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, 1999
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
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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: (908) 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 [ ]
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, 1999
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Common Stock, par value 13,509,473
$.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 six and three months ended July 31, 1999.
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, 1999.
The results reflected for the six and three months ended July 31, 1999 are
not necessarily indicative of the results for the entire fiscal year.
<PAGE>
MULTI SOFT, INC.
52% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
JULY 31, 1999 and JANUARY 31, 1999
31-Jul 31-Jan
1999 1999
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ASSETS
CURRENT ASSETS
Cash $ -- $ 18,134
Accounts Receivable (net of allowance
of $43,783 and $43,783 respectively) 206,835 130,656
Prepaid expenses and other current assets 9,675 13,385
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216,510 162,175
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,868 8,868
Office furniture and other equipment 13,824 13,824
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22,692 22,692
Less: Accumulated Depreciation (13,787) (12,250)
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8,905 10,442
OTHER ASSETS
Capitalized software development costs 1,257,723 1,460,178
Less accumulated amortization (599,192) (809,915)
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658,531 650,263
Due from Solutions 443,294 448,039
Due from NetCast 234,592 234,592
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$ 1,561,832 $ 1,505,511
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<PAGE>
MULTI SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
JULY 31, 1999 and JANUARY 31, 1999
<TABLE>
<CAPTION>
31-Jul 31-Jan
LIABILITIES AND STOCKHOLDERS' 1999 1999
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DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ 796
Note Payable 6,565 6,565
Accrued payroll 23,284 --
Payroll and other taxes payable 18,785 19,480
Accounts Payable, Accrued expenses and
other Current Liabilities 56,116 86,720
Accrued officer compensation 191,390 153,057
Deferred Revenues 195,835 187,648
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491,975 454,266
Deferred compensation due officer /shareholders 586,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
13,509,473 (1999) and 13,509,473 (1999) 13,509 13,509
Additional paid-in capital, net of deferred
compensation $27,907 (1999) and $41,365(1999) 5,999,514 5,986,056
Accumulated deficit (5,529,772) (5,534,926)
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483,251 464,639
$ 1,561,832 $ 1,505,511
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</TABLE>
<PAGE>
MULTI SOFT, INC
52% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
JULY 31, 1999 and JULY, 1998
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
31-Jul 31-Jul
1999 1998 1999 1998
------------ ------------ ------------ ------------
REVENUES
<S> <C> <C> <C> <C>
License fees $ 76,099 $ 93,639 $ 16,375 $ 16,257
Maintenance fees 231,609 294,578 118,072 142,314
Consulting and Other fees 50,304 5,000 34,786 5,000
------------ ------------ ------------ ------------
Total revenues 358,012 393,217 169,233 163,841
EXPENSES
Software development and technical support 114,385 92,310 57,193 46,155
Selling and administrative 299,067 330,034 136,512 174,227
------------ ------------ ------------ ------------
Total expenses 413,452 422,344 193,705 220,382
------------ ------------ ------------ ------------
Income (Loss) from operations (55,440) (29,127) (24,472) (56,541)
OTHER INCOME (EXPENSE)
Other Revenues 60,592 44,237 60,592 24,680
Interest Expense -- (889) -- (269)
------------ ------------ ------------ ------------
Total other income
60,592 43,348 60,592 24,411
Net Income (Loss) $ 5,152 $ 14,221 $ 36,120 $ (32,130)
============ ============ ============ ============
Weighted average shares outstanding 13,509,473 11,974,056 13,509,473 12,167,806
============ ============ ============ ============
Income (Loss) per share $ -- $ -- $ -- $ --
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
JULY 31, 1999 and JULY 31, 1998
<TABLE>
<CAPTION>
31-Jul 31-Jul
1999 1998
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Cash flows from operating activities
<S> <C> <C>
Net Income $ 5,152 $ 46,351
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 115,127 47,098
Changes in assets and liabilities
Due to / from Multi Solutions 4,745 (200)
Due to/ from NetCast -- (19,500)
Accounts receivable (76,179) (73,561)
Prepaid expenses and other current assets 3,710 (17,000)
Accrued payroll 23,284 51,355
Note Payable -- (1,790)
Payroll and other taxes payable (695) (14,952)
Accounts payable and accrued expenses (30,604) 15,455
Accrued officer compensation 38,333 49,999
Deferred revenues 8,187 (38,356)
