MULTI SOFT II, INC - Quarter Report: 2023 July (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended July 31, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
MULTI SOFT II, INC.
(Exact name of registrant as specified in its charter)
| Florida | 000-15976 | 22-2588030 | ||||||
| (State or other jurisdiction of incorporation | Commission File Number | (I.R.S. Employer Identification No.) | ||||||
| incorporation or organization) | ||||||||
4400 Biscayne Boulevard, 10th Floor
Miami, Florida 33137
305/579-8000
(Address, including zip code and telephone number, including area code,
of the principal executive offices)
Securities Registered Pursuant to 12(b) of the Act:
Title of each class: | Trading symbol(s): | Name of exchange on which registered: | ||||||
Common Stock, par value $.001 per share | MSOF | None | ||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the preceding 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 ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☐ | Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | ☒ | Smaller reporting company | ||||||||||||||||
| ☒ | Non-accelerated filer | ||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
☒ Yes ☐ No
At September 14, 2023, Multi Soft II, Inc. had 1,233,853 shares of common stock outstanding.
MULTI SOFT II, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JULY 31, 2023
TABLE OF CONTENTS
| Pages | |||||||||||
| PART I. FINANCIAL INFORMATION | |||||||||||
| Item 1. | Condensed Financial Statements (Unaudited) | ||||||||||
| Condensed Balance Sheets as of July 31, 2023 and January 31, 2023 | |||||||||||
| Condensed Statements of Operations for the three and six months ended July 31, 2023 and 2022 | |||||||||||
| Condensed Statements of Shareholders' Deficiency for the three and six months ended July 31, 2023 and 2022 | |||||||||||
| Condensed Statements of Cash Flows for the six months ended July 31, 2023 and 2022 | |||||||||||
| Notes to the Condensed Financial Statements | |||||||||||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||||||||
| Item 4. | Controls and Procedures | ||||||||||
| PART II. OTHER INFORMATION | |||||||||||
| Item 1. | Legal Proceedings | ||||||||||
| Item 6. | Exhibits | ||||||||||
| SIGNATURES | |||||||||||
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Multi Soft II, Inc.
Condensed Balance Sheets
| July 31, 2023 | January 31, 2023 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 13,916 | $ | 15,136 | |||||||
| Prepaid assets | 2,549 | — | |||||||||
| Total assets | $ | 16,465 | $ | 15,136 | |||||||
| LIABILITIES AND SHAREHOLDERS' DEFICIENCY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 23,100 | $ | 30,946 | |||||||
| Total current liabilities | 23,100 | 30,946 | |||||||||
| Due to shareholder | 1,083,969 | 1,018,202 | |||||||||
| Total liabilities | 1,107,069 | 1,049,148 | |||||||||
| Shareholders' deficiency: | |||||||||||
Preferred stock, 50,000,000 shares authorized, $0.001 par value; no shares issued or outstanding | — | — | |||||||||
Common stock, 200,000,000 shares authorized; $0.001 par value; 1,233,853 shares issued and outstanding | 1,233 | 1,233 | |||||||||
| Additional paid-in capital | 81,323 | 81,323 | |||||||||
| Accumulated deficit | (1,173,160) | (1,116,568) | |||||||||
| Total shareholders' deficiency | (1,090,604) | (1,034,012) | |||||||||
| Total liabilities and shareholders' deficiency | $ | 16,465 | $ | 15,136 | |||||||
See accompanying notes to condensed unaudited financial statements.
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Multi Soft II, Inc.
Condensed Statements of Operations
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 31, 2023 | July 31, 2022 | July 31, 2023 | July 31, 2022 | ||||||||||||||||||||
| Revenue | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative expenses | 14,531 | 9,705 | 22,825 | 17,117 | |||||||||||||||||||
| Total operating expenses | 14,531 | 9,705 | 22,825 | 17,117 | |||||||||||||||||||
| Loss from operations | (14,531) | (9,705) | (22,825) | (17,117) | |||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
| Interest expense | (17,394) | (16,045) | (33,767) | (31,406) | |||||||||||||||||||
| Total other expense | (17,394) | (16,045) | (33,767) | (31,406) | |||||||||||||||||||
| Loss before taxes | (31,925) | (25,750) | (56,592) | (48,523) | |||||||||||||||||||
| Income tax provision | — | — | — | — | |||||||||||||||||||
| Net loss | $ | (31,925) | $ | (25,750) | $ | (56,592) | $ | (48,523) | |||||||||||||||
| Basic and diluted loss per share | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.04) | |||||||||||||||
Basic and diluted weighted average number of shares outstanding | 1,233,853 | 1,233,853 | 1,233,853 | 1,233,853 | |||||||||||||||||||
See accompanying notes to condensed unaudited financial statements.
