<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-23446
ENLIGHTEN SOFTWARE SOLUTIONS, INC.
(FORMERLY KNOWN AS SOFTWARE PROFESSIONALS, INC.)
(Exact Name as registrant specified in its charter)
CALIFORNIA 94-3008888
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
999 BAKER WAY, FIFTH FLOOR, SAN MATEO, CALIFORNIA 94404
- --------------------------- --------------------- -----
(Address of principal executive offices) (Zip code)
(415) 578-0700
--------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 June 30, 1996:
OUTSTANDING
CLASS JUNE 30, 1996
----- -------------
Common Stock, no par value 2,884,638
This is Page 1 of 16 Pages.
The Index to Exhibits begins on Page 14
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-QSB
QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - 3
As of June 30, 1996 and December 31, 1995
Condensed Consolidated Statements of Operations - 4
Three months ended June 30, 1996 and 1995, and
Six months ended June 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows - 5
Six months ended June 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
- -------------------------------------------------------------------------------------
PART II OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
- -------------------------------------------------------------------------------------
SIGNATURES 13
- -------------------------------------------------------------------------------------
</TABLE>
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 900,655 $2,124,525
Short term investments 2,077,499 1,320,727
Accounts receivable, less allowance for doubtful accounts 516,908 1,100,625
Refundable income taxes 452,656 288,265
Prepaid expenses and other assets 139,625 116,536
---------- ----------
Total current assets 4,087,343 4,950,678
Property and equipment, net 1,226,752 1,268,337
Acquired technology and software development costs, net 932,835 720,667
Deferred income taxes 210,512 210,512
Other assets 186,057 178,577
---------- ----------
$6,643,499 $7,328,771
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings and other debt $ 50,000 $ 129,188
Trade accounts payable 365,529 276,151
Accrued and other current liabilities 37,502 333,176
Deferred revenue 1,397,560 1,539,074
---------- ----------
Total current liabilities 1,850,591 2,277,589
---------- ----------
Shareholders' equity:
Common stock 4,873,972 4,639,954
Retained earnings (deficit) (81,064) 411,228
---------- ----------
Total shareholders' equity 4,792,908 5,051,182
---------- ----------
$6,643,499 $7,328,771
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
Page 3
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ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- ----------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Product license fees $ 167,402 $ 522,173 $ 495,020 $1,373,321
Product maintenance fees 861,024 892,349 1,775,866 1,806,915
Consulting services 90,405 103,981 316,541 152,435
---------- ---------- ---------- ----------
Total revenue 1,118,831 1,518,503 2,587,427 3,332,671
Cost of revenue 221,692 331,657 523,472 761,864
---------- ---------- ---------- ----------
Gross profit 897,139 1,186,846 2,063,955 2,570,807
---------- ---------- ---------- ----------
Operating expenses:
Research and development 442,744 405,815 842,646 723,239
Sales and marketing 650,079 779,486 1,232,032 1,410,558
General and administrative 333,940 375,716 655,022 704,938
---------- ---------- ---------- ----------
Total operating expenses 1,426,763 1,561,017 2,729,700 2,838,735
---------- ---------- ---------- ----------
Operating loss (529,624) (374,171) (665,745) (267,928)
---------- ---------- ---------- ----------
Other income (expense):
Interest income net of interest expense 38,736 52,011 71,682 91,157
Foreign exchange gain (loss), net (19,140) (2,405) (56,466) 38,857
---------- ---------- ---------- ----------
Total other income 19,596 49,606 15,216 130,014
---------- ---------- ---------- ----------
Loss before income taxes (510,028) (324,565) (650,529) (137,914)
Income tax expense (benefit) (123,408) (58,432) (158,236) 5,304
---------- ---------- ---------- ----------
Net loss $ (386,620) $ (266,133) $ (492,293) $ (143,218)
========== ========== ========== ==========
Net loss per share $ (0.13) $ (0.09) $ (0.17) $ (0.05)
========== ========== ========== ==========
Shares used in computing net loss per share 2,894,114 2,817,162 2,860,637 2,817,162
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
Page 4
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ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (492,293) $ (143,218)
Adjustments to reconcile net loss to net cash used for
operating activities:
Depreciation and amortization 248,079 456,377
Deferred income taxes - (109,266)
Changes in operating assets and liabilities:
Accounts receivable, net 583,717 (681,366)
Refundable income taxes (164,391) -
Prepaid expenses and other assets (30,569) (35,741)
Trade accounts payable 89,378 (232,726)
Accrued and other liabilities (295,674) (114,476)
Deferred revenue (141,514) 106,140
---------- ----------
Net cash used for operating activities (203,267) (754,276)
---------- ----------
Cash flows from investing activities:
