United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended July 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-18349
THE MNI GROUP INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2383025
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 West Forest Avenue, Englewood, New Jersey 07631
(Address of principal executive offices) (Zip Code)
(201) 569-1188
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
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. [X] Yes [ ] No
Applicable Only to Issuers Involved in Bankruptcy
Proceeding During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
3,928,643 shares of Common Stock at September 12, 1996
<PAGE>
THE MNI GROUP, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
------
<TABLE>
<CAPTION>
July
31, January 31,
1996 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 10,300 $ 11,100
Accounts receivable (net of allowance) 51,800 126,200
Inventories 56,500 84,100
Other current assets 13,900 16,400
----------- -----------
Total current assets 132,500 237,800
----------- -----------
Furniture, fixtures and leasehold improvements (net) 4,000 4,700
Other assets 15,500 15,500
----------- -----------
19,500 20,200
$ 152,000 $ 258,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current liabilities:
Accounts payable $ 68,800 $ 132,800
Accrued expenses and other liabilities 293,000 303,900
Note payable 35,700 55,100
Due to officer 6,500 --
----------- -----------
Total current liabilities 404,000 491,800
----------- -----------
Long-term debt (net of current portion) 128,600 146,400
Excess of purchase price over basis of assets acquired
net of amortization 161,800 164,000
----------- -----------
290,400 310,400
----------- -----------
Stockholders' (deficiency):
Common stock, no par value; 10,000,000 shares
authorized; shares issued and outstanding -
July 31, 1996 and January 31, 1996 - 3,710,709 7,238,900 7,238,900
Accumulated deficit (7,781,300) (7,783,100)
----------- -----------
(542,400) (544,200)
$ 152,000 $ 258,000
=========== ===========
</TABLE>
<PAGE>
THE MINI GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales $ 596,400 $ 628,000 $ 195,200 $ 447,800
----------- ----------- ----------- -----------
Cost of sales and operating
expenses:
Cost of merchandise sales 358,500 409,000 108,800 290,500
Selling, general and
administrative expenses 226,900 259,700 105,100 126,100
Research and development -- 3,000 -- 1,700
----------- ----------- ----------- -----------
585,400 671,700 213,900 418,300
----------- ----------- ----------- -----------
Income (loss) from operations 11,000 (43,700) (18,700) 29,500
Other income (expense):
Interest expense (9,200) (11,000) (4,200) (5,600)
----------- ----------- ----------- -----------
Net income (loss) $ 1,800 ($ 54,700) ($ 22,900) $ 23,900
=========== =========== =========== ===========
Income (loss) per
share:
Earnings (loss) per
common and common
equivalent share:
Primary -- ($ 01) ($ 01) $ 01
Assuming full
dilution -- ($ 01) -- --
Shares used in
computing earnings
per common and
common equivalent
share:
Primary 3,710,709 3,710,709 3,710,709 3,710,709
=========== =========== =========== ===========
Assuming full
dilution 6,857,209 6,857,209 6,857,209 6,857,209
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part hereof.
<PAGE>
THE MINI GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
July 31,
----------------------------
1996 1995
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,800 ($54,700)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization (1,500) (1,000)
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable 74,400 (18,600)
(Increase) decrease in inventories 27,600 (4,700)
Decrease in prepaid expenses and other assets 2,500 (400)
Increase (decrease) in accounts payable (64,000) 54,300
Increase (decrease in accrued expenses (10,900) 27,500
-------- --------
Net cash provided by operating activities 29,900 2,400
-------- --------
Cash flows from financing activities:
Increase in loans from officers 6,500 --
Reduction in long-term debt (37,200) (500)
-------- --------
Net cash (used) by financing activities (30,700) (500)
-------- --------
Increase (decrease) in cash (800) 1,900
Cash at beginning of period 11,100 11,900
-------- --------
Cash at end of period $ 10,300 $ 13,800
======== ========
Supplemental information:
Interest expenses paid $ 9,200 $ 5,200
Federal income tax -- --
</TABLE>
The accompanying notes are an integral part hereof.