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Multi Soft II, Inc.
Condensed Statements of Shareholders' Deficiency
(Unaudited)
| Additional | |||||||||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance as of May 1, 2023 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,141,235) | $ | (1,058,679) | ||||||||||||||||||||
| Net loss | — | — | — | (31,925) | (31,925) | ||||||||||||||||||||||||
| Balance as of July 31, 2023 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,173,160) | $ | (1,090,604) | ||||||||||||||||||||
| Additional | |||||||||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance as of May 1, 2022 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,035,953) | $ | (953,397) | ||||||||||||||||||||
| Net loss | — | — | — | (25,750) | (25,750) | ||||||||||||||||||||||||
| Balance as of July 31, 2022 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,061,703) | $ | (979,147) | ||||||||||||||||||||
See accompanying notes to condensed unaudited financial statements.
5
Multi Soft II, Inc.
Condensed Statements of Shareholders' Deficiency
(Unaudited)
| Additional | |||||||||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance as of February 1, 2023 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,116,568) | $ | (1,034,012) | ||||||||||||||||||||
| Net loss | — | — | — | (56,592) | (56,592) | ||||||||||||||||||||||||
| Balance as of July 31, 2023 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,173,160) | $ | (1,090,604) | ||||||||||||||||||||
| Additional | |||||||||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance as of February 1, 2022 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,013,180) | $ | (930,624) | ||||||||||||||||||||
| Net loss | — | — | — | (48,523) | (48,523) | ||||||||||||||||||||||||
| Balance as of July 31, 2022 | 1,233,853 | $ | 1,233 | $ | 81,323 | $ | (1,061,703) | $ | (979,147) | ||||||||||||||||||||
See accompanying notes to condensed unaudited financial statements.
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Multi Soft II, Inc.
Condensed Statements of Cash Flows
(Unaudited)
| Six Months Ended | |||||||||||
| July 31, 2023 | July 31, 2022 | ||||||||||
| Cash flow from operating activities: | |||||||||||
| Net loss | $ | (56,592) | $ | (48,523) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Increase in accrued interest on due to shareholder | 33,767 | 31,406 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Increase in prepaid assets | (2,549) | — | |||||||||
| Decrease in accounts payable and accrued expenses | (7,846) | (10,218) | |||||||||
| Net cash used in operating activities | (33,220) | (27,335) | |||||||||
| Cash flow from financing activities: | |||||||||||
| Proceeds from debt issuance | 32,000 | 34,000 | |||||||||
| Net cash provided by financing activities | 32,000 | 34,000 | |||||||||
| Net (decrease) increase in cash | (1,220) | 6,665 | |||||||||
| Cash at beginning of period | 15,136 | 7,375 | |||||||||
| Cash at end of period | $ | 13,916 | $ | 14,040 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Interest paid | $ | — | $ | — | |||||||
| Income taxes paid | $ | — | $ | — | |||||||
See accompanying notes to condensed unaudited financial statements.
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MULTI SOFT II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Unaudited
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization, Basis of Presentation and liquidity
Multi Soft II, Inc.'s (the "Company") business purpose is to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company's business objective for the next 12 months and beyond will be to achieve long-term growth potential through a combination with a business, rather than immediate, short-term earnings. The Company's search for a business opportunity will not be limited to any particular geographical area or industry, including both domestic and international companies.
The Company does not have any revenues from operations and, absent a merger or other combination with an operating company, or a public or private sale of the Company's equity or debt securities, the occurrence of either of which cannot be assured, the Company will be dependent upon future loans or equity investments from the Company's present shareholders or management, for which there is no existing commitment except as disclosed in Note 2. Although the Company has no present commitment from any such parties to provide funding, except as disclosed in Note 2, if the Company reaches the point where the Company needs funds to remain in operation, the Company will attempt to raise funds from the Company's present shareholders or management in the form of equity or debt. If, in such situation, the Company is unable to raise funds from those parties, it is likely that the Company's business would cease operations. As disclosed in Note 2, the Company increased its borrowing capacity on the credit facility to $700,000. As of July 31, 2023, the Company believes it has adequate cash and available borrowing capacity under the credit facility to sustain operations for the next twelve months from the issuance date of this report.
