SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X] ANNUAL REPORT UNDER TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2000
OR
[ ] TRANSITION REPORT UNDER TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-12162
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MULTI SOLUTIONS, INC
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(Name of Small business issuer in its charter)
New Jersey 22-2418056
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4262 US Route 1, Monmouth Junction, New Jersey 08852
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (732) 329-9200
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act: Common Stock
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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]
The Issuer's consolidated revenues for the fiscal year ended January 31, 2000
were: $625,093.
The aggregate market value of the voting stock held by non-affiliates (1) of the
registrant based on the average of the closing ask ($.75) and ($.65625) bid
price of such stock, as of May 5, 2000 is $9,746,305 based upon $.703125
multiplied by the 13,861,412 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 5, 2000, is 20,505,541 shares, all of one class of $.001 par
value Common 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, 2000
Table of Contents
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Page
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PART I.........................................................................1
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ITEM 1. DESCRIPTION OF BUSINESS...............................................1
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ITEM 2. DESCRIPTION OF PROPERTIES.............................................8
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ITEM 3. LEGAL PROCEEDINGS.....................................................8
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................9
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PART II........................................................................9
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............9
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS..................................11
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ITEM 7. FINANCIAL STATEMENTS.................................................13
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
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ACCOUNTING AND FINANCIAL DISCLOSURE..................................14
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PART III......................................................................14
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT....................14
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ITEM 10. EXECUTIVE COMPENSATION...............................................16
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......18
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................19
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.....................................19
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SIGNATURES....................................................................21
SUPPLEMENTAL INFORMATION......................................................22
FINANCIAL STATEMENTS..........................................................F1
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PART I
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ITEM 1. DESCRIPTION OF BUSINESS.
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GENERAL
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During our fiscal year ended January 31, 2000, we:
o supported, our subsidiary, Multi Soft, Inc;
o formed a new subsidiary, FreeTrek.com, Inc., to market a new software-based
tool and promotion program for tapping into the marketing communications
potential of the internet - FreeTrek is offering major marketers the
opportunity to communicate one-to-one with carefully defined private
networks of their most valuable customers; and
o discontinued operations of another of our subsidiaries, NetCast, Inc.
The operations of Multi Soft, FreeTrek and NetCast are discussed below.
MULTI SOFT, INC.
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We incorporated Multi Soft in January 1985 as a wholly owned subsidiary. As
of the date of this report, we own approximately 52% of Multi Soft.
Multi Soft produces, markets and maintains three communications
front-ending, client-server and cooperative processing technologies called:
o COMRAD, which stands for Component Object Model Rapid Application
Development, for 32 bit Windows 95, 98, and NT;
o The Windows Communications LibraryTM, commonly referred to as WCL, for
Windows 3x , 95, 98 and NT; and
o INFRONT for DOS.
See the discussion below under "Multi Soft's Product Line" for more details
on these products.
MULTI SOFT'S TECHNOLOGY
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Multi Soft's product line consists of tools for the development of
client-server, front-ending, and Internet based applications using a mainframe
or an Internet server.
There are four key elements to the real world development, delivery and
production maintenance of these applications; and they all are supported by the
Multi Soft product line:
o screen-based access to mainframe data and processes;
o message-based access to mainframe and server data and processes;
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o integration of screen-based and message-based access to the mainframe in
the same application; and
o 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 Internet and 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 a host is supported by all of Multi
Soft's products.
MESSAGE-BASED ACCESS TO MAINFRAME DATA AND PROCESSES allows companies to
create client-server applications, where they use the PC for the client portion
of the application, which includes all user interaction, dialogue flow and
access to local data, and they use the mainframe for the server portion of the
application, which includes managing database interaction, data integrity and
security). In this architecture, only data and messages are passed between the
PC and host. This results in a streamlined and optimized production application.
Message-based access to the mainframe is supported by WCL's WCL/Enterprise
Server Option, commonly referred to as WCL/ESO.
INTEGRITY CONTROL AND DISTRIBUTION MANAGEMENT allows companies to use their
mainframe system as a central location to 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 also can be used to manage
the distribution of these changes. WCL's WCL/Software Distribution Option,
commonly referred to as WCL/SDO, supports integrity control and distribution
management.
MULTI SOFT'S PRODUCT LINE
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Multi Soft's Product line consists of three product sets:
1. COMRAD for 32 bit Windows 95, 98, and NT;
2. The WCL product set for Windows 3x, 95, 98 and NT; and
3. INFRONT for DOS and Windows 3x and 95.
COMRAD
COMRAD is a component-based development tool released in July 1998. It
takes advantage of Microsoft's COM/DCOM (common object model/distributed common
object model) technology and it generates both components and complete
applications, not just applications as currently done by WCL. COMRAD allows you
to build client server applications today and use the same code for your
Internet/Intranet applications tomorrow. COMRAD generated components that
interface with the mainframe can be used both by Visual Basic and your Internet
browsers, on individual workstations or Windows NT servers, depending on the
needs of your application. Microsoft's Internet Information Server and Active
Server Pages provide persistence and security.
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WCL
WCL is a toolkit and a set of dynamic linked libraries, commonly referred
to as DLLs, that work in conjunction with Windows 3270 emulation products to
provide easy integration of data and processing between local area networks,
commonly referred to as PC/LANs, and the mainframe. Any of the standard Windows
development tools such as PowerBuilder, Visual Basic, and C++, can be used with
WCL to create the client application because WCL is an open architecture. WCL
supports the development of GUI front-ends -- client-server applications that
use the mainframe as a server and for integrity control and distribution
management. The WCL toolkit provides an automated development environment that
includes, among other things:
o a screen capture mechanism,
o screen maintenance and
o a screen matching facility.
In addition, it provides code generation to remove the complexity and
development effort associated with building GUI front-end applications. Multi
Soft also has a 32-bit version of its WCL product for Windows 95 and Windows NT.
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 an IBM mainframe operating environment
called CICS. Client-server applications developed using WCL/ESO have the
added advantage of using a company's existing mainframe skills and
infrastructure, including:
o security,
o data integrity,
o backup and
o recovery and disaster recovery.
WCL/SDO is a WCL/ESO application created to centralize control and manage
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 that 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.
