-----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, GK2gbk/il98zUQdixLnVTRD3UNEUNW/RxTGLxc1njRGNZZlR7uOnVuJE2DQ+2i21 GRfvMyyRCRmv184egVV8ww== 0001012709-98-000362.txt : 19980916 0001012709-98-000362.hdr.sgml : 19980916 ACCESSION NUMBER: 0001012709-98-000362 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19980915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTI SOLUTIONS INC CENTRAL INDEX KEY: 0000723733 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [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: 98709685 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 MULTI SOLUTIONS, INC - 2ND QUARTER 10QSB 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, 1998 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: (908) 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, 1998 - ----------------------- ---------------------------- Common Stock, par value 18,548,398 $.001 per share 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 management considers necessary for the fair presentation of results for the six and three months ended July 31, 1998. 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 the Company's audited financial statements at, and for the fiscal year ended January 31, 1998. The results reflected for the six and three months ended July 31, 1998 are not necessarily indicative of the results for the entire fiscal year. Multi Solutions, Inc. owns 53.6% of Mult Soft, Inc's common stock. Multi Solutions Inc. financial statements are consolidated with Multi Soft and its other subsidiary NetCast, Inc. which is currently in the development stage. MULTI SOLUTIONS,INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS July 31, 1998 and January 31 1998 31-Jul 31-Jan 1998 1998 Unaudited ----------- ----------- ASSETS CURRENT ASSETS Cash $ 3,372 $ 29,524 Accounts Receivable (net of allowance of $20,086 and $29,086 respectively) 103,112 58,635 Prepaid expenses and other current assets 44,724 20,799 ----------- ----------- 151,208 108,958 FURNITURE AND EQUIPMENT Research and Development Equipment & Software 63,526 63,526 Office furniture and other equipment 20,474 20,474 ----------- ----------- 84,000 84,000 Less: Accumulated Depreciation (13,970) (10,952) ----------- ----------- 70,030 73,048 Organizational costs 2,415 2,415 Less: Accumulated Amorization (726) (484) ----------- ----------- 1,689 1,931 OTHER ASSETS Capitalized software development costs 1,492,308 1,716,121 Less accumulated amortization (662,431) (939,942) ----------- ----------- 829,877 776,179 Intangibles 200 200 ----------- ----------- $ 1,053,004 $ 960,316 =========== =========== CONSOLIDATED BALANCE SHEETS July 31, 1998 and January 31, 1998
31-Jul 31-Jan 1998 1998 LIABILITIES AND STOCKHOLDERS' Unaudited ----------- ----------- DEFICIENCY CURRENT LIABILITIES Loan payable to bank $ 9,441 $ 16,338 Note Payable 8,356 11,339 Accrued payroll 71,579 20,080 Payroll and other taxes payable 25,457 32,755 Accounts Payable 181,849 167,269 Accrued officer compensation 240,555 153,057 Deferred Revenues 170,795 191,820 ----------- ----------- 708,032 592,658 Deferred compensation due officer /shareholders 631,605 631,605 STOCKHOLDERS' DEFICIENCY Common stock, authorized 40,000,000 shares $.001 par value, issued and outstanding 18,549 18,267 18,548,398 July 31(1998) and 18,266,898 January 31 (1998) Additional paid-in capital, 8,646,364 8,643,517 Minority Interest 88,340 87,821 Accumulated deficit (9,039,886) (9,013,552) ----------- ----------- (286,633) (263,947) $ 1,053,004 $ 960,316 =========== ===========
MULTI SOLUTIONS, INC. AND SUBSIDIARY'S CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended Three Months Ended July 31, July 31, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Revenues License fees $ 93,639 $ 84,914 $ 16,527 $ 54,545 Maintenance Revenue 294,578 374,333 142,314 170,673 Consulting and other fees 5,240 49,845 5,240 25,055 ------------ ------------ ------------ ------------ Total revenues 393,457 509,092 164,081 250,273 Operating expenses Software development and technical support 92,310 156,547 46,155 91,901 Selling and administrative expenses 338,049 372,143 177,713 178,371 ------------ ------------ ------------ ------------ Total expenses 430,359 528,690 223,868 270,272 Income (Loss) from operations (36,902) (19,598) (59,787) (19,999) Other Income (Expenses) Other Income 5,237 5,237 Interest expense (889) (1,291) (269) (637) ------------ ------------ ------------ ------------ Total other Income (expense) 4,348 (1,291) 4,968 (637) ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ (32,554) $ (20,889) $ (54,819) $ (20,636) ============ ============ ============ ============ Weighted average number of shares outstanding 18,407,648 18,016,898 18,548,398 18,016,898 ============ ============ ============ ============ Loss per share $ -- $ -- $ -- $ -- ============ ============ ============ ============