In order to minimize potential conflicts of interest which may arise because the Company's directors and officers also serve as the directors and officers of Multi Solutions II, Inc., an entity under common control, each of the Company's officers and directors have entered into an agreement with the Company and Multi Solutions II, Inc. whereby all parties have each agreed that the Company will not analyze or consider any possible business combination opportunities until Multi Solutions II, Inc. has agreed to consummate a business combination.
The unaudited interim condensed financial statements of the Company as of July 31, 2023 and for the three and six months ended July 31, 2023 and 2022 included herein have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions for Form 10-Q, and Article 8 of Regulation S-X. Certain information and note disclosures normally included in complete financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations relating to interim condensed financial statements. In the opinion of management, the accompanying unaudited interim condensed financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at July 31, 2023, the results of its operations for the three and six months ended July 31, 2023 and 2022, and the results of its cash flows for the six months ended July 31, 2023 and 2022. The results of operations and cash flows for such periods are not necessarily indicative of results expected for the full year or for any future period. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 31, 2023 filed with the Securities and Exchange Commission ("SEC").
(B) Financial Instruments
The carrying amounts of cash and accounts payable and credit facility approximate their fair values due to their short term nature and that they are receivable or payable upon demand. However, considerable judgment is involved in making fair value determinations and current estimates of fair value may differ significantly from amounts presented herein.
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MULTI SOFT II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Unaudited
(C) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and expenses during the reported period. Actual results could differ from those estimates.
(D) Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
(E) Loss Per Share
Basic and diluted loss per share is calculated based on loss available to common shareholders and the weighted-average number of shares outstanding during the reporting period. There are no outstanding options or warrants.
(F) New Accounting Pronouncements
Accounting Standards Updates to be adopted in the future
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements.
SEC Proposed Rules
On March 21, 2022, the SEC proposed rule changes that would require registrants to provide certain climate-related information in their registration statements and annual reports. The proposed rules would require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks would also include disclosure of a registrant's greenhouse gas emissions, which have become a commonly used metric to assess a registrant's exposure to such risks. In addition, under the proposed rules, certain climate-related financial metrics would be required in a registrant's audited financial statements. The Company is currently evaluating the impact of the proposed rule changes.
(G) Subsequent Events:
The Company has evaluated subsequent events through September 19, 2023, the date the financial statements were issued.
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MULTI SOFT II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Unaudited
NOTE 2. DUE TO SHAREHOLDER
The Company has a credit facility with its majority shareholder, Vector Group Ltd., whereby, the credit facility provides the principal amount up to $700,000, as amended as of June 10, 2022, of financing to the Company for working capital purposes. Amounts outstanding under the credit facility accrue interest at an annual interest rate of 11% and mature in December 2025. As of July 31, 2023 and January 31, 2023, respectively, principal and interest outstanding under the credit facility totaled $1,083,969 and $1,018,202, including principal of $627,111 and $595,111, respectively, and accrued interest of $456,858 and $423,091, respectively. Interest expense related to the credit facility was $17,394 and $16,045 for the three months ended July 31, 2023 and 2022, respectively; and $33,767 and $31,406 for the six months ended July 31, 2023 and 2022, respectively.
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MULTI SOFT II, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with Multi Soft II, Inc.'s audited financial statements as of and for the year ended January 31, 2023 and Notes thereto, included in our Annual Report on Form 10-K for the year ended January 31, 2023, and our Condensed Financial Statements and the related Notes contained elsewhere in this quarterly report on Form 10-Q. All statements in the following discussion that are not reports of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the factors that may affect operating results set forth herein.
Overview
Our principal business objective for the next twelve months and beyond will be to achieve long-term growth potential through a combination with a business, rather than immediate, short-term earnings. Our search for a business opportunity will not be limited to any particular geographical area or industry, including both domestic and international companies.
We have negative shareholders' equity and have not earned any revenues from operations since 2005. However, we have issued an 11% revolving credit promissory note in favor of Vector Group Ltd. ("Vector") in the principal amount of up to $700,000, maturing in December 2025, as amended as of June 10, 2022, which we believe provides us with access to sufficient capital for the next twelve months from the issuance date of this report. We are currently devoting our efforts to locating merger candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations. Our historical operating results disclosed in this Form 10-Q are not meaningful to our future results.
We do not currently engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs associated with being a publicly traded company, including the filing of Exchange Act reports, and we could incur expenses and expenditures related to: (i) investigating and analyzing business combinations, (ii) consummating an acquisition. We believe we will be able to finance these expenses and expenditures through amounts, as needed, to be lent by or invested in us by our shareholders, management or other investors.
