SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 1997           Commission File No. 33-3133

            New Jersey                                    22-2588030
 (State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation or organization)

                                 MULTI SOFT, INC
                 (Name of Small business issuer in its charter)

      4262 US Route 1, Monmouth Junction, New Jersey    08852
        (Address of principal executive offices)     (Zip Code)

Registrant's telephone number, including area code  (908) 329-9200

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Common Stock

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.[X]

Issuer revenue for the fiscal year: $1,065,135

The aggregate market value of the voting stock held by non-affiliates (1) of the
registrant based on the average ask ($ 3/8) and ($ 1/4) bid price of such stock,
as of April 30, 1997 is $1,453,831 based upon $.3125 multiplied by the 4,652,259
Shares of Registrant's Common Stock held by non-affiliates.

The number of shares  outstanding of each of the registrant's  classes of common
stock, as of April 30, 1997, is 11,766,239 shares, all of one class of $.001 par
value Common Stock.

(1) Affiliates for purposes of this item refers to those persons who, during the
preceding 3 months, were officers,  directors and/or owners of 5% or more of the
Company's outstanding stock.

     DOCUMENTS INCORPORATED BY REFERENCE: None
Transitional Small Business Disclosure Format (check one):     Yes___   No_X_


                                      -1-
<PAGE>


     MULTI SOFT, INC.
                                   Form 10-KSB
                           Year Ended January 31, 1997

                                Table of Contents
                                -----------------
                                                                         Page
                                                                         ----
PART I ................................................................    3
Item 1.  Business .....................................................    3
Item 2.  Properties ...................................................    8
Item 3.  Legal Proceedings ............................................    8
Item 4.  Submission of Matters to a Vote of Security Holders ..........    8
PART II ...............................................................    9
Item 5.  Market for Registrant's Common Equity and
         Related  Stockholder Matters .................................    9
Item 6.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations ..........................   10
Item 7.  Financial Statements .........................................   12
Item 8.  Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosures ......................   12
PART III ..............................................................   13
Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         compliance with Section 16(a) of the Exchange Act ............   13
Item 10. Executive Compensation .......................................   14
Item 11. Security Ownership of Certain Beneficial Owners and Management   17
Item 12. Certain Relationships and Related Transactions ...............   18
PART IV ...............................................................   20
Item 13. Exhibits and Reports on Form 8-K .............................   20
Signatures ............................................................   22
Financial Statements ..................................................   F1
Exhibits ..............................................................   E1


                                      -2-
<PAGE>


                                     PART I

Item 1. Business.

General

     Multi Soft,  Inc.  (the  "Company"  or "Multi  Soft") was  incorporated  in
January 1985 as a wholly owned subsidiary of Multi Solutions,  Inc. ("MSI") and,
as of the date hereof,  is a 55.40% owned subsidiary of MSI. The Company engages
in the  production,  marketing and maintenance of  communications  front-ending,
client-server  and  cooperative  processing   technologies  called  The  Windows
Communications  Library(TM) (WCL(TM)) for Windows and INFRONT and QuickFRONT For
DOS.

The Technology

     The Multi  Soft  product  line  consists  of tools for the  development  of
client-server  applications using the mainframe as the Enterprise Server.  There
are four key elements to the real world  development,  delivery  and  production
maintenance  of these  applications,  and all are  supported  by the Multi  Soft
product line. These include screen-based access to mainframe data and processes;
message-based   access  to  mainframe   data  and   processes;   integration  of
screen-based and message-based  access to the mainframe in the same application;
and control and distribution management.

     Screen-based  access  to  Mainframe  Data  and  Processes  (which  includes
front-ending) allows the user to enhance existing mainframe applications through
the integration of client technologies such as GUIs (graphical user interfaces),
imaging  and local  data,  without  changing  any  mainframe  code.  This allows
companies to leverage their PC capabilities to streamline user processes and for
presenting  mainframe data to users in a way that is intuitive,  easy to use and
productive. Screen-based access to the mainframe is supported by WCL, QuickFRONT
and INFRONT.

     Message-based  access to Mainframe Data and Processes  allows  companies to
create client-server  applications,  where the PC is used for the client portion
of the  application  (i.e.,  all user  interaction,  dialogue flow and access to
local data) and the mainframe is used for the server portion of the  application
(i.e., management of database interaction, data integrity and security). In this
architecture,  only data and messages are passed between the PC and host,  which
results in a streamlined  and optimized  production  application.  Message-based
access to the  mainframe  is  supported by WCL's  WCL/Enterprise  Server  Option
("WCL/ESO"), and by INFRONT's and QuickFRONT's Host Processing Option ("HPO").

     Integrity  Control and Distribution  Management allows companies to use the
mainframe system to centrally manage the integrity of the work station logic and
distribute new version releases. In production client-server  applications it is
important  to ensure that the  programs,  files and data  residing on the PC are
correct  before the user starts the  application.  When  changes are made to the
work  station  logic,  the host can also be used to manage the  distribution  of
these changes.  Integrity  control and  distribution  management is supported by
WCL's  WCL/Software   Distribution  Option  ("WCL/SDO")  and  by  INFRONT's  and
QuickFRONT's Software Distribution Facility ("SDF").


                                      -3-
<PAGE>


The Multi Soft Product Line

     The Multi Soft Product line consists of two product  sets:  the WCL product
set and the  INFRONT/QuickFRONT  product  set.  The WCL  product  set is an open
environment that runs under Windows and includes WCL,  WCL/ESO and WCL/SDO.  The
INFRONT and QuickFRONT product set is an integrated  environment that runs under
DOS and Windows. It includes INFRONT, QuickFRONT, HPO and SDF.

     WCL is a toolkit and a set of DLLs (Dynamic Linked  Libraries) that work in
conjunction with Windows 3270 emulation  products to provide easy integration of
data and  processing  between  PC/LANs  (local area networks) and the mainframe.
Because  WCL is open,  any of the  standard  Windows  development  tools such as
PowerBuilder,  Visual Basic,  and C++, can be used with WCL to create the client
application.  It  supports  the  development  of GUI  front-ends,  client-server
applications  that use the  mainframe  as a server  and  integrity  control  and
distribution  management.  The WCL  toolkit  provides an  automated  development
environment  that includes,  among other things, a screen capture  mechanism,  a
screen maintenance and a screen matching facility. In addition, it provides code
generation to remove the  complexity  and  development  effort  associated  with
building GUI front-end applications.

     DynaGUI  is a new  product  introduced  this  year and is an  automted  sub
product  of WCL which can be sold as a  stand-alone  application  tool.  DynaGUI
(Dynamic  Graphical User  Interface  generation)  is a fully  automatic  runtime
utility which  dynamically  converts 3270 or 5250 legacy emulation  screens into
Windows GUI screens,  with  absolutely no  programming or  maintenance.  It uses
advanced  pattern  recognition  to interpret host  attributes and  automatically
converts them into Windows controls.  And, it allows a non-programmer to quickly
and easily add screen & field-level help in minutes.

     WCL/ESO is the host component to WCL and provides a message-based transport
layer  between  client  PC/LANs and the  mainframe.  The client  application  is
created using any of the standard  Windows  tools and  products,  and the server
application is created using a standard  language,  such as COBOL. Any mainframe
file  structure or database,  such as VSAM,  DB2, or IMS, can be accessed  using
WCL/ESO  through CICS (an IBM mainframe  operating  environment).  Client-server
applications  developed  using  WCL/ESO  have  the  added  advantage  of using a
company's existing mainframe skills and infrastructure, including security, data
integrity, backup and recovery and disaster recovery.

     WCL/SDO is a WCL/ESO  application  created for the centralized  control and
management of application code, data and software for distributed  client-server
applications.  It allows companies to control, audit and distribute from central
host-based  master libraries to distributed PCs. These PCs can be clients and/or
servers.  WCL/SDO is used as a verification  mechanism to ensure all files,  and
appropriate  versions of files are present on a PC or in a host library. It will
automatically  update the PC or Host with  correct  versions of files if any are
found to be missing or invalid.  This facility is important  for the  successful
production management of large-scale distributed applications.

     QuickFRONT is a powerful, but easy to use, tool which offers the ability to
rapidly  improve  existing  mainframe  applications  by  creating  new  PC-based
interfaces  for them.  This can be  accomplished  without  programming,  without
training,  without any significant learning curve and without any changes to the
mainframe  code.  If the user needs  special  functions  that are not  generated
automatically  through  QuickFRONT's  dialogues,  the user also has  access to a
powerful 4GL (fourth generation  language) called CPL/1.  QuickFRONT is designed
to give the user the maximum benefit from front-ending  with maximum  investment
from both a development resource and software expenditure standpoint.


                                      -4-
<PAGE>


     INFRONT is a  comprehensive  and  integrated  development  environment  for
building PC front-ends and client-server  applications  with the mainframe.  The
development  environment  includes:  an intelligent  forms subsystem with screen
capture,  screen painting,  editing and validation assignment  facilities,  data
dictionary;  a 4GL; an intelligent  editor with language  templates and reusable
code library; a PC-resident database,  including database maintenance facilities
such as sorting and reorganizing;  sophisticated debugging facilities, including
a source-level language debugger, and other utilities such as code libraries and
forms libraries.

