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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                  FOR THE FISCAL YEAR ENDED: JANUARY 31, 2001
                 ----------------------------------------------
OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-18349
                                  -------------

                              GENDER SCIENCES, INC.
                           (F/K/A 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)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 569-1188

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS                    NAME OF EACH EXCHANGE ON WHICH REGISTERED
-------------------                    -----------------------------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                  COMMON STOCK
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                                (TITLE OF CLASS)

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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K/A. [ ]

The number of shares outstanding of the Registrant's common stock is 29,359,680
(as of 4/25/01). The aggregate market value of the voting stock held by
nonaffiliates of the Registrant is $5,578,339.20 (as of 4/25/01).

              APPLICABLE ONLY TO REGISTRANTS 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 [ ]

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<PAGE>

                                Table of Contents


                                      10-K


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         PART I                                                3
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              Item 1                                           3
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              Item 2                                           13
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              Item 3                                           14
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              Item 4                                           14
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         PART II                                               14
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              Item 5                                           14
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              Item 6                                           15
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              Item 7                                           16
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              Item 8                                           F-1
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              Item 9                                           22
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         PART III                                              22
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              Item 10                                          22
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              Item 11                                          23
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              Item 12                                          25
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              Item 13                                          25
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         PART IV                                               26
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              Item 14                                          26
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         EXHIBITS
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                                       2
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                                     PART I

Item 1.  BUSINESS


GENERAL DEVELOPMENT OF BUSINESS / INTRODUCTION

         Gender Sciences, Inc. ("The Company"), (F/K/A as The MNI Group, Inc.),
has primarily been engaged in the development and distribution of nutritional
and health products. The Company has developed a line of proprietary nutritional
supplements for women to be sold under the FemChoice(TM)label or alternatively
to be made under private label for various distribution channels. (See " Network
Marketing"). The Company has also completed the development of an internet site,
His and Her Medicine.com, which is intended to provide comprehensive health care
information for women and men on a broad range of conditions. (See: "Business -
Internet marketing Opportunity").

INDUSTRY TRENDS AND STRATEGY

         The Company believes that the markets for nutritional products is
expanding and wants to be a leader in proving gender-specific products, services
and information. By responding to these trends, the Company believes that it can
become a premier marketer of health and nutritional products and can have the
opportunity to penetrate niche markets of minority populations whose healthcare
needs have been largely overlooked.

         o        Rapid growth of the healthcare industry fueled by the link
                  between diet, nutrition and disease.

         o        A growing disenchantment with traditional treatment creates
                  enhanced use of preventive and alternative treatments,
                  including natural and nutrition based remedies.

         o        Burgeoning niche markets of African-American and Hispanic
                  populations whose health-care needs are underserved. The
                  Company believes that there are few if any companies focusing
                  on these groups through network marketing.

         o        Consumer demand for comprehensive health information is
                  rising. The Company believes that there is a significant and
                  growing population who are dissatisfied with their healthcare.
                  The establishment of the Company's web site with detailed
                  gender-specific health information developed in conjunction
                  with its Health Advisory board, is intended to redefine the
                  way health and wellness information is provided and used.

         The Company has had a very limited operating history in the
gender-specific health care arena on which to base an evaluation of its business
and prospects.

INDUSTRY OVERVIEW / NUTRITIONAL SUPPLEMENTS

         The nutritional supplements industry is highly fragmented and intensely
competitive. It includes companies that manufacture and distribute products that
are generally intended to enhance the body's performance and well-being.
Nutritional supplements include vitamins, minerals, dietary supplements, herbs,
botanicals and compounds derived there from. Opportunities in the nutritional
supplements industry were enhanced by the enactment of the Dietary Supplement
Health and Education Act of 1994 ("DSHEA"). Under DSHEA, vendors of dietary
supplements are now able to educate consumers regarding the effects of certain
component ingredients. With certain limited exceptions, the sale of nutritional
supplements is not subject to FDA approval prior to sale. See "Government
Regulation" below.

         Sales in the vitamin/supplement market in which the Company's products
compete totaled approximately $14.68 billion in 1999, (Nutrition Business
Journal), and have been experiencing a double-digit annual growth rate,
(N/Sight, The Hartman Group; Winter 1998-9.). The Company believes the growth in
the nutritional supplement market is driven by several factors, including (i)
the general public's heightened awareness and understanding of the connection
between diet and health, (ii) the aging population, particularly the baby-boomer
generation, which is more likely to consume nutritional supplements, (iii)
product introduction in response to new scientific research and (iv) the
nationwide trend toward preventive medicine.

                                       3
<PAGE>

         The Company, in developing its products, elected to focus on the
women's market because women are the primary household shoppers and are
predominately the KEY health care decision-makers for their family.

         Management believes that women are highly interested and informed about
health care issues, but are not as satisfied as men with the information or the
level of communication they receive from their health care provider.
Additionally, several studies have found that, in comparison to men, women
generally receive less thorough evaluations for complaints, less explanation in
response to questions and fewer interventions from their health care provider.
In the face of these conditions, many women have sought out alternative
remedies.

         It is estimated that 40 percent of women increasingly believe they need
supplements to ensure proper health. Part of this belief stems from
dissatisfaction with the cost and quality of treatment experienced within the
mainstream medical community as described above. In addition, increased
knowledge and exposure to the benefits of natural remedies has also helped drive
women's interest in the dietary supplement industry.

         While many of the women's products currently on the market are skewed
toward an older generation, manufacturers now recognize that as younger women
become more interested in maintaining their current good health status, the
market may shift toward total health nutrition products as well as intervention.
The Company believes that its branded line of products is broad enough to appeal
to all groups of women. Management is aware that this is a highly competitive
market and, as described below, believes it must target specific market niches
in order to successfully market its products.

MARKETING AND DISTRIBUTION STRATEGY

         In order to take advantage of the burgeoning interest in alternative
remedies, the Company has developed a strategy focusing primarily on reaching
the large minority populations in the U.S. through alliances with certain
network marketing companies as described below. The Company recognizes that the
success of its strategy will be dependent upon the quality of its products; its
ability to establish brand name recognition for its products; its ability to
continue to develop new products; the ability of its management and the people
associated with the Company to implement and execute its strategy and the
ability of the management of the network marketing companies to successfully
attract independent distributors. There is no certainty that the Company will be
successful in implementing its strategy. In addition, the market for nutritional
supplements is extremely competitive. There are a significant number of
companies with substantially greater resources and with established brands
presently being marketed.

NETWORK MARKETING

         Network Marketing covers any type of selling that uses independent
representatives working on commission and further permits the independent
representative to recruit other independent distributors and to draw a
commission from the sales of those recruits. In 1998, Network Marketing sales
attributable to personal care and wellness products were $4.38 billion,
(Nutrition Business Journal (Volume IV, No. 6, Industry Overview 1999).

         The Company, consistent with its strategy to focus on niche markets,
has entered into an agreement with E2K Inc., ("E2K"), a network marketing
company focused on the African-American market. E2K recently began its
network-marketing program, pursuant to which it is selling the Company's
nutritional supplements under the label, "Carver-Curtis", (the exclusive rights
to the name and certain products formerly marketed under the Carver-Curtis label
were acquired by the Company in 2001). The Company has signed a distribution
agreement with E2K under the terms of which E2K is the exclusive distributor of
the Carver-Curtis products in the network marketing arena.

         The Company believes that within the African-American community, the
name "Carver-Curtis" has strong name recognition and will substantially enhance
E2K's ability to sell its nutritional supplements. Initially E2K will offer 20
products. E2K intends to seek independent representatives by promoting through

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<PAGE>

churches and other community based organizations. Initially, E2K intends to
focus its recruiting efforts in the New York metropolitan region and thereafter
expand to other urban locations where there is a significant African-American
population. On a national basis, there are approximately 40,000 churches with an
estimated 18,000,000 parishioners. Overall, the African-American population now
exceeds 30 million.

         The Company believes that a significant opportunity exists for E2K to
penetrate the African-American market in part because of the immediate brand
name recognition of "Carver-Curtis" in the African-American community, and
because presently there are very few multi-level network marketing companies
offering nutritional supplements that are focused on the African-American
community. Since the activities of E2K have only recently begun, there is no
assurance that E2K's program will be successful in recruiting sufficient
independent representatives to generate sufficient revenues for the Company or
that even if the Company does sell its nutritional supplements to E2K that the
business will be profitable.

         Under the terms of the agreement, the Company will be paid directly by
E2K for all the nutritional supplements and all shipping costs. The Company will
be responsible for shipping the nutritional supplements to each distributor. The
Company also intends to publish a Carver/Curtis Healthletter that is exclusively
for the E2K members. Each issue will provide health news and nutritional tips
focused principally on conditions affecting the African-American population such
as hypertension, sickle cell anemia, and diabetes. There will be six issues per
year at a member cost of $19.95.

         The Company also is the supplier to Natural Living, a multi-level
company located in Florida that focuses on the Hispanic market. The Company's
management believes that next to the African-American market, the Hispanic
market (with approximately 34 million population) offers very significant growth
opportunities. The Company's nutritional supplements are being sold under a
Spanish label. The Company sells these products in bulk quantities directly to
the company's distribution warehouse. The Company is paid directly by Natural
Living for all products.

         In pursuing this network marketing strategy, the Company believes that
these arrangements afford it the best opportunity to sell its nutritional
supplements without incurring the substantial marketing and other related costs
associated with either attempting to sell its products at retail or to certain
other end users (i.e. doctors, nurses etc.) which would require either a
dedicated sales force or establishing distributor relationships. By eliminating
its selling and marketing expenses, the Company believes it will achieve gross
margins in excess of 50%. The Company also believes that in the present economic
environment participating in a network marketing program, which does not require
a person devoting full time to the program, affords the individual an
opportunity to earn additional income without requiring a significant
investment. For example, under the E2K program, a distributor for an initial
investment of $450, (assuming the distributor recruits the maximum number of
other independent distributors known as "downliners"), could receive commissions
totaling more than $100,000.

         The Company has also formed an alliance with Family Health Network,
Inc., ("Family Health"), a 2-1/2 year old multi-level marketing organization
with approximately 5,000 distributors. Family Health network plans to open
virtual stores where the Company's nutritional supplements may be purchased
on-line. The virtual stores are being marketed to persons who want to own a
home-based business through an advertising campaign in 26 major cities
throughout the United States. Each owner is obligated to purchase a minimum of
$300 worth of the Company's products from the Company's e-commerce area of its
Internet site in order to launch their store. The Company has developed three
new products for Family Health in addition to its existing products: MACHO MAN,
a male performance enhancer with all natural herbs including Yohimbe and Maca
extracts, known to help increase blood flow to erectile tissue as well as to
increase libido; SEXTASY CREAM that helps increase the intensity of sexual
pleasure for men and women; and COLOSTRUM-C, an energy and anti-aging product
that is more fully described below.

         The Company continues to explore several other multi-level
opportunities to further enhance the sale of its nutritional supplements. There
is no assurance any of the alliances described herein will be successful or that
the Company's operations will become profitable as a result of these alliances.

                                       5
<PAGE>

NEW PRODUCT DEVELOPMENTS

         The Company believes that to remain competitive, it is necessary to
continually introduce new products. Recently, the Company has introduced a new
product, plans to re-introduce a product that it has been marketing for many
years, and is preparing prototypes for several other products.

         The new product is called "Immuno-C" and is designed to boost the
immune system and increase a person's energy level. The active ingredients of
"Immuno-C" are Colostrum and a non-acid form of Vitamin C. These are delivered
in a patented "quickmelt" wafer for instant absorption. Colostrum is the fluid
secreted by the mammary glands just after childbirth that contains the highest
content of immunoglobulins (antibodies) and other immune boosters and energizing
elements, (proteins). Colostrum is taken during the first 2-4 hour collection
called colostrogenesis when the concentration of the active components is at
peak. Studies have shown that Colostrum assists the immune system in fighting
disease before its onset or by slowing disease down as it progresses on its
destructive path. Research further indicates that colostrum may be useful in
providing protection against infectious agents and their toxins thereby
providing systemic immunological enhancement and promoting general health and
healing of the body.

         To the best of knowledge of the Company, there are a limited number of
companies offering a product with Colostrum taken during the first 2-4 hours,
the peak period for the components and no other company is presently offering
Colostrum in a "quickmelt" wafer form. The Company plans to market this product
to doctors and clinics that specialize in anti-aging, and the treatment of viral
and bacterial infections that depress the immune system such as HIV/AIDS.
Colostrum may be helpful to these patients in delivering energy and fortifying
the immune system, thus improving the quality of life and helping to fight
infectious organisms. The Company has already received initial orders for 1,000
bottles of Immuno-C from a specialty care provider company that specializes in
the treatment of patients with chronic medical conditions. Their staff includes
experienced pharmacists, dieticians, client service coordinators, and
reimbursement specialists. The specialty care provider is seeking approval from
Medicaid to make Immuno-C reimbursable, the consequence of which would be to
make this product also affordable to a larger population of sufferers, thereby
increasing the potential market for the product.

