UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: June 30, 1997
Commission File No.: 2-72849-NY
IMN FINANCIAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------------------------------
(State or other jurisdiction
of incorporation or organization)
11-2558192
----------
(I.R.S. Employer
Identification No.)
520 Broadhollow Road Melville, New York 11746
----------------------------------------------
(Address of principal executive offices)
(516) 844-9805
----------------------------------------------------
(Registrant's telephone number, including area code)
NGT Enterprises, Inc. 100 Garden City Plaza, Garden City, New York 11350
------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
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 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 [ ] .
Indicate the number of shares outstanding of each of the registrant's
classes of stock as of August 15, 1997:
Common stock, $.001 par value - 23,686,700 shares outstanding.
<PAGE>
Item 1. Financial Statements
The condensed financial statements for the period ended June 30, 1997
included herein have been prepared by IMN Financial Corp., (the "Company")
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "Commission"). In the opinion of management, the
statements include all adjustments necessary to present fairly the financial
position of the Company as of June 30, 1997, and the results of operations and
cash flows for the nine-month periods ended June 30, 1996 and 1997.
The Company's results of operations during the nine months of the Company's
fiscal year are not necessarily indicative of the results to be expected for the
full fiscal year.
The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-KSB for the fiscal years ended September 30, 1995 and
1996.
2
<PAGE>
IMN FINANCIAL CORP. (formerly NGT Enterprises, Inc.) AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS (Unaudited)
Page
Condensed Consolidated Balance Sheets.................................. 4-5
June 30, 1997 and September 30, 1996
Condensed Consolidated Statement of Income
Nine Months Ended June 30, 1997 and 1996
Three Months Ended June 30, 1997 and 1996......................... 6-7
Condensed Consolidated Statement of Cash Flows
Nine Months Ended June 30, 1997 and 1996.......................... 8-9
Condensed Consolidated Statement of Stockholders Equity................ 10
Notes to Financial Statements.......................................... 11-12
Item II - MANAGEMENT'S DISCUSSION AND ANALYSIS......................... 13
PART II - OTHER INFORMATION............................................ 14
SIGNATURES............................................................. 15
Exhibit A - Proforma Condensed Consolidated Statement of Income
for the Nine Months Ended June 30, 1997 and 1996
Exhibit B - Form 8-K dated May 5, 1997 (incorporated by reference)
Exhibit C - Form 8-K dated August 1, 1997 (incorporated by reference)
Exhibit 27 - Financial Data Schedule................................. 16
3
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises. Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
6/30/97 9/30/96
Unaudited Audited
--------- -------
Current Assets
Cash $ 232,333 $ 0
Mortgage inventory 16,253,149
Points and fees receivable 368,100
Subscription receivable 6,600,000
Other current receivables 144,967
Marketable securities 5,000,000
Investments 660,293
Prepaid expenses 1,798,493
------------ ------------
Total Current Assets 31,057,335 0
Fixed Assets
Property and equipment - net 489,795 0
Other Assets
Mortgage receivable 2,296,229
Intangible assets - net 694,649
Other assets 69,994
------------ ------------
Total Other Assets 3,060,872 0
Total Assets $34,608,022 $ 0
============ ============
4
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES & STOCKHOLDERS' EQUITY
6/30/97 9/30/96
Unaudited Audited
--------- -------
Current Liabilities
Accounts payable and accrued expenses $ 1,902,274 $ 0
Warehouse lines of credit 15,880,615
Borrowers escrow funds 364,621
Capital lease obligations 146,470
Due to related party 2,196,436
Deferred income 280,809
------------ ------------
Total Current Liabilities 20,771,225 0
Long-Term Liabilities
Other liabilities 5,374 0
Stockholders' Equity
Preferred stock - authorized 5,000,000
shares $.001 par value per share 0 0
Common stock - authorized 45,000,000
shares, $.001 par value per share,
the number of shares outstanding
at June 30, 1997 and September 30,
1996 was 23,686,700 and 4,257,199,
respectively. 2,369 426
Additional paid in capital 13,639,304 16,867
Retained earnings 189,730 (17,293)
------------ ------------
Total Stockholders' Equity 13,831,403 0
------------ ------------
Total Liabilities and Stockholders' Equity $34,608,002 $ 0
============ ============
5
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises' Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Three Months
Ended Ended
6/30/97 6/30/96
------------ ------------
Operating Income
Points, Fees and Premium Income $ 2,296,774 $ 0
Interest Income 150,138 0