     HPO (Host  Processing  Option)  is the host  component  to  QuickFRONT  and
INFRONT that supports the development of  client-server  applications  using the
mainframe as a server. HPO is also used to incrementally  migrate legacy systems
into  a  client-server  architecture.  It  uses  a  message-based  protocol  for
peer-to-peer  interaction  between  PC/LANs and host  systems.  HPO delivers the
capabilities  of APPC and  LU6.2  (communications  protocols)  over  the  user's
existing LU2 and  asynchronous  networks  without  requiring any  upgrades.  HPO
allows the user to offload 60% to 80% of an  application's  logic to the client,
thereby reducing the mainframe to the role of a server.

     SDF (Software Distribution  Facility) is a client-server  application based
on HPO.  It is a utility  for the  centralized,  host-based  management  of work
station integrity and the automated  distribution of updates and new versions of
PC  software,  files and data.  With SDF a master  production  library of all PC
programs, files and data is stored on the host. As a user logs on to the system,
SDF can automatically  check to see if the programs,  files and data on the work
station are correct according to the master library on the host. If they are not
correct,  SDF will  automatically  download  the  correct  versions  before  the
application  is  started.  If  they  are  correct,   the  application   proceeds
immediately.

New Product

     In addition to DynaGUI,  the Company has recently released a 32-bit version
of its WCL product for Windows 95 and Windows/NT.

Key Services

     Multi Soft offers a wide array of training and consulting services designed
to help its new customers get a fast start in  client\server  development and to
help existing  customers  with  additional  resources to  facilitate  successful
production application roll-outs.

     Training Services include basic and advanced product  training,  as well as
courses such as "Design and Development  Methodologies,"  which covers the major
issues  companies need to understand for  successfully  developing  applications
running on distributed platforms.

     Consulting  Services range from human factors design and project management
to assisting  licensees with application  development  and/or the development of
complete applications.

     Technical   Support  Services  include  a  telephone   hotline  staffed  by
knowledgeable  personnel  trained and  experienced  with the Multi Soft  product
line. An online  bulletin  board system is also used to augment  hotline and fax
support to customers.  The amortization of software over the last two years were
$344,588 in 1997 and $369,548 in 1996.


                                      -5-
<PAGE>


Clients

     Multi  Soft's  past  and  current  client  base  spans  over  40,000  users
throughout approximately 125 Fortune 500 companies. Customers that have licensed
Multi Soft's products include:  American Cyanamid,  Bell Atlantic, ITT Hartford,
Honda, Con Edison, Hoescht,  American International Group, Ciba Geigy, Comdisco,
EDS,  Exxon,  General  Electric,  Hilton,  Lever Brothers,  Teachers  Insurance,
Chicago Northwestern and US West Business.

In-House Marketing and Sales

     In addition to their  management  responsibilities,  Charles  Lombardo  and
Miriam Jarney also are active in sales. At present, in-house sales are generally
made  through  telemarketing.  If the  Company  obtains  additional  funds  from
operations  or  otherwise,  it plans to  further  market  its  products  through
advertisements in trade publications and targeted mailings.  No assurance can be
given that the Company will have sufficient funds to increase its in-house sales
and marketing activities.

Distributors

     To  supplement  its domestic  sales and marketing  efforts,  Multi Soft has
built an international  distribution  network.  Business  arrangements have been
established with software distributors in European markets and Australia.  These
organizations  include:  Ferntree  Computer Services  (Australia),  SEE Software
Engineering (Switzerland) and Software Engineering (Holland, Germany, UK).

Strategic Alliances

     Multi  Soft has  established  strategic  relationships  with  complementary
hardware and software  vendors.  Most notable among these are the  relationships
with IBM (see "IBM" below) and Computer Data  Systems,  Inc.  ("CDSI").  CDSI, a
supplier of financial  systems and consulting  services to the government market
place,  licenses  Multi Soft products into it existing  customer base and to new
clients.

IBM

     In October 1993, the Company  entered into a Software  Licensing  Agreement
("SLA") and other ancillary  agreements with IBM Corporation  ("IBM")  providing
IBM with certain exclusive  marketing rights for the Company's flagship product,
WCL (runtime  version)  with IBM IMS  Extensions.  This IBM EXTENDED  VERSION of
Multi  Soft's  WCL is named IMS  Client  Server(TM)  for  Windows.  Specifically
modified for use with IBM mainframe  systems,  IMS Client Server(TM) for Windows
provides remote presentation support for IMS.

     The IBM  agreement,  effective  for a term of seven  years  with  automatic
renewals for two more one year  periods,  provides for the payment of percentage
royalties  and unit  royalties as specified in the  agreement.  The Agreement is
terminable by IBM upon 90 days notice.  The Company has been  receiving  monthly
maintenance for the above agreement.

     Multi  Soft  and  IBM  also  have  entered  into  International   Marketing
Agreements  to market Multi Soft's WCL Toolkit  under the name IMS Client Server
Toolkit(TM)  for Windows in the United  States,  Puerto Rico,  the Asian Pacific
Region,   Europe,  the  Middle  East,  Africa  and  Canada.  IMS  Client  Server
Toolkit(TM)  facilitates the generation of client application which run with IMS
Client Server(TM) for Windows.


                                      -6-
<PAGE>


     In addition,  in September 1994,  Multi Soft entered into an  International
Software Licensing  Agreement with IBM's Personal  Communications  3270 division
("P-Comm").  This  agreement  allows  IBM to logo and  market a P-Comm  specific
version of both the Toolkit and  Runtime of Multi  Soft's WCL.  Pursuant to this
agreement,  the Company will receive a minimum of $75,000 per quarter over a two
year period representing minimum advances against royalties.  This IBM agreement
is  effective  for a term of two years and is  renewable by IBM for two more one
year  periods.  The  Agreement is  terminable by the Company or IBM upon 90 days
notice in the event of a default by the other party.  As of November  1996,  the
contract  with IBM was extended for two more years and IBM is paying the Company
monthly maintenance and royalties.

     Management   believes,   but  cannot  assure,   that  these  marketing  and
distribution  agreements will provide Multi Soft with a significant  presence in
the  marketplace,  enhance the  visibility  and  credibility  of Multi Soft, and
result  in  increased  sales  of Multi  Soft's  products  by Multi  Soft and its
existing distributors. Management expects that, as the IBM relationship matures,
significant  revenues  will be generated by IBM and Multi Soft's  product  sales
base will  continue to expand.  In addition,  management  expects  that,  as the
products  sales base expands,  so will the  subsequent  maintenance  and support
revenue.

Since fiscal 1994, IBM has represented a significant  percentage of Multi Soft's
revenues  See  "Item  6.  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations".

Bellcore

     In 1995  Multi  Soft,  Inc.  entered  a  joint  development  and  marketing
agreement  with Bellcore to develop and market a Sun Solaris Unix version of its
WCL product.  The agreement provides that Bellcore pay Multi Soft for developing
an extension of its WCL product to the Sun Solaris Unix  environment.  Also,  it
provides  for a joint  marketing  agreement in which both  companies  will share
marketing  royalties.  During fiscal 1997 Multi Soft had been receiving  monthly
maintenance for the above contract.

Employees

     The Company has twelve employees and  consultants,  including two officers,
three support  personnel,  four technical and engineering  personnel,  and three
administrative/secretarial personnel.

Competition

     The Company operates in a business composed of strong competitors,  many of
whom have substantially  greater resources,  are better established,  and have a
longer history of operations  than the Company.  In addition,  many  competitors
have more extensive facilities than those which now or in the foreseeable future
will become available to the Company.

     The Company competes directly with computer  manufacturers,  large computer
service companies and independent software suppliers.  The Company believes that
hundreds  of  firms  that  manufacture   software   applications   products  are
significant  competitors,  and the Company is one of the smaller entities in the
field.

     The Company's products provide front-ending,  client-server and cooperative
processing  technologies  which the Company  believes  represent  a  significant
advance over other products being marketed.


                                      -7-
<PAGE>


     NetCast,   Inc.  is  a  subsidiary  company  of  Multi  Solutions  and  was
incorporated  in April of 1996. It is in the business of developing new Internet
technologies  to create a series of products and businesses that will extend the
power of advertising on the Internet.  Multi Solutions  currently owns $76.1% of
NetCast.  Multi Soft  provides  services and office space to NetCast at cost for
which it has billed  approximately  $55,000.  The Board of Directors consists of
two officers,  Charles Lombardo and Miriam Jarney.  NetCast is in the process of
raising private funding for its operations. However, we can make no assurance it
will obtain the funding necessary to bring its software to the marketplace.

Item 2. Properties.

     The Company  subleases  approximately  3,300 square feet of office space at
4262 US Route 1, Monmouth Junction, New Jersey 08852 from C&S Consulting,  Inc.,
a company owned by the Company's  Chairman and his wife.  C&S  Consulting,  Inc.
leases the space from an unaffiliated  party. The lease commenced on December 1,
1993 and is  terminable  at any time on three  months  notice.  Monthly  rent is
$3,750 during the first year,  $4,250 during the second year,  $4,750 during the
third year and $4,950 during the fourth year. The Company is responsible for all
utilities.

Item 3. Legal Proceedings.

     The Company is not presently a party to any material  litigation;  however,
the Company was a party in the following matters:


Taxes

     Certain  federal,   state  taxes,   interest,   and  penalties  aggregating
approximately $38,000 remain unpaid at January 31, 1997.


Item 4. Submission of Matters to a Vote of Security Holders.

     No matters were submitted to a vote of Security Holders in the last quarter
of the Company's fiscal year ended January 31, 1997.