         The Company during the past ten years has sold in limited amounts its
EMF, a collagen hydrolysate used as nutritional support for wasting disease, to
nursing homes and hospitals. The Company received a series of patents for EMF
covering oral administration, preventing nutritional deficiency, treating
nutritional deficiency during wasting disease and certain other conditions, and
as a method of treating obesity, (see "PATENTS"). Studies with EMF have
demonstrated weight stabilization and weight gain in wasting disease patients.
The importance of this is the improvement of the quality of life to those
patients who feel more energized after using EMF. The Company believes there is
a significant market for this product, in particular, nursing homes and
hospitals. EMF is also attractive for the anti-aging market, the most rapidly
growing field in the nutrition market, because of its energy delivering
qualities. Because the amino acids in EMF have been hydrolyzed, (predigested),
the body can quickly absorb and utilize the benefits without interference from
the normal digestive process.

         The Company also has entered discussions with the specialty care
provider to create a bar for HIV/AIDS patients to deliver energy from
specialized nutrients, and a high protein shake with natural killer cell booster
ingredients.

         The Company believes that the Immuno-C, EMF, and its new line of
anti-aging, immune boosting products create a line of products designed to
address conditions associated with some of the most debilitating diseases
afflicting people, including cancer and HIV/AIDS. The anti-aging market presents
an opportunity for the Company because there is a marketing boom that appeals to
the insecurities of a baby boomer graying population. They are, in effect, a

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<PAGE>

captive audience seeking to delay aging and embracing this trend that blends
alternative medicine with traditional medicine. There is no assurance that the
Company will be able to successfully market these new products or that the sale
of these products will be profitable for the Company.


PRODUCTS

1.       MENOPAUSE (Capsule) a support and replenishing formula designed to help
         alleviate symptoms of hot flashes, irritability and mood swings.

2.       PMS (Capsule) A synergistically balanced formula providing a natural
         approach to provide support for the relief of PMS and menstrual
         discomforts such as mood and water.

3.       OSTEO CARE (Capsule) This extensively researched nutrient has shown in
         clinical studies its ability to support bone health and increase bone
         mineral density.

4.       JOINT MAINTENANCE (Caplet) A unique blend of ingredients that work
         together to provide the building blocks needed to maintain healthy
         joint cartilage and decrease the pain associated with joint disease.

5.       CHOLESTEROL CONTROL FORMULA (capsule) Contains all the ingredients that
         work together in the body to help maintain a healthy cholesterol level
         and keep the heart strong and healthy.

6.       WILD MEXICAN YAM EXTRACT (capsule) Contains progesterone like
         components making it useful for helping with PMS and menopause.

7.       CANDIDA CARE (capsule) This revolutionary formula contains the most
         researched, cutting-edge ingredients to provide nutritional support for
         yeast control

8.       GENINSTEIN 1000 MG (tablet) Standardized soy Isoflavonoid extract. A
         nutrient dense "Phytohormone" (Plant Estrogens) that may be helpful in
         menopausal symptoms.

9.       CRANBERRY CONCENTRATE (soft gel) the natural and concentrated benefits
         of cranberries without the unnecessary sugars and colors found in
         juices. A definite need in acidifying urine and preventing bacteria
         from adhering to the bladder walls, a common female problem.

10.      NUTRITION PLUS (tablet) A phytonutrient powerhouse! An advanced formula
         designed to help meet the nutritional dietary supplement needs of
         women.

11.      SUPER FOLIC ACID (capsule) 800 mcg of Folacin, a heart healthy
         supplement for women and a positive aid during menopause when women are
         less efficient in absorbing nutrients.

12.      INNER BEAUTY FOR HAIR, NAILS AND SKIN (tablet) Nourishes, strengthens,
         and supplies the nutrients needed for healthy lustrous hair, glowing
         skin, and shiny nails.

13.      SUPER PRIMROSE OIL (capsule) Three (3) times the G.L.A. content of
         regular Evening Primrose Oil: 1300 mg/135 mg G.L.A.

14.      PRO-GREENS (powder) An advanced Probiotic whole food, multi-nutrient,
         concentrated powder.

15.      THE HEALTHY NUT (snack) SALTED, UNSALTED and HONEY ROASTED flavors. A
         natural snack high in protein and phytonutrients.

16.      KAVA KAVA (capsule) Eases tension, relaxes muscles and helps contribute
         to a good night's sleep.

17.      HUPERZINE A COMPLEX (tablets) contains an ingredient being tested in
         clinical trials in the United States for the treatment of memory loss
         associated with aging.

18.      PHYTO-TONIC (liquid) a true health formula dietary supplement.

19.      NATURAL PLANT ESTROGENS (tablets) The natural way to help women who
         have an estrogen imbalance.

20.      SUPER EPA (soft gels) Omega 3 fatty acids consisting of
         Eicosapentaenoic Acid (EPA) and Docosahexaenoic Acid (DHA) provide
         benefits for the heart and circulatory system.

21.      OLIVE LEAF EXTRACT (capsule) is similar in molecular configuration to
         well-established antioxidants such as the bioflavonoids, grape seed
         compounds, pycnogenol, soy isoflavones and green tea catechins.

22.      COLON ENHANCER (capsule) contains natural, gentle fibers that help keep
         the entire gastrointestinal system functioning smoothly, while
         promoting the growth of helpful bacteria in the intestines.

23.      BLACK CURRANT SEED OIL (soft gel) a comprehensive source of Omega 3 and
         Omega 6 (Essential Fatty acids). Important in the production of
         prostaglandins.

24.      CELLU-SHRINK (capsule) is made from plant extracts and other dietary
         supplements. Works below the surface, where cellulite occurs.

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<PAGE>

25.      ESSENTIAL OILS (soft gel) Provides Omega 3, 6 and 9 Essential Fatty
         Acids.

26.      FEVERFEW (capsule) Feverfew is derived from the Latin term for "chase
         away fevers." Provides anti-inflammatory properties.

27.      COLLAGEN PLUS (liquid) nutritionally supports body structure and
         provides energy. Enhances lean body mass.

28.      DONG QUAI (capsule) often called the "female ginseng", Dong Quai is an
         all-purpose herb used for a wide range of female complaints. This herb
         has been popular for centuries for its ability to invigorate and
         revitalize the body.

29.      USRDA CALCIUM 1200 (wafers) a delicious chewable wafer flavored with
         malted milk. Provides the calcium necessary to prevent bone loss in
         women.

30.      *MIRACLE RUBBING OIL (liquid) For fast relief from minor aches and
         pains including arthritis

31.      *PRESSURE MAINTENANCE (liquid) An herbal potassium mineral complex used
         to help lower pressure.

32.      *FRUIT AND VEGETABLE DETOX WASH (liquid) Cleans produce to remove
         pesticides, fungicides, herbicides, chemicals and toxins.

33.      *STOPPS BUMPS SHAVING LOTION (liquid) A fully tested remedy for
         annoying and irritating ingrown hairs.

34.      *SAGE AND SULPHUR HAIR TREATMENT (cream) A true scalp tonic.

35.      *HAIR ENRICHMENT FORMULA (liquid) helps control hair breakage, dry
         scalp, damaged hair and brittle ends.

36.      *BLACK AND BEAUTIFUL CONDITIONER (liquid) Promotes easy care for all
         styles.

37.      *POTENCY PLUS (tablets) A male performance enhancer.

38.      *SEXUAL ENHANCEMENT CREAM (cream) Increases intensity of sexual
         pleasure for men and women naturally.

         *These products are sold under the "Carter-Curtis" label.


MANUFACTURING

         The Company does not have a manufacturing facility, but relies on third
parties to manufacture its products. The third party manufacturers are
responsible for receipt and storage of raw material production and packaging and
labeling of finished goods. At present, the Company is dependent upon
manufacturers for the production of all of its products. To the extent the
manufacturers should discontinue their relationship with the Company, the
Company's sales could be adversely impacted. The Company believes at the present
time it will be able to obtain the quantity of products it will need to meet
orders.

COMPETITION

         The market for nutritional supplements is highly competitive with few
barriers to entry. The Company will be competing with many health sites and
nutritional supplement manufacturers as well as specialty health retailers, drug
stores, supermarkets, and mass merchandisers. Many of the Company's potential
competitors have significantly greater marketing and financial resources. The
Company for many of the foregoing reasons has decided to focus on becoming the
supplier for multi-level marketing organizations under exclusive supply
arrangements where its financial resources can be focused on product procurement
and product development instead of marketing against larger companies. The
Company believes that there are a limited number of companies presently engaged
in multi-level marketing to niche markets, however, there can be no assurance
that the Company can successfully implement its new strategy.

INTELLECTUAL PROPERTY

         The Company regards the protection of copyrights, trademarks and other
proprietary rights that it may own or license as material to its future success
and competitive position. The Company intends to rely on a combination of laws
and contractual restrictions such as confidentiality agreements to establish and
protect its proprietary rights. Laws and contractual restrictions, however, may
not be sufficient to prevent misappropriation of proprietary rights or deter
others from independently developing products that are substantially equivalent
or superior.

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<PAGE>

PATENTS

         The Company owns four issued patents for its collagen Hydrolysate
product. These are for (1) METHOD OF PROVIDING HIGH-PROTEIN NUTRITION BY THE
ORAL ADMINISTRATION OF A PREDIGESTED PROTEIN COMPOSITION, (2) METHOD OF
COMPOSITION FOR PREVENTING NUTRITIONAL DEFICIENCY, (3) METHOD OF TREATING
NUTRITIONAL DEFICIENCY DURING CARDIAC CACHEXIA, DIABETES, HYPOGLYCEMIA,
GASTROENTEROLOGY, LIPID, CELL GLYCOGEN AND KERATIN RELATED SKIN CONDITIONS AND
ALCOHOLISM, and (4) METHOD OF TREATING OBESITY BY THE ORAL ADMINISTRATION OF A
PREDIGESTED PROTEIN COMPOSITION. Some of the products that the Company offers
incorporate patented technology owned by others, but patents do not protect most
of the Company's products.

COPYRIGHTS

         The Company has applied for copyright registration for the FemChoice
brand. Proof of use has been filed and the Company awaits final approval.

LICENSES

         The Company has a five year exclusive license to the name
"Carver-Curtis" for which it pays to the license holder a royalty of 10% on
sales of six particular items out of the current 20 "Carver-Curtis" products.
These six products had been manufactured at the Carver facility in Detroit and
the formulas were turned over to the Company.

TRADEMARKS AND DOMAIN NAMES

         The Company owns the following domain names: womenshealthnetwork.com,
hisandhermed.com, hisandhermed.net, hisandhermedicine.com,
hisandhermedicine.net, menwomenandmedicine.com, menwomenandmedicine.net,
menshealthnetwork.com, womenandgendermed.com, womenandgendermed.net,
hischoice.net, kidshealthnetwork.com, genderhealth.net, gendermed.com,
gendermed.net, gendermedicine.com, gendermedicine.net, genderspecificmed.com,
genderspecificmed.net, genderspecificmedicine.com, genderspecificmedicine.net,
hisandherhealthnews.com, hisandherhealhtnews.net, blackfamilyhealth.net,
blackfamilymedicine.com, blackfamilymedicine.net, blackwomenshealth.net,
femchoice.cc, menshealthnetwork.cc, whnnetwork.cc, womanshealthnetwork.cc
,womenshealthnetwork.cc, womenshealthnetwork.co.uk, saluddefamilia.com,
saluddefamilia.net, and saluddemujer.com. domain names. The .cc is a new domain
name extension.

         Under current domain registration practices, no one else can obtain an
identical domain name, but can obtain a similar name or the identical name with
a different suffix such as "net" or "org". The relationship between regulations
governing domain names and the laws protecting trademarks and similar
proprietary rights is evolving. Internet regulatory bodies regulate domain names
and the present regulations may be subject to change.

         In addition, the regulation of domain names in the United States and in
foreign countries is subject to change. There are plans to establish additional
top-level domain names, appoint additional domain name registrars or modify the
requirements for holding domain names. As a result, the Company may not acquire
or be able to maintain its domain names in all of the countries in which it
intends to conduct business, and the Company could be unable to prevent third
parties from acquiring domain names that infringe or otherwise decrease the
value of its domain names or trademarks.

         While the Company intends to take the actions that it believes are
necessary to protect its proprietary rights, it may not be successful in doing
so. In addition, the Company may be dependent on the owners of the proprietary
rights it licenses to protect those rights. Moreover, the Company and its
licensors may face challenges to the validity and enforceability of proprietary
rights and may not prevail in any litigation regarding those rights.

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<PAGE>

         The Company is also subject to the risk of adverse claims and
litigation alleging infringement of the proprietary rights of others. While the
Company is not currently involved in any such claims, there can be no assurance
against future infringement claims by third parties. The resolution of any such
infringement claims may result in protracted and costly litigation, regardless
of the merits of such claims. Moreover, any such resolution may require the
Company to obtain a license to use those proprietary rights or possibly to cease
using those rights altogether. Any of these events could have a material adverse
effect on the Company's business, financial condition and results of operations.

GOVERNMENT REGULATION

         The formulation, manufacture and labeling of the Company's products are
subject to regulation by one or more federal agencies, including, principally,
the Food and Drug Administration ("FDA"). These activities are also regulated by
various agencies of the states and localities in which the Company's products
are sold.

