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 April 30, 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
---------
MULTI SOLUTIONS, INC
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2418056
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4262 US Route 1, Monmouth Junction, New Jersey 08852
----------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (732) 329-9200
----------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding at April 30, 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 three months ended April 30, 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.
The results for the three months ended April 30, 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 subsidiary,
NetCast, Inc. which is currently in the development stage.
<PAGE>
MULTI SOLUTIONS,INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30 ,1999 and January 1999
<TABLE>
<CAPTION>
1999 1999
----------- -----------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 20,276 $ 18,420
Accounts Receivable (net of allowance
of $43,783 and $43,783 respectively) 124,705 132,316
Prepaid expenses and other current assets 9,676 13,385
----------- -----------
154,657 164,121
FURNITURE AND EQUIPMENT
Research and Development Equipment & Software 63,526 63,526
Office furniture and other equipment 20,474 20,474
----------- -----------
84,000 84,000
Less: Accumulated Depreciation (17,579) (16,780)
----------- -----------
66,421 67,220
Organizational costs 2,415 2,415
Less: Accumulated Amorization (1,135) (968)
----------- -----------
1,280 1,447
OTHER ASSETS
Capitalized software development costs 1,344,122 1,607,505
Less accumulated amortization (542,398) (809,915)
----------- -----------
801,724 797,590
Intangibles 200 200
----------- -----------
$ 1,024,282 $ 1,030,578
=========== ===========
</TABLE>
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, 1999 and January 31, 1999
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' 1999 1999
DEFICIENCY ----------- -----------
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ -- $ 796
Note Payable 6,565 6,565
Accrued payroll 19,265 --
Payroll and other taxes payable 28,096 19,480
Accounts Payable 181,430 196,416
Accrued officer compensation 231,390 198,057
Deferred Revenues 160,327 187,648
----------- -----------
627,073 608,962
Deferred compensation due officer /shareholders 586,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$.001 par value, issued and outstanding 18,814 18,814
18,813,398 (1999) and 18,813,398 (1999)
Additional paid-in capital, 8,663,240 8,661,197
Accumulated deficit (8,871,450) (8,845,000)
----------- -----------
(189,396) (164,989)
$ 1,024,282 $ 1,030,578
=========== ===========
</TABLE>
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Period Ended April 30, 1999 and April 30, 1998
1999 1998
------------ ------------
REVENUES
License fees $ 59,724 $ 77,112
Maintenance fees 113,537 152,264
Consulting and Other fees 15,518 --
------------ ------------
Total revenues 188,779 229,376
EXPENSES
Software development and technical support 57,192 46,155
Selling and administrative 164,598 160,336
------------ ------------
Total expenses 221,790 206,491
------------ ------------
Income (loss) from operations (33,011) 22,885
OTHER INCOME (EXPENSE)
Other Revenues -- --
Interest Expense -- 620
------------ ------------
Total other income -- 620
Net Income (Loss) $ (33,011) $ 22,265
============ ============
Weighted average shares outstanding 18,813,398 18,266,898
============ ============
Income (Loss) per share a a
============ ============
(a) less then $.01 per share
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period ended April 30, 1999 and April 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
Cash flows from operating activities
<S> <C> <C>
Net Income $ (33,011) $ 22,265
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization 57,596 47,785
Common stock issued to Solutions
Changes in assets and liabilities
Accounts receivable 7,611 (73,561)
Prepaid expenses and other current assets 3,709 (17,000)
Accrued payroll 19,265 51,354
Payroll and other taxes payable 8,616 (14,952)
Note Payable -- (1,790)
Accounts payable and accrued expenses (14,986) 18,186
Accrued officer compensation 33,333 49,999
Deferred revenues (27,321) (38,355)
----------- -----------
Net cash provided by operating activities 54,812 43,931
Cash flows from investing activities
Capital expenditures
Capitalized software development costs (60,928) (73,267)
----------- -----------
Net cash used in investing activities (60,928) (73,267)
Cash flows from financing activities
Net repayments under loan and line of credit ageements (796) (2,728)
Losses in excess of investment in subsidiaries 6,725 2,207
Amorization of Stock Grants 2,043 333
Issuance of capital stock -- --
----------- -----------
Net cash provided by financing activities 7,972 (188)
----------- -----------
NET INCREASE (DECREASE) IN CASH 1,856 (29,524)
Cash at beginning of year 18,420 29,524
----------- -----------
Cash at end of year $ 20,276 $ --
=========== ===========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
----------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Results of Operations
- ---------------------
Three months ended April 30, 1999 compared to three months ended April 30, 1998
- -------------------------------------------------------------------------------
Revenues for the current three months of fiscal year 1999 decreased $40,597
or 17.7% compared with the comparable period of the prior year. The decrease in
revenues for the three month period is primarily attributable to a decrease in
maintenance revenues of $56,115 or 24.5%. 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.
