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, 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
---------
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 April 30, 1999
- ----------------------- -----------------------------
Common Stock, par value 13,509,473
$.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, 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 for the three months ended April 30, 1999 are not necessarily
indicative of the results for the entire fiscal year.
Multi Soft, Inc. is a 52% owned subsidiary of Multi Solutions, Inc.
<PAGE>
MULTI SOFT, INC.
52% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS APRIL 30, 1999 and JANUARY 31, 1999
1999 1999
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 19,991 $ 18,134
Accounts Receivable (net of allowance
of $43,783 and $43,783 respectively) 123,045 130,656
Prepaid expenses and other current assets 9,676 13,385
----------- -----------
152,712 162,175
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,869 8,868
Office furniture and other equipment 13,824 13,824
----------- -----------
22,693 22,692
Less: Accumulated Depreciation (13,051) (12,250)
----------- -----------
9,642 10,442
OTHER ASSETS
Capitalized software development costs 1,196,795 1,460,178
Less accumulated amortization (542,399) (809,915)
----------- -----------
654,396 650,263
Due from Solutions 448,039 448,039
Due from NetCast 234,592 234,592
----------- -----------
$ 1,499,381 $ 1,505,511
=========== ===========
<PAGE>
MULTI SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
APRIL 30, 1999 and JANUARY 31, 1999
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' 1999 1999
DEFICIENCY ----------- -----------
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ -- $ 796
Note Payable 6,565 6,565
Accrued payroll 19,265 --
Payroll and other taxes payable 28,096 19,480
Accounts Payable, Accrued expenses and
other Current Liabilities 71,733 86,720
Accrued officer compensation 186,390 153,057
Deferred Revenues 160,327 187,648
----------- -----------
472,376 454,266
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 $34,636 (1999) and $41,365 (1999) 5,992,785 5,986,056
Accumulated deficit (5,565,894) (5,534,926)
----------- -----------
440,400 464,639
$ 1,499,381 $ 1,505,511
=========== ===========
</TABLE>
<PAGE>
MULTI SOFT, INC
52% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
APRIL 30, 1999 and APRIL 30, 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
REVENUES
<S> <C> <C>
License fees $ 59,724 $ 77,112
Maintenance fees 113,537 152,264
Consulting and Other fees 15,518 --
------------ ------------
Total revenues 188,779 229,376
EXPENSES
Software development and technical support 57,192 46,155
Selling and administrative 162,555 155,807
------------ ------------
Total expenses 219,747 201,962
------------ ------------
Income (Loss) from operations (30,968) 27,414
OTHER INCOME (EXPENSE)
Other Revenues -- 19,557
Interest Expense -- (620)
------------ ------------
Total other income -- 18,937
Net Income (Loss) $ (30,968) $ 46,351
============ ============
Weighted average shares outstanding 13,509,473 11,780,306
============ ============
Income per share $ -- $ --
============ ============
</TABLE>
<PAGE>
MULTI SOFT, INC.
52 % owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
APRIL 30 , 1999 and APRIL 30, 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
Cash flows from operating activities
<S> <C> <C>
Net Income $ (30,968) $ 46,351
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 57,595 47,098
Changes in assets and liabilities
Due to / from Multi Solutions -- (200)
Due to/ from NetCast -- (19,500)
Accounts receivable 7,611 (73,561)
Prepaid expenses and other current assets 3,709 (17,000)
Accrued payroll 19,265 51,355
Note Payable -- (1,790)
Payroll and other taxes payable 8,616 (14,952)
Accounts payable and accrued expenses (14,987) 15,455
Accrued officer compensation 33,333 49,999
Deferred revenues (27,321) (38,356)
----------- -----------
Net cash provided by operating activities 56,853 44,899
Cash flows from investing activities
Capitalized software development costs (60,928) (73,267)
----------- -----------
Net cash used in investing activities (60,928) (73,267)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (796) (2,728)
Amortization of Stock Grants 6,729 2,003
----------- -----------
Net cash provided (used) by financing activities 5,933 (725)
----------- -----------
NET INCREASE (DECREASE) IN CASH 1,858 (29,093)
Cash at beginning of year 18,133 29,093
----------- -----------
Cash at end of period $ 19,991 $ --
=========== ===========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
----------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Results of Operations
- ---------------------
Three months ended April 30, 1999 compared to three months ended April 30, 1998
- -------------------------------------------------------------------------------
Revenues for the current three months of fiscal year 1999 decreased $40,597 or
17.7% 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
License and Maintenance fees of $56,115 or 24.5%. 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 Consulting and Other Fees.
Operating expenses as a percent of revenues for the three month period was
116.4% compared with 88.0% for the comparable period of the prior year. The
higher level of expenses in the current three month period, in addition to the
lower level of revenues for the current three month period accounts for the
percentage increase .The increase is a result of greater Selling and
Administrative Expenses in the amount of $6,748 or 4.3% compared to the
compareable period of the prior year. Also, software development increased for
the current three month period in the amount of $11,037 or 24%. The increase is
attributed to amortizing capitalized costs in the current year that were not
amortized in the prior year.
Operating loss, before other expense of $(30,968) for the current three month
period increased $(58,382) compared with the comparable period of the prior
year.
Other Income (expense) for the current three month period was $0 as compared
with $18,937 for the comparable period of the prior year. The decrease is
attributable to revenue from consulting, rent and Selling and Administration
fees that were accrued in the prior year but not in the current year.
For the current three month period , net loss of $(30,968) or ($.00)cents per
share was incurred compared with a net income of $46,351 or ($.00) cents per
share a decrease of $77,319.
Major Customers
- ---------------
In the first three months of 1998, IBM accounted for 11% of total revenues.
In the first six months of 1997, IBM accounted for 20%.
Liquidity and Capital Resources
- -------------------------------
At April 30, 1999, the Company had a negative working capital position of
($319,664); 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. 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
- ---------------
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
- ---------
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
- -------------------
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 22, 1999
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-31-1999
<PERIOD-END> APR-30-1999
<CASH> 19,991
<SECURITIES> 0
<RECEIVABLES> 166,828
<ALLOWANCES> (43,783)
<INVENTORY> 0
<CURRENT-ASSETS> 152,712
<PP&E> 22,693
<DEPRECIATION> 13,051
<TOTAL-ASSETS> 1,499,381
<CURRENT-LIABILITIES> 472,376
<BONDS> 0
<COMMON> 13,509
0
0
<OTHER-SE> 440,400
<TOTAL-LIABILITY-AND-EQUITY> 1,499,381
<SALES> 59,724
<TOTAL-REVENUES> 188,779
<CGS> 0
<TOTAL-COSTS> 57,192
<OTHER-EXPENSES> 162,555
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (30,968)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30,968)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,968)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
