-----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, DdrQRowjgzILPrArECzSCT7BYmslWSoOzdpirUxYjjFQLzteoylU9Zcqn8EVoFPe ZL0ndoU/P7gZ5PYzU0MrZw== /in/edgar/work/20000619/0001012709-00-000538/0001012709-00-000538.txt : 20000919 0001012709-00-000538.hdr.sgml : 20000919 ACCESSION NUMBER: 0001012709-00-000538 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000430 FILED AS OF DATE: 20000619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTI SOLUTIONS INC CENTRAL INDEX KEY: 0000723733 STANDARD INDUSTRIAL CLASSIFICATION: [7372 ] IRS NUMBER: 222418056 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-12162 FILM NUMBER: 656901 BUSINESS ADDRESS: STREET 1: 4262 US ROUTE 1 STREET 2: SUITE 2 CITY: MONMOUTH JUNCTION STATE: NJ ZIP: 08852 BUSINESS PHONE: 9083299200 MAIL ADDRESS: STREET 1: 4262 US HIGHWAY 1 STREET 2: SUITE 2 CITY: MONMOUTH JUNCTION STATE: NJ ZIP: 08852-1905 10QSB 1 0001.txt MULTI SOLUTIONS, INC. - 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 0-12162 ------- MULTI SOLUTIONS, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) NEW JERSEY 22-2418056 - ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4262 US Route 1, Monmouth Junction, New Jersey 08852 ---------------------------------------------------- (Address of principal executive offices) Issuer's telephone number, including area code: (732) 329-9200 -------------- Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Class Outstanding at April 30, 2000 - ----------------------- ----------------------------- Common Stock, par value 20,791,255 $.001 per share Transitional Small Business Format (check one); Yes [ ] No [X] PART I. FINANCIAL INFORMATION - ----------------------------- ITEM 1. FINANCIAL STATEMENTS -------------------- The accompanying consolidated financial statements are unaudited for the interim periods, but include all adjustments (consisting only of normal recurring accruals) which we consider necessary for the fair presentation of results for the three months ended April 30, 2000. Moreover, these consolidated financial statements do not purport to contain complete disclosure in conformity with generally accepted accounting principles and should be read in conjunction with our audited consolidated financial statements at, and for the fiscal year ended January 31, 2000. The results for the three months ended April 30, 2000 are not necessarily indicative of the results for the entire fiscal year. We operate primarily through our subsidiaries: Our Approximate Name of Subsidiary Percentage Ownership - ------------------ -------------------- Multi Soft, Inc. 51.3% FreeTrek.Com, Inc. 54.7% NetCast, Inc. 75% Our financial statements are consolidated with our subsidiaries. In January 2000, we decided to discontinue any further operations of NetCast. 2 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS April 30, 2000 and January 31, 2000 (Unaudited) April 30, January 31, 2000 2000 ----------- ----------- ASSETS CURRENT ASSETS Cash $ 394,103 $ 342,207 Accounts Receivable (net of allowance of $37,486 and $37,486 respectively) 103,167 140,484 Prepaid expenses and other current assets 45,892 44,992 Subscriptions receivable 50,000 100,000 ----------- ----------- 593,162 627,683 FURNITURE AND EQUIPMENT Research and Development Equipment 75,517 74,982 Office furniture and other equipment 70,982 61,874 ----------- ----------- 146,499 136,856 Less: Accumulated Depreciation (30,365) (27,515) ----------- ----------- 116,134 109,341 Organizational costs 11,126 11,126 Less: Accumulated Amortization (4,904) (4,569) ----------- ----------- 6,222 6,557 OTHER ASSETS Capitalized software development costs 1,661,023 1,554,869 Less accumulated amortization (759,283) (712,776) ----------- ----------- 901,740 842,093 $ 1,617,258 $ 1,585,674 =========== =========== 3 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS April 30, 2000 and January 31, 2000 (Unaudited)
April 30, January 31, LIABILITIES AND STOCKHOLDERS' 2000 2000 ----------- ----------- DEFICIENCY CURRENT LIABILITIES Accrued payroll $ 14,783 $ 14,783 Payroll and other taxes payable 18,910 19,048 Accounts Payable, Accrued expenses and other Current Liabilities 57,522 95,692 Accrued officer compensation 206,190 206,192 Deferred Revenues 65,558 127,532 ----------- ----------- 362,963 463,247 Deferred compensation due officer /shareholders 586,605 586,605 Minority interest in subsidiary 581,487 556,604 STOCKHOLDERS' DEFICIENCY Common stock, authorized 30,000,000 shares $.001 par value, issued and outstanding 20,791,255 (2000) and 20,505,541 (2000) 20,792 20,170 Additional paid-in capital, net of deferred compensation $41,491 (1999) and $46,449 (2000) 9,090,842 8,886,456 Accumulated deficit (9,025,431) (8,927,408) ----------- ----------- 86,203 (20,782) $ 1,617,258 $ 1,585,674 =========== ===========
4 MULTI SOLUTIONS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS April 30, 2000 and 1999 (Unaudited)
