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. 0-12162


          New Jersey                                      22-2418056
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

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

     4262 US Route 1, Monmouth Junction,  New Jersey           08852
          (Address of principalexecutive 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 consolidated 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 ($.12) and ($.02) bid price of such stock,
as of April 30, 1997 is $818,527  based upon $.07  multiplied by the  11,693,241
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 May 22, 1997, is 18,016,898  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 SOLUTIONS, 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..............................................15

Item 11. Security Ownership of Certain Beneficial Owners
         and Management......................................................17

Item 12. Certain Relationships and Related Transactions......................18

PART IV......................................................................19

Item 13. Exhibits and Reports on Form 8-K....................................19

SIGNATURES...................................................................21

Financial Statements.........................................................F1



                                     - 2 -
<PAGE>



                                     PART I

Item 1. Business.
        --------
General
-------

During the fiscal year ended  January  31,  1997,  Multi  Solutions,  Inc.  (the
"Company" or "Multi  Solutions") was relatively  inactive,  its primary activity
being the  support of its  subsidiary,  Multi Soft,  Inc.  ("Multi  Soft").  The
business of Multi Soft is discussed below.

BUSINESS OF MULTI SOFT
----------------------

     Multi Soft,  Inc. (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 55.4% owned  subsidiary of the Company.  Multi Soft 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.



                                     - 4 -
<PAGE>



     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.

     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.



                                     - 5 -
<PAGE>



     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.  Amortization  of  software  over the last two years were
344,588 in fiscal 1997 and 369,548 in 1996.

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 and marketing. At present, in-house sales
are generally made through telemarketing. If Multi Soft 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 Multi Soft 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.  These organizations
include:  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 its existing  customer base and to new
clients.

IBM
---

     In October  1993,  Multi Soft entered into a Software  Licensing  Agreement
("SLA") and other ancillary  agreements with IBM Corporation  ("IBM")  providing
IBM with certain  exclusive  marketing rights for Multi Soft'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.  Multi Soft has been  receiving  monthly
maintenance from the above contract.



                                     - 6 -
<PAGE>



     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.

     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,  Multi Soft 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 Multi Soft or IBM upon 90 days
notice in the  event of a default  by the other  party.  The  contract  has been
renewed  for two years  paying  Multi  Soft a minimum  monthly  maintenance  and
royalty fees.

     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 but cannot  assure 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.  Multi Soft has been receiving  maintenance  for the above
contract during fiscal 1997.


Employees
---------

     The Company only has two employees,  its officers:  Charles J. Lombardo and
Miriam  Jarney.  Employees of Multi Soft devote such time as is necessary to the
Company's business.  Multi Soft has twelve employees and consultants,  including
two officers, three support personnel, four technical and engineering, and three
administrative/secretarial personnel.


Competition
-----------

     Multi Soft 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 Multi Soft. In addition, many competitors have
more extensive facilities than those which now or in the foreseeable future will
become available to Multi Soft.

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



                                     - 7 -
<PAGE>



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

     NetCast,  Inc. is a  subsidiary  company 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.  The Company 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  uses Multi  Soft's  facilities,  at no charge,  consisting  of
approximately  3,300  square feet of office  space at 4262 US Route 1,  Monmouth
Junction, New Jersey 08852, which Multi Soft leases from C&S Consulting, Inc., a
company owned by Multi Soft'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.  Multi  Soft is  responsible  for all
utilities.

Item 3. Legal Proceedings.
        -----------------

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

Tax Liens

     Certain State taxes,  interest,  and penalties aggregating $38,000 remained
unpaid.

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, Class A Warrants (for
one share of Common  Stock and one Class B Warrant),  Class B Warrants  (for one
share of Common Stock), and Class C Redeemable Warrants (for one share of Common
Stock)  are  traded in the  over-the-counter  market,  and are quoted on The OTC
Bulletin Board (symbol: "MULT").

