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 consolidated financial statements and related notes.
ITEM 1. BUSINESS.
Background of the Issuer
Multi Solutions II, Inc., (“we,” “us,” “our,” or the "Company"), was originally incorporated on July 26, 1982 in New Jersey under the name "Multi Solutions, Inc." Through our subsidiary, Multi Soft II, Inc. ("Multi Soft"), 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"). In September 2011, we (and Multi Soft) 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 Solutions II, Inc. and Multi Soft was effective on September 29, 2011. All shares issued prior to September 29, 2011 have been restated retroactively to reflect the reverse split.
In 1983, we consummated our initial public offering of securities pursuant to a Registration Statement on Form S-18 (SEC File No. 2-85710-NY) declared effective by the Securities and Exchange Commission (SEC) on November 14, 1983 and contemporaneously registered our shares of Common Stock under the Securities Exchange Act of 1934 (SEC File No. 0-12162). In 2002, we began to discontinue and wind down our Prior Operations and by 2005, our Prior Operations had completely ceased.
In April and May 2005, we and Multi Soft entered into purchase agreements with several investors pursuant to which the investors purchased $105,000 principal amount of our 6% convertible debentures due May 1, 2006 and $36,000 principal amount of Multi Soft's 6% convertible debentures due May 1, 2006 (collectively, the "Debentures"). The Debentures were convertible into an aggregate of 1,476,788 shares of our common stock (73,839,393 shares pre-split), and 959,663 shares of common stock of Multi Soft (47,983,170 shares pre-split). The proceeds from the sale of the Debentures were used to satisfy certain liabilities of ours and Multi Soft.
On July 27, 2005, we received a letter from the SEC notifying us that we were subject to deregistration pursuant to Section 12 of the Exchange Act for failure to comply with SEC reporting requirements. We responded and provided the SEC with a timetable for becoming compliant with Exchange Act reporting requirements. We became compliant with our Exchange Act reporting obligations in 2006.
On August 7, 2009, we received a letter (the “Letter”) from Moore & Associates, Chartered (“Moore”), our independent registered public accounting firm, stating that Moore would no longer be engaged in auditing or reviewing public company financial statements, effectively resigning from serving as our independent registered public accounting firm. In July 2011, we retained Marcum, LLP as our independent registered public accounting firm.
In 2009, we again became delinquent in our Exchange Act reporting obligations by not filing our Form 10-K for the fiscal year ended January 31, 2009 and 2010, and our Forms 10-Q for the fiscal quarters ended April 30, 2009, July 31, 2009, October 31, 2009, April 30, 2010 and July 30, 2010. On September 7, 2010, we received a letter from the SEC that due to our failure to comply with our Exchange Act reporting obligations, we were again subject to the deregistration of our securities under the Exchange Act. On September 29, 2010, the SEC revoked the registration of our securities under Section 12(g) of the Exchange Act, and our stock symbol ("MULT") was removed from trading on the over-the-counter markets.
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 Soft. Upon the closing, Vector converted $39,102 of the $141,000 outstanding principal amount of the Debentures into 378,058 shares of our common stock (18,902,885 shares pre-split), and 325,806 shares of common stock of Multi Soft (16,290,286 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 40,000,000 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, we filed an Amended and Restated Certificate of Incorporation with the State of New Jersey to increase the authorized common stock of our 51% subsidiary Multi Soft from 30,000,000 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 1,098,730 shares of our common stock (54,936,508 shares pre-split), and 633,858 shares of common stock of Multi Soft (31,692,884 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 53% and 54% of our outstanding common stock and the common stock of Multi Soft, respectively, which resulted in a change in control of Multi Soft because our ownership of the outstanding common stock of Multi Soft decreased from 51% to 11%, and Multi Soft was 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 our 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 Solutions (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 Solutions, 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 4, 2011, we changed our name to Multi Solutions 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.