         Principally through the efforts of the dietary supplement industry, on
October 25, 1994, the Dietary Supplement Health and Education Act of 1994 was
signed into law. The law amends the Federal Food, Drug, and Cosmetic Act and, in
the judgment of the Company, is favorable to the dietary supplement industry.
First and foremost, the legislation creates a new statutory class of "dietary
supplements". This new class includes vitamins, minerals, herbs, amino acids and
other dietary substances for human use to supplement the diet. A dietary
supplement which contains a new dietary ingredient, one not on the market as of
October 15, 1994, will require evidence of a history of use or other evidence of
safety establishing that it will reasonably be expected to be safe, such
evidence to be provided by the manufacturer or distributor to the FDA before it
may be marketed. The legislation also recognizes the need for the dissemination
of information about the link between nutrition and health and provides that
publications, which are not false and misleading and present a balanced view of
available scientific information on a dietary supplement, may be used in
connection with the sale of dietary supplements to consumers. Among other
changes, the new law prevents the further regulation of dietary ingredients as
"food additives" and allows the use of statements of nutritional support on
product labels and in other labeling.

         On September 23, 1997, the FDA issued final new regulations to
implement the 1994 legislation. Among other things, these new regulations
establish a procedure for dietary supplement companies to notify the FDA about
the intended marketing of a new dietary ingredient or about the use in labeling
of statements of nutritional support. The regulations also establish a new
format for nutrition labeling on dietary supplements. The new format became
mandatory on March 23, 1999, and the Company revised all of its dietary
supplements labels to be in compliance by that date.

         The FDA and other federal authorities are reviewing alternative
approaches to assure the safety of vitamins, minerals, herbals and other
products sold as dietary supplements. Increased regulatory oversight could
subject the Company and other manufacturers and distributors of dietary
supplements to increased production and compliance costs and possibly require
capital expenditures. Future regulation affecting dietary supplements could
result in a recall or discontinuance of certain products.

INTERNET MARKET OPPORTUNITY

         The Company during the past eighteen months has completed the
development of an Internet site called His and Her Medicine.com intended to
provide both men and women with proprietary, comprehensive, relevant and timely
content regarding various health conditions. The Company's strategy was to
establish its network as a recognized and comprehensive source of healthcare
information and services on the Internet for women and men. The business model
was to generate revenues from a variety of sources. (i) E-commerce transactions,
such as sales of nutritional supplements (principally the Company's FemChoice
branded line of products) (ii) sharing of revenues with other companies that
have formed alliances with the Company to offer their products and services on
the site, and (iii) fees from licensing of proprietary healthcare information to
other health sites. Unfortunately, since the Company commenced its Internet
development activities, the market for Internet services and products has

                                       10
<PAGE>

materially deteriorated and as a result thereof, the Company has elected to
de-emphasize the site pending a change in the environment for Internet sites and
the establishment of a definitive plan to achieve profitability on the site.

         Although the Company presently has de-emphasized its site, it will
continue to maintain the site at an estimated cost of approximately $2,000 per
month. In connection with its relationship with Family Health Network and E2K,
the Company will be using its Internet site to fill orders for nutritional
supplements. The Company believes that its site provides very important
information on gender-specific medicine, which has recently received significant
interest in the medical community. Moreover, the Company has assembled a
prestigious group of medical advisors and should the Company elect to
discontinue its site, it might have resulted in the medical advisors
discontinuing their relationship with the site.

HEALTH ADVISORY BOARD

         As part of the Company's strategy to create brand awareness of its
site, and develop a reputation for quality healthcare information, it has formed
a Health Advisory Board consisting of:


MYRON WEISFELDT, M.D.
The Samuel Bard Professor of Medicine

Chair, Department of Medicine at Columbia University College of Physicians &
         Surgeons (1991-present).
         National President of the American Heart Association (1989-1990).
         Current member of the National Advisory Council, National Institute of
         Aging.
         In 1998, he won the Gold Heart Award from the American Heart
         Association.
         Author of more than 250 papers for many publications including the
         Journal of Clinical Investigation, Circulation (Consulting Editor), and
         the New England Journal of Medicine


WENDY KLEIN, MD, FACP
       Program Director of the Dept. of Internal Medicine, Women's Health
       Residency Track.
       Associate Professor of Internal Medicine & OB/GYN
                  Virginia Commonwealth University, Richmond VA.


MARY DEKKER NETTLEMAN, MD
       Associate Dean for Primary Care
                 Virginia Commonwealth University, School of Medicine, Richmond
       Professor and Division Chair of General Internal Medicine
                  Virginia Commonwealth University, School of Medicine,Richmond


ELLEN SHAW DE PAREDES, MD
         Professor of Radiology, Chief of Breast Imaging Section,
                  Medical College of Virginia, Richmond
         President, Virginia chapter of the American College of Radiology-
                  current
         Author of:  ATLAS OF FILM - SCREEN MAMMOGRAPHY
                  Urban and Schwarzenberg Publishing Co., Baltimore, Maryland.
                  1988, 364 pages
         ATLAS OF FILM - SCREEN MAMMOGRAPHY, 2nd Edition
                  Williams and Wilkins, Baltimore. 1992, 650 pages


                                       11
<PAGE>

BENJAMIN H. LEWIS, M.D., F.A.C.C.
Assistant Professor of Medicine at Columbia University School of Physicians &
         Surgeons,(since 1982)
         Established the first Adult Cardiac Doppler Unit and the Exercise
         Echocardiography Laboratory at Columbia Presbyterian
         Medical Center/Eastside.
         Research Fellow in Cardiology at Harvard Medical School. (1980-82).
         Author of many published articles including those in the Journal of
         American College of Cardiology, the New England Journal of Medicine,
         and The Journal of Gender-Specific Medicine. First cardiologist in New
         York State to be accredited for both transthoracic and stress
         echocardiography.


LAURI ROMANZI, M.D., FACOG,
         Clinical Assistant Professor at New York Hospital.
         Former Director of the Division of Urogynecology at the Hospital.
         Fellow of the American College of Obstetrics and Gynecology and is a
         member of numerous national and international professional committees
         including the International Continence Society, the American
         Urogynecologic Society. Member of the Editorial Advisory Board for The
         Journal of Gender-Specific Medicine. Concentrates on the effective
         behavioral, pharmacologic and surgical assessment and treatment of
         incontinence in women.


PETER D. VASH, MD, M.P.H.
       Assistant Clinical Professor of Medicine, UCLA Medical Center, CA
       Board Certified Internist
       Specialist in eating Disorders and Endocrinology


ROBERT STENSON, M.D., F.A.C.O.G.
       One of 750 Gynecological Oncologists worldwide
       American College of Obstetricians and Gynecologists, Diplomate
       Director of Gynecological Oncology at Holy Name Hospital, Teaneck, NJ


RALPH E. MARCUS, MD
       Chief of Rheumatology and Medical Director, Osteoporosis Program
                Hackensack University Medical Center, Hackensack, NJ
       Chief of Rheumatology and Medical Director, Osteoporosis Program
                Women's Outpatient Center, Holy Name Hospital, Teaneck, NJ


FRANK E. VOGEL, PH.D., MD
         Chief, Interventional Radiology, Holy Name Hospital, Teaneck, NJ
         Assistant Professor of Radiology, New York University Medical Center,
                New York, NY


ISAAC GREENBERG, PH.D.
        Instructor, Dept. of Psychiatry (Psychologist), Harvard Medical School
        Department of Psychiatry, Beth Israel Deaconess Medical Center,
                 Boston, MA


LINDA ARPINO, M.A., C.D.N., R.D.
         Community Nutritionist and Professor
                 New York State Dietetic Board of Directors


GARY D. WASSERMAN, MD
         Attending Urologist, Englewood Hospital and Medical Center
                 Englewood, NJ
         Attending Urologist, Holy Name Hospital, Teaneck, NJ


ANDREW M. SPECTOR, DMD, FAGD, FICOI
         Clinical Associate Professor
                Surgical and Prosthetic Implantology Program
                New York University, New York, NY


FAYE E. WILLIAMS, ESQ., PH.D.
         President & CEO of Natural Health Options, Inc., Washington, DC
         Former Counsel to the US Congress

                                       12
<PAGE>

CYNTHIA STAMPER GRAFF
         President and CEO of Lindora, Inc., Costa Mesa, CA Founder of the Lean
         for Life Foundation, a non-profit organization that promotes obesity
         research,educational programs, and funds weight control services to
         selected low income, morbidly obese, men, women and teenagers who meet
         the criteria.


JEFFREY SCHNEIDER
         Nutraceutical Consultant and hands-on leader in the nutrition industry
         since 1980.


HOWARD NADEL
         Director of Research the North Bronx Health Care Network in New York
         City.
         Consultant and lecturer for major pharmaceutical companies.

         The Company selected the members of the Advisory Board to take
advantage of the professional's extensive experience in dealing with various
women's health issues. Each of the members of the Medical Advisory Board has
executed a letter agreement with the Company pursuant to which they agree to
serve on the Medical Advisory board. As an inducement to each of the members of
the Board, they have received option grants totaling between 10,000 and 25,000
options with the exception of Dr. Wendy Klein who received 150,000 as
compensation for her one year term as Chairman of the Health Advisory Board and
her work for the Company.

EMPLOYEES

         The Company presently has 6 employees.

RECENT DEVELOPMENTS

         In 1999 and 2000, the Company sold approximately $2,021,000 of its 10%
Convertible Debentures ("Debentures"). In October and November 2000, these
debentures and the accrued interest thereon became convertible into shares of
the Company's common stock at exchange rates varying between $0.075 and $0.25
per share. In addition, the Company received a loan from Unity Capital of
$130,000 through January 31, 2001. The Company intends to seek additional
capital which is essential to permitting the Company to execute its new
strategy. There can be no assurance the Company will be successful in raising
new funds or that the terms under which the funds are raised are favorable to
the Company.

PREVIOUS BUSINESS OPERATIONS

         During the fiscal year ending January 31, 2001, the revenues generated
by the Company resulted from the sale of existing products, including
nutritional supplements, pet products, and home remedy products.

         Commencing in the first quarter of 2001, the Company intends to focus
on the sale of its branded products (Carver- Curtis) to E2K and its other
products to network marketers.


FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

         Inapplicable.

Item 2.  PROPERTIES

         The principal executive offices of the Company are located at 10 West
Forest Avenue, Englewood, New Jersey 07631, where it occupies approximately
7,500 square feet at an annual rental of $60,000 under a lease which expired in
December 1999. The Company has renewed the lease for a period of five years
commencing January 1, 2000. The annual rent for the initial three years is
$65,625 and for the fourth and fifth year of the lease is $67,500.

         Approximately 2,500 square feet of this facility house the Company's
administrative offices with the balance utilized for shipping and warehousing.
The Company presently subleases a portion of its space to non-affiliated

                                       13
<PAGE>

persons. The Company also has arrangements with co-packers pursuant to which
such suppliers manufacture, package and ship the Company's products to major
customers. The Company believes its present facility is adequate for its present
and reasonably foreseeable future operational needs.

Item 3.  LEGAL PROCEEDINGS

         None. (See Note 6 and Note 8 to the Financial Statements)


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Annual Meeting ("Meeting") of Shareholders of the Company was held
on October 19, 2000. The 3,735,767 shares of common stock ("Common Stock")
present at the Meeting out of a then total 4,633,683 shares outstanding and
entitled to vote, acted as follows with respect to the following proposals:

         Approved, by a vote of: 3,734,767 shares of Common Stock for and 1,000
shares against the election of Arnold M. Gans as a director of the Company;
3,734,767 shares of Common Stock for and 1,000 shares against the election of
Myra D. Gans as a director of the Company; 3,735,267 shares of Common Stock for
and 500 shares against the election of Lawrence S. Burstein as a director of the
Company; and 3,735,267 shares of Common Stock for and 500 shares against the
election of Alan Gaines as a director of the Company. In addition, no shares of
Common Stock were voted against the election of all of the nominees.

         Approved, by a vote of 3,731,617 shares of Common Stock for and 1,100
shares against an amendment to the Company's Certificate of Incorporation to
change the name of the Company to Gender Sciences, Inc.

         Approved, by a vote of 3,692,260 shares of Common Stock for and 16,041
shares against an amendment to the Company's Certificate of Incorporation to
increase the Company's authorized Common Stock from 10,000,000 shares to
70,000,000 shares.

PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

         (a)      The Company's Common Stock is currently traded over NASDAQ's
                  Electronic Bulletin Board. Information as to the range of high
                  and low bid quotations for the Company's Common Stock, for the
                  periods indicated, as furnished by national Quotation Bureau
                  incorporated, is set forth below:

                                                     BID
                                    -------------------------------------
THREE MONTHS ENDED                  HIGH                             LOW

January 31, 1999                    .062                             .062
April 30, 1999                      .03                              .03
July 31, 1999                       .07                              .07
October 31, 1999                    .25                              .25
January 31, 2001                    .0621                            .062
April 30, 2000                      .75                              .625
July 31, 2000                       .50                              .375
October 31, 2000                    .50                              .50
January 31, 2001                    .312                             .187


The above bid quotations represent prices between dealers and do not include
actual retail mark-ups, mark-downs or commissions and may not represent actual
transactions.

         (b)      As of April 17,2001, there were approximately 112 record
                  holders of the Company's Common Stock.

                                       14
<PAGE>

         (c)      The Company has not declared any cash dividends on its Common
                  Stock and it has no intention to pay cash dividends in the
                  foreseeable future.

Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents selected historical consolidated financial data for
the Company and its wholly owned subsidiaries. This data is qualified in its
entirety by the more detailed consolidated financial statements of the Company
included elsewhere herein. The following selected consolidated financial data
were derived from audited consolidated financial statements of the Company and
should be read in conjunction with the statements included elsewhere herein.

