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, 2002
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.)
3535 Quakerbridge Road, Hamilton New Jersey 08619
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(Address of principal executive offices)
Issuer's telephone number, including area code: (609) 631-7401
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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
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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, 2002
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Common Stock, par value 13,709,477
$.001 per share
Transitional Small Business Format (check one); Yes No X
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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, 2002.
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, 2002.
The results reflected for the three months ended April 30, 2002 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, 2002 and January 31, 2002
(Unaudited)
April 30, January 31,
2002 2002
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ASSETS
CURRENT ASSETS
Cash $ 3,505 $ 3,207
Accounts Receivable (net of allowance
of $46,219 and $49,212 respectively 29,765 22,117
Prepaid expenses and other current assets 20,726 22,636
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53,996 47,960
FURNITURE AND EQUIPMENT
Research and Development Equipment 8,868 8,868
Office furniture and other equipment 31,209 31,209
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40,077 40,077
Less: Accumulated Depreciation (26,029) (24,837)
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14,048 15,240
OTHER ASSETS
Capitalized software development costs 1,707,908 1,702,582
Less accumulated amortization (1,085,668) (1,047,052)
Less valuation allowance (210,000) (210,000)
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412,240 445,530
Due from Multi Solutions, Inc 352,739 351,926
Due from Freetrek, Inc. 119,623 215,730
Due from NetCast, Inc. 234,592 234,592
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706,954 802,248
Less valuation allowance (200,000) (200,000)
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506,954 602,248
$ 987,238 $ 1,110,978
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MULTI SOFT, INC.
a 51.3 % owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
April 30, 2002 and January 31, 2002
(Unaudited)
April 30, January 31,
2002 2002
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LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Accrued payroll $ 45,034 $ 81,817
Payroll and other taxes payable 30,893 28,589
Accounts Payable, Accrued expenses and
other Current Liabilities 165,753 169,933
Accrued officer compensation 133,868 133,868
Due to officer 19,646 52,847
Deferred Revenues 64,423 72,552
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459,617 539,606
Deferred compensation due officers/shareholders 586,605 586,605
STOCKHOLDERS' DEFICIENCY
Common stock, authorized 30,000,000 shares
$.001 par value, issued and outstanding
13,709,477 for 2002 and 2002 respectively 13,709 13,709
Additional paid-in capital 6,039,221 6,039,221
Accumulated deficit (6,111,914) (6,068,163)
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(58,984) (15,233)
$ 987,238 $ 1,110,978
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MULTI SOFT, INC
a 51.3% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
April 30, 2002 and April 30, 2001
(Unaudited)
Three Months Ended
April 30,
2002 2002
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REVENUES
License fees $ 4,696 $ --
Maintenance fees 39,350 27,720
Consulting and Other fees 7,329 9,002
Consulting fees from Freetrek affiliate 21,000 37,500
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Total revenues 72,375 74,222
EXPENSES
Software development and technical support 39,119 83,378
Selling and administrative 100,007 124,094
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Total expenses 139,126 207,472
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(Loss) income from operations ($ 66,751) ($ 133,250)
OTHER INCOME
Administrative charges to Freetrek 23,000 19,940
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Net loss ($ 43,751) ($ 113,310)
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Weighted average shares outstanding 13,709,477 13,709,477
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Income (Loss) per share (a) (a)
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(a) less than $.01 per share
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MULTI -SOFT, INC.
a 51.3 % owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF CASH FLOWS
April 30, 2002 and April 30, 2001
(Unaudited)
Three Months Ended
April 30,
2002 2002
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Cash flows from operating activities
Net income (loss) ($ 43,751) $ (113,310)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 39,808 40,217
Changes in assets and liabilities
Due to / from Multi Solutions (813) (1,706)
Due to/ from Freetrek 96,107 (3,102)
Accounts receivable (7,648) 60,543
Prepaid expenses and other current assets 1,910 5,580
Accrued payroll (36,783) --
Payroll and other taxes payable 2,304 (957)
Accounts payable and accrued expenses (4,180) 36,439
Due to officer (33,201) --
Deferred revenues (8,129) 28,028
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Net cash provided by operating activities 5,624 51,732
Cash flows from investing activities
Capital expenditures -- (4,635)
Capitalized software development costs (5,326) (47,097)
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Net cash used in investing activities (5,326) (51,732)
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NET INCREASE (DECREASE) IN CASH 298 --
Cash at beginning of year 3,207 --
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Cash at end of period $ 3,505 $ --
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MULTI SOFT, INC.