     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 ....................         .07         .02
Second Quarter ending July 31, 1995 ....................         .12         .05
Third Quarter ending October 31, 1995 ..................         .10         .05
Fourth Quarter ending January 31, 1996 .................         .10         .02

Period - Fiscal Year 1997                                       High         Low
--------------------------------------------------------------------------------
First Quarter ending April 30, 1996 ....................         .38         .35
Second Quarter ending July 31, 1996 ....................         .34         .27
Third Quarter ending October 31, 1996 ..................         .26         .25
Fourth Quarter ending January 31, 1997 .................         .18         .15


     (b)  Holders  -- There  were  approximately  838  holders  of record of the
Company's Common Stock, 190 holders of record of the Class A Warrants,  1 holder
of  record  of the  Class B  Warrants  and 55  holders  of record of the Class C
Warrants as of May 8, 1997,  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).

     (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.



                                     - 9 -
<PAGE>



Sales of Unregistered Securities
--------------------------------

Name                                         Date             Number
                                                        of Securities Issued
--------------------------------------------------------------------------------
Charles J. Lombardo                         1/16/96         1,000,000
--------------------------------------------------------------------------------
Miriam G. Jarney                            1/16/96         1,000,000
--------------------------------------------------------------------------------
Michael  Zindler                             4/2/96           25,000
--------------------------------------------------------------------------------
John Lowy                                    4/2/96           75,000
--------------------------------------------------------------------------------
Linda Dorrian                                5/6/96           20,000
--------------------------------------------------------------------------------


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, a 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 companies largest  customers.
Primary reason for this decrease is that there were no royalty  advances paid to
Multi Soft during this fiscal year.

     In fiscal 1997, Multi Soft's two principal sources of revenues were license
fees and maintenance fees which represented approximately 33% ($356,494) and 65%
($688,692) percent of revenues in 1997, respectively.

     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 19% from fiscal 1996  ($1,426,876) to fiscal
1997  ($1,162,470)   primarily  as  a  result  of  a  decrease  in  selling  and
administrative  costs. The decrease in software development costs is principally
due to an decrease in the base of capitalized development costs.

     Other income (expenses)  changed from $49,249 in fiscal 1996 to $101,244 in
fiscal 1997.  Settlements of previously written off accounts payable is included
as other  income in the amount of $54,782  for 1996 and  $17,110  for 1997.  For
fiscal  1997,  $55,349  included in other income  consists of rent,  revenue and
consulting fees. Also for fiscal 1997, $30,000 included in other income consists
of forgone deferred compensation by an officer of the company.

     As a result of all of the foregoing, Multi Solution's income in fiscal 1997
of $3,909 decreased compared to its income in 1996 of $21,553.



                                     - 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
($470,055) 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
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,  Multi Soft will receive a minimum of $75,000 per quarter over a
two year period  representing  minimum advances against  royalties (see "Item 1.
Business - IBM").

     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 Multi Soft 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").

Working Capital and Current Ratios were:
----------------------------------------

Descriptions                          January 31, 1997          January 31, 1996
--------------------------------------------------------------------------------

Working capital (deficiency)              ($470,055)                ($579,204)

Current ratios                             .088:1                    .26:1


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 and it's subsidiaries. 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 or its  subsidiaries  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 its  subsidiaries,  include Multi Soft'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  cash  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.

<TABLE>
<CAPTION>

                                               MULTI SOLUTIONS, INC. AND SUBSIDIARIES
                                                  CONSOLIDATED FINANCIAL STATEMENTS
                                                 FISCAL YEAR ENDED January 31, 1997

                                                                INDEX

                                                                                                                            Page #
                                                                                                                            ------
<S>                                                                                                                        <C>
 Report of Independent Certified Public Accountant                                                                          F1

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

 Consolidated Statements of Operations for Each of the Years in the Period Ended
 January 31, 1997                                                                                                           F4

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

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

 Notes to Financial Statements                                                                                              F7 - F14

</TABLE>


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

George Mansur Jr.              Director

James J. Kaput, PhD.           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 Secretary-Treasurer since December 1988. He
has been Multi Soft's  Chief  Executive  Officer,  Chief  Financial  Officer and
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 of the Company since
December 1988. She has been Executive Vice  President,  Secretary 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



                                     - 13 -
<PAGE>



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 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.