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Net cash provided by operating activities 91,060 44,899
Cash flows from investing activities
Capitalized software development costs (121,856) (73,267)
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Net cash used in investing activities (121,856) (73,267)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (796) (2,728)
Amortization of Stock Grants 13,458 2,003
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Net cash provided (used) by financing activities 12,662 (725)
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NET INCREASE (DECREASE) IN CASH (18,134) (29,093)
Cash at beginning of year 18,134 29,093
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Cash at end of period $ (0) $ --
=========== ===========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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Results of Operations
- ---------------------
Six months ended July 31, 1999 compared to six months ended July 31, 1998 and
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three months ended July 31, 1999 compared to three months ended July, 31 1998
- -----------------------------------------------------------------------------
Revenues for the current six months of fiscal year 1999 decreased $35,205
or 9.8% compared with the comparable period of the prior year. Revenues for the
three month period ending July 31, 1999 increased $5,392 or 3.2% compared with
the comparable period of the prior year. The overall decrease in revenues for
the current six month period is attributable a decrease in maintenance revenue
during the current six month period.
Operating expenses for the current six month period decreased $8,892 or
(2.2%) compared with the comparable period of the prior year. Operating expense
for the three month period ending July 31, 1999 decreased $26,677 or 13.8%
compared with the prior year. The decrease in the six month and three month
period was due to the reduction of certain expenses such as legal fees, outside
marketing and a reduction in staff from the prior period to the current period.
The decrease in operating expense is offset by an increase in six and three
month software development by $22,075 and $11,038 respectively. The reason for
this increase in Software Development is that Multi Soft is amortizing capital
development that was not being amortized in the prior period.
Operating Loss, before other (expense) of $55,440 for the current six month
period increased $26,313 compared with the comparable period of the prior year.
Operating Loss, before other income (expense) $24,472 for the current three
month decreased $32,069 compared with comparable period of the prior year. The
reason for this increase in the six month period operating loss is cancellations
in maintenance coupled with a decrease in sales for the current six month
period.
Other (expense) for the current six month period was 60,592 as compared
with 43,348 for the comparable period of the prior year. The increase is
attributable to services rendered from Multi Soft to a new Subsidiary of Multi
Solutions.
For the current six month period , net income of $5,152 or ($.00) cents per
share was incurred compared with a net income of $14,221 or ($.00) cents per
share an decrease of $9,069. For the current three month period, a net income of
$36,120 or .00 cents per share was incurred compared with a loss of $32,130 in
the comparable period for the prior year an increase of $68,250. As previously
stated, the reason for the increase in income over the current three month
period is due to services render to the new subsidiary and a curtailment of
expenses.
Major Customers
- ---------------
In the first six months of 1999, IBM accounted for 17.25% of total
revenues. In the first six months of 1996, IBM accounted for 24.3%.
<PAGE>
Liquidity and Capital Resources
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At July 31, 1999, the Company had a negative working capital position of
($275,465); and has been experiencing cash flow problems.
Management of Multi Soft 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.
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
- ---------------
Multi Soft 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
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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.
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: September 15, 1999
By:______________________________
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-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 250,618
<ALLOWANCES> 43,783
<INVENTORY> 0
<CURRENT-ASSETS> 216,510
<PP&E> 22,692
<DEPRECIATION> 13,787
<TOTAL-ASSETS> 1,561,832
<CURRENT-LIABILITIES> 491,975
<BONDS> 0
<COMMON> 13,509
0
0
<OTHER-SE> 483,251
<TOTAL-LIABILITY-AND-EQUITY> 1,561,832
<SALES> 76,099
<TOTAL-REVENUES> 358,012
<CGS> 114,385
<TOTAL-COSTS> 413,452
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,152
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,152
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,152
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
