ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT.
Maxi Group, Inc. (the "Issuer" or "Company"), was incorporated under the laws of the State of Nevada on June 17, 1986. The Issuer 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 Issuer effected a public offering of its $.001 par value common stock in 1988, pursuant to which it sold 2,155,000 shares of common stock and raised gross proceeds of $107,750. 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. Subsequent to the close of the offering, the Issuer 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.
Since its public offering, the Company has issued additional shares of common stock for cash on various occasions in private offerings. At December 31, 2001, the Company had 24,592,500 shares issued and outstanding.
The Company reverse split its common stock on a 10 to 1 basis, reducing the total issued and outstanding to 2,592,500 shares. The Company then issued an additional 22,000,000 shares for a total consideration of $22,000 cash. In conjunction with this, existing management resigned and appointed new management.
(B) BUSINESS OF ISSUER.
None at the present time.
ITEM 2.
ITEM 2. PROPERTIES.
The Issuer has no significant properties or assets. The Company has no office facilities or employees. The Company uses the address of its President.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
There are not currently any material pending legal proceedings, to which the Issuer is a party or of which any of its property is subject and no such proceedings are known to the Issuer to be threatened or contemplated by or against it.
ITEM 4.
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.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET INFORMATION.
The Issuer's common stock has not been publicly traded.
(B) HOLDERS.
The approximate number of record holders of the Issuer's common stock as of June 3, 2002, is 23.
(C) DIVIDENDS.
The Issuer 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 non-assessable. 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 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.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Maxi Group has never engaged in any material operations or had any revenues from operations during the last two fiscal years. The Company is presently attempting to determine which industries or areas where the Company should concentrate its business efforts, and at that determination, will formulate its business plan and commence operations. During the next twelve months, the Company's only foreseeable cash requirements will relate to maintaining the Company in good standing or the payment of expenses associated with reviewing or investigating any potential business venture, which the Company expects to pay from advances from management or shareholders.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS.
MAXI GROUP, Inc. (A Development Stage Company)
INDEPENDENT AUDITORS' REPORT
To the Stockholders and 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, 2001 and 2000, and the related statements of operations, stockholders' deficit and cash flows for the years then ended 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 auditing standards generally accepted in the United States of America. 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, 2001 and 2000 and the results of its operations and its cash flows for the years then ended 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 2 to the financial statements, the Company has suffered recurring losses and has an accumulated 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 2. The financial statements do not include any adjustments that might result form the outcome of this uncertainty.
Tanner + Company Salt Lake City, Utah May 15, 2002
MAXI GROUP, INC.. (A Development Stage Company)
______________________________________________________________________________
See accompanying notes to financial statements.
MAXI GROUP, INC.. (A Development Stage Company)
Statement of Operations
See accompanying notes to financial statements.
MAXI GROUP, INC.. (A Development Stage Company)
Statement of Stockholder's (Deficit) Equity
See accompanying notes to financial statements.
MAXI GROUP, INC.. (A Development Stage Company) Statement of Cash Flows
_______________________________________________ See accompanying notes to financial statements.
MAXI GROUP, INC.. (A Development Stage Company) Notes to Financial Statements
December 31, 2001 and 2000
1. Summary of Significant Accounting Policies
Organization The Company was organized under the laws of the State of Nevada on June 17, 1986 (date of inception). 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 basic loss per common share is based on the weighted average number of shares outstanding during each period.
The computation of diluted loss per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding using the treasury stock method and the average market price per share during the period.
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.
MAXI GROUP, INC.. (A Development Stage Company) Notes to Financial Statements Continued
2. Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Because of significant losses and the lack of any revenue generating activities, the Company's ability to continue as a going concern is dependent on attaining future profitable operations, and obtaining additional financing and/or equity.
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.
3. Related Party Transactions
At December 31, 2001 and 2000 the Company owed a shareholder $4,000 related to cash advances made during the year ended December 31, 1998. The advances are non-interest bearing and have no specific repayment items.
4. Supplemental Cash Flow Disclosure
The Company has not paid any amounts for interest or income taxes during the years ended December 31, 2001 and 2000, and since inception.
____________________________________________________________________
MAXI GROUP, INC.. (A Development Stage Company) Notes to Financial Statements Continued
5. Income Taxes
The difference between income taxes at statutory rates and the amount presented in the financial statements is a result of the following:
The Company has net operating loss carryforwards of approximately $100,000, which begin to expire in 2002. 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. The following approximate amounts will expire over the next five years from the net operating loss carryforward, if not used.
