FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C, 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal year ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission File No. 33-8070-LA
MAXI GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 87-0420448
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
10 West 100 South, Ste 450
Salt Lake City, Utah 84101
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 355-0252
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 _____
The aggregate market value of the common voting stock held by
non-affiliates as of March 31, 1997: Not Determinable.
Shares outstanding of the Registrant's common stock as of December 31,
1996: 23,925,000
The issuer had no significant revenue for its fiscal year ended December 31,
1996.
<PAGE>
PART I
Item 1. Description of Business.
(a) General Development of Business.
Maxi Group, Inc. (the "Registrant" or "Company"), was incorporated under
the laws of the State of Nevada on June 17, 1986. The Registrant was
organized to raise capital and then seek out, investigate and acquire any
suitable asset, property or other business opportunity without regard to any
specific business or industry.
In connection with its corporate purposes, the Registrant effected a
public offering of its $.001 par value common stock which became effective
January 5, 1988, pursuant to which it sold 2,155,000 shares of common stock
and raised gross proceeds of $107,750. This offering was closed on April 22,
1988. This offering was registered under the Securities Act of 1933 pursuant
to a Registration Statement on Form S-18 which was filed with the Securities &
Exchange Commission at the regional office in Los Angeles, California.
Subsequent to the close of the offering, the Registrant has been in the
process of investigating potential acquisitions, but has not made any
acquisition. The Company has not yet engaged in any significant business
activities.
The Company formed a wholly-owned subsidiary, Zoe Capital Corp., a public
blind pool (blank check) company, for the purpose of allowing the shareholders
of the company to participate in another company which would seek a business
acquisition of its own. This was intended to diversify the number and type of
acquisitions which can potentially benefit the shareholders of the Company.
In connection with its formation, Zoe Capital Corp. issued 3,655,000 shares of
common stock to the Company in exchange for $30,000. The shares were issued
as units with warrants to purchase another 3,655,000 shares of common stock at
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$1.00 per share. The Company distributed all 3,655,000 of the Zoe units to
its shareholders on a 1 for 1 basis (one Zoe unit for every one Maxi share).
The shares were distributed at no cost to the individual Maxi Group
shareholders who were shareholders of record as of June 19, 1989, the Record
Date.
(b) Financial Information about Industry Segments.
The Registrant does not presently have separate industry
segments.
(c) Narrative Description of the Business.
General Discussion
The Company's business plan is to seek one or more potential business
ventures, anywhere in the United States, which, in the opinion of management
may warrant involvement by the Company. The Company will only acquire
businesses which can generate or provide audited financial statements. This
will limit the types of businesses which the Company could acquire to those
firms which have previously had audited financial statements. The Company
recognizes that because of its limited financial, managerial and other
resources, the number of suitable potential business ventures which may be
available to it will be extremely limited. The Company's principal business
objective will be to seek long-term growth potential in the business venture
in which it participates rather than to seek immediate, short-term earnings.
In seeking to attain the Company's business objective, it will not restrict
its search to any particular business or industry, but may participate in
business ventures of essentially any kind or nature, including, but not
limited to, finance, high technology, manufacturing, natural resources,
service, research and development, communications, insurance, brokerage,
transportation and others. Management's discretion is unrestricted and it may
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participate in any business venture whatsoever, which may meet the business
objectives discussed herein. It is emphasized that the business objectives
discussed are extremely general and are not intended to be restrictive upon
the discretion of management.
The Company will seek one or more potential business ventures from its
known sources, but will rely heavily on personal contacts of its officers and
directors as well as indirect associations between them and other business and
professional people. It is not anticipated that the Company will engage
professional firms specializing in business acquisitions or reorganizations.
In some instances, the Company may publish notices or advertisements seeking a
potential business venture in financial or trade publications.
The Company will not restrict its search to any specific kind of firms,
but may acquire a venture in its preliminary or development stage, may
participate in a business which is already in operation or in a business in
various stages of its corporate existence. It is impossible to predict at
this stage the status of any venture in which the Company may participate, in
that the venture may need additional capital, may merely desire to have its
shares publicly traded, or may seek other perceived advantages which the
Company may offer. In some instances, the business endeavors may involve the
acquisition of or merger with a corporation which does not need substantial
additional cash but which desire to establish a public trading market for its
common stock.
