MMTS Multi Media Tutorial Services Inc (CE)

[_] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________

 DELAWARE 73-1293914
------------------------------------------------ ----------------------
(State of Other Jurisdiction of Incorporation or (I.R.S. Employer
 Organization) Identification Number)

 1214 EAST 15TH STREET
 BROOKLYN, NY 11230
---------------------------------------- ----------------------
(Address of Principal Executive Offices) (Zip Code)

 (718) 951-2350
--------------------------------------------------------------------------------
 (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during the preceding 12 months (or 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.

[X] Yes [_] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_| Accelerated filer |_|
 Smaller reporting
Non-accelerated filer |_| company |X|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

There are 54,209,902 of common stock, par value $0.0001 per share, issued and
outstanding as of January 20, 2009.

Transitional Small Business Disclosure Format (check one): [ ] Yes [X] No

TABLE OF CONTENTS

 PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or Plan of Operation 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Item 4T. Controls and Procedures 14

PART II - OTHER INFORMATION 14
Item 1. Legal Proceedings 15
Item 1A. Risk Factors 15
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits 15

SIGNATURES 16

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

-----------------------------------------------------------------------------------------------
 Assets
 ------
 November 30, February 29,
 2008 2008
 ------------ ------------
 (UNAUDITED) (AUDITED)
Current assets:
---------------
Cash $ -- $ --
Accounts receivable, less allowance for
 doubtful accounts of $12,000 and $12,023 78,523 108,315
Inventories 415 827
Prepaid expenses 112,577 114,206
 ------------ ------------

Total current assets 191,515 223,348
 ------------ ------------


Furniture & equipment, net 11,484 14,007
Intangible assets, net 67,176 66,120
Other assets 26,736 26,736
 ------------ ------------
Total assets $ 296,911 $ 330,211
 ============ ============

 Liabilities and Stockholders' Deficit
 -------------------------------------
Current liabilities
-------------------
Book overdraft $ 23,757 $ 20,162
Accounts payable and accrued expenses 4,728,078 4,392,938
Notes payable 2,216,524 2,134,774
 ------------ ------------
Total current liabilities 6,968,359 6,547,874
 ------------ ------------

Long-term debt
--------------
Notes payable, net of discount of $138,227 and $216,977 538,023 433,023
 ------------ ------------

Total liabilities 7,506,382 6,980,897
 ------------ ------------

Commitements and contingencies -- --
 ------------ ------------

Stockholders' deficit
---------------------
Preferred stock, Series A, $0.01 par value; 1,000,000
 shares authorized; no shares issued and outstanding -- --
Preferred stock, Series B, $0.01 par value; 50 shares
 authorized; no shares issued and outstanding -- --
Common stock, $0.0001 par value; 100,000,000
 shares authorized; 54,084,902 shares issued and outstanding 5,408 5,297
Stock subscription receivable 39,000 (6,000)
Additional paid-in capital 15,559,325 15,375,854
Accumulated deficit (22,813,204) (22,025,837)
 ------------ ------------
Total stockholders' deficit (7,209,471) (6,650,686)
 ------------ ------------

Total liabilities and stockholders' deficit $ 296,911 $ 330,211
 ============ ============


The financial information presented herein has been prepared by management
without audit by independent certified public accountants.

The accompanying notes are an integral part of these consolidated financial
statements.


 3

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------------------------------------------

 For the Three Months Ended For the Nine Months Ended
 November 30, November 30,
 ------------------------------ ------------------------------
 2008 2007 2008 2007
 ------------ ------------ ------------ ------------
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Net sales $ 111,645 $ 142,189 $ 340,134 $ 499,064

Cost of sales 15,354 7,636 52,879 64,226
 ------------ ------------ ------------ ------------

Gross profit 96,291 134,553 287,255 434,838

Selling, general and administrative expenses 196,547 435,198 792,416 1,227,873
 ------------ ------------ ------------ ------------

Loss from operations (100,256) (300,645) (505,161) (793,035)
 ------------ ------------ ------------ ------------

OTHER INCOME (EXPENSE)

Cancellation of Debt -- -- -- 46,174

Interest Expense (93,147) (98,966) (282,208) (387,275)
 ------------ ------------ ------------ ------------

Total other expense (93,147) (98,966) (282,208) (341,101)
 ------------ ------------ ------------ ------------

NET LOSS $ (193,403) $ (399,611) $ (787,369) $ (1,134,136)
 ============ ============ ============ ============

BASIC AND DILUTED LOSS PER SHARE $ (0.004) $ (0.008) $ (0.015) $ (0.023)
 ============ ============ ============ ============

WEIGHTED-AVERAGE SHARES OUTSTANDING 54,084,902 51,641,892 53,984,801 48,785,672
 ============ ============ ============ ============


The financial information presented herein has been prepared by management
without audit by independent certified public accountants

The accompanying notes are an integral part of these consolidated financial
statements.