MULTI -SOLUTIONS, INC. STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended 31-Jul 1998 1997 --------- --------- Cash flows from operating activities Net Loss $ (32,554) $ (20,889) Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization 95,569 159,299 Changes in assets and liabilities Increase in Accounts receivable (44,477) (101,772) Increase in Prepaid expenses and other current assets (23,925) (19,404) Increase in Accrued payroll 51,499 51,654 Decrease in Payroll and other taxes payable (7,298) (7,201) Decrease in Note Payable (2,983) (1,998) Increase in Accounts payable and accrued expenses 14,580 13,778 Increase in Accrued officer compensation 87,498 71,376 Increase (decrease) in Deferred revenues (21,025) 2,643 --------- --------- Net cash provided by operating activities 116,884 147,486 Cash flows from investing activities Capitalized software development costs (146,007) (137,936) --------- --------- Net cash used in investing activities (146,007) (137,936) Cash flows from financing activities Net repayments under loan and line of credit ageements (6,897) (5,154) Increase (decrease) in Minority Interest 6,739 (11,605) Amorization of Stock Grants 2,847 667 Issuance of capital stock 282 -- --------- --------- Net cash (used) provided by financing activities 2,971 (16,092) NET DECREASE IN CASH (26,152) (6,542) Cash at beginning of year 29,524 13,575 Cash at end of period $ 3,372 $ 7,033 ========= =========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ---------------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- Results of Operations - --------------------- Six months ended July 31, 1998 compared to six months ended July 31, 1997 and - -------------------------------------------------------------------------------- three months ended July 31, 1998 compared to three months ended July, 31 1997 - ----------------------------------------------------------------------------- License fees for the current six months of fiscal year 1998 increased $8,725 or 10.28% compared with the comparable period of the prior year. License fees for the three month period ending July 31, 1998 decreased $38,018 or 69.70% compared with the comparable period of the prior year. Maintenance revenue for the current six months of fiscal 1998 decreased 79,755 or 21.31% compared with the comparable period of the prior year. Maintenance revenue for the current three month period decreased 28,359 or 16.62% compared with the comparable period in the prior year. The increase in sales for the current six month period is attributed to normal fluctuations. The decrease in Maintenance revenues for the current six and three month period is attributable to cancellations of maintenance agreements. Operating expenses for the six month period decreased $98,331 or 18.60% compared with the comparable period of the prior year. Operating expense for the three month period ending July 31, 1998 decreased $46,404 or 17.17% compared with the prior year. The decrease in the six month and three month period was due to the reduction of certain expenses such as legal fees, outside marketing and outside consulting. Also, the software development expense has decreased, because Multi Soft has been developing a new product that is not ready for sale. As a result, there has been no amortization on the current capitalized value. Operating loss, before other Income (expense) of $36,902 for the current six month period increased $17,304 compared with the comparable period of the prior year. Operating loss, before other income (expense) was $59,787 for the current three month increased $39,788 compared with the operating income from the comparable period of the prior year. The reason for this increase is the continues cancellations of maintenance agreements. Other income (expense) for the current six month period was $4,348 as compared with ($1,291) for the comparable period of the prior year. For the current three month period other income (expense) was 4,968 compared with (637) with the comparable period from the prior year. The increase is attributable to accounts payable writeoffs that occurred in the current period that did not occur in the prior comparable period. For the current six month period , net loss of $32,554 or ($.00) cents per share was incurred compared with a net loss of $20,889 or ($.00) cents per share an increase of $11,665. For the current three month period, a net loss of $54,819 was incurred compared with a loss of $20,636 in the comparable period for the prior year a increase of $34,183. As previously stated, the reason for this increase was due to cancellations in maintenance agreements. Major Customers - --------------- In the first six months of 1998, IBM accounted for 22.87% of total revenues. In the first six months of 1997, IBM accounted for 29.46%. Liquidity and Capital Resources - ------------------------------- At July 31, 1998, the Company had a negative working capital position of ($556,824); and has been experiencing cash flow problems. Management of the company has taken various steps to correct this situation. Multi Soft