SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1997 Commission File No. 0-12162
New Jersey 22-2418056
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
MULTI SOLUTIONS, INC
(Name of Small business issuer in its charter)
4262 US Route 1, Monmouth Junction, New Jersey 08852
(Address of principalexecutive offices) (Zip Code)
Registrant's telephone number, including area code (908) 329-9200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 _____
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.[X]
Issuer consolidated revenue for the fiscal year: $1,065,135.
The aggregate market value of the voting stock held by non-affiliates (1) of the
registrant based on the average ask ($.12) and ($.02) bid price of such stock,
as of April 30, 1997 is $818,527 based upon $.07 multiplied by the 11,693,241
Shares of Registrant's Common Stock held by non-affiliates.
The number of shares outstanding of each of the registrant's classes of common
stock, as of May 22, 1997, is 18,016,898 shares, all of one class of $.001 par
value Common Stock.
(1) Affiliates for purposes of this item refers to those persons who, during the
preceding 3 months, were officers, directors and/or owners of 5% or more of the
Company's outstanding stock.
DOCUMENTS INCORPORATED BY REFERENCE: None
Transitional Small Business Disclosure Format (check one): Yes _____ No __X__
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MULTI SOLUTIONS, INC.
Form 10-KSB
Year Ended January 31, 1997
Table of Contents
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Page
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PART I........................................................................3
Item 1. Business.............................................................3
Item 2. Properties...........................................................8
Item 3. Legal Proceedings....................................................8
Item 4. Submission of Matters to a Vote of Security Holders..................8
PART II.......................................................................9
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters...................................................9
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................10
Item 7. Financial Statements.................................................12
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures.................................12
PART III.....................................................................13
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act...................13
Item 10. Executive Compensation..............................................15
Item 11. Security Ownership of Certain Beneficial Owners
and Management......................................................17
Item 12. Certain Relationships and Related Transactions......................18
PART IV......................................................................19
Item 13. Exhibits and Reports on Form 8-K....................................19
SIGNATURES...................................................................21
Financial Statements.........................................................F1
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PART I
Item 1. Business.
--------
General
- -------
During the fiscal year ended January 31, 1997, Multi Solutions, Inc. (the
"Company" or "Multi Solutions") was relatively inactive, its primary activity
being the support of its subsidiary, Multi Soft, Inc. ("Multi Soft"). The
business of Multi Soft is discussed below.
BUSINESS OF MULTI SOFT
- ----------------------
Multi Soft, Inc. (or "Multi Soft") was incorporated in January 1985 as a
wholly owned subsidiary of Multi Solutions, Inc. ("MSI") and, as of the date
hereof, is a 55.4% owned subsidiary of the Company. Multi Soft engages in the
production, marketing and maintenance of communications front-ending,
client-server and cooperative processing technologies called The Windows
Communications Library(TM) (WCL(TM)) for Windows and INFRONT and QuickFRONT For
DOS.
The Technology
- --------------
The Multi Soft product line consists of tools for the development of
client-server applications using the mainframe as the Enterprise Server. There
are four key elements to the real world development, delivery and production
maintenance of these applications, and all are supported by the Multi Soft
product line. These include screen-based access to mainframe data and processes;
message-based access to mainframe data and processes; integration of
screen-based and message-based access to the mainframe in the same application;
and control and distribution management.
Screen-based access to Mainframe Data and Processes (which includes
front-ending) allows the user to enhance existing mainframe applications through
the integration of client technologies such as GUIs (graphical user interfaces),
imaging and local data, without changing any mainframe code. This allows
companies to leverage their PC capabilities to streamline user processes and for
presenting mainframe data to users in a way that is intuitive, easy to use and
productive. Screen-based access to the mainframe is supported by WCL, QuickFRONT
and INFRONT.
Message-based access to Mainframe Data and Processes allows companies to
create client-server applications, where the PC is used for the client portion
of the application (i.e., all user interaction, dialogue flow and access to
local data) and the mainframe is used for the server portion of the application
(i.e., management of database interaction, data integrity and security). In this
architecture, only data and messages are passed between the PC and host, which
results in a streamlined and optimized production application. Message-based
access to the mainframe is supported by WCL's WCL/Enterprise Server Option
("WCL/ESO"), and by INFRONT's and QuickFRONT's Host Processing Option ("HPO").
Integrity Control and Distribution Management allows companies to use the
mainframe system to centrally manage the integrity of the work station logic and
distribute new version releases. In production client-server applications it is
important to ensure that the programs, files and data residing on the PC are
correct before the user starts the application. When changes are made to the
work station logic, the host can also be used to manage the distribution of
these changes. Integrity control and distribution management is supported by
WCL's WCL/Software Distribution Option ("WCL/SDO") and by INFRONT's and
QuickFRONT's Software Distribution Facility ("SDF").
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The Multi Soft Product Line
- ---------------------------
The Multi Soft Product line consists of two product sets: the WCL product
set and the INFRONT/QuickFRONT product set. The WCL product set is an open
environment that runs under Windows and includes WCL, WCL/ESO and WCL/SDO. The
INFRONT and QuickFRONT product set is an integrated environment that runs under
DOS and Windows. It includes INFRONT, QuickFRONT, HPO and SDF.
WCL is a toolkit and a set of DLLs (Dynamic Linked Libraries) that work in
conjunction with Windows 3270 emulation products to provide easy integration of
data and processing between PC/LANs (local area networks) and the mainframe.
Because WCL is open, any of the standard Windows development tools such as
PowerBuilder, Visual Basic, and C++, can be used with WCL to create the client
application. It supports the development of GUI front-ends, client-server
applications that use the mainframe as a server and integrity control and
distribution management. The WCL toolkit provides an automated development
environment that includes, among other things, a screen capture mechanism, a
screen maintenance and a screen matching facility. In addition, it provides code
generation to remove the complexity and development effort associated with
building GUI front-end applications.
DynaGUI is a new product introduced this year and is an automted sub
product of WCL which can be sold as a stand-alone application tool. DynaGUI
(Dynamic Graphical User Interface generation) is a fully automatic runtime
utility which dynamically converts 3270 or 5250 legacy emulation screens into
Windows GUI screens, with absolutely no programming or maintenance. It uses
advanced pattern recognition to interpret host attributes and automatically
converts them into Windows controls. And, it allows a non-programmer to quickly
and easily add screen & field-level help in minutes.
WCL/ESO is the host component to WCL and provides a message-based transport
layer between client PC/LANs and the mainframe. The client application is
created using any of the standard Windows tools and products, and the server
application is created using a standard language, such as COBOL. Any mainframe
file structure or database, such as VSAM, DB2, or IMS, can be accessed using
WCL/ESO through CICS (an IBM mainframe operating environment). Client-server
applications developed using WCL/ESO have the added advantage of using a
company's existing mainframe skills and infrastructure, including security, data
integrity, backup and recovery and disaster recovery.
WCL/SDO is a WCL/ESO application created for the centralized control and
management of application code, data and software for distributed client-server
applications. It allows companies to control, audit and distribute from central
host-based master libraries to distributed PCs. These PCs can be clients and/or
servers. WCL/SDO is used as a verification mechanism to ensure all files, and
appropriate versions of files are present on a PC or in a host library. It will
automatically update the PC or Host with correct versions of files if any are
found to be missing or invalid. This facility is important for the successful
production management of large-scale distributed applications.
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QuickFRONT is a powerful, but easy to use, tool which offers the ability to
rapidly improve existing mainframe applications by creating new PC-based
interfaces for them. This can be accomplished without programming, without
training, without any significant learning curve and without any changes to the
mainframe code. If the user needs special functions that are not generated
automatically through QuickFRONT's dialogues, the user also has access to a
powerful 4GL (fourth generation language) called CPL/1. QuickFRONT is designed
to give the user the maximum benefit from front-ending with maximum investment
from both a development resource and software expenditure standpoint.
INFRONT is a comprehensive and integrated development environment for
building PC front-ends and client-server applications with the mainframe. The
development environment includes: an intelligent forms subsystem with screen
capture, screen painting, editing and validation assignment facilities, data
dictionary; a 4GL; an intelligent editor with language templates and reusable
code library; a PC-resident database, including database maintenance facilities
such as sorting and reorganizing; sophisticated debugging facilities, including
a source-level language debugger, and other utilities such as code libraries and
forms libraries.