____________________________________________________________________
MAXI GROUP, INC.. (A Development Stage Company) Notes to Financial Statements
_____________ Continued
6 Fair Value of Financial Instruments
The Company's financial instruments consist of cash and payables. The carrying amount of cash and payables approximates fair value because of the short-term nature of these items.
7. Recent Accounting Pronouncements
SFAS No, 140, Accounting for Transfers and Servicing of Accounting Financial Assets and Extinguishments of Liabilities, was issued in September 2000. SFAS No. 140 is a replacement of SFAS No 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Most of the Provisions of SFAS No 125 were carried forward to SFAS No. 140 without reconsideration by the Financial Accounting Standard Board (FASB), and some were changed only in minor ways. In issuing SFAS No. 140, the FASB included issues and decisions that had been addressed and determined since the original publication of SFAS No. 125. SFAS No. 140 is effective for transfers after March 31, 2001. Management does not expect the adoption of SFAS No. 140 to have a significant impact on the financial position or results of operations of the Company. In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, collectively, the Statements. These Statements change the accounting for business combinations, goodwill and intangible assets. Statement 141 eliminates the pooling-of-interests method of accounting for business combinations except for qualifying business combinations that were initiated prior to July 1, 2001. Statement 141 also changes the criteria to recognize intangible assets apart from goodwill. Under Statement 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise. Separable intangible assets that have finite lives will continue to be amortized over their useful lives. The amortization provisions of Statement 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the amortization provisions of Statement 142 are effective upon adoption of Statement 142. Pre-existing goodwill and intangibles will be amortized during the transition period until adoption. Companies are required to adopt Statement 142 in their fiscal year beginning after March 15, 2001. Early adoption is permitted for companies with fiscal years beginning after March 15, 2001. The Company plans to adopt Statement 142 effective July 1, 2002. Goodwill will be tested for impairment at least annually using a two-step process that will start with an estimation of the fair value. The first step will screen for potential impairment, and the second step will measure the amount of impairment, if any. Management does not expect the adoption of SFAS Nos. 141 and 142 to have a significant impact on the financial position or results of operations of the Company.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143. Accounting for Asset Retirement Obligations. This Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. Management does not expect the adoption of SFAS No. 143 to have a significant impact on the financial position or results of operations of the Company.
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for The Impairment of Disposal of Long-Lived Assets. This Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Management does not expect the adoption of SFAS No. 144 to have a significant impact on the financial position or results of operations of the Company.
ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
During the two most recent fiscal years, there has not been any change in the principal independent accountant for the Issuer, 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.
ITEM 9. DIRECTORS, EXECUTIVE OFFICER, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
(A) IDENTIFICATION OF DIRECTORS.
The current directors of the Issuer, who will serve until the next annual meeting, or until their successors are elected or appointed and qualified, are set forth below: Subsequent to the end of the fiscal year, these persons resigned as officers and directors of the Company, and the person named below was appointed in their stead.
(B) IDENTIFICATION OF EXECUTIVE OFFICERS.
Same as above.
(C) SIGNIFICANT EMPLOYEES.
The Issuer has no significant employees other than its officers and directors.
(D) FAMILY RELATIONSHIPS.
None
(E) BUSINESS EXPERIENCE.
(1) Background
Mathew W. Evans, has been employed as a City Planner with the cities of Provo, Utah (April, 1997 - Present) and Riverton, Utah (January, 1995-April, 1997). He received a Bachelor of Science Degree in Geography from Utah State University in Logan, Utah, with emphasis in Rural Planning and Urban Geography, and also received a certificate in Urban and Regional Planning from the University of Utah.
(2) Directorships
Except as described herein, none of the Issuer'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 of 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.
ITEM 10. EXECUTIVE COMPENSATION.
(A) CASH COMPENSATION.
No compensation made.
(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 Issuer.
(C) OTHER COMPENSATION.
None.
(D) COMPENSATION TO DIRECTORS.
None
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT.
The following table sets forth the beneficial stock ownership of all persons known by the Issuer to own more than 5% of the outstanding common stock, and the officers and directors, both individually and as a group.
(1) Includes all shares beneficially owned, regardless of the form of ownership.
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.
ITEM 12. CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS.
During 1999, the Company issued 22,000,000 shares to the Company's President for $22,000. The Company used the office of a former officer and director of the Company, who also provided 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.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
None.
1. Exhibits.
None
Reports on Form 8-K.
The Company filed no reports on Form 8-K during the last quarter of the year ended December 31, 2001.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Issuer has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
MAXI GROUP, INC.
Date: June 4, 2002 /s/ Mathew W. Evans Mathew W. Evans, President