INFRONT
INFRONT is a comprehensive and integrated development environment for
building PC front-ends and client-server applications with the mainframe. The
development environment includes:
o an intelligent forms subsystem with
o screen capture,
o screen painting,
o editing and validation assignment facilities and
o a data dictionary;
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o a fourth generation language, commonly referred to as 4GL;
o an intelligent editor with language templates and reusable code library;
o a PC-resident database, including database maintenance facilities such as
sorting and reorganizing;
o sophisticated debugging facilities, including a source-level language
debugger; and
o other utilities such as code libraries and forms libraries.
KEY SERVICES PROVIDED BY MULTI SOFT
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Multi Soft offers 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. Multi Soft also offers contract technical consulting
services.
TRAINING SERVICES include basic and advanced product training, as well as
courses such as "Design and Development Methodologies," which cover 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.
TECHNICAL SUPPORT SERVICES include a telephone hotline, fax, e-mail and
Internet support staffed by knowledgeable personnel trained and experienced with
Multi Soft's product line.
CONTRACT TECHNICAL CONSULTING SERVICES include services related to the
technical expertise of Multi Soft's staff. In the past, Multi Soft has provided
technical consulting services on a contract basis to our subsidiary, NetCast,
and it currently is providing technical consulting services on a contract basis
to our subsidiary, FreeTrek. Multi Soft hopes to provide such services to
unaffiliated companies as well.
CLIENTS
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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:
o American Cyanamid, o Comdisco,
o Bell Atlantic, o EDS,
o ITT Hartford, o Exxon,
o Honda, o General Electric,
o Con Edison, o Hilton,
o Hoechst, o Lever Brothers,
o American International Group, o Teachers Insurance,
o Ciba Geigy, o Chicago Northwestern and
o US West Business.
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IN-HOUSE MARKETING AND SALES
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Charles Lombardo and Miriam Jarney, two of our officers and directors, are
responsible for sales and marketing of Multi Soft's products and services. 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 and services 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 AND VARS
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Multi Soft uses international distributors and VARs on a non-exclusive
basis to supplement its domestic sales and marketing efforts.
IBM
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In September 1994, Multi Soft entered into an international software
licensing agreement with IBM's Personal Communications 3270 division. This
agreement allows IBM to logo and market a P-Comm specific version of certain of
Multi Soft's products. This IBM agreement was effective for a term of two years
and was renewable by IBM for two more one year periods. The Agreement was
terminable by Multi Soft or IBM upon 90 days notice in the event of a default by
the other party. As of November 1996, the contract with IBM was extended for two
more years and IBM paid Multi Soft monthly maintenance and royalties through
December 1998. On January 31, 1999, the contract with IBM was extended for one
year and IBM paid Multi Soft monthly maintenance through December 1999. The
contract was not extended beyond this one year period. As of the date of this
report, IBM has not renewed the contract.
Since fiscal 1994, IBM has represented a significant percentage of Multi
Soft's revenues. The loss of revenues from IBM will have a materially adverse
effect on our financial condition. However, we have offset the loss of revenues
from IBM with revenues generated from our affiliate, FreeTrek, for work related
to the prior and ongoing development, maintenance and enhancement of FreeTrek's
products. For more details about the effect of the loss of IBM as a customer,
see the discussion in Part II. Item 6. "Management's Discussion and Analysis of
Financial Condition and Results of Operations." For more details about the
business of FreeTrek, see the discussion below under the caption "FreeTrek.Com."
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FREETREK. COM
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We formed FreeTrek.Com, Inc. under the laws of the state of New Jersey in
April 1999. At present, we own approximately 65% of FreeTrek's issued and
outstanding shares of common stock. The balance is held by private investors who
provided services and cash to fund the initial software development and other
start-up activities.
FreeTrek.Com is a business to business to consumer affinity group service
company, commonly referred to as a B2B2C affinity group service company, that
recently commenced marketing its products and services to businesses, referred
to as sponsors, that want to create an Internet community of their current and
future customers. We refer to this as a virtual private community or VPC.
FreeTrek's program, is a complete turnkey service for a sponsor which creates
and maintains the sponsor's VPC on the Internet. We have not made any sales to
date.
We formed FreeTrek to:
o market a promotional program to institutions and associations pursuant
to which they can provide their clients and members with free internet
access while defraying the cost of providing such service with
advertising; and
o create a carefully defined database of internet users from this
promotional program that will be attractive to major advertisers.
We plan to take advantage of companies, institutions and associations,
which already have users/customers connected to the Internet or have a strategic
need for their users/customers to be so connected.
We believe that many banks, brokerage houses, large retailers, publishers
and financial institutions, to name some, have a long-term strategic interest in
conducting on-line commerce in order to reduce transaction costs. In addition,
many professional associations such as medical or legal associations may have a
significant interest in offering their members on-line services.
DEFINITIONS:
1. VIRTUAL PRIVATE COMMUNITY - A Virtual Private Community is a community
of members who have a commonality of interests. It:
o is identified, created and managed by a commercially motivated
community builder, a sponsor;
o is defined by the nature of the common interests of the members;
o focuses on member interests; and
o it integrates content and communication.
2. SPONSOR - A sponsor is a company, institution, or association with a
tactical and strategic need to create a VPC and which pays or plans to
pay the Internet ISP cost for the members of its VPC.
3. FREETREK.COM(TM) PROGRAM - The FreeTrek.Com(TM) Program is an Affinity
Group "Opt-in Permission Marketing" service offered to sponsors that
want to create a VPC. The FreeTrek.Com Program, is a complete turnkey
service for a sponsor which creates and maintains the sponsor's VPC on
the Internet.
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Sponsors consisting of interested companies, institutions and
associations offer or might offer Internet service to their clients as
a premium/incentive to increase their business with their existing
client base or attract new clients. Sponsors do this for both
tactical, to open up new accounts, and strategic, to lower transaction
costs, reasons. FreeTrek plans to help mitigate this cost by offering
these sponsors an advertising profit sharing program. Each sponsor's
clients will get free Internet access. The access will contain
advertising. Advertising profits will be shares by the sponsor and
FreeTrek. Assuming sufficient advertising revenues, the sponsor may
recover the entire Internet fee paid, in addition to a profit as part
of its advertising profit sharing program with FreeTrek.
As the number of sponsor networks increase, FreeTrek will be creating
and expanding a database of national Internet users with demographics
which, in turn, should increase the amount that it can charge
advertisers.
4. FREETREK PORTAL - The FreeTrek Portal consists of two main components:
o the commercial space, which is 60 pixels high by 468 pixels wide,
and
o the sponsor's logo space, which is 60 pixels high by 100 pixels
wide.
