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, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-15976
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MULTI SOFT, INC
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(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2588030
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4262 US Route 1, Monmouth Junction, New Jersey 08852
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(Address of principal executive offices)
Issuer's telephone number, including area code: (732) 329-9200
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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
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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, 1998
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Common Stock, par value 11,780,306
$.001 per share
<PAGE>
PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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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, 1998.
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, 1998.
The results for the three months ended April 30, 1998 are not necessarily
indicative of the results for the entire fiscal year.
Multi Soft, Inc. is a 55.4% owned subsidiary of Multi Solutions, Inc.
<PAGE>
MULTI SOFT, INC.
a 55.40% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
30-Apr 31-Jan
1998 1998
Unaudited
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ASSETS
CURRENT ASSETS
Cash $ -- $ 29,093
Accounts Receivable (net of allowance
of $29,086 and $29,086 respectively) 130,586 57,025
Prepaid expenses and other current assets 37,799 20,799
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168,384 106,917
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,869 8,869
Office furniture and other equipment 13,824 13,824
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22,693 22,693
Less: Accumulated Depreciation (9,631) (8,688)
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13,061 14,005
OTHER ASSETS
Capitalized software development costs 1,272,240 1,568,794
Less accumulated amortization (616,276) (939,942)
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655,964 628,852
Due from Solutions 422,439 422,239
Due from NetCast 174,751 155,251
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$ 1,434,600 $ 1,327,264
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<PAGE>
MULTI SOFT, INC.
a 55.40% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
30-Apr 31-Jan
1998 1998
Unaudited
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LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ 13,610 $ 16,338
Note Payable 9,549 11,339
Accrued payroll 71,434 20,080
Payroll and other taxes payable 17,803 32,755
Accounts Payable, Accrued expenses and
other Current Liabilities 73,746 58,291
Accrued officer compensation 203,056 153,057
Deferred Revenues 153,464 191,820
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542,662 483,680
Deferred compensation due officer /shareholders 586,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
11,780,306 April 30 (1998) and 11,780,306 January 31 (1998) 11,780 11,780
Additional paid-in capital, net of deferred
compensation $3,937 April 30(1998) and $5,941 January 31 (1998) 5,933,879 5,931,876
Accumulated deficit (5,640,326) (5,686,677)
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305,333 256,979
$ 1,434,600 $ 1,327,264
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</TABLE>
<PAGE>
MULTI -SOFT, INC.
STATEMENTS OF CASH FLOWS
Quarters ended April 30, 1998 and 1997
<TABLE>
<CAPTION>
Three Months Ended
April 30
1998 1997
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Cash flows from operating activities
<S> <C> <C>
Net Income $ 46,351 $ 12,954
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 47,098 65,539
Changes in assets and liabilities
Due to / from Multi Solutions (200) --
Due to/ from NetCast (19,500) (24,762)
Accounts receivable (73,561) (124,828)
Prepaid expenses and other current assets (17,000) (4,000)
Accrued payroll 51,354 27,891
Note Payable (1,790) --
Payroll and other taxes payable (14,952) (8,726)
Accounts payable and accrued expenses 15,455 6,924
Accrued officer compensation 49,999 33,336
Deferred revenues (38,356) 64,118
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Net cash provided by operating activities 44,899 48,446
Cash flows from investing activities
Capitalized software development costs (73,267) (55,173)
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Net cash used in investing activities (73,267) (55,173)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (2,728) (3,845)
Amortization of Stock Grants 2,003 1,991
Payment of loan Payable -- (1,998)
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Net cash used by financing activities (725) (3,852)
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NET (DECREASE) IN CASH (29,093) (10,579)
Cash at beginning of year 29,093 9,148
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Cash at end of year $ (0) $ (1,431)
======== =========
</TABLE>
<PAGE>
MULTI SOFT, INC
a 55.40% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
April 30
1998 1997
REVENUES
<S> <C> <C>
License fees $ 77,112 $ 30,369
Maintenance fees 152,264 203,660
Consulting and Other fees -- 24,790
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Total revenues 229,376 258,819
EXPENSES
Software development and technical support 46,155 64,646
Selling and administrative 155,807 180,565
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Total expenses 201,962 245,211
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Income from operations 27,414 13,608
OTHER INCOME (EXPENSE)
Other Revenue 19,557 --
Interest Expense 620 654
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Total other income 18,937 654
Net Income 46,351 12,954
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Weighted average shares outstanding 11,780,306 11,592,343
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Income per share a a
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</TABLE>
(a) less then $.01 per share
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------
RESULTS OF OPERATIONS
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Results of Operations
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Three months ended April 30, 1998 compared to three months ended April 30, 1997
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Revenues for the current three months of fiscal year 1998 decreased $29,443 or
11.4% compared with the comparable period of the prior year. The decrease in
revenues for the three month period is primarily attributable to a decrease in
maintenance revenues and consulting fees of $76,186 or 33.3%. This is
attributable to cancellations of maintenance agreements with customers of Multi
Soft whom have been paying for monthly maintenance and support. The decrease is
partially offset by an increase in license fees in the amount of $46,743 or
154.1%. This increase is primarily attributed to a significant sale that
occurred in the first quarter of the current year.