HPO (Host Processing Option) is the host component to QuickFRONT and
INFRONT that supports the development of client-server applications using the
mainframe as a server. HPO is also used to incrementally migrate legacy systems
into a client-server architecture. It uses a message-based protocol for
peer-to-peer interaction between PC/LANs and host systems. HPO delivers the
capabilities of APPC and LU6.2 (communications protocols) over the user's
existing LU2 and asynchronous networks without requiring any upgrades. HPO
allows the user to offload 60% to 80% of an application's logic to the client,
thereby reducing the mainframe to the role of a server.
SDF (Software Distribution Facility) is a client-server application based
on HPO. It is a utility for the centralized, host-based management of work
station integrity and the automated distribution of updates and new versions of
PC software, files and data. With SDF a master production library of all PC
programs, files and data is stored on the host. As a user logs on to the system,
SDF can automatically check to see if the programs, files and data on the work
station are correct according to the master library on the host. If they are not
correct, SDF will automatically download the correct versions before the
application is started. If they are correct, the application proceeds
immediately.
New Product
- -----------
In addition to DynaGUI, the Company has recently released a 32-bit version
of its WCL product for Windows 95 and Windows/NT.
Key Services
- ------------
Multi Soft offers a wide array of training and consulting services designed
to help its new customers get a fast start in client\server development and to
help existing customers with additional resources to facilitate successful
production application roll-outs.
Training Services include basic and advanced product training, as well as
courses such as "Design and Development Methodologies," which covers the major
issues companies need to understand for successfully developing applications
running on distributed platforms.
Consulting Services range from human factors design and project management
to assisting licensees with application development and/or the development of
complete applications.
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<PAGE>
Technical Support Services include a telephone hotline staffed by
knowledgeable personnel trained and experienced with the Multi Soft product
line. An online bulletin board system is also used to augment hotline and fax
support to customers. Amortization of software over the last two years were
344,588 in fiscal 1997 and 369,548 in 1996.
Clients
- -------
Multi Soft's past and current client base spans over 40,000 users
throughout approximately 125 Fortune 500 companies. Customers that have licensed
Multi Soft's products include: American Cyanamid, Bell Atlantic, ITT Hartford,
Honda, Con Edison, Hoescht, American International Group, Ciba Geigy, Comdisco,
EDS, Exxon, General Electric, Hilton, Lever Brothers, Teachers Insurance,
Chicago Northwestern and US West Business.
In-House Marketing and Sales
- ----------------------------
In addition to their management responsibilities, Charles Lombardo and
Miriam Jarney also are active in sales and marketing. At present, in-house sales
are generally made through telemarketing. If Multi Soft obtains additional funds
from operations or otherwise, it plans to further market its products through
advertisements in trade publications and targeted mailings. No assurance can be
given that Multi Soft will have sufficient funds to increase its in-house sales
and marketing activities.
Distributors
- ------------
To supplement its domestic sales and marketing efforts, Multi Soft has
built an international distribution network. Business arrangements have been
established with software distributors in European markets. These organizations
include: SEE Software Engineering (Switzerland) and Software Engineering
(Holland, Germany, UK).
Strategic Alliances
- -------------------
Multi Soft has established strategic relationships with complementary
hardware and software vendors. Most notable among these are the relationships
with IBM (see "IBM" below) and Computer Data Systems, Inc. ("CDSI"). CDSI, a
supplier of financial systems and consulting services to the government market
place, licenses Multi Soft products into its existing customer base and to new
clients.
IBM
- ---
In October 1993, Multi Soft entered into a Software Licensing Agreement
("SLA") and other ancillary agreements with IBM Corporation ("IBM") providing
IBM with certain exclusive marketing rights for Multi Soft's flagship product,
WCL (runtime version) with IBM IMS Extensions. This IBM EXTENDED VERSION of
Multi Soft's WCL is named IMS Client Server(TM) for Windows. Specifically
modified for use with IBM mainframe systems, IMS Client Server(TM) for Windows
provides remote presentation support for IMS.
The IBM agreement, effective for a term of seven years with automatic
renewals for two more one year periods, provides for the payment of percentage
royalties and unit royalties as specified in the agreement. The Agreement is
terminable by IBM upon 90 days notice. Multi Soft has been receiving monthly
maintenance from the above contract.
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Multi Soft and IBM also have entered into International Marketing
Agreements to market Multi Soft's WCL Toolkit under the name IMS Client Server
Toolkit(TM) for Windows in the United States, Puerto Rico, the Asian Pacific
Region, Europe, the Middle East, Africa and Canada. IMS Client Server
Toolkit(TM) facilitates the generation of client application which run with IMS
Client Server(TM) for Windows.
In addition, 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 WCL. Pursuant to this
agreement, Multi Soft will receive a minimum of $75,000 per quarter over a two
year period representing minimum advances against royalties. This IBM agreement
is effective for a term of two years and is renewable by IBM for two more one
year periods. The Agreement is terminable by Multi Soft or IBM upon 90 days
notice in the event of a default by the other party. The contract has been
renewed for two years paying Multi Soft a minimum monthly maintenance and
royalty fees.
Management believes, but cannot assure, that these marketing and
distribution agreements will provide Multi Soft with a significant presence in
the marketplace, enhance the visibility and credibility of Multi Soft, and
result in increased sales of Multi Soft's products by Multi Soft and its
existing distributors. Management expects but cannot assure that, as the IBM
relationship matures, significant revenues will be generated by IBM and Multi
Soft's product sales base will continue to expand. In addition, management
expects that, as the products sales base expands, so will the subsequent
maintenance and support revenue.
Since fiscal 1994, IBM has represented a significant percentage of Multi Soft's
revenues See "Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations".
Bellcore
- --------
In 1995 Multi Soft, Inc. entered a joint development and marketing
agreement with Bellcore to develop and market a Sun Solaris Unix version of its
WCL product. The agreement provides that Bellcore pay Multi Soft for developing
an extension of its WCL product to the Sun Solaris Unix environment. Also, it
provides for a joint marketing agreement in which both companies will share
marketing royalties. Multi Soft has been receiving maintenance for the above
contract during fiscal 1997.
Employees
- ---------
The Company only has two employees, its officers: Charles J. Lombardo and
Miriam Jarney. Employees of Multi Soft devote such time as is necessary to the
Company's business. Multi Soft has twelve employees and consultants, including
two officers, three support personnel, four technical and engineering, and three
administrative/secretarial personnel.
Competition
- -----------
Multi Soft operates in a business composed of strong competitors, many of
whom have substantially greater resources, are better established, and have a
longer history of operations than Multi Soft. In addition, many competitors have
more extensive facilities than those which now or in the foreseeable future will
become available to Multi Soft.
Multi Soft competes directly with computer manufacturers, large computer
service companies and independent software suppliers. Multi Soft believes that
hundreds of firms that manufacture software applications products are
significant competitors, and Multi Soft is one of the smaller entities in the
field.
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<PAGE>
Multi Soft's products provide front-ending, client-server and cooperative
processing technologies which Multi Soft believes represent a significant
advance over other products being marketed.
NetCast, Inc. is a subsidiary company and was incorporated in April of
1996. It is in the business of developing new Internet technologies to create a
series of products and businesses that will extend the power of advertising on
the Internet. The Company currently owns $76.1% of NetCast. Multi Soft provides
services and office space to NetCast at cost for which it has billed
approximately $55,000. The Board of Directors consists of two officers, Charles
Lombardo and Miriam Jarney. NetCast is in the process of raising private funding
for its operations. However, we can make no assurance it will obtain the funding
necessary to bring its software to the marketplace.
Item 2. Properties
----------
The Company uses Multi Soft's facilities, at no charge, consisting of
approximately 3,300 square feet of office space at 4262 US Route 1, Monmouth
Junction, New Jersey 08852, which Multi Soft leases from C&S Consulting, Inc., a
company owned by Multi Soft's Chairman and his wife. C&S Consulting, Inc. leases
the space from an unaffiliated party. The lease commenced on December 1, 1993
and is terminable at any time on three months notice. Monthly rent is $3,750
during the first year, $4,250 during the second year, $4,750 during the third
year and $4,950 during the fourth year. Multi Soft is responsible for all
utilities.