                                      -8-
<PAGE>


                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

     (a) Market  Information -- The Company's  Common Stock and the Common Stock
Purchase  Warrants  (for  one  share  of  Common  Stock)  are  traded  is in the
over-the-counter market, and are quoted on The OTC Bulletin Board (symbol:
"MSOF").

     The following tables set forth the range of high and low bid prices for the
Company's  Common  Stock on a quarterly  basis for the past two fiscal  years as
reported by the National  Quotation Bureau (which reflect  inter-dealer  prices,
without  retail  mark-up,  mark-down,  or  commission  and may  not  necessarily
represent actual transactions). The Warrants are unpriced.

                                   Bid Prices
                                   ----------

          Period - Fiscal Year 1996                     High   Low
          ---------------------------------------------------------
          First Quarter ending April 30, 1995           1/4    1/8
          Second Quarter ending July 31, 1995           3/8    3/16
          Third Quarter ending October 31, 1995          .29   1/8
          Fourth Quarter ending January 31, 1996        9/32   1/8


          Period - Fiscal Year 1997                      High   Low
          ---------------------------------------------------------
          First Quarter ending April 30, 1996            .66    .56
          Second Quarter ending July 31, 1996            .53    .41
          Third Quarter ending October 31, 1996          .32    .28
          Fourth Quarter ending January 31, 1997         .26    .21


     (b)  Holders  -- There  were  approximately  160  holders  of record of the
Company's  Common Stock and 16 holders of record of the  Company's  Common Stock
Purchase  Warrants as of May 8, 1996 inclusive of those  brokerage  firms and/or
clearing houses holding the Company's  securities for their clientele (with each
such brokerage house and/or clearing house being considered as one holder).


                                      -9-
<PAGE>


     (c)  Dividends -- The Company has not paid or declared any  dividends  upon
its Common  Stock since its  inception  and, by reason of its present  financial
status and its  contemplated  financial  requirements,  does not  contemplate or
anticipate paying any dividends upon its Common Stock in the foreseeable future.

Sales of unregistered securities

--------------------------------------------------------------------------------
Name                                        Date                 Number
                                                           of Securities Issued
--------------------------------------------------------------------------------
Multi Solutions                            1/16/96            1,500,000
--------------------------------------------------------------------------------
Michael Zindler                            5/6/96                25,000
--------------------------------------------------------------------------------
Markowitz & Zindler                        5/6/96               100,000
--------------------------------------------------------------------------------
John Lowy                                  4/2/96                77,260
--------------------------------------------------------------------------------
Linda Dorrian                              5/16/96               20,000
--------------------------------------------------------------------------------
Lorraine Hartley                           5/16/96               10,000
--------------------------------------------------------------------------------
Larry Levine                               12/15/97              50,000
--------------------------------------------------------------------------------

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

Results of Operations

Fiscal Year Ended  January 31,  1997  Compared to Fiscal Year Ended  January 31,
1996

     Revenues  for the fiscal year ended  January 31, 1997 were  $1,065,.135  as
compared to $1,399,180 in fiscal year 1996, an decrease of $334,045 (24%).  This
decrease is primarily  due to a 56% decrease in revenues  from license fees from
$812,069 to $356,494,  much of which come from the company's  largest  customer.
The  decrease  in  license  fees is  primarily  due to the  decrease  in royalty
payments to the company from IBM.

     In fiscal 1997, Multi Soft's two principal sources of revenues were license
fees and maintenance fees which represented approximately 34% ($356,494) and 65%
($688,692) percent of revenues in fiscal 1997.

     Management  believes  that the growth in  maintenance  fees during the year
ended  January 31, 1997 is due to an increase  in requests  from  customers  for
product updates,  technical  assistance and support and contracts with IBM which
requires  $10,000 per month in maintenance  fees. Also, since November 1996, the
minimum maintenance has been $25,000 per month from IBM.

     Operating  expenses  decreased 25% from fiscal 1996  ($1,399,476) to fiscal
1997  ($1,051,821)  primarily  as a result  of a 31%  decrease  in  selling  and
administrative  costs. The decrease in software development costs is principally
due to a decrease in the base of capitalized development costs.

     Other income  (expenses)  changed from $49,249 in fiscal 1996 to $71,244 in
fiscal 1997.  Also,  settlements of accounts payable is included as other income
in the amount of $54,782 in 1996.  Consulting  and rent  revenue are included in
the other income section in the amount of $55,349 in 1997.

     As a result of all of the foregoing,  Multi Soft's income in fiscal 1997 of
$84,558 increased compared to its income in 1996 $48,953.


                                      -10-
<PAGE>


Major Customers

     In fiscal 1997, IBM accounted for 29% of total revenues. In fiscal 1996 IBM
accounted for 42% of total revenues.

Liquidity and Capital Resources

     At January  31,  1997,  the  Company had a working  capital  deficiency  of
$(369,345) and has experienced cash flow problems.

     Management of Multi Soft has taken various steps to correct this situation.
Overhead  costs have been cut  drastically  as a result of staff  reductions and
curtailment of all outside marketing and advertising costs. In addition,  senior
staff  salaries  were  reduced  and  executive  officers'  salaries  were partly
deferred.  Secondly,  Multi Soft  broadened  its product  base into the Windows,
Windows 95 and  Windows/NT  environment  and has made its Windows based products
easier to learn and use.



     In addition,  in September 1994,  Multi Soft entered into an  International
Software Licensing  Agreement with IBM's Personal  Communications  3270 division
("P-Comm").  This  agreement  allows  IBM to logo and  market a P-Comm  specific
version of both the  Toolkit and Runtime of Multi  Soft's  WCL(TM).  Pursuant to
this agreement, the Company will receive a minimum of $75,000 per quarter over a
two year period  representing  minimum advances against  royalties (see "Item 1.
Business - (IBM"). Contract was renewed as of November 1996 in which the Company
will receive minimum maintenance and royalties.

     It is Multi Soft's  intent to remain a  technology  provider and search out
multiple  distribution  channels,  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 the  Company
obtains  additional  funds  from  operations  or  otherwise,  it plans to expand
in-house  marketing  activities  by  advertising  in trade  publications  and by
conducting  targeted  mailing.  (See "Item 1. Business - In-House  Marketing and
Sales").

Dividend Policy

     The Company  has not  declared or paid any  dividends  on its common  stock
since its inception and does not anticipate  the  declaration or payment of cash
dividends in the foreseeable future. The Company intends to retain earnings,  if
any, to finance the development  and expansion of its business.  Future dividend
policy will be subject to the  discretion  of the Board of Directors and will be
contingent  upon future  earnings,  if any, the Company's  financial  condition,
capital requirements,  general business conditions and other factors. Therefore,
there can be no assurance that dividends of any kind will ever be paid.

Effect of Inflation

     Management  believes that  inflation  has not had a material  effect on its
operations for the periods presented.


                                      -11-
<PAGE>


Cautionary Statement

     This Form 10-KSB contains  certain  forward-looking  statements  regarding,
among other things,  the  anticipated  financial  and  operating  results of the
Company.  For  this  purpose,  forward-looking  statements  are  any  statements
contained herein that are not statements of historical fact and include, but are
not  limited to,  those  preceded by or that  include the words,  "believes,"  "
expects,"  "anticipated,"  or similar  expressions.  In connection with the safe
harbor provisions of the Private  Securities  Litigation Reform act of 1995, the
Company is including this cautionary  statement  identifying  important  factors
that could cause the Company's  actual results to differ  materially  from those
projected in forward  looking  statements made by, or on behalf of, the Company.
These  factors,  many of which are beyond the control of the Company and include
the  Companies's  ability to, (i) continue as a going concern,  (ii) continue to
receive royalties from its existing licensing and consulting arrangements, (iii)
develop  additional  marketable  software  and  technology  , (iv)  compete with
larger,  better capitalized  competitors,  and (v) reverse ongoing liquidity and
cast flow problems.

Item 7. Financial Statements.

     The following  financial  statements  have been prepared in accordance with
the requirements of Item 310(a) of Regulation S-B.

                                MULTI SOFT, INC.
                              FINANCIAL STATEMENTS
                       FISCAL YEAR ENDED January 31, 1997

                                      INDEX

                                                                      Page #
                                                                      ------
Report of Independent Certified Public Accountant                       F1

Balance Sheets - January 31, 1997 and 1996                              F2, F3

Statements of Operations for Each of the Two Years
 in the Period Ended January 31, 1996                                   F4

Statements of Changes in Stockholders' Equity (Deficiency)
 for Each of the Two Years in the Period Ended January 31, 1997         F5

Statements of Cash Flows for Each of the
 Two Years in the Period Ended January 31, 1997                         F6

Notes to Financial Statements                                           F7 - F15


Schedules

     All   schedules  of  the  Company  have  been  omitted   because  they  are
inapplicable or not required,  or the  information is included  elsewhere in the
financial statements or notes thereto.

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosures.

          None


                                      -12-
<PAGE>


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

Name                                 Position(s) Held
----                                 ----------------

Charles J. Lombardo          Chairman of the Board of Directors,
                             Chief Executive Officer,
                             Chief Financial Officer and Treasurer

Miriam G. Jarney             Executive Vice President, Secretary and Director

Larry Spatz                  Director


     Directors   are  elected  to  serve  until  the  next  annual   meeting  of
stockholders  and until their  successors  have been elected and have qualified.
Officers  are  appointed  to serve until the  meeting of the Board of  Directors
following the next annual  meeting of  stockholders  and until their  successors
have been elected and have qualified.