<TABLE>
<CAPTION>

STATEMENTS OF OPERATIONS DATA:

                                                       YEAR ENDED JANUARY 31,
                                             -----------------------------------------
                                                 2001           2000          1999
                                             -----------    -----------    -----------
<S>                                          <C>            <C>            <C>
Sales                                        $   627,500    $   443,200    $   939,700
Cost of sales and operating expenses           1,683,600      1,086,800        982,000
Operating (loss)                              (1,056,100)      (643,600)       (42,300)
Other (expense)                                 (128,200)       (85,700)       (40,100)
(Loss) from continuing operations             (1,184,300)      (729,300)       (82,400)
Income (loss) from discontinued operations            --             --         15,700
Extraordinary items                               13,800        485,100             --
Net (loss)                                    (1,170,500)      (244,200)       (66,700)

Basic Earnings Per share data
        (Loss) from continuing operations    ($     0.12)   ($     0.18)   ($     0.02)
(Loss) from discontinued operations                   --             --             --
        Extraordinary items                                 $      0.12             --
        Net (Loss)                           ($     0.12)   ($     0.06)   ($     0.01)
</TABLE>

<TABLE>
<CAPTION>
BALANCE SHEET DATA:

                                                       YEAR ENDED JANUARY 31,
                                             -----------------------------------------
                                                 2001           2000          1999
                                             -----------    -----------    -----------
<S>                                          <C>            <C>            <C>
Working capital(deficiency)                  $   (87,000)   $(1,038,300)   $  (585,300)
Total assets                                     425,600        795,100        148,200
Long-term debt                                                       --         75,000
Stockholders' equity (deficit)                    65,100     (1,013,300)      (796,200)
</TABLE>


                                       15
<PAGE>

Item 7:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations


RESULTS OF OPERATIONS

         The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Condensed
Consolidated Financial Statements and the related Notes included elsewhere in
the report. This discussion contains certain forward-looking statements that
involve risks and uncertainties. Actual results may differ materially from those
anticipated in these forward-looking statements as a result of various factors.

2001 - 2000

         Sales for the year ended January 31, 2001 were $627,500 as compared
with sales of $443,200 for the year ended January 31, 2000, an increase of
41.6%. The increase in sales was primarily due to collagen-based products and
The Healthy Nut (soybean) program. Cost of sales increased from $267,600 for the
year ended January 31, 2000, or 60.4% of sales, to $311,800, or 49.7% of sales,
for the year ended January 31, 2001. Selling, general and administrative
expenses increased 51.8% to $980,100 from $645,600. This represents an increase
of approximately $334,500, which consists of increased professional fees of
$69,000; the hiring of additional personnel and salary increases of
approximately $150,000; the cost of obtaining additional insurance of $27,000
and consulting fees of $80,000. The Company also expended $379,600 towards the
development of its website as compared to an expenditure of $167,200 in the
prior year. The preponderance of these expenses was incurred during the first
nine months of the fiscal year. The Company increased advertising expense by
$5,700 in the current year. For the year ended January 31, 2001, the Company
incurred an operating loss of $1,056,100 as compared to an operating loss of
$643,600 for the comparable period in 2000. The Company had a loss from
continuing operations of $1,184,300 or ($.12) per share, as compared to a loss
of $729,300 or ($.18) per share for the comparable period in 2000. The net loss
for the year ended January 31, 2001 was $1,170,500, which includes forgiveness
of debt in the aggregate amount of $13,800. The net loss for the year ended
January 31, 2000 reflects the forgiveness of debt in the aggregate amount of
$337,500 and the extinguishment of the minority interest of $147,600. (See Note
10 - to notes to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS) Because of the
decline in the interest in the Internet and, in particular the determination by
the Company that its Women's Health website and its e-commerce initiative would
not be successful in the foreseeable future the Company elected to significantly
reduce its Internet initiative and has focused its efforts on its off-line
businesses. See "Liquidity and Capital Resources".

         Interest expense was $140,300 and interest income was $12,100 for the
year ended January 31, 2001, as compared to interest expense of $94,700 and
interest income of $9,000 during the comparable period of 2000. The increase in
both interest expense and interest income was primarily due to the $2,021,250
principal amount of 10% Convertible Subordinated Debentures.

2000 - 1999

         The results from continuing operations exclude the results of
operations of K.O.S. Industries, Inc. (KOS) a former subsidiary. The Company
terminated its agreement with KOS on December 31, 1998.

         Sales for the year ended January 31, 2000 were $443,200 as compared
with sales of $939,700 for the year ended January 31, 1999, a decrease of 52.8%.
Cost of sales decreased from $527,700 for the year ended January 31, 1999, or
56.2% of sales, to $267,600, or 60.4% of sales, for the year ended January 31,
2000. Selling, general and administrative expenses increased 42.5% to $645,600
from $453,200. This was due to an increase in legal fees of approximately
$50,000; costs associated with the issuance of the 10% Convertible Subordinated
Debentures of approximately $26,000; an increase in travel, promotion and trade
show expenses of approximately $27,000 and costs related to the introduction of
new products of approximately $39,000. In addition, the Company incurred a

                                       16
<PAGE>

general increase in salaries, rent and other operating costs of approximately
$50,400. The decline in sales was due principally to the Company's decision to
de-emphasize sales of its existing products and focus its efforts on the
development of its women's line of products as well as the creation of an
internet site devoted to women's health. The Company has expended $167,200
towards such development. For the year ended January 31, 2000, the Company
incurred an operating loss of $643,600 as compared to an operating loss of
$42,300 for the comparable period in 1999. The Company had a loss from
continuing operations of $729,300 or ($.18) per share, as compared to a loss of
$82,400 or ($.02) per share for the comparable period in 1999. The Company's
gain from discontinued operations in 1999 was $15,700 resulting in a net loss of
$66,700 for 1999 as compared to a net loss of $244,200 in 2000. The net loss for
the year ended January 31, 2000 reflects the forgiveness of debt in the
aggregate amount of $337,500 and the extinguishment of the minority interest of
$147,600. (See Note 10 - to notes to CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS).

         Interest expense was $94,700 and interest income was $9,000 for the
year ended January 31, 2000, as compared to interest expense of $40,100 during
the comparable period of 1999 primarily due to the $1,521,250 principal amount
of 10% Convertible Subordinated Debentures outstanding.

Liquidity and Capital Resources

         At January 31, 2001, the Company had cash of $32,700 as compared to
cash of $649,700 on January 31, 2000.

         In 1999, the Company determined that in order to sustain its existing
business operations and to successfully implement its plan of developing a line
of women's products and an Internet web site devoted to women's health that
additional capital would be required. Thereafter the Company completed the
private placement of $2,021,250 principal amount of 10% Convertible Subordinated
Debentures. The Convertible Subordinated Debentures became convertible into
shares of common stock at rates ranging between $.075 and $.25 per share. In
addition, accrued interest on these debentures was also converted into common
stock thus resulting in the issuance of 24,725,997 shares. See Note 6 - to notes
to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. However as noted above due to
the significant decline in the commercial potential of its internet site, the
Company has now focused its efforts on off-line activities. As part of its
decision to refocus on its off-line strategy and reduce its cash expenditures
the Company reduced its number of employees and discontinued its use of
consultants during fiscal 2001. The Company has recently entered into marketing
affiliations with two network-marketing groups in the past three months, and has
begun to make sales to one of these groups and has received deposits from the
other. All sales are made against prepayments from the network marketing
companies rather than selling directly to independent distributors thereby
limiting credit risks. The Company will require additional working capital until
such time as profitability from these ventures and sales of existing products
are achieved and the Company reaches breakeven levels. There can be no assurance
that the Company will be successful in raising such funds and that if additional
funds are raised, that the Company's decision to focus on off-line activities
will result in the Company achieving profitability. The inability to raise
additional funds will materially effect the future business operations of the
Company.

THIS FORM 10-K AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY THE
COMPANY OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. THOSE STATEMENTS INCLUDE STATEMENTS
REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY AND MEMBERS
OF ITS MANAGEMENT, AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE
BASED. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND
UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY
KNOWN TO MANAGEMENT THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE IN FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE
STATEMENT FOR FORWARD-LOOKING STATEMENTS SET FORTH BELOW. THE COMPANY UNDERTAKES

                                       17
<PAGE>

NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED
ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE
OPERATING RESULTS OVER TIME.

                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
                        SAFE HARBOR COMPLIANCE STATEMENT
                         FOR FORWARD-LOOKING STATEMENTS

         In passing the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"), Congress encouraged public companies to make "forward-looking
statements" by creating a safe harbor to protect companies from securities law
liability in connection with forward-looking statements. The Company intends to
qualify both its written and oral forward-looking statements for protection
under the Reform Act and any other similar safe harbor provisions.

         "Forward-looking statements" are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based. All
forward-looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to those
uncertainties and risks, prospective investors are urged not to place undue
reliance on written or oral forward-looking statements of the Company. The
Company undertakes no obligation to update or revise this Safe Harbor Compliance
Statement for Forward-Looking Statements to reflect future developments. In
addition, the Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over time.

         The Company provides the following risk factor disclosure in connection
with its continuing effort to qualify its written and oral forward-looking
statements for the safe harbor protection of the Reform Act and any other
similar safe harbor provisions. Important factors currently known to management
that could cause actual results to differ materially from those in
forward-looking statements include the following:

         THE COMPANY HAS RECENTLY INSTITUTED ITS NEW BUSINESS STRATEGY. ITS
BUSINESS MUST EXPAND FOR IT TO ATTAIN PROFITABILITY.

         The Company has only recently commenced the implementation of its new
business strategy. The Company may not successfully complete the transition to
successful operations or profitability pursuant to its new strategy. The Company
may encounter problems, delays and expenses in implementing its new business
strategy. These may include, but not be limited to, unanticipated problems and
additional costs related to marketing, competition and product acquisitions and
development. These problems may be beyond the Company's control, and in any
event, could adversely affect the Company's results of operations. See "Selected
Consolidated Financial Information" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

        IF THE COMPANY DOES NOT SUCCESSFULLY MANAGE ANY GROWTH IT EXPERIENCES,
IT MAY EXPERIENCE INCREASED EXPENSES WITHOUT CORRESPONDING REVENUE INCREASES.

The Company's business plan will, if implemented, result in rapid expansion of
its operations. This expansion may place a significant strain on management,
financial and other resources. It also will require the Company to increase
expenditures before it generates corresponding revenues. The Company's ability
to manage future growth, should it occur, will depend upon its ability to
identify, attract, motivate, train and retain highly skilled managerial,
financial, business development, sales and marketing and other personnel.
Competition for these employees is intense. Moreover, the addition of products
or businesses will require the Company's management to integrate and manage new
operations and an increasing number of employees. The Company may not be able to
implement successfully and maintain its operational and financial systems or
otherwise adapt to growth. Any failure to manage growth, if attained, would have
a material adverse effect on the Company's business.

                                       18
<PAGE>

         THE COMPANY IS DEPENDENT ON A LIMITED NUMBER OF SOURCES OF SUPPLY FOR
MANY OF THE PRODUCTS IT OFFERS. IF ONE OF IT SUPPLIERS FAILS TO SUPPLY ADEQUATE
AMOUNTS OF A PRODUCT THE COMPANY OFFERS, THE COMPANY'S SALES MAY SUFFER AND IT
COULD BE REQUIRED TO ABANDON A PRODUCT LINE.

         The Company is dependent on a limited number of sources of supply for
many of the products it offers. With respect to these products, the Company
cannot guarantee that these third parties will be able to provide adequate
supplies of products in a timely fashion. The Company also faces the risk that
one of its suppliers could become insolvent, declare bankruptcy, lose its
production facilities in a disaster, be unable to comply with applicable
government regulations or lose the governmental permits necessary to manufacture
the products it supplies to the Company. If the Company is unable to renew or
extend an agreement with a third-party supplier, if an existing agreement is
terminated or if a third-party supplier otherwise cannot meet the Company's need
for a product, the Company may not be able to obtain an alternative source of
supply in a timely manner or at all. In these circumstances, the Company may be
unable to continue to market products as planned and could be required to
abandon or divest itself of a product line on terms which would materially
affect it.

         THE COMPANY MAY BE EXPOSED TO PRODUCT LIABILITY CLAIMS NOT COVERED BY
INSURANCE THAT WOULD HARM ITS BUSINESS.

         The Company may be exposed to product liability claims. Although the
Company believes that it currently carries and intends to maintain a
comprehensive multi peril liability package, the Company cannot guarantee that
this insurance will be sufficient to cover all possible liabilities. A
successful suit against the Company could have an adverse effect on its business
and financial condition if the amounts involved are material.

         THE COMPANY IS UNCERTAIN OF ITS ABILITY TO OBTAIN ADDITIONAL FINANCING
FOR ITS FUTURE CAPITAL NEEDS. IF THE COMPANY IS UNABLE TO OBTAIN ADDITIONAL
FINANCING, IT MAY NOT BE ABLE TO CONTINUE TO OPERATE ITS BUSINESS.

         The Company will require significant amounts of additional capital to
achieve its stated goals. The Company believes that the net proceeds from the
Company's recent private offering of convertible debentures will be insufficient
to implement its strategy in calendar year 2001. The Company's future capital
requirements will depend on many factors including:

         -        the costs of its sales and marketing activities and its
                  education programs for its markets,

         -        competing product and market developments,

         -        the costs of acquiring or developing new products,

         -        the costs of expanding its operations, and

         -        its ability to generate positive cash flow from its sales.