Item 3. Legal Proceedings.
-----------------
The Company is not presently a party to any material litigation; however,
Multi Soft was a party in the following matters:
Tax Liens
Certain State taxes, interest, and penalties aggregating $38,000 remained
unpaid.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
No matters were submitted to a vote of Security Holders in the last quarter
of the Company's fiscal year ended January 31, 1997.
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PART II
-------
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
---------------------------------------------------------------------
(a) Market Information -- The Company's Common Stock, Class A Warrants (for
one share of Common Stock and one Class B Warrant), Class B Warrants (for one
share of Common Stock), and Class C Redeemable Warrants (for one share of Common
Stock) are traded in the over-the-counter market, and are quoted on The OTC
Bulletin Board (symbol: "MULT").
The following tables set forth the range of high and low bid prices for the
Company's Common Stock on a quarterly basis for the past two fiscal years as
reported by the National Quotation Bureau (which reflect inter-dealer prices,
without retail mark-up, mark-down, or commission and may not necessarily
represent actual transactions). The Warrants are unpriced.
Bid Prices
----------
Period - Fiscal Year 1996 High Low
- --------------------------------------------------------------------------------
First Quarter ending April 30, 1995 .................... .07 .02
Second Quarter ending July 31, 1995 .................... .12 .05
Third Quarter ending October 31, 1995 .................. .10 .05
Fourth Quarter ending January 31, 1996 ................. .10 .02
Period - Fiscal Year 1997 High Low
- --------------------------------------------------------------------------------
First Quarter ending April 30, 1996 .................... .38 .35
Second Quarter ending July 31, 1996 .................... .34 .27
Third Quarter ending October 31, 1996 .................. .26 .25
Fourth Quarter ending January 31, 1997 ................. .18 .15
(b) Holders -- There were approximately 838 holders of record of the
Company's Common Stock, 190 holders of record of the Class A Warrants, 1 holder
of record of the Class B Warrants and 55 holders of record of the Class C
Warrants as of May 8, 1997, inclusive of those brokerage firms and/or clearing
houses holding the Company's securities for their clientele (with each such
brokerage house and/or clearing house being considered as one holder).
(c) Dividends -- The Company has not paid or declared any dividends upon
its Common Stock since its inception and, by reason of its present financial
status and its contemplated financial requirements, does not contemplate or
anticipate paying any dividends upon its Common Stock in the foreseeable future.
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Sales of Unregistered Securities
- --------------------------------
Name Date Number
of Securities Issued
- --------------------------------------------------------------------------------
Charles J. Lombardo 1/16/96 1,000,000
- --------------------------------------------------------------------------------
Miriam G. Jarney 1/16/96 1,000,000
- --------------------------------------------------------------------------------
Michael Zindler 4/2/96 25,000
- --------------------------------------------------------------------------------
John Lowy 4/2/96 75,000
- --------------------------------------------------------------------------------
Linda Dorrian 5/6/96 20,000
- --------------------------------------------------------------------------------
Item 6. Management's Discussion and Analysis of Financial Condition and Results
------------------------------------------------------------------------
of Operations.
-------------
Results of Operations
- ---------------------
Fiscal Year Ended January 31, 1997 Compared to Fiscal Year
- ----------------------------------------------------------
Ended January 31, 1996
- ----------------------
Revenues for the fiscal year ended January 31, 1997 were $1,065,135 as
compared to $1,399,180 in fiscal year 1996, a decrease of $334,045 (24%). This
decrease is primarily due to a 56% decrease in revenues from license fees from
$812,069 to $356,494, much of which come from the companies largest customers.
Primary reason for this decrease is that there were no royalty advances paid to
Multi Soft during this fiscal year.
In fiscal 1997, Multi Soft's two principal sources of revenues were license
fees and maintenance fees which represented approximately 33% ($356,494) and 65%
($688,692) percent of revenues in 1997, respectively.
Management believes that the growth in maintenance fees during the year
ended January 31, 1997 is due to an increase in requests from customers for
product updates, technical assistance and support and contracts with IBM which
requires $10,000 per month in maintenance fees. Also, since November, 1996 the
minimum maintenance has been $25,000 per month from IBM.
Operating expenses decreased 19% from fiscal 1996 ($1,426,876) to fiscal
1997 ($1,162,470) primarily as a result of a decrease in selling and
administrative costs. The decrease in software development costs is principally
due to an decrease in the base of capitalized development costs.
Other income (expenses) changed from $49,249 in fiscal 1996 to $101,244 in
fiscal 1997. Settlements of previously written off accounts payable is included
as other income in the amount of $54,782 for 1996 and $17,110 for 1997. For
fiscal 1997, $55,349 included in other income consists of rent, revenue and
consulting fees. Also for fiscal 1997, $30,000 included in other income consists
of forgone deferred compensation by an officer of the company.
As a result of all of the foregoing, Multi Solution's income in fiscal 1997
of $3,909 decreased compared to its income in 1996 of $21,553.
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Major Customers
- ---------------
In fiscal 1997, IBM accounted for 29% of total revenues. In fiscal 1996,
IBM accounted for 42% of total revenues.
Liquidity and Capital Resources
- -------------------------------
At January 31, 1997, the Company had a working capital deficiency of
($470,055) and has experienced cash flow problems.
Management of Multi Soft has taken various steps to correct this situation.
Overhead costs have been cut drastically as a result of staff reductions and
curtailment of all outside marketing and advertising costs. In addition, senior
staff salaries were reduced and executive officers' salaries were partly
deferred. Secondly, Multi Soft broadened its product base into the Windows
environment and has made its Windows based products easier to learn and use.
In addition, 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 WCL(TM). Pursuant to
this agreement, Multi Soft will receive a minimum of $75,000 per quarter over a
two year period representing minimum advances against royalties (see "Item 1.
Business - IBM").
It is Multi Soft'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 Multi Soft 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. (See "Item 1. Business - In-House Marketing and Sales").
Working Capital and Current Ratios were:
- ----------------------------------------
Descriptions January 31, 1997 January 31, 1996
- --------------------------------------------------------------------------------
Working capital (deficiency) ($470,055) ($579,204)
Current ratios .088:1 .26:1
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.
Effect of Inflation
- -------------------
Management believes that inflation has not had a material effect on its
operations for the periods presented.
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Cautionary Statement
- --------------------
This Form 10-KSB contains certain forward-looking statements regarding,
among other things, the anticipated financial and operating results of the
Company and it's subsidiaries. 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 or its subsidiaries 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 its subsidiaries, include Multi Soft'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 (v) reverse ongoing liquidity and cash flow
problems.
Item 7. Financial Statements.
--------------------
The following financial statements have been prepared in accordance with
the requirements of Item 310(a) of Regulation S-B.
<TABLE>
<CAPTION>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEAR ENDED January 31, 1997
INDEX
Page #
------
<S> <C>
Report of Independent Certified Public Accountant F1
Consolidated Balance Sheets - January 31, 1997 and 1996 F2, F3
Consolidated Statements of Operations for Each of the Years in the Period Ended
January 31, 1997 F4
Consolidated Statements of Changes in Stockholders' Deficiency for Each of the Two
Years in the Period Ended January 31, 1997 F5
Consolidated Statements of Cash Flows for Each of the Two Years in the Period Ended
January 31, 1997 F6
Notes to Financial Statements F7 - F14
</TABLE>
Schedules
- ---------
All schedules of the Company have been omitted because they are
inapplicable or not required, or the information is included elsewhere in the
financial statements or notes thereto.
Item 8. Changes in and Disagreements with Accountants on Accounting and
----------------------------------------------------------------------
Financial Disclosures
---------------------
None
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PART III
--------
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
------------------------------------------------------------------------
with Section 16(a) of the Exchange Act.