FreeTrek can make this portal any size the sponsor wishes, but
for purposes of this trial program it is assume that our standard
Portal shall be used. There are approximately 72 pixels to the
inch.
During the calendar year ended December 31, 1999, FreeTrek raised
approximately $621,000 in gross proceeds in a private offering of its common
stock. FreeTrek is using these proceeds, as well as proceeds provided from a
private placement of our common stock, to continue to develop and to market its
products and services.
NETCAST, INC.
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Our 75% subsidiary, NetCast, Inc., was created in 1996 to develop new
Internet technologies to create a series of products and businesses that would
extend the power of advertising on the Internet. Multi Soft provided services
and office space to NetCast at cost for which it has billed approximately
$240,000 through January 31, 2000, of which $78,000 was incurred during the
fiscal year ended January 31, 1999. Multi Soft charged NetCast for this time. We
have guaranteed NetCast's debt to Multi Soft. In January 2000, we decided to
discontinue any further operations of NetCast. As a result, a loss of ($87,462)
has been reflected in our consolidated financial statements for the fiscal year
ended January 31, 2000 as a loss from discontinued operations. For more detail,
please see our audited consolidated financial statements at the end of this
report and the discussion contained in Part II. Item 6. "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
Employees
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We are essentially a holding company. Accordingly, we have two employees,
our executive officers: Charles J. Lombardo and Miriam Jarney. Multi Soft's
employees devote such time as is necessary to our business.
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Multi Soft has eight full time employees, including Mr. Lombardo and Ms.
Jarney, one support personnel, four technical and engineering personnel plus
several independent consultants, which work for the company on an as needed
basis.
At this time, FreeTrek has two employees, our executive officers: Charles
J. Lombardo and Miriam Jarney. Multi Soft's employees devote such time as is
necessary to Freetrek's business.
Competition
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Multi Soft operates in a business composed of strong competitors, many of
which 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.
Multi Soft's products provide front-ending, client-server and cooperative
processing technologies which Multi Soft believes represent an advance over
other products being marketed.
FreeTrek competes with other firms and entities that provide marketing and
advertising to companies, institutions and associations that want to retain
and/or increase their client or membership base. Most of its competitors have
substantially greater resources, are better established, and have a longer
history of operations than FreeTrek. In addition, many competitors have more
extensive facilities than those which now or in the foreseeable future will
become available to FreeTrek. We believe that FreeTrek's ability to compete
primarily will depend upon the effectiveness of its products and services to
retain and increase client and membership base compared to the effectiveness of
the services provided by its competitors.
Item 2. Description of Properties
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We use 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 our 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 $5,200 per year. Multi Soft is
responsible for all utilities.
Item 3. Legal Proceedings
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We are not presently a party to any material litigation. However, We and
Multi Soft have been, from time to time, parties to legal actions arising in the
normal course of our business. In the opinion of management, the disposition of
these actions will not have a material effect on our financial position or
results of operations taken as a whole.
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In May 1997, a lawsuit was commenced against NetCast in the Superior Court
of New Jersey by former consultants for approximately $113,000 for services
rendered. Netcast contested the claim and contended that no services were
rendered nor product delivered. While Netcast defended the lawsuit, the court
found in favor of the plaintiff.
Tax Liens
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Certain federal, state taxes, interest, and penalties aggregating
approximately $13,000 remain unpaid at January 31, 2000.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of our security holders during the last
quarter of our fiscal year ended January 31, 2000.
PART II
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Item 5. Market for Common Equity and Related Stockholder Matters.
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(a) Market Information -- Our 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 closing bid prices
for the our Common Stock on a quarterly basis for the past two fiscal years and
the first quarter of fiscal 2001 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
have not traded and hence are not priced.
Bid Prices
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Period - Fiscal Year 1999 High Low
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First Quarter ending April 30, 1998 .33 .04
Second Quarter ending July 31, 1998 .32 .11
Third Quarter ending October 31, 1998 .11 .07
Fourth Quarter ending January 31, 1999 .32 .07
Period - Fiscal Year 2000 High Low
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First Quarter ending April 30, 1999 .38 .22
Second Quarter ending July 31, 1999 .25 .16
Third Quarter ending October 31, 1999 .22 .14
Fourth Quarter ending January 31, 2000 .57 .11
Period - Fiscal Year 2001 High Low
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First Quarter ending April 30, 2000 2.43 .48
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(b) Holders -- There were approximately 818 holders of record of our common
stock, 192 holders of record of our class A warrants, 1 holder of record of our
class B warrants and 51 holders of record of our class C warrants as of May 5,
2000, inclusive of those brokerage firms and/or clearing houses holding our
securities for their clientele (with each such brokerage house and/or clearing
house being considered as one holder).
(c) Dividends -- We have not paid or declared any dividends upon our common
stock since inception and, by reason of our present financial status and our
contemplated financial requirements, we do not contemplate or anticipate paying
any dividends upon our common stock in the foreseeable future.
Issuances of Common Stock
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NAME DATE NUMBER
OF SECURITIES ISSUED
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MIRIAM JARNEY (A) 3/15/98 150,000
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CHARLES J. LOMBARDO (A) 3/15/98 150,000
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JOSEPH LOMBARDO (A) 3/15/98 25,000
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HES GIFT (A) 3/15/98 100,000
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JEANETTE RUSSEL (A) 3/15/98 4,000
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J.B. LOWY (A) 3/15/98 12,500
- --------------------------------------------------------------------------------
LORETTA MESSINA (B) 3/15/98 15,000
- --------------------------------------------------------------------------------
LINDA DORRIAN (B) 3/15/98 20,000
- --------------------------------------------------------------------------------
LORRAINE HARTLEY (B) 3/15/98 10,000
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HARRY WINGARD (B) 3/15/98 10,000
- --------------------------------------------------------------------------------
HOWARD MENDELSON (B) 3/15/98 25,000
- --------------------------------------------------------------------------------
ELAIN BINE (B) 3/15/98 10,000
- --------------------------------------------------------------------------------
JOSEPH CAMISCIONI (B) 3/15/98 20,000
- --------------------------------------------------------------------------------
SHARON JONES (B) 3/15/98 10,000
- --------------------------------------------------------------------------------
PATRICIA MCMAHON (B) 3/15/98 20,000
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LARRY LEVINE (A) 3/10/99 45,000
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ANDY GOREN (A) 5/25/99 5,000
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JUAN RIVUAL (A) 11/15/99 200,000
- --------------------------------------------------------------------------------
CHARLES LOMBARDO (C) 11/15/99 250,000
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MIRIAM JARNEY (C) 11/15/99 250,000
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NOGA INVESTMENTS IN TECHNOLOGIES, LTD. (D) 1/00 - 4/00 1,000,000
- --------------------------------------------------------------------------------
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(A) For services rendered.