------------ ------------
Total Operating Income 2,446,912 0
------------ ------------
Operating Expenses
Field and Direct Expenses 1,052,301 0
Interest Expense 171,480 0
------------ ------------
Total Operating Expenses 1,223,781 0
------------ ------------
Gross Profit 1,223,131 0
General and Administrative Expenses 1,014,608 2,000
------------ ------------
Income (Loss) from Operations 208,523 (2,000)
Other Income (Expenses) 0 0
------------ ------------
Income (Loss) before Provision
for Income Taxes 208,523 (2,000)
Provision for Income Taxes 0 0
------------ ------------
Net Income (Loss) $ 208,523 $ (2,O00)
============ ============
6
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
FOR THE NINE MONTHS ENDED JUNE 30
(SIX MONTHS ENDED JUNE 30 FOR SUBSIDIARIES)
1997 1996
----------- -----------
Operating Income
Points, Fees and Premium Income $ 5,158,512 $ 2,777,121
Interest Income 389,646 220,445
------------ ------------
Total Operating Income 5,548,158 2,997,566
------------ ------------
Operating Expenses
Field and Direct Expenses 2,371,180 1,687,850
Interest Expense 440,530 271,391
------------ ------------
Total Operating Expenses 2,811,710 1,959,241
------------ ------------
Gross Profit 2,736,448 1,038,325
General and Administrative Expenses 2,821,810 1,446,538
------------ ------------
Income (Loss) from Operations (85,362) (408,213)
Other Income (Expenses) 0 426,278
------------ ------------
Income (Loss) before Provision
for Income Taxes (85,362) 18,065
Provision for Income Taxes 0 4,321
------------ ------------
Net Income (Loss) $ (85,362) $ 13,744
============ =============
Weighted Average Number of
Shares Outstanding 5,503,629 3,931,199
Net Income per Share $ (0.0155) $ 0.0035
7
<PAGE>
. IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Nine Months
Ended Ended
6/30/97 6/30/96
----------- -----------
Cash Flows From Operating Activities
Net Income (Loss) $ 207,023 $ (13,415)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization 29,219 0
Depreciation 25,316 0
Changes in assets and liabilities (5,421,784) 13,415
------------ -----------
Net cash provided (used)
by operating activities (5,160,226) 0
------------ -----------
Cash Flows From Investing Activities
Purchase of fixed assets (31,515) 0
Purchase of intangible assets (209,153) 0
Mortgages originated - net (35,195,259) 0
Mortgages sold 37,743,126 0
------------ -----------
Net cash provided by investing activities 2,307,199 0
------------ -----------
Cash Flows From Financing Activities
Advances from related parties 492,533 0
Proceeds from warehouse line of credit 34,843,306 0
Repayments of warehouse line of credit (32,366,825) 0
Collection of notes receivable 1,886 0
Reduction of capital lease obligations (2,301) 0
------------- ------------
Net cash provided by financing activities 2,968,599 0
------------- ------------
Net increase (decrease) in cash
and equivalents 115,572 0
------------- ------------
Cash balance at beginning of period 116,761 0
------------- ------------
Cash balance at end of period $ 232,333 $ 0
============= ============
8
<PAGE>
. IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Nine Months
Ended Ended
6/30/97 6/30/96
----------- -----------
Supplemental Disclosures:
Interest expense $ 171,480 $ 0
============= ============
Income taxes $ 0 $ 0
============= ============
9
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Common Additional
Stock Stock Paid-In Retained
Date (Shares) ($) Capital Earnings Total
- ---- -------- -------- ---------- --------- ----------
10/01/93 3,930,926 $ 393 $ 0 $ (393) $ 0
09/30/94 273 0
--------- ------- ---------- --------- ------------
3,931,199 393 0 (393) 0
09/30/96 326,000 33 16,867 16,900
09/30/96 Net loss (16,900) (16,900)
--------- -------- ------------ --------- -----------
4,257,199 426 16,867 (17,293) 0
05/05/97(1) (3,192,899) (319) 319 0 0
05/05/97(2) 20,221,700 2,022 7,173,020 0 7,175,042
05/19/97(3) 1,100,000 110 3,300,000 0 3,300,110
06/04/97(4) 200,000 20 (150,902) (150,882)
06/24/97(3) 1,100,000 110 3,300,000 3,300,110
06/30/97 Net income 207,023 207,023
---------- --------- ----------- --------- ------------
23,686,000 $ 2,369 $13,639,304 $189,730 $13,831,403
(1) Stock split preceding transaction #2 (below).
(2) Shares of common stock issued, valued at $.21 per share (Note 3).
(3) Shares of common stock issued, valued at $3.00 per share (Note 4).
(4) Shares of common stock issued, valued at $5.00 per share.
10
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information as set forth in Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. It should be noted that
the Registrant was involved in a reverse acquisition, as disclosed in Note 3
below, and that certain required disclosures are included herein on the
Company's Form 8-K, dated May 5, 1997, marked Exhibit B. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results of the
Company for the nine months ended June 30, 1997 are not necessarily indicative
of the results that may be expected for the fiscal year ended September 30,
1997.