--------------------------------------
Name Position(s) Held
- ---- ----------------
Charles J. Lombardo Chairman of the Board of Directors, Chief
Executive Officer, Chief Financial Officer and
Treasurer
Miriam G. Jarney Executive Vice President, Secretary and Director
Larry Spatz Director
George Mansur Jr. Director
James J. Kaput, PhD. Director
Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Officers are appointed to serve until the meeting of the Board of Directors
following the next annual meeting of stockholders and until their successors
have been elected and have qualified.
A summary of the business experience for each officer and director of the
Company is as follows:
CHARLES J. LOMBARDO, age 54, has been the Company's Chairman of the Board
of Directors since January 1985 and has been the Company's Chief Executive
Officer, Chief Financial Officer and Secretary-Treasurer since December 1988. He
has been Multi Soft's Chief Executive Officer, Chief Financial Officer and
Treasurer since August 1982. From 1972 to 1993, Mr. Lombardo also served as the
President of Petro-Art, Ltd., an inactive publicly owned company and its wholly
owned subsidiary JCT Enterprises, Inc. Mr. Lombardo was President of Hopewell
Graphic Industries from 1969 through 1971 and from 1967 to 1969 was associated
with Keystone Computer Associates as a staff member in the Physics Section of
the Systems Analysis Department. From 1965 to 1967, Mr. Lombardo served as a
scientist in the Plasma Physics Department of Raytheon Space and Information
Systems Division. Mr. Lombardo has a Bachelor of Science degree in Physics from
Worcester Polytechnic Institute (1964), a Master of Science degree in Physics
from Northeastern University (1966) and has continued studies toward a Ph.D. in
Theoretical Physics. Mr. Lombardo is a Member of the American Physical Society,
The American Mathematical Society, The Society for Industrial and Applied
Mathematics, The American Association of Physics Teachers, and the Philosophy of
Science Association.
MIRIAM G. JARNEY, age 56, has been a Director of the Company since January
1985, Executive Vice President of the Company since 1986 of the Company since
December 1988. She has been Executive Vice President, Secretary and a Director
of MSI since January 1982. From 1973 to February 1982, Ms. Jarney was a
marketing representative for National CSS, Inc., a computer services company
that has since been acquired by Dun & Cst, Inc. From 1972 through 1973, Ms.
Jarney was associated with Mathematica, Inc., which originated a Data Base
Management System called RAMIS, for which National CSS has exclusive marketing
rights. Ms. Jarney has also worked as a computer systems analyst for Western
Electric Company and Exxon Corporation. She graduated from the Hebrew University
in Jerusalem with a degree in Economics and Statistics and has a Master's degree
in Computer Science from Stevens Institute of Technology. In February 1982, Ms.
Jarney started her own company, Dedicated
- 13 -
<PAGE>
Systems, Inc., for the purpose of packaging computer software for the
microprocessor market, which company is inactive.
LARRY SPATZ, age 53, as been a director of the Company since May 12, 1986,
and a director of Multi Solutions since July 14, 1989. He has been Chief
Executive Officer and Chairman of the Board of Heartthrob Enterprises, Inc., a
restaurant and night club management and development company since September
1985. From 1982 to 1984, Mr. Spatz was President of Universal Petroleum, Inc.
From 1979 to 1982, he was Vice President and a director of Mercantile Trading
Company. Mr. Spatz is also a director of Centrex Communications Systems, Inc.
and Ultramed, Inc.
GEORGE MANSUR, JR., age 67, has been a Director of the Company since March
1982. Since March, 1984, Mr. Mansur has also been Chairman of ALG Corp. and
Chairman of Auto Loan Guarantee Company, as well as President of National
Benefit Services Corp. and Executive Vice President of Benefit Services Group,
Ltd. Since January 1981, Mr. Mansur has been an officer of Petro-Art Ltd., an
inactive publicly owned New Jersey corporation. From 1971 to 1976, he was
President of Benefit Communications, Corp. From 1977 to 1978, he was marketing
director of Commercial Credit Corp., and in 1979 and 1980, he was an officer of
Coronet Graphics, Ltd. and Agri Parogram, Ltd. Mr. Mansur is a Charter Member of
the International Association of Financial Planners.
DR. JAMES J. KAPUT, age 56, a Director of the Company since July 14, 1989,
has been a Professor of Mathematics at Southern Massachusetts University since
1968. Since 1986, he has also been a Research Associate at Harvard University.
Dr. Kaput received a B.S. Degree in Mathematics from Worcester Polytechnice
Institute in 1964 and a Ph.D in Mathematics from Clark University in 1968.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
To the Company's knowledge, based solely on a review of such materials as
are required by the Securities and Exchange Commission, no officer, director or
beneficial holder of more than ten percent of the Company's issued and
outstanding shares of Common Stock failed to timely file with the Securities and
Exchange Commission any form or report required to be so filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934 during the fiscal year
ended January 31, 1997.
- 14 -
<PAGE>
Item 10. Executive Compensation.
----------------------
The following table shows all the cash compensation paid or to be paid by
the Company and Multi Soft, as well as certain other compensation paid or
accrued, during the fiscal years indicated, to the Chief Executive Officer and
Executive Vice President (collectively, "Principal Officers") for such period in
all capacities in which they served. No other Executive Officer received total
annual salary and bonus in excess of $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
Awards Payouts
- ------------------------------------------------------------------------------------------------------------------------------------
Name & Fiscal Salary ($) Bonus Other Annual Restricted Options LTIP All Other
Principle Year ($) Compensation Stock Award SARs Payouts Compensation
Position ($) ($) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles J. 1997 (A) $ 80,000 $0 (C) $20,000 $0 $0 $0 $0
Lombardo CEO 1996 $129,505 $0 $36,750 $0 $0 $0 $0
1994 $128,470 $0 $0 $0 $0 $0 $0
1993 $145,354 $0 $43,937 $0 $0 $0 $0
1992 $155,771 $0 $55,155 $0 $0 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
Miriam Jarney 1997 (B) $ 80,000 $0 $0 $0 $0 $0 $0
Exec. V.P. 1996 $98,491 $0 $0 $0 $0 $0 $0
1994 $98,559 $0 $0 $0 $0 $0 $0
1993 $107,247 $0 $4,991 $0 $0 $0 $0
1992 $113,233 $0 $20,611 $0 $0 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Accrued and unpaid to Charles Lombardo $60,007
(B) Accrued and unpaid to Miriam Jarney $43,342
(C) Consulting Fees
The following table sets forth information with respect to the Principal
Officers concerning the grants of options and Stock Appreciation Rights ("SAR")
during the past fiscal year:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------------------
Name Options/SARs Percent of Total Options/SARs Exercise or Expiration
Granted Granted to Employees in Fiscal Base Price Date
Year ($/Sh)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles J. Lombardo -0- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Miriam Jarney -0- - - -
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- 15 -
<PAGE>
The following table sets forth information with respect to the Principal
Officers concerning exercise of options during the last fiscal year and
unexercised options and SARs held as of the end of the fiscal year:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired on Options/SARs at Options/SARs at
Name Exercise (#) Value Realized ($) FY-End (#) FY-End ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles J. Lombardo -0- -0- -0- -0-
- ------------------------------------------------------------------------------------------------------------------------------------
Miriam Jarney -0- -0- -0- -0-
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Directors' Compensation
- -----------------------
Directors are not compensated for acting in their capacity as Directors.
Directors are reimbursed for their accountable expenses incurred in attending
meetings and conducting their duties.
Employment Agreements
- ---------------------
On July 14, 1989, Multi Soft entered into a five-year employment agreement
with its Chairman of the Board and Chief Executive Officer, Charles J. Lombardo,
which may be renewed for successive periods unless terminated by Multi Soft on
twelve months notice or by Mr. Lombardo on six months notice. Mr. Lombardo is
the Chairman of the Board, Chief Executive Officer, Chief Financial Officer and
Treasurer of the Company. The agreement contains non-disclosure provisions and a
one year restrictive covenant preventing Mr. Lombardo from becoming employed by
a similar company in any state or country in which Multi Soft does business, or
engaging in a competitive business for his own account. Mr. Lombardo is entitled
to annual salary increases of at least 10%, plus additional annual compensation
equal to 2% of Multi Soft's after tax profits. The employment agreement has been
renewed for an additional year on an annual basis.