(B) Grant under the Stock Grant Program.
(C) Represents shares issued in lieu of past accrued salary.
(D) Issued for an aggregate of $350,000 pursuant to a private placement under
section 4(2) of the Securities Act of 1933. 428,571 of these shares were
issued upon partial exercise of an option originally granted to Noga
Investments In Technologies, Ltd. in February 2000. This option is for the
purchase of an aggregate of 857,142 shares of our common stock at the rate
of 142,857 shares per month at an exercise price of $0.35 per share.
Item 6. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Results of Operations
- ---------------------
Fiscal Year Ended January 31, 2000 Compared to Fiscal Year Ended January 31,
- --------------------------------------------------------------------------------
1999
- ----
Our revenues for the fiscal year ended January 31, 2000 were $625,093
compared to $805,895 in fiscal year 1999, a decrease of $180,802, or 22.4%. We
believe that this decrease was due primarily to a decrease in revenues from
license and maintenance fees from $798,708 to $622,091.
Multi Soft's two principal sources of revenues were license fees and
maintenance fees which represented approximately 99.5% or $622,091 of revenues
in fiscal 2000 and 99.1% or $798,708 of revenues in fiscal 1999. We believe that
the decrease in maintenance fees during the fiscal year ended January 31, 2000
primarily was due to the non-renewal of older maintenance contracts by
customers.
Operating expenses totaled $748,401in the fiscal year ended January 31,
2000 and $813,462 in the fiscal year ended January 31, a decrease of $65,061 or
8.0%. We believe that this decrease in operating expenses during the fiscal year
ended January 31, 2000 was due primarily to lower levels of selling and
administrative costs.
Other income was $83,251 in the fiscal year ended January 31, 2000 and
$56,873 in the fiscal year ended January 31, 1999, an increase of $26,873 or
47.3%. We believe that the increase in other income during the fiscal year ended
January 31, 2000 primarily was due to the addition of minority share of
consolidated subsidiary's loss offset by debt extinguishment realized during the
fiscal year ended January 31, 1999, but not during fiscal 2000.
In the fiscal year ended January 31, 2000, our loss, before the loss from
discontinued operations of our subsidiary, Netcast in the amount of $87,462, was
$40,057, compared with net income of $49,306 for the prior year.
In the fiscal year ended January 31, 2000, we incurred a net loss of
$127,519 compared to net income of $49,306 for the comparable period of the
prior year.
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Major Customer
- --------------
In fiscal 2000, IBM accounted for 13% of our total consolidated revenues.
In fiscal 1999, IBM accounted for 25% of our total consolidated revenues. IBM
extended its contract with Multi Soft through December 31, 1999; however, IBM
has not renewed the contract. The loss of revenues from IBM will have a
materially adverse effect on our financial condition. Multi Soft has offset the
loss of revenues from IBM with revenues generated from our affiliate, FreeTrek,
for work related to the prior and ongoing development, maintenance and
enhancement of FreeTrek's products. However, FreeTrek is a development stage
company and, although it is marketing its products and services, it has yet to
make its first sale. Fees paid by FreeTrek have come from the proceeds of
private placements of FreeTrek's securities and of our securities. If FreeTrek
is unable to generate substantial revenues or continue to raise funds, revenues
received by Multi Soft from FreeTrek most likely will decrease and eventually
cease. For more details about Multi Soft's contract with IBM, see the discussion
in Part I. Item 1. "Description of Business."
Liquidity and Capital Resources
- -------------------------------
At January 31, 2000, we had working capital of $164,436. While we have
experienced cash flow problems, this situation has been alleviated during fiscal
2000 by proceeds from the issuance of stock by our new subsidiary, FreeTrek.Com.
It also has been alleviated by the proceeds from a private placement of our
common stock and the exercise of an option issued in conjunction with the
private placement. For more information on this private placement, see footnote
C to the chart in "Part II. Item 5. Market for Common Equity and Related
Stockholder Matters; Issuances of Common Stock."
Working Capital and Current Ratios were:
- ----------------------------------------
Descriptions January 31, 2000 January 31, 1999
---------------------------------------------------------------------------
Working capital (deficiency) $164,436 ($444,841)
Current ratios 1.36:1 0.27:1
Dividend Policy
- ---------------
We have not declared or paid any dividends on our common stock since
inception and we do not anticipate that we will be declaring or paying cash
dividends in the foreseeable future. We intend to retain earnings, if any, to
finance the development and expansion of our business. Future dividend policy
will be subject to the discretion of our Board of Directors and will be
contingent upon future earnings, if any, our financial condition, capital
requirements, general business conditions and other factors. Therefore, we
cannot assure that dividends of any kind will ever be paid.
Effect of Inflation
- -------------------
We believe that inflation has not had a material effect on our operations
for the periods presented.
CAUTIONARY STATEMENT
- --------------------
This annual report on form 10-KSB contains certain forward-looking
statements regarding, among other things, our anticipated financial and
operating results and those of our subsidiaries. For this purpose,
forward-looking statements are any statements contained in this report that are
not
12
<PAGE>
statements of historical fact and include, but are not limited to, those
preceded by or that include the words, "believes," " expects," or similar
expressions. In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, we are including this cautionary
statement identifying important factors that could cause our or our
subsidiaries' actual results to differ materially from those projected in
forward looking statements made by, or on behalf of, us. These factors, many of
which are beyond our control or the control of our subsidiaries, include:
o Multi Soft's ability to:
o continue to receive royalties from its existing licensing and
consulting arrangements,
o develop additional marketable software and technology,
o compete with larger, better capitalized competitors, and
o reverse ongoing liquidity and cash flow problems;
o FreeTrek's ability to:
o support ongoing development and future product enhancements along with
requisite testing;
o raise sufficient additional funds if needed;
o enlist and sustain a sufficient number of sponsors;
o sell and sustain sales of a significant amount of advertising;
o and operate profitably.