Additional funding may not be available on acceptable terms, if at all. If
adequate funds are not available, the Company may be required to curtail
significantly or defer one or more of its marketing programs or to limit or
postpone obtaining new products through license, acquisition or other
agreements. If the Company raises additional funds through the issuance of
equity securities, the percentage ownership of its then-current stockholders may
be reduced and such equity securities may have rights, preferences or privileges
senior to those of the holders of its common stock. If the Company raises
additional funds through the issuance of additional debt securities, these new
securities would have certain rights, preferences and privileges senior to those
of the holders of its common stock, and the terms of these debt securities could
impose restrictions on its operations. For a further discussion of expenditures
and other factors that could affect the Company's need for future capital, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

                                       19
<PAGE>

         THE COMPANY'S INABILITY TO OBTAIN NEW PROPRIETARY RIGHTS OR TO PROTECT
AND RETAIN ITS EXISTING RIGHTS COULD IMPAIR ITS COMPETITIVE POSITION AND
ADVERSELY AFFECT ITS SALES.

         The Company believes that the trademarks, copyrights and other
proprietary rights that it owns or licenses, or that it will own or license in
the future, will continue to be important to its success and competitive
position. If the Company fails to maintain its existing rights or cannot acquire
additional rights in the future, its competitive position may be harmed. While
some products we offer incorporate patented technology, most of the products we
sell are not protected by patents.

         The Company has applied for registration of a number of key trademarks
and intends to introduce new trademarks, service marks and brand names. The
Company intends to take the actions that it believes are necessary to protect
its proprietary rights, but it may not be successful in doing so on commercially
reasonable terms, if at all. In addition, parties that license their proprietary
rights to the Company may face challenges to their patents and other proprietary
rights and may not prevail in any litigation regarding those rights. Moreover,
the Company's trademarks and the products it offers may conflict with or
infringe upon the proprietary rights of third parties. If any such conflicts or
infringements should arise, the Company would have to defend itself against such
challenges. The Company also may have to obtain a license to use those
proprietary rights or possibly cease using those rights altogether. Any of these
events could harm the Company's business.

         IF THE NETWORK MARKETERS DO NOT SUCCESSFULLY SELL THE PRODUCTS THE
COMPANY OFFERS, THE COMPANY MAY EXPERIENCE SIGNIFICANT LOSSES.

         The products the Company offers may not achieve market acceptance. The
market acceptance of these products will depend on, among other factors, their
advantages over existing competing products, and their perceived efficacy and
safety.

         The Company's business model assumes that the marketing programs
instituted by the network marketing companies with which it has alliances will
result in increased demand for the products it offers. If the marketing programs
do not succeed in generating a substantial increase in demand for its products,
the Company will be unable to realize its operating objectives. In addition, the
Company's business model seeks to build on the expanding roles of network
marketers, and its marketing efforts are concentrated on this group. If these
distribution networks do not successfully sell the products the Company offers
or if their customers do not regularly use these products, the Company may
experience significant losses and its business will be adversely affected.

     THE HEALTH CARE INDUSTRY AND THE MARKETS FOR THE PRODUCTS THE COMPANY
OFFERS ARE VERY COMPETITIVE. THE COMPANY MAY NOT BE ABLE TO COMPETE EFFECTIVELY,
ESPECIALLY AGAINST ESTABLISHED INDUSTRY COMPETITORS WITH SIGNIFICANTLY GREATER
FINANCIAL RESOURCES.

         The health care industry is highly competitive. Many of the Company's
competitors are large well-known health care companies that have considerably
greater financial, sales, marketing and technical resources than the Company.
Additionally, these competitors have research and development capabilities that
may allow them to develop new or improved products that may compete with product
lines the Company markets and distributes. In addition, competitors may elect to
devote substantial resources to marketing their products to similar outlets and
may choose to develop educational and information programs like those developed
by the Company to support their marketing efforts. The Company's business,
financial condition and results of operations could be materially and adversely
affected by any one or more of such developments.

         Competition for the self-care products the Company offers is
significant. These products compete against a number of well-known brands of
similar products. The Company's Internet site, competes with other Internet

                                       20
<PAGE>

sites focused on health in general. The Company's failure to adequately respond
to the competitive challenges faced by the products it offers could have a
material adverse effect on its business, financial condition and results of
operations.

         THE COMPANY'S QUARTERLY FINANCIAL RESULTS ARE LIKELY TO FLUCTUATE
SIGNIFICANTLY AND MAY FAIL TO MEET OR EXCEED THE EXPECTATIONS OF SECURITIES
ANALYSTS OR INVESTORS, WHICH COULD CAUSE THE PRICE OF THE COMPANY'S STOCK TO
DECLINE SIGNIFICANTLY.

         The Company's quarterly operating results may fluctuate significantly
based on factors such as:

         -        changes in the acceptance or availability of the products it
                  offers,

         -        the timing of new product offerings, acquisitions or other
                  significant events by the Company or its competitors,

         -        regulatory approvals and legislative changes affecting the
                  products it offers or those of its competitors,

         -        the timing of expenditures for the expansion of its
                  operations, and

         -        general economic and market conditions and conditions specific
                  to the health care industry.

         Due to the Company's short operating history pursuant to its new
business strategy and the difficulty of predicting demand for the products it
offers, the Company is unable to accurately forecast its revenues. Accordingly,
the Company's operating results in one or more future quarters may fail to meet
the expectations of securities analysts or investors, which could have a
material adverse effect on the Company's stock price.

         THE PUBLIC MARKET FOR THE COMPANY'S COMMON STOCK MAY BE VOLATILE, AND
THE PRICE OF THE COMMON STOCK MAY FLUCTUATE FOR REASONS UNRELATED TO THE
COMPANY'S OPERATING PERFORMANCE. A SIGNIFICANT DECLINE IN THE PRICE OF THE
COMMON STOCK COULD LEAD TO A CLASS ACTION LAWSUIT AGAINST THE COMPANY.

         There has been a very limited public market for the Company's common
stock, and the Company does not know whether investor interest in the Company
will lead to the development of a more active trading market. The market prices
and trading volumes for securities of emerging companies, such as the Company,
historically have been highly volatile and have experienced significant
fluctuations both related and unrelated to the operating performance of those
companies. The price of the Company's common stock may fluctuate widely,
depending on many factors, including factors that may cause the Company's
quarterly operating results to fluctuate as well as market expectations and
other factors beyond the Company's control. In the past, following periods of
volatility in the market price of a company's securities, class action
litigation has often been instituted against that company by some of its
stockholders. This type of litigation, if instituted against the Company, could
result in substantial costs and a diversion of management's attention and
resources, which could materially and adversely affect the Company's results of
operations and financial condition.

                                       21
<PAGE>

Item 8:  Financial Statements and Supplemental Data


                         REPORT OF INDEPENDENT AUDITORS


To the Board of Directors of
Gender Sciences, Inc., F/K/A The MNI Group Inc.


         We have audited the accompanying consolidated balance sheets of Gender
Sciences, Inc. F/K/A The MNI Group, Inc. as of January 31, 2001 and January 31,
2000 and the related consolidated statements of operations, stockholders'
deficit, and cash flows for the years then ended. 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 audit. The financial
statements of Gender Sciences, Inc. F/K/A The MNI Group, Inc. as of January 31,
1999, were audited by other auditors whose report dated May 6, 1999, on those
statements included an explanatory paragraph that described the uncertainty of
the Company's ability to continue as a going concern.

         We conducted our audit 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 audit provides 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 Gender Sciences,
Inc. F/K/A The MNI Group, Inc. as of January 31, 2001 and January 31, 2000, and
the results of its operations and cash flows for the years then ended in
conformity with generally accepted accounting principles.

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
8 to the financial statements, the Company has suffered recurring losses from
operations, a decline in revenue and net capital deficiencies that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 8. The consolidated
financial statements do not include any adjustments relating to the
recoverability or reclassification of any asset or liability that might result
from the outcome of this uncertainty.



                                            Goldstein & Ganz, CPA's, PC

Great Neck, NY
April 11, 2001


                                       F-1
<PAGE>
<TABLE>
<CAPTION>

                 GENDER SCIENCES, INC. F/K/A THE MNI GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS


                                  ASSETS                                                  January 31
                                                                                  --------------------------
Current Assets                                                                        2001           2000
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
    Cash                                                                          $    32,700    $   649,700
    Accounts receivable (net of allowance for doubtful
      accounts of $0 in 2001 and 2000)                                                 81,200         14,000
    Inventories                                                                        92,800         83,400
    Other current assets                                                               66,800         23,000
                                                                                  -----------    -----------
      Total current assets                                                            273,500        770,100
    Fixed assets, net of accumulated depreciation of
    $102,500 and $91,100, respectively                                                133,200          9,800
    Other assets:
    Security deposits                                                                  15,200         15,200
    Trademark, net of amortization                                                      3,700             --
                                                                                  -----------    -----------

                                                                                  -----------    -----------
                                                                                  $   425,600    $   795,100
                                                                                  ===========    ===========


                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable and accrued expenses                                         $   166,500    $   226,100
    Notes payable, short-term portion                                                  64,000         61,000
    10% convertible subordinated debentures                                                --      1,521,300
    Loans payable - officers                                                          130,000             --
                                                                                  -----------    -----------
       Total current liabilities                                                      360,500      1,808,400
                                                                                  -----------    -----------

Stockholders' equity:
    Common stock, no par value; 70,000,000 and 10,000,000 shares authorized at
    January 31, 2001 and January 31, 2000, respectively; 29,359,680 and
    4,110,709 shares issued and outstanding at January 31, 2001 and January 31,
    2000, respectively
                                                                                    9,562,800      7,313,900
    Accumulated deficit                                                            (9,487,300)    (8,316,800)
                                                                                  -----------    -----------
                                                                                       75,500     (1,002,900)
Less: Treasury stock, at cost                                                         (10,400)       (10,400)
                                                                                  -----------    -----------
      Total stockholders' equity (deficit)                                             65,100     (1,013,300)
                                                                                  -----------    -----------

                                                                                  $   425,600    $   795,100
                                                                                  ===========    ===========
</TABLE>


                 See notes to consolidated financial statements.

                                       F-2
<PAGE>

                 GENDER SCIENCES, INC. F/K/A THE MNI GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                               Years Ended January 31,
                                                     -----------------------------------------
                                                         2001           2000           1999
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
Sales                                                $   627,500    $   443,200    $   939,700
                                                     -----------    -----------    -----------

Cost of sales and operating expenses:
      Cost of merchandise sales                          311,800        267,600        527,700
      Selling, general and administrative expenses       980,100        645,600        453,200
      Web site development cost                          379,600        167,200             --
      Advertising expense                                 12,100          6,400          1,100
                                                     -----------    -----------    -----------

Total cost of sales and operating expenses             1,683,600      1,086,800        982,000
                                                     -----------    -----------    -----------

Operating (loss)                                      (1,056,100)      (643,600)       (42,300)
                                                     -----------    -----------    -----------

Other income (expense):
      Interest income                                     12,100          9,000             --
      Interest (expense)                                (140,300)       (94,700)       (40,100)
                                                     -----------    -----------    -----------
          Total other income (expense)                  (128,200)       (85,700)       (40,100)
                                                     -----------    -----------    -----------
(Loss) from continuing operations                     (1,184,300)       729,300)       (82,400)
Discontinued operations:
      Gain on discontinued operations                         --             --         15,700
                                                     -----------    -----------    -----------
Net (loss) before extraordinary items and
  provision for income taxes                          (1,184,300)      (729,300)       (66,700)
Extraordinary items:
      Forgiveness of debt                                 13,800        337,500             --
      Extinguishment of minority interest                     --        147,600             --
                                                     -----------    -----------    -----------
Net income from extraordinary items                       13,800        485,100             --
                                                     -----------    -----------    -----------

(Loss) before provision for income taxes              (1,170,500)      (244,200)       (66,700)
Provision for income taxes                                    --             --             --
                                                     -----------    -----------    -----------

Net (loss)                                           ($1,170,500)   ($  244,200)   ($   66,700)
                                                     ===========    ===========    ===========

Basic (loss) per common share:
      (Loss) from continuing operations              ($     0.12)   ($     0.18)   ($     0.02)
      Income (loss) from discontinued operations              --             --             --
      Net income from extraordinary items                     --    $      0.12             --
      Net (loss)                                     ($     0.12)   ($     0.06)   ($     0.01)

Weighted average number of shares outstanding          9,981,743      3,979,015      4,635,709
                                                     ===========    ===========    ===========
</TABLE>


                See notes to consolidated financial statements.


