<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission File Number 0-20216
MOMENTUM SOFTWARE CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-2618553
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
401 South Van Brunt Street
Englewood, New Jersey 07631
(Address of principal executive office including zip code)
201-871-0077
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
As of March 31, 1996 there were issued and outstanding 4,149,698 shares of the
Registrant's Common Stock.
<PAGE>
MOMENTUM SOFTWARE CORPORATION
INDEX - FORM 10 - Q
MARCH 31, 1996
PAGE
PART I - Financial Information
Item 1 - Financial Statements.
Balance Sheet - March 31, 1996 (unaudited)
and December 31, 1995 .................................. 3
Statement of Operations (unaudited) for the
Three Months ended March 31, 1996 and 1995 ............ 4
Statement of Cash Flows (unaudited) for the Three
Months ended March 31, 1996 and March 31, 1995 ........ 5
Notes to Financial Statements ........................... 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations ........... 7
PART II - Other Information
Item 6 - Exhibits and Reports on Form 8-K .................. 9
SIGNATURES ................................................. 10
2
<PAGE>
Item 1 - Financial Statements
MOMENTUM SOFTWARE CORPORATION
BALANCE SHEET
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
1996 1995
------------------ ------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 511 $ 904
------------------ ------------------
$ 511 $ 904
================== ==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Due to shareholders $ 514,266 $ 506,874
Accrued professional fees 152,506 150,506
Other accrued expenses 12,208 11,708
Due to affiliate 152,086 145,674
------------------ ------------------
Total current liabilities 831,066 814,762
------------------ ------------------
Stockholders' deficit:
Common stock, $.001 par value; 6,000,000
shares authorized; 4,149,698 shares
issued and outstanding at March 31, 1996
and December 31, 1995 4,150 4,150
Additional paid-in-capital 101,514 101,514
Accumulated deficit (936,219) (919,522)
------------------ ------------------
Total stockholders' deficit (830,555) (813,858)
------------------ ------------------
$ 511 $ 904
================== ==================
</TABLE>
Note: See accompanying Notes to Financial Statements.
3
<PAGE>
MOMENTUM SOFTWARE CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
--------------- ----------------
<S> <C> <C>
General and administrative expenses $ 6,393 $ 6,310
--------------- ----------------
Loss from operations (6,393) (6,310)
Interest expense (10,304) (9,361)
Net loss $ (16,697) $ (15,671)
=============== ================
Net loss per share -- --
Weighted average shares outstanding 4,149,698 4,099,698
</TABLE>
Note: See accompanying Notes to Financial Statements.
4
<PAGE>
MOMENTUM SOFTWARE CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
---------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss $(16,697) $(15,671)
Adjustments to reconcile net loss to net
cash provided by (used for) operating
activities:
Increase (decrease) in cash flows due to changes in:
Interest payable to shareholders 7,392 7,000
Accrued professional fees 2,000 500
Other accrued expenses 500 500
Payable to affiliate 6,412 8,361
-------- --------
Net cash provided by (used for)
operating activities (393) 690
Cash at beginning of period 904 1,451
-------- --------
Cash at end of period $ 511 $ 2,141
======== ========
</TABLE>
Note: See accompanying Notes to Financial Statements.
5
<PAGE>
MOMENTUM SOFTWARE CORPORATION
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996
The balance sheet as of March 31, 1996 and the statements of operations and cash
flows for all periods presented herein have been prepared by the Company without
audit. In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial position as of
March 31, 1996 and the results of operations and cash flows for all periods
presented, have been made. Results of the interim periods are not necessarily
indicative of the results for an entire year.
These financial statements should be read in conjunction with the Financial
Statements and Notes thereto for the year ended December 31, 1995 contained in
the Company's Form 10-K, which was filed with the Securities and Exchange
Commission on April 12, 1996.
Due to Affiliate
At March 31, 1996 and December 31, 1995, the Company has recorded $152,086 and
$145,674, respectively, due to its affiliate, Momentum Software Corporation, a
Delaware corporation ("MSC"). These unsecured balances began earning interest at
8%, compounded quarterly January 1, 1994. No arrangements have been made to date
as to the settlement of this balance.
Loss per Share
Loss per share is determined by dividing the net loss for the period by the
weighted average number of shares of common stock outstanding. There were no
changes in the number of shares of common stock outstanding during the three
months ended March 31, 1996 and 1995, respectively, and therefore the weighted
average number of shares outstanding for each of these two periods is 4,149,698
and 4,099,698, respectively.
6
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
LIQUIDITY AND CAPITAL RESOURCES:
As of March 31, 1996, the Company had a working capital deficit of
$830,555, as compared to a working capital deficit of $813,858 as of December
31, 1995. The decrease in the Company's working capital is attributable to the
lack of revenues generated to date, as described below. As of the date hereof,
the only operations engaged in by the Company are those operations being
conducted by its affiliate, Momentum Software Corporation, a Delaware
corporation ("MSC"). Apart from revenues generated by MSC and the ability of the
Company to receive such revenues, the Company has no independent source of
revenue. The Company will require additional financing in the short term to
sustain any operations, apart from the operations of MSC. In addition, and
depending upon whether the Company is then engaged in any operations, apart from
MSC, the Company will require additional financing to sustain its operations in
the long term. No assurance can be given that the Company will be able to
procure such financing, or if available, that such financing would be on terms
deemed favorable by the Company. In the event the Company is unable to obtain
such financing, the Company will be unable to conduct any operating activities,
apart from MSC.
As of March 31, 1996 the Company owed its Directors, Ely Eshel, Sol
Menche and Daniel Schwartz an aggregate of $514,266. The payment of principal
and accrued interest to such persons is to be made upon demand by such
individuals. The Company is not currently in a position to be able to pay
such persons the amounts owed and does not anticipate making payments to them
with respect to such obligation in the short term.
The Company is not currently in default with respect to any outstanding
loan obligations.
The Company's operations have not been significantly affected by
inflation to date, and the Company does not anticipate inflation to
significantly affect its results of operations in the near term.
7
<PAGE>
RESULTS OF OPERATIONS:
Three Months Ended March 31, 1996, as compared to Three Months Ended March 31,
1995
Commencing in June 1990, all the Company's operations were conducted
through its affiliate, MSC. Exclusive of the results of operations of MSC, the
Company did not generate any revenues for both the three months ended March 31,
1996, and for the three months ended March 31, 1995. The Company incurred total
costs and expenses of $6,393 and $6,310, for the three months ended March 31,
1996 and March 31, 1995, respectively, and interest expenses of $10,304 and
$9,361, for such periods, respectively. Accordingly, the Company incurred a net
loss of $16,697 for the three months ended March 31, 1996, as compared to a net
loss of $15,671 for the three months ended March 31, 1995.
8
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27 Financial Data Schedule.
(b) No reports on Form 8-K were filed by the Registrant for
the quarter ended March 31, 1996.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Momentum Software Corporation
By: /s/ Ely Eshel
Ely Eshel, President and Chief
Executive Officer
Dated: May 13, 1996
By: /s/ Daniel Schwartz
Daniel Schwartz, Secretary,
Treasurer and Principal
Financial Officer
Dated: May 13, 1996
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 511
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 511
<CURRENT-LIABILITIES> 831,066
<BONDS> 0
0
0
<COMMON> 4,150
<OTHER-SE> (834,705)
<TOTAL-LIABILITY-AND-EQUITY> 511
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 6,393
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,304
<INCOME-PRETAX> (16,697)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,697)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