 4

MULTI-MEDIA TUTORIAL SERVICES, INC.AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------------------------------------------------------
 For the Three Months Ended For the Nine Months Ended
 November 30, November 30,
 ---------------------------- ----------------------------
 2008 2007 2008 2007
 ----------- ----------- ----------- -----------
 UNAUDITED UNAUDITED UNAUDITED UNAUDITED
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (193,403) $ (399,611) $ (787,369) $(1,134,136)
Adjustments to reconcile net loss to net
 cash used in operating activities
Depreciation and amortization 6,508 7,965 19,176 20,055
Forgiveness of debt -- -- -- (46,174)
Amortization of prepaid contract for service -- 10,937 3,649 32,812
Amortization of deferred compensation 27,500 51,750 106,750 113,375
Amortization of discount on debt 26,250 33,888 78,750 132,418
Stock based compensation 5,828 17,078 88,484 138,534
Common stock issued for Services -- 77,046 33,349 170,546
Changes in Operating assets and Liabilities:
 Accounts receivable (682) (24,089) 29,792 (26,469)
 Inventories 1,181 1,158 412 3,529
 Prepaid expenses and other assets (702) (17,660) (2,020) (94,799)
 Accounts Payable and accrued expenses 129,938 129,348 335,140 113,266
 ----------- ----------- ----------- -----------
Net cash used in operating activities 2,418 (112,190) (93,887) (577,043)
 ----------- ----------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and equipment (61) -- (259) (7,464)
Increase in intangibles (3,497) (17,447) (17,448) (29,647)
Security deposit on new facility -- 2,600 -- 2,600
 ----------- ----------- ----------- -----------
Net cash used in investing activities (3,558) (14,847) (17,707) (34,511)
 ----------- ----------- ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable (112,000) -- -- 650,000
Repayment of note payable 108,000 22,100 108,000 (44,600)
Cash deficit 5,140 22,267 3,594 6,154
 ----------- ----------- ----------- -----------
Net cash provided by financing activities 1,140 44,367 111,594 611,554
 ----------- ----------- ----------- -----------
Net increase (decrease) in cash -- (82,670) -- --

CASH, BEGINNING OF PERIOD -- 82,670 -- --
 ----------- ----------- ----------- -----------
CASH, END OF PERIOD $ -- $ -- $ -- $ --
 =========== =========== =========== ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
INTEREST PAID $ 4,513 $ 1,348 $ 6,867 $ 1,348
 =========== =========== =========== ===========
INCOME TAXES PAID $ -- $ -- $ -- $ --
 =========== =========== =========== ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued:
With issuance of debt $ -- $ -- $ -- $ 354,505
 =========== =========== =========== ===========
Deferred compensation paid in common stock $ -- $ -- $ -- $ 317,000
 =========== =========== =========== ===========
Services $ -- $ -- $ 45,000 $ --
 =========== =========== =========== ===========
Conversion of debt to common stock $ -- $ -- $ -- $ 132,000
 =========== =========== =========== ===========
Exercise of option / stock subscription receivable $ -- $ 2,000 $ -- $ 2,000
 =========== =========== =========== ===========


The financial information presented herein has been prepared by management
without audit by certified public accountants

The accompanying notes are an integral part of these consolidated financial
statements.


 5

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Multi-Media Tutorial Services, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q under Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all material adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended November 30, 2008 are not necessarily indicative of the results that are to be expected for the year ended February 28, 2009. The information contained in this Form 10-Q should be read in conjunction with the audited financial statements filed as part of the Company's Form 10-KSB for the year ended February 29, 2008.