Mr. Lombardo also receives a salary from the Company of $25,000 per year,
which he agreed to forego for fiscal 1997.
On August 1, 1989, Multi Soft entered into a five-year employment agreement
with Miriam Jarney, Executive Vice-President and a Director of both Multi Soft
and the Company, which may be renewed for additional periods, unless terminated
by Multi Soft on twelve months notice or Ms. Jarney on six months notice. Ms.
Jarney is entitled to annual salary increases of at least 10%, plus additional
annual compensation equal to 1.5% of Multi Soft 's after tax profits. The
agreement also contains non-disclosure provisions and a one year restrictive
covenant preventing Ms. Jarney from becoming employed by a similar company in
any state or country in which Multi Soft does business, or engaging in any
competitive business for her own account. The employment agreement has been
renewed for an additional year on an annual basis.
In January of 1996, the Company issued 1,000,000 shares of common stock to
Mrs. Jarney for accrued salary of Multi Soft.
During fiscal 1996 and fiscal 1997, Mr. Lombardo and Ms. Jarney accrued a
portion of their salaries. See financials. The balance due between both officers
as of January 31, 1997 is $804,954 including deferred increases of $661,605.
- 16 -
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
--------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners -- The persons listed
in the chart below are known to the Company to be the beneficial owners of more
than 5% of the 18,016,898 Shares of the Company's outstanding Common Stock,
$.001 par value, as of March 19, 1997.
(b) Security Ownership of Management -- The number and percentage of Shares
of Common Stock of the Company owned of record and beneficially by each officer
and director of the Company and by all officers and directors of the Company as
a group are set forth on the chart below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Address of Beneficial Owner Amount and Nature of Percent of Class (1)
Beneficial
Ownership(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles J. Lombardo 4,212,414 (1) 23.52%
Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, & Treasurer
1511 Laurie Lane, Yardley, PA 19067
- ------------------------------------------------------------------------------------------------------------------------------------
Miriam G. Jarney 2,094,100 (2) 11.69%
Executive Vice President, Secretary, Director
21 Doering Way, Cranford, NJ 07106
- ------------------------------------------------------------------------------------------------------------------------------------
Larry Spatz 0 (3) 0.0%
Director
3175 Commercial Ave., Suite 222
Northbrook, IL 60062
- ------------------------------------------------------------------------------------------------------------------------------------
James J. Kaput, PhD. 10,000 **
Director
473 Chase Road, N. Dartmouth, MA 02747
- ------------------------------------------------------------------------------------------------------------------------------------
George E. Mansur, Jr. 7,143 **
Director
1413 State Rd., Phoenixville, PA 19460
All Executive Officers and Directors as a group (5 persons) 6,323,657(4) 35.31%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
** Less than one percent.
(1) Includes shares held by Mr. Lombardo's wife and shares owned jointly with
his wife. Also includes 1,000,000 shares issued to Mr. Lombardo in 1996
(See "Item 10. Executive Compensation").
(2) Includes 19,100 shares owned by Ms. Jarney's husband and 1,000,000 issued
in 1996.
(3) Excludes shares owned beneficially by a family trust of which Mr. Spatz'
wife is one of the beneficiaries. Mr. Spatz has confirmed to the Company
that neither he nor his wife has any voting or dispositive power with
regard to the shares owned by the trust.
(4) Based upon 18,016,898 shares outstanding as of May 22, 1997.
- 17 -
<PAGE>
Item 12. Certain Relationships and Related Transactions.
----------------------------------------------
Multi Soft has a demand loan with a commercial bank. Borrowings are
collateralized Multi Soft`s accounts receivable and bear interest at the bank's
prime rate plus 2% (10.50% at January 31, 1997). The Company was in default on
this loan. Multi Soft obtained a forbearance from the bank in November 1993
requiring an initial $20,000 payment and monthly payments of $1,500 of principal
and interest and the personal guarantee of the Company's Chairman. As of this
date, Multi Soft is in compliance with the terms of the forbearance agreement
and owes approximately $25,497. During 1997 and 1996, the maximum amount of
borrowings outstanding were $41,000 and $53,729, respectively.
In June 1993, Multi Soft conducted a private placement of Multi Soft common
stock for a total of 268,671 shares at $.03 per share, in connection with the
private placement by Multi Solutions, Inc. ("MSI") of $260,000 in convertible 8%
promissory notes (the "Notes"). MSI used $210,000 of the net proceeds from the
Notes to purchase an additional 700,000 shares of Multi Soft. The principal and
interest due under the Notes, pursuant to the terms of the Notes, have been
converted into restricted shares Multi Soft's common stock at the rate of $.30
per share (936,450 shares in the aggregate). The holders of the Notes and the
268,671 shares have exercised their right to demand registration of these shares
and accordingly, on March 17, 1995 a registration statement on Form SB-2 was
filed with the Securities and Exchange Commission to register these shares and
certain other shares.
Although there is no written agreement between MSI and Multi Soft granting
MSI preemptive rights with regard to MSI's majority ownership of Multi Soft
common stock, in practice, MSI has and plans to continue to acquire sufficient
shares of Multi Soft's common stock to assure its majority ownership in Multi
Soft.
In January 1996, Multi Soft issued 1,500,000 shares of its common stock to the
Company. The transaction was valued at $.22 per share ($330,000) for which Multi
Solutions issued a note.
In connection with this transaction, Multi Soft paid for the acquisition of
1,000,000 each of the Company's common shares (valued at $0.08 per share) to the
chairman and vice president by allowing the indebtedness of the Company to Multi
Soft to be reduced by $160,000 which thereby reduced the debt of Multi Soft to
the two officers by the same amount.
After completion of this series of transactions, the net debt due to Multi Soft
in connection with the common stock sale was reduced to $170,000.
Through the end of MSI's fiscal year ending January 31, 1994, MSI owed Mr.
Lombardo $98,946 in accrued salary. In July 1994, MSI authorized the issuance of
549,700 shares of its Common Stock to Mr. Lombardo in lieu of the foregoing
accrued salary. During fiscal 1996, the company issued 1,000,000 shares to each
Charles Lombardo and Miriam Jarney, such transaction being effected to pay
accrued salary of Multi Soft and reducing debts of the company to Multi Soft.
The balance due between both officers as of January 31, 1997 is $734,954
including deferred increases of $631,605.
Multi Soft subleases its office space from C&S Consulting, Inc., a company
owned by the Company's Chairman and his wife (see "Item 2. Properties").
- 18 -
<PAGE>
PART IV
-------
Item 13. Exhibits and Reports on Form 8-K.
--------------------------------
Exhibits
- --------
3.a Certificate of Incorporation of the Company (1)
3.b By-Laws of the Company (1)
4.a Specimen Common Stock of the Company (1)
4.b Class A Warrant (1)
4.c Class B Warrant (1)
4.d Class C Warrant (4)
10.a Company Employment Agreement with Charles J. Lombardo (5)*
10.b Multi Soft Employment Agreement with Charles J. Lombardo (5)*
10.c Multi Soft Employment Agreement with Miriam G. Jarney(5)
10.d Licensing Agreement with Widow, Inc. (6)
10.e Agreements with IBM (2)
10.f Copy of MSI's Non-Qualified Stock Option Plan, Stock Grant Program and
Employee Incentive Stock Option Plan (3)
10.g Amendments to MSI's Non-Qualified Stock Option and Stock Grant
Program (4)
16. The required letters from the former accountant (7)
21. List of Subsidiaries
27. Financial data schedule (electronic format only)
- --------------------
* Management contracts or compensatory plan or arrangement required to be
filed as an exhibit.
(1) Previously filed as an Exhibit to the Company's Form S-18 Registration
Statement, File No. 2-85710-NY filed with the Commission on July 14, 1983,
and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Company's Form 10-K for the fiscal
year ended January 31, 1993 as filed with the Commission on or about
Nov. 18, 1993, and incorporated herein by reference.
(3) Previously filed as part of the Company's proxy materials for the Annual
Meeting of Stockholders held on July 9, 1985, as filed with the Commission
on or about May 24, 1985, and incorporated herein by reference.