<PAGE>
THE MNI GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1996
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial position
of the company as of July 31, 1996, and the results of its operations and cash
flows for the six months ended July 31, 1996 and 1995. Such financial statements
have been condensed in accordance with the applicable regulations of the
Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements for the year
ended January 31, 1996, which is included in its Form 10K filed in April 1996.
The results of operations for the period ended July 31, 1996 are not necessarily
indicative of the operating results for the full year.
1. Income per Share:
Income per share is computed on the weighted average number of shares
outstanding. All outstanding options and warrants have been included in the
computation of the earnings per share for the six months ended July 31, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
July 31, 1996
Results of Operations
Seasonal fluctuations and an overstock of network distributor affiliates
contributed to a downtrend in sales, resulting in a quarterly loss.
Sales for the three months ended July 31, 1996 were $195,200 as compared with
sales of $447,800 for the comparable period in 1995, a decrease of 56.4%. Cost
of sales decreased from $290,500 for the three months ended July 31, 1995, or
64.9% of sales, to $108,800, or 55.7% of sales, for the comparable period in
1996. Selling, general and administrative expenses decreased 16.6% to $105,100
from $126,100. For the three months ended July 31, 1996, the Company incurred an
operating loss of $18,700 and a net loss of $22,900, or ($.01) per share, as
compared to an operating income of $29,500 and a net income of $23,900, or $.01
per share, for the comparable period of 1995.
Interest expense was $4,200 for the three months ended July 31, 1996 as compared
to $5,600 during the comparable period of 1995.
Sales for the six months ended July 31, 1996 were $596,400 as compared with
sales of $628,000 for the comparable period in 1995, a decrease of 5%. Cost of
sales decreased from $409,000 for the six months ended July 31, 1995 or 65.1% of
sales, to $358,500, or 60.1% of sales, for the comparable period in 1996.
Selling, general and administrative expenses decreased 12.6% to $226,900 from
$259,700. For the six months ended July 31, 1996, the Company incurred an
operating income of $11,000 and a net income of $1,800 or $- per share, as
compared to an operating loss of $43,700 and a net loss of $54,700 or ($.01) per
share, for the comparable period of 1995.
Interest expense was $9,200 for six months ended July 31, 1996, as compared to
$11,000 during the comparable period of 1995.
Liquidity and Capital Resources
At July 31, 1996 the Company had cash of $10,300 as contrasted with cash of
$11,100 on January 31, 1996. There is no assurance that the Company will be able
to obtain sufficient cash to fund its operations. Management believes that the
Company requires additional financing to conduct its operations on a profitable
basis and to develop and market additional products and programs. The Company is
engaged in an effort to obtain such funding.
<PAGE>
PART II - OTHER INFORMATION
Not Applicable
<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.
THE MNI GROUP INC.
(registrant)
September 13, 1996 By: /s/Arnold M. Gans
-----------------
Arnold M. Gans
President
(Principal Operating Officer
and Principal Accounting and
Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> JUL-31-1996
<CASH> 10300
<SECURITIES> 0
<RECEIVABLES> 51800
<ALLOWANCES> 0
<INVENTORY> 56500
<CURRENT-ASSETS> 13900
<PP&E> 4000
<DEPRECIATION> 0
<TOTAL-ASSETS> 152000
<CURRENT-LIABILITIES> 404000
<BONDS> 0
0
0
<COMMON> 7238900
<OTHER-SE> (7781300)
<TOTAL-LIABILITY-AND-EQUITY> 152000
<SALES> 596400
<TOTAL-REVENUES> 596400
<CGS> 358500
<TOTAL-COSTS> 585400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9200
<INCOME-PRETAX> 1800
<INCOME-TAX> 0
<INCOME-CONTINUING> 1800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1800
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