     A summary of the business  experience  for each officer and director of the
Company is as follows:

     CHARLES J. LOMBARDO,  age 54, has been the Company's  Chairman of the Board
of Directors  since  January  1985 and has been the  Company's  Chief  Executive
Officer,  Chief Financial Officer and Treasurer since December 1988. He has been
MSI's Chief Executive  Officer and  Secretary-Treasurer  since August 1982. From
1972 to 1993, Mr.  Lombardo also served as the President of Petro-Art,  Ltd., an
inactive publicly owned company and its wholly owned subsidiary JCT Enterprises,
Inc. Mr. Lombardo was President of Hopewell Graphic Industries from 1969 through
1971 and from 1967 to 1969 was associated with Keystone Computer Associates as a
staff member in the Physics  Section of the Systems  Analysis  Department.  From
1965  to  1967,  Mr.  Lombardo  served  as a  scientist  in the  Plasma  Physics
Department of Raytheon Space and Information Systems Division.  Mr. Lombardo has
a Bachelor of Science  degree in Physics from  Worcester  Polytechnic  Institute
(1964),  a Master of Science  degree in  Physics  from  Northeastern  University
(1966) and has continued  studies  toward a Ph.D. in  Theoretical  Physics.  Mr.
Lombardo is a Member of the American Physical Society, The American Mathematical
Society,  The  Society for  Industrial  and Applied  Mathematics,  The  American
Association of Physics Teachers, and the Philosophy of Science Association.

     MIRIAM G. JARNEY,  age 56, has been a Director of the Company since January
1985,  Executive  Vice  President of the Company since 1986 and Secretary of the
Company  since  December  1988.  She has been  Executive  Vice  President  and a
Director of MSI since January 1982. From 1973 to February 1982, Ms. Jarney was a
marketing  representative  for National CSS, Inc., a computer  services  company
that has since been  acquired by Dun & Cst,  Inc.  From 1972 through  1973,  Ms.
Jarney was  associated  with  Mathematica,  Inc.,  which  originated a Data Base
Management  System called RAMIS, for which National CSS has exclusive  marketing
rights.  Ms.  Jarney has also worked as a computer  systems  analyst for Western
Electric Company and Exxon Corporation. She graduated from the Hebrew University
in Jerusalem with a degree in Economics and Statistics and has a Master's degree
in Computer Science from Stevens Institute of Technology.  In February 1982, Ms.
Jarney  started her own company,  Dedicated  Systems,  Inc.,  for the purpose of
packaging  computer  software for the  microprocessor  market,  which company is
inactive.

     LARRY SPATZ,  age 53, as been a director of the Company since May 12, 1986,
and a  director  of Multi  Solutions  since  July 14,  1989.  He has been  Chief
Executive Officer and Chairman of the Board of


                                      -13-
<PAGE>


Heartthrob  Enterprises,  Inc.,  a  restaurant  and night  club  management  and
development  company  since  September  1985.  From 1982 to 1984,  Mr. Spatz was
President of Universal Petroleum,  Inc. From 1979 to 1982, he was Vice President
and a director of Mercantile  Trading  Company.  Mr. Spatz is also a director of
Centrex Communications Systems, Inc. and Ultramed, Inc.


Section 16(a) Beneficial Ownership Reporting Compliance

     To the Company's  knowledge,  based solely on a review of such materials as
are required by the Securities and Exchange Commission,  no officer, director or
beneficial  holder  of  more  than  ten  percent  of the  Company's  issued  and
outstanding shares of Common Stock failed to timely file with the Securities and
Exchange  Commission  any form or report  required  to be so filed  pursuant  to
Section  16(a) of the  Securities  Exchange  Act of 1934  during the fiscal year
ended January 31, 1996.

Item 10. Executive Compensation.

     The following table shows all the cash  compensation  paid or to be paid by
the  Company  or its  parent,  as well as  certain  other  compensation  paid or
accrued,  during the fiscal years indicated,  to the Chief Executive Officer and
Executive Vice President (collectively, "Principal Officers") for such period in
all capacities in which they served.  No other Executive  Officer received total
annual salary and bonus in excess of $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
----------------------------------------------------------------------  ------------------------------------------------------------
                              Annual Compensation                                       Long Term Compensation
----------------------------------------------------------------------  ------------------------------------------------------------
                                                                                  Awards                      Payouts
----------------------------------------------------------------------  ------------------------------------------------------------
Name &         Fiscal        Salary ($)       Bonus     Other Annual     Restricted    Options SARs     LTIP          All Other
Principle       Year                           ($)      Compensation     Stock Award                   Payouts      Compensation
Position                                                    ($)              ($)                         ($)            ($)
----------------------------------------------------------------------  ------------------------------------------------------------
<S>             <C>            <C>              <C>        <C>                <C>           <C>          <C>            <C>
Charles J.      1997       (A) $100,000         $0     (C) $20,000            $0            $0           $0             $0
Lombardo CEO    1996           $104,505         $0              $0            $0            $0           $0             $0
                1995           $104,505         $0     (C) $36,750            $0            $0           $0             $0
                1994           $103,470         $0              $0            $0            $0           $0             $0
                1993           $117,862         $0         $43,937            $0            $0           $0             $0
----------------------------------------------------------------------  ------------------------------------------------------------

----------------------------------------------------------------------  ------------------------------------------------------------
Miriam Jarney   1997       (B) $100,000         $0              $0            $0            $0           $0             $0
Exec. V.P.      1996            $98,491         $0              $0            $0            $0           $0             $0
                1995            $98,491         $0              $0            $0            $0           $0             $0
                1994            $98,559         $0              $0            $0            $0           $0             $0
                1993           $107,247         $0          $4,991            $0            $0           $0             $0
----------------------------------------------------------------------  ------------------------------------------------------------
</TABLE>

(A)  Accrued and unpaid to Charles J. Lombardo $80,007
(B)  Accrued and unpaid to Miriam Jarney $63,342
(C)  Consulting fees


                                      -14-
<PAGE>


     The following  table sets forth  information  with respect to the Principal
Officers  concerning the grants of options and Stock Appreciation Rights ("SAR")
during the past fiscal year:

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                Individual Grants

<TABLE>
<CAPTION>
------------------------------- -------------------- ---------------------------------- ----------------- ---------------
Name                               Options/SARs        Percent of Total Options/SARs      Exercise or       Expiration
                                      Granted         Granted to Employees in Fiscal       Base Price          Date
                                                                   Year                      ($/Sh)
------------------------------- -------------------- ---------------------------------- ----------------- ---------------
<S>                                     <C>                          <C>                       <C>              <C>
Charles J. Lombardo                     -0-                          -                         -                -
------------------------------- -------------------- ---------------------------------- ----------------- ---------------
Miriam Jarney                           -0-                          -                         -                -
------------------------------- -------------------- ---------------------------------- ----------------- ---------------
</TABLE>


The  following  table  sets forth  information  with  respect  to the  Principal
Officers  concerning  exercise  of  options  during  the  last  fiscal  year and
unexercised options and SARs held as of the end of the fiscal year:


      Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values

<TABLE>
<CAPTION>
------------------------------- ---------------- ------------------------- ------------------------ ---------------------
                                                                            Number of Securities          Value of
                                                                                 Underlying             Unexercised
                                    Shares                                       Unexercised            In-The-Money
                                  Acquired on                                  Options/SARs at        Options/SARs at
Name                             Exercise (#)       Value Realized ($)           FY-End (#)              FY-End ($)
------------------------------- ---------------- ------------------------- ------------------------ ---------------------
<S>                                   <C>                  <C>                       <C>                    <C>
Charles J. Lombardo                   -0-                  -0-                       -0-                    -0-
------------------------------- ---------------- ------------------------- ------------------------ ---------------------
Miriam Jarney                         -0-                  -0-                       -0-                    -0-
------------------------------- ---------------- ------------------------- ------------------------ ---------------------
</TABLE>
----------
*


Directors' Compensation

     Directors are not  compensated  for acting in their  capacity as Directors.
Directors are reimbursed for their  accountable  expenses  incurred in attending
meetings and conducting their duties.

Employment Agreements

     On July 14, 1989, the Company entered into a five-year employment agreement
with its Chairman of the Board and Chief Executive Officer, Charles J. Lombardo,
which may be renewed for successive  periods unless terminated by the Company on
twelve months notice or by Mr.  Lombardo on six months notice.  Mr.  Lombardo is
the Chairman of the Board, Chief Executive Officer,  Chief Financial Officer and
Treasurer of the Company. The agreement contains non-disclosure provisions and a
one year restrictive  covenant preventing Mr. Lombardo from becoming employed by
a similar company in any state or country in which the Company does business, or
engaging in a competitive business for his own account. Mr. Lombardo is entitled
to annual salary increases of at least 10%, plus additional annual  compensation
equal to 2% of the Company's  after tax profits.  The  employment  agreement has
been renewed for an additional year on an annual basis.

     Mr.  Lombardo also receives a salary from MSI of $25,000 per year.  Through
the end of MSI's  fiscal year ended  January  31,  1994,  MSI owed Mr.  Lombardo
$98,946 in accrued salary. In July 1994, MSI


                                      -15-
<PAGE>


authorized the issuance of 549,700 shares of its Common Stock to Mr. Lombardo in
lieu of the foregoing accrued salary.