Item 7. Financial Statements
--------------------
The following financial statements are attached to the end of this report
and have been prepared in accordance with the requirements of Item 310(a) of
Regulation S-B.
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEAR ENDED January 31, 2000
INDEX
Page #
------
Report of Independent Certified Public Accountant F1
Consolidated Balance Sheets - January 31, 2000 and 1999 F2
Consolidated Statements of Operations for Each of the
Two Years in the Period Ended January 31, 2000 F4
Consolidated Statements of Changes in Stockholders' Deficiency
for Each of the Two Years in the Period Ended January 31, 2000 F5
Consolidated Statements of Cash Flows for Each of the Two
Years in the Period Ended January 31, 2000 F6
Notes to Financial Statements Schedules F7
All schedules have been omitted because they are inapplicable or not
required, or the information is included elsewhere in the financial statements
or notes thereto.
13
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosures.
----------------------
There have been no changes in, or disagreements with our independent
accountants with respect to accounting and/or financial disclosure, during the
past two fiscal years.
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, Ph.D. Director
Our directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Our 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 of our officers and directors
is as follows:
CHARLES J. LOMBARDO, age 57, has been our Chairman of the Board of
Directors, Chief Executive Officer, Chief Financial Officer and Treasurer since
August 1982. He has been Multi Soft's Chief Executive Officer, Chief Financial
Officer and Treasurer since January 1985. 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
14
<PAGE>
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 59, has been our Executive Vice President and
Secretary and a member of our Board of Directors since January 1982. She has
been Executive Vice President, Secretary and a Director of Multi Soft since
January 1985. 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.
LARRY SPATZ, age 57, as been a member of our Board of Directors since July
1989, and a director of Multi Soft since May 1986. 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 70, has been a member of our Board of Directors
since March 1982. Since March, 1984, Mr. Mansur also has 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 58, has been a member of our Board of Directors
since July 1989. He has been a Professor of Mathematics at Southern
Massachusetts University since 1968. Since 1986, he also has been a Research
Associate at Harvard University. Dr. Kaput received a B.S. Degree in Mathematics
from Worcester Polytechnic Institute in 1964 and a Ph.D. in Mathematics from
Clark University in 1968.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
To our knowledge, based solely on a review of such materials as are
required by the Securities and Exchange Commission, none of our officers,
directors or beneficial holders of more than ten percent of our issued and
outstanding shares of Common Stock has 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, 1999.
15
<PAGE>
Item 10. Executive Compensation.
----------------------
The following table shows all the cash compensation paid or to be paid by
us and Multi Soft, as well as certain other compensation paid or accrued, during
the fiscal years indicated, to our 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 $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------ ------------------------------------------------
AWARDS PAYOUTS
---------------------- ----------------------
NAME & FISCAL SALARY BONUS OTHER ANNUAL RESTRICTED OPTIONS LTIP ALL OTHER
PRINCIPLE YEAR ($) ($) COMPENSATION STOCK AWARD SARS PAYOUTS COMPENSATION
POSITION ($) ($) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHARLES J. 2000 $54,167 $0 (D) $16,700 $0 $0 $0 $0
LOMBARDO CEO 1999 $12,500 $0 (C) $34,550 $0 $0 $0 $0
1998 (A) $60,000 $0 (D) $40,493 $0 $0 $0 $0
- --------------------------------------------------------------------------------------------------------------------
MIRIAM JARNEY 2000 $54,167 $0 $0 $0 $0 $0 $0
EXEC. V.P. 1999 $25,000 $0 (E) $16,000 $0 $0 $0 $0
1998 (B) $60,000 $0 $0 $0 $0 $0 $0
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Includes accrued and unpaid salary to Charles Lombardo of $39,167.
(B) Includes accrued and unpaid salary to Miriam Jarney of $10,000.
(C) Consisting of $19,950 in consulting fees and common stock valued at
$14,600.
(D) Consulting fees
(E) Common stock valued at $16,000
The following table sets forth information with respect to the Principal
Officers concerning the grants of options and Stock Appreciation Rights ("SAR")
during the past fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NAME OPTIONS/SARS PERCENT OF TOTAL OPTIONS/SARS EXERCISE OR BASE EXPIRATION
GRANTED GRANTED TO EMPLOYEES IN FISCAL YEAR PRICE ($/SH) DATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHARLES J. LOMBARDO -0- - - -
- ----------------------------------------------------------------------------------------------------------------------
MIRIAM JARNEY -0- - - -
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
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:
16
<PAGE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE REALIZED ($) OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE (#) FY-END (#) FY-END ($)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHARLES J. LOMBARDO -0- -0- -0- -0-
- ----------------------------------------------------------------------------------------------------------------------
MIRIAM JARNEY -0- -0- -0- -0-
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Directors' Compensation
- -----------------------
Our 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 is automatically renewed for successive periods unless terminated by Multi
Soft on twelve months notice or by Mr. Lombardo on six months notice. Mr.
Lombardo is our Chairman of the Board, Chief Executive Officer, Chief Financial
Officer and Treasurer. 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. Under Mr. Lombardo's contract he
may assign any part of his salary to a third party as a consulting fee.
In November 1999, we issued 250,000 shares to Mr. Lombardo in lieu of past
accrued salary of Multi Soft.
Mr. Lombardo also is entitled to a salary from us of $25,000 per year,
which he has agreed to forego since 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 Multi Solutions. This agreement is automatically 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.
In January of 1996, we issued 1,000,000 shares of our common stock to Mrs.
Jarney in lieu of accrued salary of Multi Soft.
In November 1999, we issued 250,000 shares to Ms. Jarney in lieu of past
accrued salary of Multi Soft.
17
<PAGE>
Through fiscal 1997, Mr. Lombardo and Ms. Jarney accrued a portion of their
Multi Soft salaries. The balance due between both officers as of January 31,
2000, on a consolidated basis, is $792,797 including deferred increases of
$586,605. Since fiscal 1998, Mr. Lombardo and Mr. Jarney have relinquished that
portion of their annual compensation that was earned but not paid for fiscal
1998 through fiscal 2000.