(4) Previously filed as an Exhibit to the Company's Registration Statement on
Form S-1, SEC File No. 33-3133, filed with the Commission on February 4,
1986, and incorporated herein by reference.
(5) Previously filed as an Exhibit to Multi Soft's Form 10-K for the fiscal
year ended January 31, 1990 as filed with the Commission on or about April
29, 1990 under SEC File No. 33-3133-NY, and incorporated herein by
reference.
- 19 -
<PAGE>
(6) Previously filed as an Exhibit to the Company's Form 10-K for the fiscal
year ended January 31, 1990 as filed with the Commission on or about April
29, 1990, under SEC File No. 33-3133-NY, and incorporated herein by
reference.
(7) Previously filed as an Exhibit to the Company's Form 8-K dated April 25,
1995 as filed with the Commission on or about April 25, 1995, and
incorporated herein by reference.
Reports of Form 8-K
- -------------------
No reports on Form 8-K were filed during the last quarter of the fiscal
year ended January 31, 1997.
- 20 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MULTI SOLUTIONS, INC.
Dated: May 10, 1997 By:
------------------------
Charles J. Lombardo,
Chief Executive Officer,
Chief Financial Officer
and Secretary-Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
Chairman of the Board of Directors, May 10, 1997
- ------------------------------ Chief Executive Officer, Financial
Charles J. Lombardo Officer, and Secretary-Treasurer
Executive Vice President, and May 10, 1997
- ------------------------------ Director
Miriam Jarney
Director May 10, 1997
- ------------------------------
Larry Spatz
- ------------------------------ Director May 10, 1997
James Kaput, PhD.
- ------------------------------ Director May 10, 1997
George E. Mansur, Jr.
</TABLE>
- 21 -
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
Multi Soft, Inc. incorporated in the State of New Jersey in January 1985 doing
business only under the name of Multi Soft, Inc.
NetCast, Inc. incorporated in the State of New Jersey in May 1996 doing business
only under the name of NetCast, Inc.
- 22 -
<PAGE>
Stewart W. Robinson
Certified Public Accountant
462 Seventh Avenue, Suite 1600
New York, NY 10018
Tel: (212) 279-8430
Fax: (212) 629-7052
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
-------------------------------------------------
To the Board of Directors
Multi Solutions, Inc.
I have audited the accompanying consolidated balance sheets of Multi Solutions,
Inc. and Subsidiaries as of January 31, 1997 and 1996 and the related
consolidated statements of operations, changes in stockholders' deficiency and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Multi Solutions, Inc.
and Subsidiaries as of January 31, 1997 and 1996 and the consolidated results of
its operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficiency, raising substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note A. The financial statements do not include
any adjustments relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might
result should the Company be unable to continue as a going concern.
STEWART W. ROBINSON
New York, New York
May 5, 1997
F-1
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 1997 and 1996
1997 1996
---- ----
ASSETS
CURRENT ASSETS
Cash $ 13,575 $ 89,575
Accounts Receivable (net of allowance
of $6,854 and $32,880 respectively) 18,571 100,428
Prepaid expenses and other current assets 13,532 13,532
----------- -----------
45,678 203,535
FURNITURE AND EQUIPMENT
Research and Development Equipment 14,603 259,907
Office furniture and other equipment 22,476 10,053
----------- -----------
37,079 269,960
Less: Accumulated Depreciation (9,119) (266,066)
----------- -----------
27,960 3,894
Capitalized Organizational costs 2,415
OTHER ASSETS
Capitalized software development costs 1,852,822 1,980,130
Less accumulated amortization (1,110,741) (1,256,153)
----------- -----------
742,081 723,977
Intangibles 200
----------- -----------
$ 818,334 $ 931,406
=========== ===========
SEE NOTES TO FINANCIAL STATEMENTS F-2
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 1997 and 1996
1997 1996
as restated
----------- -----------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Loan payable to bank $ 25,497 $ 41,099
Note Payable 15,504
Accrued payroll -- 30,285
Payroll and other taxes payable 38,070 74,993
Accounts Payable 164,902 216,554
Accrued officer compensation 103,349 110,016
Deferred Revenues 168,411 309,792
----------- -----------
515,733 782,739
Deferred compensation due officer/shareholders 631,605 636,605
Deferred Revenues - net of current portion -- 8,022
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$.001 par value, issued and outstanding 18,017 17,807
18,016,898 (1997) and 17,806,898 (1996)
Additional paid-in capital, 8,592,434 8,578,537
Minority Interest 87,092
Accumulated deficit (9,026,547) (9,092,304)
----------- -----------
(329,004) (495,960)
COMMITMENTS AND CONTINGENCIES-- NOTE F
SOFTWARE AND LICENSING AGREEMENT-- NOTE I
$ 818,334 $ 931,406
=========== ===========
SEE NOTES TO FINANCIAL STATEMENTS F-3
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended January 31, 1997 and 1996
1997 1996
------------ ------------
REVENUES
License fees $ 356,494 $ 812,069
Maintenance fees 688,692 545,977
Consulting and Other fees 19,949 41,134
------------ ------------
Total revenues 1,065,135 1,399,180
EXPENSES
Software development and technical support 344,588 369,548
Selling and administrative 817,882 1,057,328
------------ ------------
Total expenses 1,162,470 1,426,876
------------ ------------
(Loss) from operations (97,335) (27,696)
OTHER INCOME (EXPENSE)
Other Revenues 109,102 54,782
Interest Expense (7,858) (5,533)
------------ ------------
Total other income 101,244 49,249
Net Income $ 3,909 $ 21,553
============ ============
Weighted average shares outstanding 17,986,898 15,974,000
============ ============
Income per share a a
============ ============
(a) less then $.01 per share
SEE NOTES TO FINANCIAL F-4
STATEMENTS
<PAGE>
MULTI SOLUTIONS,INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFECIENCY
Years ended January 31, 1997 and 1996
<TABLE>
<CAPTION>
Total
Common Stock paid in Accumulated
Shares Amount capital deficit
<S> <C> <C> <C> <C>
Balance as of February 1 ,1995 15,806,898 $ 15,807 $ 8,420,537 $(9,113,857)
Issuance of common stock 2,000,000 2,000 158,000
Net Income 21,553
---------- ----------- ----------- -----------
Balance at January 31, 1996 17,806,898 17,807 8,578,537 (9,092,304)
Issuance of resticted common stock 100,000 210 16,564
Addition to Minority Interest used to 61,848
reduce loss absorbed at 100%
Addition of Minority Interest
Deferred Compensation
Net Income 3,909
---------- ----------- ----------- -----------
Balance at January 31, 1997 18,016,898 $ 18,017 $ 8,595,101 $(9,026,547)
========== =========== =========== ===========
Total
Minority Deferred stockholders
Interest Compensation deficiency
<S> <C> <C> <C>
Balance as of February 1 ,1995 $(677,513)
Issuance of common stock 160,000
Net Income 21,553
---------
Balance at January 31, 1996 (495,960)
Issuance of resticted common stock (4,000) 12,774
Addition to Minority Interest used to
reduce loss absorbed at %100 61,848
Addition of Minority Interest 87,092 87,092
Deferred Compensation 1,333 1,333
Net Income 3,909
--------- --------- ---------
Balance at January 31, 1997 $ 87,092 $ (2,667) $(329,004)
========== ========= =========
</TABLE>
F-5
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended January 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
--------- ---------
Cash flows from operating activities
<S> <C> <C>
Net Income (Loss) $ 3,909 $ 21,553
Adjustments to reconcile net income (loss)
to net cash provided by operating activities
Prior period adjustment
Depreciation and amortization 347,548 371,921
Common stock issued to Solutions
Changes in assets and liabilities
Accounts receivable 81,857 (4,637)
Prepaid expenses and other current assets -- 3,778
Accrued payroll (30,285) (905)
Payroll and other taxes payable (36,923) --
Note Payable 15,504
Accounts payable and accrued expenses (51,652) (90,297)
Accrued officer compensation (6,667) (42,230)
Deferred officer compensation (5,000) 225,758
Deferred revenues (141,381) 20,401
Long term deferred revenues (8,022) (192,864)
--------- ---------
Net cash provided by operating activities 168,888 312,478
Cash flows from investing activities
Capital expenditures (29,641) --
Capitalized software development costs (362,692) (366,615)
--------- ---------
Net cash used in investing activities (392,333) (366,615)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (15,602) (12,630)
Loan from officer (22,000)
Increase in Minority Interest 148,940
Restricted Common stock issued to Solutions 160,000
Issuance of capital stock 14,107 --
--------- ---------
Net cash provided by financing activities 147,445 125,370
--------- ---------
NET INCREASE (DECREASE) IN CASH (76,000) 71,233
Cash at beginning of year 89,575 18,342
--------- ---------
Cash at end of year $ 13,575 $ 89,575
========= =========
</TABLE>
F-6
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
NOTE A - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Multi Solutions, Inc. (the Company) was incorporated under the laws of the
State of New Jersey on July 26, 1982. The Company is presently a holding
company for its ownership of its subsidiaries, Multi Soft, Inc. ("Multi
Soft") and NetCast, Inc. ("NetCast"). As of January 31, 1997, the Company
owns 55.4% of "Multi Soft" and 76.1% of NetCast.