We may consider acquiring a business which has recently commenced operations, a developing company in need of additional funds for expansion into new products or markets, a company seeking to develop a new product or service or an established business that may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company that does not need substantial additional capital, but desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Our management has not had any meaningful discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that we will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective shareholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among
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MULTI SOFT II, INC.
other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
In order to minimize potential conflicts of interest which may arise because our directors and officers also serve as the directors and officers of Multi Solutions II, Inc., an entity under common control, each of our officers and directors has entered into an agreement with us and Multi Solutions II, Inc. whereby they have each agreed that we will not analyze or consider any possible business combination opportunities until Multi Solutions II, Inc. has agreed to consummate a business combination.
If we consummate a business combination, we will use our best efforts to have our stock quoted on the OTC Bulletin Board (the “OTCBB”), and anticipate that our common stock will be eligible to trade on the OTCBB subsequent to such business combination. In addition, subsequent to such business combination, we may seek the listing of our common stock on any of the several NASDAQ markets or the NYSE American, either immediately after such business combination or sometime in the future. However, in 2011, the NASDAQ, NYSE, and NYSE American adopted a “seasoning” requirement for the listing of former reverse merger companies, which includes trading in another market for an adequate period of time at certain minimum price levels, with an adequate number of round lot shareholders and completing SEC filings during this time, although there is an exception to this requirement for firmly underwritten public offerings which generate net proceeds of at least $40 million. We may be unable to comply with seasoning requirements for listing prior to the listing deadline and we may be unable to qualify for the $40 million exception, which could adversely impact our ability to access U.S. stock exchanges. There can be no assurance that after we consummate a business combination we will be quoted on the OTCBB or be able to meet the initial listing standards of any stock exchange or quotation service, or that we will be able to maintain a listing of our common stock on any of those or any other stock exchange or quotation service. If an active trading market for our shares does not develop, the value and liquidity of our shares will be materially and adversely affected.
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MULTI SOFT II, INC.
Results of Operations
Comparison of Three Months Ended July 31, 2023 and 2022
Revenues. We did not generate revenues for the three months ended July 31, 2023 and 2022, respectively.
General and Administrative Expenses. General and administrative expenses for the three months ended July 31, 2023 and 2022 were $14,531 and $9,705, respectively. During the three months ended July 31, 2023 and 2022, such expenses consisted primarily of professional fees associated with various matters associated with being a publicly traded corporation. These general and administrative expenses are subject to inflationary increases as well as changes in the regulatory environment and may increase in the future. In addition, if we effectuate a merger or other business combination with an operating business, we believe the level of expenses necessary to operate a publicly traded company will increase.
Other Expense. Other expense was $17,394 and $16,045 for the three months ended July 31, 2023 and 2022, respectively. Other expense for the three months ended July 31, 2023 and 2022 related to interest expense on the outstanding balance of the 11% revolving credit facility due December 2025.
Net Loss. Our net loss for the three months ended July 31, 2023 and 2022 was $31,925 and $25,750, respectively.
Comparison of Six Months Ended July 31, 2023 and 2022
Revenues. We did not generate revenues for the six months ended July 31, 2023 and 2022, respectively.
General and Administrative Expenses. General and administrative expenses for the six months ended July 31, 2023 and 2022, were $22,825 and $17,117, respectively. During the six months ended July 31, 2023 and 2022, such expenses consisted primarily of professional fees associated with various matters associated with being a publicly traded corporation. These general and administrative expenses are subject to inflationary increases as well as changes in the regulatory environment and may increase in the future. In addition, if we effectuate a merger or other business combination with an operating business, we believe the level of expenses necessary to operate a publicly traded company will increase.
Other Expense. Other expense was $33,767 and $31,406 for the six months ended July 31, 2023 and 2022, respectively. Other expense for the six months ended July 31, 2023 and 2022 related to interest expense on the outstanding balance of the 11% revolving credit facility due December 2025.
Net Loss. Our net loss for the six months ended July 31, 2023 and 2022 was $56,592 and $48,523, respectively.
Liquidity and Capital Resources
We do not have any revenues from operations and, absent a merger or other combination with an operating company, or a public or private sale of our equity or debt securities, the occurrence of either of which cannot be assured, we will be dependent upon future loans or equity investments from our present shareholders or management, for which there is no existing commitment. Although we have no present commitment from any such parties to provide funding aside from the credit facility, if we reach the point where we need funds to remain in operation, we will attempt to raise funds from our present shareholders or management in the form of equity or debt. If, in such situation, we are unable to raise funds from those parties, it is likely that our business would cease operations. As of July 31, 2023, we had a cash balance of $13,916, total liabilities of $1,107,069 and a negative working capital balance of approximately $6,600. We believe our available borrowing capacity under the credit facility provides us with sufficient capital for the next twelve months from the issuance date of this report.
