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 October 31, 1999
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
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MULTI SOLUTIONS, INC
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2418056
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4262 US Route 1, Monmouth Junction, New Jersey 08852
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(Address of principal executive offices)
Issuer's telephone number, including area code: (732) 329-9200
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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 October 31, 1999
- ----------------------- -------------------------------
Common Stock, par value 18,813,398
$.001 per share
<PAGE>
PART I. FINANCIAL INFORMATION
- -----------------------------
ITEM 1. FINANCIAL STATEMENTS
--------------------
The accompanying consolidated financial statements are unaudited for the
interim periods, but include all adjustments (consisting only of normal
recurring accruals) which management considers necessary for the fair
presentation of results for the nine months ended October 31, 1999.
Moreover, these consolidated financial statements do not purport to contain
complete disclosure in conformity with generally accepted accounting principles
and should be read in conjunction with the Company's audited consolidated
financial statements at, and for the fiscal year ended January 31, 1999.
FreeTrek.Com is a newly formed subsidiary of Multi Solutions Inc. Multi
Solutions, Inc. retains approximately a 65% interest in FreeTrek.Com, Inc. The
remaining approximately 35% interest in FreeTrek.com Inc. obtained by private
investors for services and cash to fund initial software development and other
startup activities.
The company has developed a powerful new software-based tool and promotion
program for tapping into the marketing communication potential of the Internet.
Unlike many "broadcast" model Internet marketing concepts, FreeTrek.com
offers major marketers the opportunity to communicate one-on-one with carefully
defined private networks of their most valuable consumers.
The results for the nine months ended October 31, 1999 are not necessarily
indicative of the results for the entire fiscal year. Multi Solutions, Inc. (
the "company") owns 52% of Multi Soft, Inc's common stock. The companies
financial statements are consolidated with Multi soft and its other
subsidiaries, NetCast, Inc. (currently inactive), and FreeTrek.Com, Inc. which
is currently in the development stage. The financial statements include the
operational results of FreeTrek.Com, Inc. for the period ending October 31,
1999. FreeTrek did not have a material impact on the consolidated results of
operations for Multi Solutions.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
---------------------
Results of Operations
- ---------------------
Nine and three months ended October 31, 1999 compared to nine and three months
- --------------------------------------------------------------------------------
ended October 31, 1998
- ----------------------
Revenues for the current nine months of fiscal year 1999 decreased $94,284
or 15% compared with the comparable period of the prior year. The decrease in
revenues for the nine-month period is primarily attributable to a decrease in
maintenance revenues of $67,329 or 10%. This is attributable to cancellations of
maintenance agreements with customers of Multi Soft whom have been paying for
monthly maintenance and support. The decrease is partially offset by an increase
in Consulting and Other Fees.
<PAGE>
Operating expenses as a percent of revenues for the nine-month period was
115% compared with 97% for the comparable period of the prior year. The higher
level of expenses in the current nine month period, in addition to the lower
level of revenues for the current nine month period accounts for the percentage
increase.
The operating income loss, before other income expense of $(83,217) for the
current nine-month period decreased $104,374 compared with the comparable period
of the prior year.
For the current three month period, operating income of $21,157 was incurred,
compared with an operating income of $58,059 of a decrease of $36,902.
Major Customers
- ---------------
In the first nine months of 1999, IBM accounted for 16.24% of total
revenues. In the first nine months of 1998, IBM accounted for 19.75% of total
revenues.
Liquidity and Capital Resources
- -------------------------------
At October 31, 1999, the Company had a negative working capital position of
($33,370) and has been experiencing cash flow problems. The cash flow deficiency
derives from certain outstanding receivable that remain uncollected coupled with
normal fluctuations in sales.
Management of the company 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, the company's 52.% owned subsidiary, Multi Soft
Inc. broadened its product base into the Windows environment and has made its
Windows based products easier to learn and use. During the summer Multi Soft
plans to introduce a new product which extends its present product line into the
internet.