     GEORGE MANSUR,  JR., age 67, has been a Director of the Company since March
1982.  Since March,  1984,  Mr. Mansur has also been  Chairman of ALG Corp.  and
Chairman  of Auto Loan  Guarantee  Company,  as well as  President  of  National
Benefit  Services Corp. and Executive Vice President of Benefit  Services Group,
Ltd.  Since January 1981,  Mr. Mansur has been an officer of Petro-Art  Ltd., an
inactive  publicly  owned New  Jersey  corporation.  From  1971 to 1976,  he was
President of Benefit  Communications,  Corp. From 1977 to 1978, he was marketing
director of Commercial  Credit Corp., and in 1979 and 1980, he was an officer of
Coronet Graphics, Ltd. and Agri Parogram, Ltd. Mr. Mansur is a Charter Member of
the International Association of Financial Planners.

     DR. JAMES J. KAPUT,  age 56, a Director of the Company since July 14, 1989,
has been a Professor of Mathematics at Southern  Massachusetts  University since
1968. Since 1986, he has also been a Research  Associate at Harvard  University.
Dr. Kaput  received a B.S.  Degree in Mathematics  from  Worcester  Polytechnice
Institute in 1964 and a Ph.D in Mathematics from Clark University in 1968.



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, 1997.




                                     - 14 -
<PAGE>



Item 10. Executive Compensation.
         ----------------------

     The following table shows all the cash  compensation  paid or to be paid by
the  Company  and Multi  Soft,  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.

<TABLE>
<CAPTION>

                                                     SUMMARY COMPENSATION TABLE

------------------------------------------------------------------------------------------------------------------------------------
                       Annual Compensation                                          Long Term Compensation
------------------------------------------------------------------------------------------------------------------------------------
                                                                                Awards                      Payouts
------------------------------------------------------------------------------------------------------------------------------------

Name &          Fiscal     Salary ($)        Bonus    Other Annual    Restricted         Options        LTIP        All Other
Principle       Year                          ($)     Compensation    Stock Award          SARs       Payouts    Compensation
Position                                                 ($)             ($)                            ($)               ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>           <C>              <C>        <C>              <C>               <C>         <C>             <C>
Charles J.      1997       (A) $ 80,000         $0    (C)  $20,000          $0                $0          $0              $0
Lombardo CEO    1996           $129,505         $0         $36,750          $0                $0          $0              $0
                1994           $128,470         $0              $0          $0                $0          $0              $0
                1993           $145,354         $0         $43,937          $0                $0          $0              $0
                1992           $155,771         $0         $55,155          $0                $0          $0              $0
------------------------------------------------------------------------------------------------------------------------------------
Miriam Jarney   1997       (B) $ 80,000         $0              $0          $0                $0          $0              $0
Exec. V.P.      1996            $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
                1992           $113,233         $0         $20,611          $0                $0          $0              $0
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(A)  Accrued and unpaid to Charles Lombardo $60,007
(B)  Accrued and unpaid to Miriam Jarney $43,342
(C)  Consulting Fees

     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:

<TABLE>
<CAPTION>

                                                OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                                          Individual Grants
------------------------------------------------------------------------------------------------------------------------------------
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>



                                                               - 15 -
<PAGE>



     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:


<TABLE>
<CAPTION>

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

------------------------------------------------------------------------------------------------------------------------------------
                                                                            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, Multi Soft 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 Multi Soft 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 Multi Soft 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 Multi Soft'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 the Company of $25,000 per year,
which he agreed to forego for fiscal 1997.

     On August 1, 1989, Multi Soft entered into a five-year employment agreement
with Miriam Jarney,  Executive  Vice-President and a Director of both Multi Soft
and the Company, which may be renewed for additional periods,  unless terminated
by Multi Soft 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  Multi  Soft '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  Multi Soft 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.

     In January of 1996, the Company issued  1,000,000 shares of common stock to
Mrs. Jarney for accrued salary of Multi Soft.

     During fiscal 1996 and fiscal 1997,  Mr.  Lombardo and Ms. Jarney accrued a
portion of their salaries. See financials. The balance due between both officers
as of January 31, 1997 is $804,954 including deferred increases of $661,605.