Operating expenses as a percent of revenues for the three month period was
117.5% compared with 90.0% for the comparable period of the prior year. The
higher level of expenses in the current three month period, in addition to the
lower level of revenues for the current three month period accounts for the
percentage increase. The increase in the three month period is a result of a
increase in Selling and Administrative expenses of 4,262 or 2.7%. Also, software
development increased for the current three month period in the amount of
$11,037 or 24%. The increase is attributed amortization of capital costs that
were not amortized in the prior period but were amortized in the current period.
The operating income loss, before other income expense of $(30,011) for the
current three month period decreased $55,896 compared with the comparable period
of the prior year.
For the current three month period , a net loss of $(30,011) was incurred,
compared with a net income of $22,265 of a decrease of $55,276.
Major Customers
- ---------------
In the first three months of 1999, IBM accounted for 11% of total revenues.
In the first three months of 1998, IBM accounted for 20% of total revenues.
Liquidity and Capital Resources
- -------------------------------
At April 30, 1999, the Company had a negative working capital position of
($472,416) 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
<PAGE>
summer Multi Soft plans to introduce a new product which extends its present
product line into the internet.
In September 1994, Multi Soft entered into an International Software
Licensing Agreement with IBM's Personal Communications 3270 division ("P-Comm").
This agreement allows IBM to logo and market a P-Comm specific version of both
the Toolkit and Runtime of Multi Soft's WCLTM. Pursuant to this agreement, the
Company will receive a minimum of $75,000 per quarter over a two year period
representing minimum advances against royalties. As of November 1996, the
contract with IBM was extend for two more years and IBM is paying Multi Soft
monthly maintenance and royalties.
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.
Dividend Policy
- ---------------
The Company has not declared or paid any dividends on its common stock
since its inception and does not anticipate the declaration or payment of cash
dividends in the foreseeable future. The Company intends to retain earnings, if
any, to finance the development and expansion of its business. Future dividend
policy will be subject to the discretion of the Board of Directors and will be
contingent upon future earnings, if any, the Company's financial condition,
capital requirements, general business conditions and other factors. Therefore,
there can be no assurance that dividends of any kind will ever be paid.
Year 2000
- ---------
Many companies systems experience problems handling dates beyond the year
1999. The companies products are not directly impacted by this problem.
In particular, year 2000 issues are transparent to WCL. WCL simply transports
data between the 3270/5250 presentation space and the client application. WCL
does no formatting of any data, including dates. This is handled by the client
developement 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 theYear 2000. Any date functions that use 2 positions for the year, the
SETUPSL command can be used to handle the year 2000.
<PAGE>
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.
<PAGE>
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 June 22, 1999
By:______________________________
Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> APR-30-1999
<CASH> 20,276
<SECURITIES> 0
<RECEIVABLES> 124,705
<ALLOWANCES> (43,783)
<INVENTORY> 0
<CURRENT-ASSETS> 154,657
<PP&E> 84,000
<DEPRECIATION> (17,579)
<TOTAL-ASSETS> 1,024,449
<CURRENT-LIABILITIES> 636,186
<BONDS> 0
<COMMON> 18,814
0
0
<OTHER-SE> (198,342)
<TOTAL-LIABILITY-AND-EQUITY> 1,024,449
<SALES> 59,724
<TOTAL-REVENUES> 188,778
<CGS> 0
<TOTAL-COSTS> 57,192
<OTHER-EXPENSES> 173,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 33,011
<INCOME-TAX> 0
<INCOME-CONTINUING> 33,011
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,011
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
