<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, 1997
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.
3,710,709 shares of Common Stock at June 10, 1997
<PAGE>
THE MNI GROUP, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
April
30, January 31,
1997 1997
---------- ----------
(Unaudited)
Current assets:
Cash $ 25,200 $ 13,000
Accounts receivable (net of allowance) 38,400 125,900
Inventories 102,800 61,400
Other current assets 10,500 11,900
--------- ---------
Total current assets 176,900 212,200
--------- ---------
Furniture, fixtures and leasehold
improvements (net) 2,600 2,900
Other assets 15,500 15,500
--------- ---------
18,100 18,400
--------- ---------
$ 195,000 $ 230,600
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable $ 81,700 $ 92,600
Accrued expenses and other liabilities 335,600 308,300
Note payable 35,700 35,700
Due to officer 38,700 71,100
--------- ---------
Total current liabilities 491,700 507,700
--------- ---------
Long-term debt (net of current portion) 101,800 113,700
Excess of purchase price over basis of assets
acquired net of amortization 158,500 159,600
--------- ---------
260,300 273,300
--------- ---------
Stockholders' (deficiency):
Common stock, no par value; 10,000,000 shares
authorized; shares issued and outstanding -
April 30, 1997 and January 31, 1997 - 3,710,709 7,248,900 7,248,900
Accumulated deficit ( 7,805,900) ( 7,799,300)
---------- ----------
( 557,000) ( 550,400)
---------- ----------
$ 195,000 $ 230,600
---------- ----------
---------- ----------
The accompanying notes are an integral part hereof.
<PAGE>
THE MNI GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
APRIL 30,
------------------------
1997 1996
---------- ----------
(Unaudited) (Unaudited)
Sales $ 302,600 $ 401,200
---------- ----------
Cost of sales and operating expenses:
Cost of merchandise sales 180,900 249,700
Selling, general and administrative expenses 123,400 121,800
---------- ----------
304,300 371,500
---------- ----------
Income (loss) from operations ( 1,700) 29,700
Other expense:
Interest expense ( 5,000) ( 5,000)
--------- --------
Net income (loss) ($ 6,700) $ 24,700
--------- ---------
--------- ---------
Income (loss) per share:
Earnings (loss) per common and
common equivalent share:
Primary $ - $ .02
Assuming full dilution - -
Shares used in computing earnings per
common and common equivalent share:
Primary 3,710,709 3,710,709
--------- ---------
--------- ---------
Assuming full dilution 6,857,209 6,857,209
--------- ---------
--------- ---------
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,
------------------------
1997 1996
---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($ 6,700) $ 24,700
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization ( 700) ( 800)
Change in operating assets and liabilities:
(Increase) decrease in accounts receivables 87,500 ( 75,400)
(Increase) decrease in inventories ( 41,400) 9,000
Decrease in prepaid expenses and other assets 1,400 2,800
Increase (decrease) in accounts payable ( 10,900) 51,700
Increase in accrued expenses and other liabilities 27,300 8,200
--------- ---------
Net cash provided by operating activities 56,500 20,200
--------- ---------
Cash flows from financing activities:
Increase in loans from officers - 11,500
Reduction in loans from officers ( 32,400) -
Reduction in long-term debt ( 11,900) ( 28,300)
--------- ---------
Net cash (used) by financing activities ( 44,300) ( 16,800)
--------- ---------
Increase in cash 12,200 3,400
Cash at beginning of period 13,000 11,100
--------- ---------
Cash at end of period $ 25,200 $ 14,500
--------- ---------
--------- ---------
Supplemental information:
Interest expense paid $ 1,131 $ -
Federal income tax - -
</TABLE>
The accompanying notes are an integral part hereof.
<PAGE>
THE MNI GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997
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, 1997, and the results of its
operations and cash flows for the three months ended April 30, 1997 and
1996. 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, 1997, which is included
in its Form 10K filed in May 1997. The results of operations for the
period ended April 30, 1997 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. The inclusion of common stock equivalents (warrants and
options) in this computation would be antidilutive.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
April 30, 1997
Results of Operations
Sales for the three months ended April 30, 1997 decreased to $302,600 as
compared with sales of $401,200 for the comparable period in 1996, a decrease
of 24.5%. Cost of sales decreased from $249,700 for the three months ended
April 30, 1996, or 62.2% of sales, to $180,900, or 59.8% of sales, for the
comparable period in 1997. Selling, general and administrative expenses
increased 1.3% to $123,400 from $121,800.
The Company incurred interest expense of $5,000 in each of the three months
ended April 30, 1997 and 1996, respectively.
For the three months ended April 30, 1997, the Company incurred an operating
loss of $1,700 and a net loss of $6,700, or $ - per share, as compared to an
operating profit of $29,700 and a net profit of $24,700, or $.01 per share,
for the comparable period of 1996.
Liquidity and Capital Resources
At April 30, 1997 the Company had cash of $25,200 as contrasted with cash of
$13,000 on January 31, 1997. 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)
June 10, 1997 By: /s/ Arnold M. Gans
---------------------------------
Arnold M. Gans
President
(Principal Operating Officer
and Principal Accounting and
Financial Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> APR-30-1997
<CASH> 25,200
<SECURITIES> 0
<RECEIVABLES> 38,400
<ALLOWANCES> 0
<INVENTORY> 102,800
<CURRENT-ASSETS> 10,500
<PP&E> 2,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 195,000
<CURRENT-LIABILITIES> 491,700
<BONDS> 0
0
0
<COMMON> 7,248,900
<OTHER-SE> 7,805,900
<TOTAL-LIABILITY-AND-EQUITY> 195,000
<SALES> 302,600
<TOTAL-REVENUES> 302,600
<CGS> 180,900
<TOTAL-COSTS> 180,900
<OTHER-EXPENSES> 123,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,000
<INCOME-PRETAX> (6,700)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,700)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,700)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