Purchases of short-term investments (756,772) (400,204)
Acquired technology and software development costs (313,895) (226,463)
Purchases of property and equipment (104,766) (325,783)
---------- ----------
Net cash used for investing activities (1,175,433) (952,450)
---------- ----------
Cash flows from financing activities:
Net proceeds from issuance of common stock and other stock transactions 234,018 8,759
Principal payments under notes payable to bank and third parties (79,188) (72,851)
---------- ----------
Net cash provided by (used for) financing activities 154,830 (64,092)
---------- ----------
Net decrease in cash and cash equivalents (1,223,870) (1,770,818)
Cash and cash equivalents at beginning of period 2,124,525 3,659,607
---------- ----------
Cash and cash equivalents at end of period $ 900,655 $1,888,789
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
Page 5
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ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The Consolidated Financial Statements of ENlighten Software Solutions, Inc. and
Subsidiary (the "Company") included in the Company's Form 10-KSB for the year
ended December 31, 1995 contain additional information about the Company, its
operations, and its financial statements and accounting practices, and should be
read in conjunction with this Quarterly Report on Form 10-QSB. These unaudited
condensed consolidated financial statements have been prepared in accordance
with the instructions for Form 10-QSB and therefore certain information and
footnote disclosures normally contained in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted.
The accompanying unaudited condensed consolidated financial statements of the
Company reflect all adjustments of a normal recurring nature which are, in the
opinion of management, necessary to present a fair statement of the financial
position as of June 30, 1996, and the results of operations and cash flows for
the interim periods presented.
2. Revenue Recognition
Product license fees are recognized after the following events have occurred: a
product evaluation has been shipped to the customer; the customer elects to
purchase the software following an evaluation period; and the customer signs the
related contract. Product maintenance fees committed as part of new product
licenses and maintenance resulting from renewed maintenance contracts are
deferred and recognized ratably over the contract period, generally one year.
Consulting service revenue is recognized when services are performed for time
and material contracts and on a percentage of completion basis for fixed price
contracts.
3. Cost of Revenue
Included in cost of revenue are royalties, amortization of capitalized software
and acquired technology, and direct costs relating to consulting services
revenue.
4. Cash and Cash Equivalents
The Company considers all liquid investments purchased with an original maturity
of three months or less to be cash equivalents. The Company accounts for its
investments in debt and equity securities in accordance with Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (SFAS 115). Under the provisions of SFAS 115, the
Company has classified its investments in commercial paper and U.S. Treasury
notes as "held-to-maturity." All such investments mature in less than one year
and are stated at amortized cost, which approximates fair value. Interest income
is recorded using an effective interest rate, with the associated discount or
premium amortized to interest income.
Additionally, the Company has classified its investments in preferred stock as
"available-for-sale." Such investments are recorded at fair market value based
on quoted market prices, with unrealized gains and losses reported as a separate
component of stockholders' equity. As of June 30, 1996, unrealized gains and
losses were not material.
Page 6
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ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated on the
straight-line basis over the estimated useful lives of the assets, generally
five years. Leasehold improvements are amortized on a straight-line basis over
the lease term or the estimated useful life of the asset, whichever is less.
6. Acquired Technology and Software Development Costs
A summary of acquired technology and software development costs as of June 30,
1996 and December 31, 1995 follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Acquired technology $ 475,000 $ 475,000
Software development costs 1,514,502 1,200,607
---------- ----------
1,989,502 1,675,607
---------- ----------
Less accumulated amortization:
Acquired technology 288,124 241,249
Software development costs 768,543 713,691
---------- ----------
1,105,667 954,940
---------- ----------
$ 932,835 $ 720,667
========== ==========
</TABLE>
Recent Accounting Pronouncements
In October 1995 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation. SFAS No. 123 will be effective for fiscal years beginning after
December 15, 1995, and will require that the Company recognize in its financial
statements costs related to its employee stock-based compensation plans, such as
stock option and stock purchase plans, or pro forma disclosures of such costs in
a footnote to the financial statements.