     On  August  1,  1989,  the  Company  entered  into a  five-year  employment
agreement with Miriam Jarney,  Executive  Vice-President  and a Director of both
the  Company  and MSI,  which may be  renewed  for  additional  periods,  unless
terminated  by the Company on twelve  months  notice or Ms. Jarney on six months
notice.  Ms. Jarney is entitled to annual salary increases of at least 10%, plus
additional annual compensation equal to 1.5% of the Company's after tax profits.
The agreement also contains non-disclosure provisions and a one year restrictive
covenant  preventing Ms. Jarney from becoming  employed by a similar  company in
any state or country in which the  Company  does  business,  or  engaging in any
competitive  business for her own account.  The  employment  agreement  has been
renewed for an additional year on an annual basis.

     During fiscal 1995 and fiscal 1996,  Mr.  Lombardo and Ms. Jarney accrued a
portion of their salaries. See financials. The balance due between both officers
as of January 31, 1996 is $689,952 including deferred increases of $586,605.


                                      -16-
<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management.

     (a) Security  Ownership of Certain  Beneficial Owners -- The persons listed
in the chart below are known to the Company to be the beneficial  owners of more
than 5% of the  11,766,239  Shares of the  Company's  outstanding  Common Stock,
$.001 par value, as of April 30, 1997.

     (b) Security Ownership of Management -- The number and percentage of Shares
of Common Stock of the Company owned of record and  beneficially by each officer
and director of the Company and by all officers and  directors of the Company as
a group are set forth on the chart below.

<TABLE>
<CAPTION>
---------------------------------------------------------------- ----------------------------- -----------------------------
Name and Address of Beneficial Owner                                 Amount and Nature of            Percent of Class
                                                                          Beneficial
                                                                          Ownership
---------------------------------------------------------------- ----------------------------- -----------------------------
<S>                                                                       <C>                             <C>
MSI(1)                                                                    6,526,722                       55.40%
4262 US Route 1, Monmouth Junction, NJ 08852
---------------------------------------------------------------- ----------------------------- -----------------------------
Charles J. Lombardo                                                       6,688,387(1)                     58.2%
Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, & Treasurer
1511 Laurie Lane, Yardley, PA  19067
---------------------------------------------------------------- ----------------------------- -----------------------------
Miriam G. Jarney                                                          6,670,055(1)                     58.1%
Executive Vice President, Secretary, Director
21 Doering Way, Cranford, NJ  07106
---------------------------------------------------------------- ----------------------------- -----------------------------
Larry Spatz                                                               6,526,722(1)(2)                  56.8%
Director
Suite 332, 401 East Illinois St., Chicago, IL 60611
---------------------------------------------------------------- ----------------------------- -----------------------------
All Executive Officers and Directors as a group (3 persons)               6,831,720(1)                     59.5%
---------------------------------------------------------------- ----------------------------- -----------------------------
</TABLE>

*    Except as indicated below in the footnotes, each person has sole voting and
     dispositive power over the Shares indicated.  All numbers have been revised
     to give retroactively effect to the one-for-three reverse stock split which
     occured on January 31, 1996.

(1)  Messrs.  Lombardo  and  Spatz  and Ms.  Jarney  are  also  officers  and/or
     directors of MSI. Therefore, together with the other directors of MSI, they
     share the voting  power of the Company  shares owned by MSI, and the shares
     owned by MSI have been deemed to be owned by the officers and  directors of
     the  Company.  The shares  listed as owned by Charles J.  Lombardo,  Miriam
     Jarney and Larry Spatz include the 6,526,722 shares owned by MSI.

(2)  Excludes  shares owned  beneficially  by a family trust of which Mr. Spatz'
     wife is one of the  beneficiaries.  Mr. Spatz has  confirmed to the Company
     that  neither  he nor his wife has any  voting or  dispositive  power  with
     regard to the shares owned by the trust.


                                      -17-
<PAGE>


Item 12. Certain Relationships and Related Transactions.

     The  Company  has a demand  loan with a  commercial  bank.  Borrowings  are
collateralized  by the Company's  accounts  receivable  and bear interest at the
bank's  prime rate plus 2% (10.75% at January  31,  1997).  The  Company  was in
default on this  loan.  The  Company  obtained  a  forbearance  from the bank in
November  1993  requiring  an initial  $20,000  payment and monthly  payments of
$1,500 of principal  and interest  and the personal  guarantee of the  Company's
Chairman.  As of March 1, 1997,  the Company is in compliance  with the terms of
the forbearance agreement and owes approximately $25,497.  During 1997 and 1996,
the  maximum  amount  of  borrowings   outstanding  were  $41,000  and  $53,729,
respectively.

     In June 1993,  the Company  conducted a private  placement of the Company's
common stock for a total of 268,671 shares at $.03 per share, in connection with
the  private  placement  by  Multi  Solutions,   Inc.  ("MSI")  of  $260,000  in
convertible  8%  promissory  notes (the  "Notes").  MSI used $210,000 of the net
proceeds from the Notes to purchase an additional 700,000 shares of the Company.
The  principal  and interest  due under the Notes,  pursuant to the terms of the
Notes,  have been converted into restricted shares of the Company's common stock
at the rate of $.30 per share (936,450 shares in the aggregate).  The holders of
the  Notes  and  the  268,671  shares  have  exercised  their  right  to  demand
registration of these shares and  accordingly,  on March 17, 1995 a registration
statement on Form SB-2 was filed with the Securities and Exchange  Commission to
register these shares and certain other shares.

     In January  and March  1994,  the Company  issued an  aggregate  of 254,500
shares at $.03 per share to the  individuals  who converted their MSI notes into
Company shares and 254,500 shares to MSI for $.03 per share.

     In consideration of MSI incurring the risk of potentially having to pay off
the Notes if the  Noteholders  had not  elected to convert  their Notes into the
Company's  shares,  and  in  consideration  for  MSI's  purchase  of a  bulk  of
restricted  Company shares with the proceeds of the Note offering at or slightly
above the market value of the Company's  freely  tradeable  shares  (i.e.,  well
above  the  actual  value of such  shares  given the size of the  purchase,  the
restriction  on transfer  and the extreme  liquidity  problems of the Company at
that time),  the Company  issued an additional  283,334 shares of its restricted
common stock to MSI.

     Although there is no written agreement between MSI and the Company granting
MSI preemptive rights with regard to MSI's majority  ownership of Company common
stock, in practice,  MSI has and plans to continue to acquire  sufficient shares
of the Company's common stock to assure its majority ownership in the Company.

In January 1996, Multi Soft issued 1,500,000 shares of its common stock to Multi
Solutions.  The  transaction  was valued at $.22 per share  ($330,000) for which
Multi Solutions was to issue a note.

In connection  with this  transaction,  Multi Soft paid for the  acquisition  of
1,000,000 each Multi Solutions  common shares (valued at $0.08 per share) to the
chairman and vice president by allowing the  indebtedness  of Multi Solutions to
Multi Soft to be reduced by  $160,000  which  thereby  reduced the debt of Multi
Soft to the two officers by the same amount.

After completion of this series of transactions,  the net debt due to Multi Soft
in connection with the common stock sale was reduced to $170,000.


                                      -18-
<PAGE>


Through  the end of MSI's  fiscal year ending  January  31,  1994,  MSI owed Mr.
Lombardo $98,946 in accrued salary. In July 1994, MSI authorized the issuance of
549,700  shares of its Common  Stock to Mr.  Lombardo  in lieu of the  foregoing
accrued salary.  During fiscal 1996, the company issued 1,000,000 shares to each
Charles  Lombardo and Miriam  Jarney,  such  transaction  being  effected to pay
accrued  salary of Multi Soft and  reducing  debts of Multi  Solutions  to Multi
Soft.  The balance due between both  officers as of January 31, 1997 is $729,954
including deferred increases of $586,605.

     The Company subleases its office space from C&S Consulting, Inc., a company
owned by the Company's Chairman and his wife (see "Item 2. Properties").


                                      -19-
<PAGE>


                                     PART IV

Item 13. Exhibits and Reports on Form 8-K.

Exhibits
--------

     3.a  Certificate  of  Incorporation  and  Certificate  of Correction of the
          Company (1)

     3.b  By-Laws of the Company (1)

     10.a Employment  Agreement with Charles J. Lombardo  (6)** 

     10.b Employment Agreement with Miriam G. Jarney (6)**

     10.c Facility sublease (8) 10.d IBM Agreement executed October 1993*(8)

     10.e IBM Agreement executed August 1994*(8)

     10.f IBM Amendment executed May 15, 1995 (P)

     10.g Copy of MSI's Non-Qualified Stock Option Plan, Stock Grant Program and
          Employee Incentive Stock Option Plan (3)

     10.h Amendments to MSI's Non-Qualified Stock Option and Stock Grant Program
          (4)

     16.  The required letters from the former accountant(2)(5)(7)

     27.  Financial Data Schedules (electronic form only)


*    Certain information  contained in these exhibits has been omitted and filed
     separately with the Commission.

**   Management  contracts or  compensatory  plan or arrangement  required to be
     filed as an exhibit.

(1)  Previously filed as an Exhibit to the Company's  Registration  Statement on
     Form S-1, SEC File No.  33-3133,  filed with the  Commission on February 4,
     1986, and incorporated herein by reference.

(2)  Previously  filed as an Exhibit to the  Company's  Form 8-K dated March 15,
     1994,  as filed  with  the  Commission  on or about  March  21,  1994,  and
     incorporated herein by reference.

