-----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, BNn9vI8pSl7Dj5P/+RDTIC4MybMaQn9e+BPr1FJmpXSQoHO2Xk6jkO2QS5FemCqH bZi1RcbF216sHgSDWOolDw== /in/edgar/work/20000913/0001012709-00-000858/0001012709-00-000858.txt : 20000922 0001012709-00-000858.hdr.sgml : 20000922 ACCESSION NUMBER: 0001012709-00-000858 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20000913 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: 721678 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 July 31, 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 July 31, 2000 - ----------------------- ---------------------------- Common Stock, par value 21,096,969 $.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 six months and three months ended July 31, 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 six and three months ended July 31, 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. 53.5% 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 July 31, 2000 and January 31, 2000 (Unaudited) July 31, January 31, 2000 2000 ----------- ----------- ASSETS CURRENT ASSETS Cash $ 318,110 $ 342,207 Accounts Receivable (net of allowance of $37,486 and $37,486 respectively) 55,309 140,484 Prepaid expenses and other current assets 85,689 44,992 Subscriptions receivable -- 100,000 ----------- ----------- 459,108 627,683 FURNITURE AND EQUIPMENT Research and Development Equipment 75,591 74,982 Office furniture and other equipment 78,789 61,874 ----------- ----------- 154,380 136,856 Less: Accumulated Depreciation (33,407) (27,515) ----------- ----------- 120,973 109,341 Organizational costs 11,126 11,126 Less: Accumulated Amortization (5,241) (4,569) ----------- ----------- 5,885 6,557 OTHER ASSETS Capitalized software development costs 1,681,447 1,554,869 Less accumulated amortization (803,627) (712,776) ----------- ----------- 877,820 842,093 $ 1,463,786 $ 1,585,674 =========== =========== 3 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS July 31,2000 and January 31, 2000 (Unaudited) July 31, January 31, 2000 2000 ----------- ----------- LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES Accrued payroll $ 14,783 $ 14,783 Payroll and other taxes payable 18,580 19,048 Accounts Payable, Accrued expenses and other Current Liabilities 70,914 95,692 Accrued officer compensation 197,016 206,192 Deferred Revenues 80,373 127,532 ----------- ----------- 381,666 463,247 Deferred compensation due officer /shareholders 586,605 586,605 Minority interest in subsidiaries 555,139 556,604 STOCKHOLDERS' DEFICIENCY Common stock, authorized 30,000,000 shares $.001 par value, issued and outstanding 21,096.969 and 20,505,541 respectively 21,098 20,170 Additional paid-in capital, net of deferred compensation $30,531 and $41.491 respectively 9,201,696 8,886,456 Accumulated deficit (9,282,418) (8,927,408) ----------- ----------- (59,624) (20,782) $ 1,463,786 $ 1,585,674 =========== =========== 4 MULTI SOLUTIONS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Six and Three months ended July 31, 2000 and 1999 (Unaudited)
Six Months Ended Three Months Ended July 31, July 31, 2000 1999 2000 1999 ---------- ---------- ---------- ---------- REVENUES License fees $ 14,482 $ 76,099 $ 1,997 $ 16,375 Maintenance fees 117,554 231,609 51,734 118,072 Consulting and Other fees 9,512 50,304 2,813 34,786 ---------- ---------- ---------- ---------- Total revenues 141,548 358,012 56,544 169,233 EXPENSES Software development and technical support 214,857 114,385 126,229 57,193 Selling and administrative 367,184 306,422 211,737 141,824 ---------- ---------- ---------- ---------- Total expenses 582,041 420,807 337,966 199,017 ---------- ---------- ---------- ---------- Income (loss) from operations (440,493) (62,795) (281,422) (29,784) OTHER INCOME (EXPENSE) Other Revenues Interest income 7,223 3,981 Minority share of consolidated subsidiary's loss 78,259 36,401 ---------- ---------- ---------- ---------- Total other income 85,482 40,382 Net (loss) $ (355,011) $ (62,795) $ (241,040) $ (29,784) ========== ========== ========== ========== Weighted average shares outstanding 20,572,888 18,813,398 20,886,943 18,813,398 ========== ========== ========== ========== Income (Loss) per share (a) (a) (a) (a) ========== ========== ========== ========== (a) less than $.01 per share
5 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended July 31, 2000 and 1999 (Unaudited)
July 31, 2000 1999 ---------- ---------- Cash flows from operating activities Net (loss) $ (355,011) $ (62,795) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 97,415 115,253 Changes in assets and liabilities Accounts receivable 85,175 (76,129) Prepaid expenses and other current assets (40,697) (2,290) Accrued payroll -- 23,284 Payroll and other taxes payable (468) (695) Accounts payable and accrued expenses (24,778) (30,603) Accrued officer compensation (9,176) 38,533 Deferred revenues (47,159) 8,187 Net cash provided (used) by operating activities (294,699) 12,745 Cash flows from investing activities Organizational expenditures (6,111) Capital expenditures (17,524) Capitalized software development costs (126,578) (163,156) ---------- ---------- Net cash used in investing activities (144,102) (169,267) Cash flows from financing activities Net repayments under loan and line of credit ageements -- (796) Amortization of stock grants 15,918 7,131 Minority interest and loss in excess of investments 93,758 457,000 Collection of subscription receivables 100,000 Issuances of capital stock 205,028 -- ---------- ---------- Net cash provided by financing activities 414,704 463,335 ---------- ---------- NET INCREASE (DECREASE) IN CASH (24,097) 306,813 Cash at beginning of year 342,207 18,420 ---------- ---------- Cash at end of period $ 318,110 $ 325,233 ========== ==========