The Company will continue to use the intrinsic value-based method of Accounting
Principles Board Opinion No. 25, as allowed under SFAS No. 123, to account for
all of its employee stock-based compensation plans. Therefore, in its financial
statements for fiscal 1996, the Company will make the required pro forma
disclosures in a footnote to the financial statements. SFAS No. 123 is not
expected to have a material effect on the Company's results of operations or
financial position.
Page 7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Management's Discussion and Analysis Of Financial Condition and
Results Of Operations includes a number of forward-looking statements which
reflect the Company's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties, including those discussed below, that could cause actual results
to differ materially from historical results or those anticipated. In this
report, the words "anticipates", "believes", "expects", "intends", "future", and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof.
OVERVIEW
ENlighten Software Solutions develops, markets, and supports software
products designed to automate the management of computer systems used by some of
the world's largest companies in banking, finance, telecommunications, health
care, information technology, and other major industries. The Company develops
software products internally and enhances and packages other software products
it acquires.
The Company intends to continue expansion of its market presence
through hiring additional staff, diversifying its product line, and/or adding
features to existing products. This may require the Company to incur substantial
additional operating expenses prior to its receipt of material additional
revenues, if any, resulting from those expenditures. The combination of these
expenses and this revenue lag may adversely affect the Company's quarterly net
income in 1996 and, perhaps, thereafter.
VARIABILITY OF QUARTERLY RESULTS
The Company has experienced significant quarterly fluctuations in
operating results and expects that these fluctuations will continue in future
periods. These fluctuations have been caused by a number of factors, including
the timing of new product or product enhancement introductions by the Company or
its competitors, purchasing patterns of its customers, size and timing of
individual orders, the rate of customer acceptance of new products, and pricing
and promotion strategies undertaken by the Company or its competitors. Future
operating results may fluctuate as a result of these and other factors,
including the Company's ability to continue to develop, acquire, and introduce
new products on a timely basis. Additionally, the Company's operating results
may be influenced by seasonality (principally in Europe where sales are
typically lower in the summer months) and overall trends in the global economy.
Because the Company operates with a relatively small backlog, quarterly sales
and operating results generally depend on the volume and timing of orders
received during the quarter, which are difficult to forecast.
RESULTS OF OPERATIONS
Total revenue. Revenue for the second quarter of 1996, totaled
$1,119,000, a 26% decrease when compared to the same quarter in 1995. Product
license fees decreased significantly, while revenues from maintenance fees and
consulting services decreased slightly over the same quarter of the prior year.
Total revenue for the six months ended June 30, 1996, decreased 22% to
$2,587,000, from the same period in 1995. Both product licenses and maintenance
fees decreased when compared to the first six months of 1995, while consulting
services increased during that same period.
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Product license fees decreased by $355,000, or 68%, in the second
quarter of 1996 when compared to the same quarter of 1995. The decrease is
primarily due to a decline in the Company's Performance family of products. The
Performance products decreased by $337,000, while all other products combined
decreased by $18,000, or 17%, in the second quarter of 1996 when compared to the
same quarter of 1995. Product license fees decreased by $878,000, or 64%, for
the six months ended June 30, 1996, when compared to the same period of 1995.
License fees during the second quarter and for the six months ended June 30,
1996 were impacted by a change in sales executive management. In March 1996,
Byron Jacobs was hired as the Vice President of Sales and Marketing. Mr. Jacobs
has begun implementing a new sales strategy for the Company which includes
setting up remote field sales offices, staffing a larger telesales organization,
and leveraging an increased number of VARs and other third party distribution
channels. These changes included a higher than normal turnover rate in the sales
and marketing organization. The effects of such changes on the Company's
revenues and the productivity of new sales personnel may take several quarters
to be realized.
Additionally, the revenue decline for the six months ended June 30,
1996, when compared to the same period in 1995, is related to a single foreign
order recorded in the first quarter of 1995 which accounted for 23% of the
license fees for the six months ended June 30, 1995. There was no comparable
sale in the first six months of 1996.
Revenues from consulting services decreased by $14,000, or 13%, in the
second quarter of 1996 when compared to the same quarter of 1995. The decrease
is due to a reduced level of Tandem-related services projects. The Company
expects continued decreasing consulting services revenues as it restructures its
services division to focus on services projects closely related to its product
line, as opposed to tailored development projects. Revenues from consulting
services increased by $164,000, or 108%, for the six months ended June 30, 1996
when compared to the same period of 1995. The increase is due to a higher level
of Tandem-related services projects, most of which commenced in mid to late
1995, and terminated in the first quarter of 1996.
