<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 SEPTEMBER 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 September 30, 1996:
<TABLE>
<CAPTION>
OUTSTANDING
CLASS SEPTEMBER 30, 1996
----- ------------------
<S> <C>
Common Stock, no par value 2,903,907
</TABLE>
This is Page 1 of 16 Pages.
The Index to Exhibits begins on Page 14
<PAGE> 2
ENLIGHTEN SOFTWARE SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - 3
As of September 30, 1996 and December 31, 1995
Condensed Consolidated Statements of Operations - 4
Three months ended September 30, 1996 and 1995, and
Nine months ended September 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows - 5
Nine months ended September 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 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
Page 2
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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>
September 30, December 31,
1996 1995
----------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 184,887 $2,124,525
Short term investments 2,075,299 1,320,727
Accounts receivable, less allowance for doubtful accounts 1,436,548 1,100,625
Refundable income taxes 452,656 288,265
Prepaid expenses and other assets 122,970 116,536
----------- ----------
Total current assets 4,272,360 4,950,678
Property and equipment, net 1,177,399 1,268,337
Acquired technology and software development costs, net 896,875 720,667
Deferred income taxes 210,512 210,512
Other assets 201,748 178,577
----------- ----------
$ 6,758,894 $7,328,771
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings and other debt $ 20,000 $ 129,188
Trade accounts payable 567,775 276,151
Accrued and other current liabilities 95,351 333,176
Deferred revenue 1,423,783 1,539,074
----------- ----------
Total current liabilities 2,106,909 2,277,589
----------- ----------
Shareholders' equity:
Common stock 4,897,881 4,639,954
Retained earnings (deficit) (245,896) 411,228
----------- ----------
Total shareholders' equity 4,651,985 5,051,182
----------- ----------
$ 6,758,894 $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 Nine months ended
September 30, September 30,
-------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Product license fees $ 958,087 $ 676,268 $ 1,453,107 $ 2,049,589
Product maintenance fees 783,832 920,671 2,559,698 2,727,586
Consulting services 58,203 110,978 374,744 263,413
----------- ----------- ----------- -----------
Total revenue 1,800,122 1,707,917 4,387,549 5,040,588
Cost of revenue 285,512 341,925 808,984 1,103,789
----------- ----------- ----------- -----------
Gross profit 1,514,610 1,365,992 3,578,565 3,936,799
----------- ----------- ----------- -----------
Operating expenses:
Research and development 568,693 444,096 1,411,339 1,167,336
Sales and marketing 804,410 735,163 2,036,442 2,145,720
General and administrative 359,908 342,392 1,014,930 1,047,329
----------- ----------- ----------- -----------
Total operating expenses 1,733,011 1,521,651 4,462,711 4,360,385
----------- ----------- ----------- -----------
Operating loss (218,401) (155,659) (884,146) (423,586)
----------- ----------- ----------- -----------
Other income (expense):
Interest income net of interest expense 35,686 59,590 107,368 150,746
Foreign exchange gain (loss), net 19,705 (6,675) (36,761) 32,182
----------- ----------- ----------- -----------
Total other income 55,391 52,915 70,607 182,928
----------- ----------- ----------- -----------
Loss before income taxes (163,010) (102,744) (813,539) (240,658)
Income tax expense (benefit) 1,822 55,774 (156,414) 61,078
----------- ----------- ----------- -----------
Net loss $ (164,832) $ (158,518) $ (657,125) $ (301,736)
=========== =========== =========== ===========
Net loss per share $ (0.06) $ (0.06) $ (0.23) $ (0.11)
=========== =========== =========== ===========
Shares used in computing net loss per share 2,894,273 2,818,571 2,875,060 2,816,226
=========== =========== =========== ===========
</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>
Nine months ended
September 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (657,125) $ (301,736)
Adjustments to reconcile net loss to net cash (used for)
provided by operating activities:
Depreciation and amortization 434,849 715,139
Deferred income taxes -- --
Changes in operating assets and liabilities:
Accounts receivable, net (335,923) 435,702
Refundable income taxes (164,391) --
Prepaid expenses and other assets (29,605) 1,408
Trade accounts payable 291,624 50,548
Accrued and other liabilities (237,825) (862,377)
Deferred revenue (115,291) 52,796
----------- -----------
Net cash (used for) provided by operating activities (813,687) 91,480