Firms which seek the Company's participation in their operations through
a reorganization, asset acquisition, or some other means may desire to do so
to avoid what such firms may deem to be adverse factors related to undertaking
a public offering. Such factors include substantial time requirements and
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legal costs, along with other conditions or requirements imposed by various
state laws.
To a large extent, a decision to participate in a specific business
endeavor may be made upon management's analysis of the quality of the other
firm's management and personnel, the anticipated acceptability of new products
or marketing concepts, the merit of technological changes, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is anticipated
that the results of a specific firm to date may not necessarily be indicative
of the potential for the future because of the requirement to substantially
shift marketing approaches, expand significantly, change product emphasis,
change or substantially augment management, and other factors. Because the
Company may participate in business endeavors with newly organized firms or
with. firms which are entering a new phase of their growth, it should be
emphasized that the Company will incur further risks since management in many
instances will not have proved its abilities or effectiveness, the eventual
market of such firm's product or services will likely not be established, and
the profitability of the firm will be unproved and cannot be predicted.
As part of the Company's investigation, officers and directors will meet
personally with management and key personnel of the firm sponsoring the
business opportunity, may visit and inspect material facilities, obtain
independent analysis or verification of certain information provided, check
references of management and key personnel, and conduct other reasonable
measures, to the extent of the Company's limited financial resources and
management and technical expertise.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of available
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facts, without reliance upon any single factor as controlling.
It is anticipated that business endeavors will be available to the
Company from various sources, including its officers and directors,
professional advisors, securities broker-dealers, venture capitalists, members
of the financial community, and other who may present unsolicited proposals.
In certain circumstances, the Company may agree to pay a finder's fee or to
otherwise compensate investment banking or other services provided by persons
who are unaffiliated with the Company but who submit a potential business
endeavor in which the Company participates. No such finder's or other fees
will be paid to any person who is an officer, director, owner of record or to
the knowledge of the Company owner beneficially, of 10% or more of the
Company's issued and outstanding stock, without the approval of a majority of
disinterested shareholders.
The Company may acquire a business venture by conducting a reorganization
involving the issuance of securities in the Company. Due to the requirements
of certain provisions of the Internal Revenue Code of 1954 (as amended) in
order to obtain certain beneficial tax consequences in such reorganizations,
the number of shares held by all of the present shareholders of the Company
prior to such transaction or reorganization, including persons purchasing
shares in this offering, may be substantially less than the total outstanding
shares held by such shareholders in any reorganized entity. As noted above,
such a transaction may be based upon the sole determination of management
without any vote or approval by the shareholders of the Company. The result
of any such reorganization could be additional dilution to the shareholders of
the Company prior to such reorganization. If the Company were to issue
substantial additional securities in any such reorganization, or otherwise,
such issuance may have an adverse effect on any trading market which may
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develop in the Company's securities in the future.
It is anticipated that the investigation of specific business endeavors
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business endeavor, the costs
theretofore incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a
specific business venture, the failure to consummate that transaction may
result in the loss to the Company of the related costs incurred.
The Company will not participate in a business endeavor wherein it
invests the proceeds of this offering in an affiliate of the Company.
The Issuer has not yet engaged in any business activities. The Company
has no formal business plan or any particular area of business which it
intends to engage. Management of the Company will attempt to acquire on
behalf of the Company assets, properties and/or ongoing businesses which it
believes are potential for successful development. This may include
businesses or assets related to manufacturing, retail and wholesale sales,
industrial development, and natural resource development or any other field of
business or endeavor which Management of the Company may encounter. Management
of the Company have not adopted any formal business plan or conducted any
market studies with respect to any business or industry. Management have made
the decision to pursue a public offering at this time inasmuch as it believes
that if it has funds on hand it may be able to act more quickly and take
advantage of business opportunities that may not be able to be postponed
pending a public offering. No representation is made that Management of the
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Company have any particular expertise in connection with the proposed
activities of the Company or any particular industry or business field.
Management of the Company may rely on independent experts or consultants in
any business field in connection with their examination and investigation of
potential acquisitions.
Management of the Company presently have no specific assets, properties
or business operation which it has in mind for potential acquisition nor does
it have any particular areas of business or industry in which it intends to
look for such business acquisitions.