NOTE 2 - GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has an accumulated deficit of $22,813,204 and a working capital deficiency of $7,209,471 at November 30, 2008. Also, the Internal Revenue Service has placed a federal tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 of approximately $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, settling its existing debt by issuing shares of its common stock and raising additional capital through future issuance of stock and or debentures. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Multi-Media Tutorial Services, Inc. ("MMTS") and its wholly-owned subsidiaries, Video Tutorial Services, Inc. ("VTS") and Math Channel, Inc. ("Math Channel"). All significant intercompany transactions and balances have been eliminated in consolidation. Action Telesales and Communications, Inc. is an affiliated company of the Company which handles the billing process for MMTS and VTS. All intercompany transactions have been eliminated.

ESTIMATES

In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company classifies highly liquid temporary investments with an original maturity of six months or less when purchased as cash equivalents.

CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS

The Company maintains cash in bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses on these accounts.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued payroll and other expenses, the carrying amounts approximate fair value due to their short maturities. The amount shown for notes payable also approximates fair value because the current interest rates offered to the Company for debt of similar maturities are substantially the same.

STOCK BASED COMPENSATION

Effective March 1, 2006, the Company began recording compensation expense associated with stock-based awards and other forms of equity compensation in accordance with Statement of Financial Accounting Standards No. 123-R, Share-Based Payment, ("SFAS 123R") as interpreted by SEC Staff Accounting Bulletin No. 107. The Company adopted the modified prospective transition method provided for under SFAS 123r and consequently has not retroactively adjusted results from prior periods. The Company records expense over the vesting period in connection with stock options granted. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the expected term of the award on a straight line basis.

As of November 30, 2008, there are 11,175,000 options with a weighted average exercise price of $.043 and a weighted average remaining life of approximately 2-1/2 years, remaining outstanding and continue to be measured at the intrinsic value over their remaining vesting period. Compensation expense in any given period is calculated as the difference between total earned compensation at the end of the period, less total earned compensation at the beginning of the period. Compensation earned is calculated on a straight line basis over the requisite service period for any given option award. When the stock options are granted, the fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model.

-------------------------- ----------------------------------- ------------------------------------
 For the Nine Months Ended For the Three Months Ended
 November 30, November 30,
-------------------------- ----------------------------------- ------------------------------------
 2008 2007 2008 2007
-------------------------- ----------------- ----------------- ----------------- ------------------
Risk free interest rate: 4.60% 4.65% 4.71% 4.64%
-------------------------- ----------------- ----------------- ----------------- ------------------
Expected life (years): 10 10 10 10
-------------------------- ----------------- ----------------- ----------------- ------------------
Dividend rate: 0% 0% 0% 0%
-------------------------- ----------------- ----------------- ----------------- ------------------
Expected Volatility: 280% 270% 281% 271%
-------------------------- ----------------- ----------------- ----------------- ------------------

The Company granted options for 1,200,000 shares of the Company's common stock at an average price of $.02479. These options were valued with the use of the Black-Scholes valuation model. These options are exercisable upon grant, and accordingly their entire value of $29,750 has been expensed as a general and administrative expense. These options expire ten years from the date of grant.

As of November 30, 2008, there is approximately $25,797 of total unrecognized compensation costs related to granted stock options that are unvested. These costs are expected to be recognized over a weighted average period of 2 years.

The Company granted options for 1,000,000 shares of the Company's common stock to the Company's CEO and President, 500,000 were granted at an exercise price of $0.10 per share and 250,000 at an exercise price of $0.07 per share. These options were valued with the use of the Black-Scholes valuation model at $0.10 per share, or $50,000. These options are exercisable upon grant, and accordingly their entire value has been expensed as a general and administrative expense. These options expire ten years from the date of grant. The Company extended the exercise period of options, for 1,000,000 shares of the Company's common stock that originally had a five year life and had expired in January 2007. These options were extended for five additional years until January 2012. The original exercise price of $0.07 per share has not been amended. These options were granted to the Company's CEO and President. These options, with their extended exercise period, were valued with the use of the Black-Scholes valuation model at $0.0448 per share, or $44,800. These options are exercisable upon grant, and accordingly their entire value has been expensed as a general and administrative expense for the nine months ended November 30, 2007.

The Company recorded $138,534 and $21,657of compensation expense, net of related tax effects, relative to stock options for the nine months ended November 30, 2007 and 2006, respectively, in accordance with SFAS 123R. Included in such expense for the nine months ended November 30, 2007 is the expenses associated with the granting of the above mentioned options for 500,000 shares at $0.10, 250,000 options at $0.07 and the extension of the expiration date of options for 1,000,000 shares at $0.07, both these options granted to the Company's President and CEO. Net loss per share, basic and diluted, for SFAS 123R expense is approximately ($0.02) and ($0.01), for the nine months ended November 30, 2007 and 2006, respectively.