----------- -----------
Cash flows from investing activities:
Purchases of short-term investments (754,572) (1,217,521)
Acquired technology and software development costs (378,667) (317,547)
Purchases of property and equipment (141,451) (612,397)
----------- -----------
Net cash used for investing activities (1,274,690) (2,147,465)
----------- -----------
Cash flows from financing activities:
Net proceeds from issuance of common stock and other stock transactions 257,927 37,681
Principal payments under notes payable to bank and third parties (109,188) (229,163)
----------- -----------
Net cash provided by (used for) financing activities 148,739 (191,482)
----------- -----------
Net decrease in cash and cash equivalents (1,939,638) (2,247,467)
Cash and cash equivalents at beginning of period 2,124,525 3,659,607
----------- -----------
Cash and cash equivalents at end of period $ 184,887 $ 1,412,140
=========== ===========
</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 September 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 September 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 September
30, 1996 and December 31, 1995 follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Acquired technology $ 475,000 $ 475,000
Software development costs 1,483,917 1,200,607
---------- ----------
1,958,917 1,675,607
---------- ----------
Less accumulated amortization:
Acquired technology 311,562 241,249
Software development costs 750,480 713,691
---------- ----------
1,062,042 954,940
---------- ----------
$ 896,875 $ 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, Inc. 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
revenue, 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 future periods.
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 third quarter of 1996, totaled
$1,800,000, a 5% increase when compared to the same quarter in 1995. Product
license fees increased, while revenue from maintenance fees and consulting
services decreased over the same quarter of the prior year. Total revenue for
the nine months ended September 30, 1996, decreased 13% to $4,388,000, from the
same period in 1995. Both product licenses and maintenance fees decreased when
compared to the first nine months of 1995, while consulting services increased
during that same period.
Product license fees increased by $282,000, or 42%, in the third
quarter of 1996 when compared to the same quarter of 1995. The increase is due
to an increase in revenue from nearly all product families lines of the
Company, particularly the Database family of products and the new Unix product
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line. The Database and Unix products increased by $103,000 (up from $14,000 in
the same quarter of 1995) and $104,000 (up from $3,000 in the same quarter of
1995) respectively, while all other products combined increased by $75,000, or
11%, in the third quarter of 1996 when compared to the same quarter of 1995. The
Database line of products was acquired in the fourth quarter of 1994 and were
released over time, resulting in low initial license fees. A significant upgrade
to the Unix product (version 2.0) was released in late second quarter of 1996,
thereby increasing license fees during the most recent quarter.
Product license fees decreased by $596,000, or 29%, for the nine
months ended September 30, 1996, when compared to the same period of 1995. As
evident from the increase in license fees for the third quarter of 1996 over the
third quarter of 1995, discussed above, the decrease in license fees year to
date is attributable to the first six months of 1996. All product families,
other than Database and Unix, experienced decreased license fees for the nine
months ended September 30, 1996, when compared to the same period in 1995.
License fees during the six months ended June 30, 1996 were impacted by a change
in sales executive management. In January 1996, the Company reduced its
workforce by 12%, including sales and marketing personnel, most notably the Vice
President of Sales and Marketing, Byron Jacobs in March 1996. Mr. Jacobs began
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 resulted in a higher than normal turnover rate in the
sales and marketing organization during the months following Mr. Jacobs
commencement with the Company. The effects of such changes on the Company's
revenue and the delayed productivity of new sales personnel were reflected in
the decreased license fee revenue through June 30, 1996. While improvement was
seen in the third quarter of 1996, the effects of these changes may take several
quarters to be fully realized.