                                     - 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  18,016,898  Shares of the  Company's  outstanding  Common Stock,
$.001 par value, as of March 19, 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 (1)
                                                                          Beneficial
                                                                         Ownership(1)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                              <C>
Charles J. Lombardo                                                     4,212,414 (1)                     23.52%
Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, & Treasurer
1511 Laurie Lane, Yardley, PA  19067
------------------------------------------------------------------------------------------------------------------------------------
Miriam G. Jarney                                                        2,094,100 (2)                     11.69%
Executive Vice President, Secretary, Director
21 Doering Way, Cranford, NJ  07106
------------------------------------------------------------------------------------------------------------------------------------
Larry Spatz                                                                 0 (3)                          0.0%
Director
3175 Commercial Ave., Suite 222
Northbrook, IL  60062
------------------------------------------------------------------------------------------------------------------------------------
James J. Kaput, PhD.                                                        10,000                          **
Director
473 Chase Road, N. Dartmouth, MA 02747
------------------------------------------------------------------------------------------------------------------------------------
George E. Mansur, Jr.                                                       7,143                           **
Director
1413 State Rd., Phoenixville, PA  19460
All Executive Officers and Directors as a group (5 persons)              6,323,657(4)                     35.31%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

**   Less than one percent.

(1)  Includes  shares held by Mr.  Lombardo's wife and shares owned jointly with
     his wife.  Also includes  1,000,000  shares issued to Mr.  Lombardo in 1996
     (See "Item 10. Executive Compensation").

(2)  Includes 19,100 shares owned by Ms. Jarney's  husband and 1,000,000  issued
     in 1996.

(3)  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.

(4)  Based upon 18,016,898 shares outstanding as of May 22, 1997.



                                     - 17 -
<PAGE>



Item 12. Certain Relationships and Related Transactions.
         ----------------------------------------------

     Multi  Soft  has a demand  loan  with a  commercial  bank.  Borrowings  are
collateralized  Multi Soft`s accounts receivable and bear interest at the bank's
prime rate plus 2% (10.50% at January 31,  1997).  The Company was in default on
this loan.  Multi Soft  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 this
date,  Multi Soft 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, Multi Soft conducted a private placement of Multi Soft 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 Multi Soft. The principal and
interest  due under the Notes,  pursuant  to the terms of the  Notes,  have been
converted into  restricted  shares Multi Soft'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.

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

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

In connection  with this  transaction,  Multi Soft paid for the  acquisition  of
1,000,000 each of the Company's common shares (valued at $0.08 per share) to the
chairman and vice president by allowing the indebtedness of the Company 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.

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 the company to Multi Soft.
The  balance  due  between  both  officers  as of January  31,  1997 is $734,954
including deferred increases of $631,605.

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



                                     - 18 -
<PAGE>



                                     PART IV
                                     -------

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

Exhibits
--------

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

     4.a  Specimen  Common  Stock of the Company (1)
     4.b  Class A Warrant (1) 
     4.c  Class B Warrant (1)
     4.d  Class C Warrant (4)

     10.a Company Employment Agreement with Charles J. Lombardo (5)*
     10.b Multi Soft Employment Agreement with Charles J. Lombardo (5)*
     10.c Multi Soft Employment Agreement with Miriam G. Jarney(5)
     10.d Licensing Agreement with Widow, Inc. (6)
     10.e Agreements with IBM (2)
     10.f Copy of MSI's Non-Qualified Stock Option Plan, Stock Grant Program and
          Employee Incentive Stock Option Plan (3)
     10.g Amendments to MSI's Non-Qualified Stock Option and Stock Grant 
          Program (4)
          
     16.  The required letters from the former accountant (7)

     21.  List of Subsidiaries

     27.  Financial data schedule (electronic format only)
--------------------

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

(1)  Previously  filed as an Exhibit  to the  Company's  Form S-18  Registration
     Statement,  File No. 2-85710-NY filed with the Commission on July 14, 1983,
     and incorporated herein by reference.

(2)  Previously  filed as an Exhibit to the  Company's  Form 10-K for the fiscal
     year ended January 31, 1993 as filed with the Commission on or about 
     Nov. 18, 1993, and incorporated herein by reference.

(3)  Previously  filed as part of the Company'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.

(4)  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.

(5)  Previously  filed as an  Exhibit to Multi  Soft'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.




                                     - 19 -
<PAGE>



(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.

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.



                                     - 20 -
<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 SOLUTIONS, INC.


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


<TABLE>
<CAPTION>



SIGNATURES                                    TITLE                             DATE

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



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


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



------------------------------     Director                                     May 10, 1997
James Kaput, PhD.