                                       F-3
<PAGE>

                 GENDER SCIENCES, INC. F/K/A THE MNI GROUP, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   YEARS ENDED JANUARY 31, 2001, 2000 AND 1999
<TABLE>
<CAPTION>

                                                Common Stock
                                         --------------------------    Accumulated     Treasury        Total
                                           Shares         Amount         Deficit         Stock         Equity
                                         -----------    -----------    -----------    -----------   -----------
<S>                                        <C>          <C>            <C>            <C>           <C>
Balance, January 31, 1998                  4,685,709    $ 7,576,400    ($8,005,900)            --   ($  429,500)

Redemption of shares from discontinued
operations                                  (600,000)      (300,000)            --             --      (300,000)

Net (loss)                                        --             --        (66,700)            --       (66,700)
                                         -----------    -----------    -----------    -----------   -----------

Balance, January 31, 1999                  4,085,709      7,276,400     (8,072,600)            --      (796,200)

Shares repurchased in connection with
settlement with LN Investment Capital     (1,536,030)            --             --       (100,000)     (100,000)

Shares issued as payment of services
performed                                    300,000         37,500             --             --        37,500

Sale of treasury stock                     1,261,030             --             --         89,600        89,600

Net (loss)                                        --             --       (244,200)            --      (244,200)
                                         -----------    -----------    -----------    -----------   -----------
Balance, January 31, 2000                  4,110,709      7,313,900     (8,316,800)       (10,400)   (1,013,300)

Shares issued in connection with the
payment of expenses                          122,974          5,000             --             --         5,000

Shares issued in connection with the
conversion of debentures to equity        24,725,997      2,213,900             --             --     2,213,900

Shares issued as payment for various
obligations                                  400,000         30,000             --             --        30,000

Net (loss)                                        --             --     (1,170,500)            --    (1,170,500)
                                         -----------    -----------    -----------    -----------   -----------

Balance, January 31,2001                  29,359,680    $ 9,562,800    ($9,487,300)   ($   10,400)  $    65,100
                                         ===========    ===========    ===========    ===========   ===========
</TABLE>


                See notes to consolidated financial statements.


                                       F-4
<PAGE>

                 GENDER SCIENCES, INC. F/K/A THE MNI GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                Years Ended January 31,
                                                      -----------------------------------------
                                                          2001           2000           1999
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Cash flows from operating activities:
  Net (loss)                                          ($1,170,500)   ($  244,200)   ($   66,700)
  Adjustments to reconcile net (loss) to
    net cash provided (used) by operating
    activities:
      Extraordinary items:
        Foregiveness of debt                              (13,800)      (337,500)            --
        Extinguishment of minority interest                    --       (147,600)            --
      Payment of services with common stock                 5,000         37,500             --
      Payment of interest with common stock               134,100             --             --
      Depreciation and amortization                        11,400         (2,500)         1,200
      Net gain on discontinued operations                      --             --        (15,700)
      Changes in working capital items:
       (Increase) decrease in accounts receivable         (67,200)        72,800         44,600
       (Increase) decrease in inventories                  (9,400)       (43,100)        85,800
       (Increase) decrease in other assets                (43,800)       (21,900)         6,700
       (Increase) decrease in security deposits                --           (200)           700
        Increase (decrease) in accounts payable
          and accrued expenses                             42,700         51,300       (121,200)
                                                      -----------    -----------    -----------
Net cash (used) by operating activities                (1,111,500)      (635,400)       (64,600)
                                                      -----------    -----------    -----------

Cash flows from investing activities:
  Purchase of equipment                                  (134,800)       (10,600)        (4,000)
  Trademarks                                               (3,700)            --             --
  Goodwill adjustment                                          --             --         63,300
                                                      -----------    -----------    -----------
Net cash (used for)provided by investing activities
                                                         (138,500)       (10,600)        59,300
                                                      -----------    -----------    -----------

Cash flows from financing activities:
  Redemption of stock in settlement                            --       (100,000)            --
  Proceeds from sale of treasury stock                         --         89,600             --
  (Decrease) increase in loans from stockholders          130,000       (172,500)        48,700
  (Decrease) increase in short-term debt                    3,000        (47,700)       (75,300)
  Proceeds from sale of debentures                        500,000      1,521,300             --
                                                      -----------    -----------    -----------
Net cash provided (used) by financing activities          633,000      1,290,700        (26,600)
                                                      -----------    -----------    -----------

Increase (decrease) in cash                              (617,000)       644,700        (31,900)
Cash, beginning of year                                   649,700          5,000         36,900
                                                      -----------    -----------    -----------

Cash, end of year                                     $    32,700    $   649,700    $     5,000
                                                      ===========    ===========    ===========

Supplemental information:
  Cash expended for:
    Interest expense                                  $    32,600    $    32,600    $    32,400
    Federal income taxes                                       --             --             --
</TABLE>

                 See notes to consolidated financial statements.

                                       F-5
<PAGE>

                 GENDER SCIENCES, INC. F/K/A THE MNI GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JANUARY 31, 2001


Note 1.  ORGANIZATION AND BUSINESS:

         Gender Sciences, Inc. F/K/A The MNI Group, Inc. (Gender Sciences), a
New Jersey corporation organized in 1981, and its subsidiaries, are engaged in
the development, marketing and distribution of a variety of health-related
products and programs. The Company and its subsidiaries distribute nutritional
support products and programs for healthy living, a line of
nutritionally-oriented pet products, and over-the-counter household remedies.

         In May 1993, the Company organized NutraPet Labs, Inc. (NutraPet) for
the purpose of developing and marketing pet products. The Company subsequently
issued 313,000 shares of NutraPet for $313,000 in a private placement.

         In July 1997, the Company consummated a merger with K.O.S. Industries,
Inc. (KOS) whereby all of KOS outstanding common stock was exchanged for 600,000
shares of the Company's common stock. The transaction was treated as a purchase.
KOS distributes and markets a line of pet-related products. In addition, one of
KOS key employees was granted stock options to acquire 750,000 additional shares
of the Company, and a KOS consultant was granted options to acquire 150,000
shares of the Company's common stock. (See Note 6)

         In December 1998, the Company reversed the KOS transaction above, as a
result of KOS's inability to meet marketing expectations.

         On October 19, 2000, at the Company's annual meeting, the stockholders
voted to change the Company's name to Gender Sciences, Inc.

Note 2.  SIGNIFICANT ACCOUNTING POLICIES:

         PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly-owned and majority-owned
subsidiaries after elimination of intercompany accounts and transactions for
ongoing activities. They do not include any of the activities of KOS.

         The consolidated statements of operations for the year ended January
31, 1999, include in "Discontinued Operations" the results of operations for
K.O.S. Industries, Inc. and the resulting gain on the reversal of the KOS
transaction. The amounts shown in discontinued operations are not shown net of
any income tax effect (either expense or benefit) due to the net loss in that
year, as well as substantial net operating loss carryforwards.

         INVENTORIES - Inventories, which consist primarily of purchased
finished foods, are stated at the lower of cost or market using the "first-in,
first-out" (FIFO) cost method.

         FIXED ASSETS - Furniture, fixtures and equipment, and leasehold
improvements are stated at cost and depreciated and amortized over their
estimated useful lives using the straight-line method for financial reporting
purposes and accelerated methods for income tax purposes. Expenditures for
repairs and maintenance, which do not extend the useful life of the property are
expensed as incurred. The estimated useful lives of the assets are as follows:


                                       F-6

<PAGE>

         Furniture, fixtures and equipment                   5-10 years
         Leasehold improvement                                3-7 years

         RESEARCH AND DEVELOPMENT - The Company and its subsidiaries utilize
independent third parties to design and test certain products. These
expenditures are accounted for as research and development costs and are
expensed as incurred.

         WEB SITE DEVELOPMENT COSTS - Costs to develop the Company's web site,
including the cost of developing services offered to visitors of the web site,
are accounted for under Statement of Position No. 98-1 "Accounting for Costs of
Computer Software Developed or Obtained for Internal Use". Through the third
quarter of the year ended January 31, 2001, such costs were incurred during the
preliminary project stage and, accordingly, were expensed. Since that time, such
costs have been capitalized and amortized over a five year period.

         INCOME TAXES - The Company provides for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 (SFAS 109)"Accounting for
Income Taxes". SFAS 109 requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences between
the financial statement carrying amounts and the tax basis of assets and
liabilities.

         REVENUE RECOGNITION - Revenue is recognized upon shipment of products
to customers.

         EARNINGS PER SHARE - The consolidated financial statements are
presented in accordance with Statement of Financial Accounting Standards No. 128
(SFAS 128), "Earnings per Share". Basic earnings per common share are computed
using the weighted average number of common shares outstanding during the
period. Diluted earnings per common share incorporate the incremental shares
issuable upon the assumed exercise of stock options and warrants. In accordance
with SFAS 128, diluted earnings per share is not presented in years during which
the Company incurred a loss from operations.

         USE OF ESTIMATES - In preparing financial statements in conformity with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosures of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Note 3.  FIXED ASSETS:

         Fixed assets consisted of the following at January 31, 2001 and 2000,
respectively:


                                                            January 31,
                                                      -----------------------
                                                        2001           2000
                                                      --------       --------
         Furniture, fixtures and equipment            $103,000       $  3,200
         Leasehold improvements                         25,200         97,700
         Web site development costs                    107,400             --
                                                      --------       --------
                                                       235,600        100,900
         Less:  accumulated depreciation
                and amortization                       102,400         91,100
                                                      --------       --------

                                                      $133,200       $  9,800
                                                      ========       ========

                                      F-7

<PAGE>

Note 4.  NOTES PAYABLE:

         In November 1991, Family Weight Loss Centers, Inc. (FWLC), (a former
subsidiary of Gender Sciences), filed a petition for bankruptcy proceedings
pursuant to Chapter 7 of the federal bankruptcy statutes. This petition provided
for complete liquidation of all of the corporate assets and liabilities. FWLC
was an affiliate of a stockholder of the Company.

         Subsequent to the bankruptcy filing, the Company agreed to satisfy an
outstanding $4,000,000 obligation, which it had guaranteed as part of the FWLC
acquisition. The guarantee was in the form of a term note to Fleet Bank, NA. The
Company agreed to satisfy the obligation by the payment of $125,000, issuance of
a three year note in the amount of $125,000, with interest at the bank's prime
rate, and the issuance of warrants to purchase 750,000 shares of the Company's
common stock at a price of $.01 per share, expiring in February 2002. In
February 1995, the Company agreed to liquidate the three-year note in the amount
of $125,000 by the payment of 42 monthly payments in the amount of $2,976 each
plus interest at the prime rate commencing in August 1995. At January 31, 2000,
the balance outstanding was $23,800. During the year ended January 31, 2001 the
Company negotiated a payoff settlement with Fleet Bank which resulted in
forgiveness of debt of $13,800. Interest charged to expense on this debt was
$600, $3,800, and $2,800 for the years ended January 31, 2001, 2000 and 1999,
respectively.

         The Company borrowed $50,000 from PNC Bank on January 29, 1998. The
maturity date of the loan was January 29, 1999, with interest accruing at the
rate of 10.25% per annum. During the year ended January 31, 1999, this loan was
converted to a demand note. Principal and interest payments are being made on a
monthly basis. Interest paid during the year ending January 31, 2001 was
approximately $3,000. At January 31, 2001, the outstanding balance was $30,000.

         All of the Company's notes payable are due within one year. A summary
of notes payable at January 31, 2001 and 2000 is as follows:

                                                     January 31,
                                             ---------------------------
                                               2001               2000
                                             --------           --------
                PNC Bank demand note         $ 30,000           $ 37,200
                Fleet Bank, NA                     --             23,800
                                             --------           --------
                                             $ 30,000           $ 61,000
                                             ========           ========


Loans Payable - Officers

         From time to time the Company's chief operating officer has made
advances to the Company for working capital purposes. Interest on these advances
was charged at rates varying from 11% to 18%. The balance due at January 31,
1999, was $196,300 and the highest balance due during the 2000 fiscal year was
$230,800. The total of all repayments during the year, including interest,
amounted to $278,200. At January 31, 2000, all advances were repaid and,
accordingly, no balance remained outstanding. No advances were made during
fiscal 2001.

         During the fourth quarter of fiscal 2001, the Company received an
advance of $130,000 from an affiliate of the Chairman of the Board. Although no
documentation was prepared for this loan, management expects the terms of the
debt to be favorable to the Company.

                                      F-8
<PAGE>

Note 5.  LEASE COMMITMENTS:

         Gender Sciences leases an office and warehouse facility in New Jersey
under a lease which expires in December 2004.

         Total gross rental expense for the year ended January 31, 2001, 2000
and 1999 was approximately $85,000, $65,600, and $77,300 respectively. Gender
Sciences sub-leases (on a month to month basis) a portion of its facility to
various entities at an annual rental income of approximately $33,800, $34,600,
and $41,000 for the year ended January 31, 2001, 2000 and 1999, respectively.
The future minimum annual rents are as follows:


                                      Year ended January 31,
                                                   2002        $ 65,600
                                                   2003          65,800
                                                   2004          67,500
                                                   2005          61,900
                                                               --------

         Total future minimum annual rent payments             $260,800
                                                               ========

         The Company leases equipment under various operating leases. During the
year ended January 31, 2001, the total payments under such leases were $12,000.
The future minimum annual lease payments are as follows:

                                      Year ended January 31,
                                                   2002        $ 15,900
                                                   2003           5,900
                                                   2004           1,100
                                                               --------

         Total future minimum annual lease payments            $ 22,900
                                                               ========

Note 6.  STOCKHOLDERS' EQUITY:

         In February 1992, in connection with the bankruptcy of FWLC (see Note
4) the Company issued to Fleet Bank warrants to purchase 750,000 shares of the
Company's common stock. The warrants are exercisable at $.01 per share and
expire in February 2002. At January 31, 2001, none of the options were
exercised.