Revenue from consulting services decreased by $53,000, or 48%, in
the third 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 service revenue as it
restructures its service division to focus on service projects closely related
to its product lines, as opposed to tailored development projects. Revenue from
consulting services increased by $111,000, or 42%, for the nine months ended
September 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 $56,000, or 16%, in
the third quarter of 1996 compared to the same quarter in 1995. This decrease is
attributable to a decrease in costs associated with consulting services and a
decrease in amortization related to acquired software technology. Costs of
consulting services were reduced commensurate with the decrease in consulting
revenue. The decrease in amortization is a result of a write-down of acquired
technology in the fourth quarter of 1995. For the nine months ended September
30, 1996, cost of revenue decreased by $295,000, or 27%. This decrease is
attributable to a decrease in third party royalties and the decrease in
amortization mentioned above. The decrease in third party royalties relates to
the decrease in product license fees for the nine months ended September 30,
1996. These decreases were partially offset by an increase in the cost of
revenue related to consulting services. This increase is due to the increase in
consulting services revenue and the inclusion of low margin hardware sales
during the first half of 1996.
Research and development. Research and development expenditures
increased by $125,000, or 28%, in the third quarter of 1996, compared with same
quarter in 1995. Research and development expenditures increased by $244,000, or
21%, for the nine month period ended September 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
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Manager(TM) ("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, including ports to
additional platforms such as Digital Equipment Corporation ("DEC"), and
operating systems such as Microsoft Windows NT. Due to the rapid increased
demands on the engineering staff, contractors were used during the second and
third quarters of 1996. While necessary to fill immediate needs, the use of
third party contractors is more expensive than full time employee equivalents.
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 increased by
$69,000, or 9%, during the third quarter of 1996 compared to the same quarter of
1995. This increase is mainly attributable to increased commissions and sales
costs associated with the increased license fees during the quarter. Sales and
marketing expenses decreased by $109,000, or 5%, in the nine months ended
September 30, 1996 as compared to the same period in the prior year. This
decrease was primarily due to decreased sales commissions as a result of lower
revenue and turnover in sales personnel during the first six months of 1996 as
compared to the prior year.
General and administrative. General and administrative expenses
increased by $18,000, or 5%, for the third quarter of 1996 as compared to the
same quarter of 1995. For the nine month period ended September 30, 1996,
general and administrative expenses decreased by $32,000, or 3%. The decrease in
expenses year to date 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 $36,000 during
the third quarter of 1996. In the same quarter of 1995, net interest income
totaled $60,000. For the nine months ended September 30, 1996, net interest
income totaled $107,000, compared to $151,000 for the same period in 1995. 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 tax expense of
$2,000, and a tax benefit of $156,000 in the third quarter of 1996 and for the
nine months ended September 30, 1996, respectively. The Company expects to
recover the year-to-date amount in future taxable periods. The tax expense for
the third quarter of 1996 results from tax expense related to foreign
jurisdictions.
Net loss. Pre-tax loss was $165,000 in the third quarter of 1996,
compared to a pre-tax loss of $159,000 in the same quarter in 1995. The pre-tax
loss per share was $.06 based on 2,894,000 shares outstanding in the third
quarter of 1996, compared to a loss per share of $.06 based on 2,819,000 shares
outstanding, in the same quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of 1996 the Company's operating
activities used cash of $814,000, compared to cash provided by operating
activities of $91,000 in the same period of the prior year. The change is
principally related to an increased net loss (which includes a reduction in
non-cash depreciation and amortization), and increased accounts receivable.
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 $1,275,000 for the nine
months ended September 30, 1996, compared with using cash of $2,147,000 in same
period in 1995. The change is due to decrease in purchases of short-term
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investments and a decrease in equipment purchases for the nine months ended
September 30, 1996, when compared to the same period in 1995.
Financing activities provided cash of $149,000 in the nine months
ended September 30, 1996, compared with using cash of $191,000 for the same
period in the prior year. The change is due to an increased level of funds
provided by employee option exercises, particularly during the second quarter of
1996, and reduced debt service on leased equipment.
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 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 revenue 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 September 30, 1996, the Company had cash, cash equivalents,
and short-term investments of $2,260,000, compared to $3,445,000 at September
30, 1995, and working capital of $2,165,000, compared to working capital of
$2,673,000 at September 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 March 31,
1997.