Office Facilities and Employees
The Company has no office facilities or employees. The Company uses the
business address of its Secretary, who also provides accounting services,
clerical and secretarial help, for which the Company pays $100 per month.
Item 2. Properties.
The Registrant has no significant properties or assets.
Item 3. Legal Proceedings.
There are not currently any material pending legal proceedings, to which
the registrant is a party or of which any of its property is subject and no
such proceedings are known to the registrant to be threatened or contemplated
by or against it.
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Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the security holders, through
solicitation of proxies or otherwise during the 4th quarter of the fiscal year
covered by this report.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
(a) Market Information.
The registrant's common stock has not been publicly traded.
(b) Holders.
The approximate number of holders of the registrant's common stock as of
May 31, 1996, is 15.
(c) Dividends.
The registrant has not paid any cash dividends to date and does not
anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of the Company's business.
The Company is authorized by its certificate of incorporation to issue up
to 100,000,000 shares of common stock, $.001 par value.
All shares of stock, when issued, will be fully-paid and nonassessable.
All shares are equal to each other with respect to voting, liquidation and
dividend rights. Holders of shares of common stock are entitled to one vote
for each share they own at any stockholders' meeting. Holders of shares of
common stock are entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available therefor, and upon
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liquidation are entitled to participate pro-rata in a distribution of assets
available for such a distribution to stockholders. There are no conversion,
pre-emptive or other subscription rights or privileges with respect to any
shares. Reference is made to the Company's Articles of Incorporation together
with the Amendments thereto and its By-Laws as well as to the applicable
statutes of the State of Nevada for a more complete description of the rights
and liabilities of holders of common stock. The common stock of the Company
does not have cumulative voting rights which means that the holders of more
than 50% of the shares voting for the election of directors may elect all of
the directors if they choose to do so. In such event, the holders of the
remaining shares aggregating less than 50% will not be able to elect any
directors.
Item 6 . Management's Discussion and Analysis or Plan of Operation.
The Company was formed to effectuate a public stock offering and then
to look for potential acquisitions. It has not yet made any acquisitions. The
Company has no significant assets at the present time except for cash in the
approximate amount of $3,000 at December 31, 1995.
The Company's plan of operations is to actively seek a business
combination with an ongoing private business enterprise, although no specific
combination is presently contemplated.
Item 7. Financial Statements.
See attached financial statements.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
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During the two most recent fiscal years, there has not been any change
in the principal independent accountant for the registrant, and there has been
no disagreement on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
(a) Identification of Directors.
The current directors of the registrant, who will serve until the next
annual meeting, or until their successors are elected or appointed and
qualified, are set forth below:
YEAR FIRST ELECTED
NAME AGE AS DIRECTOR POSITION
---- --- ------------------ --------------------
Robert W. Mann 48 Since Inception President and
Director
Gary B. Peterson 49 Since Inception Secretary/
Treasurer and
Director
(b) Identification of Executive Officers.
Same as above.
(c) Significant Employees.
The registrant has no significant employees other than its officers and
directors.
(d) Family Relationships.
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None
(e) Business Experience.
(1) Background
Robert W. Mann, graduated from Harvard University in 1970. He received
his MBA in finance at Northeastern University (Boston, Mass.) in 1973, his
J.D. from Southwestern University (Los Angeles) in 1977 and an LLM in taxation
from New York University in 1980. Since 1980 he has engaged in the private
practice of law in Los Angeles specializing in corporate taxation and finance.
At the present time Mr. Mann's principal efforts are devoted to managing his
own financial affairs.
Gary B. Peterson, is currently associated with the CPA firm of Smith &
Deacon and is also functioning as the chief financial officer of Digitran
Systems, Inc., a public company. During 1995 and 1996, he was the chief
executive officer of Data Security Corporation, a public company. From 1982
through 1995, Mr. Peterson was the shareholder/officer in the Utah C.P.A. firm
of Peterson, Siler & Stevenson. Mr. Peterson is qualified to practice as a
CPA in California and Utah and is a member of the Utah Society of Certified
Public Accountants and the American Institute of CPA's. Prior to starting his
own practice in 1982 he worked as a tax senior and manager with Price
Waterhouse & Company from 1972 to 1976, Touche Ross & Company from 1976 to
1977 and Charles Huber & Associates from 1977 to 1978. Mr. Peterson worked as
a controller for Newbery Engineering and Construction Company from 1978 to
1982, where he was responsible for all of the company's financial matters.