Cost of revenue. Cost of revenue decreased by $110,000, or 33%, in the
second quarter of 1996 compared to the same quarter in 1995. For the six months
ended June 30, 1996, cost of revenue decreased by $238,000, or 31%. This
decreases are attributable to a decrease in third party royalties and a decrease
in amortization related to acquired software technology. The decrease in third
party royalties relates to the decrease in product license fees for the quarter.
The decrease in amortization is a result of a write-down of acquired technology
in the fourth quarter of 1995. These decreases were partially offset by an
increase in the cost of revenue related to consulting services. This increase is
approximately proportional to the increase in consulting services revenue.
Research and development. Research and development expenditures
increased by $37,000, or 9%, in the second quarter of 1996, compared with same
quarter in 1995. Research and development expenditures increased by $119,000, or
17%, for the six month period ended June 30, 1996, compared with same period in
1995. The increase in research and development is primarily attributable to the
development of the Company's open systems administration product. Release 2.0 of
ENlighten for UNIX - Distributed Systems ManagerTM ("DSM") was released in May
1996. In conjunction with this release, the Company is continuing to increase
its research and development headcount in order to deliver its planned future
releases of DSM. The Company expects research and development expenditures to
continue to increase both in total dollars and as a percentage of revenue
throughout 1996 as compared to 1995.
Sales and marketing. Sales and marketing expenses decreased by
$129,000, or 17%, during the second quarter of 1996 compared to the same quarter
of 1995, and $179,000, or 13%, year to date through June 30, 1996. This decrease
was primarily due to decreased sales
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commissions as a result of lower revenues and turnover in sales personnel during
the respective periods.
General and administrative. General and administrative expenses
decreased by $42,000, or 11%, for the second quarter of 1996 as compared to the
same quarter of 1995. For the six month period ended June 30, 1996, general and
administrative expenses decreased by $50,000, or 7%. The decrease in expenses
during these periods was due to continuous efforts by management to control
general and administrative costs.
Other income (expense), net. Other income and expense includes interest
income, net of interest expense, gains and losses on assets disposals, and
foreign currency transactions. Net interest income totaled $39,000 during the
second quarter of 1996. In the same quarter of 1995, net interest income totaled
$52,000. The decrease in net interest is primarily due to a reduction in cash,
which was used to fund expanding operations.
Provision for income taxes. The Company recognized a tax benefit of
$123,000 and $158,000 in the second quarter of 1996 and for the six months ended
June 30, 1996, respectively, as a result of a net loss during those periods. The
Company expects to recover these amounts in future taxable periods.
Net loss. Pre-tax loss was $510,000 in the second quarter of 1996,
compared to a pre-tax loss of $325,000 in the same quarter in 1995. Loss per
share was $.13 per share, based on 2,894,000 shares in the second quarter of
1996, compared to a loss of $.09 per share, based on 2,817,000 shares
outstanding in the same quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of 1996 the Company's operating activities
used cash of $203,000, compared to cash used by operating activities of $754,000
in the same period of the prior year. The change is related to reduced accounts
receivable and an increase in trade accounts payable, both of which more than
offset the decrease in net income.
The Company's investing activities have consisted primarily of
purchases of short-term investments, expenditures for software product
acquisitions, capitalization of software development costs, and additions to
capital equipment. Investing activities used cash of $1,175,000 for the six
months ended June 30, 1996, compared with using cash of $952,000 in same period
in 1995. The change is due to additional purchases of short-term investments in
the second quarter of 1996.
Financing activities provided cash of $155,000 in the six months ended
June 30, 1996, compared with using cash of $64,000 for the same period in the
prior year. The change is due to an increased level of funds provided by
employee option exercises during the second quarter of 1996.
In September 1994, the Company acquired all rights to a suite of SQL
database management products from Sierra Software, Inc. Pursuant to the
agreement, the two principals of Sierra Software will each provide two years of
services exclusively for the Company. The purchase price and incentives are to
be paid over a two year period.