Three Months Ended April 30, 2000 1999 ------------ ------------ REVENUES License fees $ 12,485 $ 59,724 Maintenance fees 65,820 113,537 Consulting and Other fees 6,699 15,518 ------------ ------------ Total revenues 85,004 188,779 EXPENSES Software development and technical support 88,628 57,192 Selling and administrative 155,447 164,598 ------------ ------------ Total expenses 244,075 221,790 ------------ ------------ Income (loss) from operations (159,071) (33,011) OTHER INCOME (EXPENSE) Other Revenues -- -- Interest income 3,242 -- Minority share of consolidated subsidiary's loss 41,858 ------------ ------------ Total other income 45,100 -- Net (loss) $ (113,971) $ (33,011) ============ ============ Weighted average shares outstanding 20,409,113 18,813,398 ============ ============ Income (Loss) per share (a) (a) ============ ============ (a) less than $.01 per share
5 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS April 30, 2000 and 1999 (Unaudited)
Three months ended April 30, 2000 1999 ---------- ---------- Cash flows from operating activities Net (loss) $ (113,971) $ (33,011) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 49,692 57,596 Changes in assets and liabilities Accounts receivable 37,317 7,611 Prepaid expenses and other current assets (900) 3,709 Accrued payroll -- 19,265 Payroll and other taxes payable (138) 8,616 Accounts payable and accrued expenses (38,170) (14,986) Accrued officer compensation -- 33,333 Deferred revenues (61,974) (27,321) ---------- ---------- Net cash provided (used) by operating activities (128,144) 54,812 Cash flows from investing activities Capital expenditures (9,643) Capitalized software development costs (106,154) (60,928) ---------- ---------- Net cash used in investing activities (115,797) (60,928) Cash flows from financing activities Net repayments under loan and line of credit ageements -- (796) Amortization of stock grants 4,958 2,043 Minority interest and loss in excess of investments 40,829 6,725 Colelction of subscription receivables 50,000 Issuances of capital stock 200,050 -- ---------- ---------- Net cash provided by financing activities 295,837 7,972 ---------- ---------- NET INCREASE (DECREASE) IN CASH 51,896 1,856 Cash at beginning of year 342,207 18,420 ---------- ---------- Cash at end of period $ 394,103 $ 20,276 ========== ==========
6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ---------------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- CAUTIONARY STATEMENT - -------------------- This quarterly report on form 10-QSB contains certain forward-looking statements regarding, among other things, our anticipated financial and operating results and those of our subsidiaries. For this purpose, forward-looking statements are any statements contained in this report that are not statements of historical fact and include, but are not limited to, those preceded by or that include the words, "believes," " expects," or similar expressions. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, we are including this cautionary statement identifying important factors that could cause our or our subsidiaries' actual results to differ materially from those projected in forward looking statements made by, or on behalf of, us. These factors, many of which are beyond our control or the control of our subsidiaries, include: o Multi Soft's ability to: o continue to receive royalties from its existing licensing and consulting arrangements, o develop additional marketable software and technology, o compete with larger, better capitalized competitors and o reverse ongoing liquidity and cash flow problems; o FreeTrek's ability to: o support ongoing development and future product enhancements along with requisite testing; o raise sufficient additional funds if needed; o enlist and sustain a sufficient number of sponsors; o sell and sustain sales of a significant amount of advertising; and o operate profitably. Results of Operations - --------------------- Three months ended April 30, 2000 compared to three months ended April 30, 1999 - ------------------------------------------------------------------------------- We generated revenues during the three months ended April 30, 2000, the first quarter of our fiscal year ending January 31, 2001, of $85,004 compared to revenues of $188,779 during the first quarter of fiscal 2000. The revenues were generated by our subsidiary, Multi Soft. We believe that this decrease of $103,775, or approximately 55%, was due primarily to a decrease in Multi Soft's revenues from license and maintenance fees. License fee revenues decreased $47,239, or approximately 79.1%, and maintenance fees decreased $47,717, or approximately 42.0%. 