Item 11. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
Security Ownership of Management -- The number and percentage of shares of
our common stock owned of record and beneficially by each owner of 5% or more of
our common stock, each of our officers and directors and by all of our officers
and directors 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
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHARLES J. LOMBARDO 4,237,986 (2) 20.7%
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL
OFFICER, & TREASURER
1511 LAURIE LANE, YARDLEY, PA 19067
- ------------------------------------------------------------------------------------------------------------------------
MIRIAM G. JARNEY 2,389,000 (3) 11.7%
EXECUTIVE VICE PRESIDENT, SECRETARY, DIRECTOR
21 DOERING WAY, CRANFORD, NJ 07106
- ------------------------------------------------------------------------------------------------------------------------
LARRY SPATZ 0 (4) 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) 6,644,129 (4) 32.4%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
** Less than one percent.
(1) Based upon 20,505,541 shares of common stock outstanding on May 5, 2000.
(2) Includes shares held by Mr. Lombardo's wife and shares owned jointly with
his wife.
(3) Includes 19,100 shares owned by Ms. Jarney's husband.
(4) Excludes shares owned beneficially by a family trust of which Mr. Spatz'
wife is one of the beneficiaries. Mr. Spatz has confirmed to us that
neither he nor his wife has any voting or dispositive power with regard to
the shares owned by the trust.
18
<PAGE>
Item 12. Certain Relationships and Related Transactions
----------------------------------------------
As of January 31, 1999, Multi Soft had a demand loan with a commercial
bank. As of March 31, 1999, the loan was paid off and Multi Soft is no longer
indebted to this bank. During 2000 and 1999, the maximum amount of borrowings
outstanding were $0 and $16,338, respectively.
Although there is no written agreement between us and Multi Soft granting
us preemptive rights with regard to our majority ownership of Multi Soft common
stock, in practice, we have and plan to continue to acquire sufficient shares of
Multi Soft's common stock to assure our majority ownership in Multi Soft.
Multi Soft subleases its office space from C&S Consulting, Inc., a company
owned by our chairman and his wife. For more information, see "Part I. Item 2.
Description of Properties").
Item 13. Exhibits and Reports on Form 8-K.
--------------------------------
Exhibits
- --------
3.a Certificate of Incorporation (1)
3.b By-Laws (1)
4.a Specimen Common Stock (1)
4.b Class A Warrant (1)
4.c Class B Warrant (1)
4.d Class C Warrant (4)
10.a Our 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 Non-Qualified Stock Option Plan, Stock Grant Program and
Employee Incentive Stock Option Plan (3)
10.g Amendments to Non-Qualified Stock Option and Stock Grant Program (4)
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 our 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 our 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 our 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.
19
<PAGE>
4. Previously filed as an Exhibit to our 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.
6. Previously filed as an Exhibit to our 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.
Reports of Form 8-K
- -------------------
No reports on Form 8-K were filed during the last quarter of the fiscal
year ended January 31, 2000.
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 12, 2000 By: /s/ Charles J. Lombardo
----------------------
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.
SIGNATURES TITLE DATE
/S/ Charles J. Lombardo Chairman of the Board of Directors, May 12, 2000
- --------------------------- Chief Executive Officer, Chief
Charles J. Lombardo Financial Officer and Secretary-
Treasurer
/S/ Miriam Jarney Executive Vice President, and May 12, 2000
- --------------------------- Director
Miriam Jarney
/S/ Larry Spatz Director May 12, 2000
- ---------------------------
Larry Spatz
/S/ James Kaput, PhD. Director May 12, 2000
- ---------------------------
James Kaput, PhD.
/S/ George E. Mansur, Jr. Director May 12, 2000
- ---------------------------
George E. Mansur, Jr.
21
<PAGE>
SUPPLEMENTAL INFORMATION
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
Not Applicable.
22
<PAGE>
STEWART W. ROBINSON
CERTIFIED PUBLIC ACCOUNTANT
70-09 AUSTIN STREET, SUITE 206
FOREST HILLS, NY 11375
TEL: 718 793-0500
FAX: 718 793-7529
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Board of Directors
MULTI SOLUTIONS, INC.
I have audited the accompanying balance sheets of MULTI SOLUTIONS, INC. AND
SUBSIDIARIES as of January 31, 2000 and 1999 and the related statements of
operations, changes in stockholders' equity 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 our 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 financial position of MULTI SOLUTIONS, INC. AND
SUBSIDIARIES as of January 31, 2000 and 1999 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
STEWART W. ROBINSON
New York, New York
May 9, 2000
-F1-
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 342,207 $ 18,420
Accounts Receivable (net of allowance for doubtful
accounts of $37,486 and $43,783 for 2000 and
1999 respectively 140,484 132,316
Prepaid expenses and other current assets 44,992 13,385
Subscriptions receivable 100,000
------------ ------------
Total current assets 627,683 164,121
FURNITURE AND EQUIPMENT
Research and Development Equipment & Software 74,982 63,526
Office furniture and other equipment 61,874 20,474
------------ ------------
136,856 84,000
Less: Accumulated Depreciation (27,515) (16,780)
------------ ------------
109,341 67,220
Organizational costs 11,126 2,415
Less: Accumulated Amortization (4,569) (968)
------------ ------------
6,557 1,447
OTHER ASSETS
Capitalized software development costs 1,554,869 1,607,505
Less accumulated amortization (712,776) (809,915)
------------ ------------
842,093 797,590
Intangibles -- 200
------------ ------------
$ 1,585,674 $ 1,030,578
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
-F2-
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 2000 and 1999
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' 2000 1999
------------ ------------
DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Loan payable to bank $ -- $ 796
Note Payable -- 6,565
Accrued payroll 14,783 --
Payroll and other taxes payable 19,048 19,480
Accounts Payable 95,692 196,416
Accrued officer compensation 206,192 198,057
Deferred Revenues 127,532 187,648
------------ ------------
Total current liabilities 463,247 608,962
DEFERRED COMPENSATION DUE OFFICERS/SHAREHOLDERS 586,605 586,605
MINORITY INTEREST IS SUBSIDIARY 556,604 --
COMMITMENTS AND CONTINGENCIES -- Note F
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 40,000,000 shares
$.001 par value, issued and outstanding 20,170 18,814
20,169,827 (2000) and 18,813,398 (1999)
Additional paid-in capital, 8,886,456 8,661,197
Accumulated deficit (8,927,408) (8,845,000)
------------ ------------
(20,782) (164,989)
$ 1,585,674 $ 1,030,578
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
-F3-
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended January 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
REVENUES
<S> <C> <C>
License fees $ 177,099 $ 273,760
Maintenance fees 444,992 524,948
Consulting and Other fees 3,002 7,187
------------ ------------
Total revenues 625,093 805,895