------------------------------     Director                                     May 10, 1997
George E. Mansur, Jr.

</TABLE>


                                     - 21 -
<PAGE>



                                   EXHIBIT 21
                              LIST OF SUBSIDIARIES


Multi Soft,  Inc.  incorporated in the State of New Jersey in January 1985 doing
business only under the name of Multi Soft, Inc.

NetCast, Inc. incorporated in the State of New Jersey in May 1996 doing business
only under the name of NetCast, Inc.



                                     - 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 Solutions, Inc.

I have audited the accompanying  consolidated balance sheets of Multi Solutions,
Inc.  and  Subsidiaries  as of  January  31,  1997  and  1996  and  the  related
consolidated statements of operations,  changes in stockholders'  deficiency 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 consolidated financial position of Multi Solutions,  Inc.
and Subsidiaries as of January 31, 1997 and 1996 and the consolidated results of
its operations and its cash flows for the years then ended,  in conformity  with
generally accepted accounting principles.

The accompanying  consolidated  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



                                       F-1


<PAGE>



MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 1997 and 1996



                                                          1997           1996
                                                          ----           ----
ASSETS                                                                          
CURRENT ASSETS
     Cash                                            $    13,575    $    89,575
     Accounts Receivable (net of allowance
      of $6,854 and $32,880 respectively)                 18,571        100,428
     Prepaid expenses and other current assets            13,532         13,532
                                                     -----------    -----------
                                                          45,678        203,535


FURNITURE AND EQUIPMENT
     Research and Development Equipment                   14,603        259,907
     Office furniture and other equipment                 22,476         10,053
                                                     -----------    -----------
                                                          37,079        269,960
     Less: Accumulated Depreciation                       (9,119)      (266,066)
                                                     -----------    -----------

                                                          27,960          3,894

Capitalized Organizational costs                           2,415

OTHER ASSETS
     Capitalized software development costs            1,852,822      1,980,130
     Less accumulated amortization                    (1,110,741)    (1,256,153)
                                                     -----------    -----------

                                                         742,081        723,977

      Intangibles                                            200
                                                     -----------    -----------



                                                     $   818,334    $   931,406
                                                     ===========    ===========

                                      
SEE NOTES TO FINANCIAL STATEMENTS     F-2



<PAGE>



MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 1997 and 1996


                                                         1997            1996
                                                                    as restated
                                                     -----------    -----------

LIABILITIES AND STOCKHOLDERS'                                       
DEFICIENCY
CURRENT LIABILITIES
     Loan payable to bank                            $    25,497    $    41,099
     Note Payable                                         15,504
     Accrued payroll                                          --         30,285
     Payroll and other taxes payable                      38,070         74,993
     Accounts Payable                                    164,902        216,554
     Accrued officer compensation                        103,349        110,016
     Deferred Revenues                                   168,411        309,792
                                                     -----------    -----------
                                                         515,733        782,739


     Deferred compensation due officer/shareholders      631,605        636,605
     Deferred Revenues - net of current portion               --          8,022






STOCKHOLDERS' DEFICIENCY
     Common stock, authorized 40,000,000 shares
      $.001 par value, issued and outstanding             18,017         17,807
     18,016,898 (1997) and 17,806,898 (1996)
     Additional paid-in capital,                       8,592,434      8,578,537
      Minority Interest                                   87,092
     Accumulated deficit                              (9,026,547)    (9,092,304)
                                                     -----------    -----------
                                                        (329,004)      (495,960)


     COMMITMENTS AND CONTINGENCIES-- NOTE F
     SOFTWARE AND LICENSING AGREEMENT-- NOTE I
                                                     $   818,334    $   931,406
                                                     ===========    ===========


SEE NOTES TO FINANCIAL STATEMENTS     F-3



<PAGE>



MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED 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                        817,882       1,057,328
                                                   ------------    ------------
             Total expenses                           1,162,470       1,426,876
                                                   ------------    ------------
             (Loss)  from operations                    (97,335)        (27,696)

OTHER INCOME (EXPENSE)
      Other Revenues                                    109,102          54,782
      Interest Expense                                   (7,858)         (5,533)
                                                   ------------    ------------
             Total other income                         101,244          49,249








             Net Income                            $      3,909    $     21,553
                                                   ============    ============