As of November 30, 2007, there is approximately $44,109 of total unrecognized compensation costs related to granted stock options that are unvested. These costs are expected to be recognized over a weighted average period of 3-1/2 years.

NOTE 4 - NOTES PAYABLE

As of November 30, 2008, the Company maintained the following notes payable - current:

b) On April 10, 2006, the Company issued demand notes totaling $87,500 for consulting services to be performed by the note holders over a twenty-four month period, subsequent to the issuance of these notes payable. These notes accrue interest at 10% per annum. In lieu of cash payment the Company may redeem these notes, and any accrued interest, with the issuance of Series E unsecured convertible promissory notes ("Series E"). The Company has recorded the issuance of these notes payable for consulting services as a prepaid expense of $87,500 that is being expensed over the twenty four month period of the consulting agreement.

In February 2007, a total of $75,000 of these demand notes redeemed their note principal (accrued interest paid subsequent to February 28, 2007) for Series E notes. Under the terms of the Series E note, the note holder upon issuance of Series E receives 5 shares of common stock for each $1 of debt, for a total of 375,000 share of common stock. These shares have been valued at $29,950, and have been recorded as a discount on debt, that was to have been amortized and expensed as interest over the life of the debt, or until such time as the debt was converted. The Series E debt is convertible at $.50 per share, or 50 percent of the average closing bid during the five trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. This note, including accrued interest, was due and payable in February 2010. In February 2007, these demand note holders, upon conversion into these Series E notes, converted all $75,000 Series E principal into 750,000 shares of common stock valued at $0.10 per share or $75,000. The $29,950 discount on debt was fully expensed as interest upon conversion of the Series E into common stock.

 In March 2007, one of these notes payable for $50,000 redeemed
 their note principal for a Series E note. Under the terms of
 the Series E note, the note holder upon issuance of Series E
 received 5 shares of common stock for each $1 of debt, for a
 total of 250,000 share of common stock. These shares have been
 valued at $31,250, and have been recorded as a discount on
 debt, that was to have been amortized and expensed as interest
 over the life of the debt, or until such time as the debt was
 converted. In addition, the Company recognized a beneficial
 conversion of $12,500 related to the Series E. As Series E are
 immediately convertible to common stock, this Series E was
 issued and convertible at a rate below market on the date of
 issuance of the Series E. The Series E debt is convertible at
 $.50 per share, or 50 percent of the average closing bid
 during the five trading days prior to the note holder giving
 notice of conversion, but not lower than $.10 per share. This
 Series E note, including accrued interest, was due and payable
 in March 2010. On the date of conversion from a demand note to
 a Series E note, the note holder converted the $50,000 Series
 E principal into 500,000 shares of common stock valued at
 $0.10 per share or $50,000. The $31,250 discount on debt, plus
 the $12,500 beneficial conversion feature, was fully
 amortized, and recorded as an interest expense
 upon conversion of the Series E into common stock. 90,727
 ---------------------------------------------------------------------------

c) 8% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 8% per annum. These
 notes were originally issued in September and October 1996 750,000
 --------------------------------------------------------------------------

d) Non-interest bearing notes, unsecured, payable on demand. 171,426

e) 17% convertible unsecured note payable on demand; the note is
 convertible into common stock at a price of $1.2656 per share
 or an alternate conversion of 75% of the closing bid for the
 first five trading days prior to conversion. The alternate
 conversion price cannot be lower than $0.55 per share, or more
 than $3.55 per share. 250,000
 --------------------------------------------------------------------------

f) 10% convertible unsecured notes, payable on demand. The notes
 are convertible into common stock at a price of the lesser of
 $.50 or 50% of the average closing bid during the five trading
 days prior to notice of conversion, but not lower than $.10
 per share. 401,390
 --------------------------------------------------------------------------

g) 10% convertible notes payable variously in 2006; the notes are convertible into common stock at the lesser of $.50 or 50% of the average of the closing bid price in the over the counter market during the five business days ending on the day before the holder gives notice of conversion, but not lower than $.10 per share.

i) 8% notes, unsecured, payable on demand. These advances accrue

interest based on an annualized rate of 8% per annum. 25,000
--------------------------------------------------------------------------

