PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this annual report on Form 10-K discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this annual report on Form 10-K, forward-looking statements are generally identified by the words such as "anticipate", "plan", "believe", "expect", "estimate", and the like. 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 annual report on Form 10-K. Important factors that may cause actual results to differ from projections include, for example:
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 annual report on Form 10-K 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 financial statements and related notes.
ITEM 1. BUSINESS
Background of the Issuer
Multi Soft II, Inc., (“we,” “us,” “our,” or the "Company"), was originally incorporated on January 20, 1985 in New Jersey under the name "Multi Soft, Inc." We were engaged in the production, marketing and maintenance of a line of software products consisting of tools for the development of client-server, front-ending, and Internet based applications using a mainframe or an Internet server through 2002 (the "Prior Operations"). Until May 2011, we were a consolidated subsidiary of Multi Solutions, Inc., a New Jersey corporation ("Multi Solutions"). In September 2011, we (and Multi Solutions) effected a 50 for 1 reverse split and changed our domicile from New Jersey to Florida, as discussed below. As a result of the filing of Articles of Merger with the State of Florida, the reverse split for both Multi Soft II, Inc. and Multi Solutions was effective on September 29, 2011. All shares issued prior to September 29, 2011 have been restated retroactively to reflect the reverse split.
In July 1986, pursuant to a Registration Statement on Form S-1 (SEC File No. 33-3133) declared effective by the Securities and Exchange Commission (SEC) on July 14, 1986 (the "S-1"), we, along with Multi Solutions as co-issuer, consummated an exchange offering to holders of Multi Solutions Class A common stock warrants to exchange such warrants plus cash for units consisting of our common stock and common stock warrants, plus Multi Solutions common stock and Multi Solutions Class C common stock warrants. In 2002, we began to discontinue and wind down our Prior Operations and by 2005, our Prior Operations had completely ceased. On December 16, 2002, we filed a Form 15 with the SEC to voluntarily deregister our shares of common stock under the Exchange Act. Upon such filing, our obligation to file certain reports with the SEC, including annual, quarterly and current reports on Form 10-K, Form 10-Q and Form 8-K, respectively, was immediately suspended. Other filing requirements terminated upon the effectiveness of the deregistration, which occurred 90 days after the filing of the Form 15.
In April and May 2005, we and Multi Solution entered into purchase agreements with several investors pursuant to which the investors purchased $36,000 principal amount of our 6% convertible debentures due May 1, 2006 and $105,000 principal amount of Multi Solution's 6% convertible debentures due May 1, 2006 (collectively, the "Debentures"). The Debentures were convertible into an aggregate of 959,663 shares of our common stock (47,983,170 shares pre-split) and 1,476,788 shares of common stock of Multi Solutions (73,839,393 shares pre-split). The proceeds from the sale of the Debentures were used to satisfy certain liabilities of ours and Multi Solutions.
In May 2011, pursuant to the terms of several debenture purchase agreements between our debenture holders and Vector Group Ltd., a Delaware corporation ("Vector") (the "Vector Purchase Agreements"), Vector purchased from the debenture holders an aggregate of $97,000 principal amount of the Debentures and assumed certain liabilities from us and Multi Solutions. Upon the closing, Vector converted $39,102 of the $141,000 outstanding principal amount of the Debentures into 325,806 shares of our common stock (16,290,286 shares pre-split) and 378,058 shares of common stock of Multi Solutions (18,902,885 shares pre-split).
On June 1, 2011, we filed an Amended and Restated Certificates of Incorporation with the State of New Jersey to increase our authorized common stock from 30,000,000 to 200,000,000 shares, and to create a class of 50,000,000 shares of blank check preferred stock, $0.001 par value. On the same date, Multi Solutions filed an Amended and Restated Certificate of Incorporation with the State of New Jersey to increase its authorized common stock from 40,000,000 to 200,000,000, and to create a class of 50,000,000 shares of blank check preferred stock, $0.001 par value. Pursuant to the terms of the Vector Purchase Agreements described above, upon the effectiveness of the amended certificates, the remaining $101,898 outstanding principal balance of the Debentures was converted by Vector and the other debenture holders into an aggregate of 633,858 shares of our common stock (31,692,884 shares pre-split) and 1,098,730 shares of common stock Multi Solutions (54,936,508 shares pre-split). Interest due as of May 25, 2011 on the Debentures was $60,106, which was forgiven by the holders upon conversion.