             Weighted average shares outstanding     17,986,898      15,974,000
                                                   ============    ============

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

        (a) less then $.01 per share


                                      
SEE NOTES TO FINANCIAL                F-4
STATEMENTS



<PAGE>



MULTI SOLUTIONS,INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFECIENCY

Years ended January 31, 1997 and 1996                                          

<TABLE>
<CAPTION>


                                                                                                       Total
                                                                       Common Stock                    paid in          Accumulated
                                                                Shares            Amount               capital            deficit

<S>                                                            <C>               <C>                <C>                <C>         
Balance as of February 1 ,1995                                  15,806,898        $    15,807        $ 8,420,537        $(9,113,857)

Issuance of  common stock                                        2,000,000              2,000            158,000           


Net Income                                                                                                                   21,553
                                                                ----------        -----------        -----------        ----------- 


Balance at January 31, 1996                                     17,806,898             17,807          8,578,537         (9,092,304)

Issuance of resticted common stock                                 100,000                210             16,564             

Addition to Minority Interest used to                                                                                        61,848
reduce loss absorbed at 100%


Addition of Minority Interest                                                                                        

Deferred Compensation                                                

Net  Income                                                                                                                   3,909
                                                                ----------        -----------        -----------        ----------- 

Balance at January 31, 1997                                     18,016,898        $    18,017        $ 8,595,101        $(9,026,547)
                                                                ==========        ===========        ===========        =========== 


                                                                                                                           Total
                                                                             Minority               Deferred            stockholders
                                                                             Interest            Compensation            deficiency 
<S>                                                                        <C>                    <C>                    <C>       

Balance as of February 1 ,1995                                                                                            $(677,513)

Issuance of  common stock                                                                                                   160,000


Net Income                                                                                                                   21,553
                                                                                                                          ---------

Balance at January 31, 1996                                                                                                (495,960)

Issuance of resticted common stock                                                                    (4,000)                12,774

Addition to Minority Interest used to
reduce loss absorbed at %100                                                                                                 61,848


Addition of Minority Interest                                                   87,092                                        87,092

Deferred Compensation                                                                                  1,333                  1,333

Net  Income                                                                                                                   3,909
                                                                             ---------             ---------              ---------

Balance at January 31, 1997                                                 $   87,092             $  (2,667)             $(329,004)
                                                                            ==========             =========              ========= 
                                                                                                                          


</TABLE>


                                      F-5
SEE NOTES TO FINANCIAL STATEMENTS



<PAGE>



MULTI SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended January 31, 1997 and 1996

<TABLE>
<CAPTION>



                                                                                                        1997                 1996
                                                                                                    ---------             ---------
                                                                                    
Cash flows from operating activities
<S>                                                                                                 <C>                   <C>      
      Net Income (Loss)                                                                             $   3,909             $  21,553
      Adjustments to reconcile net income (loss)
           to net cash provided by operating activities
      Prior period adjustment
      Depreciation and amortization                                                                   347,548               371,921
      Common stock issued to Solutions
      Changes in assets and liabilities
             Accounts receivable                                                                       81,857                (4,637)
             Prepaid expenses and other current assets                                                     --                 3,778
             Accrued payroll                                                                          (30,285)                 (905)
             Payroll and other taxes payable                                                          (36,923)                   --
             Note Payable                                                                              15,504
             Accounts payable and accrued expenses                                                    (51,652)              (90,297)
             Accrued officer compensation                                                              (6,667)              (42,230)
             Deferred officer compensation                                                             (5,000)              225,758
             Deferred revenues                                                                       (141,381)               20,401
             Long term deferred revenues                                                               (8,022)             (192,864)
                                                                                                    ---------             ---------


                    Net cash provided  by operating activities                                        168,888               312,478


Cash flows from investing activities
      Capital expenditures                                                                            (29,641)                   --
      Capitalized software development costs                                                         (362,692)             (366,615)
                                                                                                    ---------             ---------

                    Net cash used in investing activities                                            (392,333)             (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)
      Increase in Minority Interest                                                                   148,940
      Restricted Common stock issued to Solutions                                                                            160,000
      Issuance of capital stock                                                                        14,107                    --
                                                                                                    ---------             ---------

                    Net cash provided by financing activities                                         147,445               125,370
                                                                                                    ---------             ---------