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 - --------------------- Six months ended July 31, 2000 compared to Six months ended July 31, 1999 and - -------------------------------------------------------------------------------- Three months ended July 31, 2000 compared to Three months ended July 31, 1999 - ----------------------------------------------------------------------------- We generated revenues during the six months ended July 31,2000, the first six months of our fiscal year ending January 31, 2001 of $141,548 compared to revenues of $358,012 during the first six months of fiscal 2000. The revenues during all these periods were generated by our subsidiary, Multi Soft. We believe that the decrease in revenues of $216,464 or approximately 60.5% was due primarily to a decrease in Multi Soft's three sources of revenues- license, maintenance fees and consulting fees. License fee revenue decreased $61,617, or approximately 81.0%, maintenance fees decreased $114,055, or approximately 49.2%, and consulting and other fees decreased $40,792, or approximately 81.1%. 7 We generated revenues during the three months ended July 31, 2000, of $56,544 compared to revenues of $169,233 during the second quarter of fiscal 2000. We believe that the decrease of $112,689, or approximately 66.6%, was due primarily to a decrease in Multi Soft's three sources of revenues- license fees, maintenance fees and consulting fees. License fee revenues decreased $14,378, or approximately 87.8%, maintenance fees decreased $66,338, or approximately 56.2%, consulting fees decreased $31,973 or approximately 91.9%. Multi Soft's two traditional principal sources of revenues were license fees and maintenance fees which represented approximately 93.3% or $132,036 of revenues for the six months ended July 31, 2000 and 85.9% or $307,708 of revenues for the six months ended July 31, 1999. License fees and maintenance fees represented approximately 95.0% or $53,731 of revenues for the three months ended July 31, 2000 and 79.4% or $134,447 for the three months ended July 31, 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. We believe that the decrease in consulting and other fees was due to a reduction in consulting projects for non-affiliate customers. Our operating expenses were $582,041 for the six months ended July 31, 2000 compared to $420,807 for the comparable six month period in fiscal 2000, and increase of $161,234 or approximately 38.3%. Our operating expenses were $337,966 for the three months ended July 31, 2000 compared to $199,017 for the comparable three month period in fiscal 2000, an increase of $138,949 or approximately 69.8%. We believe that the increase was a result of higher levels of software development costs as well as higher levels of selling and administrative costs charged to operations. We had other income of $85,482 during the first six months of fiscal 2001 compared to no other income during the first six months of fiscal 2000. We had other income of $40,382 during the three months ended July 31, 2000 compared to no income during the comparable three months of fiscal 2000 We believe that the increase in other income during the first six months and the current three month period was primarily due to the addition of minority share of consolidated subsidiaries' losses during the first six months and current three month period of fiscal 2001, but not during the first six months and comparable three month period of fiscal 2000. As a result of all of the foregoing, we incurred a net loss for the first six months of fiscal 2001 of $350,011 compared to a net loss of $62,795 for the first six months of fiscal 2000, an increase of $292,216 or approximately 465%. We incurred a net loss for the current three month period ended July 31, 2000 of $241,040 compared to a net loss of $29,784 for the three months ended July 31, 1999 an increase of $211,256 or approximately 709%. 8 Major Customers - --------------- In the first six months of fiscal 2000, IBM accounted for 17% 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 as a result of the consolidation of the financial statements. Liquidity and Capital Resources - ------------------------------- At July 31, 2000, we had working capital of $77,442, 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 six months of fiscal 2001. Working Capital and Current Ratios were: - ---------------------------------------- Descriptions July 31, 2000 January 31, 2000 ------------------------------------------------------------------ Working capital $77,442 $164,436 Current ratios 1.20:1 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. 9 Effect of Inflation - ------------------- We believe that inflation has not had a material effect on our operations for the periods presented. 10 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 July 31, 2000, we issued an aggregate of 285,714 shares of common stock to Noga Investments In Technologies, Ltd., for an aggregate of $100,000 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 the date hereof, Noga has exercised the entire option 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. 11 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 September 11, 2000 By: /s/ Charles J. Lombardo ------------------------------------ Charles J. Lombardo, Chief Executive Officer, Chief Financial Officer and Treasurer EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 6-MOS JAN-31-2001 JUL-31-2000 318,110 0 92,795 37,486 0 459,108 154,380 (33,407) 1,463,786 381,666 0 21,098 0 0 59,624 1,463,786 0 141,548 214,857 582,041 0 0 0 (355,011) 0 (355,011) 0 0 0 (355,011) 0 0
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