7 Multi Soft's two traditional principal sources of revenues were license fees and maintenance fees which represented approximately 92.1% or $78,305 of revenues for the three months ended April 30, 2000 and 91.8% or $173,261 of revenues for the three months ended April 30, 1999. We believe that the decrease in licensing fees was due primarily to a reduction in software sales. We believe that the decrease in maintenance fees was due to the non-renewal of older maintenance contracts by customers. Our operating expenses were $244,075 for the three months ended April 30, 2000 compared to $221,790 for the comparable three month period of fiscal 2000, an increase of $22,28 or approximately 10%. We believe that the increase was a result of higher levels of software development costs, offset in part by lower levels of selling and administrative costs charged to operations. We had other income of $45,100 during the first quarter of fiscal 2001 compared to no other income during the first quarter of fiscal 2000. We believe that the increase in other income during the current three month period was primarily due to the addition of minority share of consolidated subsidiary's loss during the first quarter of fiscal 2001, but not during the first quarter of fiscal 2000. As a result of all of the foregoing, we incurred a net loss for the first quarter of fiscal 2001year of $113,971 compared to a net loss of $33,011 for the first quarter of fiscal 2000, a decrease of $80,960 or approximately 245.3%. Major Customers - --------------- In the first quarter of fiscal 2000, IBM accounted for 11% of total consolidated revenues. In the first quarter of fiscal 2001, IBM did not account for any revenues. IBM extended its contract with Multi Soft through December 31, 1999; however, IBM has not renewed the contract. The loss of revenues from IBM will have a materially adverse effect on our financial condition. Multi Soft has offset the loss of revenues from IBM with revenues generated from our subsidiary, FreeTrek, for work related to the prior and ongoing development, maintenance and enhancement of FreeTrek's products, rent and administrative services. However, FreeTrek is a development stage company and, although it is marketing its products and services, it has yet to make its first sale. Fees paid by FreeTrek have come from the proceeds of private placements of FreeTrek's securities and of our securities. If FreeTrek is unable to generate substantial revenues or continue to raise funds, revenues received by Multi Soft from FreeTrek most likely will decrease and eventually cease. Although Multi Soft has supplemented its revenues with services provided to FreeTrek, these revenues are eliminated in as a result of the consolidation of the financial statements. 8 Liquidity and Capital Resources - ------------------------------- At April 30, 2000, we had working capital of $230,199, compared to working capital of $164,436 at January 31, 2000. While we have experienced cash flow problems, this situation has been alleviated by: o proceeds from the issuance of stock by our new subsidiary, FreeTrek during fiscal 2000; o proceeds from a private placement of our common stock during fiscal 2000; and o proceeds from the exercise of an option issued in conjunction with the private placement during fiscal 2000 and the first quarter of fiscal 2001. Working Capital and Current Ratios were: - ---------------------------------------- Descriptions April 30, 2000 January 31, 2000 ---------------------------------------------------------------- Working capital $230,199 $164,436 Current ratios 1.63:1 1.36:1 Dividend Policy - --------------- We have not declared or paid any dividends on our common stock since inception and we do not anticipate that we will be declaring or paying cash dividends in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be subject to the discretion of our board of directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors. Therefore, we cannot assure that dividends of any kind will ever be paid. Effect of Inflation - ------------------- We believe that inflation has not had a material effect on our operations for the periods presented. 9 PART II - OTHER INFORMATION - --------------------------- Item 1. Legal Proceedings ----------------- None. Item 2. Changes in Securities and Use of Proceeds ----------------------------------------- Our class A, class B and class C common stock purchase warrants expired on June 1, 2000. During the quarter ended April 30, 2000, we issued an aggregate of 571,428 shares of common stock to Noga Investments In Technologies, Ltd., for an aggregate of $200,000 pursuant to the exercise of an option. This option is for the purchase of an aggregate of 857,142 shares of our common stock at the rate of 142,857 shares per month at an exercise price of $0.35 per share. As of June 15, 2000, Noga has exercised an aggregate of 857,142 shares for an aggregate of $300,000. All of these shares were issued pursuant to the exemption from registration provided by section 4(2) of the Securities Act of 1933. Item 3. Defaults Upon Senior Securities ------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- None. Item 5. Other Information ----------------- None. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K None. 10 SIGNATURES ---------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the registration has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MULTI SOLUTIONS, INC. Date June 16, 2000 By: /s/ Charles J. Lombardo --------------------------------------------- Charles J. Lombardo, Chief Executive Officer, Chief Financial Officer and Treasurer 11 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 3-MOS JAN-31-2001 APR-30-2000 394,103 0 140,653 37,486 0 593,162 146,499 (30,365) 1,617,258 362,963 0 20,792 0 0 65,429 1,617,258 0 85,004 88,628 244,075 0 0 0 (113,971) 0 (113,971) 0 0 0 (113,971) 0 0
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