NOTE 2 - EARNINGS PER SHARE
Earnings per share have been computed on the basis of the total weighted
average number of shares outstanding at June 30, 1997.
June 30, 1997 June 30, 1996
------------- -------------
Number of shares outstanding - start of period 1,064,300 3,931,199
Increases in shares 22,621,700 0
------------- -------------
Number of shares outstanding - end of period 23,686,000 3,931,199
============= =============
Weighted average number of shares outstanding 5,503,629 3,931,199
============= =============
NOTE 3 - ACQUISITIONS
On May 5, 1997, the Company acquired 100% of the outstanding common stock
of Donald Henig, Inc., First Equities Commercial Corp., First Equities Service
Corp. and holdings in the Aristocrat Endeavor Fund from IMN Equities, Inc. for
20,221,700 shares of its common stock. This item is explained more fully in the
Company's Form 8-K dated August 1, 1997 attached hereto as Exhibit C.
On August 1, 1997, the Company acquired 100% of the outstanding common
stock of Green Shield Mortgage Corporation ("GSM"). In consideration for the
acquisition of GSM, the Company delivered to the principal of GSM: 1) 144,906
shares of the Company's common stock in the name of the principal; 2) the
Belansen note receivable as set forth on the December 31, 1996 financial
statement of GSM, valued at approximately $147,000 as of August 1, 1997; and 3)
direct payment of the principal in the amount of $350,000. This item is
explained more fully in the Company's Form 8-K dated August 1, 1997 referred to
herein as Exhibit C.
11
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - CONSULTING ARRANGEMENTS
In May of 1997, the Company entered into consulting agreements with various
companies. In exchange for certain consultation services, each agreement called
for the issuance of 1,100,000 nonstatutory options exercisable at $3.00 per
share. Both options were exercised pursuant subscription agreements on May 19,
1997 and June 24, 1997, respectively.
NOTE 5 - PROFORMA FINANCIAL STATEMENT
The proforma financial statement included herewith presents the results of
operations as if the acquisition of DHI took place on the first day of the
current fiscal year.
12
<PAGE>
IMN FINANCIAL CORP.
(formerly NGT Enterprises, Inc.)
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.
RESULTS OF OPERATIONS - JUNE 30, 1997 VS. JUNE 30, 1996
- -------------------------------------------------------
The increase in revenue, operating expenses, gross profit, general and
administrative expenses and net income (loss) for both the nine months ended
June 30, 1997 and the three months ended June 30, 1997, versus the same periods
in 1996, are completely due to the acquisition by the Company of Donald Henig,
Inc., an active mortgage banker, in May of 1997.
RESULTS OF OPERATIONS (PROFORMA) - JUNE 30, 1997 VS. JUNE 30, 1996
- ------------------------------------------------------------------
The increase in revenue, operating expenses, gross profit, general and
administrative expenses and net income (loss) for the proforma nine months ended
June 30, 1997, versus the proforma nine months ended June 30, 1996 was due to
the expansion program of the Company, through its subsidiary, Donald Henig, Inc.
Under this program, the Company opened several new branch offices in New York
State as well as expanding into several new states.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company believes that current operations will provide adequate cash
flow to meet current obligations. The Company has $6,600,000 in subscription
receivables and marketable securities of $5,000,000 as its present capital
resources. Management believes that these resources provide adequate working
capital for the Company.
13
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
The exhibits filed as part of this report are listed below.
Exhibit No. Description
----------- -----------
A Proforma Condensed Consolidated Statement of
Income for the Nine Months Ended
June 30, 1997 and 1996
B Form 8-K dated May 5, 1997 (incorporated by reference
C Form 8-K dated August 1, 1997 (incorporated by reference
27 Financial Data Schedule
14
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
IMN FINANCIAL CORP.
Dated: August 15, 1997 By: /s/Edward Capuano
-------------------------
Edward Capuano
President
Principal Executive Officer
Principal Financial Officer
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the six month period ended June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 232,333
<SECURITIES> 5,000,000
<RECEIVABLES> 9,409,286
<ALLOWANCES> 0
<INVENTORY> 16,253,149
<CURRENT-ASSETS> 31,057,335
<PP&E> 489,795
<DEPRECIATION> 0
<TOTAL-ASSETS> 34,608,022
<CURRENT-LIABILITIES> 20,771,225
<BONDS> 0
0
0
<COMMON> 2,369
<OTHER-SE> 13,639,304
<TOTAL-LIABILITY-AND-EQUITY> 34,608,002
<SALES> 2,296,774
<TOTAL-REVENUES> 2,446,912
<CGS> 0
<TOTAL-COSTS> 2,239,239
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 171,480
<INCOME-PRETAX> 207,023
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,446,912
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207,023
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