Operating expenses as a percent of revenues for the three month period was 88%
compared with 94.7%. The decrease in the three month period is a result of a
decrease in Selling and Administrative expenses of $24,758 or 13.7%. This
reduction is primarily a result of an effort by management to reduce certain
expenses such as legal fees, outside marketing, insurance costs and outside
consulting. Also, software development decreased for the current three month
period in the amount of $18,491 or 28.6%. The reduction is attributed to zero
amortization for the capitalized values of fiscal 98 and the current quarter.
Amortization of the capitalized values for fiscal 98 and for the first quarter
of the current year have not been expensed because during that period Multi Soft
has been developing a new product that is not ready for sale. .
Operating income, before other (expense) of $27,414 for the current three month
period increased $13,806 compared with the comparable period of the prior year.
Other Income (expense) for the current three month period was $18,937 as
compared with (654) for the comparable period of the prior year. The increase is
attributable to revenue from consulting, rent and Selling and Administration
fees.
For the current three month period, net income of $46,351 or ($.00) cents per
share was incurred compared with a net income of $12,954 or ($.00) cents per
share an increase of $33,397.
Major Customers
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In the first three months of 1998, IBM accounted for 20% of total revenues.
In the first six months of 1997, IBM accounted for 29%.
Liquidity and Capital Resources
- -------------------------------
At April 30, 1998, the Company had a negative working capital position of
($374,278); and has been experiencing cash flow problems.
<PAGE>
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. During the summer Multi Soft plans to introduce a new product which extends
its present product line into the internet.
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.
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
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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.
Year 2000
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Many companies systems experience problems handling dates beyond the year
1999. The companies products are not directly impacted by this problem.
In particular, year 2000 issues are transparent to WCL. WCL simply transports
data between the 3270/5250 presentation space and the client application. WCL
does no formatting of any data, including dates. This is handled by the client
development tool such as VB,PB and VC++. Therefore, Year 2000 issues must be
addressed by these development tools, not WCL.
In addition, The Company's INFRONT and QuickFRONT product have built in support
for the Year 2000. Any date functions that use 2 positions for the year, the
SETUPSL command can be used to handle the year 2000.
<PAGE>
Effect of Inflation
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Management believes that inflation has not had a material effect on its
operations for the periods presented.
Cautionary Statement
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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
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
<PAGE>
SIGNATURES
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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 2, 1998
By:
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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-31-1999
<PERIOD-END> APR-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 130,586
<ALLOWANCES> 29,086
<INVENTORY> 0
<CURRENT-ASSETS> 168,384
<PP&E> 29,086
<DEPRECIATION> 9,631
<TOTAL-ASSETS> 1,434,600
<CURRENT-LIABILITIES> 542,662
<BONDS> 0
0
0
<COMMON> 11,780
<OTHER-SE> 305,333
<TOTAL-LIABILITY-AND-EQUITY> 1,434,600
<SALES> 77,112
<TOTAL-REVENUES> 229,376
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 620
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 620
<INCOME-PRETAX> 46,351
<INCOME-TAX> 0
<INCOME-CONTINUING> 46,351
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,351
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
