-----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, MDdCga5PpJaxpQ/bziIk2wz3WEASPfHL0Mhkdi3X8dQoy4vnndBqyM7wzQnw66r9 mPdJjp05TVv5hBWY8VefkQ== 0001012709-02-001302.txt : 20020919 0001012709-02-001302.hdr.sgml : 20020919 20020919135105 ACCESSION NUMBER: 0001012709-02-001302 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020731 FILED AS OF DATE: 20020919 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: 1934 Act SEC FILE NUMBER: 000-12162 FILM NUMBER: 02767621 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 x10qsb-902.txt MULTI SOLUTIONS, INC. 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, 2002 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.) 3535 Quakerbridge Road, Hamilton, New Jersey 08619 -------------------------------------------------- (Address of principal executive offices) Issuer's telephone number, including area code: (609) 631-7401 -------------- 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, 2002 - ----------------------- ----------------------------- Common Stock, par value 21,096,969 $.001 per share Transitional Small Business Format (check one); Yes No X --- --- 1 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 and three months ended July 31, 2002. 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, 2002. The results for the six and three months ended July 31, 2002 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, Inc. 45.8% 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, 2002 and January 31, 2002 (Unaudited)
July 31, January 31, 2002 2002 ------------ ------------ ASSETS CURRENT ASSETS Cash $ -- $ 3,511 Accounts Receivable (net of allowance of $37,486 and $37,486 respectively) 36,084 22,991 Prepaid expenses and other current assets 42,109 23,824 ------------ ------------ 78,193 50,326 FURNITURE AND EQUIPMENT Research and Development Equipment 24,982 24,982 Office furniture and other equipment 89,225 89,225 ------------ ------------ 114,207 114,207 Less: Accumulated Depreciation (73,611) (64,102) ------------ ------------ 40,596 50,105 Organizational costs 11,126 11,126 Less: Accumulated Amortization (7,925) (7,254) ------------ ------------ 3,201 3,872 OTHER ASSETS Capitalized software development costs 2,258,164 2,250,915 Less accumulated amortization (1,124,284) (1,047,052) Less valuation allowance (210,000) (210,000) ------------ ------------ 923,880 993,863 $ 1,045,870 $ 1,098,166 ============ ============
3 MULTI SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS July 31,2002 and January 31, 2002 (Unaudited)
July 31, January 31, 2002 2002 ------------ ------------ LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES Accrued payroll $ 67,034 $ 81,817 Payroll and other taxes payable 30,899 28,589 Accounts Payable, Accrued expenses and other Current Liabilities 221,710 226,788 Accrued officer compensation 178,668 178,668 Due to officer 36,946 52,847 Deferred Revenues 49,431 72,552 ------------ ------------ 584,688 641,261 Deferred compensation due officer /shareholders 586,605 586,605 Minority interest in subsidiaries 775,819 633,992 STOCKHOLDERS' DEFICIENCY Common stock, authorized 40,000,000 shares $.001 par value, issued and outstanding 21,096,969 and 21,096,969 respectively 21,098 21,098 Additional paid-in capital 9,219,532 9,219,532 Accumulated deficit (10,141,872) (10,004,322) ------------ ------------ (901,242) (763,692) $ 1,045,870 $ 1,098,166 ============ ============
4 MULTI SOLUTIONS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Six and Three months ended July 31, 2002 and 2001 (Unaudited)
Six Months Ended Three Months Ended July 31, July 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ REVENUES License fees $ 16,252 $ 9,698 $ 11,556 $ 9,698 Maintenance fees 74,791 73,701 35,441 45,981 Consulting and Other fees 17,890 22,781 10,561 13,779 ------------ ------------ ------------ ------------ Total revenues 108,933 106,180 57,558 69,458 EXPENSES Software development and technical support 76,809 72,255 39,022 25,163 Selling and administrative 205,848 281,730 91,722 122,061 ------------ ------------ ------------ ------------ Total expenses 282,657 353,985 130,744 147,224 ------------ ------------ ------------ ------------ Income (loss) from operations (173,724) (247,805) (73,186) (77,766) OTHER INCOME (EXPENSE) Other Revenues Interest income/capital gain income (loss) -- (36,637) -- (20,225) Minority share of consolidated subsidiary's loss 36,174 66,852 16,422 35,736 ------------ ------------ ------------ ------------ Total other income 36,174 30,215 16,422 15,511 Net (loss) $ (137,550) $ (217,590) $ (56,764) $ (62,255) ============ ============ ============ ============ Weighted average shares outstanding 21,096,969 21,096,969 21,096,969 21,096,969 ============ ============ ============ ============ 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, 2002 and 2001 (Unaudited)
Six months ended July 31, 2002 2001 ------------ ------------ Cash flows from operating activities Net (loss) $ (137,550) $ (217,590) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 87,412 87,969 Changes in assets and liabilities Accounts receivable (13,093) 70,211 Prepaid expenses and other current assets (18,285) 5,354 Accrued payroll (14,783) 16,687 Payroll and other taxes payable 2,310 4,227 Accounts payable and accrued expenses (5,078) 117,381 Due to officer (15,901) -- Deferred revenues (23,121) (9,973) ------------ ------------ Net cash provided (used) by operating activities (138,089) 74,266 Cash flows from investing activities Capital expenditures -- (4,635) Capitalized software development costs (7,249) (192,666) Sales of marketable securities -- 168,000 ------------ ------------ Net cash used in investing activities (7,249) (29,301) Cash flows from financing activities Minority interest and loss in excess of investments 141,827 (66,852) ------------ ------------ Net cash provided (used) by financing activities 141,827 (66,852) NET (DECREASE) IN CASH (3,511) (21,887) Cash at beginning of year 3,511 22,846 ------------ ------------ Cash at end of period $ -- $ 959 ============ ============
