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, 1997
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 April 30, 1997
Common Stock, par value 11,780,306
$.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, 1997.
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, 1997.
The results for the three months ended April 30, 1997 are not necessarily
indicative of the results for the entire fiscal year.
Multi Soft, Inc. is a 56.4% owned subsidiary of Multi Solutions, Inc.
<PAGE>
MULTI SOFT, INC.
a 56.40% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
April 30, January 31,
1997 1997
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ (1,431) $ 9,148
Accounts Receivable (net of allowance
of $6,854 and $32,880respectively) 141,789 16,961
Prepaid expenses and other current assets 17,532 13,532
----------- -----------
157,890 39,641
FURNITURE AND EQUIPMENT
Research and Development Equipment 7,953 7,953
Office furniture and other equipment 17,818 17,818
----------- -----------
25,771 25,771
Less: Accumulated Depreciation (10,012) (9,119)
----------- -----------
15,759 16,652
OTHER ASSETS
Capitalized software development costs 1,777,476 1,722,303
Less accumulated amortization (1,175,387) (1,110,741)
----------- -----------
602,089 611,562
Due from Solutions 422,951 422,951
Due from NetCast 80,097 55,335
----------- -----------
$ 1,278,786 $ 1,146,141
=========== ===========
<PAGE>
MULTI SOFT, INC.
a 56.4% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
April 30, January 31,
1997 1997
(Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Loan payable to bank $ 21,652 $ 25,497
Note payable 13,506 15,504
Accrued payroll 27,891
Payroll and other taxes payable 29,346 38,072
Accounts Payable 65,079 58,155
Accrued officer compensation 136,683 103,347
Deferred Revenues 232,529 168,411
----------- -----------
526,686 408,986
Deferred Compensation due officer/ shareholders 586,605 586,605
STOCKHOLDERS' EQUITY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
11,780,306 (1997) and 11,780,306(1996) 11,780 11,780
Additional paid-in capital, net of deferred
compensation 11,957 and $14,813 respectively 5,925,859 5,923,868
Accumulated deficit (5,772,144) (5,785,098)
----------- -----------
165,495 150,550
$ 1,278,786 $ 1,146,141
=========== ===========
<PAGE>
MULTI SOFT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
April 30,
1997 1996
------------ ------------
REVENUES
License fees $ 30,369 $ 85,869
Maintenance fees 203,660 159,753
Consulting and Other fees 24,790 227
------------ ------------
Total revenues 258,819 245,849
EXPENSES
Software development and technical support 64,646 84,324
Selling and administrative 180,565 203,555
------------ ------------
Total expenses 245,211 287,879
------------ ------------
Income (Loss) from operations 13,608 (42,030)
OTHER INCOME(EXPENSE)
Interest Expense (654) (1,024)
Total other income(expense) (654) (1,024)
------------ ------------
NET INCOME (LOSS) $ 12,954 $ (43,054)
============ ============
Weighted average shares outstanding 11,592,343 10,109,000
============ ============
Loss per share a a
============ ============
<PAGE>
MULTI-SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income ( loss) $ 12,954 $ (43,054)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities
Depreciation and amortization 65,539 84,734
Common stock issued as compensation to employees
Changes in assets and liabilities
Due to / from NetCast (24,762)
(Increase) decrease in accounts receivable (124,828) (10,767)
Decrease in prepaid expenses and other current assets (4,000) (3,000)
Increase (decrease) in accrued payroll 27,891 (10,775)
(Decrease) in payroll and other taxes payable (8,726) (13,623)
Increase (decrease) in accounts payable and accrued expenses 6,924 (10,744)
(Decrease) increase in accrued officer compensation 33,336 8,332
Increase in Deferred Compensation -- --
Increase (decrease) in deferred revenues 64,118 (13,992)
Increase (decrease) in long term deferred revenues -- (8,022)
--------- ---------
Net cash provided (used) by operating activities 48,446 (20,911)
Cash flows from investing activities
Capitalized Research and developement -- (2,050)
Capitalized software development costs (55,173) (51,550)
--------- ---------
Net cash used in investing activities (55,173) (53,600)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (3,845) (4,610)
Payment of loan payable (1,998) --
Amortization of Stock Grants 1,991 39
--------- ---------
Net cash (used)financial activities (3,852) (4,571)
NET (DECREASE) IN CASH (10,579) (79,082)
Cash at beginning of quarter 9,148 88,015
Cash at end of quarter (1,431) $ 8,933
========= =========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three months ended April 30, 1997 compared to three months ended April 30, 1996
Revenues for the current three months of fiscal year 1997 increased $12,970 or
5.3% compared with the comparable period of the prior year. The increase in
revenues for the three month period is attributable to an increase in
maintenance revenues of $43,907 or 27.4%. This is attributable to maintenance
agreements with a major customer of Multi Soft which has been paying for monthly
maintenance and support. This increase is partially offset by a decrease in
license fees in the amount of $55,500 or 64.6%. This decease is primarily
attributed to royalty payments made in the first quarter of last year that have
not accrued in the first quarter of this year.