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MULTI SOFT II, INC.
In April 2012 we entered into an 11% revolving credit promissory note in favor of Vector in the principal amount of up to $700,000, maturing in December 2025, as amended on June 10, 2022. The outstanding principal and interest owed to Vector as of July 31, 2023 was $1,083,969, which included principal of $627,111 and accrued interest of $456,858. We believe this revolving credit arrangement provides us with access to sufficient capital for the next twelve months from the issuance date of this filing. If we later determine that our capital reserves are insufficient, we will either cease operations or we will need to raise additional capital through the issuance of additional shares or through debt. There is no existing commitment to provide additional capital. In such situation, there can be no assurance that we shall be able to receive additional financing, and if we are unable to receive sufficient additional financing upon acceptable terms, it is likely that our business would cease operations.
Discussion of Cash Flows
For the six months ended July 31, 2023, net cash and cash equivalents decreased by $1,220. Net cash used in operations was $33,220, compared to $27,335 for the six months ended July 31, 2022.
For the six months ended July 31, 2023 and 2022, no cash was provided by investing activities.
For the six months ended July 31, 2023 and 2022, cash provided by financing activities was $32,000 and $34,000, respectively, and was associated with borrowing under the revolving credit facility.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements.
Critical Accounting Policies
Management has not identified any critical accounting policies.
Critical Accounting Estimates
Our condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to income taxes, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting estimates are described in more detail in Note 1 to our financial statements included in the annual report on Form 10-K for the year ended January 31, 2023.
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MULTI SOFT II, INC.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this quarterly report on Form 10-Q discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this quarterly report on Form 10-Q, forward-looking statements are generally identified by the words such as “anticipate”, “believe”, “continue”, "could", “estimate”, “expect,” “intend”, “may be,” “objective”, “opportunistically”, “plan”, “potential”, “predict”, “project”, “prospects”, “seek” or “will be” and similar words or phrases or their negatives. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader deciding whether to invest in our securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report on Form 10-Q. Important factors that may cause actual results to differ from projections include, for example:
•the success or failure of our efforts to implement our plan of operation;
•our ability to obtain financing to implement our plan of operation, including an acquisition or merger, on terms we consider favorable;
•our ability to fund our operating expenses;
•our ability to compete with other companies that have a similar plan of operation;
•the effect of changing economic conditions, including the impact of inflation, higher interest rates over a long period or an economic recession impacting our plan of operation;
•our ability to meet the other risks as may be described in future filings with the SEC.
Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this quarterly report on Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of our public disclosure practices.
Additionally, the discussion regarding our financial condition and results of operations should be read in conjunction with the condensed financial statements and related notes.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company as defined Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this section.
Item 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, and, based on their evaluation, our principal executive officer and principal financial officer have concluded that these controls and procedures are effective.
During the quarter covered by this report, we have not made any change to our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
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MULTI SOFT II, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings of which we or any of our property is the subject as of the date of this filing.
ITEM 6. EXHIBITS
| No. | Description | ||||||||||
| Certification of Chief Executive Officer, Pursuant to Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||
| Certification of Chief Financial Officer, Pursuant to Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||
| Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||
| 101.INS | *** | XBRL Instance Document | |||||||||
| 101.SCH | *** | XBRL Taxonomy Extension Schema | |||||||||
| 101.CAL | *** | XBRL Taxonomy Extension Calculation Linkbase | |||||||||
| 101.DEF | *** | XBRL Taxonomy Extension Definition Linkbase | |||||||||
| 101.LAB | *** | XBRL Taxonomy Extension Label Linkbase | |||||||||
| 101.PRE | *** | XBRL Taxonomy Extension Presentation Linkbase | |||||||||
| * | Incorporated by reference | ||||||||||
| *** | Pursuant to Rule 406T of SEC Regulations S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability under these sections. | ||||||||||
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SIGNATURES
Pursuant to the requirements 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.
| Dated: | September 19, 2023 | MULTI SOFT II, INC. | |||||||||||||||
| By: | /s/ J. Bryant Kirkland III | ||||||||||||||||
| Name: | J. Bryant Kirkland III | ||||||||||||||||
| Title: | President and Chief Executive Officer | ||||||||||||||||
| By: | /s/ Deborah A. Fasanelli | ||||||||||||||||
| Name: | Deborah A. Fasanelli | ||||||||||||||||
| Title: | Chief Financial Officer, Secretary and Treasurer | ||||||||||||||||
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