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 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, 2002 compared to Six months ended July 31, 2001 and - -------------------------------------------------------------------------------- Three months ended July 31, 2002 compared to Three months ended July 31, 2001 - ----------------------------------------------------------------------------- We generated revenues during the six months ended July 31, 2002, the first six months of our fiscal year ending January 31, 2003 of $108,933 compared to revenues of $106,180 during the first six months of fiscal 2002. The revenues during all these periods were generated by our subsidiary, Multi Soft. We believe that the increase in revenues of $2,753 or approximately 2.69% was due primarily to an increase in Multi Soft's primary sources of revenues - license, and maintenance fees, offset by a decrease in consulting fees. License fee revenue increased approximately 67.6% from $9,698 in the first six months of fiscal 2002 to $16,252 during the first six months of fiscal 2003. Maintenance fees increased $1,090, 7 or approximately 1.5%, and consulting and other fees decreased $4,891, or approximately 21.5%. Multi Soft's consulting fees relate to consulting services that it provided to our other subsidiary, FreeTrek, Inc. We generated revenues during the three months ended July 31, 2002 of $57,558 compared to revenue of $69,458 during the second quarter of fiscal 2002. We believe that the decrease in revenues of $11,900 or approximately 17.1% was due primarily to an increase in licensing fees offset in part by a decrease in maintenance fees and consulting fees. License fee revenue increased $1,858, or approximately 19.2%, maintenance fees decreased $10,540, or approximately 22.9% and consulting and other fees decreased $3,218, or approximately 23.4%. Multi Soft's two traditional principal sources of revenues have been license fees and maintenance fees which represented approximately 83.6% or $91,043 of revenues for the six months ended July 31, 2002, and 78.5% or $83,399 of revenues for the six months ended July 31, 2001. However, our principal sources of revenues during the first six months of fiscal 2003 were maintenance fees and consulting fees. Maintenance fees represented approximately $74,791 or 68.7% of revenues for the six months ended July 31, 2002 and approximately $73,701 or 69.4% of revenues for the six months ended July 31, 2001. Maintenance fees and consulting fees represented approximately $46,002 or 79.9% of revenues for the three months ended July 31, 2002 and approximately $59,760 or 86.0% of revenues for the three months ended July 31, 2001. We believe Multi Soft's increase in licensing fees was due to increased software sales. We believe that the increase in maintenance fees was due to the renewal of maintenance contracts by customers. Our operating expenses were $282,657 for the six months ended July 31, 2002 compared to $353,985 for the comparable six month period in fiscal 2002, a decrease of $71,328 or approximately 20.2%. Our operating expenses for the three months ended July 31, 2002 were $130,744 compared to $147,224 for the comparable three months ended July 31, 2001, a decrease of $16,480 or approximately 11.2%. We believe that the decrease was a result of lowers levels of selling and administrative costs charged to operations offset by increased levels of software development costs (principally resulting from amortization of capitalized development costs) for the six and three month period ending July 31, 2002 compared to the same periods in the previous year. The reduction in selling and administrative expenses were a direct result of our cost cutting initiative. We moved our operations to smaller, less expensive premises saving approximately $24,000 in rent for six months and $12,000 for three months. Our utility bills in the new smaller space were substantially reduced. We cut staff, thereby reducing payrolls by approximately $23,000 for the six months and $11,000 for three months. Other overhead reductions aggregating approximately $18,000 for the six months and $9,000 for the three months resulted from cutbacks in marketing expenditures and changes in our internet service provider. We had other income of $36,174 during the first six months of fiscal 2003 compared to $30,215 of other income during the first six months of fiscal 2002. We had other income of $16,422 during the three months ended July 31, 2002 compared to $15,511 during the comparable three months of fiscal 2002 We believe that the decrease in other income during the first six and three months of fiscal 2003 as compared to fiscal 2002 was primarily due to a decrease in the minority share of consolidated subsidiaries losses 8 As a result of all of the foregoing, we incurred a net loss for the first six months of fiscal 2003 of $137,550 compared to a net loss of $217,590 for the first six months of fiscal 2002, a decrease of $80,040 or approximately 36.8%. Major Customers - --------------- No individual customer accounted for a significant portion of revenues. Multi Soft has generated revenues 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, 2002, we had a negative working capital position of ($506,495), compared to negative working capital of ($590,935) at January 31, 2002 and we continue to experience cash flow problems. Working Capital and Current Ratios were: - ---------------------------------------- Descriptions July 31, 2002 January 31, 2002 --------------------------------------------------------------------- Working capital ($506,495) ($590,935) Current ratios .13:1 .079:1 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 ----------------------------------------- None. 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 None. (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 19, 2002 By: /s/ Charles J. Lombardo ----------------------------------------- Charles J. Lombardo, Chief Executive Officer Chief Financial Officer and Treasurer 12 CERTIFICATIONS Securities and Exchange Act of 1934 Rule 13a-14 as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002: I, Charles Lombardo, Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer and Treasurer of Multi Soft, Inc. (the "Company") certify that: (1) I have reviewed this quarterly report on Form 10-QSB of Multi Soft, Inc.; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report. --------------------------- Charles Lombardo Chief Executive Officer and Chief Financial Officer September 19, 2002 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: In connection with the Quarterly Report of Multi Soft, Inc. (the "Company") on Form 10-QSB for the period ending July 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Charles Lombardo, Chief Executive Officer of the Company and Chief Financial Officer of the Company, in both capacities, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. --------------------------- Charles Lombardo Chief Executive Officer and Chief Financial Officer 13 -----END PRIVACY-ENHANCED MESSAGE-----