         In March 1992, three officers and directors of Gender Sciences were
each granted options to purchase 125,000 shares of the Company's common stock
plus 150,000 additional options which vested over 60 months. The options are
exercisable at $.10 per share. Upon the resignation of one of the officers,
150,000 options were cancelled. The original 125,000 options issued to this
officer expired in 1999. In 1999, the options issued to the remaining two
officers (275,000 each), were extended to November 2004. At January 31, 2001,
none of the options were exercised.

         In January 1996, as consideration to forego payment of past due salary,
two officers of the Company were issued 375,000 options each exercisable at $.10
per share. The options expire in November 2004. At January 31, 2001, none of the
options were exercised.

         In February 1997, as consideration for his efforts on behalf of the
Company, an officer was issued options to purchase 100,000 shares of the
Company's common stock at $.10 per share. The options expire in November 2004.
At January 31, 2001, none of the options were exercised.

         During 1999, the Company issued options to a consultant to purchase
175,000 shares of the Company's common stock as additional consideration on
behalf of his efforts in building the Company's web site. The options are

                                      F-9
<PAGE>

exercisable 100,000 at $.10 per share and 75,000 at $.25 per share. All of these
options expire November 2004. At January 31, 2001, none of the options were
exercised.

         In July 1999, as consideration for his efforts on behalf of the
Company, an officer was issued options to purchase 100,000 shares of the
Company's common stock at $.10 per share. The options expire in November 2004.
At January 31, 2001, none of the options were exercised.

         In August, 1999, options to purchase 750,000 shares of the Company's
common stock which were previously issued to Lepercq Capital Management, were
transferred to Arnold and Myra Gans, President and Vice President of the
Company, respectively. These options were transferred as consideration for their
efforts in developing Womens Health Network on behalf of the Company. Such
options expire on November 1, 2004. At January 31, 2001, none of the options
were exercised.

         In October 1999, the Chairman and one director of the Company were each
contingently awarded options to purchase a total of 300,000 shares of the
Company's common stock at a price of $0.10 per share. The grant of these options
was contingent upon the adoption of a stock option plan by the stockholders of
the Company. On October 19, 2000, at the Company's annual meeting, the
stockholders adopted the 2000 Long-Term Incentive Stock Option Plan and the
options vested. At January 31, 2001, none of the options were exercised. The
options will expire on November 1, 2004.

         In November 1999, options to purchase 335,000 shares of the Company's
common stock were issued to various medical consultants and options to purchase
20,000 shares were issued to various other consultants. Such options expire on
November 1, 2009. At January 31, 2001, none of the options were exercised.

         In December 1999, the Company issued options to purchase 5,250 shares
and 500 shares of the Company's common stock as bonuses to employees and
consultants, respectively. The options are exercisable at $.10 per share and
expire November 2004. At January 31, 2001, none of the options were exercised.

         In February 2000, as consideration for accepting the terms of her
employment agreement, an employee was issued 25,000 options each exercisable at
$.875 per share. The options expire in November 2004. At January 31, 2001, none
of the options were exercised.

         In March 2000, the Company granted options to a member of its medical
review board to purchase 100,000 shares of its common stock. Additionally, in
March 2000, the Company granted options to a consultant to purchase 1,000 shares
of its common stock. Both options are exercisable at $.875 per share and expire
on November 1, 2009 and November 1, 2004, respectively. At January 31, 2001,
none of the options were exercised.

         In March 2000, the Company entered into an agreement with a consultant,
which provided, in addition to cash consideration, options to purchase 3,985,000
shares of common stock of the Company at an exercise price of $.875 per share.
The options have a five year term and vest 20% upon grant and 20% on each six
month anniversary of the date of grant. Further, the agreement provided, on
substantially the same terms, options to purchase 1) - 500,000 shares for the
Department of Medicine at Columbia University College of Physicians and Surgeons
and, 2) - 413,500 shares for two individuals associated with the consultant. At
January 31, 2001, none of the options were exercised. The Company and the
consultant are engaged in discussion pursuant to which the vesting period for
the options will be accelerated and the exercise price of a portion of the
options will be reduced. These discussions are based in part upon the proposed
financing by the Company described elsewhere herein. See Note 8 hereunder for
discussion of the potential consequences if the proposed offering is not
consummated.

                                      F-10
<PAGE>

         Throughout the year ended January 31, 2001, as consideration for
accepting positions on the Company's Advisory Board, four individuals were
issued a total of 85,000 options each exercisable at prices ranging from $.10 to
$.875 per share. The options expire in November 2004. At January 31, 2001, none
of the options were exercised.

Subordinated Debentures

         In November 1999, the Company completed a private placement for the
principal amount $1,521,250 of 10% Convertible Debentures due October 1, 2000.
This private placement included the conversion of $390,000 of unsecured advances
received earlier in that year. Under the terms of the Debentures, the principal
dollar amount was convertible by the holders into the Company's common stock at
$.075 per share. The Debentures were to be converted automatically upon the
Company amending its Certificate of Incorporation to increase its authorized
capitalization to not less than 35,000,000 shares of common stock.

         During the year ended January 31, 2001, the Company sold $500,000 of
additional debentures with terms similar to those sold in the prior fiscal year.
However, these debentures were convertible at $0.25 per share.

         On October 19, 2000, at the Company's annual meeting, the stockholders
voted to increase the authorized number of shares of the Company's common stock
to 70,000,000. This resulted in the automatic conversion of the debenture sold
during the current fiscal year plus the related accrued interest to 2,388,826
shares. The original debentures matured on October 1, 2000, and thereafter
became convertible into shares of common stock. As of January 31, 2001
(including shares issuable for accrued interest) there were 22,622,161 shares
issued.


2000 Long-Term Incentive Stock Plan

         On October 19, 2000, the stockholders approved the 2000 Long-Term
Incentive Stock Plan (the Plan). Under the Plan, the Company may grant stock
options, stock appreciation rights (SAR's) or stock awards. All employees of the
Company are eligible to participate in the Plan. The Plan authorizes the
issuance, in the aggregate, of up to 6,000,000 share of common stock. No stock
option, SAR or other award, may be granted under the Plan after October 27,
2009. The maximum number of share for which awards may be granted to any person
in any fiscal year is 300,000. The purchase price per share for each stock
option may not be less than 100% of the fair market value on the date of grant
and may not be for more than ten years. In the case of incentive stock options
granted to an optionee who, at the time of grant, owns stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company, the exercise price per share may not be less than 110% of the fair
market value on the date of grant and the option may not be exercisable for more
than five years. At January 31, 2001, no options were granted from the Plan.

Note 7.  INCOME TAXES:

         The Company has adopted the liability method of accounting for income
taxes pursuant to SFAS 109. No recognition has been made of the possible
benefits of available net operating loss carryforwards due to the uncertainty
that future years' will provide income to be offset by such available benefits.
Gender Sciences and its subsidiaries have net operating loss carryforwards in
excess of $9,000,000, which could be available to reduce income otherwise
subject to income tax. The possible deferred income tax benefits of such
available net operating losses are estimated to be approximately $3,320,000 as
of January 31, 2001, with a valuation allowance of an equal amount as follows:

                                      F-11
<PAGE>
<TABLE>
<CAPTION>

                                                          Year Ended January 31,
                                            ----------------------------------------------
                                               2001              2000              1999
                                            ----------        ----------        ----------
<S>                                         <C>               <C>               <C>
        Deferred tax asset                  $3,320,000        $2,911,000        $1,720,000
        Allowance for deferred tax asset    (3,320,000)       (2,911,000)       (1,720,000)
                                            ----------        ----------        ----------
        Net deferred tax asset              $       --        $       --        $       --
                                            ==========        ==========        ==========
</TABLE>

         Net operating losses carryovers of approximately $9,485,800, will
expire over the next 18 years, the majority of which (approximately $6,979,800)
will expire between fiscal 2002 and 2007.

Note 8.  COMMITMENTS AND CONTINGENCIES:

Government Regulations

         The Company's food and pet products are produced by third parties in
various plants under applicable government regulations. The Company depends upon
its vendors to comply with such regulations. Failure by such vendors to comply
with the applicable regulations could result in fines and/or seizure of the food
products. Presently, the Company is not a party to any such lawsuits. In
addition, it has no commitments to its vendors for the purchase of either raw
materials or finished product.

Consulting Agreements

         In March 2000, the Company entered into an agreement with a consultant,
which provided cash consideration and options to purchase shares of common stock
of the Company (see Note 6). The options have a five-year term and vest over two
years. Upon execution of the agreement, the Company paid the consultant $100,000
and became obligated to make an additional payment of $150,000 on the first
anniversary of the agreement (March 27, 2001). The Company and the consultant
have since been engaged in discussions to extend the period for payment of the
outstanding sums as well as revising the pricing and vesting of the options
granted to consultant. These discussions are based in part upon the success of
the Company's proposed financing. If unsuccessful, there is no assurance that
the consultant might not elect to assert certain claims. The Company believes
that if that should occur it would have meritorious defenses against such
claims.

Going Concern

         As shown in the accompanying financial statements, although the
Company's sales have increased from $443,200 to $627,500, losses from operations
have increased from ($729,300) to ($1,182,800). Additionally, the Company has
negative working capital at January 31, 2001, of ($87,000). The fact that the
Company has continued to sustain losses and requires additional sources of cash
to fund its operations, continues to create uncertainty about the Company's
ability to continue as a going concern.

         Management of the Company has developed a plan to improve cash flow
through expanding operations and raising additional funds either through the
issuance of debt or equity. Managements' plan includes the sale of $500,000 of
additional subordinated convertible debentures or equity, which is expected to
be completed by May 31, 2001 (during the years ended January 31, 2000 and 1999,
the Company sold approximately $0.5 million and $1.5 million of its subordinated
convertible debentures, respectively). There is no assurance that the Company
will successfully consummate this financing. As noted below, failure to
consummate this financing could materially impact the Company's ability to
operate its business. During fiscal years 2000 and 2001, management had directed
its efforts toward the development of its non-biased gender based womens'
healthcare Internet web site. Presently, managements' efforts and the Company's
resources are being directed toward new product development and direct sales and
marketing to existing and new customers.

         The ability of the Company to continue as a going concern is dependent
upon its ability to raise additional funds and the success of managements plan
to expand operations. The Company anticipates that the proceeds from the
forthcoming sale of debentures or equity as discussed above will provide the
necessary funds it requires for the balance of the year ending January 31, 2002.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern as a result of its
inability to complete its financing.

                                      F-12
<PAGE>

Note 9.  MAJOR CUSTOMERS:

         For the year ended January 31, 2001, three customers were responsible
for approximately $244,400 in sales; representing approximately 39% of sales.
For the year ended January 31, 2000, one customer was responsible for
approximately $75,800 in sales representing approximately 17% of total sales.
For the year ended January 31, 1999, two customers were responsible for
approximately $523,000 in sales representing approximately 56% of total sales.

Note 10. EXTRAORDINARY ITEMS:

Forgiveness of Debt

         In August 1999, the Company entered into a settlement agreement with
the former Chairman of the Company's board of directors and his affiliates,
LePercq Capital Management Inc. (LePercq) and LN Investment Capital Ltd.
Partnership (LNIC). The settlement provided that the Company repurchase from the
former Chairman 1,536,030 shares of its common stock for $100,000 (the current
market value). Further, the Company's indebtedness of $165,000 for consulting
fees to LePercq and notes of $75,000 with additional accrued interest of $22,100
payable to LNIC were forgiven and options for 150,000 shares of the Company's
common stock were returned. Additionally, as part of the terms of the agreement,
two of the Company's officers and directors agreed to forgive accrued salaries
due them aggregating $75,000.

         In February 1995, the Company agreed to liquidate a three-year note
payable to Fleet Bank in the amount of $125,000 by the payment of 42 equal
monthly principal payments plus interest at the prime rate. At January 31, 2000,
the balance outstanding was $23,800. During the year ended January 31, 2001, the
Company negotiated a payoff settlement with Fleet Bank, which resulted in
forgiveness of debt of $13,800.

Extinguishment of minority interest

         In 1993, the Company sold a minority interest in one of its
subsidiaries to third parties through a private offering. As a result, the
Company recorded an obligation to minority shareholders representing their
proportionate share of the subsidiary's equity. This liability changed from year
to year as the equity of the subsidiary changed. Although the equity of the
subsidiary was negative in recent years, the Company continued to reflect a
liability to the minority shareholders. Due to the negative equity of the
subsidiary as of January 31, 2000, and the absence of the Company's obligation
to the minority shareholders, the liability was written off. When the subsidiary
reestablishes a positive equity the Company will record a liability to reflect
the minority interests' proportionate share.

Note 11. DISTRIBUTION AGREEMENT:

        On January 30, 2001, the Company entered into a distribution agreement,
which gave the Company the right to provide certain products to an entity, which
has exclusive marketing and sales rights to such products. As part of the
agreement, the Company was required to advance approximately $49,000 for
marketing and promotional expenses. Such advances are to be repaid out of
profits during the first six months of the agreement. These advances are
reflected in Other Current Assets on the Company's balance sheet at January 31,
2001.

                                      F-13
<PAGE>

Note 12. SEGMENTAL REPORTING:

         The Company organizes its business units into three reportable
segments: nutritional support products, holistic products, and animal products.

