-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DJ7hjcnb10cZbryNkkRbArvUg5EGwFtGQ/9dxIxhLtasHWbl6l8Q5tcL5/kZYsFQ ktkMC9O9/zFOZH0TCS4B/w== 0000950149-96-001892.txt : 19961118 0000950149-96-001892.hdr.sgml : 19961118 ACCESSION NUMBER: 0000950149-96-001892 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENLIGHTEN SOFTWARE SOLUTIONS INC CENTRAL INDEX KEY: 0000919175 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943008888 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-23446 FILM NUMBER: 96664613 BUSINESS ADDRESS: STREET 1: 999 BAKER WAY STE 390 CITY: SAN MATCO STATE: CA ZIP: 94404-1578 BUSINESS PHONE: 4155780700 FORMER COMPANY: FORMER CONFORMED NAME: SOFTWARE PROFESSIONALS INC DATE OF NAME CHANGE: 19940217 10QSB 1 FORM 10-QSB 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:
OUTSTANDING CLASS SEPTEMBER 30, 1996 ----- ------------------ Common Stock, no par value 2,903,907
This is Page 1 of 16 Pages. The Index to Exhibits begins on Page 14 2 ENLIGHTEN SOFTWARE SOLUTIONS, INC. QUARTERLY REPORT ON FORM 10-QSB QUARTER ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS
PAGE NO. -------- 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
Page 2 3 PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, December 31, 1996 1995 ----------- ---------- 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 =========== ==========
The accompanying notes are an integral part of the condensed consolidated financial statements Page 3 4 ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended Nine months ended September 30, September 30, -------------------------- -------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- 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 =========== =========== =========== ===========
The accompanying notes are an integral part of the condensed consolidated financial statements Page 4 5 ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended September 30, -------------------------- 1996 1995 ----------- ----------- 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 =========== ===========
The accompanying notes are an integral part of the condensed consolidated financial statements Page 5 6 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 7 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:
September 30, December 31, 1996 1995 ---------- ---------- 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 ========== ==========
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 8 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 Page 8 9 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 Page 9 10 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 Page 10 11 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. Page 11 12 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 13 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 Page 13 14 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 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 EX-11.1 2 CALCULATION OF NET LOSS PER SHARE 1 EXHIBIT 11.1 ENLIGHTEN SOFTWARE SOLUTIONS, INC. AND SUBSIDIARY STATEMENT RE: COMPUTATION OF NET LOSS PER SHARE (UNAUDITED)
Three months ended Nine months ended September 30, September 30, -------------------------- -------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- 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) =========== =========== =========== ===========
(1) Primary and Fully Diluted Page 16 EX-27.1 3 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 184,887 2,075,299 1,436,548 0 0 4,272,360 2,367,298 1,189,899 6,758,894 2,106,909 0 0 0 4,897,881 0 6,758,894 4,387,549 4,387,549 808,984 808,984 4,462,711 0 0 (813,539) (156,414) (657,125) 0 0 0 (657,125) (0.23) (0.23)
-----END PRIVACY-ENHANCED MESSAGE-----