As a result of the consummation of the transactions contemplated by the Vector Purchase Agreements, Vector became the holder of 54% and 53% of our outstanding common stock and the common stock of Multi Solutions, respectively, which resulted in a change in control of the Company because Multi Solution's our ownership of our outstanding common stock decreased from 51% to 11%, and we were no longer consolidated as a subsidiary in our financial statements. Upon the closing of the Vector Purchase Agreements in May 2011, our incumbent directors and officers resigned, and Richard J. Lampen, J. Bryant Kirkland III and Robert L. Frome were appointed to our board of directors and Messrs. Lampen and Kirkland became our President, and Secretary, Treasurer and Chief Financial Officer, respectively. In July 2012, Mr. Lampen resigned as an officer and director, Robert M. Lundgren was appointed to the board of directors, Mr. Kirkland was appointed as our Chairman, President and Chief Executive Officer, and Deborah Fasanelli was appointed as our Secretary, Treasurer and Chief Financial Officer.
On September 21, 2011, Multi Soft (Florida), Inc., a Florida corporation, was formed for the purpose of merging with us to change our domicile from New Jersey to Florida and to effect a 50 for 1 reverse split of our outstanding common stock (the "Reverse Split"). Articles of Merger for Multi Soft, Inc. and the Florida corporation were filed in New Jersey and, respectively, Florida to effectuate the merger of the New Jersey corporation with and into the Florida corporation (the "Merger"), which Merger became effective on September 29, 2011. As a result of the Merger and in accordance with the terms of the agreement and plan of merger executed by both companies, the shareholders of the New Jersey corporation received .02 shares of new (Florida) common stock for every one share of old (New Jersey) common stock they owned, and all outstanding shares of the New Jersey corporation's common stock were canceled. Pursuant to the Merger, the Florida corporation became the surviving entity, and as a result, we are authorized to issue 200,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.001 par value preferred stock.
Effective on October 3, 2011, we changed our name to Multi Soft II, Inc. The name change is not meant to be reflective of any business plan or particular business industry but rather is thought by management to be neutral and therefore may assist us in our current business plan.
In August 2012, we registered our shares of common stock under Section 12(g) of the Exchange Act.
Our Business
From June 2011 through August 17, 2012, we were engaged in organizational efforts, including obtaining initial financing, and preparing to identify potential merger or acquisition candidates. Upon the effectiveness of our Form 10 Registration Statement on August 17, 2012, we commenced our business operations. Our 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.
Prior to the effectiveness of our Registration Statement on Form 10 on August 17, 2012, we were solely engaged in organizational activities related to our corporate structure and causing our shares of Common Stock to become publicly tradable (including the filing of the Form 10 Registration Statement) and had not yet engaged in identifying potential merger or acquisition candidates. As of August 17, 2012, we commenced our investigation for potential merger or acquisition candidates and thus commenced our business operations, and as of such date became a Development Stage Entity in accordance with ASC 915. All our results after August 17, 2012 have been reported as Development Stage operations.
Our intended business purpose is to seek the acquisition of, or merger with, an existing company. The acquisition of a business opportunity may be made by purchase, merger, exchange of stock, or otherwise, and may encompass assets or a business entity, such as a corporation, joint venture, or partnership. We have very limited capital, and it is unlikely that we will be able to take advantage of more than one such business opportunity. We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. We will not restrict potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. As of the date hereof, we have made no efforts to identify a possible business combination including, but not limited to, not conducting negotiations or entering into a letter of intent with respect to any target business and we have not entered into a letter of intent or any definitive agreement with respect to any target business. If we are unable to locate a suitable entity with which to enter into a business combination, we may invest in passive investments as an alternative to acquiring a business. This may prove to be more suitable, as an alternative, because it will be a non-management control investment.