NOTE TO FINANCIAL STATEMENTS
April 30, 2002
(Unaudited)
RECLASSIFICATION OF REVENUE TO OTHER INCOME FROM ADMINISTRATIVE CHARGES
Rent and administrative fees charged to Freetrek, Inc., an affiliate, were
reflected on prior financial statements as "Revenue" on the Statement of
Operations. During the three months ended April 30, 2002, these fees have been
included in "Other Income" in the category "Other Income" on the Statement of
Operations. For purposes of comparison, the Statements of Operations for the
three months ended April 30, 2001 have been restated accordingly.
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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 ours 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 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, 2002 compared to Three months ended April 30, 2001
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We generated revenues during the three months ended April 30, 2002, the first
three months of our fiscal year ending January 31, 2003, of $72,375 compared to
revenues of $74,222 during the first three months of fiscal 2002. We believe
that the decrease of $1,847, or approximately 2.5%, was due primarily to a
decrease in our consulting fees, primarily to our affiliate Freetrek, Inc.,
offset in part by increases in license and maintenance fees. License fee revenue
increased from $0 in the first quarter of fiscal 2002 to $4,696 during the first
quarter of fiscal 2003. Maintenance fees increased $11,630, or approximately
42.0% and consulting and other fees, primarily to our affiliate Freetrek, Inc.,
decreased $18,173,or approximately 39.1%.
Please note that we have included income derived from consulting and
administrative charges to our affiliate Freetrek, Inc. in the amount of $23,000
in "Other Income" for the three months ended April 30, 2002. Previously this
income was reported as "Revenues" in the Income Statement. We have restated our
Statement of Operations for the three months ended April 30, 2001 to reflect
this change.
Our principal sources of revenues were license fees and maintenance fees.
License and maintenance fees represented approximately $44,046 or 60.9% of
revenues for the three months ended April 30, 2002 and approximately $27,720 or
37.3% of revenues for the three months ended April 30, 2001. Consulting fees
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represented approximately $28,329 or 39.1% of revenues for the three months
ended April 30, 2002 and approximately $46,502 or 62.7% of revenues for the
three months ended April 30, 2001.
We believe that the increase in licensing fees was due to increased software
sales. We believe that the increase in maintenance fees was due to renewal of
maintenance contracts by customers.. We believe that the decrease in consulting
and other fees was due to a reduction in charges for consulting and
administrative fees to our affiliate Freetrek, Inc. This reduction in consulting
and administrative fees from Freetrek resulted from a decrease in funds
available to Freetrek from its financing activities. See the discussion below
under "Major Customers."
Our operating expenses were $139,126 for the three months ended April 30, 2002
compared to $207,472 for the comparable three month period of fiscal 2002, a
decrease of $68,346 or approximately 32.9%. We believe that the decrease was a
result of both lower levels of software development costs as well as a reduction
in selling and administrative costs charged to operations for the three month
period ending April 30, 2002 compared to the period ending April 30, 2001.
As a result of all of the foregoing, we incurred a net loss for the first three
months of fiscal 2003 of $43,751 compared to a net loss of $113,310 for the
first three months of fiscal 2002, a decrease of $69,559.
Major Customers
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No individual customer accounted for a significant portion of revenues. We have
generated revenues 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, 2002, we had a negative working capital position of ($405,621)
compared to a negative working capital position of ($491,646) on January 31,
2002. We continue to experience significant cash flow problems.
We have taken various step to correct this situation, including:
o significantly cutting overhead costs through staff reduction;
o extending our product line to operate within the internet environment;
o performing work for our affiliate, Freetrek, related to the prior and
ongoing development, maintenance and enhancement of Freetrek's
products: and
o performing contract consulting services for others.
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We intend to remain a technology provider of products and services and search
out multiple distribution channels, with increasing emphasis on the use of the
Internet for marketing, rather than to try and grow via an expensive direct
sales force. This allows the focus to stay on technology, with a low overhead
cost for each distribution channel used. However, if we obtain additional funds
from operations or otherwise, we plan to expand in-house marketing activities by
advertising in trade publications and by conducting targeted mailing.
Working Capital and Current Ratios:
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Descriptions April 30, 2002 January 31, 2002
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(deficiency) ($ 405,621) ($ 491,646)
Current ratios 0.16:1 0.09:1
Dividend Policy
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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
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We believe that inflation has not had a material effect on our operations for
the periods presented.
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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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None.
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
None.
(b) Reports on Form 8-K
None.
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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 17, 2002 By: /s/ Charles J. Lombardo
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Charles J. Lombardo, Chief Executive Officer,
Chief Financial Officer and Treasurer
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