Mr. Peterson graduated with honors from Brigham Young University in Provo,
Utah in 1972. Mr. Peterson is the President and a Director of Capital
Growth, Inc., a company which effectuated a Regulation A blind pool/blank
check public offering. Mr. Peterson's primary obligation will be to take
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potential acquisitions first to Capital Growth. His principal role with Maxi
Group is to handle its financial, recordkeeping and bookkeeping affairs and to
review potential acquisitions from a financial point of view.
(2) Directorships
Except as described herein, none of the registrant's directors, nor any
person nominated or chosen to become a director holds any other directorships
in any other company with class of securities registered pursuant to Section
12 of the Exchange Act or subject to the requirements of Section 15(d) of such
Act or any company registered as an investment company under the Investment
Company Act of 1940.
(f) Involvement in Certain Legal Proceedings.
None of the officers or directors have been involved in any material
legal proceedings which occurred within the last five years of any type as
described in Section 401(f) of Regulation S-K.
Item 10. Executive Compensation.
(a) Cash Compensation.
Other than the $100 per month being paid to the Company's president for
use of office facilities and accounting services, during the last fiscal year
none of the registrant's officers or directors individually received any
salary, wage or other compensation. During 1996 a total of $1,200 was paid to
the Company's president pursuant to this arrangement. During the current
fiscal year the registrant will continue this arrangement but has no present
plans to pay any other compensation to officers or directors.
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(b) Compensation Pursuant to Plans.
There are presently no ongoing pension or other plans or arrangements
pursuant to which remuneration is proposed to be paid in the future to any of
the officers and directors of the registrant.
(c) Other Compensation.
None.
(d) Compensation to Directors.
None.
Item 11. Security Ownership of Certain Beneficial Owners &
Management.
The following table sets forth the beneficial stock ownership of all
persons known by the registrant to own more than 5% of the outstanding common
stock, and the officers and directors, both individually and as a group.
Name and Address Amount and Nature Percent
of Beneficial Position with of Beneficial of
Owner Company Ownership Class
- -------------------------------------------------------------------------
Robert W. Mann, President and 18,270,000 (1) 83.3%
737 Westholme Ave. Director
Los Angeles, CA 90024
Gary B. Peterson Secretary 18,750 --
2726 E. 2500 N. Treasurer and
Layton, Utah 84041 Director
All officers & directors
as a group 2 persons 18,288,750 83.3%
(1) These shares are owned by a trust, of which, Mr. Mann is the trustee.
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Changes in Control.
There are no arrangements including pledges by any person of securities
of the Company, the operation of which may at a subsequent date result in a
change in control of the Company.
Item 12. Certain Relationships & Related Transactions.
For the year ended December 31, 1995, the Company incurred professional
fees of $3,927 to an accounting firm whose managing partner during part of
1995 was also an officer of the Company. During 1996, the Company's debt owed
for such accounting services and for similar services provided in prior years
was transferred from the accounting firm to such officer. At December 31,
1996, $5,420 was owed to the officer.
The Company, during 1996, issued 2,000,000 shares to the Company's
President for $2,000. The Company uses the office of an officer and director
of the Company, who also provides accounting, clerical and secretarial
services as needed, for $100 per month. The terms of these transactions were
not determined on an arms length basis.
No officer, director, promoter, or affiliate of the Issuer has or
proposes to have any direct or indirect material interest by security
holdings, contracts, options, or otherwise in the Issuer or any asset proposed
to be acquired by the Issuer other than as described herein.
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) The following documents are filed as a part of this
report:
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1. Audited Financial Statements are included as part of this report.
2. Financial Statement Schedules.
None.
3. Exhibits.
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K.
The Company filed no reports on Form 8-K during the last quarter of the
year ended December 31, 1994. However, the registrant filed a report dated
May 3, 1994, which reported a change of auditors as of May 3, 1994.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
MAXI GROUP, INC.
Date: April 11, 1997 /s/ Robert W. Mann
-------------------------- -------------------------------
Robert W. Mann, President
Date: April 11, 1997 /s/ Gary B. Peterson
-------------------------- -------------------------------
Gary B. Peterson, Secretary-
Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: April 11, 1997 /s/ Robert W. Mann
-------------------------- -------------------------------
Robert W. Mann, Director
Date: April 11, 1997 /s/ Gary B. Peterson
-------------------------- -------------------------------
Gary B. Peterson, Director
17
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MAXI GROUP, INC.