Operating expenses as a percent of revenues for the three month period was 94.7%
compared with 117%. The decrease in the three month period is a result of a
decrease in Selling and Administrative expenses of 22,990 or 11.3%. This
reduction is primarily a result of an effort by managment to reduce certain
expenses such as legal fees, outside marketing and outside consulting. Also,
software development decreased for the current three month period in the amount
of $19,678 or 23.3%. The reason for this reduction is that Multi Soft reduced
its development staff which in effect decreases the software development costs.
Operating income, before other (expense) of $13,608 for the current three month
period increased $55,638 compared with the comparable period of the prior year.
Other (expense) for the current three month period was ($654) as compared with
($1,024) for the comparable period of the prior year. The decrease is
attributable to a minor tax penalty that occurred in the previous three month
period but did not occur in the current three month period.
For the current three month period , net income of $12,954 or ($.00) cents per
share was incurred compared with a net loss of $43,054 or ($.00) cents per share
an increase of $56,008.
Major Customers
In the first three months of 1997, IBM accounted for 29% of total revenues.
In the first six months of 1996, IBM accounted for 17.9%.
Liquidity and Capital Resources
At April 30, 1997, the Company had a negative working capital position of
($368,796); 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
<PAGE>
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 maintenance subject against royalties. As of
November 1996, the contract with IBM was extend for two more years and IBM is
paying Multi Soft monthly maintenance and 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 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 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.
<PAGE>
Effect of Inflation
Management believes that inflation has not had a material effect on its
operations for the periods presented.
Cautionary Statement
This Form 10-KSB contains certain forward-looking statements regarding,
among other things, the anticipated financial and operating results of the
company. For this purpose, forward-looking statements are any statements
contained herein that are not statements of historical fact and include, but are
not limited to, those preceded by or that include the words, "believes,"
"expects," "anticipated," or similar expressions. In connection with the safe
harbor provisions of the Private Securities Litigation Reform act of 1995, the
Company is including this cautionary statement identifying important factors
that could cause the company's actual results to differ materially from those
projected in forward looking statements made by, or on behalf of, the company.
These factors, many of which are beyond the control of the company and include
the Company's ability to, (I) continue as a going concern, (ii) continue to
receive royalties from its existing licensing and consulting arrangements(iii)
develop additional marketable software and technology, (iv) compete with larger,
better capitalized competitors, and reverse ongoing liquidity and cash flow
problems.
<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: JUNE 27, 1996
By:
------------------------------------------
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> APR-30-1997
<CASH> (1,431)
<SECURITIES> 0
<RECEIVABLES> 148,643
<ALLOWANCES> 6,854
<INVENTORY> 0
<CURRENT-ASSETS> 157,890
<PP&E> 25,771
<DEPRECIATION> 10,012
<TOTAL-ASSETS> 1,278,786
<CURRENT-LIABILITIES> 526,686
<BONDS> 0
0
0
<COMMON> 11,780
<OTHER-SE> 165,495
<TOTAL-LIABILITY-AND-EQUITY> 1,278,786
<SALES> 30,369
<TOTAL-REVENUES> 258,819
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (654)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (654)
<INCOME-PRETAX> 12,954
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,954
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,954
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
