<PAGE>
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 April 30, 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 22-2380325
(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 June 12, 1996
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PART I - FINANCIAL INFORMATION
THE MNI GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
April
30, January 31,
1996 1996
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(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 14,500 $ 11,100
Accounts receivable (net of allowance) 201,600 126,200
Inventories 75,100 84,100
Other current assets 13,600 16,400
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Total current assets 304,800 237,800
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Furniture, fixtures and leasehold improvements (net) 4,400 4,700
Other assets 15,500 15,500
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19,900 20,200
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$ 324,700 $ 258,000
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable $ 184,500 $ 132,800
Accrued expenses and other liabilities 312,100 303,900
Note payable 55,100 55,100
Due to officer 11,500 -
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Total current liabilities 563,200 491,800
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Long-term debt (net of current portion) 118,100 146,400
Excess of purchase price over basis of assets acquired
net of amortization 162,900 164,000
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281,000 310,400
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Stockholders' (deficiency):
Common stock, no par value; 10,000,000 shares
authorized; shares issued and outstanding -
April 30, 1996 and January 31, 1996 - 3,710,709 7,238,900 7,238,900
Accumulated deficit ( 7,758,400) ( 7,783,100)
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( 519,500) ( 544,200)
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$ 324,700 $ 258,000
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</TABLE>
The accompanying notes are an integral part hereof.
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THE MNI GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
April 30,
------------------------
1996 1995
---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Sales $ 401,200 $ 180,200
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Cost of sales and operating expenses:
Cost of merchandise sales 249,700 118,500
Selling, general and administrative expenses 121,800 133,600
Research and development - 1,300
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371,500 253,400
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Income (loss) from operations 29,700 ( 73,200)
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Other expense:
Interest expense ( 5,000) ( 5,400)
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( 5,000) ( 5,400)
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Net income (loss) $ 24,700 ($ 78,600)
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Income (loss) per share:
Earnings (loss) per common and
common equivalent share:
Primary $ .01 ($ .02)
Assuming full dilution - -
Shares used in computing earnings per
common and common equivalent share:
Primary 3,710,709 3,710,709
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Assuming full dilution 6,857,209 6,857,209
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</TABLE>
The accompanying notes are an integral part hereof.
<PAGE>
THE MNI GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
April 30,
------------------------
1996 1995
---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 24,700 ($ 78,600)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization ( 800) ( 600)
Change in operating assets and liabilities:
(Increase) decrease in accounts receivables ( 75,400) 12,600
(Increase) decrease in inventories 9,000 ( 4,000)
Decrease in prepaid expenses and other assets 2,800 8,000
Increase in accounts payable 51,700 24,800
Increase in accrued expenses 8,200 51,600
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Net cash provided by operating activities 20,200 13,800
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Cash flows from financing activities:
Increase in loans from officers 11,500 -
Reduction in long-term debt ( 28,300) -
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Net cash (used) by financing activities ( 16,800) -
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Increase in cash 3,400 13,800
Cash at beginning of period 11,100 11,900
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Cash at end of period $ 14,500 $ 25,700
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Supplemental information:
Interest expense paid $ 5,000 $ 2,400
Federal income tax - -
</TABLE>
The accompanying notes are an integral part hereof.
<PAGE>
THE MNI GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 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 April 30, 1996, and the results of its
operations and cash flows for the three months ended April 30, 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 and notes thereto included in the Company's audited
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 April 30, 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 three months ended April
30, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
April 30, 1996
Results of Operations
The Company has been profitable during this quarter due to increased sales.
Sales for the three months ended April 30, 1996 increased to $401,200 as
compared with sales of $180,200 for the comparable period in 1995, an increase
of 122%. Cost of sales increased from $118,500 for the three months ended April
30, 1995, or 65.8% of sales, to $249,700, or 62.2% of sales, for the comparable
period in 1996. For the three months ended April 30, 1996, the Company incurred
an operating profit of $29,700 and a net profit of $24,700, or $.01 per share,
as compared to an operating loss of $73,200 and a net loss of $78,600, or $.02
per share, for the comparable period of 1995.
Other expense was $5,000 for the three months ended April 30, 1996 as compared
to $5,400 during the comparable period of 1995, a decrease of $400.
Liquidity and Capital Resources
At April 30, 1996 the Company had cash of $14,500 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
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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)
June 13, 1996 By: /s/Arnold M. Gans
------------------------
Arnold M. Gans
President
(Principal Operating Officer
and Principal Accounting and
Financial Officer)