                    NET INCREASE (DECREASE) IN CASH                                                   (76,000)               71,233

Cash at beginning of year                                                                              89,575                18,342
                                                                                                    ---------             ---------
Cash at end of year                                                                                 $  13,575             $  89,575
                                                                                                    =========             =========
</TABLE>


                                      F-6
SEE NOTES TO FINANCIAL STATEMENTS



<PAGE>


                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996



NOTE A - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     Multi Solutions,  Inc. (the Company) was incorporated under the laws of the
     State of New Jersey on July 26,  1982.  The Company is  presently a holding
     company for its ownership of its  subsidiaries,  Multi Soft,  Inc.  ("Multi
     Soft") and NetCast, Inc.  ("NetCast").  As of January 31, 1997, the Company
     owns 55.4% of "Multi Soft" and 76.1% of NetCast.

     The Company's  consolidated  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 incurred a net income of $3,909 in 1997
     and had net income of $21,553 in 1996.  In  addition,  at January 31, 1997,
     the Company's current  liabilities  exceeded current assets by $470,055 and
     total liabilities exceeded total assets by $329,004.

     The Company intends to  aggressively  market its new products (see note I),
     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
     consolidated  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.

     NetCast acquired the assets of the Discovery  Publishing Group in September
     1996 for 200,000 shares of its restricted common stock valued at par.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     1.   Principles of Consolidation

     The accompanying  consolidated financial statements include the accounts of
     the  Company and its  subsidiaries,  Multi Soft,  Inc.  ("Multi  Soft") and
     NetCast,  Inc.  ("NetCast").  All  significant  intercompany  balances  and
     transactions  have been eliminated in  consolidation.  None of Multi Soft's
     net income was  allocated  to  minority  shareholders  because  the company
     absorbed  the  minority  interest of  accumulated  losses  allocated  up to
     January 31, 1995.

     2.   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 $5,060 and $2,372 for the years ended January 31,
     1997 and 1996 respectively.



                                       F7


<PAGE>


                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     3.   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 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.

     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 that 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  between  Multi Soft,  Inc. and 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  and  Windows  NT).
     Unamortized costs relating to Windows products at January 31, 1997 and 1996
     are $744,181 and $723,977, 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 all  products  at January  31, 1997 and 1996 was
     $344,588 and $369,548, respectively.

     4.   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 when 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.

     5.   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 the
     grant.



                                       F8



<PAGE>



                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     6.   Income (Loss) Per Share

     Income (loss) per share is computed  using the weighted  average  number of
     common shares outstanding  during the period.  Common stock equivalents are
     antidilutive and, therefore,  are not considered in the computation of loss
     per share.

     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 thoses estimates.

     8.   Income Taxes

     The  Financial  Accounting  Standards  Board  (FASB)  issued  Statement  of
     Financial  Accounting  Standards  (SFAS) No.  109,  "Accounting  for Income
     Taxes," which  significantly  changes 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 its  year  ended  January  31,  1994.  The
     cumulative   effect  of  the  change  in  accounting   principles  was  not
     significant.

NOTE C - NOTES PAYABLE

     1.   Demand Loan - Bank

     Multi Soft 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 Multi Soft'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.  Multi Soft  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 borrowing 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 at the rate
     of $597 per month for 36 months with interest at 9%.



                                       F9



<PAGE>



                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996



NOTE D - INCOME TAXES

     As a result of  losses  incurred  in  recent  years,  the  Company  and its
     subsidiaries  separately have net operating loss carryforwards available to
     offset future federal taxable income of approximately  $5.5 million.  These
     losses expire at various dates through 2012.

     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 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  revenues and allowance for uncollectible
     accounts.

     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 and 1996:

                                                    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 carryforwards                              4,088,000             4,079,000
                                                ---------             ---------


         Gross deferred tax assets              4,175,000           $ 4,166,000

Deferred tax assets valuation allowance        (4,175,000)          ($4,166,000)
                                               ----------           ----------- 
                                                
                                              $      -0-            $       -0-
                                              ===========           ============
                                                         


NOTE E - STOCKHOLDERS' DEFICIENCY

     1.   Warrants

     The expiration dates of the Company's Class A, Class B and Class C Warrants
     have been extended to December 1, 1997.  There are presently  outstanding a
     total of 723,793 Class A Warrants, 600 Class B Warrants and 714,012 Class C
     Warrants.