EXPENSES
Software development and technical support 248,944 239,794
Selling and administrative 499,457 573,668
------------ ------------
Total expenses 748,401 813,462
------------ ------------
(Loss) from operations (123,308) (7,567)
OTHER INCOME (EXPENSE)
Other Revenues 5,269 66,391
Interest income (expense) 3,589 (9,518)
Minority share of consolidated subsidiary's loss 74,393 --
------------ ------------
Total other income 83,251 56,873
Income (loss) before discontinued operations (40,057) 49,306
Loss from operations of discontinued subsidiary (87,462)
------------ ------------
Net income (loss) ($ 127,519) $ 49,306
============ ============
Weighted average shares outstanding 19,527,207 18,749,543
============ ============
Income per share a a
============ ============
</TABLE>
(a) less then $.01 per share
SEE NOTES TO FINANCIAL STATEMENTS
-F4-
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
Years ended January 31, 2000 and 1999 Total Total
Common Stock paid-in Accumulated Deferred stockholders
Shares Amount capital deficit Compensation deficiency
------ ------ ------- ------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 31, 1998 18,266,898 $ 18,267 $ 8,644,851 ($8,925,731) ($1,334) ($263,947)
Issuance of restricted common stock 506,500 507 34,949 (35,456)
Issuance of common stock 40,000 40 1,960 2,000
Addition to Minority Interest used to
reduce loss absorbed at %100 31,426 31,426
Amortization of stock grants 16,226 16,226
Net Income 49,305 49,305
---------- -------- ----------- ----------- --------- --------
Balance at January 31, 1999 18,813,398 18,814 8,681,760 (8,845,000) (20,564) (164,990)
Issuance of restricted common stock 1,356,429 1,356 251,145 (52,500) 200,001
Addition to Minority Interest used to
reduce loss absorbed at %100 45,111 45,111
Amortization of stock grants 26,615 26,615
--
Net loss (127,519) (127,519)
---------- -------- ----------- ----------- --------- --------
Balance at January 31, 2000 20,169,827 $ 20,170 $ 8,932,905 $(8,927,408) $ (46,449) ($20,782)
========== ======== =========== =========== ========= ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
-F5-
<PAGE>
MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended January 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
Cash flows from operating activities
<S> <C> <C>
Net Income (loss) ($ 127,519) $ 49,306
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization 243,280 246,104
Changes in assets and liabilities
Accounts receivable (8,168) (73,681)
Prepaid expenses and other current assets (31,607) 7,416
Accrued payroll 14,783 (20,080)
Payroll and other taxes payable (432) (13,275)
Note Payable (6,565) (4,774)
Accounts payable and accrued expenses (100,724) 29,147
Accrued officer compensation 8,135 --
Deferred revenues (60,116) (4,172)
------------ ------------
Net cash provided (used) by operating activities (68,933) 215,991
Cash flows from investing activities
Capital expenditures (52,856) --
Organization costs of subsidiaries (8,711) --
Write off of intangibles 200 --
Capitalized software development costs (273,447) (261,205)
------------ ------------
Net cash used in investing activities (334,814) (261,205)
Cash flows from financing activities
Net repayments under loan and line of credit agreements (796) (15,542)
Minority interest and loss in excess of investments 549,215 31,426
Amortization of stock grants 26,615 16,226
Subscription receivable (100,000) --
Issuance of capital stock 252,500 2,000
------------ ------------
Net cash provided by financing activities 727,534 34,110
------------ ------------
NET INCREASE (DECREASE) IN CASH 323,787 (11,104)
Cash at beginning of year 18,420 29,524
------------ ------------
Cash at end of year $ 342,207 $ 18,420
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
-F6-
<PAGE>
Multi Solutions, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2000 and 1999
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"), Freetrek.Com, Inc. ("FreeTrek") and NetCast, Inc. ("NetCast"). As
of January 31, 2000, the Company owns 51.3% of Multi Soft, 59.3% of
FreeTrek and 75% 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 had a consolidated net (loss) of
($127,519) which includes loss from discontinued operations of ($87,462) in
2000 compared with income of $49,306 in 1999. In addition, at January 31,
2000, the Company's current liabilities exceeded current assets by
$161,846.
Multi Soft continues to market its products and has decreased its operating
costs. In addition, Multi Soft has generated revenues through services
rendered to the Company's FreeTrek subsidiary and hopes to generate
additional revenues from services to be rendered to FreeTrek and others.
The Company has raised $350,000 to date from the sale of its common stock
in a private transaction; and the purchaser has an option to acquire an
additional $150,000 worth of common stock. Moreover, through December 31,
1999, FreeTrek raised $621,000 from sales of its common stock.
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.
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, FreeTrek and 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 $3,157 and $3,563 for the years ended January 31,
2000 and 1999 respectively.
3. Capitalization of Computer Software Development Costs
-----------------------------------------------------
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.
Multi Soft 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 and IBM, which
began in October
-F7-
<PAGE>
Multi Solutions, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2000 and 1999
1993. Multi Soft'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, 2000 and 1999 are $658,611 and $650,263,
respectively.
FreeTrek is continuing to modify and improve its software and has
capitalized $183,482 of software development costs and has not started
amortization. Amortization will commence upon release of the software to
customers.
Amortization expense for all products at January 31, 2000 and 1999 was
$228,944 and $239,794 respectively.
4. Revenue Recognition
-------------------
In accordance with Statement of Position 97-2, "Software Revenue
Recognition" (SOP 97-2), 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.
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
anti-dilutive 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 those 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
NOTE C - NOTES PAYABLE
1. Demand Loan - Bank
------------------
Multi Soft had a demand loan payable to a commercial bank with a balance of
$796 at January 31, 1999. Borrowings were collateralized by Multi Soft's
accounts receivable and bear interest at the bank's prime rate plus 2%
(9.75% at January 31, 1999) As of March 31, 1999 Multi Soft paid off this
note in full.
During the fiscal years 2000 and 1999, the maximum amount of borrowings
outstanding was $796 and $16,338 respectively, the average borrowings were
$200 and $8,567, respectively, and the weighted average interest rates were
10.1%.
-F8-
<PAGE>
Multi Solutions, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2000 and 1999
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%. This note was
satisfied during the fiscal year 2000.
NOTE D - INCOME TAXES
As a result of losses incurred in recent years, the Company and its
subsidiaries separately have net operating loss carry-forwards available to
offset future federal taxable income of approximately $5.6 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.
