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, 2000
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: 0-15976
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MULTI SOFT, INC.
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(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2588030
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4262 US Route 1, Monmouth Junction, New Jersey 08852
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(Address of principal executive offices)
Issuer's telephone number, including area code: (732) 329-9200
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding at April 30, 2000
----------------------- -----------------------------
Common Stock, par value 13,709,477
$.001 per share
Transitional Small Business Format (check one); Yes [ ] No [X]
<PAGE>
PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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The accompanying financial statements are unaudited for the interim periods, but
include all adjustments (consisting only of normal recurring accruals) which we
consider necessary for the fair presentation of our results for the three months
ended April 30, 2000.
Moreover, these financial statements do not purport to contain complete
disclosure in conformity with generally accepted accounting principles and
should be read in conjunction with our audited financial statements at, and for
the fiscal year ended January 31, 2000.
The results reflected for the three months ended April 30, 2000 are not
necessarily indicative of the results for the entire fiscal year.
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MULTI SOFT, INC.
a 51.3% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
April 30, 2000 and January 31, 2000
(Unaudited)
April 30, January 31,
2000 2000
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ASSETS
CURRENT ASSETS
Cash $ (5,914) $ 13,205
Accounts Receivable (net of allowance
of $37,486 and $37,486 respectively) 101,993 139,610
Prepaid expenses and other current assets 45,293 44,991
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141,372 197,806
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,869 8,868
Office furniture and other equipment 13,824 13,824
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22,693 22,692
Less: Accumulated Depreciation (16,219) (15,439)
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6,474 7,253
OTHER ASSETS
Capitalized software development costs 1,391,023 1,371,387
Less accumulated amortization (759,283) (712,776)
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631,740 658,611
Due from Multi Solutions, Inc 429,661 448,039
Due from NetCast, Inc. 234,592 234,592
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$ 1,443,839 $ 1,546,301
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MULTI SOFT, INC.
a 51.3% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
April 30, 2000 and January 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
April 30, January 31,
LIABILITIES AND STOCKHOLDERS' 2000 2000
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DEFICIENCY
CURRENT LIABILITIES
<S> <C> <C>
Accrued payroll $ 14,783 $ 14,783
Payroll and other taxes payable 17,806 19,048
Accounts Payable, Accrued expenses and
other Current Liabilities 21,790 50,215
Accrued officer compensation 161,390 161,390
Deferred Revenues 65,558 127,532
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281,327 372,968
Deferred compensation due officer /shareholders 586,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
13,709,477respectively 13,709 13,709
Additional paid-in capital, net of deferred
compensation $18,903 and $25,257 respectively 6,020,318 6,013,964
Accumulated deficit (5,458,120) (5,440,945)
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575,907 586,728
$ 1,443,839 $ 1,546,301
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</TABLE>
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<PAGE>
MULTI SOFT, INC
a 51.3% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
April 30, 2000 and April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
2000 1999
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REVENUES
<S> <C> <C>
License fees $ 12,485 $ 59,724
Maintenance fees 65,820 113,537
Consulting and Other fees 6,699 15,518
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Total revenues 85,004 188,779
EXPENSES
Software development and technical support 88,628 57,192
Selling and administrative 153,051 162,555
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Total expenses 241,679 219,747
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Income (Loss) from operations (156,675) (30,968)
OTHER INCOME (EXPENSE)
Other Revenues 139,500 --
Interest Expense --
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Total other income 139,500 --
Net (Loss) $ (17,175) $ (30,968)
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Weighted average shares outstanding 13,709,477 13,509,473
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Income (Loss) per share (a) (a)
============ ============
(a) less than $.01 per share
</TABLE>
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<PAGE>
MULTI SOFT, INC.
a 51.3% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
April 30, 2000 and April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
April 30,
2000 1999
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Cash flows from operating activities
<S> <C> <C>
Net (loss) $ (17,175) $ (30,968)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 47,286 57,595
Changes in assets and liabilities
Due to / from Multi Solutions 18,378 --
Due to / from NetCast -- --
Accounts receivable 37,617 7,611
Prepaid expenses and other current assets (302) 3,709
Accrued payroll -- 19,265
Payroll and other taxes payable (1,242) 8,616
Accounts payable and accrued expenses (28,425) (14,987)
Accrued officer compensation -- 33,333
Deferred revenues (61,974) (27,321)
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Net cash provided by operating activities (5,837) 56,853
Cash flows from investing activities
Capitalized software development costs (19,636) (60,928)
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Net cash used in investing activities (19,636) (60,928)
Cash flows from financing activities
Net repayments under loan and line of credit ageements -- (796)
Amortization of Stock Grants 6,354 6,729
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Net cash provided by financing activities 6,354 5,933
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NET INCREASE (DECREASE) IN CASH (19,119) 1,858
Cash at beginning of year 13,205 18,133
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Cash at end of period $ (5,914) $ 19,991
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</TABLE>
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<PAGE>
MULTI SOFT, INC.