TOTAL NOTES PAYABLE, CURRENT $2,216,524
==========================================================================

As of November 30, 2008, the Company maintained the following notes payable, long-term:

During the year ended February 28, 2008, the Company issued $650,000 of Series E notes payable along with 3,250,000 shares of the Company's common stock value at $315,000, which will be expensed as interest over the life of the debt, or until such time as the debt is converted. These Series E notes payable have a three
(3) year life from the date of issuance. The debt is convertible at $.50 per share or 50% of the average closing bid during the five (5) trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. As of November 30, 2008, the unamortized portion of the debt discount is $138,227.

NOTE 5 - COMMON STOCK

For the nine months ended November 30, 2008, the Company issued 1,111,620 shares of common stock for services at an average price of $.03 per share. $33,349 of expense was charged to operations.

For the nine months ended November 30, 2007, as related to the conversion of a $67,000 demand note payable plus accrued interest of $605 into a Series E note payable the Company issued 1,025,175 share of common stock. These common shares have been valued at $99,005, and have been recorded as a discount on debt, that was to have been amortized and expensed as interest over the life of the debt, or until such time as the debt was converted. In addition, the Company recognized a beneficial conversion of $12,500 related to the Series E having an immediate conversion provision that was below market on the date of conversion. The Series E debt is convertible at $.50 per share, or 50 percent of the average closing bid during the five trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. This Series E note, including accrued interest, was due and payable in March 2010. On the date of conversion from a demand note to a Series E note, the note holder converted the $50,000 Series E principal into 500,000 shares of common stock valued at $0.10 per share or $50,000.

For the nine months ended November 30, 2007, the Company converted Series E notes payable of $50,000 plus accrued interest of $5,833 for a total of $55,883 into 558,330 shares of common stock at a per share price of $.10. The stock price was $.11 on the date of conversion; the balance of $5,583 was charged to interest expense.

For the six months ended August 31, 2007, the Company converted $15,000 notes payable directly to 150,000 shares of common stock at a per share price of $.10.

On August 27, 2007, the Company issued 100,000 shares of common stock for a consulting services agreement valued at $7,000, on an average per share price of $.07. For the six months ended August 31, 2007, a total of $7,000 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

On June 19, 2007, the Company issued 2,000,000 shares of common stock for a two
(2) year consulting services agreement valued at $220,000, on an average per share price of $.11. For the six months ended August 31, 2007, a total of $27,500 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

In March, April and June 2007, the Company issued an additional $650,000 of Series E notes payable. Issued with this debt were 3,250,000 shares of the Company's common stock valued at $315,000, at an average per share price of $.097.

In March 2007, the Company entered into a one year advertising and marketing consulting agreement. Under the terms of this agreement the Company is required to issue 100,000 shares of common stock each month commencing in March 2007. A total of 1,000,000 shares of common stock are to be to be issued under this agreement. During each of the six months in the six months ended August 31, 2007 the Company issued 100,000 shares of common stock, for a total of 600,000 shares of common stock. These shares were valued at market on their dates of issue. The Company has recorded $55,000, on an average per share price of $.092, for the issuance of these common shares as a consulting expense included in selling, general and administrative expenses.

In May 2007, the Company entered into an investor relations consulting agreement. This agreement has a one year term, and requires the issuance of 750,000 shares of common stock upon commencement. These shares have a market value of $57,000 on an average per share price of $.076, and have been recorded as a deferred compensation expense, netted against additional paid in capital. As services commence under this agreement, a pro-rata share of the deferred compensation is expensed. For the six months ended August 31, 2007, a total of $16,625 has been expensed for this consulting agreement and included in selling, general and administrative expenses.

In March 2007, the Company entered into a financial consulting agreement. This agreement has a one year term, and requires the issuance of 500,000 shares of common stock. Services under this agreement are set to commence in June 2007. These shares have a market value of $40,000, and have been recorded as a deferred compensation expense, netted against additional paid in capital. For the six months ended August 31, 2007, the Company has recorded $10,000, as a consulting expense included in selling, general and administrative expenses.

During the six months ended August 31, 2007, the Company expensed the remaining deferred compensation cost of $7,500 related to a consulting agreement entered into in June 2006 and paid for in common stock, which concluded in August 2007.