(3)  Previously filed as an Exhibit to MSI's Form 10-K for the fiscal year ended
     January 31, 1984 as filed with the Commission on or about May 15, 1984, and
     incorporated herein by reference.

(4)  Previously  filed  as part of the  MSI's  proxy  materials  for the  Annual
     Meeting of Stockholders  held on July 9, 1985, as filed with the Commission
     on or about May 24, 1985, and incorporated herein by reference.

(5)  Previously filed as an Exhibit to the Company's Form 8-K dated July 9, 1993
     as filed with the  Commission on or about July 12, 1993,  and  incorporated
     herein by reference.

(6)  Previously  filed as an Exhibit to the  Company's  Form 10-K for the fiscal
     year ended January 31, 1990 as filed with the  Commission on or about April
     29,  1990,  under  SEC File No.  33-3133-NY,  and  incorporated  herein  by
     reference.

(7)  Previously  filed as an Exhibit to the  Company's  Form 8-K dated April 25,
     1995 as  filed  with  the  Commission  on or  about  April  25,  1995,  and
     incorporated herein by reference.


                                      -20-
<PAGE>


(8)  Previously filed as an Exhibit to the Company's  Registration  Statement on
     Form SB-2,  SEC File No.  33-87460,  filed with the Commission on March 15,
     1995, and incorporated herein by reference.

Reports of Form 8-K

     No  reports on Form 8-K were  filed  during the last  quarter of the fiscal
year ended January 31, 1997.


                                      -21-
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.


                                MULTI SOFT, INC.


Dated:  May 10, 1997        By: ________________________________
                                Charles J. Lombardo,
                                Chief Executive Officer,
                                Chief Financial Officer and Treasurer
                                

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.




SIGNATURES                               TITLE                         DATE


                                                                    May 10, 1997
----------------------
Charles J. Lombardo           Chairman of the Board of Directors,
                              Chief Executive Officer,
                              Financial Officer, and Treasurer

                                                                    May 10, 1997
-----------------------
Miriam Jarney                 Executive Vice President, Secretary,
                              and Director


                                                                    May 10, 1997
------------------------
Larry Spatz                   Director




                                      -22-
<PAGE>


                               Stewart W. Robinson
                           Certified Public Accountant
                         462 Seventh Avenue, Suite 1600
                               New York, NY 10018
                               Tel: (212)279-8430
                               Fax: (212) 629-7052


                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To the Board of Directors
Multi Soft, Inc.

I have  audited the  accompanying  balance  sheets of Multi  Soft,  Inc. ( a New
Jersey  corporation and 55.4% owned subsidiary of Multi  Solutions,  Inc.) as of
January 31, 1997 and 1996 and the related  statements of operations,  changes in
stockholders'  equity and cash flows for the years then ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial position of Multi Soft, Inc. as of January 31,
1997 and 1996 and the results of its operations and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note A to the
financial statements,  the Company has suffered recurring losses from operations
and has a  working  capital  deficiency,  raising  substantial  doubt  about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note A. The  financial  statements do not include
any  adjustments  relating to the  recoverability  and  classification  of asset
carrying  amounts or the amount and  classification  of  liabilities  that might
result should the Company be unable to continue as a going concern.



STEWART W. ROBINSON

New York, New York
May 5, 1997



                                       F1
<PAGE>


MULTI SOFT, INC.
a 55.40% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
January 31 ,1997 and 1996


                                                         1997           1996
                                                     -----------    -----------
ASSETS
CURRENT ASSETS
     Cash                                                 $9,148        $88,015
     Accounts Receivable (net of allowance
      of $6,854 and $32,880 respectively)                 16,961        100,428
     Prepaid expenses and other current assets            13,532         13,532
                                                     -----------    -----------
                                                          39,641        201,975


FURNITURE AND EQUIPMENT
     Research and Development Equipment                    7,953        259,907
     Office furniture and other equipment                 17,818         10,053
                                                     -----------    -----------
                                                          25,771        269,960
     Less: Accumulated Depreciation                       (9,119)      (266,066)
                                                     -----------    -----------
                                                          16,652          3,894


OTHER ASSETS
     Capitalized software development costs            1,722,303      1,980,130
     Less accumulated amortization                    (1,110,741)    (1,256,153)
                                                     -----------    -----------
                                                         611,562        723,977

     Due from Solutions                                  422,951        408,762
     Due from NetCast                                     55,335
                                                     -----------    -----------
                                                      $1,146,141     $1,338,608
                                                     ===========    ===========

See notes to financial statements

                                       F2
<PAGE>


MULTI SOFT, INC.
a 55.40% owned subsidiary of Multi Solutions, Inc.
BALANCE SHEETS
January 31, 1997 and 1996



<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS'                              1997           1996 As Restated
                                                       -----------    -----------
<S>                                                        <C>            <C>
DEFICIENCY
CURRENT LIABILITIES
     Loan payable to bank                                  $25,497        $41,099
     Note Payable                                           15,504
     Accrued payroll                                          --           30,285
     Payroll and other taxes payable                        38,072         74,993
     Accounts Payable, Accrued  expenses and
      other  Current Liabilities                            58,155        173,652
     Accrued officer compensation                          103,347        110,016
     Deferred Revenues                                     168,411        309,792
                                                       -----------    -----------

                                                           408,986        739,837


     Deferred compensation due officer /shareholders       586,605        586,605
     Deferred Revenues - net of current portion               --            8,022


STOCKHOLDERS' DEFICIENCY
     Common stock, authorized 30,000,000 shares
      $.001 par value, issued and outstanding
   11,780,306 (1997) and 11,483,979 (1996)                  11,780         11,498
     Additional paid-in capital, net of deferred
      compensation $14,813 (1997) and  $234 (1996)       5,923,868      5,862,302
     Accumulated deficit                                (5,785,098)    (5,869,656)
                                                       -----------    -----------
                                                           150,550          4,144

COMMITMENTS AND CONTINGENCIES --NOTE F
SOFTWARE LICENSING AGREEMENT  --NOTE I

                                                        $1,146,141     $1,338,608
                                                       ===========    ===========
</TABLE>

See notes to financial statements

                                       F3
<PAGE>


MULTI SOFT, INC
a 55.40% owned subsidiary of Multi Solutions, Inc.
STATEMENTS OF OPERATIONS
Years ended January 31, 1997 and 1996



                                                        1997            1996
                                                   ------------    ------------
REVENUES
      License fees                                     $356,494        $812,069
      Maintenance fees                                  688,692         545,977
      Consulting and Other fees                          19,949          41,134
                                                   ------------    ------------
             Total revenues                           1,065,135       1,399,180



EXPENSES
      Software development and technical support        344,588         369,548
      Selling and administrative                        707,233       1,029,928
                                                   ------------    ------------

             Total expenses                           1,051,821       1,399,476
                                                   ------------    ------------

             Income  (Loss)  from operations             13,314            (296)

OTHER INCOME (EXPENSE)
      Other Revenues                                     79,102          54,782
      Interest Expense                                   (7,858)         (5,533)
                                                   ------------    ------------
             Total other income                          71,244          49,249




             Net Income                                 $84,558         $48,953
                                                   ============    ============

             Weighted average shares outstanding     11,592,343      10,109,000
                                                   ============    ============


             Income  per share                          a               a
                                                   ============    ============


        (a) less then $.01 per share


See notes to financial statements

                                       F4
<PAGE>



MULTI SOFT, INC.
STATEMENT OF CHANGES IN  STOCKHOLDERS'  DEFECIENCY  Years ended January 31, 1997
and 1996

<TABLE>
<CAPTION>
                                                                                Total                                      Total
                                                        Common Stock            paid in      Deferred      Accumulated  stockholders
                                                   Shares          Amount       capital     Compensation    deficit       deficiency


<S>                                               <C>               <C>       <C>                <C>      <C>              <C>
Balance as of February 1, 1995                    9,983,979         9,998     5,534,397          (595)    (5,918,608)      (374,808)

Issuance of resticted common stock                1,500,000         1,500       328,138                                     329,638

Amortization of deferred compensation                                                             361                           361

Net Income                                                                                                    48,952         48,953
                                                 ----------    ----------    ----------    ----------     ----------     ----------


Balance at January 31, 1996                      11,498,046        11,498     5,862,535          (233)    (5,869,656)         4,144

Issuance of resticted common stock                  282,260           282        75,516       (16,020)                       59,778

Amortization of deferred compensation                                                           2,070                         2,070

Net  Income                                                                                                   84,558         84,558
                                                 ----------    ----------    ----------    ----------     ----------     ----------


Balance at January 31, 1997                      11,780,306        11,780     5,938,051       (14,183)    (5,785,098)       150,550
                                                 ==========    ==========    ==========    ==========     ==========     ==========
</TABLE>

See notes to financial statements

                                       F5
<PAGE>


MULTI SOFT, INC.
STATEMENTS OF CASH FLOWS
Years ended January 31, 1997 and 1996

<TABLE>
<CAPTION>
                                                                                       1997                  1996
                                                                                    ---------             ---------
<S>                                                                                   <C>                   <C>
Cash flows from operating activities
      Net Income                                                                      $84,558               $48,953
      Adjustments to reconcile net income  to net cash
           provided by operating activities
      Depreciation and amortization                                                   347,548               371,921
      Common stock issued to Solutions                                                                      160,000
      Changes in assets and liabilities
              Due to / from Multi Solutions                                           (69,524)             (151,851)
              Accounts receivable                                                      83,467                (4,630)
              Prepaid expenses and other current assets                                  --                   3,778
              Accrued payroll                                                         (30,285)                 (906)
              Note Payable                                                             15,504
              Payroll and other taxes payable                                         (36,921)               (3,614)
              Accounts payable and accrued expenses                                  (115,497)             (129,586)
              Accrued officer compensation                                             (6,669)              (42,234)
              Deferred officer compensation                                              --                 239,892
              Deferred revenues                                                      (141,380)               20,401
              Long term deferred revenues                                              (8,022)             (192,864)
                                                                                    ---------             ---------