The Company's consolidated financial statements have been presented on a
going concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The liquidity
of the Company has been adversely affected in recent years by significant
losses from operations. The Company incurred a net income of $3,909 in 1997
and had net income of $21,553 in 1996. In addition, at January 31, 1997,
the Company's current liabilities exceeded current assets by $470,055 and
total liabilities exceeded total assets by $329,004.
The Company intends to aggressively market its new products (see note I),
control operating costs and broaden its product base through enhancements
of products for use by non-technical computer personnel.
The Company believes that these measures will provide sufficient liquidity
for it to continue as a going concern in its present form. Accordingly, the
consolidated financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts or the
amount and classification of liabilities or any other adjustments that
might be necessary should the Company be unable to continue as a going
concern in its present form.
NetCast acquired the assets of the Discovery Publishing Group in September
1996 for 200,000 shares of its restricted common stock valued at par.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries, Multi Soft, Inc. ("Multi Soft") and
NetCast, Inc. ("NetCast"). All significant intercompany balances and
transactions have been eliminated in consolidation. None of Multi Soft's
net income was allocated to minority shareholders because the company
absorbed the minority interest of accumulated losses allocated up to
January 31, 1995.
2. Furniture and Equipment
Furniture and equipment are stated at cost. Depreciation is provided on the
straight-line method over the estimated useful lives of the assets which
range from three to seven years.
Depreciation expense was $5,060 and $2,372 for the years ended January 31,
1997 and 1996 respectively.
F7
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
3. Capitalization of Computer Software
Capitalized software development costs relating to products for which
technological feasibility has been established qualify for capitalization
under Statement of Financial Accounting Standards No. 86, "Accounting for
the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed."
Research and development costs associated with the creation of computer
software prior to reaching technological feasibility are expensed as
incurred, except for related computer equipment expenditures such as
personal computers and other hardware components, which are capitalized and
depreciated over their useful lives if the equipment is deemed to have
alternative future use.
Capitalized software development costs are amortized to operations when the
product is available for general release to customers. Amortization is
calculated using (a) the ratio of current gross revenues for the product to
the total of current and anticipated gross revenues for that product or (b)
the straight-line method over the remaining useful life of the product,
whichever is greater.
The Company is amortizing, over a sixty month period, the capitalized
software costs for its Windows-based products. The period is based on sales
forecasts for the seven year agreement between Multi Soft, Inc. and IBM
which began in October 1993. The Company's Windows products are compatible
with Windows 95 and further modifications are continually made,
specifically for 32 bit environments (Windows 95 and Windows NT).
Unamortized costs relating to Windows products at January 31, 1997 and 1996
are $744,181 and $723,977, respectively.
The unamortized capitalized software costs relating to the two DOS products
are being amortized over the one year remaining life as of January 31,
1997. The unamortized costs relating to DOS products at January 31, 1997
and 1996 are $2,440 and $4,878, respectively.
Amortization expense for all products at January 31, 1997 and 1996 was
$344,588 and $369,548, respectively.
4. Revenue Recognition
In accordance with Statement of Position 91-1, "Software Revenue
Recognition" (SOP 91-1), the Company's policy is to recognize license and
maintenance fees when earned and consulting fee income when services are
rendered. License fees are recognized upon shipment of the software while
maintenance fees are recorded over the period covered by the related
contract. Consulting is performed on a time and material basis.
5. Deferred Compensation
Deferred compensation arising from the issuance of stock grants is
amortized over the term of the related grant or employment agreements (one
to five years). The amount of compensation attributable to stock grants is
determined by the market price of the Company's stock on the date of the
grant.
F8
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
6. Income (Loss) Per Share
Income (loss) per share is computed using the weighted average number of
common shares outstanding during the period. Common stock equivalents are
antidilutive and, therefore, are not considered in the computation of loss
per share.
7. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from thoses estimates.
8. Income Taxes
The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes," which significantly changes the accounting for deferred income
taxes. The standard provides for a liability approach under which deferred
income taxes are provided for based upon enacted tax laws and rates
applicable to the periods in which the taxes become payable. The Company
adopted the new standard for its year ended January 31, 1994. The
cumulative effect of the change in accounting principles was not
significant.
NOTE C - NOTES PAYABLE
1. Demand Loan - Bank
Multi Soft has a demand loan payable to a commercial bank ($25,497 and
$41,099 at January 31, 1997 and 1996 respectively). Borrowings are
collateralized by Multi Soft's accounts receivable and bear interest at the
bank's prime rate plus 2% (10.5% and 10.75% at January 31, 1997 and 1996
respectively). The loan is currently in default. Multi Soft obtained a
forbearance from the bank in November 1993 requiring a $20,000 payment upon
execution, monthly payments of $1,500 principal and interest and the
personal guarantee of the Company's chairman. As of January 31, 1997, the
Company is in compliance with the terms of the forbearance agreement.
During 1997 and 1996, the maximum amount of borrowings outstanding was
$41,099 and $53,729, respectively, the average borrowing were $33.248 and
$47,819, respectively, and the weighted average interest rates were 11.0%
and 9.5%, respectively.
2. Note Payable
In June 1996, $18,700 due to a vendor was converted to a note at the rate
of $597 per month for 36 months with interest at 9%.
F9
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
NOTE D - INCOME TAXES
As a result of losses incurred in recent years, the Company and its
subsidiaries separately have net operating loss carryforwards available to
offset future federal taxable income of approximately $5.5 million. These
losses expire at various dates through 2012.
The Company adopted, effective February 1, 1993, SFAS No. 109, "Accounting
for Income Taxes." Under the liability method specified by SFAS No. 109,
deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax basis of assets and liabilities are
determined based on the difference between the financial statement and tax
basis of assets and liabilities as measured by the enacted tax rates which
will be in effect when these differences reverse. Deferred tax expense is
the result of changes in deferred tax assets and liabilities. The principal
types of differences between assets and liabilities for financial statement
and tax return purposes are capitalized software development costs,
deferred compensation, deferred revenues and allowance for uncollectible
accounts.
The deferred method, used in years prior to 1993, required the Company to
provide for deferred tax expense based on certain items of income and
expense which were reported in different years in the financial statements
and the tax returns as measured by the tax rate in effect for the year the
difference occurred.
Deferred tax (liabilities) assets consist of the following at January 31,
1997 and 1996:
1997 1996
--------- ---------
Capitalized software $ (242,000) $ (289,000)
Allowance for bad debts 3,000 15,000
Deferred compensation 234,000 234,000
Deferred revenue royalties 92,000 127,000
Loss carryforwards 4,088,000 4,079,000
--------- ---------
Gross deferred tax assets 4,175,000 $ 4,166,000
Deferred tax assets valuation allowance (4,175,000) ($4,166,000)
---------- -----------
$ -0- $ -0-
=========== ============
NOTE E - STOCKHOLDERS' DEFICIENCY
1. Warrants
The expiration dates of the Company's Class A, Class B and Class C Warrants
have been extended to December 1, 1997. There are presently outstanding a
total of 723,793 Class A Warrants, 600 Class B Warrants and 714,012 Class C
Warrants.