<TABLE>
<CAPTION>

                                 Segment Report
                           Year Ended January 31, 2001

                                     Nutritional                                Adjustment
                                      Support         Holistic       Animal         &
                                      Products        Products      Products    Elimination     Consolidated
                                     ----------      ----------    ----------   -----------     ------------
<S>                                  <C>             <C>           <C>          <C>              <C>
Revenues:
From unaffiliated
  customers                          $  456,500      $  100,000    $   71,000                    $  627,500
                                     ==========      ==========    ==========                    ==========
(Loss) from operations before
discontinued
operations and extraordinary
item
                                    ($1,238,200)     $   48,600        $6,800                   ($1,182,800)
                                     ==========      ==========    ==========                    ==========
Identifiable assets at
January 31, 2000                     $  703,600      $   51,900    $  243,300   ($ 573,200)      $  425,600
                                     ==========      ==========    ==========   ==========       ==========
</TABLE>

         The accounting policies for the Company's segments are the same as
those described in the summary of significant accounting policies. The Company
evaluates performance based on profit or loss from operations before interest
and income taxes, and excluding nonrecurring gains and losses.

         The Company's reportable business segments are strategic business units
that offer different products and services. Each segment is managed as a
separate unit and markets its products to a distinct class of customers.


Note 13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):

         Below is a summary of the quarterly results of operations for each
quarter of fiscal 2001 and 2000:

<TABLE>
<CAPTION>

2001                                   First       Second        Third        Fourth
----                                 ---------    ---------    ---------    ---------
<S>                                  <C>          <C>          <C>          <C>
Sales                                $ 228,100    $ 125,500    $ 135,800    $ 138,100
Gross Profit                           115,800       62,500       63,700       73,700
Net Income (loss)                     (332,600)    (268,600)    (331,700)    (237,600)
Net Income (loss) per common share   ($   0.07)   ($   0.06)   ($   0.07)   ($   0.01)

2000
----
Sales                                $  90,500    $ 127,200    $ 158,800    $  66,700
Gross Profit                            17,900       69,300       75,000       13,400
Net Income (loss)                     (103,000)     (95,200)     258,600     (304,600)
Net Income (loss) per common share   ($   0.03)   ($   0.02)   $    0.07    ($   0.07)
</TABLE>


Note 14. SUPPLEMENTAL CASH FLOW INFORMATION:

         During the year ended January 31, 2001 and 2000, the Company issued
122,674 and 300,000 shares of its common stock valued at $5,000 and $37,500,
respectively, as payment in lieu of services performed. Additionally, during the
year ended January 31, 2001, the Company issued 400,000 shares of common stock
as payment of $30,000 of corporate obligations.

                                      F-14
<PAGE>

Item 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ACCOUNTING AND FINANCIAL DISCLOSURE

         None


                                    PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

Set forth below are the names, ages, and the position and offices held by each
of the directors and executive officers of the Company.

Name                       Age               Position and Office
--------                   -----             ----------------------------------
Lawrence Burstein          58                Chairman (1) and Director
Arnold Gans                66                President
Myra Gans                  63                Executive Vice President/Director
Alan Gaines                42                Director

----------
(1) Michael J. Connelly resigned as the Company's Chairman in November 1999.


         LAWRENCE BURSTEIN, Chairman, is and since March 1996 has been
President, a Director and principal shareholder of Unity Venture Capital
Associates, a private investment banking firm. Mr. Burstein is a director of
four other public companies, being respectively, CAS Medical Systems, Inc.
engaged in the manufacture and marketing of specially formulated medical foods,
and T-HQ, Inc., a developer of electronic game cartridges, Traffix, Inc., an
Internet marketing company, and ID Systems, Inc., a manufacturer and marketer of
systems to monitor physical assets.

         ARNOLD GANS has been President and a director of the Company since its
formation in 1981. Prior thereto, Mr. Gans had been involved in the weight
control market for over 25 years during which time he, among other things,
developed certain appetite suppressants and anti-obesity programs. Prior to
founding the Company in 1981, Mr. Gans was President of Control Drug, Inc. a
private company engaged in the manufacture of nutritional protein supplements.
Mr. Gans was granted patents in 1977 for method-use manufacturing for certain
nutritional formula processes relating to the use of certain foods (EMF) to
treat nutritional deficiency, which he has assigned to the Company.

         MYRA GANS, wife of Arnold Gans, the Company's president, has been
Executive Vice President of and a director of the Company since 1982. Mrs Gans,
who is Mr. Gans' spouse, has been an executive at MNI since 1981 and was
employed at Control Drug, Inc. as Vice President-Sales for five years prior
thereto. She has worked extensively with medical professionals and hospitals to
integrate company products and programs. She directed and manages all the
Internet project components for the His and Her Medicine.com site.

         ALAN GAINES, Director, co-founded Gaines, Berland Inc. (GBI) in 1983.
GBI, a full service brokerage concern (member NASD, SIPC), specializes in global
energy markets. GBI commenced operations as a research boutique that provides
consultative, brokerage, and capital formation services to institutions. Mr.
Gaines left GBI in 1998 in order to pursue several entrepreneurial pursuits
including expanding the market presence of HitTheBeach. Upon Mr. Gaines'
departure in 1998, GBI maintained a sales and operations staff in excess of 600
employees and a retail system consisting of 400 registered sales
representatives. In 1998, Mr. Gaines provided critical angel capital to
GlobalNetFinancial.com, Inc. GlobalNetFinancial is a rapidly expanding
international financial portal providing online financial news and content,
investment tools and transaction services.

         Directors of the Company hold office until the next annual meeting of
the Company's shareholders and until their successors have been duly elected and
qualified. None of the Company's Directors receives compensation for his
services as such.

         Officers of the Company serve at the pleasure of the Board of Directors
and until the first meeting of the Board of Directors following the next annual
meeting of the Company's shareholders and until their successors have been
elected and qualified.

                                       22
<PAGE>

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Pursuant to Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules issued thereunder, the Company's executive
officers and directors are required to file with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. reports of
ownership and changes in ownership of Common Stock. Copies of such reports are
required to be furnished to the Company. Arnold Gans did not timely file a Form
4 with respect to the grant to him of 750,000 options in August, 1999 and the
purchase of 133,340 shares of Common Stock and Myra Gans did not timely file a
Form 4 with respect to the same 750,000 options granted to her in August 1999
and the same purchase of 133,340 shares of Common Stock. A Form 5 was filed by
both on February 16, 2000. The Company believes that during the year ended 2001,
all of its other executive officers and directors complied with the requirements
of Section 16(a).


Item 11. EXECUTIVE COMPENSATION

(a)      CASH COMPENSATION

         The following table summarizes the compensation paid in the fiscal
years ended January 31, 2001, 2000, & 1999 respectively, to the Company's Chief
Executive Officer and Executive Vice President.

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL POSITION         ANNUAL COMPENSATION          LONG TERM COMPENSATION AWARDS(b)
                                    -------------------
                                    YEAR       SALARY                     STOCK OPTIONS
                                    ----      ---------                  --------------
<S>                                 <C>      <C>                            <C>
Arnold Gans
    President (CEO)                 2001     $156,923                       750,000 (a)
                                    2000     $140,000
                                    1999     $140,000

Myra Gans
   Executive Vice President         2001     $ 98,461                       750,000 (a)
     & Secretary                    2000     $ 85,000
                                    1999     $ 85,000
</TABLE>


(a)      These stock options are owned jointly by Mr. And Mrs. Gans.

(b)      The Company does not offer any restricted stock awards, stock
appreciation rights, or other long term incentive programs.

         In October 1999, Lawrence Burstein, Chairman of the Company was
contingently awarded options to purchase 300,000 shares of the Company's common
stock at a price of $0.10 per share. The grant of these options was contingent
upon the adoption of a stock option plan by the stockholders of the Company at
the upcoming annual meeting of stockholders. None of these options will vest
unless and until a stock option plan is adopted by the stockholders. The options
will expire on November 1, 2004.

                                       23
<PAGE>

                 AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR
                        AND FISCAL YEAR END OPTION VALUES

                  NUMBER OF SECURITIES             VALUE OF UNEXERCISED
                  UNDERLYING UNEXERCISED           IN-THE-MONEY OPTIONS
                  OPTIONS AT YEAR END (#)          AT FISCAL YEAR END ($)(a)
                  ---------------------------      -----------------------------

NAME              EXERCISABLE    UNEXERCISABLE     EXERCISABLE     UNEXERCISABLE

Arnold Gans(a)     1,400,000                        $ 350,000        $
Myra Gans (a)      1,400,000                        $ 350,000        $
---------
(a)      includes 750,000 options owned jointly by Mr. and Mrs. Gans



OPTIONS GRANT IN LAST FISCAL YEAR

         None

EMPLOYMENT AGREEMENTS

None of the Company's executive officers is presently a party to an employment
agreement with the Company.


(b)      COMPENSATION PURSUANT TO PLANS
           None.

(c)      OTHER COMPENSATION
           None.

(d)      COMPENSATION OF DIRECTORS

           Directors receive no compensation for their services as such.

                                       24
<PAGE>

(e)      TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

           None.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the Company's
outstanding common stock beneficially owned on January 31, 2001 by (i) each
person who is known by the Company to beneficially own or exercise voting or
dispositive control over at least 5% of the Company's common stock, (ii) each of
the Company's directors and (iii) all of the Company's executive officers and
directors as a group:


NAMES AND ADDRESSES             NUMBER OF SHARES
OF BENEFICIAL OWNER             BENEFICIALLY OWNED(1)    PERCENTAGE OF CLASS(1)
-------------------             ---------------------    ----------------------

Arnold Gans                         2,399,830(2)                  6.02%
10-West Forest Avenue,
Englewood, NJ 07631

Myra Gans                           2,399,830(2)                  6.02%
10 West Forest Avenue,
Englewood, New Jersey 07631

Lawrence Burstein                     892,750(4) (5)              2.3%
245 Fifth Avenue,
New York, New York 10016

Alan Gaines                         2,266,666(4)                  5.8%
7 Wakeman Road
Westport, CT  06880

All directors and executive
officers as a group
(4 persons) (3) (4) (5)              5,695,160                   14.75%


(1)      Includes all shares issuable pursuant to presently exercisable options
         as well as all such options that will become exercisable within 60 days
         of the date hereof. Except as otherwise indicated, all shares are
         beneficially owned, and the persons named herein hold their sole
         investment and voting power.

(2)      Includes 349,830 shares which are owned by Arnold and Myra Gans; also
         includes options to acquire an aggregate of 2,050,000 shares for Arnold
         and Myra Gans exercisable at $.10 per share through November 1, 2004.

(3)      Excludes 8,863 shares owned by Trinity Pension Trust, of which Mr.
         Burstein is a trustee and beneficiary.

(4)      Excludes accrual of interest on 10% debentures.

(5)      Excludes 1,333,333 shares owned by Unity Capital, of which Mr. Burstein
         is a Director, President and principal shareholder. Unity Capital also
         has loaned to the Company $130,000.


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         From time to time Arnold Gans, the Company's Chief Operating Officer,
made advances to the Company for working capital purposes. Interest on these
advances was charged at rates varying from 11% to 18%. The balance due at
February 1, 1999, was $196,300 and the highest balance due during the year was

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<PAGE>

$230,800. The total of all repayments during the year, including interest,
amounted to $278,200. At January 31, 2000, all advances were repaid out of the
proceeds raised from the private placement of 10% Convertible Subordinated
Debentures and, accordingly, no balance remained outstanding.

         During the quarter ended October 31, 1999, the Company raised a total
of $1,148,700 in connection with a private placement of 10% Convertible
Subordinated Debentures convertible at $.075 per share (including $390,000 of
unsecured advances received during the second quarter which were converted into
10% Convertible Subordinated Debentures). Mr. Lawrence Burstein, a Director and
Chairman of the Company, and an entity of which Mr. Burstein is a shareholder,
officer and director, acquired $137,500 principle amount of the 10% Convertible
Subordinated Debentures.


                                    PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)      FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                  (i)      FINANCIAL STATEMENTS (included in Part 11)

                           Report of Independent Public Accountants

                           Consolidated Balance Sheets - January 31, 2000 and
                           1999.

                           Consolidated Statements of Operations for the years
                           ended January 31, 2000, 1999 and 1998.

                           Consolidated Statements of Stockholders' Equity for
                           the years ended January 31, 2000, 1999 and 1998.

                           Notes to Consolidated Financial Statements for the
                           years ended January 31, 2000, 1999 and 1998.


                  (ii)     FINANCIAL STATEMENTS SCHEDULES

                  Not applicable

         (b)      REPORTS ON FORM 8-K

                  None.

         (c)      EXHIBITS

                       Exhibit
                       Number         Description
                       ------         -----------

                        1.1           Carver-Curtis License Agreement

                        1.2           E2K Distribution Agreement


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<PAGE>

SIGNATURES

         Pursuant to the requirements of Section 13 or 15 (d) 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.

Dated: April 30, 2001               THE MNI GROUP INC.



                                    By: /s/ ARNOLD GANS
                                        -----------------------------------
                                        Arnold Gans, President

         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.


Signature                        Title                            Date
---------                        -----                            ----


/s/ LAWRENCE BURSTEIN           Chairman and Director
---------------------------     (Principal Executive Officer)     April 30, 2001
Lawrence Burstein


/s/ ARNOLD GANS                 President (Principal
---------------------------     Operating Officer and
Arnold Gans                     Principal Accounting
                                and Financial Officer)            April 30, 2001


/s/ MYRA GANS                   Vice President,
---------------------------     Secretary, and Director           April 30, 2001
Myra Gans



---------------------------     Director
Alan Gaines


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