It is the company's intent to remain a technology provider and search out
multiple distribution channels, rather than to try and grow via an expensive
direct sales force. This allows the focus to stay on technology, with a low
overhead cost for each distribution channel used. However, if 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.
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.
<PAGE>
Year 2000
- ---------
Many companies systems experience problems handling dates beyond the year
1999. The companies products are not directly impacted by this problem.
In particular, year 2000 issues are transparent to COMRAD and WCL. WCL and
COMRAD simply transports data between the 3270/5250 presentation space and the
client application. WCL and COMRAD do no formatting of any data, including
dates. This is handled by the client development tool such as VB, PB and VC++.
Therefore, Year 2000 issues must be addressed by these development tools, not
WCL.
In addition, The Company's INFRONT and QuickFRONT product have built in support
for the Year 2000. Any date functions that use 2 positions for the year, the
SETUPSL command can be used to handle the year 2000.
Effect of Inflation
- -------------------
Management believes that inflation has not had a material effect on its
operations for the periods presented.
Cautionary Statement
- --------------------
This Form 10-KSB contains certain forward-looking statements regarding, among
other things, the anticipated financial and operating results of the company.
For this purpose, forward-looking statements are any statements contained herein
that are not statements of historical fact and include, but are not limited to,
those preceded by or that include the words, "believes," "expects,"
"anticipated," or similar expressions. In connection with the safe harbor
provisions of the Private Securities Litigation Reform act of 1995, the Company
is including this cautionary statement identifying important factors that could
cause the company's actual results to differ materially from those projected in
forward looking statements made by, or on behalf of, the company. These factors,
many of which are beyond the control of the company and include the Company's
ability to, (I) continue as a going concern, (ii) continue to receive royalties
from its existing licensing and consulting arrangements (iii) develop additional
marketable software and technology, (iv) compete with larger, better capitalized
competitors, and reverse ongoing liquidity and cash flow problems.
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
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 December 18, 1999
By:______________________________
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<PAGE>
MULTI SOLUTIONS, INC.
BALANCE SHEETS
OCTOBER 31, 1999 and JANUARY 31, 1999
31-Oct 31-Jan
1999 1999
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 345,360 $ 18,420
Accounts Receivable (net of allowance
of $43,783 and $43,783 respectively) 220,318 132,316
Prepaid expenses and other current assets 15,675 13,385
------------ ------------
581,353 164,121
FURNITURE AND EQUIPMENT
Research and Development Equipment 15,518 63,526
Office furniture and other equipment 50,581 20,474
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66,099 84,000
Less: Accumulated Depreciation (19,052) (16,780)
------------ ------------
47,047 67,220
Organizational costs 9,126 2,415
Less: Accumulated Amorization (968) (968)
------------ ------------
8,158 1,447
OTHER ASSETS
Capitalized software development costs 1,614,044 1,607,505
Less accumulated amortization (655,986) (809,915)
------------ ------------
958,058 797,590
Intangibles 200 200
$ 1,594,816 $ 1,030,578
============ ============
<PAGE>
MULTI SOLUTIONS, INC.