has shifted its marketing focus to the internet, which is very cost effective, thereby allowing it to reduce staff, overhead and selling costs. In addition, senior staff salaries were reduced and executive officers' salaries were partly deferred. Secondly, the company's subsidiary Multi Soft broadened its product base into the Windows environment and has made its Windows based products easier to learn and use. In addition to other distributors and VARs the companies subsidiary Multi Soft and IBM have marketing agreements to market Multi Soft's WCL toolkit. In September 1994, Multi Soft entered into an International Software Licensing Agreement with IBM's Personal Communications 3270 division ("P-Comm"). This agreement allows IBM to logo and market a P-Comm specific version of both the Toolkit and Runtime of Multi Soft's WCLTM. As of November 1996, the contract with IBM was extended for two more years and IBM is paying Multi Soft monthly maintenance and royalties. It is the company's intent to remain a technology provider and search out multiple distribution channels, rather than to try and grow via an expensive direct sales force. This allows the focus to stay on technology, with a low overhead cost for each distribution channel used. However, if the Company obtains additional funds from operations or otherwise, it plans to expand in-house marketing activities by advertising in trade publications and by conducting targeted mailing. Dividend Policy - --------------- The Company has not declared or paid any dividends on its common stock since its inception and does not anticipate the declaration or payment of cash dividends in the foreseeable future. The Company intends to retain earnings, if any, to finance the development and expansion of its business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, the Company's financial condition, capital requirements, general business conditions and other factors. Therefore, there can be no assurance that dividends of any kind will ever be paid. Year 2000 - --------- Many companies systems experience problems handling dates beyond the year 1999. The conpanies subsidiary Multi Soft products are not directly impacted by this problem. In particular, year 2000 issues are transparent to WCL. WCL simply transports data between the 3270/5250 presentation space and the client application. WCL does no formatting of any data, including dates. This is handled by the client development tool such as VB, PB and VC++. Therefor, Year 2000 issues must be addressed by these development tools, not WCL. In addition, The Company's INFRONT and QuickFRONT product have built in support for the year 2000. Any date functions that use 2 positions for the year, the SETUPSL command can be used to handle the year 2000 The risks inherent with the year 2000 issue are not significant to the company except to the extent that some customers may not be year 2000 compliant. Should this occur Multi Soft's operations could be materially affected. Also, the company has no contingency plan regarding this issue. Effect of Inflation - ------------------- Management believes that inflation has not had a material effect on its operations for the periods presented. Cautionary Statement - -------------------- This Form 10-KSB contains certain forward-looking statements regarding , among other things, the anticipated financial and operating results of the company. For this purpose, forward-looking statements are any statements contained herein that are not statements of historical fact and include , but are not limited to, those preceded by or that include the words, "believes," "expects," "anticipated," or similar expressions. In connection with the safe harbor provisions of the Private Securities Litigation Reform act of 1995, the Company is including this cautionary statement identifying important factors that could cause the company's actual results to differ materially from those projected in forward looking statements made by, or on behalf of, the company. These factors, many of which are beyond the control of the company and include the Company's ability to, (I) continue as a going concern, (ii) continue to receive royalties from its existing licensing and consulting arrangements(iii) develop additional marketable software and technology, (iv) compete with larger, better capitalized competitors, and reverse ongoing liquidity and cash flow problems. PART II - OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K 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. Dated: August 27, 1998 By:_____________________________________________ Charles J. Lombardo, Chief Executive Officer, Chief Financial Officer and Treasurer EX-27 2 MULTI SOLUTIONS, INC. - FINANCIAL DATA SCHEDULE
5 6-MOS JAN-31-1998 JUL-31-1998 3,372 0 123,198 20,086 0 151,208 70,030 13,970 1,053,004 708,032 0 18,549 0 0 286,633 1,053,004 93,639 393,457 0 430,359 889 0 889 (32,554) 0 (32,554) 0 0 0 (32,554) 0 0
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