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 June 1, 2000. There are presently outstanding a total
of 723,793 Class A Warrants, 600 Class B Warrants and 714,012 Class C
Warrants.
2. Stock and Option Compensation 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 895,880 shares has been issued pursuant to the Plan.
3. Common Stock Issued to Affiliates
---------------------------------
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.
In December 1998, Multi Soft issued 500,000 shares of common stock to the
Company. The transaction was valued at $.05 per share ($25,000). The effect
of this transaction was to reduce indebtedness owed to the Company, from
approximately $33,000 to $7,000.
In March 1998, the Company issued 150,000 shares of common stock each to
Charles J. Lombardo and Miriam Jarney for services rendered.
In November, 1999, the Company issued 250,000 of common stock each to
Charles J. Lombardo and Miriam Jarney in lieu of past accrued salaries.
4. Private Placement
-----------------
In January 2000, an investor signed a subscription agreement and completed
the purchase of 571,429 shares of the Company's common stock for $200,000.
In connection therewith, the Company issued an option to acquire an
aggregate of 857,142 shares at $.35 per share. As of May 9, 2000, the
option has been exercised to purchase an aggregate of 428,571 shares. The
Company has received an aggregate of $350,000 from this series of
transactions resulting in this investor owning approximately 4.9% of the
outstanding shares.
-F9-
<PAGE>
Multi Solutions, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2000 and 1999
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 $5,600 pr month increased
from $5,200 per month. Rental expense under the lease aggregated
approximately $62,400 and $63,200 for the years ended January 31, 2000 and
1999, respectively.
Future minimum lease payments under the non-cancelable equipment operating
lease are as follows:
In November 1997 the Multi Soft entered into a 60 month operating lease for
a laser copier with monthly payments of $365 plus tax and copy charges
through October 2003.
Year Ending January 31 Laser Color Total
Copier Copier
---------------------- -------- -------- --------
2001 4,380 6,000 10,380
2002 4,380 3,000 7,380
2003 3,285 - 3,285
-------- -------- --------
$ 12,045 $ 9,000 $ 21,045
2. Employment Agreements
---------------------
Multi Soft has employment agreements with two officers which provide
aggregate minimum annual compensation of $200,000 through July 1999, and
which are automatically renewed annually.
These officers relinquished a portion of the salaries due under their Multi
Soft contracts for the years ending January 31, 2000 and 1999.
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.
Mr. Lombardo and Ms. Jarney have agreed to forego this additional
compensation since fiscal 1997.
Mr. Lombardo is also entitled to a salary from the Company of $25,000 per
year which he has agreed to forego since fiscal 1997.
3. Payroll Taxes
-------------
Certain Federal and state taxes, interest, and penalties aggregating
approximately $13,000 remain unpaid at January 31, 2000.
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 vigorously defended the lawsuit.
During the fiscal year 2000 this lawsuit was found in favor of the
plaintiff.
Although NetCast is liable for the damages from this lawsuit, it has no
assets and has discontinued operations. Consequently, no future income will
be earned and NetCast will never have any assets. The Company is not liable
for the debt of NetCast. Accordingly, no expense or liability for this
award has been included in the consolidated financial statements.
-F10-
<PAGE>
Multi Solutions, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2000 and 1999
NOTE G - MAJOR CUSTOMERS
In fiscal 2000 one customer accounted for 14%. In fiscal 1999, one customer
accounted for 25% of total revenue.
NOTE H - SUPPLEMENTAL INFORMATION
Supplemental disclosures of cash flow information for years ended January
31, 2000 and 1999 are as follows:
2000 1999
---- ----
Cash paid during the year for Interest $0 $9,518
NOTE I - SOFTWARE LICENSING AGREEMENT
In 1995, the Company entered into a contract with IBM's Network Software
Division that provided the Company prepaid royalties of $600,000 in
quarterly installments over a two-year period. As a result, IBM received a
non-exclusive and non-transferable license to market certain Multi Soft
products. In October 1996 the agreement was amended to provide $15,000 in
monthly payments to the company through October 1998. As of January 31,
1999, the contract with IBM was extended for one year and IBM paid monthly
maintenance of $7,000. This contract was not renewed.
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 current
fiscal year. The balance due to Multi Soft at January 31, 2000 and 1999 was
$448,039.
Multi Soft provides certain services and office space to NetCast. The
balance due from NetCast, for such services, at January 31, 2000 was
$234,592. The Company has guaranteed this debt to Multi Soft.
Multi Soft provides office space, consulting and administrative services to
its affiliate, FreeTrek.Com, Inc. a subsidiary of the Company. During the
year ended January 31, 2000, the Company received payments from FreeTrek of
$193,000, which is included in Other Income on the Statement of Operations.
NOTE K - NETCAST
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 75% of NetCast. The
Board of Directors consists of two officers, Charles Lombardo and Miriam
Jarney.
In January 2000 the Board of Directors decided to discontinue any further
operations of NetCast, Inc. with the result that a loss from discontinued
operations in the amount of $87,462 is reflected in the statement of
operations for the fiscal year ended January 31, 2000. See Note F-4.
Litigation.
-F11-
Exhibit 21
LIST OF SUBSIDIARIES OF MULTI SOLUTIONS, INC.
---------------------------------------------
Name of Subsidiary* State of Incorporation
- ------------------- ----------------------
Multi Soft, Inc. New Jersey
FreeTrek.Com, Inc. New Jersey
NetCast, Inc. New Jersey
- -------------------------
* All of our subsidiaries do business under their own names.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 342,207
<SECURITIES> 0
<RECEIVABLES> 102,998
<ALLOWANCES> (37,486)
<INVENTORY> 0
<CURRENT-ASSETS> 627,683
<PP&E> 136,856
<DEPRECIATION> (27,515)
<TOTAL-ASSETS> 1,585,674
<CURRENT-LIABILITIES> 463,247
<BONDS> 0
<COMMON> 20,170
0
0
<OTHER-SE> (40,952)
<TOTAL-LIABILITY-AND-EQUITY> 1,585,674
<SALES> 625,093
<TOTAL-REVENUES> 708,344
<CGS> 0
<TOTAL-COSTS> 748,401
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (127,519)
<INCOME-TAX> 0
<INCOME-CONTINUING> (40,057)
<DISCONTINUED> (87,462)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (127,519)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