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, SEPTEMBER 30, 1996
PART II: OTHER INFORMATION
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 September 30, 1996, the Company
did not file any reports on Form 8-K.
ITEMS 1, 2, 3, 4, AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE.
Page 12
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, SEPTEMBER 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: November 14, 1996 SIGNATURE: /s/ Peter J. McDonald
------------------------
Peter J. McDonald
Chief Executive Officer
DATE: November 14, 1996 SIGNATURE: /s/ Michael A. Morgan
------------------------
Michael A. Morgan
Chief Financial Officer
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ENLIGHTEN SOFTWARE SOLUTIONS, INC.
FORM 10-QSB, SEPTEMBER 30, 1996
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
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 ENlighten Software
Solutions, Inc. and Commercial Center Bank.
10.5(1) Commercial Security Agreement and related agreements,
dated April 14, 1993, by and between ENlighten Software
Solutions, Inc. and Commercial Center Bank.
10.6(1) Loan Agreement and related agreements, dated April 14,
1993, by and ENlighten Software Solutions, Inc. and
Commercial Center Bank.
10.10(1) Lease, dated January 19, 1989, by and between ENlighten
Software Solutions, Inc. 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
ENlighten Software Solutions, 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 ENlighten Software Solutions, Inc. and
Steve Killelea.
10.13(1) Partner Agreement, dated December 29, 1993, by and
between ENlighten Software Solutions, Inc. and Gupta
Corporation.
10.14(2)@ Nonqualified Stock Option Agreement, dated January 1,
1993, by and between ENlighten Software Solutions, Inc.
and Kenneth S. Voss.
10.15(2)@ Nonqualified Stock Option Agreement, dated January 1,
1993, by and between ENlighten Software Solutions, Inc.
and Michael A. Morgan.
10.16(2)@ Nonqualified Stock Option Agreement, dated January 1,
1993, by and between ENlighten Software Solutions, 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 ENlighten Software
Solutions, Inc., Thomas Kraus, and Overseers
Corporation.
10.20(5) Lease, dated February 24, 1995, by and between
ENlighten Software Solutions, Inc. and Mariner's Island
Ltd. for 999 Baker Way, Suite 500, San Mateo,
California 94404.
Page 14
<PAGE> 15
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
10.21(6)@ Employment letter and Termination and Change in Control
Agreement, dated March 4, 1996, by and between
ENlighten Software Solutions, Inc.and Byron E. Jacobs.
10.22(6)@ Nonqualified Stock Option Agreement, dated March 4,
1996, by and between ENlighten Software Solutions, Inc.
and Byron E. Jacobs.
10.23(6)@ Incentive Stock Option Agreement, dated March 4, 1996,
by and between ENlighten Software Solutions, 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
27.1 Financial Data Schedule
- -------------------------------
(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 Nine months ended
September 30, September 30,
-------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net loss $ (164,832) $ (158,518) $ (657,125) $ (301,736)
=========== =========== =========== ===========
Shares used in per share calculation:
Weighted average number of common shares outstanding 2,894,273 2,818,571 2,875,060 2,816,226
Net loss per share (1) $ (0.06) $ (0.06) $ (0.23) $ (0.11)
=========== =========== =========== ===========
</TABLE>
(1) Primary and Fully Diluted
Page 16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 184,887
<SECURITIES> 2,075,299
<RECEIVABLES> 1,436,548
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,272,360
<PP&E> 2,367,298
<DEPRECIATION> 1,189,899
<TOTAL-ASSETS> 6,758,894
<CURRENT-LIABILITIES> 2,106,909
<BONDS> 0
0
0
<COMMON> 4,897,881
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,758,894
<SALES> 4,387,549
<TOTAL-REVENUES> 4,387,549
<CGS> 808,984
<TOTAL-COSTS> 808,984
<OTHER-EXPENSES> 4,462,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (813,539)
<INCOME-TAX> (156,414)
<INCOME-CONTINUING> (657,125)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (657,125)
<EPS-PRIMARY> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