                     Net cash provided  by operating activities                       122,779               319,260


Cash flows from investing activities
      Capital expenditures                                                            (15,718)                 --
      Capitalized software development costs                                         (232,173)             (366,615)
                                                                                    ---------             ---------

                     Net cash used in investing activities                           (247,891)             (366,615)


Cash flows from financing activities
      Net repayments under loan and line of credit ageements                          (15,602)              (12,630)
      Loan from officer                                                                  --                 (22,000)
      Restricted Common stock issued to Solutions                                        --                 170,000
      Issuance of capital stock                                                        61,847                  --
                                                                                    ---------             ---------


                     Net cash provided by financing activities                         46,245               135,370
                                                                                    ---------             ---------

                     NET INCREASE (DECREASE) IN CASH                                  (78,867)               88,015

Cash at beginning of year                                                              88,015                  --
                                                                                    ---------             ---------

Cash at end of year                                                                    $9,148               $88,015
                                                                                    =========             =========
</TABLE>


                                       F6
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996

NOTE A - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     Multi Soft,  Inc. (the Company) was  incorporated on January 29, 1985 under
     the laws of the State of New Jersey.  At January 31, 1997,  the Company was
     55.40% owned by Multi Solutions,  Inc. The Company is principally  involved
     in the design, production and delivery of computer applications development
     software for sale to large corporate customers throughout the United States
     and overseas.

     The Company's  financial  statements have been presented on a going concern
     basis which  contemplates the realization of assets and the satisfaction of
     liabilities in the normal course of business.  The liquidity of the Company
     has been  adversely  affected in recent  years by  significant  losses from
     operations.  The Company earned net income of $84,558 in 1997 and earned an
     income of $48,953 in 1996. In addition,  at January 31, 1997, the Company's
     current  liabilities  exceeded  current assets by $369,345 and total assets
     exceeded total liabilities by $150,550.

     The  Company  intends  to  aggressively  market its new  products,  control
     operating  costs and broaden  its  product  base  through  enhancements  of
     products for use by non-technical computer personnel.

     The Company believes that these measures will provide sufficient  liquidity
     for it to continue as a going concern in its present form. Accordingly, the
     financial  statements  do  not  include  any  adjustments  relating  to the
     recoverability  and  classification of recorded asset amounts or the amount
     and  classification  of liabilities or any other  adjustments that might be
     necessary  should the Company be unable to  continue as a going  concern in
     its present form.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     1.  Furniture and Equipment

     Furniture and equipment are stated at cost. Depreciation is provided on the
     straight-line  method over the  estimated  useful lives of the assets which
     range from three to seven years.

     Depreciation  expense was $2,960 and $2,372 for the years ended January 31,
     1997 and 1996.

     2.  Capitalization of Computer Software

     Capitalized  software  development  costs  relating to  products  for which
     technological  feasibility has been established  qualify for capitalization
     under  Statement  of  Financial   Accounting   Standards   (SFAS)  No.  86,
     "Accounting  for the Costs of  Computer  Software  to be Sold,  Leased,  or
     Otherwise Marketed."

     Research and  development  costs  associated  with the creation of computer
     software  prior to  reaching  technological  feasibility  are  expensed  as
     incurred,  except  for  related  computer  equipment  expenditures  such as
     personal computers and other hardware components, which are capitalized and
     depreciated  over their  useful  lives if the  equipment  is deemed to have
     alternative future use.


                                       F7
<PAGE>



                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

     Capitalized software development costs are amortized to operations when the
     product is available  for general  release to  customers.  Amortization  is
     calculated using (a) the ratio of current gross revenues for the product to
     the total of current and anticipated  gross revenues for the product or (b)
     the  straight-line  method over the  remaining  useful life of the product,
     whichever is greater.

     The Company is  amortizing,  over a sixty  month  period,  the  capitalized
     software costs for its Windows-based products. The period is based on sales
     forecasts  for the seven  year  agreement  with IBM which  began in October
     1993. The Company's  Windows  products are  compatible  with Windows 95 and
     further   modifications  are  continually  made  specifically  for  32  bit
     environments  (Windows 95 or Windows  NT).  Unamortized  costs  relating to
     Windows products as of January 31, 1997 and 1996 are $609,062 and $723,978,
     respectively.

     The unamortized capitalized software costs relating to the two DOS products
     are being  amortized  over the one year  remaining  life as of January  31,
     1997.  The  unamortized  costs relating to DOS products at January 31, 1997
     and 1996 are $2,440 and $4,878, respectively.

     Amortization expense for 1997 and 1996, for all products,  was $344,588 and
     $369,548 respectively.

     3. Revenue Recognition

     In  accordance   with  Statement  of  Position  91-1,   "Software   Revenue
     Recognition"  (SOP 91-1), the Company's policy is to recognize  license and
     maintenance  fees which earned and  consulting fee income when services are
     rendered.  License fees are recognized  upon shipment of the software while
     maintenance  fees are  recorded  over the  period  covered  by the  related
     contract. Consulting is performed on a time and material basis.

     4. Deferred Compensation

     Deferred  compensation  arising  from  the  issuance  of  stock  grants  is
     amortized over the term of the related grant or employment  agreements (one
     to five years). The amount of compensation  attributable to stock grants is
     determined by the market price of the Company's stock on the date of grant.

     5. Income Per Share

     Income per share is computed  using the weighted  average  number of common
     shares outstanding during the period.

     6. Income Taxes

     The  Financial  Accounting  Standards  Board  (FASB)  issued  Statement  of
     Financial  Accounting  Standards  (SFAS) NO.  109,  "Accounting  for Income
     Taxes," which  significantly  changed the  accounting  for deferred  income
     taxes. The standard provides for a liability  approach under which deferred
     income  taxes  are  provided  for  based  upon  enacted  tax laws and rates
     applicable  to the periods in which the taxes become  payable.  The Company
     adopted the new standard for the year ended January 31, 1994.


                                       F8
<PAGE>



                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     7. Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements and reported  amounts of revenues and expenses during
     the reporting period. Actual results could differ from those estimates.


NOTE C - LOAN PAYABLE

     1. Demand Loan - Bank

     The Company has a demand loan  payable to a  commercial  bank  ($25,497 and
     $41,099  at  January  31,  1997  and  1996  respectively).  Borrowings  are
     collateralized  by the Company's  accounts  receivable and bear interest at
     the bank's  prime rate plus 2% (10.5%  and 10.75% at January  31,  1997 and
     1996 respectively).  The loan is currently in default. The Company obtained
     a forbearance  from the bank in November 1993  requiring a $20,000  payment
     upon execution,  monthly  payments of $1,500 principal and interest and the
     personal guarantee of the Company's  chairman.  As of January 31, 1997, the
     Company is in compliance with the terms of the forbearance agreement.

     During 1997 and 1996,  the maximum  amount of  borrowings  outstanding  was
     $41,099 and $53,729  respectively,  the average borrowings were $33,248 and
     $47,819,  respectively,  and the weighted average interest rates were 11.0%
     and 9.5%, respectively.

     2. Note Payable

     In June 1996,  $18,700 due to a vendor was  converted  to a note payable at
     the rate of $597 per month for 36 months with interest at 9%.

NOTE D - INCOME TAXES

     As a result of  losses  incurred  in  recent  years,  the  Company  has net
     operating  loss carry forwards  available to offset future federal  taxable
     income of approximately $5.6 million.  These losses expire at various dates
     through 2011. Therefore, there is no provision for income taxes.

     The Company adopted,  effective February 1, 1993, SFAS No. 109, "Accounting
     for Income  Taxes."  Under the liability  method  specified by SFAS No 109,
     deferred tax assets and liabilities are determined  based on the difference
     between the financial  statement and tax basis of assets and liabilities as
     measured  by the  enacted  tax rates  which  will be in effect  when  these
     differences  reverse.  Deferred  tax  expense  is the  result of changes in
     deferred tax assets and  liabilities.  The principal  types of  differences
     between  assets and  liabilities  for  financial  statement  and tax return
     purposes are capitalized software development costs, deferred compensation,
     deferred income and allowance for uncollectible accounts.


                                       F9
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     The deferred method,  used in years prior to 1993,  required the Company to
     provide  for  deferred  tax  expense  based on certain  items of income and
     expense which were reported in different years in the financial  statements
     and the tax  returns as measured by the tax rate in effect for the year the
     difference occurred.

     Deferred tax (liabilities) assets consist of the following at January 31:
 
                                                        1997            1996
                                                        ----            ----
     
     Capitalized software                           $  (242,000)   $  (289,000)
     Allowance for bad debts                              3,000         15,000
     Deferred compensation                              234,000        234,000
     Deferred revenue - royalties                        92,000        127,000
     Loss carry forwards                              2,220,000      2,237,000
                                                    -----------    -----------
     
           Gross deferred tax assets                  2,307,000      2,324,000
     
     Deferred tax assets valuation allowance          2,307,000      2,324,000
                                                    -----------    -----------
     
                                                    $   -0-        $   -0-
                                                    ===========    ===========


NOTE E - STOCKHOLDERS' EQUITY

     1. Stock Transactions

     The expiration date of the Company's 714,012 outstanding  warrants has been
     extended to December 1, 1997.