NOTE TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
OTHER REVENUES
Represents amounts for consulting, rent and administrative fees charged to
FreeTrek.Com, Inc., an affiliate, during the three months ended April 30, 2000.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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CAUTIONARY STATEMENT
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This quarterly report on form 10-QSB contains certain forward-looking
statements regarding, among other things, our anticipated financial and
operating results. For this purpose, forward-looking statements are any
statements contained in this report that are not statements of historical fact
and include, but are not limited to, those preceded by or that include the
words, "believes," " expects," or similar expressions. In connection with the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995,
we are including this cautionary statement identifying important factors that
could cause our or our affiliates' 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
affiliates, include our ability to:
o continue to receive royalties from our 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.
Results of Operations
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Three months ended April 30, 2000 compared to Three months ended April 30, 1999
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We generated revenues during the three months ended April 30, 2000, the first
quarter of our fiscal year ending January 31, 2001, of $85,004 compared to
revenues of $188,779 during the first quarter of fiscal 2000. We believe that
this decrease of $103,775, or approximately 55%, was due primarily to a decrease
in revenues from license and maintenance fees. License fee revenues decreased
$47,239, or approximately 79.1%, and maintenance fees decreased $47,717, or
approximately 42.0%.
Our two traditional principal sources of revenues were license fees and
maintenance fees which represented approximately 92.1% or $78,305 of revenues
for the three months ended April 30, 2000 and 91.8% or $173,261 of revenues for
the three months ended April 30, 1999.
We believe that the decrease in licensing fees was due primarily to a reduction
in software sales. We believe that the decrease in maintenance fees was due to
the non-renewal of older maintenance contracts by customers.
Although our traditional sources of revenues decreased significantly during the
first quarter of fiscal 2001, we generated other income of $139,500 from fees
charged to our affiliate, FreeTrek.com, Inc. These fees consisted of:
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<PAGE>
o consulting fees of $116,000,
o rent of $7,500 and
o administrative fees of $16,000.
See the discussion below under "Major Customers."
Our operating expenses were $241,679 for the three months ended April 30, 2000
compared to $219,747 for the comparable three month period of fiscal 2000, an
increase of $21,932 or approximately 10%. We believe that the increase was a
result of higher levels of software development costs, offset in part by lower
levels of selling and administrative costs charged to operations.
As a result of all of the foregoing, we incurred a net loss for the first
quarter of fiscal 2001year of $17,175 compared to a net loss of $30,968 for the
first quarter of fiscal 2000, a decrease of $13,793 or approximately 44.5%.
Major Customers
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In the first quarter of fiscal 2000, IBM accounted for 11% of total revenues. In
the first quarter of fiscal 2001, IBM did not account for any revenues. IBM
extended its contract with us 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. 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. 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 Multi Solutions' securities. If FreeTrek is unable to generate
substantial revenues or continue to raise funds, revenues received by us from
FreeTrek most likely will decrease and eventually cease.
Liquidity and Capital Resources
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At April 30, 2000, we had a negative working capital position of ($139,955)
compared to a negative working capital position of ($175,162) on January 31,
2000. We continue to experience significant cash flow problems.
We have taken various step to correct this situation, including:
o significantly cutting overhead costs thru staff reduction;
o extending our product line to operate within the internet environment;
o performing work for our affiliate, FreeTrek, related to the prior and
ongoing development, maintenance and enhancement of FreeTrek's
products: and
o performing contract consulting services for others.
We intend to remain a technology provider of products and services and search
out multiple distribution channels, with increasing emphasis on the use of the
Internet for marketing, rather than to try and grow
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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 we obtain additional funds from operations or otherwise, we plan to
expand in-house marketing activities by advertising in trade publications and by
conducting targeted mailing.
Working Capital and Current Ratios:
-----------------------------------
Descriptions April 30, 2000 January 31, 2000
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Working capital
(deficiency) ($139,955) ($175,162)
Current ratios 0.50:1 0.53:1
Dividend Policy
---------------
We have not declared or paid any dividends on our common stock since inception
and we do not anticipate that we will declare or pay 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 the 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.
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<PAGE>
PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
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None.
Item 2. Changes in Securities and Use of Proceeds
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Our common stock purchase warrants expired on June 1, 2000.
Item 3. Defaults Upon Senior Securities
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None.
Item 4. Submission of Matters to a Vote of Security Holders
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None.
Item 5. Other Information
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None.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None.
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<PAGE>
SIGNATURES
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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 SOFT, INC.
Dated: June 16, 2000
By: /s/ Charles J. Lombardo
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Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
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