In December 1994, the Company acquired all of the outstanding shares of
Network Partners, Inc. Additionally, in December 1994, the Company acquired core
UNIX systems management technology from Overseers Corporation. Both purchases
were cash acquisitions requiring down payments for a portion of the guaranteed
purchase price at time of acquisition with payment of the balance within one
year. In connection with these two acquisitions, the Company immediately
expensed $983,000, representing acquired in-process research and development. An
additional $50,000 of the purchase price was related to the value of
non-competition agreements
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entered into with the principals of both organizations. Under the terms of the
agreements, the purchase price is increased by incentive amounts based upon
future sales levels of the technology acquired. Should revenues directly
resulting from these technologies fail to exceed certain revenue thresholds, no
additional amounts will be paid. Any increases to the purchase price under these
agreements are to be paid annually through 1998, should revenue exceed stated
thresholds in any twelve month period.
As of June 30, 1996, the Company had cash, cash equivalents, and
short-term investments of $2,978,000, compared to $3,376,000 at June 30, 1995,
and working capital of $2,237,000, compared to working capital of $2,952,000 at
June 30, 1995.
The Company is currently leasing approximately 17,000 square feet of
office space in San Mateo, California, under a lease expiring in April 2001.
The Company believes that its existing sources of liquidity and
anticipated funds from operations will satisfy the Company's projected working
capital and capital expenditure requirements through at least through December
31, 1996.
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, JUNE 30, 1996
PART II: OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Company was held on May 20, 1996. The
following matters were submitted to a vote of shareholders:
(a) Election of Directors
<TABLE>
<CAPTION>
Date of Term Votes
Name Expiration Votes Withheld
---- ---------- ----- --------
<S> <C> <C> <C>
Peter J. McDonald 1997 Annual Meeting 2,698,563 6,700
Michael A. Morgan 1997 Annual Meeting 2,698,563 6,700
Peter J. Sprague 1997 Annual Meeting 2,698,563 6,700
Bruce Cleveland 1997 Annual Meeting 2,698,563 6,700
</TABLE>
(b) Corporate Name Change
A proposal was submitted to approve an amendment to the Company's
Articles of Incorporation to change the Company's name to Enlighten
Software Solutions, Inc. Approved by a vote of 2,677,863 shares in
favor, 16,200 shares against, 11,200 shares abstaining, and no broker
non-votes.
(c) Employee Stock Purchase Plan Amendment
A proposal was submitted to approve an amendment to the Company's 1994
Employee Stock Purchase Plan to change the continuous employment
eligibility requirements from six months to three months. Approved by a
vote of 2,659,560 shares in favor, 38,790 shares against, 1,800 shares
abstaining, and 5,113 of broker non-votes.
(d) Appointment of Independent Auditors
A proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending
December 31, 1996. Approved by vote of 2,700,863 shares in favor, 3,500
shares against, and 9,000 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the accompanying Index of Exhibits on
Page 14 are filed or incorporated by reference as part of this
report. Exhibit numbers 10.1, 10.2, 10.3, 10.14, 10.15, 10.16,
10.21, 10.22, and 10.23 are management contracts or
compensatory plans or arrangements.
(b) Reports on Form 8-K
During the quarter ended June 30, 1996, the Company did not
file any reports on Form 8-K.
ITEMS 1, 2, 3, AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE.
Page 12
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, JUNE 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENlighten Software Solutions, Inc.
DATE: SIGNATURE: /s/ Peter J. McDonald
-------------------------- ----------------------------------
Peter J. McDonald
Chief Executive Officer
DATE: SIGNATURE: /s/ Michael A. Morgan
-------------------------- ----------------------------------
Michael A. Morgan
Chief Financial Officer
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, JUNE 30, 1996
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
10.1(1)@ Form of Indemnity Agreement for officers and directors.
10.2(1)@ First Amended and Restated 1992 Stock Option Plan.
10.3(1)@ 1994 Employee Stock Purchase Plan.
10.4(1) Business Loan Agreement and related agreements, dated April 14,
1993, by and between Software Professionals, Inc. and Commercial
Center Bank.
10.5(1) Commercial Security Agreement and related agreements, dated
April 14, 1993, by and between Software Professionals, Inc. and
Commercial Center Bank.
10.6(1) Loan Agreement and related agreements, dated April 14, 1993, by
and between Software Professionals, Inc. and Commercial Center
Bank.
10.10(1) Lease, dated January 19, 1989, by and between Software
Professionals and Mariner's Island Ltd. for 999 Baker Way, Suite
390, San Mateo, California 94404, and Amendments 1, 2, 3 and 4
thereto.