BALANCE SHEETS
OCTOBER 31 , 1999 and JANUARY 31, 1999
<TABLE>
<CAPTION>
31-Oct 31-Jan
LIABILITIES AND STOCKHOLDERS' 1999 1999
------------ ------------
DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ -- $ 796
Note Payable 6,565 6,565
Accrued payroll 18,359 --
Payroll and other taxes payable 12,292 19,480
Accounts Payable, Accrued expenses and
other Current Liabilities 167,264 196,416
Accrued officer compensation 241,390 198,057
Deferred Revenues 168,853 187,648
------------ ------------
614,723 608,962
Deferred compensation due officer /shareholders 631,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
18,813,398 (1999) and 18,813,398 (1999) 18,814 18,814
Additional paid-in capital, net of deferred
compensation $22,819 (1999) and $41,365(1999) 8,673,416 8,661,197
Accumulated deficit (8,891,742) (8,845,000)
------------ ------------
(199,512) (164,989)
Minority Inerest 548,000
$ 1,594,816 $ 1,030,578
============ ============
</TABLE>
<PAGE>
MULTI SOLUTIONS, INC
STATEMENTS OF OPERATIONS
OCTOBER 31, 1999 and OCTOBER 31, 1998
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
31-Oct 31-Oct
1999 1998 1999 1998
------------ ------------ ------------ ------------
REVENUES
<S> <C> <C> <C> <C>
License fees $ 94,284 $ 213,865 $ 18,185 $ 120,226
Maintenance fees 357,901 425,230 126,292 130,652
Consulting and Other fees 94,614 6,336 44,310 1,096
------------ ------------ ------------ ------------
Total revenues 546,799 645,431 188,787# 251,974
EXPENSES
Software development and technical support 171,178 147,661 56,793 55,351
Selling and administrative 458,838 476,613 152,416 138,564
------------ ------------ ------------ ------------
Total expenses 630,016 624,274 209,209 193,915
------------ ------------ ------------ ------------
Income (Loss) from operations (83,217) 21,157 (20,422)# 58,059
OTHER INCOME (EXPENSE)
Other Revenues 16,288 16,349 16,288 11,112
Interest Expense -- (1,022) -- (133)
------------ ------------ ------------ ------------
Total other income
16,288 15,327 16,288 10,979
Net Income (Loss) $ (66,929) $ 36,484 $ (4,134) $ 69,038
============ ============ ============ ============
Weighted average shares outstanding 18,813,398 18,454,556 18,813,398 18,548,398
============ ============ ============ ============
Income (Loss) per share $ -- $ -- $ -- $ --
============ ============ ============ ============
</TABLE>
<PAGE>
MULTI -SOLUTIONS, INC.
52 % owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
October 31 , 1999 and 31 October 31, 1998
<TABLE>
<CAPTION>
31-Oct 31-Oct
1999 1998
------------ ------------
Cash flows from operating activities
<S> <C> <C>
Net Income $ (66,929) $ 36,484
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 172,656 152,532
Changes in assets and liabilities
Accounts receivable (88,002) (51,101)
Prepaid expenses and other current assets (2,290) (36,200)
Accrued payroll 18,359 51,499
Note Payable -- (11,172)
Payroll and other taxes payable (7,188) (4,774)
Accounts payable and accrued expenses (29,152) 7,166
Accrued officer compensation 43,333 87,498
Deferred revenues (18,795) (65,987)
------------ ------------
Net cash provided by operating activities 21,992 165,945
Cash flows from investing activities
Capitalized Organizational Cost
Capitalized software development costs (206,784) (197,638)
------------ ------------
Net cash used in investing activities (206,784) (197,638)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (796) (11,164)
Amortization of Stock Grants --
Issuances of Capital Stock 18,546 5,923
Increase (Decrease) in Minority Interest 493,982 9,712
------------ ------------
Net cash provided (used) by financing activities 511,732 4,471
------------ ------------
NET INCREASE (DECREASE) IN CASH 326,940 (27,222)
Cash at beginning of year 18,420 29,524
------------ ------------
Cash at end of period $ 345,360 $ 2,302
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> OCT-31-1999
<CASH> 345,360
<SECURITIES> 0
<RECEIVABLES> 220,318
<ALLOWANCES> 15,675
<INVENTORY> 0
<CURRENT-ASSETS> 581,353
<PP&E> 66,099
<DEPRECIATION> (19,052)
<TOTAL-ASSETS> 1,594,816
<CURRENT-LIABILITIES> 614,723
<BONDS> 0
<COMMON> 18,814
0
0
<OTHER-SE> (287,849)
<TOTAL-LIABILITY-AND-EQUITY> 1,594,816
<SALES> 0
<TOTAL-REVENUES> 546,799
<CGS> 171,178
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (66,929)
<INCOME-TAX> 0
<INCOME-CONTINUING> (66,929)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (66,929)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