On March 15, 2007, Company issued 350,000 shares of common stock for financial related services valued at market for a total of $31,500. For the six months ended August 31, 2007, the Company has recorded $31,500, as a consulting expense included in selling, general and administrative expenses.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

COMMITMENTS:

CONSULTING AGREEMENTS:

In March 2007, the Company entered into a one year advertising and marketing consulting agreement. Under the terms of this agreement the Company is required to issue 100,000 shares of common stock each month commencing in March 2007. A total of 1,000,000 shares of common stock are to be to be issued under this agreement.

In May 2007, the Company entered into an investor relations consulting agreement. This agreement has a one year term, and requires the issuance of 750,000 shares of common stock upon commencement. These shares have a market value of $57,000 on an average per share price of $.076, and have been recorded as a deferred compensation expense, netted against additional paid in capital. As services commence under this agreement, a pro-rata share of the deferred compensation is expensed.

In March 2007, the Company entered into a financial consulting agreement. This agreement has a one year term, and requires the issuance of 500,000 shares of common stock. Services under this agreement are set to commence in June 2007. These shares have a market value of $40,000, and have been recorded as a deferred compensation expense, netted against additional paid in capital. For the nine months ended November 30, 2007, the Company has recorded $20,000, as a consulting expense included in selling, general and administrative expenses.

The Company leases an approximate 1,400 square foot facility at 1214 East 15th Street, Brooklyn, New York, which houses its telemarketing and other staff. This lease, which currently calls for monthly rent of $2,500, expired in February, 2006. The company is currently leasing this facility on a month-to-month basis.

CONTINGENCIES:

The Company is subject to litigation in the normal course of business, and claims arise from time to time. Presently the Company is not aware of any pending or threatened litigation and has not provided a reserve or an accrual for any such contingencies.

The Company has a significant amount of debt and notes payable that have been recorded. In certain instances, the Company has been involved, and be involved in the future, in litigation due to non-payment of debt and notes payable.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL is claiming a predecessor/successor relationship between the Company and the Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that the Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained Counsel to investigate and seek a resolution in this matter. The accompanying financial statements do not reflect this potential liability pending Counsel's attempt to resolve this matter.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

THIS REPORT CONTAINS STATEMENTS THAT WE BELIEVE ARE, OR MAY BE CONSIDERED TO BE, "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS REPORT REGARDING THE PROSPECTS OF OUR INDUSTRY OR OUR PROSPECTS, PLANS, FINANCIAL POSITION OR BUSINESS STRATEGY, MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. IN ADDITION, FORWARD-LOOKING STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS SUCH AS "MAY," "WILL," "EXPECT," "INTEND," "ESTIMATE," "FORESEE," "PROJECT," "ANTICIPATE," "BELIEVE," "PLANS," "FORECASTS," "CONTINUE" OR "COULD" OR THE NEGATIVES OF THESE TERMS OR VARIATIONS OF THEM OR SIMILAR TERMS. FURTHERMORE, SUCH FORWARD-LOOKING STATEMENTS MAY BE INCLUDED IN VARIOUS FILINGS THAT WE MAKE WITH THE SEC OR PRESS RELEASES OR ORAL STATEMENTS MADE BY OR WITH THE APPROVAL OF ONE OF OUR AUTHORIZED EXECUTIVE OFFICERS. ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED IN THESE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT ASSURE YOU THAT THESE EXPECTATIONS WILL PROVE TO BE CORRECT.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, AS WELL AS ASSUMPTIONS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THESE FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, WHICH REFLECT MANAGEMENT'S OPINIONS ONLY AS OF THE DATE HEREOF. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO REVISE OR PUBLICLY RELEASE THE RESULTS OF ANY REVISION TO ANY FORWARD-LOOKING STATEMENTS. YOU ARE ADVISED, HOWEVER, TO CONSULT ANY ADDITIONAL DISCLOSURES WE MAKE IN OUR REPORTS TO THE SEC. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR PERSONS ACTING ON OUR BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED IN THIS REPORT.

GOING CONCERN; IRS TAX LIEN

The Company continues to suffer recurring losses and has an accumulated deficit of approximately $22,813,204 and a working capital deficiency of approximately $7,209,471 at November 30, 2008. In addition, the United States Internal Revenue Service has placed a tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 approximating $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements have been prepared assuming that that the Company will continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, raising additional capital through future issuances of stock and/or equity, and finding sufficient profitable markets for its products to generate sufficient cash to meet its business obligations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2008 AND 2007.