10.11(1) Lease, dated November 25, 1994, by and between Software
Professionals, Ltd. and Cannon Silver Quastel for 6 Eghams
Court, Boston Drive, Bourne End, Bucks, SL8 54S, U.K.
10.12(1) Enlighten Purchase Agreement, dated April 10, 1993, by and
between and Software Professionals, Inc. and Steve Killelea.
10.13(1) Partner Agreement, dated December 29, 1993, by and between
Software Professionals, Inc. and Gupta Corporation.
10.14(2)@ Nonqualified Stock Option Agreement, dated January 1, 1993, by
and between Software Professionals, Inc. and Kenneth S. Voss.
10.15(2)@ Nonqualified Stock Option Agreement, dated January 1, 1993, by
and between Software Professionals, Inc. and Michael A. Morgan.
10.16(2)@ Nonqualified Stock Option Agreement, dated January 1, 1993, by
and between Software Professionals, Inc. and Michael A. Morgan.
10.17(3) Software Purchase and Assignment Agreement dated September 9,
1994 by and between Software Professionals and Sierra Software.
10.18(4) Stock Agreement dated December 30, 1994, by and between Software
Professionals, Inc. and Network Partners, Inc.
10.19(5) Software Purchase and Assignment Agreement dated December 30,
1994, by and between Software Professionals, Inc., Thomas Kraus,
and Overseers Corporation.
10.20(5) Lease, dated February 24, 1995, by and between Software
Professionals and Mariner's Island Ltd. for 999 Baker Way, Suite
500, San Mateo, California 94404.
</TABLE>
Page 14
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
10.21(6)@ Employment letter and Termination and Change in Control
Agreement, dated March 4, 1996, by and between Software
Professionals, Inc. and Byron E. Jacobs.
10.22(6)@ Nonqualified Stock Option Agreement, dated March 4, 1996, by and
between Software Professionals, Inc. and Byron E. Jacobs.
10.23(6)@ Incentive Stock Option Agreement, dated March 4, 1996, by and
between Software Professionals, Inc. and Byron E. Jacobs.
11.1 Calculation of Net Loss per Share. 16
21.1(5) Subsidiaries of the Company.
23.1(5) Consent of KPMG Peat Marwick. LLP
</TABLE>
- -------------------------------
(1) Incorporated by reference from exhibits of the same number in the
Company's Registration Statement on Form S-1 (No. 33-75388), which was
declared effective on April 19, 1994.
(2) Exhibits 10.14, 10.15, 10.16 are incorporated by reference from exhibits
4.1, 4.2, and 4.3, respectively, in the Company's Registration Statement
on Form S-1 (No. 33-75388), which was declared effective on April 19,
1994.
(3) Incorporated by reference from an exhibit of the same number in the
Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1994.
(4) Incorporated by reference from exhibit 2.1 in the Company's Current
Report on Form 8-K dated December 30, 1994.
(5) Incorporated by reference from an exhibit of the same number in the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1995.
(6) Incorporated by reference from an exhibit of the same number in the
Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1996.
@ Compensatory or employment arrangement.
Page 15
<PAGE> 1
Exhibit 11.1
ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY
STATEMENT RE: COMPUTATION OF NET LOSS PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------- ---------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net loss $ (386,620) $ (266,133) $ (492,293) $ (143,218)
========== ========== ========== ==========
Shares used in per share calculation:
Weighted average number of common shares outstanding 2,894,114 2,817,162 2,860,637 2,817,162
Net loss per share (1) $ (0.13) $ (0.09) $ (0.17) $ (0.05)
========== ========== ========== ==========
</TABLE>
(1) Primary and Fully Diluted
Page 16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 900,655
<SECURITIES> 2,077,499
<RECEIVABLES> 516,908
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,087,343
<PP&E> 2,330,613
<DEPRECIATION> 1,103,861
<TOTAL-ASSETS> 6,643,499
<CURRENT-LIABILITIES> 1,850,591
<BONDS> 0
0
0
<COMMON> 4,873,972
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,643,499
<SALES> 2,587,427
<TOTAL-REVENUES> 2,587,427
<CGS> 523,472
<TOTAL-COSTS> 523,472
<OTHER-EXPENSES> 2,729,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (650,529)
<INCOME-TAX> (158,236)
<INCOME-CONTINUING> (492,293)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (492,293)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> (0.17)
</TABLE>
