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, 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: (732) 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 October 31, 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 nine and three months ended October 31, 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 reflected for the nine and three months ended October 31, 1997
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
MULTI SOFT, INC.
a 55.4% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
October 31, January 31,
1997 1997
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 47,293 $ 9,148
Accounts receivable (net of allowance
of $26,854 and $6,854 respectively) 83,877 16,961
Prepaid expenses and other current assets 38,486 13,532
----------- -----------
169,656 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 (11,801) (9,119)
----------- -----------
13,970 16,652
OTHER ASSETS
Capitalized software development costs 1,929,207 1,722,303
Less accumulated amortization (1,332,266) (1,110,741)
----------- -----------
596,941 611,562
Due from Multi Solutions, Inc. 421,252 422,951
Due from NetCast, Inc. 130,299 55,335
$ 1,332,118 $ 1,146,141
=========== ===========
<PAGE>
MULTI SOFT, INC.
a 55.4% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, January 31,
1997 1997
(Unaudited)
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 20,976 $ 25,497
Note Payable 12,026 15,504
Accrued payroll 51,656 --
Payroll and other taxes payable 28,050 38,072
Accounts payable 68,935 58,155
Accrued officer compensation 212,221 103,347
Deferred Revenues 123,624 168,411
----------- -----------
517,488 408,986
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 and 11,780,306 shares, respectivley 11,780 11,780
Additional paid-in capital, net of deferred
compensation 5,929,846 5,923,868
Accumulated deficit (5,713,601) (5,785,098)
----------- -----------
228,025 150,550
1,332,118 1,146,141
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
October 31, October 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
REVENUES
<S> <C> <C> <C> <C>
License fees $ 162,409 $ 328,693 $ 77,495 $ 74,627
Maintenance fees 525,781 487,491 151,448 175,107
Consulting and Other fees 83,629 48,204 33,784 30,446
---------- ---------- ---------- ----------
Total revenues 771,819 864,388 262,727 280,180
EXPENSES
Software development and technical support 221,525 256,866 78,440 85,622
Selling and administrative 476,874 571,058 144,512 192,192
---------- ---------- ---------- ----------
Total expenses 698,399 827,924 222,952 277,814
---------- ---------- ---------- ----------
Income from operations 73,420 36,464 39,775 2,366
OTHER EXPENSE
Interest Expense 1,923 7,119 632 2,313
---------- ---------- ---------- ----------
Total other expense 1,923 7,119 -- 2,313
NET INCOME(LOSS) 71,497 $ 29,345 $ 39,143 $ 53
========== ========== ========== ==========
Weighted average shares outstanding 11,780,306 11,560,000 11,780,306 11,560,000
========== ========== ========== ==========
Income (Loss) per share $ -- $ -- $ -- $ --
========== ========== ========== ==========
</TABLE>
<PAGE>
MULTI -SOFT, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Month Ended
October 31
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net Income $ 71,497 $ 29,345
Adjustments to reconcile net income( loss) to net cash
provided by operating activities
Depreciation and amortization 224,207 258,443
Changes in assets and liabilities
Due from NetCast (74,964)
Due from Multi Solutions 1,699 (11,900)
(Increase) decease in accounts receivable (66,916) 14,706
Decrease in prepaid expenses and other current assets (24,955) (3,500)
Increase (decrease) in accrued payroll 51,656 (30,285)
Decrease in payroll and other taxes payable (10,022) (24,592)
Increase (decrease) in accounts payable and accrued expenses 10,780 (88,806)
Decrease in Note payable (3,478)
(Decrease) increase in accrued officer compensation 108,874 (174,830)
Increase in Deferred Compensation -- 476,589
Decrease in deferred revenues (44,787) (382,566)
Decrease in long term deferred revenues -- (8,022)
--------- ---------
Net cash provided by operating activities 243,591 54,582
Cash flows from investing activities
Capitalized Research and developement -- (6,583)
Capitalized software development costs (206,904) (174,131)
--------- ---------
Net cash used in investing activities (206,904) (180,714)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (4,521) (11,840)
Amortization of Stock Grants 5,979 690
Issued Common Stock -- 60,468
--------- ---------
Net cash provided by financing activities 1,458 49,318
NET INCREASE (DECREASE) IN CASH 38,145 (76,814)
Cash at beginning of period 9,148 88,015
--------- ---------
Cash at end of period 47,293 $ 11,201
========= =========
</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, 1997 compared to nine and three months
ended October 31, 1996
Revenues of $771,819 for the current nine months of fiscal year 1997
decreased $92,569 or 10.7% compared with the comparable period of the prior
year. Revenues of $262,727 for the three month period ending October 31, 1997
decreased $17,453 or 6.2% compared with the comparable period of the prior year.
The decrease in revenues for the current nine month period is attributable to
advance royalty payments from a major customer that occurred in the prior period
and did not reoccur in the current period.
Operating expenses as a percent of revenues for the nine month period was
90.48% compared with 95.78% for the comparable period of the prior year.
Operating expense ending October 31, 1997 as a percent of revenues for the
current three month period was 84.86 % compared with 99.15% for the prior year.
The decrease in the nine and three month period is a result of an effort by
management to reduce as many operating expenses as possible. For example, legal,
accounting and consulting fees have been substantially reduced.
Operating income, before other expense of $73,420 for the current nine
month period increased $36,956 compared with the comparable period of the prior
year. Operating income , before other expense of $39,775 for the current three
month period increased $37,409 compared with comparable period of the prior
year.
Other expense for the current nine month period was $1,923 as compared with
$7,119 for the comparable period of the prior year. The decrease is attributable
to a miscellaneous tax expense that occurred in the prior year and did not
reoccur in the current period.
For the current nine month period , net income of $71,497 was incurred
compared with a net income of $29,345 for the prior period an increase of
$42,152. For the current three month period, a net income of $39,143 was
incurred compared with income of $53 in the comparable period for the prior
year, which results in an increase of $39,090.
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
In the first nine months of 1996, IBM accounted for 29.5 % of total
revenues. In the first nine months of 1997, IBM accounted for %.26.24 of total
revenues.
<PAGE>
Liquidity and Capital Resources
At October 31, 1997, the Company had a negative working capital position of
$347,832; 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 maintenance guarantee of $15,000
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.
In 1997 Multi Soft, Inc. entered into a distribution agreement with
Bellcore to distribute licensed software for use by Bellcore licensees as part
of a Bellcore developed application called FEPS/TIRKS. The agreement provides
for three years of Software Upgrade fees to ensure version compatibility and
three years of maintenance and support.
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.
<PAGE>
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>
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.
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
None
<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 12, 1997
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> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> OCT-31-1997
<CASH> 47,293
<SECURITIES> 0
<RECEIVABLES> 110,731
<ALLOWANCES> 26,854
<INVENTORY> 0
<CURRENT-ASSETS> 169,656
<PP&E> 25,771
<DEPRECIATION> 11,801
<TOTAL-ASSETS> 1,332,118
<CURRENT-LIABILITIES> 517,488
<BONDS> 0
0
0
<COMMON> 11,780
<OTHER-SE> 228,025
<TOTAL-LIABILITY-AND-EQUITY> 1,332,118
<SALES> 162,409
<TOTAL-REVENUES> 771,819
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,923
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,923
<INCOME-PRETAX> 71,497
<INCOME-TAX> 0
<INCOME-CONTINUING> 71,497
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,497
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