Net sales for the three months ended November 30, 2008 were $111,645, compared to $142,189 for the three months ended November 30, 2007. This decrease was due to increased competition for internet advertising resulting in fewer advertising opportunities. In addition, the economic recession reduced demand for the Company's services resulting in lower sales.

Gross profit was $96,291 for the three months ended November 30, 2008, compared to $134,553 for the three months ended November 30, 2007. This decrease was due to a decrease in net sales.

Selling, general and administrative expenses (SG&A) were $196,547 for the three months ended November 30, 2008, compared to $435,198 for the three months ended November 30, 2007. This decrease was due to reduced advertising. In addition, the Company reduced its managerial and sales overhead in order to increase efficiency.

Interest expense was $93,147 for the three months ended November 30, 2008 as compared to $98,966 for the three months ended November 30, 2007.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED NOVEMBER 30, 2008 AND 2007.

Net sales for the nine months ended November 30 2008 were $340,134, compared to $499,064 for the nine months ended November 30, 2007. This decrease was due to increased competition for internet advertising resulting in fewer advertising opportunities. In addition, the economic recession reduced demand for the Company's services resulting in lower sales.

Gross profit was $287,255 for the nine months ended November 30, 2008, compared to $434,838 for the nine months ended November 30, 2007. This decrease was due to a decrease in net sales.

Selling, general and administrative expenses (SG&A) were $792,416 for the nine months ended November 30, 2008, compared to $1,227,873 for the nine months ended November 30, 2007. This decrease was due to reduced advertising. In addition, the Company reduced its managerial and sales overhead in order to increase efficiency.

Interest expense was $282,208 for the nine months ended November 30, 2008 as compared to $387,275 for the nine months ended November 30, 2007.

LIQUIDITY AND CAPITAL RESOURCES.

At November 30, 2008, the Company had $0 cash on hand. The Company continues to suffer recurring losses and has an accumulated deficit of $22,813,204 and a working capital deficiency of approximately $7,209,471 at November 30, 2008.

At November 30, 2008, the Company had a book overdraft of $23,757 compared to a book overdraft of $20,162 as of February 28, 2008 and a book overdraft of $22,267 as of November 30, 2007. This decrease in cash was due to the accumulated losses in previous periods.

During the nine months ended November 30, 2008, $75,000 was advanced to the Company for a period of one-hundred-twenty days at an annualized interest rate of 10% secured by unregistered common stock of the Company. In the event of default, the note holder shall be entitled to receive such number of unregistered shares of the Company based upon a value of $.10 per share for any amount of the note or interest thereon that remains unpaid after the due date.

The Company continues to meet its working capital requirements through debt and equity funding from outside sources and internally generated funds. In addition, the Company may have to incur increased capital expenditures as it seeks to expand its product lines and tutorial services. In order to meet its current and future cash requirements, the Company is in discussions to negotiate additional debt and equity financing. There can be no assurance that any financing will be successful or that the Company will be able to fund internally its working capital requirements or meet its debt repayment obligations. In the event that the Company is unable to secure additional financing, it may be obligated to significantly reduce its operations and seek to sell assets, which would have a material adverse affect on the Company's prospects and financial results.

Net cash used in operating activities during the nine months ended November 30, 2008 was $93,887, compared to $577,043 for the nine months ended November 30, 2007. This decrease was due to reduction in overhead costs and advertising costs.

Net cash used in investing activities during the nine months ended November 30, 2008 was $17,707, compared to $34,511 for the nine months ended November 30, 2007.

Net cash provided by financing activities during the nine months ended November 30, 2008 was $111,594 compared to $611,554 for the nine months ended November 30, 2007. The decrease was due to a reduction of proceeds received from issuance of notes payable.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of significant accounting policies is included in Note 3 to the audited consolidated financial statements for the year ended February 28, 2008 in the Form 10-KSB. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Our financial statements and accompanying notes are prepared in accordance with U.S. Generally Accepted Accounting Principles. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies for us include revenue recognition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A.

ITEM 4T. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

The Company maintains controls and procedures designed to ensure that they are able to collect the information that is required to be disclosed in the reports they file with the Securities and Exchange Commission (the "SEC") and to process, summarize and disclose this information within the time period specified in the rules of the SEC. The Company's Chief Executive Officer and Chief Financial Officer are responsible for establishing, maintaining and enhancing these procedures. The officer is also responsible, as required by the rules established by the SEC, for the evaluation of the effectiveness of these procedures.

