent of revenues was primarily
attributable to a curtailment of selling and administrative expenses.
Operating income, before other (expense) of $34,097 for the current six month
period decreased $14,567 compared with the comparable period of the prior year.
Operating Income, before other income (expense) $76,117 for the current three
month decreased $13,053 compared with comparable period of the prior year.
Excluding the 150,000 Long Term Deferred Revenue from July 31,1995 Multi Soft
experienced a 135,433 , 136,947 six and three month increase in revenue
respectively for July 31, 1996.
Other (expense) for the current six month period was ($4,806) as compared with
($2,621) for the comparable period of the prior year. The increase is
attributable to a minor tax penalty.
For the current six month period , net income of $29,292 or ($.00) cents per
share was incurred compared with a net income of $46,043 or ($.00) cents per
share an decrease of $16,751. For the current three month period, a net income
of $72,346 or .01 cents per share was incurred compared with income of 87,532 in
the comparable period for the prior year an decrease of $15,186. As previously
stated, Without giving effect to the long term deferred revenue Multi Soft would
heve experienced an increase of 133,248 in net income for the period ending July
31 1996.
During the three months ended July 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 six months of 1996, IBM accounted for 17.19% of total
revenues. In the first six months of 1995, IBM accounted for 47.19%.
Liquidity and Capital Resources
At July 31, 1996, the Company had a negative working capital position of
($1,000,757); 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 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.
In 1995 Multi Soft, Inc. entered a joint developement 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 ot 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:September 11, 1996
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> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1996
<CASH> 70,410
<SECURITIES> 0
<RECEIVABLES> 103,971
<ALLOWANCES> 29,932
<INVENTORY> 0
<CURRENT-ASSETS> 187,913
<PP&E> 14,211
<DEPRECIATION> 7,185
<TOTAL-ASSETS> 1,282,521
<CURRENT-LIABILITIES> 1,188,670
<BONDS> 0
0
0
<COMMON> 11,716
<OTHER-SE> 93,851
<TOTAL-LIABILITY-AND-EQUITY> 1,282,521
<SALES> 254,066
<TOTAL-REVENUES> 584,207
<CGS> 0
<TOTAL-COSTS> 550,110
<OTHER-EXPENSES> 4,806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,806
<INCOME-PRETAX> 29,292
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,292
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,292
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