(A Development Stage Company)
Index
Page
Independent auditors' report F-1
Balance sheet, December 31, 1996 F-2
Statement of operations for the years
ended December 31, 1996 and 1995 and
cumulative amounts since inception F-3
Statement of stockholders' deficit
from inception F-4
Statement of cash flows for the years
ended December 31, 1996 and 1995 and
cumulative amounts since inception F-6
Notes to financial statements F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Maxi Group, Inc.
We have audited the accompanying balance sheet of Maxi
Group, Inc., (a development stage company) as of
December 31, 1996, and the related statements of operations,
stockholders' equity (deficit) and cash flows for the years
ended December 31, 1996 and 1995 and the cumulative amounts
since inception. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Maxi Group, Inc., (a development stage company)
as of December 31, 1996 and the results of its operations
and its cash flows for the years ended December 31, 1996 and
1995 and the cumulative amounts since inception in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
As discussed in Note 7 to the financial statements, the
Company has suffered recurring losses and has a
stockholders' deficit. These conditions raise substantial
doubt about its ability to continue as a going concern.
Management's plans regarding these matters also are
described in Note 7. The financial statements do not
include any adjustments that might result from the outcome
of this uncertainty.
TANNER+Co.
Salt Lake City, Utah
February 14, 1997
F-1
<PAGE>
MAXI GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
December 31, 1996
Assets
Current assets -
cash $ 2,475
=============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable 4,220
Accounts payable to related party 5,420
-------------
Total current liabilities 9,640
-------------
Stockholders' deficit:
Common stock, $.001 par value; 100,000,000
shares authorized; 23,925,000 shares issued
outstanding 23,925
Additional paid-in capital 47,042
Deficit accumulated during the development stage (78,132)
-------------
Total stockholders' deficit (7,165)
-------------
Total liabilities and stockholders' deficit $ 2,475
=============
See accompanying notes to financial statements. F-2
<PAGE>
MAXI GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
Years Ended December 31,
Cumulative
Amounts
Since
1996 1995 Inception
-----------------------------------
Revenue - interest income $ 90 $ 158 $ 7,069
-----------------------------------
Expenses:
Professional fees 1,620 3,927 53,854
Administrative expenses 2,238 702 13,670
Travel expenses - - 17,517
Amortization expense - - 160
-----------------------------------
Total expenses 3,858 4,629 85,201
-----------------------------------
Loss before income taxes (3,768) (4,471) (78,132)
Income tax expense - - -
-----------------------------------
Net loss $ (3,768)$ (4,471)$ (78,132)
===================================
Loss per share $ (.00)$ (.00)$ (.01)
===================================
Weighted average number of shares
outstanding 22,591,000 21,925,000 9,876,666
===================================
See accompanying notes to financial statements. F-3
<PAGE>
MAXI GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders' Equity (Deficit)
From Inception (June 17, 1986) Through
December 31, 1996
<TABLE>
<S> <C> <C> <C> <C> <C>
Deficit
Common Accumulated
Stock Additional Stock During the
Number of at Paid-In Subscription Development
Shares Par Value Capital Receivable Stage
---------------------------------------------------------------
Balance, June 17, 1986 - $ - $ - $ - $ -
Shares issued to initial
stockholders for cash,
June 1986, at $.005 3,000,000 3,000 12,000 - -
Net loss for the period ended
December 31, 1986 - - - - (129)
---------------------------------------------------------------
Balance, December 31, 1986 3,000,000 3,000 12,000 - (129)
Contribution of initial
stockholders' shares for
cancellation (1,500,000) (1,500) 1,500 - -
Net loss for the year ended
December 31, 1987 - - - - (289)
---------------------------------------------------------------
Balance, December 31, 1987 1,500,000 1,500 13,500 - (418)
Shares issued pursuant to
public offering for cash, April
1988, at $.05 per share 2,155,000 2,155 63,325 - -
Net loss for the year ended
December 31, 1988 - - - - (19,221)
---------------------------------------------------------------
Balance, December 31, 1988 3,655,000 3,655 76,825 - (19,639)
Distribution of stock - - (30,000) - -
Net loss for the year ended
December 31, 1989 - - - - (16,066)
