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, 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
- ------------------------------- ----------------
(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 [ ]
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, 1999
- ----------------------- -------------------------------
Common Stock, par value 13,509,473
$.001 per share
<PAGE>
PART I. FINANCIAL INFORMATION
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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, 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 nine and three months ended October 31, 1999
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
---------------------
Results of Operations
- ---------------------
Nine months ended October 31, 1999 compared to Nine months ended October 31,
- --------------------------------------------------------------------------------
1998 and three months ended October, 1999 compared to three months ended
- --------------------------------------------------------------------------------
October, 31 1998
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Revenues for the current nine months of fiscal year 1999 decreased $98,393 or
15% compared with the comparable period of the prior year. Revenues for the
three month period ending October 31, 1999 decreased $63,187 or 25% compared
with the comparable period of the prior year. The overall decrease in revenues
for the current nine month period is attributable to a decrease in maintenance
and sales revenue during the current nine month period. This was partially
offset by an increase in Consulting and Other Fees.
Operating expenses for the current nine month period increased $4,797 or (1.0%)
compared with the comparable period of the prior year. Operating expense for the
three month period ending October 31, 1999 increased $13,689 or 7% compared with
the prior year. The increase in the nine month and three month period was due to
the Software Development that Multi Soft is amortizing that was not being
amortized in the prior period. The decrease in Selling and Administration
expense is 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.
Operating Loss, before other (expense) of $70,744 for the current nine month
period increased $103,190 compared with the comparable period of the prior year.
Operating Loss, before other income (expense) $15,334 for the current three
month increased $76,876 compared with comparable period of the prior year. The
reason for this increase in the nine month period operating loss is
cancellations in maintenance coupled with a decrease in sales for the current
nine month period.
Other Income (expense) for the current nine month period was $96,739 as compared
with $74,489 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 nine month period , net income of $25,965 or ($.00) cents per
share was incurred compared with a net income of $106,244 or ($.00) cents per
share an decrease of $80,279. For the current three month period, a
<PAGE>
net income of $20,813 or .00 cents per share was incurred compared with income
of $92,021 in the comparable period for the prior year, an decrease of $71,208.
Major Customers
- ---------------
In the first nine months of 1999, IBM accounted for 16.24% of total
revenues. In the first nine months of 1998, IBM accounted for 19.75%.
Liquidity and Capital Resources
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At October 31, 1999, the Company had a negative working capital position of
($256,068); 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 many 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 NT
environment and has made its Windows based products easier to learn and use.
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 WCL. 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. This IBM agreement is effective
for a term of two years and is renewable by IBM for two more one year periods.
The Agreement is terminable by the Company or IBM upon 90 days notice in the
event of a default by the other party. As of November 1996, the contract with
IBM was extended for two more years and IBM is paying the Company monthly
maintenance and royalties. As of the date of 1/31/99 the contract with IBM was
extended for one year and IBM is paying Multi Soft monthly maintenance. As of
this date, the Company can make no assurances that the aforementioned
maintenance agreement will be extended beyond the present term of 1/31/2000.
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.
<PAGE>
Effect of Inflation
- -------------------
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.
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
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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: December 10, 1999
By:______________________________
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<PAGE>
MULTI SOFT, INC.
52% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
October 31, 1999 and JANUARY 31, 1999
31-Oct 31-Jan
1999 1999
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ASSETS
CURRENT ASSETS
Cash $ 20,577 $ 18,134
Accounts Receivable (net of allowance
of $43,783 and $43,783 respectively) 218,708 130,656
Prepaid expenses and other current assets 9,675 13,385
----------- -----------
248,960 162,175
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,869 8,868
Office furniture and other equipment 13,824 13,824
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22,692 22,692
Less: Accumulated Depreciation (14,524) (12,250)
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8,168 10,442
OTHER ASSETS
Capitalized software development costs 1,318,651 1,460,178
Less accumulated amortization (655,986) (809,915)
----------- -----------
662,665 650,263
Due from Solutions 448,039 448,039
Due from NetCast 234,593 234,592
----------- -----------
$ 1,602,425 $ 1,505,511
=========== ===========
<PAGE>
MULTI SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
October 31 , 1999 and JANUARY 31, 1999
<TABLE>
<CAPTION>
31-Oct 31-Jan
LIABILITIES AND STOCKHOLDERS' 1999 1999
----------- -----------
DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ -- $ 796
Note Payable 6,565 6,565
Accrued payroll 18,359 --
Payroll and other taxes payable 12,292 19,480
Accounts Payable, Accrued expenses and
other Current Liabilities 57,568 86,720
Accrued officer compensation 241,390 153,057
Deferred Revenues 168,853 187,648
----------- -----------
505,028 454,266
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) 6,006,243 5,986,056
Accumulated deficit (5,508,960) (5,534,926)
----------- -----------
510,792 464,639
$ 1,602,425 $ 1,505,511
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC
52% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
October 31, 1999 and October 1998
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
31-Oct 31-Oct
1999 1998 1999 1998
------------ ------------ ------------ ------------
REVENUES
<S> <C> <C> <C> <C>
License fees $ 94,284 $ 213,866 $ 18,185 $ 120,226
Maintenance fees 357,901 425,230 126,292 130,652
Consulting and Other fees 94,614 6,096 44,310 1,096
------------ ------------ ------------ ------------
Total revenues 546,799 645,192 188,787 251,974
EXPENSES
Software development and technical support 171,178 147,661 56,793 55,351
Selling and administrative 446,395 465,115 147,328 135,081
------------ ------------ ------------ ------------
Total expenses 617,573 612,776 204,121 190,432
------------ ------------ ------------ ------------
Income (Loss) from operations (70,774) 32,416 (15,334) 61,542
OTHER INCOME (EXPENSE)
Other Revenues 96,739 74,849 36,147 30,612
Interest Expense (1,021) (133)
------------ ------------ ------------ ------------
Total other income 96,739 73,828 36,147 30,479
Net Income (Loss) $ 25,965 $ 106,244 $ 20,813 $ 92,021
============ ============ ============ ============
Weighted average shares outstanding 13,509,473 12,020,106 16,509,473 12,112,206
============ ============ ============ ============
Income (Loss) per share $ 0.00 $ 0.01 $ 0.00 $ 0.01
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
October 31 , 1999 and October 31, 1998
<TABLE>
<CAPTION>
31-Oct 31-Oct
1999 1998
--------- ---------
Cash flows from operating activities
<S> <C> <C>
Net Income $ 25,965 $ 106,244
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 172,656 150,471
Changes in assets and liabilities
Due to / from Multi Solutions -- (59,842)
Due to/ from NetCast -- (800)
Accounts receivable (88,052) (51,051)
Prepaid expenses and other current assets 3,710 (36,200)
Accrued payroll 18,359 51,499
Note Payable -- (11,172)
Payroll and other taxes payable (7,188) 6,646
Accounts payable and accrued expenses (29,152) (4,774)
Accrued officer compensation 88,333 87,498
Deferred revenues (18,795) (65,987)
--------- ---------
Net cash provided by operating activities 165,836 172,532
Cash flows from investing activities
Capitalized software development costs (182,784) (197,637)
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Net cash used in investing activities (182,784) (197,637)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (796) (11,164)
Stock issued 304
Amortization of Stock Grants 20,187 8,889
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Net cash provided (used) by financing activities 19,391 (1,971)
--------- ---------
NET INCREASE (DECREASE) IN CASH 2,443 (27,076)
Cash at beginning of year 18,134 29,093
--------- ---------
Cash at end of period $ 20,577 $ 2,017
========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> OCT-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 262,491
<ALLOWANCES> 43,783
<INVENTORY> 0
<CURRENT-ASSETS> 248,960
<PP&E> 22,692
<DEPRECIATION> 14,524
<TOTAL-ASSETS> 1,602,425
<CURRENT-LIABILITIES> 505,028
<BONDS> 0
<COMMON> 13,509
0
0
<OTHER-SE> 510,792
<TOTAL-LIABILITY-AND-EQUITY> 1,602,425
<SALES> 94,284
<TOTAL-REVENUES> 546,799
<CGS> 171,178
<TOTAL-COSTS> 617,573
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,965
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,965
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,965
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