                                      F10
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


NOTE E - STOCKHOLDERS' EQUITY  - Continued

     In January 1996,  the Company  issued  1,500,000  shares of common stock to
     Multi  Solutions,  Inc.  The  transaction  was  valued  at $.22  per  share
     ($330,000) for which Multi Solutions issued note.

     In connection with this  transaction,  the company paid for the acquisition
     of 1,000,000  shares each of Multi Solutions  common stock (valued at $0.08
     per share) by the chairman and vice president by allowing the  indebtedness
     of Multi  Solutions to the company to be reduced by $160,000  which thereby
     reduced the debt of the company to the two officers by the same amount.

     After  completion  of this  series of  transactions,  the net debt due from
     Multi  Solutions  in  connection  with the common stock sale was reduced to
     $170,000.

     2. Prior  Period  Adjustment 

     During the year ended  January 31, 1996 the Company  discovered an error in
     accounts  payable  originating  in the fiscal year ended  January 31, 1994.
     This error has no effect on operations for the year ended January 31, 1996.

     3. Option and Stock Grant Program

     During  fiscal 1992,  the Company  issued to an  officer/director  employee
     stock  purchase  warrants  to  purchase  66,667  shares and 33,334  shares,
     respectively,  of its common stock at $0.27 per share.  The exercise  price
     was in excess of the fair market value of the Company's common stock at the
     date of issuance. The warrants are exercisable through June 1, 1996.

     In June 1993, the Company adopted an Employee, Consultant and Advisor Stock
     and Option Compensation Plan (the Plan). Pursuant to the terms of the Plan,
     an aggregate of up to 1,000,000 shares of common stock,  .001 par value per
     share (the common stock),  and/or  options to purchase  common stock may be
     granted to persons who are, at the time of issuance or grant,  employees or
     officers of, or  consultants  or advisors  to, the Company.  At January 31,
     1997 and 1996, an aggregate of 665,334 shares have been issued  pursuant to
     the Plan.


                                      F11
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996



The Company has issued stock grants as follows:

      Stock grants as of January 31, 1992                                427,500

      Stock grants issued to employees                                    13,334
                                                                         -------
      Stock grants of January 31, 1993                                   440,834

      Stock grants issued to employees                                    73,334
                                                                         -------
      Stock grants as of January 31, 1994                                514,168

      Stock grants issued to employees                                    71,166
                                                                         -------
      Stock grants as of January 31, 1995                                585,334

      Stock grants issued to employees                                         0
                                                                         -------
      Stock grants as of January 31, 1996                                585,334

      Stock grants issued to employees                                    80,000
                                                                         -------
      Stock grants as of January 31, 1997                                665,334
                                                                         -------

     As of January 31,  1997,  employees  were not fully vested in 80,000 of the
     aforementioned stock grants.  Amortization of deferred compensation for the
     stock grants to employees  was $2,070 and $361 for the years ended  January
     31, 1997 and 1996, respectively.

     4. Shares Issued to Officers as Compensation

     In March  1994,  the  Company  issued  66,666 to  Miriam  Jarney in lieu of
     $18,000 salary. (Also see note E 1.)


                                      F12
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


NOTE F - COMMITMENTS AND CONTINGENCIES

     1. Leases

     The  Company  is  a  subtenant   in  office   space  leased  by  an  entity
     substantially  owned by the Company's  chairman and his wife. This lease is
     on a  quarter-by-quarter  term with a base rent of $4750 per month.  Rental
     expense under the lease  aggregated  approximately  $57,200 and $52,000 for
     the years ended January 31, 1997 and 1996, respectively.

     In June 1995 the Company entered into a three year noncancelable  operating
     lease for a color laser copier with  monthly  payments of $606 plus tax and
     per copy charges through May 1998.

     Future minimum lease payments under the noncancelable  equipment  operating
     lease is as follows:

                           Year Ending
                           January 31,
                           -----------
                           1998                       7,000
                           1999                       3,000
                                                    -------
                                                    $10,000
                                                    =======
    

     2. Employment Agreements

     The Company has  employment  agreements  with two  officers  which  provide
     minimum annual compensation of $182,000 through July 1997.

     In addition,  the employment agreements entitle the two employees to 2% and
     1.5% respectively, of each fiscal year's after tax profits of the Company.

     3. Payroll Taxes

     Certain state and federal  taxes,  interest,  and penalties in  aggregating
     approximately $38,000 remain unpaid at January 31, 1997.



                                      F13
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     4. Litigation

     The Company and its parent,  Multi  Solutions,  Inc. have been from time to
     time parties to legal actions arising in the course of their business.  The
     disposition  of  these  actions  have  not  had a  material  effect  on the
     financial  position  or results of  operations  of the  Company  taken as a
     whole.

     NOTE G - MAJOR CUSTOMER

     In fiscal 1997, one customer accounted for 29% of total revenue.  In fiscal
     1996, one customer accounted for 42% of total revenue.

     NOTE H - SUPPLEMENTAL INFORMATION

     Supplemental  disclosures  of cash flow  information  for the  years  ended
     January 31, 1997 and 1996 are as follows:


                                                         1997          1996
                                                         ----          ----

       Cash paid during the year for Interest           $7,858        $5,533

     During the years ended  January 31,  1997 and 1996,  the Company  exchanged
     100,000 and 202,260  shares of the  Company's  common  stock at fair market
     value for  legal  and other  services  rendered  to the  Company  valued at
     $14,107 and $59,737.

     NOTE I - SOFTWARE LICENSING AGREEMENTS

     1. Software Licensing Agreements

     On October 8, 1993, the Company entered into a Software Licensing Agreement
     and other ancillary  agreements  with IBM  Corporation  (IBM) providing for
     certain  exclusive  marketing rights for the Company's  principal  product:
     WCL(TM) with IBM IMS Extensions.  This is a software  product  specifically
     modified for use with IBM's IMS mainframe systems.

     The agreements, effective for a term of seven years with automatic renewals
     for two additional one year periods,  provide for the payment of percentage
     royalties  and  unit  royalties  as  specified  in the  agreement.  IBM may
     terminate  the  agreement  after the first  year upon 90 days  notice.  The
     agreement further provides for minimum  non-refundable  royalty advances to
     the Company aggregating $300,000 through April 1996.

     The company has been receiving  monthly  maintenance from IBM regarding the
     above license agreement.

     The  $300,000  royalty  advance has been  recorded  as deferred  revenue in
     fiscal year 1994 and is being recognized as income over the 21 month period
     of maintenance included in the agreement without additional fees.


                                      F14
<PAGE>


                                Multi Soft, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     Effective  June 1, 1995 Multi Soft and IBM amended their  Software  License
     Agreement number:  STL93199 and its related worldwide marketing agreements,
     such that,  $150,000  dollars of the $300,000 advance amount deferred as of
     January 31,  1994 shall,  as of June 1, 1995 no longer be subject to offset
     against  royalties  accrued.  The net  effect was to remove  $150,000  from
     deferred revenues and increase license fee revenues by $150,000.

     For the years ended  January 31, 1997 and 1996,  the Company  recognized as
     income $42,864 and $192,866 of $300,000 advance respectively.

     The contract with IBM's Network Software  Division provides that Multi Soft
     will receive prepaid royalties of $600,000 in quarterly installments over a
     two  year  period.  As  a  result,  IBM  receives  non  exclusive  and  non
     transferable license to market certain Multi Soft products.  The product is
     marketed  under IBM's logo as "Personal  Communications  Toolkit for Visual
     Basic". During fiscal 1997 the company has been receiving  maintenenace for
     the above  contract.  In October  1996  agreement  # R94564 was  amended to
     provide $15,000 in monthly payments to the company through October 1998.

     2. Marketing Agreements with IBM

     The Company  entered into marketing  agreements  with IBM providing for the
     marketing  rights of the WCL software with IBM IMS Extensions in the United
     States,  Puerto Rico, the Asia Pacific Region,  Europe, the Middle East and
     Africa.

     The  agreements  are for three year terms and  provide  for the  payment of
     percentage royalties as specified in the agreement.

     3. Joint Development and Marketing Agreement with Bellcore

     In 1995  Multi  Soft,  Inc.  entered  a  joint  development  and  marketing
     agreement with Bellcore to develop and market a Sun Solaris Unix version of
     its WCL product.  The  agreement  provides that Bellcore pay Multi Soft for
     developing  an  extension  of its  WCL  product  to the  Sun  Solaris  Unix
     environment.   Additionally,   Bellcore  shall  pay  a  specified   monthly
     maintenance  fee for a period of one year.  Also,  it provides  for a joint
     marketing agreement in which both companies will share marketing royalties.

     NOTE J - RELATED PARTY TRANSACTIONS

     The Company, from time to time, pays incidental expenses of Multi Solutions
     and  allocates  its share of certain  expenses.  These items are charged to
     intercompany  receivable  and no  payments  have been  received  during the
     fiscal year.  The balance due from Multi  Solutions at January 31, 1997 and
     1996 was $422,951 and $408,962.

     The Company provides certain services and office space to NetCast, Inc., as
     subsidiary  of Multi  Solutions.  The  balance  due from  NetCast,  Inc. at
     January 31, 1997 was $55,335.


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