---------------------------------------------------------------
Balance, December 31, 1989 3,655,000 3,655 46,825 - (35,705)
Net loss for the year ended
December 31, 1990 - - - - (8,830)
---------------------------------------------------------------
Balance, December 31, 1990 3,655,000 3,655 46,825 - (44,535)
</TABLE>
See accompanying notes to financial statements. F-4
<PAGE>
MAXI GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders' Equity (Deficit)
Continued
<TABLE>
<S> <C> <C> <C> <C> <C>
Deficit
Common Accumulated
Stock Additional Stock During the
Number of at Paid-In Subscription Development
Shares Par Value Capital Receivable Stage
---------------------------------------------------------------
Shares issued in private
placement 2,000,000 2,000 8,000 (9,000) -
Net loss for the year ended
December 31, 1991 - - - - (7,238)
---------------------------------------------------------------
Balance, December 31, 1991 5,655,000 5,655 54,825 (9,000) (51,773)
Payments received on stock
subscription receivable - - - 1,567 -
Net loss for the year ended
December 31, 1992 - - - - (5,256)
---------------------------------------------------------------
Balance, December 31, 1992 5,655,000 5,655 54,825 (7,433) (57,029)
Cancellation of 2,000,000
shares, June 1993 (2,000,000) (2,000) (5,433) - -
Shares issued in private
placement, June 1993 18,270,000 18,270 (2,350) 7,433 -
Net loss for the year ended
December 31, 1993 - - - - (5,506)
---------------------------------------------------------------
Balance, December 31, 1993 21,925,000 21,925 47,042 - (62,535)
Net loss for the year ended
December 31, 1994 - - - - (7,358)
---------------------------------------------------------------
Balance, December 31, 1994 21,925,000 21,925 47,042 - (69,893)
Net loss for the year ended
December 31, 1995 - - - - (4,471)
---------------------------------------------------------------
Balance, December 31, 1995 21,925,000 21,925 47,042 - (71,364)
Shares issued in private
placement, August 1996 2,000,000 2,000 - - -
Net loss for the year ended
December 31, 1996 - - - - (3,768)
---------------------------------------------------------------
Balance, December 31, 1996 23,925,000 $ 23,925 $ 47,042 $ - $ (78,132)
===============================================================
</TABLE>
See accompanying notes to financial statements. F-5
<PAGE>
MAXI GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
Cumulative
Amounts
Since
1996 1995 Inception
-----------------------------------
Cash flows from operating activities:
Net loss $ (3,768) $ (4,471) $ (78,132)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization expense - - 160
Decrease in accounts payable - 1,088 4,220
-----------------------------------
Net cash used in
operating activities (3,768) (3,383) (73,752)
-----------------------------------
Cash flows from investing activities:
Organization costs - - (160)
Investment in subsidiary - - (30,000)
Increase in related party payable 1,200 - 5,420
-----------------------------------
Net cash provided by (used in)
investing activities 1,200 - (24,740)
-----------------------------------
Cash flows from financing activities:
Proceeds from initial issuance of
common stock - - 15,000
Net proceeds from issuance of
common stock 2,000 - 94,377
Public offering costs - - (8,410)
-----------------------------------
Net cash provided by
financing activities 2,000 - 100,967
-----------------------------------
Net (decrease) increase in cash (568) (3,383) 2,475
Cash, beginning of period 3,043 6,426 -
-----------------------------------
Cash, end of period $ 2,475 $ 3,043 $ 2,475
===================================
See accompanying notes to financial statements. F-6
<PAGE>
MAXI GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996 and 1995
1. Summary of Significant Accounting Policies
Organization
The Company was organized under the laws of the State of Nevada on June
17, 1986. The Company has not commenced planned principal operations.
The Company proposes to seek business ventures which will allow for
long-term growth. Further, the Company is considered a development
stage company as defined in SFAS No. 7 and has not, thus far, engaged in
business activities of any kind. The Company has, at the present time,
not paid any dividends and any dividends that may be paid in the future
will depend upon the financial requirements of the Company and other
relevant factors.
Cash and Cash Equivalents
Cash equivalents are generally comprised of certain highly liquid
investments with maturities of less than three months.
Loss Per Share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding.