                                      F10



<PAGE>


                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     2.   Stock Option Plan
          -----------------

     In June 1993,  the Company  adopted an  Employee,  Consultant  and Advisory
     Stock and Option Compensation Plan (the Plan). Pursuant to the terms of the
     Plan,  an aggregate of up to 2,500,000  shares of common  stock,  $0.01 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.  To
     date, an aggregate of 145,880 shares has been issued pursuant to the Plan.

     3.   Common Stock Issued to Officers
          -------------------------------

     In January 1996,  Multi Soft issued 1,500,000 shares of its common stock to
     the Company.  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 of the Company's  common shares (valued at $0.08 per share)
     to the chairman and vice  president  by allowing  the  indebtedness  of the
     Company 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.

NOTE F - COMMITMENTS AND CONTINGENCIES

     1.   Leases
          ------

     Multi Soft is a subtenant in office space leased by an entity substantially
     owned by the  Company's  chairman and his wife. At present Multi Soft has a
     quarter-by-quarter  term lease with a base rent of $4,950 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 noncancellable 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 noncancellable  equipment operating
     lease are as follows:

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


     2.   Employment Agreements
          ---------------------

     Multi  Soft has  employment  agreements  with two  officers  which  provide
     minimum annual  compensation of $182,000  through July 1997. Upon execution
     of these  agreements,  an aggregate of 91,667 shares of Multi Soft's common
     stock was issued to the employees.


                                      F11



<PAGE>


                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996



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

     3.   Payroll Taxes
          -------------

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

     4.   Litigation
          ----------

     The Company and Multi Soft have been,  from time to time,  parties to legal
     actions arising in the normal course of their  business.  In the opinion of
     management,  the  disposition  of these  actions  will not have a  material
     effect on the  financial  position or results of  operations of the Company
     taken as a whole.

     In May 1997, a lawsuit was commenced against NetCast by former  consultants
     for  approximately  $113,000.  The  Company has  accrued  $24,000  prior to
     commencement of the action.  The Company  intends to vigorously  defend the
     lawsuit and has made counterclaims.

NOTE G - MAJOR CUSTOMERS

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

NOTE H - SUPPLEMENTAL INFORMATION

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

                                                     1997                1996
                                                     ----                ----

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


                                      F12


<PAGE>

                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


NOTE I - SOFTWARE LICENSING AGREEMENT

     1.   Software Licensing Agreement
          ----------------------------

     On October 8, 1993, the Company entered into a Software Licensing Agreement
     (SLA) and other ancillary  agreements with IBM Corporation  (IBM) providing
     for certain exclusive marketing rights for the Company's principal product:
     Windows  Communications  Library (WCL) with IBM IMS  Extensions.  This is a
     software product specifically modified for use with IBM 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 June 1996.

     The agreements create certain obligations by the Company,  including future
     maintenance,  staffing,  response and software source code custody.  Future
     enhancements may be provided by the Company for additional fees. As of July
     1995 Multi Soft 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 longer of:

     o    The 21 month period of maintenance  included in the agreement  without
          additional fees; or

     o    The period in which the royalty is earned through IBM sales throughout
          the seven year term of the agreement.

     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  will  remove  $150,000  from
     deferred revenues and increase license fee revenues by $150,000.

     For the years  ended  January 31, 1997 and 1996,  Muli Soft  recognized  as
     income $42,864 and $192,864 of the $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.  Multi  Soft had been  receiving  maintenance  fees  from the  above
     contract.



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<PAGE>


                      Multi Solutions, Inc. and Subsidaries
                                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            January 31, 1997 and 1996


     2.   Marketing Agreements with IBM
          -----------------------------

     The Company entered into marketing  agreements  with IBM Corporation  (IBM)
     providing for the marketing  rights of the Windows  Communications  Library
     (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.
     During fiscal 1997, Multi Soft had been receiving maintenance fees from the
     above contract.

NOTE J - RELATED PARTY TRANSACTIONS

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

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

NOTE K - NEW SUBSIDIARY

     NetCast,  Inc. is a  subsidiary  company 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.  The Company currently owns $76.1% of NetCast.
     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.



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