Based on management's evaluation (with participation of our principal executive and principal financial officer), as of the end of the period covered by this report, the principal executive officer and principal financial officer concluded that a deficiency was identified in the Company's internal controls over financial reporting which constituted a "material weakness." Accordingly, management concluded that the Company's disclosure controls and procedures were not effective.

The material weakness was the result of an insufficient number of personnel having adequate knowledge, experience and training to provide effective, and timely, oversight and review over the Company's financial close and reporting process.

CHANGES IN INTERNAL CONTROLS.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended November 30, 2008 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

The Company's management does not expect that their disclosure controls or their internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL claimed there was a predecessor/successor relationship between the Company and The Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that The Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained legal counsel to investigate and seek a resolution in this matter. The accompanying financial statements as of November 30, 2008 do not reflect this potential liability pending legal counsel's efforts to resolve this matter as legal counsel continues to pursue a resolution.

The Company had made a settlement with one of its creditors that had begun litigation on January 6, 2000 in Superior Court, Judicial District of Stanford/Norwalk, whereby it has settled a $235,000 claim for $190,000 with a 29-month payout schedule. The Company has paid approximately $30,000 in honor of this settlement; however, since the creditor has not honored the terms of the settlement agreement to activate and to provide upgrades of its software, the Company has discontinued its schedule of payments. The creditor sued the Company in the State of Connecticut but the court ruled that the creditor could not proceed with the suit in the State of Connecticut. This case has not been reopened by the creditor.

The Company has settled with its largest creditor to whom it owed approximately $600,000. The creditor has settled for $150,000 with a four year payout schedule. The Company has not conformed to the original schedule but has been making periodic payments as per discussions with the creditor's counsel. The original judgment that the creditor held against the Company was withdrawn. However, the creditor has a stipulated judgment whereby in the event that the Company defaults on its payments the creditor can obtain a judgment for the remaining balance plus a penalty of $150,000. As of November 30, 2008, the creditor had not sent the Company any notice of default which would allow the Company ten days to cure before the creditor could file for a judgment.

The Company is subject to a claim for federal payroll and unemployment taxes for approximately, $400,000, and $100,000, respectively, which the Company is disputing. With regard to the federal payroll taxes, the Company has received notice of a levy in the amount of $83,448.33 against certain of the Company's assets. It has also received notice from the Federal Government and the Department of Labor of various liens with regard to the above arrears. The Company has filed a 941c adjustment which should eliminate all or at least a substantial portion of these tax arrears. It is doing so under advice of legal counsel who specializes in payroll tax issues. There is no assurance that the Company will be successful in resolving this dispute and having these liens removed.

ITEM 1A. RISK FACTORS

N/A

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the nine months ended November 30, 2008, the Company issued the following securities upon reliance on the exemption from registration afforded the Company under Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"):

During the nine months ended November 30, 2008, the Company granted options to the Chief Executive Officer of the Company for 1,200,000 shares of the Company's common stock at an average price of $.02479. These options were valued with the use of the Black-Scholes valuation model. These options are exercisable upon grant, and accordingly their entire value of $29,750 has been expensed as a general and administrative expense. These options expire ten years from the date of grant.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

EXHIBIT NO. DESCRIPTION

 31.1 Certification by Barry Reichman, the Principal Executive Officer and
 Principal Financial Officer of Multi-Media Tutorial Services, Inc.,
 pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
 of 1934, as amended.

 32.1 Certification by Barry Reichman, the Principal Executive Officer and
 Principal Financial Officer of Multi-Media Tutorial Services, Inc.,
 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MULTI-MEDIA TUTORIAL SERVICES, INC.

Dated: January 20, 2009 By: /s/ BARRY REICHMAN
 -------------------------------------------
 Barry Reichman
 Chief Executive Officer and Chief Financial
 Officer (Principal Executive Officer)
 (Principal Financial Officer)
 of Multi-Media Tutorial Services, Inc.

Multi Media Tutorial Ser... (CE) (USOTC:MMTS)
Historical Stock Chart
From Aug 2024 to Sep 2024

Multi Media Tutorial Ser... (CE) (USOTC:MMTS)
Historical Stock Chart
From Sep 2023 to Sep 2024