Use of Estimates in Preparation of Financial statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. Related Party Transactions
Commencing January 1, 1996, the Company agreed to pay $100 per month to
a shareholder, officer and director of the Company for accounting and
office expenses. For the year ended December 31, 1996, the Company
incurred expenses under the agreement of $1,200. At January 1, 1996,
the Company owed $8,440 to an accounting firm whose managing partner was
an officer and director of the Company. On January 1, 1996, the officer
terminated his employment with the accounting firm and at the time of
termination agreed to accept one-half of the outstanding obligation,
with the balance to be paid to the accounting firm. At December 31,
1996, the Company owed $5,420 to the officer.
F-7
<PAGE>
MAXI GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
2. Related Party Transactions - Continued
During the year ended December 31, 1993, the Company issued and
additional 18,270,000 shares of restricted common stock to the Company's
president in exchange for $18,270. During the year ended December 31,
1996, the Company issued an additional 2,000,000 shares of restricted
common stock to the Company's president for $2,000.
3. Common Stock
The initial issuance of the Company's common stock occurred in June
1986. During April 1988, the Company completed the sale of 2,155,000
shares of its previously authorized but unissued common stock. This
offering was registered with the Securities and Exchange Commission on
Form S-18, in accordance with the Securities Act of 1933. The stock was
sold at an offering price of $.05 per share. Proceeds net of offering
costs amounted to $65,480. The proceeds were deposited in an interest
bearing account.
In November 1991, the Company issued 2,000,000 shares at $.005 per share
to the Company's president. The Company received $1,000 in cash and
$9,000 receivable due on demand for such issuance.
During the year ended December 31, 1993, the Company received back and
canceled 2,000,000 shares of common stock and the related subscription
agreement with an officer of the Company. The amounts previously paid
for the stock ($2,567) were applied to the purchase of 18,270,000 shares
of restricted common stock during June 1993 by the same officer.
In November 1996, the Company issued 2,000,000 shares at $.001 per share
to the Company's president. The Company received $2,000 in cash for
such issuance.
4. Investment in Subsidiary
In January 1989, the Company purchased 3,655,000 shares of Zoe Capital
Corp., (subsidiary) common stock for $30,000. The shares purchased by
the Company were, in turn, registered with the Securities and Exchange
Commission, effective June 5, 1989, and distributed to the Company's
shareholders effective June 19, 1989. Such distribution is reflected as
a charge to additional paid-in capital.
F-8
<PAGE>
MAXI GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
5. Supplemental Cash Flow Disclosure
Cash paid for interest and income taxes are as follows:
Cumulative
Amounts
Since
Year Ended June 17, 1986
December 31, (Date of
1996 1995 Inception)
------------------------------------
Interest $ - $ - $ -
====================================
Income taxes $ - $ - $ -
====================================
6. Income Taxes
The difference between income taxes at statutory rates for 1996 and 1995
and the amount presented in the financial statements is the increase in
the tax valuation allowance, which offsets the income tax benefit for
the operating loss.
Deferred tax assets at December 31, 1996 are as follows:
Operating loss carryforward $ 27,000
Valuation allowance (27,000)
------------
$ -
============
The Company has net operating loss carryforwards of approximately
$78,000, which begin to expire in the year 2001. The amount of net
operating loss carryforward that can be used in any one year will be
limited by significant changes in ownership of the Company and by the
applicable tax laws which are in effect at the time such carryforwards
can be utilized.
F-9
<PAGE>
MAXI GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
7. Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. Because of significant
losses, the excess of current liabilities over current assets, and a
stockholders' deficit, the Company's ability to continue as a going
concern is dependent on attaining future profitable operations, and
obtaining additional financial and/or capital. As shown in the
statement of operations, the Company reported a net loss of $3,768 for
the year ended December 31, 1996, and as of December 31, 1996, has a
deficit in equity of $7,165.
Management of the Company is currently developing a plan to attempt to
resolve these uncertainties. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
F-10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MAXI GROUP,
INC. DECEMBER 31, 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,475
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,475
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,475
<CURRENT-LIABILITIES> 9,640
<BONDS> 0
0
0
<COMMON> 23,925
<OTHER-SE> (31,090)
<TOTAL-LIABILITY-AND-EQUITY> 2,475
<SALES> 90
<TOTAL-REVENUES> 90
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,768)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,768)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,768)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