F10
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
2. Stock Option Plan
-----------------
In June 1993, the Company adopted an Employee, Consultant and Advisory
Stock and Option Compensation Plan (the Plan). Pursuant to the terms of the
Plan, an aggregate of up to 2,500,000 shares of common stock, $0.01 par
value per share (the common stock), and/or options to purchase common stock
may be granted to persons who are, at the time of issuance or grant,
employees or officers of, or consultants or advisors to, the Company. To
date, an aggregate of 145,880 shares has been issued pursuant to the Plan.
3. Common Stock Issued to Officers
-------------------------------
In January 1996, Multi Soft issued 1,500,000 shares of its common stock to
the Company. The transaction was valued at $.22 per share ($330,000) for
which Multi Solutions was to issue a note.
In connection with this transaction, Multi Soft paid for the acquisition of
1,000,000 each of the Company's common shares (valued at $0.08 per share)
to the chairman and vice president by allowing the indebtedness of the
Company to Multi Soft to be reduced by $160,000 which thereby reduced the
debt of Multi Soft to the two officers by the same amount.
After completion of this series of transactions, the net debt due to Multi
Soft in connection with the common stock sale was reduced to $170,000.
NOTE F - COMMITMENTS AND CONTINGENCIES
1. Leases
------
Multi Soft is a subtenant in office space leased by an entity substantially
owned by the Company's chairman and his wife. At present Multi Soft has a
quarter-by-quarter term lease with a base rent of $4,950 per month. Rental
expense under the lease aggregated approximately $57,200 and $52,000 for
the years ended January 31, 1997 and 1996, respectively.
In June 1995 the Company entered into a three year noncancellable operating
lease for a color laser copier with monthly payments of $606 plus tax and
per copy charges through May 1998.
Future minimum lease payments under the noncancellable equipment operating
lease are as follows:
Year Ending
January 31,
-----------
1998 $7,000
1999 3,000
-----
$10,000
=======
2. Employment Agreements
---------------------
Multi Soft has employment agreements with two officers which provide
minimum annual compensation of $182,000 through July 1997. Upon execution
of these agreements, an aggregate of 91,667 shares of Multi Soft's common
stock was issued to the employees.
F11
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
In addition, the employment agreements entitle the two employees to 2% and
1.5%, respectively, of each fiscal year's after tax profits of Multi Soft.
3. Payroll Taxes
-------------
Certain Federal and state taxes, interest, and penalties aggregating
approximately $38,000 remain unpaid at January 31, 1997.
4. Litigation
----------
The Company and Multi Soft have been, from time to time, parties to legal
actions arising in the normal course of their business. In the opinion of
management, the disposition of these actions will not have a material
effect on the financial position or results of operations of the Company
taken as a whole.
In May 1997, a lawsuit was commenced against NetCast by former consultants
for approximately $113,000. The Company has accrued $24,000 prior to
commencement of the action. The Company intends to vigorously defend the
lawsuit and has made counterclaims.
NOTE G - MAJOR CUSTOMERS
In fiscal 1997 one customer accounted for 29%. In fiscal 1996, one customer
accounted for 42% of total revenue.
NOTE H - SUPPLEMENTAL INFORMATION
Supplemental disclosures of cash flow information for years ended January
31, 1997 and 1996 are as follows:
1997 1996
---- ----
Cash paid during the year for Interest $7,858 $5,533
===== =====
F12
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
NOTE I - SOFTWARE LICENSING AGREEMENT
1. Software Licensing Agreement
----------------------------
On October 8, 1993, the Company entered into a Software Licensing Agreement
(SLA) and other ancillary agreements with IBM Corporation (IBM) providing
for certain exclusive marketing rights for the Company's principal product:
Windows Communications Library (WCL) with IBM IMS Extensions. This is a
software product specifically modified for use with IBM mainframe systems.
The agreements, effective for a term of seven years with automatic renewals
for two additional one year periods, provide for the payment of percentage
royalties and unit royalties as specified in the agreement. IBM may
terminate the agreement after the first year upon 90 days notice. The
agreement further provides for minimum non-refundable royalty advances to
the Company aggregating $300,000 through June 1996.
The agreements create certain obligations by the Company, including future
maintenance, staffing, response and software source code custody. Future
enhancements may be provided by the Company for additional fees. As of July
1995 Multi Soft has been receiving monthly maintenance from IBM regarding
the above license agreement.
The $300,000 royalty advance has been recorded as deferred revenue in
fiscal year 1994 and is being recognized as income over the longer of:
o The 21 month period of maintenance included in the agreement without
additional fees; or
o The period in which the royalty is earned through IBM sales throughout
the seven year term of the agreement.
Effective June 1, 1995 Multi Soft and IBM amended their Software License
Agreement number: STL93199 and its related worldwide marketing agreements,
such that, $150,000 dollars of the $300,000 advance amount deferred as of
January 31, 1994 shall, as of June 1, 1995 no longer be subject to offset
against royalties accrued. The net effect will remove $150,000 from
deferred revenues and increase license fee revenues by $150,000.
For the years ended January 31, 1997 and 1996, Muli Soft recognized as
income $42,864 and $192,864 of the $300,000 advance respectively.
The contract with IBM's Network Software Division provides that Multi Soft
will receive prepaid royalties of $600,000 in quarterly installments over a
two year period. As a result, IBM receives non exclusive and non
transferable license to market certain Multi Soft products. The product is
marketed under IBM's logo as `Personal Communications Toolkit for Visual
Basic. Multi Soft had been receiving maintenance fees from the above
contract.
F13
<PAGE>
Multi Solutions, Inc. and Subsidaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and 1996
2. Marketing Agreements with IBM
-----------------------------
The Company entered into marketing agreements with IBM Corporation (IBM)
providing for the marketing rights of the Windows Communications Library
(WCL) software with IBM IMS Extensions in the United States, Puerto Rico,
the Asia Pacific Region, Europe, the Middle East and Africa.
The agreements are for three year terms and provide for the payment of
percentage royalties as specified in the agreement.
3. Joint Development and Marketing Agreement with Bellcore
-------------------------------------------------------
In 1995 Multi Soft, Inc. entered a joint development and marketing
agreement with Bellcore to develop and market a Sun Solaris Unix version of
its WCL product. The agreement provides that Bellcore pay Multi Soft for
developing an extension of its WCL product to the Sun Solaris Unix
environment. Additionally, Bellcore shall pay a specified monthly
maintenance fee for a period of one year. Also, it provides for a joint
marketing agreement in which both companies will share marketing royalties.
During fiscal 1997, Multi Soft had been receiving maintenance fees from the
above contract.
NOTE J - RELATED PARTY TRANSACTIONS
Multi Soft, from time to time, pays incidental expenses of the Company and
allocates its share of certain expenses. These items are credited to
intercompany payable and no payments have been made during the fiscal year.
The balance due to Multi Soft at January 31, 1997 and 1996 was $422,951 and
$408,962.
Multi Soft provides certain services and office space to NetCast. The
balance due from NetCast, Inc. at January 31, 1997 was $55,335.
NOTE K - NEW SUBSIDIARY
NetCast, Inc. is a subsidiary company and was incorporated in April of
1996. It is in the business of developing new Internet technologies to
create a series of products and businesses that will extend the power of
advertising on the Internet. The Company currently owns $76.1% of NetCast.
The Board of Directors consists of two officers, Charles Lombardo and
Miriam Jarney. NetCast is in the process of raising private funding for its
operations. However, we can make no assurance it will obtain the funding
necessary to bring its software to the marketplace.
F14
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<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> JAN-31-1997
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<RECEIVABLES> 18,571
<ALLOWANCES> 6,854
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<CURRENT-ASSETS> 45,678
<PP&E> 37,079
<DEPRECIATION> (9,119)
<TOTAL-ASSETS> 818,334
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<COMMON> 18,017
<OTHER-SE> (329,004)
<TOTAL-LIABILITY-AND-EQUITY> 818,334
<SALES> 1,065,135
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<CGS> 0
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